How The Internet Changed
Marketing Forever
by Jay Neuman
This article is an excerpt from: The Complete Internet Marketer: A Practical Guide To
Everything You Need To Know About Marketing Online
A new marketing terrain was created at the end of the Twentieth Century. A generation of
pioneering entrepreneurs set out on a great adventure. They invented new technologies
and carved out new business models from an uncharted virtual frontier. Many did not
understand the terrain they would have to pass through. Hundreds of failed Dot-Com
startups would litter the landscape of the, so called, “New Economy.” Those who did
succeed figured out what the new terrain looks like. As time went by, they adjusted their
business plans to meet the realities of that terrain. In the process, they forever changed
the way marketing is practiced. Those days are over now. But the lessons still remain.
Everyone who hopes to succeed with Internet Marketing will be following in the footsteps of
those original innovators and must learn the lessons their experiences teach.
This article puts the field in perspective by looking at exactly what happened to Marketing
when the Internet came on the scene. In a few short years, the Internet has gone from
being an obscure new idea to being an essential part of any marketing strategy.
Something changed dramatically when the Internet came on the scene. To be successful
marketing on the Internet, the first lesson is to understand what did change and the role
the Internet now plays in the new marketing world.
How Did We Get Here?
In the opening years of the Twenty-first Century, we find the practice of marketing is
noticeably different than it was throughout the Twentieth Century. In the decade of the
1990’s, the field of marketing went through a rebirth of sorts.
It was similar to another rebirth that happened a hundred years earlier. Advances in the
technology of mass production at the beginning of the Twentieth Century created a need
for marketing as a strategic tool to bring products to the masses. Traditional textbooks still
emphasize things such as balancing product, placement, price and promotion to appeal to
the largest possible audience. Fundamental marketing needs like these “Four P’s of
Marketing” have not disappeared. However, they have been expanded. Throughout the
1990’s marketing began focusing more and more on building relationships with individual
customers, one at a time.
Three phenomena came together in the 1990’s to make this possible. To understand today’
s Internet Marketing world, we must start with a basic understanding of these three.
(1) Database Marketing
(2) One-to-One Marketing
(3) The Internet.
None of these are new. In fact, in one form or another they have all been around since the
early 1970’s. However, advances in technology prompted their explosion into the
mainstream in the 1990’s. As a result, the Twenty-first century finds no company insulated
from the need to interact with their customers as individuals.
Database Marketing
The advent of database marketing can be thought of as the first step in the evolution of
today’s Internet Marketing environment. In the early 1970’s, innovators began
experimenting, using computing technologies to take the field of direct marketing to a new
level. For the first time, companies began to put their entire customer lists into databases
with the specific purpose of learning about them to maximize direct marketing efforts.
These early efforts were very costly and involved huge mainframe computer systems to
make them work. So only very large companies and direct marketing list vendors made
use of the new technology.
In the early 1990’s, microcomputers and local area networks made it possible for every
company to have a customer database. Database marketing moved into the mainstream.
Forward thinking companies put that technology to work to better understand their
customers. In turn, they were able to target their marketing efforts to meet their
customers’ wants and needs. These forward thinking companies began to raise the bar for
their competition by reaching out to customers on a more personalized basis. The trend
which continues to drive marketing innovation today was born. Database marketing
technologies were put to use by savvy marketers to reach customers in ways they had
only dreamed of before.
One-to-One Marketing
At the same time as database marketing technology was becoming popular, a little
revolution in how we think about the practice of marketing itself was sparked. Writings like
“The One-to-One Future” by Don Peppers and Martha Rogers (1993) changed the way we
think about Marketing itself. Marketers started to think in terms of using the new
technologies to build long term relationships with their customers, one at a time. As with
database marketing, the basic concepts of One-to-One Marketing were not new. In fact,
the basic concept is to reproduce an earlier time when shop owners got to know each one
of their customers and built loyalty by meeting each one’s specific wants and needs. Early
examples of one-to-one marketing ideas include such things as store membership
programs where customers received birthday cards, gift reminders or other personalized
communications.
The revolution of one-to-one marketing was a change in perspective. Marketers
traditionally focused on maximizing market share across entire customer segments. This
began to change. Some began trying to maximize the share of each customer’s
expenditures that their company was able to capture. New technologies were to be applied
to the customer database to transform it into a learning engine. This would allow
companies to discover the wants and needs of each customer. Then through automated,
customer focused communications that same technology was used to maximize the share
of each customer’s wallet that the company was able to meet. Pepper’s and Rogers coined
the term “share of wallet” as a contrast to the traditional focus on market share.
