The integration of an Internet marketing strategy into business and marketing strategies
represents a significant challenge for many organisations, in part because they may have
traditionally considered the Internet in isolation and in part because of the profound
implications of the Internet for change at an industry level and within organisations.
The E-consultancy (2005) research highlighted the challenges of Internet marketing
strategy. The research involved e-commerce managers at companies in markets where
their products could be sold online – for example, mobile phones (Orange, The
Carphone Warehouse), travel (Tui and MyTravel), financial services (Lloyds TSB and
Bradford and Bingley) and direct marketers such as BCA. Respondents were asked what
their main challenges were and these highlighted the issues of gaining sufficient
resource for Internet marketing. Challenges included:
Gaining buy-in and budget consistent with audience media consumption and value
Conflicts of ownership and tensions between a digital marketing team and other teams
such as traditional marketing, IT, finance and senior management;
Coordination with different channels in conjunction with teams managing marketing
programmes elsewhere in the business;
Managing and integrating customer information about characteristics and behaviours col-
Achieving consistent reporting, review, analysis and follow-up actions of digital market-
ing results throughout the business;
Structuring the specialist digital team and integrating into the organisation by changing
responsibilities elsewhere in the organisation;
In-sourcing vs outsourcing online marketing tactics, i.e. search, affiliate, e-mail marketing, PR;
Staff recruitment and retention.
Is a separate Internet marketing plan needed?
Should an organisation have a separate e-marketing plan defining its strategic approach
to the Internet, either for the organisation as a whole or for specific markets or brands?
Consider Figure 4.2. You will be familiar with the hierarchy of plans for an organisation,
from a corporate or business plan which informs a marketing plan which in turn informs
a communications plan and campaign briefs for different markets or brands. But where
does the e-marketing plan fit? Does the organisation need one? Figure 4.2 suggests that
an e-marketing plan may be useful to manage the ‘e-campaign components’ which refers
to online communications tools such as online advertising or e-mail marketing or contin-
uous e-marketing activities which may be conducted throughout the year to drive traffic,
for example search engine marketing, affiliate marketing or online sponsorship.
You may be thinking that the marketer already has enough plans to deal with. Surely
the practical approach for companies that are embracing e-marketing is to integrate
e-marketing activities within their existing planning frameworks? But we believe that in
many organisations, a distinct e-marketing plan is initially essential if the organisation is
to effectively harness digital marketing. Since online channels are new, it is even more
imperative to have clarity within the organisation. An e-marketing specialist can create
an e-marketing plan to help inform and influence not only senior managers or directors
and other non-marketing functions, but also to achieve buy-in from fellow marketers.
CHAPTER 4 · INTERNET MARKETING STRATEGY
An integrated Internet marketing strategy
Our rationale is that online channels are still in their infancy, yet they have had and
will have dramatic effects on how customers select and use products. We sometimes hear
that the Internet is ‘just another channel to market’. However, the potential significance
of the Internet as an influencer and direct contributor to sales is such that often it does
warrant separate attention. Strategies to increase the contribution of digital channels to
a business are required and the e-marketing plan can help define these strategies.
In the longer term, once an organisation has successfully defined its approaches to
Internet marketing, it is likely that a separate Internet marketing strategy or e-marketing
plan will not need to be developed each year since the Internet can be considered as any
other communications medium.
These problems are typical and commonplace when there is no clear planning or con-
trol for e-marketing:
1 Customer demand for online services will be underestimated if this has not been
researched and it is under-resourced and no or unrealistic objectives are set to achieve
online marketing share.
2 Existing and start-up competitors will gain market share if insufficient resources are
devoted to e-marketing and no clear strategies are defined.
3 Duplication of resources will occur, for example different parts of the marketing
organisation purchasing different tools or different agencies for performing similar
online marketing tasks.
4 Insufficient resource will be devoted to planning and executing e-marketing and there
is likely to be a lack of specific specialist e-marketing skills, making it difficult to
respond to competitive threats effectively.
5 Insufficient customer data are collected online as part of relationship building and
these data are not integrated well with existing systems.
