Journal of E-Business, Vol.

5, Issue 1, June 2005

AN ASSESSMENT OF THE PRACTICES OF ONLINE MARKETING TACTICS TO ACHIEVE MARKETING OBJECTIVES

William F. Lewis Associate Professor of Marketing University of Dayton Irene J. Dicke Instructor of Marketing University of Dayton Jodesiah Sumpter NCR Corporation

ABSTRACT This paper examines the perceived importance of specific online marketing tactics as reported by marketing professionals as well as their use of online marketing tactics, the anticipated future use of these tactics, and their ability to accomplish marketing objectives. Results show that there is a growing use of specific online marketing tactics and greater anticipated use of such tactics in the future. Specific tactics are identified and rated according to their ability to achieve broad marketing objectives (i.e. generate leads, provide information, sell, service customers, etc.). The findings will be useful for both researchers and practitioners who seek to understand issues relevant to online marketing tactics and their ability to accomp lish marketing objectives.

INTRODUCTION Recently, considerable research attention has been devoted to investigating the effects of online marketing tactics on organizations marketing objectives. Despite being a relatively young medium, a fairly broad range of research studies have addressed how online marketing strategies can influence customers responses. Early on, research related to online marketing was examined as a broad comprehensive strategy without consideration to individual tactics (Hiltz and Johnson 1990; Hoffman, Novak and Chatterjee, 1995). Other research has focused on a single online marketing tactic and its effects on marketing objectives (Briggs and Hollis, 1997; and Hagan, 1996) rather than providing an explicit comparison of perceived performance among a broad range of tactics. Whether studied as a comprehensive strategy or as individual tactics, our literature review revealed that, in fact, online tactics may be effective in influencing customers in positive ways. Sterne reported on the transformation in the ways that companies can communicate and establish rapport with existing and prospective customers (Sterne, 1996). Dreightons research suggested that the Internet allows for individualized and customized marketing strategies as well as the ability to target
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Journal of E-Business, Vol. 5, Issue 1, June 2005

diffused and scattered customer groups (Dreighton, 1996). Furthermore, m uch of the existing literature suggests the need for further exploration of the Internet as a medium for implementing effective marketing tactics. For example, Hofacker (2001) suggests that the effectiveness of various online marketing tactics have been found to vary depending upon the types of goods or services being marketed. The effectiveness of various marketing tactics has also been found to vary in their ability to achieve various marketing objectives. Further, there are some online tactics that are not tied to any physical good or service but instead offer a purely digital information product (Hofacker, 2001). Portal sites or shareware sites are specific examples of this type of digital information. These areas will not be considered for the purposes of this research. The purpose of this paper is to investigate and report on the current use of; predicted future use of; and relative perceived importance of various and specific online marketing tactics to achieve marketing objectives as reported by marketing professionals or practitioners. Development of this paper is a result of a literature review and a survey of the practices and attitudes of marketing professionals. Results can be utilized by practitioners and academics to better construct marketing strategies which include appropriate online marketing tactics.
OVERVIEW

For the purpose of this research, online marketing tactics are defined as any marketing activity that utilizes the Internet for communicating, selling, providing content, and providing a network function (Hofacker, 2001). These four categories constitute the scope of marketing activities which are the most common in terms of online marketing. Most organizations engaging in online marketing will most likely perform one or several marketing tactics. Given that this study centers on an assessment of online marketing tactics, their practice, and their relative perceived importance in meeting marketing objectives, our initial focus was on investigating a research domain to identify the scope and nature of online marketing tactics. We began with a broad-based literature search through which a broad range of outlets for online marketing research were identified. We also sought the input of marketing and business colleagues. Academicians identified publications that were the most highly regarded because of their more rigorous review process and their tendency to more carefully screen manuscripts from a methodological perspective. The initial search was supplemented with a plethora of articles from business and technological journals and textbooks. Inasmuch as the highly regarded publications provided valid and reliable empirical data the supplemental sources were found to be suitable for providing reasonable information reflective of the vigorous and dynamic nature of the Internet. Consequently, it appeared beneficial to examine a broad scope of publications to identify the various online marketing tactics and a reasonable understanding of each. It was then necessary to assess terms (words and phrases) used to describe various marketing tactics and to determine if there was a reasonable, common understanding of the nature and meaning of each term. Specifically, we wanted to determine what terms or phrases should be used in our online survey to describe each online marketing tactic that would be recognizable to online marketers. Three
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Journal of E-Business, Vol. 5, Issue 1, June 2005