Back in the early 1990’s this seemed more like a pipedream than a realistic goal.
Nevertheless, the ideas were having a big impact on direct marketing and customer
relationship practices at the time. We did not realize that a new technology was about to
make the pipedream a reality.
The Internet
In the late 1990’s the Internet brought the revolution right into customers’ homes. Most
marketers today know the basic history of the Internet. It first came online in 1969 as a
way to share information between universities and government agencies. But, it was the
invention of Hypertext Markup Language (HTML) and the World Wide Web (www) in the
early 1990’s that created the websites we know today.
The basic design of a website makes it an engine for collecting detailed customer
information. Right from the start, there were companies applying statistical algorithms to
transform that information into learning that could drive personalized marketing
messages. Once again, savvy marketers started using the new technologies to do what we
only dreamed of before. Today, customers themselves are raising the bar by going to
those web sites which best meet their needs and wants as individual customers, rather than
as generic members of a target audience.
Successful Internet Marketing strategies will combine components from all three streams.
Database marketing provides the technological backbone to capture and utilize the flood of
customer information coming into your company through the Internet. It also provides the
tools and techniques to transform that information into actionable intelligence and to
maintain customer communications. The principles of one-to-one marketing provide
practical guidelines for using technology to build and maintain customer relation-ships.
Finally, the Internet provides technology which transforms the customer communication
process into a real time interaction which takes place in the customer’s home or cubicle at
work. One way to think about it is that the Internet has turbo-charged database marketing
technologies to make the dream of one-to-one marketing a reality.
The New Marketing Terrain
Traditional businesses, spend years cultivating relationships with their customers. They
must now compete against businesses online to keep those customers. We live in an age
when customers need to go no further than their living rooms, or offices to get
satisfaction. New, virtual businesses have rushed in to occupy that space in the customers’
living rooms. Still, they must offer a superior online experience if they are going to sway
customers away from businesses they are loyal to.
Who will win the battle for your customers?
Businesses today have no choice except to enter the competition to satisfy the ever-
increasing expectations of online customers. Even if a customer comes in person to buy a
product or service, chances are they first researched it online. Businesses themselves
have made this even easier for consumers. They have put high speed Internet access on
their employee’s desktops.
The Internet is doing for consumers in the early Twenty-first century what labor unions did
for workers in the early Twentieth century. It is leveling the playing field. The old saying,
attributed to PT Barnum, goes “A sucker is born every minute.” Today, the Internet is
turning that saying on its ears. An informed consumer is born every minute. Businesses no
longer have a choice. They must use the technology available to them to meet their
customers on their own terms. Otherwise those customers will go to someone else who will.
People still go to the local mall after work to shop. But today, they can take five minutes
out of their lunch break to research the products they are planning to buy first. Savvy
online marketers are capturing those customers before they ever take that trip to the mall.
The watershed moment for online buying was the 1999 holiday shopping season. Shoppers
spent over $5 billion through the Internet. That far exceeded all expectations with a 300%
increase over 1998. There were no skeptics anymore. Online buying had become a
permanent fixture on the retail landscape. As we crossed the threshold into the twenty-
first century, the corporate website, which four years earlier had been little more than an
afterthought in marketing departments, had moved to center stage. The landscape had
changed.
What does the new terrain look like?
The Internet came upon the marketing world like a flood. The rate of technological and
organizational transformation that took place in it’s wake was enough to make your head
spin. It seemed like every couple of months the pundits were declaring a new “paradigm
shift” and heralding the triumph of the latest eBusiness innovation over old economy
dinosaurs. Now the waters have receded. We are able to see what has actually changed
and what has not.
As it turns out, the Internet did not create an entirely new economy. The hype was clearly
overrated, to the point of almost being comical. However, to be successful, marketers
must be aware of the forces that are shaping the Twenty-first Century marketing terrain.
Figure 2 shows what changed and what did not change in five areas where the new
economy was to have put to death traditional marketing practices.
Customers still behave in predictable ways. They still respond to advertising messages
and marketing promotions.
The Fifth “P” Of Marketing
We do not need to create a new economic model to successfully navigate this new terrain.
But we do need to re-think some parts of our existing business models. In the 1990’s,
using database marketing to promote loyalty among your customers, one customer at a
time, was an opportunity. In the first decade of the Twenty-first Century the explosion of
Internet Marketing has made it a necessity.
