What Is Bubblegum Marketing?

25 november 2002, 07:23

Sticky Web sites that attract lots of eyeballs just aren’t enough anymore.

Several years ago, a Fortune 100 financial firm launched a technology-savvy division of its company, intending this division to host its online business units and create a Web presence for the company’s brick-and-mortar locations—which carried a very well-known brand name. Company execs conducted extensive traditional marketing research and determined that by spending millions on marketing to drive visitors to their sites, they would have a huge audience willing to buy their offerings.

Based on the huge expectations built up by the research findings, they spent many more millions to build up two massive data centers with the most reliable, secure, fault-tolerant systems possible with known technology. Additionally, staffers engaged boutique Web designers to develop sites that were attractive and met the corporate graphics standards for this financial powerhouse.

What everyone failed to realize in those heady days of the dot-com era was they didn’t have any idea how their projected audience would take to their Web sites, and, even if the sites did become popular, the company wouldn’t know how to measure the response until after all of the initial millions had been spent. To make matters worse, Web analytic reporting software was purchased, effectively giving the IT department control of report access and leaving the business people without a voice in determining what information they needed to see to realize their projections. Too little, too late, and the high-tech hosting division was scrapped instead of spun off in an initial public offering (IPO). Millions were lost, and the failure diminished corporate leadership’s desire to leverage the power of the Internet, leaving it at the modest levels more representative of much smaller companies.

These types of stories used to be a dime a dozen during the dot-bomb era, a time all of us are trying to forget. It was Winston Churchill who advised us that “a nation that forgets its past is doomed to repeat it.” Are we forgetting what we learned just a couple of short years ago? Could it be we’re still just practicing bubblegum marketing?

You know bubblegum; it is sweet and juicy until the taste runs out and you can fill it with hot air to impress others. It has little if any nutritional value, but you go for the next piece anyway to continue the habitual process of chewing. Marketers often do a similar thing when they focus on the immediately implementable tactic and ignore or forget about the long-term goal. When this practice begins, it’s as harmless as bubble gum, but those short-term boosts in sales eventually become as addictive as heroin.

We recently met with a company, which had several divisions and $1 billion in sales, to discuss measuring return on investment (ROI). We pointed out that a conversation about its Web site ROI was impossible because clear business objectives had never been defined. The company execs were surprised (and maybe a bit insulted—the price of clarity), but eventually they agreed. It’s often easy to identify the “I” in “ROI”; the challenge is in defining the “R.”

We’re acquainted with folks at one of the world’s largest office supply companies, which launched its e-commerce site with the clear intention to “make money”—and that they did. The senior vice president in charge of the effort boasted of making $100 million last year on the Web. He didn’t know industry statistics show only 2 percent of Web visitors ever complete the transaction, meaning the company was leaving a potential $300 million of revenue on the table.

During this time, the company had not used any web analytics tools to measure the effectiveness of its business objective—to make money on the Web. Within six months of that comment by the senior vice president, the company declared bankruptcy and he was fired. There was no clear, measurable business objective and no measurement tool to provide valid feedback.

According to a June 2002 report:

Most companies tie Web site success to outdated metrics…. Boston-based Yankee Group says 66 percent of companies still determine Web site success by measuring traffic. New customer acquisition ranked second on the list at 34 percent, and revenue generation ranked third at 23 percent…. That’s a mistake, says Lisa Meslted, Yankee Group analyst…. It’s way past the time to just look at ‘eyeballs’ or ‘stickiness.’ She says companies should look deeper—find out how the website helps the sales department or marketing department cut costs, learn more about customers to provide better customer service and so on.

There are plenty more instances of bubblegum marketing going on right now. A recent eMarketer report stated the following:

Twenty-three percent of marketers… didn’t know what their company’s primary interactive marketing business objective was. And 56 percent of marketers had no tools in place to measure their marketing performance.

As Jeff Lash says, “Maybe because it is really easy to meet your objectives, if you don’t really have any!”

When we define and meet objectives, measuring, testing, and improving them is much easier. Objectives are what you want to do and how you will measure success. A proper objective must be quantifiable, such as an additional 20 qualified leads in the next 30 days or additional gross product sales of $1.5 million in the next quarter. Once defined, objectives must be broken down into their component parts and prioritized. Someone must be held accountable for that objective.

Once you can define your Web site’s objectives, you can measure them effectively. Did you invest a lot in your Web initiative without knowing what you could expect in return? Activity will never be a reasonable substitute for productivity. Are you too busy focusing on today to get your Web site marketing right for tomorrow?



Marco Derksen
Partner bij Upstream

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