assessment criteria were used. The first criterion was the tactic term or name (i.e., search engine strategy, online advertising, and chat capability). Some manipulation of terms (with common meanings) yielded an acceptable list of tactical terms. The second criterion required that persons in the pretest provide an adequate explanation and understanding of each tactic. The third criterion was a request of those in the pretest for a specific example of each tactic to further demonstrate understanding. The tactical terms and phrases in used on our online survey were the result of this procedure.
LITERATURE REVIEW

The World Wide Web is important to managers in three different aspects. First, managers use it to engage in electronic commercial transactions as sellers or as buyers (Bradlow and Schmittlein, 2000). Managers also use the www to disseminate information to customers or gather information as (business) customers, including both Web advertising (acquiring new customers) and after sales support to retain customers (Bakos 1997, Hoffman and Novak, 1996). Third, the Web is emerging as a rich source of managerial information that assists in decision making in such as areas as marketing research, as well as managerial and consumer decision making (Vikas, Manz and Glick 1998, Haubl and Trifts, 2000). Increasing attention has been focused on the value of an online presence that goes beyond some of these obvious benefits. The opportunity to collect visitor and customer information via market research capabilities such as search log analysis and click stream analysis has emerged as a strong capability. Both provide records of an individuals movement on the Internet and can provide insight as to behavior, demand, customer perceptions, language, and so on (Burton and Walther 2001; Maxwell, 2001). Some Internet marketing tactics have emerged as common and standard marketing practice. For example, search engine optimization appears to be growing in acceptance and usage for many organizations. Web search engines are commonly used to help locate information of all kinds and navigate the millions of pages on the World Wide Web (Krishnamurthey, 2003). Recognizing the way consumers use keywords on search engines to find suitable brands is important to online marketing and brand managers. To capitalize on the opportunity presented by search engines managers strive to get their brands listed at the top of the Web page (Owen, 2000). Owen finds that insufficient thought had been given to search engines while in their infancy even though they were regarded as helpful mechanisms to resolve information search problems. With greater experience, however, the concept of search engines is becoming more accepted and users now want more consumer-centric engines (Owen, 2000). Advertising on the Internet has evoked much research, from who is doing it, to the amount being spent, to its influence on viewers. It is well known that the Internets technology makes it possible to target specific customers with relevant messages. Banner ads, button ads, sponsorships, or co-branded and co-marketed ads are all attempting to integrate companies brands and products with the editorial content on targeted Web sites. The future of online advertising is going to be more intrusive and louder in order to capture the desired attention of consumers. Krishnamurthy (2003) estimates that as the level of clutter on the Internet rises, creative approaches to grab consumer attention will
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Journal of E-Business, Vol. 5, Issue 1, June 2005

be the norm. Luk, Chan, and Li (2002) investigated the characteristics of manufacturers' online advertising. They performed a content analysis of 472 product advertisements found on the Web sites of automobile manufacturers. In addition, they examined the possible impact of the content and enhancement device of Internet advertising upon the attractiveness and effectiveness of online advertisements. Their findings show that Internet advertising can facilitate selling activities, though the impact is not as strong as expected. They also report that various technologies are also making rele vance in advertising messages possible and less graphically intensive messages may be possible that may still lead to greater engagement of the customer with the message. Internet advertising strategies appear to continue to evolve. This study centers on an assessment of online marketing tactics such as search engine optimization and online advertising, their practice, and their relative perceived importance in meeting marketing objectives.
THE SAMPLE

