A. Why should a company be on the web anyway ?

1. To be where it must be

Source: http://wwww.internetworldstats.com

In 2006, approximately 1 billion people have access to the word wide web around the globe. Whatever a company does, it cannot ignore this billion people, because its competitors will not. It must have an online presence to have access to the people of the world who are connected.
Internet users are also the mostly educated and wealthier than average people. They represent an interesting prospect for companies who plan on selling over the Internet.


2. Provide key information about the company and its business

Business is mostly about contacts and networking. It’s not only what you know but also whom you know. The business card tradition embodies this necessity, and the web can have the function of a business card that can be found 24/7, at a very low cost.
On top of serving as a business card, a company’s website can be used to provide valuable information about its business. For instance, it can give details on its core competencies, service, endorsements, and types of payment that are accepted.
The company can also provide real-time information so critical to its customers that it can actually increase its level of service.

• Is the product in stock?
• In how many days can it be shipped?
• Given a query, what other products can be recommended to the customer?

The web gives companies the possibility to do just that.


3. To sell directly

This may seem the main reason to go on the web, but the Internet will not make products sell like magic. The Internet in only a different medium, and is not sufficient as such to increase sales. Therefore, a company must still go through the whole process of thinking through well its offer, target and strategy.

Once this is done, the website through which the company is going to sell must focus on making the visitor click on the right buttons and facilitate as much as possible the buying process.

As Seth Godin put it in « The Big Red Fez », the visitor is not an engineer who will put up with technical jargon. He will not give some effort to understand what you are up to.
In fact, the visitor is more like a time-conscious monkey, looking for a virtual banana to click on.




Here at Amazon.com, the banana « Add to shopping cart » is clearly shown and calls for the user to click on it (picture above).


4. To give online customer support

Companies can relieve their customer support teams by publishing online the most Frequently Asked Questions (FAQ) on their website. Dell has done this and cut customer support costs substantially. This also enables sales people to focus on sales, rather than spend most of their time answering recurrent questions from customers.


5. To address a market niche

Internet has contributed in abolishing boundaries in the way a company considers a market: geography has much less impact than ever before. Thus, some market niches suddenly become worth addressing. The merchant website artoyz.com sells designer toys. A brick and mortar shop of this kind would hardly be profitable due to its geographically limited influence. The web enables such a merchant to be accessible by art toys fanatics from all over the world, at any time.

For more information, read Chris Anderson's Long Tail theory.

B. Affiliate programs

1. What are they?

Affiliate programs are also called « associate programs ». In such a program, the affiliate is paid by the merchant site to send traffic to him. The affiliate will then be paid according to the agreement he has with him. He can be paid according to the number of visitors he has sent to his affiliation partner, or according to the sales these visitors have made.


2. How do they work?

In order for an affiliation to work properly, one must be able to keep track of visitors and their actions. This is crucial, as it will enable the affiliates to determine how much they will be paid.


According to the agreement, somebody has to measure:

• How many people click on a merchant’s link on an affiliate website
• How many people end up buying something or performs a particular action once the affiliate website has sent them to the merchant’s website
• How many people have seen the merchant website’s banner link on an affiliate website

Somehow, there are issues. Someone has to keep track of these programs, in order to know how much is to be paid to each affiliate. Also, it is time-consuming for companies to recruit affiliates, as much as it is for websites to seek out adequate companies.

Amazon takes care of its own program, but often affiliates do not trust merchants to be truthful in their measurements and bills.

The solution is to join an affiliate network. Affiliate networks, such as TradeDoubler, act as brokers, and offer the following services to either party:

• Track all activity
• Arrange all payments
• Help affiliates set up the necessary links on their site
• Help recruit affiliates by including an online merchant's affiliate program in their directory
• Enable to view reports of their traffic.

3. Payment types


There are three basic types of affiliate program payment arrangements:

a) Pay-per-sale (cost-per-sale for the merchant)

When a visitor brought by affiliate actually purchases something on the merchant’s website. The affiliate can be paid with a fixed or variable commission.

b) Pay-per-click (cost-per-click)

In this case, the payment depends on the number of people who click on the merchant’s banner on the affiliate’s website.

c) Pay-per-lead (cost-per-lead)

The payment is made according to the number of visitors sent by the affiliate who fill in a form of some kind with their contact information. This information is then used as a sales lead by the merchant.

In fact, any agreement can exist, based on any given action. In this case, the merchant will pay the affiliate any time he sends him a visitor who performs this given action.



4. The edge over traditional marketing

The merchant site pays only for the visitors that affiliates have actually sent to his site, not for a hypothetical number of viewers, like it is the norm for TV and radio. With affiliation and pay-per-sale, a company only pays for what it actually gets, and it can measure it precisely.
With the web, advertising is no longer a fixed cost; it becomes intrinsically linked to sales.

