Online Marketing

A McKinsey survey of marketing executives from around the world shows that in marketing, things are starting to change: companies are moving online across the spectrum of marketing activities, from building awareness to after-sales service, and they see online tools as an important and effective component of their marketing strategies. In 2010 respondents expect a majority of their customers to discover new products or services online and a third to purchase goods there. A majority of the respondents also expect their companies to be getting 10 percent or more of their sales from online channels in 2010—twice as many companies as have hit that mark today.

In addition to established online tools such as e-mail, information-rich Web sites, and display advertising, survey respondents show a lot of interest in the interactive and collaborative technologies collectively known as Web 2.0for advertising, product development, and customer service.

What are emerging vehicles?

Blogs (short for Web logs) are online journals or diaries hosted on a Web site.

Online games include both games played on dedicated game consoles that can be networked and “massively multiplayer” games, which involve thousands of people who interact simultaneously through personal avatars in online worlds that exist independently of any single player’s activity.

Podcasts are audio or video recordings—a multimedia form of a blog or other content. They are often distributed tharough aggregators, such as iTunes.

Social networks allow members of specific sites to learn about other members’ skills, talents, knowledge, or preferences. Commercial examples include Facebook and MySpace. Some companies use such systems internally to help identify experts.

Virtual worlds, such as Second Life, are highly social, three-dimensional online environments shaped by users who interact with and receive instant feedback from other users through the use of avatars.

Web services are software systems that make it easier for different systems to communicate with each other automatically to pass information or conduct transactions. A retailer and supplier, for example, might use Web services to communicate over the public Internet and automatically update each other’s inventory systems.

Widgets are programs that allow access from users’ desktops to Web-based content.

Wikis, such as Wikipedia, are systems for collaborative publishing. They allow many authors to contribute to an online document or discussion.

In four of the five major areas of marketing, a majority of executives—83 percent for service management and, even at the low end, 44 percent for pricing—say that online tools are at least somewhat important for companies in their industries. At least two-thirds of companies are using these tools in all the areas they deem most important.

The importance of these tools naturally varies among industries—for instance, 65 percent of the respondents in high tech say that advertising online is very or extremely important for them, compared with just 39 percent in manufacturing. There are also two other likely reasons for the relatively low use of online tools: a lack of capabilities to manage them³ and the fact that access to high-speed Internet connections (required for many of these tools) is uneven (just under half of Europeans have it, for example, compared with 59 percent of the US population).

Although marketers expect to rely increasingly on digital-advertising vehicles, they recognize barriers that could slow the adoption of these tools. The lack of sufficient capabilities at companies or their agencies is the most significant concern, for both those that are advertising and those that aren’t (Exhibit 6); among online advertisers, for example, about 60 percent of responses indicate that insufficient capabilities are a barrier. Even among respondents at companies that frequently use online tools for all marketing purposes, a full 50 percent of responses highlight capability barriers to advertising. Other McKinsey research shows that a lack of online capabilities extends far beyond the marketing department: 42 percent of the respondents to another global survey said that investing more in the capabilities of their companies would have made initial investments in Internet technologies more effective.