Practices and attitudes toward online marketing tactics were assessed through a nationwide Internet survey of marketing professionals. An electronic mailing list of 830 persons working in a diverse set of industries and positions was developed from the American Marketing Association Directory and business and academic colleagues of the authors. Response rates for online surveys have been declining significantly since 1986 (Sheehan, 2001). Sheehan examined five factors that might affect online response rates. Those five factors included the year the survey was conducted, the number of questions, whether the respondents were pre-notified, whether there were follow-up notifications, and the salience of the questions to the respondents. Following Sheehans advice all potential respondents were pre-notified and were also contacted with a follow-up notification. Since everyone on the contact list was involved in online marketing the salience of the questions was assumed. Although inducements were not provided, a relatively high response rate was hoped for as a result of obtaining their names through sponsoring organizations (AMA mailing list and personal contacts) (Gatignon and Robertson, 1989) and the use of the Internet for administering the survey (Mehta and Sivadas, 1995). In all, 52 usable responses were obtained for a return rate of 6.3 percent. Consistent with Sheehans findings our response rate was not as high as desired. However, this response rate was judged acceptable for this type of exploratory research. The Internet was considered to be appropriate for two reasons. First, given the nature of the survey, the very technology being researched appeared to provide a consistent delivery method for this survey and for follow- up surveys. In addition, the Internet delivery of the questionnaire was considered to be efficient and effective for assessing the use of online marketing tactics. Nearly two-thirds (67%) of the marketing practitioners in the sample worked in firms with 1 to 499 employees. The rest worked in larger organizations including 8% in firms with 500 to 999 employees, 14% in firms with 1,000 to 4,999 employees, and 11% in firms with 5,000 to 9,999 employees. There were 16 (31%) organizations they did not indicate their size. Respondents included 14 (27%) who were owners or principals, 6 (16%) who were senior managers, 11 (21%) who were other managers, 2 (4%) who were supervisors, and 17 (33%) who did not indicate their position. Eight (15%) of the practitioners worked in organizations with revenues ranging from $1.00 to $$999,999, 12
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Journal of E-Business, Vol. 5, Issue 1, June 2005

(23%) with revenues of $1,000,000 to $9,999,999, 6 (12%) with revenues from $10,000,000 to $49,999,999, 2 (4%) with revenues from $50,000,000 to $99,999,999, 4 (8%) with revenues from $100,000,000 to $499,999,999, 3 (6%) with revenues from $500,000,000 to $1 billion or more, and 16 (31%) did not report their organizations revenues. The sample included 2 (4%) who did not have marketing authority, 15 (29%) who make some recommendations about online marketing, 7 (14%) who make most of the recommendations about online marketing, 12 (23%) who have final approval and 16 (31%) who did not indicate the extent of their marketing authority. The sample included 18 (35%) males, 18 (35%) females and 16 (30%) who did not report their gender. The sample included 8 (15%) who were 18 to 34 years of age, 20 (39%) who were between the age of 35 and 49, 9 (17%) who were between the ages of 50 to 64, and 15 (29%) who did not report their age.
CHANNEL IMPORTANCE

Table 1 displays the 15 online Internet channel marketing tactics examined in this study. The table shows the relative importance of 15 marketing channel tactics as well as those currently used and those that marketing professionals plan to use in the next 12 months. The most important Internet marketing practices used by marketing professionals include e- mail using their own customer databases (86%), links from other Web sites (84%), search engine placement (82%), using a customer database (82%), participation in online directories (80%), and e- mail newsletters of their own (78%). The least important Internet marketing practices include e- mail using spam (10%), online sweepstakes and contests (28%), search engine advertising such as banners and text ads on search engines sites not already covered in pay for placements (36%), e- mail using third party opt-in databases (40%), and advertising in third party newsletters (47%).

