Internet marketing is getting more and more popular, which leads one to think that a product can be marketed online without using any other channels. Flowtown’s illustration of the history of marketing claims we’ve come a full circle today from the primitive cave painting that now evolved into writing on people’s virtual walls on Facebook. Is this writing on the wall enough? Does is really work without using other channels to support it?
Google gave it a try with their first Android smart phone, Nexus One, that was launched earlier this year. Google make the decision to only use the Internet channel for this phone, but it seems like the message only got to some “phone-geeks” and not the masses:
“Google had sold only 135,000 Nexus Ones in the first 74 days after the phone's launch. By comparison, about a million Motorola Droids and Apple iPhones were sold in the same period following their respective rollouts.” (Bertolucci, PCWorld)
If we compare the sales to other smart phones released at the same time frame is looks like it was a flop, but on the other hand Nexus One helped Google get their foot in the door and established the Android operating system that is now growing rapidly. Google used its home page, AdWords, You Tube and other online ads to promote the phone while reports claim that Verizon for example spent $100 million to market the Droid just months before. Google likes to do things differently, they may be taking risks that the phone will not succeed, but there are also not investing much in the advertising dollars and looking at the results it brought them in the long run, it might not have been a bad decision. It may have been a slow burn but it does seem to spread far enough.
Other examples of good use of the Internet marketing channel comes from Dell Computers and General Electric, but those are supported by other channels. Both Dell and GE are cutting costs and passing savings on to customers by using the Internet to link directly to suppliers, factories, distributors, and customers. Because customers deal directly with sellers, e-marketing often results in lower costs and improved efficiencies for channel and logistics functions such as order processing, inventory handling, delivery, and trade promotion.
It is not only the business that are saving money by using the Internet Channel. Consumers also benefit a lot using the Internet as a buying channel as they don’t have to worry about traffic, find parking spaces, and trek through stores and aisles to find and examine products. They can do comparative shopping by browsing through mail catalogues or surfing web sites. Direct marketers never close their doors. Buying is easy and private. Customers encounter fewer buying hassles and don’t have to face salespeople or open themselves up to persuasion and emotional pitches. Business buyers can learn about and buy products and services without waiting for and typing up time with salespeople.
Internet marketing is a great tool and for companies like Google, Dell and GE who can experiment with some of their products marketing, using it solely can be an acceptable risk. For newer businesses that are still trying to establish their brands and consumer base, this may not be enough.
Just recently Bank of America and Visa started testing contact-less payments through mobile phones. Customers who install this on their phones can simply wave the phone above a sensor rather than swiping a credit card through the register. Similar services already exist in Japan, Turkey and the UK.