The secret to understanding the new marketing terrain is found in the convergence of three
marketing streams: database marketing, one-to-one marketing, and the Internet. The
tried and true principles of marketing are still being used to reach a mass audience. But
now, technology makes it possible to extend the reach of your marketing efforts.
Marketing activities can now be personalized for each customer. You could say there is
now a fifth “P” of Marketing – the Person.
This is how Internet Marketing has forever changed the marketing terrain. Marketing in the
Twenty-first Century can be personalized for every customer.
Personalized marketing uses technology and ideas that themselves are not entirely new.
As we saw, they have been around in one form or another since the 1970’s. However,
personalized marketing is truly a new marketing paradigm because of at least two very
critical differences:
(1) The individual customer—the person—is an interactive
participant in real time.
(2) New technologies give businesses the ability to make that
real time interaction a unique—personalized—experience for
each customer.
Personalization Technology vs. Personalized Marketing
One of the major features utilized in Internet Marketing programs is “Personalization.” The
term usually refers to technology features that can be used on a website to modify –
personalize – the content for each user. The two most common examples are
customizable content and dynamic recommendations. In the first case, registered users of
the site are given the ability to choose what information they see when they “log on” to the
site or in email messages. In the second case, the site observes what a customer
purchases over time. Dynamic recommendations are given based on other customers who
have made similar purchases. Both cases involve learning about the customer. The online
experience is modified to better suit his or her individual preferences.
Personalization is a tremendously important development. But, by itself, personalization is
nothing more than adding bells and whistles to a website. What is needed to be
competitive in your customer’s living room or office is a strategic marketing outreach to
each individual customer. Personalization techniques are a component of that strategy.
There are many other components. Some of them are drawn from the principles of one-to-
one marketing. Some of them come from the off-line world of database marketing. Some
of them are entirely new with the advent of the World Wide Web.
How do you put together a personalized marketing program?
A successful personalized marketing program is somewhat like a jigsaw puzzle. There are
many pieces. The secret to winning over your customers when they are visiting your
business from the comfort of their own home or office is not just to have all the pieces.
The secret is to be able to put all the pieces together in a way that allows each customer to
have a truly personalized and rewarding relationship with your business. Your customers
should not see a jumble of nice features on your site. They should see the picture that
emerges when all those pieces are fit together to meet their individualized needs and wants.
Marketing Forever
by Jay Neuman
This article is an excerpt from: The Complete Internet Marketer: A Practical Guide To
Everything You Need To Know About Marketing Online
A new marketing terrain was created at the end of the Twentieth Century. A generation of
pioneering entrepreneurs set out on a great adventure. They invented new technologies
and carved out new business models from an uncharted virtual frontier. Many did not
understand the terrain they would have to pass through. Hundreds of failed Dot-Com
startups would litter the landscape of the, so called, “New Economy.” Those who did
succeed figured out what the new terrain looks like. As time went by, they adjusted their
business plans to meet the realities of that terrain. In the process, they forever changed
the way marketing is practiced. Those days are over now. But the lessons still remain.
Everyone who hopes to succeed with Internet Marketing will be following in the footsteps of
those original innovators and must learn the lessons their experiences teach.
This article puts the field in perspective by looking at exactly what happened to Marketing
when the Internet came on the scene. In a few short years, the Internet has gone from
being an obscure new idea to being an essential part of any marketing strategy.
Something changed dramatically when the Internet came on the scene. To be successful
marketing on the Internet, the first lesson is to understand what did change and the role
the Internet now plays in the new marketing world.
How Did We Get Here?
In the opening years of the Twenty-first Century, we find the practice of marketing is
noticeably different than it was throughout the Twentieth Century. In the decade of the
1990’s, the field of marketing went through a rebirth of sorts.
It was similar to another rebirth that happened a hundred years earlier. Advances in the
technology of mass production at the beginning of the Twentieth Century created a need
for marketing as a strategic tool to bring products to the masses. Traditional textbooks still
emphasize things such as balancing product, placement, price and promotion to appeal to
the largest possible audience. Fundamental marketing needs like these “Four P’s of
Marketing” have not disappeared. However, they have been expanded. Throughout the
1990’s marketing began focusing more and more on building relationships with individual
customers, one at a time.
Three phenomena came together in the 1990’s to make this possible. To understand today’
s Internet Marketing world, we must start with a basic understanding of these three.
(1) Database Marketing
(2) One-to-One Marketing
(3) The Internet.
None of these are new. In fact, in one form or another they have all been around since the
early 1970’s. However, advances in technology prompted their explosion into the
mainstream in the 1990’s. As a result, the Twenty-first century finds no company insulated
from the need to interact with their customers as individuals.