C. Be visible on the web: the purpose of search marketing

1. Search engines and marketing





Each search engine works in its own specific way, with unique algorithms and set of rules. These search engines crawl the web to index Internet pages. In order to provide users with the most relevant content during their search, these search engines look into websites for specific things such as recurrent words or incoming links. The key factor of success in this game is to optimize the website, through content and design, in such a way that it will appear in the results page for the keywords that a company deems relevant to its business.

For instance, let’s imagine a Real Estate Company decides to set up a website. In order to appear well placed in search engines, it will have to make sure its site shows up on the search results page for keywords such as « real estate », « buy house » or « rent apartment ».
The key is to know precisely what the target is going to search for, and design the website accordingly.

Knowing one’s market is crucial, and this is the reason why one can really talk about « search marketing ».



2. Professional Search Engine Optimization (SEO) companies

All this would be pretty easy if the rules used by search engines to index the web were permanent. But unfortunately for companies, the algorithms search engines change all the time, so there is a need to constantly keep up with them. This can turn out to be very time consuming, so instead of hiring someone specifically for this task, many companies choose to hire a professional SEO company.

SEO companies know the inner workings of search engines. Their mission is to help companies design their website and elaborate content so that their website will be well ranked in search results.
Let’s take the example of Google. Google relies heavily on textual content on a page, and link popularity to rank pages. Understanding this, the SEO company will make recommendations so that a given client site will rank well on Google.





Somehow, if a company does not wish to go through the process of optimizing its website for search engines, and do not wish to hire an SEO, it can always choose to purchase keywords from search engines.



3. Sponsored links: buy visibility on search engines

Overture, which now belongs to Yahoo!, has invented sponsored links on search engines. Their concept is to sell keywords to companies who wish to appear well placed on the search results page, regardless of their natural position in the search results rankings.
On the picture below, the purchased links attached to the keywords « buy » and «house » are the ones highlighted in blue at the top of the page, and the ones appearing in the sidebar on the right. Every time somebody clicks on one of these links, Google receives payment of the agreed per-click price for the concerned keywords.

D. Blogs amplify the spread of the buzz

Word of mouth has always existed, but the emergence of blogs as widely used media has sparked a revolution in the spread of a buzz. And in a time when advertising is looking for fresh new alternatives, companies have come to the realization that the web can serve them well.
How exactly does the web help spread a buzz? What are the risks attached to using the web for spreading the corporate word?


1. The rising influence of a new medium: weblogs

Wikipedia, the online user-edited encyclopaedia, defines blogs as « a type of website where entries are made (such as in a journal or diary), displayed in a reverse chronological order. »

Someone who runs a blog is called a blogger. A blogger can post text, photo and video content. Each post is archived and can be found at a permanent unique link, a permalink.


The success of blogs is impressive. As of April 2006, Technorati CEO Daniel Sifry gives a State of the Blogosphere :

• Technorati tracks over 35.3 million blogs
• The blogosphere is doubling in size every 6 months
• It is now over 60 times bigger than it was 3 years ago
• On average, a new weblog is created every second of every day
• 19.4 million bloggers (55%) are still posting 3 months after their blogs are created
• Technorati tracks about 1.2 Million new blog posts each day, about 50,000 per hour

a) The genesis of the blog phenomenon

The blog phenomenon is believed to have started around 1997, when Jorn Barger called his site a “weblog”.

In 1999, another user, Peter Merholz somehow broke the word into “we blog”. Soon enough, the word « blog » became as much a word as a noun, and became widespread over the net. Around 2003, blogs started to turn into a web phenomenon worldwide, especially in France .

b) The reasons for such an extraordinary success

Blogs are usually held by amateurs. They speak of their hobbies and share their thoughts or expertise about particular subjects. This amateurism gives blogs a taste of unpolished authenticity, compared with the widespread formatted corporate style. This probably contributed to the initial success of blogs.

What carried their success beyond just being a new way to publish are their social features.
The first one of them is the possibility to comment on any post. « The traditional media publish information. Blogs start conversations ’ is the motto for Loic le Meur, CEO for Europe of Six Apart, a blog hosting company.

On some of Loic le Meur’s posts, there are hundreds of comments. For instance, the post that shows Loic le Meur’s interview with France’s controversial Nicolas Sarkozy has received as many as 403 comments . This reader-generated content creates incentive for people to return on the blog, thus increasing traffic.

Another central feature is the « blogroll ». A blogroll is a list of links to websites of blogs the reader might be interested in. It has increasingly become a way to show readers to which clique he belongs.

Take the case of a football fanatic. He has set up a blog about his passion and regularly visits websites and blogs that he considers worth while visiting. He compiles a list of these in his blogroll, and readers will see immediately that he is part of a social group around football. The blogroll also constitutes an act of friendship and support, as it is a way for bloggers to increase each other’s visibility on search engines.