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Journal of E-Business, Vol. 5, Issue 1, June 2005

TABLE 1 IMPORTANCE, USE, AND PLANNED USE OF SELECTED ONLINE CHANNELS

Currently Use the Online Channel Dont Yes No Know % % % 87 88 88 55 86 86 59 11 12 10 45 10 12 41 2 0 2 0 4 2 0 Plan to Use the Channel in the Next 12 Months Dont Yes No Know % % % 88 88 88 85 86 85 59 10 12 10 15 10 13 41 2 0 2 0 4 2 0

Importance of Channel Not Important At All % 8 10 12 14 14 16 31 Somewhat Important % 21 10 14 42 56 19 35 Very Important % 61 76 68 38 28 59 27 Dont Know % 10 4 6 6 2 6 7

Online Channel Search engine natural placement. E-mail using your own customer database. Using a customer database. Participation in online directories such as business directories. Links from other Web sites. E-mail newsletter of your own. Search engine pay for placements such as pay per click, Overture, Google, Adwords, etc. Offline promotions. Viral marketing (assuming your product has this capability) Advertising on Web sites other than search engines via banner and text ads. Advertising in third-party newsletters. E-mail using third party opt-in database. Search engine advertising such as banners and text ads on search engines sites not already covered in pay for placements. Online sweepstakes and contests. E-mail using spam.

32 34 40

28 18 42

38 20 18

2 28 0

65 38 57

33 29 43

2 33 0

65 38 57

33 29 43

2 33 0

41 52 56

35 21 25

12 19 11

12 8 8

54 49 39

40 49 61

6 2 35

54 49 39

40 49 61

6 2 0

68 88

20 6

8 4

4 2

40 6

60 92

0 2

40 6

60 92

0 2

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Journal of E-Business, Vol. 5, Issue 1, June 2005

CHANNEL USAGE

The most currently used Internet marketing channels by marketing professionals include e- mail using your own customer database (88%), using a customer database (88%), search engine natural placement (87%), links from other Web sites (86%), and email newsletter of their own making (86%). The Internet marketing channels currently used the least by marketing professionals include e- mail using spam (6%), search engine advertising such as banners and text ads on search engines sites not already covered in pay for placements (39%), and online sweepstakes and contests (40%). Interestingly, marketing professionals are going to increase the use of only one marketing channel in the next 12 months. That channel is participation in online directories such as business directories. The planned use in the next 12 months will increase from 55 percent to 85 percent. There are no significant changes in usage patterns for the other 14 online marketing channel tactics. In terms of future usage on online channels was found that 41 percent do not intend to use search engine pay for placements, 62 percent do not intend to use search engine advertising, 92 percent do not intend to use spam, 49 percent do not intend to use e- mail using a third party opt- in database, 40 percent do not intend to advertise in third-party newsletters, 43 percent to not intend to advertise on the Web, and 60 percent do not intend to advertise online sweepstakes and contests.
WEB SITE ITEMS

Table 2 shows the Web site items that that practitioners currently have on their Web sites. The most used Web site items include an e-mail link (87%), a toll- free telephone number (77%), online forms (70%), product catalogues (60%), search features to search within their Web site (60%), and industry-related information (51%). The top three items that practitioners plan to add to their Web sites in the next 12 months include live help via instant chat (26%), Web callback features (21%), and industry-related information (19%).

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Journal of E-Business, Vol. 5, Issue 1, June 2005

TABLE 2 ITEMS USED ON WEBSITE AND ITEMS PLANNING TO ADD TO WEBSITE Plan to Add in 12 Months % 9 2 9 13 10 19 13 11 21 26 Do Not Plan to Add in 12 Months % 4 21 21 27 30 30 40 55 62 66

Web Site Item E-mail link. Toll-free phone number listed for calling you. Online forms. Product catalog. Search feature to search within your Web site. Industry-related information. Online ordering system. Online order status system. Web callback feature. Live help via instant chat.

Have Now % 87 77 70 60 60 51 47 34 17 8

WEB SITE OBJECTIVES

The marketing professionals in the survey were asked about four possible Web site objectives. Table 3 shows that 83 percent of the marketing professionals said that they used the Internet to achieve the objective of generating leads for offline sales via the telephone, salesperson visits, various forms, e- mail, etc., while 60 percent indicated that selling goods or services online was an objective. It was found that 64 percent of the practitioners have an objective to provide information to current or potential customers but they do not make sales or obtain leads via the Web. Selling goods or services online was an objective of 60 percent of the practitioners. Servicing customers by tracking orders, handling problems, etc. was an objective for 52 percent. The majority of marketing professionals were able to accomplish their online objectives. However, between 20 percent and 41 percent indicated that these four online objectives were not accomplished for them. While the majority of Web site objectives are accomplished a significant percentage of the objectives are not accomplished.

