Reseller issues in open systems
VARs and marketers should work together to develop effective Internet
Internet Promotion: Not Just Advertising
The Internet is changing from a sophisticated computer network to a public
medium. Following their use of other public media-television, radio, and
print-businesses are increasingly using the Internet to communicate with
customers and reach out to prospects.
This activity-known to marketers as promotion-is relatively new to the Internet.
But like many other things associated with the Internet, promotional activities
appear to be growing rapidly. The Internet's advertising revenues, pegged
at almost $40 million in 1995, are projected to exceed $2 billion annually
by the decade's end. Dollar estimates for other Internet-based promotional
activities are hard to come by, but my guess is that their implementation
costs equal or exceed those of Internet advertising. In a recent poll of
U.S. companies, 38 percent said that they had an Internet presence and an
equal number expected to have one within two years.
While $40 million pales in comparison to the $37 billion in advertising
revenues that drive today's television industry, advertising is just one
facet of current Internet promotion. It is likely that eventually the Internet
will develop new forms of promotion not obviously predicted by the traditional
media and their promotions.
Are there opportunities in Internet promotion for VARs? There most certainly
are, but they may not be lurking in the usual places. The IS department-the
traditional target for VARs in corporate America-may not be where the action
is when it comes to Internet promotions.
The interactive marketing columnist for a national consumer marketing magazine
recently cautioned readers about involving their IS group in Internet marketing.
His line of reasoning may be questionable, but it's important to know what
kinds of advice marketers are getting. The columnist concluded that, when
promoting business over the Internet, marketers should seek an "outside
I am not surprised that the columnist, coming from the marketing community,
sees Internet promotion as something that corporate marketing departments
can handle directly with outside vendors. Marketing departments do that
all the time with other media. Consumer-oriented television commercials,
print ads, direct mail, and other promotions are rarely executed in-house.
Corporations are spinning off their in-house teleproduction facilities and
art departments even as they spend more money on similar outside services.
Meanwhile, the Internet promotions business is emerging, and the market
is being educated. What actions can VARs take to ensure that they participate
as outside providers?
A Course of Action
First, VARs need to understand the marketing profession and the key players
in their community or industry. Who are the agencies that plan and oversee
advertising and other promotions for VARs' customers? Which agencies are
looking for an edge when pitching the next client? What are the current
marketing hot buttons for target industries and customers?
Calling on marketing managers requires a considerably different approach
than calling on IS managers. What kind of salesperson and sales presentation
will capture their interest? What new people should a VAR bring onto the
team-as employees, contractors, or venture partners-to exploit the opportunities?
In short, VARs need a good mechanism to sort through a host of new market
questions and to develop the required skills.
Second, VARs need to ally themselves with the key agencies serving the VARs'
customers and industries. For example, a professional colleague of mine
last fall joined a large promotions company whose clients possess strong
national brands. As vice president of new media, his charter is to develop
nontraditional promotional opportunities for company clients. When I met
with him shortly after his appointment, I asked if he was deluged with Internet-capable
resellers eager to educate him and his company. After all, his move and
new position had been featured in all the local business publications.
I was surprised when he said that he was not. Printers, teleproduction facilities,
photo processing labs, and other traditional media providers all establish
working relationships with the agencies that bundle their products and services
into promotional campaigns for the agencies' customers. VARs providing Internet
products and services can do the same and position themselves as professional
implementors in their chosen medium.
Third, VARs should carefully establish relationships within their corporate
customer base beyond the IS departments. The VAR salesperson who only calls
on the IS department of the corporate client may be missing outsourcing
opportunities in other departments. That salesperson should not stop with
the marketing department; every corporate department is a potential customer.
Investor relations and human resources departments are already using the
Internet in many companies. And rather than view the Internet as a computer
networking issue, these departments use it as a corporate communications
VARs should be careful not to get caught in a tug-of-war between MIS and
other departments as corporations resolve the network-versus-medium argument
about the Internet. Professional VAR salespeople should be able to cultivate
relationships with these departments while maintaining their traditional
ties to IS. In the best case, skillful VARs can become the focal point for
all sorts of innovative interdepartmental cooperation.
Internet promotion seems worlds apart from traditional MIS activities. Taking
such a step will appear at first to be a big leap for Unix VARs, but that's
to be expected. It is the nature of the Internet to force everyone involved
into new ways of doing business.
Matthew Peterson is president of Scenic Wonders in Madison, WI, which provides
visual products and services for information highways. He can be reached