The “Leveraging Online Media and Online Marketing” conference sponsored by the Marketing Science Institute just ended. The two-day conference brought together researchers from major universities and practitioners from MSI membership companies to discuss the emerging issues of online marketing. I summarize below three overarching sentiments that I observed from the conference:
(1) Facing lower switching barriers and declining consumer loyalty, companies are investing heavily into engaging their customers in the online channel. Different techniques were discussed, such as creating an environment for consumer-to-consumer interaction, incorporating consumer-generated content, and using multimedia contents such as video. Many of the ideas build on the increasing importance of social networking on the Internet, including some early exploration into the newest form of social networking in virtual worlds. No matter what form is used, however, the key is still to provide real value to consumers, whether that value comes from the firm or from other consumers.
(2) With the vast amount of brand-related commentaries and reviews online, companies are also watching closely what consumers are saying about their products and services. Specialized internal teams have been formed to plow through this valuable market information. For some companies, this information has powerful influences on their product mix and customer service decisions. With regard to negative comments and publicity, participants disagreed on how they should be handled. While some dismissed them as a natural part of life/business, others think they should be addressed more formally. Company blog seems to be the common approach, although other traditional PR channels are also mentioned.
(3) A major concern with many marketers is a lack of clear metrics for measuring online marketing, especially as it relates to social networking. This difficulty can be attributed to two sources: not understanding the true effect of some techniques (e.g., what is the value of positive or negative word-of-mouth); and an inability to track sales and conversion to the appropriate source (e.g., did this consumer buy because of that banner ad or because of a consumer-posted recipe). It is clear from the conference discussion that simple traffic building measures such as hits and visitors are not enough, as they do not necessarily lead to the critical step of conversion. But it is less clear what the right metric system should be. Without proper measurement, it becomes difficult to determine the right allocation of budget into different channels and campaigns.