Database Marketing
The advent of database marketing can be thought of as the first step in the evolution of
today’s Internet Marketing environment. In the early 1970’s, innovators began
experimenting, using computing technologies to take the field of direct marketing to a new
level. For the first time, companies began to put their entire customer lists into databases
with the specific purpose of learning about them to maximize direct marketing efforts.
These early efforts were very costly and involved huge mainframe computer systems to
make them work. So only very large companies and direct marketing list vendors made
use of the new technology.
In the early 1990’s, microcomputers and local area networks made it possible for every
company to have a customer database. Database marketing moved into the mainstream.
Forward thinking companies put that technology to work to better understand their
customers. In turn, they were able to target their marketing efforts to meet their
customers’ wants and needs. These forward thinking companies began to raise the bar for
their competition by reaching out to customers on a more personalized basis. The trend
which continues to drive marketing innovation today was born. Database marketing
technologies were put to use by savvy marketers to reach customers in ways they had
only dreamed of before.
One-to-One Marketing
At the same time as database marketing technology was becoming popular, a little
revolution in how we think about the practice of marketing itself was sparked. Writings like
“The One-to-One Future” by Don Peppers and Martha Rogers (1993) changed the way we
think about Marketing itself. Marketers started to think in terms of using the new
technologies to build long term relationships with their customers, one at a time. As with
database marketing, the basic concepts of One-to-One Marketing were not new. In fact,
the basic concept is to reproduce an earlier time when shop owners got to know each one
of their customers and built loyalty by meeting each one’s specific wants and needs. Early
examples of one-to-one marketing ideas include such things as store membership
programs where customers received birthday cards, gift reminders or other personalized
communications.
The revolution of one-to-one marketing was a change in perspective. Marketers
traditionally focused on maximizing market share across entire customer segments. This
began to change. Some began trying to maximize the share of each customer’s
expenditures that their company was able to capture. New technologies were to be applied
to the customer database to transform it into a learning engine. This would allow
companies to discover the wants and needs of each customer. Then through automated,
customer focused communications that same technology was used to maximize the share
of each customer’s wallet that the company was able to meet. Pepper’s and Rogers coined
the term “share of wallet” as a contrast to the traditional focus on market share.
Back in the early 1990’s this seemed more like a pipedream than a realistic goal.
Nevertheless, the ideas were having a big impact on direct marketing and customer
relationship practices at the time. We did not realize that a new technology was about to
make the pipedream a reality.
The Internet
In the late 1990’s the Internet brought the revolution right into customers’ homes. Most
marketers today know the basic history of the Internet. It first came online in 1969 as a
way to share information between universities and government agencies. But, it was the
invention of Hypertext Markup Language (HTML) and the World Wide Web (www) in the
early 1990’s that created the websites we know today.
The basic design of a website makes it an engine for collecting detailed customer
information. Right from the start, there were companies applying statistical algorithms to
transform that information into learning that could drive personalized marketing
messages. Once again, savvy marketers started using the new technologies to do what we
only dreamed of before. Today, customers themselves are raising the bar by going to
those web sites which best meet their needs and wants as individual customers, rather than
as generic members of a target audience.
Successful Internet Marketing strategies will combine components from all three streams.
Database marketing provides the technological backbone to capture and utilize the flood of
customer information coming into your company through the Internet. It also provides the
tools and techniques to transform that information into actionable intelligence and to
maintain customer communications. The principles of one-to-one marketing provide
practical guidelines for using technology to build and maintain customer relation-ships.
Finally, the Internet provides technology which transforms the customer communication
process into a real time interaction which takes place in the customer’s home or cubicle at
work. One way to think about it is that the Internet has turbo-charged database marketing
technologies to make the dream of one-to-one marketing a reality.
The New Marketing Terrain
Traditional businesses, spend years cultivating relationships with their customers. They
must now compete against businesses online to keep those customers. We live in an age
when customers need to go no further than their living rooms, or offices to get
satisfaction. New, virtual businesses have rushed in to occupy that space in the customers’
living rooms. Still, they must offer a superior online experience if they are going to sway
customers away from businesses they are loyal to.
Who will win the battle for your customers?
Businesses today have no choice except to enter the competition to satisfy the ever-
increasing expectations of online customers. Even if a customer comes in person to buy a
product or service, chances are they first researched it online. Businesses themselves
have made this even easier for consumers. They have put high speed Internet access on
their employee’s desktops.
