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A practical new framework for web marketing

A practical new framework for web marketing Jim Leach

One of the most famous taxonomies in marketing is the marketing mix, also known as The Four Ps -- product, price, place and promotion. The framework was introduced in the early 1960s and now is dutifully taught in every Marketing 101 course.

Like a recipe, The Four Ps are the primary ingredients (though other Ps have been added over the years) that a marketing manager can mix in various proportions to create or expand a market.

The Four Ps were developed in a world of physical products. Yet, a major shift in the marketing landscape has occurred over the past 40 years with the introduction and pervasive adoption of the web. Recent studies estimate that there are over 162 million websites and 1.4 billion users of the internet, which is a market in itself. In addition, a whole new class of web-based, "virtual" products is changing the way consumers find, evaluate, select, purchase and use products. What are the marketing ingredients that can be mixed to build a market for these web-based services? I would like to propose a new taxonomy: The Five Cs.

It's not just about hits and page views anymore. A huge shift is occurring on the internet with the introduction of automated transaction engines. Think of the global financial markets. Over half the trades on the New York Stock Exchange are made by computers using robust online financial models, complex algorithms and low latency networks. For these applications, a couple of microseconds can mean the difference between a profit and a loss.

One of the killer applications on the web has been executing sales transactions. Amazon, eBay and PayPal are paragons of pure play web commerce businesses. But these are huge e-commerce ecosystems. Today, every business from small to large needs to consider what element(s) of their product mix can be purchased and consumed over the internet.

Think of communities in terms of members and value/member. A community can become a corporate asset by attaining critical mass with a hurdle rate of greater than 100 thousand registered members. Facebook and MySpace, with over 100 million registered members each, are prototypical examples. The web can also be used to nurture communities with fewer members but higher value/member. For example, investment portals for a small group of high net worth individuals could generate web-based services with a high return on investment (ROI).

This C is spawning a whole new generation of websites and internet applications using video on-demand, live web events, music downloads, and interactive media. This new content is often delivered in "streams" where you click once and then watch the video or download the song. An individual piece of content can become wildly popular almost overnight which can stress a website.

How much interaction is there between users of the web application? Do users come to the site purely to consume information or is there value in the engagement? LinkedIn, a social networking site for over 24 million business professionals, is a great example.

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Applying The Five Cs -- a business view
How can The Five Cs be used? For entrepreneurs planning to launch a new website or established businesses looking to bring part of its operation to the web, The Five Cs can provide structure and execution to the business strategy. For information technology providers targeting this web market with solutions, The Five Cs can assist with product ideation and development.

Let's look at an application of The Five Cs -- a new website called Beautiful Stranger.TV. I met with two of the founders of BeautifulStranger.tv a couple of weeks ago and was blown away. By now, most people have experienced social networking sites. When I saw a demo of an early version of BeautifulStranger.tv, the first thing that came to my mind was that it was a "fashion and lifestyle networking" site.

Editors from BeautifulStranger.tv travel around Manhattan with a video camera looking for real people who are fashion mavens. They tape these mavens answering questions about what they are wearing, where they get their hair cut, their favorite restaurants, hobbies, clubs, etc. As they answer the questions, links appear to sites where you can buy the products or services.

Beautiful Stranger.TV is a great example of The Five Cs at work. It is building a community that will scale rapidly and is made up of relatively big spenders. It is using high-quality video content to attract visitors to the site. It is promoting commerce using the product links which will soon drive advertising revenue. Future releases of Beautiful Stranger.TV will add user-generated content from around the world, which will drive collaboration and clicks. Imagine being able to see the latest styles in Tokyo or Paris on the street, as opposed to on the runway.

Applying The Five Cs -- a technology view
The Five C's also present a framework for information technology (IT) companies to develop products and services for the web market.

In the past, IT companies may have built solutions for target industry verticals (financial services, retail, healthcare, etc.), applications (database, word processing, analytics, etc.) or data types (integers, images, voice, etc.). Today, IT companies can design and build solutions mapped to the requirements inherent in The Five Cs.

Three major categories of technology are particularly relevant to The Five Cs.

Optimized internet. The internet is the foundation for the web marketplace. The challenge is that the internet is made up of many interconnected networks. Performance of the internet across these individual network links is fluid and subject to change at any time. You cannot bet your web business on a network with erratic performance. You need an optimized internet service that continually monitors internet backbones and adjusts traffic flows based on performance, costs and business rules.

Utility computing. Computing capacity -- servers, storage and security -- is increasingly being delivered as a utility. It's difficult to avoid buzzword overload in this area of IT. However, whether you talk about virtualization, cloud computing or software-as-a-service (SaaS), it's all leading in the same direction -- computing capacity that can be dialed up or down to support spikes and dips in usage of web-based applications.

Interactive media systems. Internet applications began with bits of data... that grew into character bytes... that expanded to  megabytes of images... and now are preparing for gigabytes and terabytes of interactive media. New systems are emerging to create, organize, store, retrieve, update, deliver, present and analyze interactive media files.

From P to C -- the internet changes everything
The internet changes everything, including marketing. As marketers, we need to be careful about simply re-skinning traditional marketing approaches using such a disruptive technology as the internet. We should not "pave over the cow paths" of our marketing programs using the internet. The internet offers us entirely new ways to apply both the art and science of marketing. The Five Cs can be used as a guide to develop breakthrough marketing programs and business models.

Jim Leach is VP of marketing at Internap.

Mr. Leach provides leadership and management of the marketing organization and programs for Harris' cyber solutions worldwide.Jim Leach is Vice President of Market Development at Harris Corporation. He is an expert in sales and marketing of...

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