Direct E-Mail Promotions And Discounts Beat Out Advertising

ONLINE ADVERTISING:
THE JURY IS IN

In addition to Christmas, we are all witnesses and survivors of the "great dot-coming" of America. We’ve been deluged with ads for dot-com companies wooing us to their web sites.

How effective was this blitzkreig to promote mouse-clicking madness? MWT has found two studies with data that show it’s direct marketing and product sales that generate real cash online, not advertising.

Despite the huge budgets spent on print, radio and billboard advertising, e-mail promotions were by far the most successful marketing tools used by e-retailers in the final days of the 1999 online holiday shopping season, according to survey data released today by e-BuyersGuide.com, a leading multi-channel market research service.

In the "Last Days of Shopping" survey of 657 online consumers conducted by e-BuyersGuide.com between December 10 and December 22, 1999, 63% said they found their e-retailers by replying to e-mail promotions. Coupons (43%) and click-through banner advertising (38%) also helped draw consumers to e-retailer Web sites, but only 29% said that traditional advertising had been a factor.

When shopping at e-retailer Web sites, consumers polled by e-BuyersGuide.com revealed that special discount promotions (72%), free shipping (63%), coupons (58%) and reward or points programs (49%) were the most frequently used incentives. The study also found that up to 29% of shoppers experienced problems logging on to e-retailer sites, illuminating the long way e-retailing has to go to meet all customers’ needs.

The survey also highlighted the emergence of bots as Web-traffic drivers: 21% of those surveyed said they had found e-retailers through product bots (sites that search for specific products) and 15% said they had reached e-retailer Web sites through price bots (sites that search for the best prices).

"This survey legitimizes the value of opt-in e-mail promotions - they are not viewed by everyone as spam," said Irwin Barkan, chairman of e-BuyersGuide.com. "In fact, e-retailers who relied too heavily on expensive traditional advertising may have a lot of explaining to do in January when investors want to know where their money went."

As a multi-channel market research company, e-BuyersGuide.com is pioneering cross channel data gathering and analysis for the retail industry. E-BuyersGuide.com provides incentives for shoppers to give their feedback but derives no income whatsoever from click-through commissions or advertising from retailers. E-BuyersGuide.com is privately held and based in Burlington, Massachusetts. For more information on the survey, visit http://www.e-buyersguide.com.

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Data collected in ActivMedia’s annual e-commerce study continues to show that among sites that intend to generate revenues, sales of products and services continues to be where the real money is made. Advertising as a means of revenue generation seems to be key only among over half of Media/Portals and a third of Internet Service (ISP/ISS) companies.

"Real Numbers Behind ‘Net Profits 1999"

VP of Research Harry Wolhandler, "As might be expected, only 9% of consumer and b-to-b websites offer paid ad space or links, preferring to keep their customers focused on their products. Overall, B-to-B websites focus mainly on customer service issues where building and maintaining relationships equate to future business."

Over half of the Media/Portal websites are ad-supported, and an abundance of links and paid advertising space sets media sites apart from other sectors on the Web. Media sites are five times more likely than retail sites and 10 times more likely than business-to-business sites to showcase other people’s wares for a fee and to offer links to other sites.