Since 1994 Internet usage in United States has increased 10,000 percent from 3 to 304 million people. Along with this amazing growth has come a period of previously unimaginable innovation. But marketing guru Al Ries, author of "Positioning: The Battle for Your Mind," and most recently of "The 11 Immutable Laws of Internet Branding," says few companies have an Internet strategy that makes any sense.
Companies don't understand difference between Internet and "the Outernet," Ries' name for everything outside Web. "Taking your real world name and putting it on Internet is line extension and that is wrong on a fundamental level," pundit insists.
While many Internet mavens may disagree strongly with some of Ries' views on new economy, there is one important thing to remember. This man has been right about branding issues many, many times in past 35 years. And often his was a lone voice in forest.
"Branding for Internet is more important than in Outernet," says Ries, who invented concept of positioning products to achieve a share of mind with consumers. "That's because Internet has no visual clues to get you into a site."
BRAND INVISIBILITY Internet brands are invisible until you input brand name into keyboard. If you don't know brand name and how to spell it, no sale can happen. Therefore, online, name recognition is paramount.
In Outernet, you can walk past a shoe store and have something in window catch your eye. You can go inside, try on and buy a pair of shoes and walk away without really remembering name of shoe store. A similar experience can't happen on Internet because it lacks visual clues that can attract casual shoppers.
Ries disagrees with new economy observers who believe bricks and mortar companies can also sell online, and with those who say luxury items can be sold on Internet. Ries says Internet will turn out to be a place to find low prices, not high service.
Despite Web business' ability to automate many customer service functions and provide a convenient shopping experience, Ries says people will always want to touch, feel and try products before they buy.
Internet brands have an advantage where communication with customers is involved, Ries says. The Internet can provide better two-way communication with customers than real world stores. But it can't provide a smile and a cup of coffee while you shop.
ADVERTISING IS USELESS: PR IS KEY The most widespread misunderstanding of Internet, according to Ries is idea that advertising can be used to establish online brands. "Unless your site has some angle for creating news it isn't going to be successful. When you try to save situation by advertising, people ignore you. Yet most dot.coms are advertising because their names are unknown and they think advertising can solve problem. It can't."
Another widespread misconception is that search engines can direct a great amount of traffic to sites. Early on very few brands are strongly registered in mind so people have to use search engines, Ries says. People go to search engines now because we are still learning how to use Internet, Ries says, but he suggests that long-term they will become less important. As people continue to use Internet they will go directly to various sites.
What Internet businesses need to do before advertising is PR. "Unless you are relatively known - maybe not well-known -- but have some degree of presence in mind, advertising is almost sure to be a total waste."
While there's much talk about integrated marketing today, Ries says, "It usually has to do with launching a program with a big bang: using advertising, direct mail and publicity all at once. I am talking about sequential launches - launch with a massive publicity campaign. After gaining some name recognition and acceptance, shift to advertising for name reminders."
HIRE PR FIRMS FOR STRATEGY, NOT INK Dot.coms must have publicity, Ries maintains. "It's not easy to do, but if you tell me your site can't get any publicity I will tell you there is something wrong with site. Generally only first mover can get publicity - but there always is an opportunity to create news by narrowing focus."
For example, Ries says, let's say a company sells a huge selection of golf clubs on Internet. Along comes a second site that wants to sell golf clubs. It carves out its niche by selling only left-handed clubs. That would be newsworthy even though site isn't a first mover. Only after site created name recognition through publicity would it make any sense to advertise. Advertising needs credibility publicity can create.