Is Madison Avenue fed up with the Internet?
To hear executives at Web sites like Yahoo tell it, big traditional advertisers have not filled the ad void left by failed and struggling dot-coms.
And yet the biggest marketers in the world, like Coca-Cola, General Motors and Procter & Gamble, say they are finding ever more ways to use the Internet to sell their products. The problem for Web sites like Yahoo and hundreds of others is that little of the marketers' money and effort involves advertising on Web sites.
Rather than renting rectangular banners or even larger swaths of other people's sites, the marketers are finding they can do much more with sites of their own. It is on sites like Pampers.com or GMBuyPower.com that big marketers can offer detailed product information, rewards, entertainment and even samples. And they find that they can use e-mail, rather than place advertisements, to alert customers and prospects to new offerings.
"Over time we are allocating a smaller percentage or budget to pure banners and a larger percentage to opportunities to be more interactive and build relationships with customers," said Darryl Cobbin, vice president for consumer communications at Coca-Cola. Coke, for example, uses Sprite.com to let visitors type in codes hidden under Sprite bottle caps to earn points redeemable for prizes.
P.& G. takes a similar view. "It's not that our spending on online advertising is getting diminished; but as our overall Internet spending is growing, the slices of the pie for our own Web sites and e-mail marketing are growing," said Vivienne Bechtold, P.& G.'s head of Web advertising.
As they review five years of experiments, the big consumer marketers see that, in many ways, the Internet is very much the opposite of television - although valuable for very different purposes.
Because television watching is largely passive, with commercials that interrupt the programming, it has proved to be very effective for building awareness of products and selling people things they did not even know they wanted. But on the Internet, users tend to focus on one task at a time and so are harder to distract - particularly by small and lifeless advertising formats that are not nearly as compelling as a 30- second TV commercial.
So the Internet is most useful for communicating with people who are already interested in learning more about a product. There is no question that the Internet is playing a huge role in the way many people shop for expensive and complex products like cars, mortgages and travel reservations. And there is a role, too, for the Internet in selling the sort of products to which people usually do not give much thought, like soap - although the approach is much different than in a TV ad.
"There is an 80-20 rule with most brands," said Anthony Romeo, vice president for strategy at Unilever. "With Dove soap, we have a group of incredibly loyal customers that like what Dove does to their skin and want more information about it." For this small, but profitable group, Unilever created DoveSpa.com, mixing skin care tips and information on new Dove products.
Similarly, SlimFast.com lets users of Unilever's diet shakes and food bars keep track of their weight loss, get food tips and communicate with other dieters. The SlimFast site has only several hundred thousand users, but the company thinks they are among its most active buyers.
As it builds these sites, Unilever has put an increasing emphasis on gathering customers' names so it can sell them other products. But not all of those pitches are electronic. Last year, the company mailed an old-fashioned paper magazine, with cooking and cleaning tips, to people on its list.
"We're interested in electronic communication because it's cheaper," said Mr. Romeo. "But I don't think a magazine would have worked by e-mail."
Procter & Gamble also uses the Internet as part of promotions that combine online and offline efforts. For example, print advertisements direct prospects to a Web site to sign up for free samples of Olay Daily Facials. The company finds this a more efficient method of distributing samples than a mass mailing or handing them out at a mall.
"For broad reach and awareness, the offline media work best," Ms. Bechtold said. "The Internet can offer greater depth."
Procter & Gamble and others are mimicking the tactics of "The Blair Witch Project," the 1999 movie that made well-chronicled use of the Internet to generate public interest. P.& G. has started selling its new Crest White Strips, a tooth-whitening product, directly on its Web site. The purpose is not to bypass retailers but to seed the market with some early users in advance of a retail rollout.
In few industries has the Internet had more of an effect than in the car business, where most shoppers now use the Web to look up features and compare prices. But the car companies are also learning that they have to approach their own efforts very differently than in their television campaigns.
Thus General Motors has invested heavily in its site, which is filled with detailed information about G.M. cars, including which local dealers have them in stock. The approach has little in common with "baseball, hot dogs, apple pie and Chevrolet" or any other television campaign that uses imagery, emotion and repetition to make people feel good about a product.
"With television ads you are trying to get into a consideration set even before people even realize they are thinking about buying a new car," said Joyce Fierens, director of interactive marketing for G.M. "What the Web does best is provide shopping tools and access to information in a very targeted way."
And like Procter & Gamble, G.M. has found the best way to lure people to its site is through traditional advertising.
"Your offline media can drive people to the Web, where you can tell a story more richly," Ms. Fierens said. "Your general media doesn't have to do it all, and the Web can't do it alone."
G.M. still advertises on other Web sites. But it has scaled back to focus its ads on car sites, like AutoBytel, and the auto section of broader sites like ClubMom.
"We are not spending money in nonautomotive areas any more," Ms. Fierens said. "When people are ready to shop for a car, they will be in an automotive site."
Similarly, Unilever has found that its few successful banner campaigns are those in which its message can be the answer to whatever question drove the user to search online. For example, it placed ads on the food section of AOL Time Warner's America Online with headlines like "Looking for Quick Family Favorites." The ad did not mention any product brands. But those who clicked got recipes that included products from a variety of Unilver brands including Lipton, Ragu and Wishbone.
"We've learned that consumers are going online with a purpose in mind," Ms. Fierens said. "The ad wasn't about brand. It was about letting the consumer focus on the solution to her problem."
The current emphasis by big marketers is great news for sites about food, cars or anything else people want to buy. And it is quite depressing for those covering news, literary matters or even offering useful services like electronic mail.
"The deus ex machina of every site or piece of software developed over the last four years was `advertising would pay for it,' " said Myer Berlow, the president of Interactive Marketing for America Online. "That's mathematically impossible."
AOL, Mr. Berlow said, has never pinned its hopes on competing with television for advertising that builds brand awareness. Rather it positioned itself to clients as a method of closing sales that can be more efficient than direct mail, point-of-purchase displays and salespeople.
"Television made it possible for there to be 40 different brands of dishwashing liquid," Mr. Berlow said. "The Internet lets a car maker print fewer brochures."
Saul Hansell, The New York Times. March 26, 2001
Copyright © 2001 The New York Times Company. All rights reserved.