The Internet is doing for consumers in the early Twenty-first century what labor unions did
for workers in the early Twentieth century. It is leveling the playing field. The old saying,
attributed to PT Barnum, goes “A sucker is born every minute.” Today, the Internet is
turning that saying on its ears. An informed consumer is born every minute. Businesses no
longer have a choice. They must use the technology available to them to meet their
customers on their own terms. Otherwise those customers will go to someone else who will.
People still go to the local mall after work to shop. But today, they can take five minutes
out of their lunch break to research the products they are planning to buy first. Savvy
online marketers are capturing those customers before they ever take that trip to the mall.
The watershed moment for online buying was the 1999 holiday shopping season. Shoppers
spent over $5 billion through the Internet. That far exceeded all expectations with a 300%
increase over 1998. There were no skeptics anymore. Online buying had become a
permanent fixture on the retail landscape. As we crossed the threshold into the twenty-
first century, the corporate website, which four years earlier had been little more than an
afterthought in marketing departments, had moved to center stage. The landscape had
changed.
What does the new terrain look like?
The Internet came upon the marketing world like a flood. The rate of technological and
organizational transformation that took place in it’s wake was enough to make your head
spin. It seemed like every couple of months the pundits were declaring a new “paradigm
shift” and heralding the triumph of the latest eBusiness innovation over old economy
dinosaurs. Now the waters have receded. We are able to see what has actually changed
and what has not.
As it turns out, the Internet did not create an entirely new economy. The hype was clearly
overrated, to the point of almost being comical. However, to be successful, marketers
must be aware of the forces that are shaping the Twenty-first Century marketing terrain.
Figure 2 shows what changed and what did not change in five areas where the new
economy was to have put to death traditional marketing practices.
Customers still behave in predictable ways. They still respond to advertising messages
and marketing promotions.
The Fifth “P” Of Marketing
We do not need to create a new economic model to successfully navigate this new terrain.
But we do need to re-think some parts of our existing business models. In the 1990’s,
using database marketing to promote loyalty among your customers, one customer at a
time, was an opportunity. In the first decade of the Twenty-first Century the explosion of
Internet Marketing has made it a necessity.
The secret to understanding the new marketing terrain is found in the convergence of three
marketing streams: database marketing, one-to-one marketing, and the Internet. The
tried and true principles of marketing are still being used to reach a mass audience. But
now, technology makes it possible to extend the reach of your marketing efforts.
Marketing activities can now be personalized for each customer. You could say there is
now a fifth “P” of Marketing – the Person.
This is how Internet Marketing has forever changed the marketing terrain. Marketing in the
Twenty-first Century can be personalized for every customer.
Personalized marketing uses technology and ideas that themselves are not entirely new.
As we saw, they have been around in one form or another since the 1970’s. However,
personalized marketing is truly a new marketing paradigm because of at least two very
critical differences:
(1) The individual customer—the person—is an interactive
participant in real time.
(2) New technologies give businesses the ability to make that
real time interaction a unique—personalized—experience for
each customer.
Personalization Technology vs. Personalized Marketing
One of the major features utilized in Internet Marketing programs is “Personalization.” The
term usually refers to technology features that can be used on a website to modify –
personalize – the content for each user. The two most common examples are
customizable content and dynamic recommendations. In the first case, registered users of
the site are given the ability to choose what information they see when they “log on” to the
site or in email messages. In the second case, the site observes what a customer
purchases over time. Dynamic recommendations are given based on other customers who
have made similar purchases. Both cases involve learning about the customer. The online
experience is modified to better suit his or her individual preferences.
Personalization is a tremendously important development. But, by itself, personalization is
nothing more than adding bells and whistles to a website. What is needed to be
competitive in your customer’s living room or office is a strategic marketing outreach to
each individual customer. Personalization techniques are a component of that strategy.
There are many other components. Some of them are drawn from the principles of one-to-
one marketing. Some of them come from the off-line world of database marketing. Some
of them are entirely new with the advent of the World Wide Web.
How do you put together a personalized marketing program?
A successful personalized marketing program is somewhat like a jigsaw puzzle. There are
many pieces. The secret to winning over your customers when they are visiting your
business from the comfort of their own home or office is not just to have all the pieces.
The secret is to be able to put all the pieces together in a way that allows each customer to
have a truly personalized and rewarding relationship with your business. Your customers
should not see a jumble of nice features on your site. They should see the picture that
emerges when all those pieces are fit together to meet their individualized needs and wants.
The Complete
Internet Marketer
Internet Marketer
