The Science of Internet Marketing

In an interview with a senior corporate executive in one of Australia's largest financial institutions, I asked what she thought had been the biggest change in marketing and sales over the past 10 years. She answered that marketing and sales are becoming much more scientific. The measurability of sales and marketing efforts will be what determines where marketing investment is directed. It is no longer good enough to guess - executives what to see a return for investment. My own background is in the area of Information Technology and I have worked on some large transformational projects in the areas of Customer Relationship Management (or CRM), sales force effectiveness in direct distribution models and call centres. I have also played a large part in developing data warehousing and analytics strategies to exploit the rich information that effective CRM and sales force automation tools generate.

So I was not surprised to hear that response to my question. What is surprising is how slowly corporate are to adopting the science. One of the biggest challenges as a technology strategist is to ensure that technology is not the focus of most projects (there are some projects where it is appropriate, eg technology infrastructure projects). Information technology is a capability that exists to manage the real corporate asset - information. Don't forget the 'I' in 'IT'! It is how the organisation uses the information assets that has the potential to drastically improve sales and marketing efforts. But there is a real challenge.

The word 'change'. In many organisations twenty percent of the sales people generate eighty percent of sales. Furthermore, these people often believe that selling is an art, not a science, and are unwilling to change. Their experience in sales typically spans decades and they argue that their methods are proven. So achieving a positive return on investment in sales and marketing projects that have a significant technology investment is challenging.

In fact Gartner Group have stated that 70% of customer relationship management projects fail. It is not all doom and gloom though! Companies that achieve success in strengthening their sales and marketing capabilities and importantly, integrate the two functions, will enjoy a competitive advantage because the unwillingness to change is a barrier to entry of this elite group of companies. Let me explain. There are only so many places of value to market on the internet. In Australia Google has about eighty percent of the search engine market. Any company that wants to be a leader online in Australia must achieve prominence in this search engine.

As we all know though, this prominence comes at a price and the price is increasing. So converting this investment and the traffic that results to profitable business is the primary objective. How do we so that? This is where the science offers promise.

I believe that companies that dominate the major search engine positions, particularly for paid advertising, will build positions of unassailable competitive advantage. Why? Because they will know exactly what the return on investment for each and every keyword is and will use this knowledge to prevent new entrants from entering. In future articles I am going to talk about how these companies will achieve this position of dominance. Interestingly, I don't believe that it will necessarily be big businesses either. They certainly have the buying power but they suffer from the change resistance more than smaller and more nimble businesses.

So the battles will be very interesting going forward.

Billy is an Internet Strategist with a focus on internet marketing and internet strategy. He advises clients on how to maximise their return on investment on online marketing.


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