So to speak, blogs are platforms for conversations, involving thousands of people for the most popular. In France alone, there are 2 million blogs. This figure is such that brands cannot ignore this population. If a company chooses to ignore bloggers, it will at best lose an edge faced with competitors who have chosen to monitor blogs closely and integrate them in their marketing strategy. But in what way can brands benefit from blogs?

c) Buzz: blogs spread the word

Blogs are made of posts. Posts are commented. Links to other blogs and sites can be included inside these posts and comments. The blogroll gives the reader the chance to read blogs around a similar topic.

As we can see, the structure of a blog is ideal for any idea to spread amongst any given community. This feature is promising for companies who wish to launch a buzz marketing campaign over the Internet.

The chart below shows that the blogosphere reacts to news instantly. They react to any major event, may it be politics, sports (Superbowl), or commercial. The launch of the iPod video by Apple has triggered a huge peak in the number of postings. We can rightly say Apple has succeeded in creating a buzz around its new product.





In this example, Apple has created a successful buzz. But how did they pull this off?

Apple applies a very strict policy of total secrecy around the elaboration of its products. As a result, geeks and fans speculate for months over upcoming products. Needless to say, every product launch is a surprise that creates enormous buzz over the web.

Somehow this is a case of indirect buzz. Apple did not interact directly with bloggers to spark some buzz. So how can companies use the leverage of blogs to trigger a buzz in a proactive way?

d) Using influential bloggers to create buzz

Most bloggers speak of their everyday life, but some run more specialised blogs. Subjects range from baseball to 1930’s paraphernalia or French cuisine. These are the most interesting ones to target for brands. Bloggers who run a specialized blog will be read by a more homogeneous audience. It is thus easy to avoid missing the target.

Warner Bros has successfully applied this strategy with its campaign for the release of the latest Harry Potter film on DVD. First, the firm carefully selected the best and most read blogs that focused around the Harry Potter series, DVD’s and cinema. By doing so, WB was making sure they had the optimal audience for their product. Then, the studio gave away limited series of the DVD to the most influential bloggers, five days before its official launch to the public. The exclusive disclosure successfully sparked many comments and posts on other blogs, creating a large but targeted buzz.

Another approach is to create a mini website with viral content that can be easily shared, thanks to « send to a friend » or « blog this ’ buttons. Personiva has specialized in what they called « personalized branding ». The user starts by uploading photos of him in the system. Then, personiva integrates the photographs into the online video commercial.

As a result of this stardom effect, people feel an urge to share their personal ad with their family and friends. Hewlett Packard has successfully used this for their new campaign « the computer gets personal again ». As can be seen on the screen capture below, the result is impressive.







The visitor is able to blog his personal HP ad, but he must sign up (by giving away his email) beforehand. HP not only has a way to make the ad spread, but also gets to build up a good relevant database of email addresses.






2. The dark side of the buzz: pitfalls and limitations


The Internet gives companies tremendous power to spread their word. However, they must be careful to use this power cautiously.

• Lose control over the buzz

Not all websites can handle an increase of traffic by the thousands overnight. If the buzz campaign involves giveaways and goodies, the marketing department must make sure it can live up to their promises. If not, the buzz can turn into a negative one and damage a valuable corporate image that could have taken years to build. To counter this risk, it can be a good idea to set up limitations.

• Saturate consumers

If this kind of marketing becomes used too frequently, people will become increasingly resistant. Originality is what makes viral marketing viral. If people become saturated by their friends’ viral emails, they will start filtering them like unsollicited email.

• Fall into stealth marketing (also called "undercover" marketing)

Some brands have had the idea to create their own blog. So far, it could be a good idea. Somehow, some brands have thought of disguising their corporate blog as a personal blog. This technique is often referred to as « stealth » marketing.

HP has used this method successfully with its fingerskilz.tv blog. Everyone believed the blog was run by a bored office worker who posted close-up videos of hands disguised as football players, performing football tricks with a wadded up paper ball. The site successfully attracted 180 000 visitors to it, and many people came up with their own videos, posted on Youtube. It is only after a few weeks that HP revealed the true nature of the blog.




While it was a success for HP , it can sometimes turn out as a disaster.

The France-based VICHY cosmetics firm has had a tricky experience of viral marketing through blogs. Everything started with a blog called « Le Journal de ma Peau », written by a thirty-something woman called Claire. On her blog she posted opinions about the latest VICHY products she was trying out. However, something went wrong. The readers of the blog discovered that Claire was a fictitious character, and what looked like a personal blog was in fact run by VICHY’s staff. Regular readers felt betrayed and manipulated, and spoke of it in their personal blogs. All this resulted in a lot of negative buzz over the Internet and in the offline world. The marketing staff admitted that they had been wrong to do this, and made its coming out with a public apology on the blog.

"(…) I have read your comments, and I understand we have a lot more to learn about the world of blogs. Don’t be too harsh…"

Full text here (in French)

All in all, marketing is all about the trust customers have in a brand. If this trust is broken, the company loses.