A practical new framework for web marketing

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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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