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Journal of E-Business, Vol. 5, Issue 1, June 2005

TABLE 3 ONLINE OBJECTIVES AND ACCOMPLISHMENT OF OBJECTIVES Is an Objective Web Site Objective To generate leads for offline sales via phone, salesperson visits, forms, e-mail, etc. To provide information, but not to make sales or obtain leads. To sell goods or services online. To service customers, such as order tracking, handle problems, etc. Yes % No % Dont Know % Accomplished the Objective AccompDoes not Accomplishes Dont lishes Accomplish Somewhat Know Completely % % % % 20 59 21 0

83

17

64

36

20

51

29

60

40

42

36

22

52

48

41

36

23

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Journal of E-Business, Vol. 5, Issue 1, June 2005

CONCLUSIONS
The range of the value of Internet-related marketing tactics to accomplish objectives is becoming well-documented and validated through on- going research. There appears, however, to be a lack of the use of this research by practitioners. A substantial opportunity appears to exist to utilize prior research findings that provide explication for the capacity of the Internet in accomplishing desired marketing objectives. Prior research can be linked to the development of a compilation of Internet-related tactical options and their perceived effectiveness in attaining specific marketing objectives. Practitioners and researchers must also consider the rapid changes in marketing processes, new technological opportunities, and new research findings. The paradigm for these changes is implanted in conve ntional marketing strategy objectives and goals. The power of the Internet and Internet-related tactics in the marketing function from search engine optimization to the use of chat rooms will be most effective when these tactics are considered systematically and strategically and then incorporated into current marketing processes. The objective of this paper was to present an the results of an exploratory study that provided an overview of practitioners perceived importance of 15 Internet marketing tactics, their current use, and predicted future use, as well as their ability to accomplish specific online marketing objectives. The results of this study provide a benchmark and guide for practitioners and researchers to consider in marketing strategy efforts. The results of this research can be useful to practitioners and researcher alike in their efforts to identify which tactic(s) are most effective in accomplishing desired marketing objectives. The results are also useful in guiding marketing managers in their decision- making as to which online marketing tactics best support the overall marketing strategy plan.

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Hoffman, Donna L. Thomas P. Novak. 1996. Marketing in Hypermedia Computermediated Environments: Conceptual Foundations. Journal of Marketing. 60 (July), 50-68. Hoffman, Donna L and Patrali Chatterjee. 1995. Commercial Scenarios for the Web: Opportunities and Challenges. Journal of Computer-Mediated Communication. 1, (3). Krishnamurthy, Sandeep. 2003. E-Commerce Management. South-Western Publishing, Inc., Mason, OH. Luk, Sheriff T.K., Wesley P.S. Chan and Esther L.Y. Li. 2002. The Content of Internet Advertisements and its Impact on Awareness and Selling Performance. Journal of Marketing Management. (September), Vol. 18 Issue 7/8, 693-720. Maxwell, Nick. 2001. Search Log analysis: A Great Tool for Frank Customer Research. Marketing News. 35(24), 15-16. Mehta, R. and E. Sivadas. 1995. Comparing Response Rates and Response Content in Mail Versus Electronic Mail Sur veys. Journal of the Market Research Society. 37 (4), 429-446. Kim Sheehan. 2001. E-Mail Response Rates: A Review, Journal of ComputerMediated Communication, [On-line], 6 (2), Available: http://www.ascusc.org/jcmc/vol2/issue6/sheehan.html Sterne, J. 1996. Customer Service on the Internet. New York: J. Wiley & Sons, Inc. Vikas, Anand, Charles C. Manz, and William H. Glick. 1998. An Organizational Memory Approach to Information Management. The Academy of Management Review. Vol. 23, No. 4, Oct., 796-809.

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About the Authors: William F. Lewis Associate Professor of Marketing University of Dayton lewis@udayton.edu Irene J. Dickey Instructor of Marketing University of Dayton dickey@udayton.edu Jodesiah Sumpter NCR Corporation Dayton, OH js150005@ncr.com

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