6 Efficiencies available through online marketing will be missed, for example lower
communications costs and enhanced conversion rates in customer acquisition and
AN INTEGRATED INTERNET MARKETING STRATEGY
Figure 4.2 Hierarchy of organisation plans including e-marketing plans
Step 1. Annual business plan
Step 2. Annual marketing plan
Step 3. Annual communications plan
Continuous E-marketing activity – Search, Partners, E-mail marketing
7Opportunities for applying online marketing tools such as search marketing or e-mail
marketing will be missed or the execution may be inefficient if the wrong resources
are used or marketers don’t have the right tools.
8Changes required to internal IT systems by different groups will not be prioritised
9The results of online marketing are not tracked adequately on a detailed or high-level
10 Senior management support of e-marketing is inadequate to drive what often needs
to be a major strategic initiative.
Furthermore, we can suggest that benefits of an e-marketing plan are in common
with those of any marketing plan. McDonald (2003) describes the following reasons why
a marketing plan is useful:
For the marketer
For non-marketing functions
To help identify sources of competitive advantage
To force an organised approach
To develop specificity
To ensure consistent relationships
To get resources
To get support
To gain commitment
To set objectives and strategies.
Managers responsible for a substantial investment in an Internet web site and associ-
ated e-marketing communications will naturally want to ensure that the correct amount
of money is invested and that it is used effectively. For these reasons and others given in
this section, many leading adopters of e-commerce do have a distinct e-marketing plan,
as the E-consultancy survey of UK e-commerce managers shows (Figure 4.3).
For smaller organisations, the digital plan need not be exhaustive – a two-page sum-
mary defining objectives and outlining strategies may be sufficient. The important thing
CHAPTER 4 · INTERNET MARKETING STRATEGY
Figure 4.3 Usage of detailed e-marketing plans in UK e-commerce organisations
Source: E-consultancy (2005)
No detailed e-plan
is to set clear objectives and strategies showing how the digital presence should con-
tribute to the sales and marketing process. Specific initiatives that are required such as
search marketing, e-mail marketing or features of web site redesign can be specified.
A strategy process model provides a framework that gives a logical sequence or ‘roadmap’
to follow to ensure inclusion of all key activities of strategy development and implemen-
tation. In a marketing context, these strategy development and implementation activities
are coordinated through a marketing plan, and the process of creating this is known as
‘marketing planning’. McDonald (2003) defines marketing planning simply as:
The planned application of marketing resources to achieve marketing objectives …
Marketing planning is simply a logical sequence and a series of activities leading to the
setting of marketing objectives and the formulation of plans for achieving them.
McDonald (2003) distinguishes between strategic marketing plans which cover a
period beyond the next financial year (typically three to five years) and tactical market-
ing plans which cover detailed actions over a shorter time period of one year or less.
For Internet marketing, a similar distinction is useful. We suggest that a longer-term
strategic Internet marketing plan should be developed in large organisations, which
places emphasis on three key areas. First, early identification of changes to competitive
forces in the micro-environment and significant changes in the macro-environment.
Second, developing value propositions for customers using online services as part of their
buying process. Third, definition of the technology infrastructure and information archi-
tecture to deliver these value propositions as a customer experience. It could be argued
that the third issue is part of tactical planning, but the reality is that new technologies
and new information architectures such as a customer relationship management system
are major investments which can take several years to specify, select and implement. This
long-term plan provides a two-to-four-year roadmap of the infrastructure for e-commerce
as noted by some interviewees in E-consultancy (2005) research.
Figure 4.4 shows an overall strategy process model for strategic Internet marketing.
An alternative perspective was presented in Figure 1.9 in order to introduce the role of
strategy development into the first three chapters.
Shorter-term, tactical or operational Internet marketing plans then address actions
specific to the current time such as specification of Internet marketing activities to sup-
port current marketing objectives. Alternative shorter-term plans include:
Web site design and build plan. A plan to relaunch an existing web site or to create a
new company web site or campaign microsite. Includes specification of online and
offline marketing communications to support a web site launch or relaunch.
Specialist online marketing communications plans. These are plans for specific digital
marketing tools, featured in more details in Chapters 6 to 9. They include:
– search marketing plan
– affiliate marketing plan
– e-mail communications or e-newsletter plan
– e-CRM plan
– interactive advertising and sponsorship
– mobile marketing campaign
– web analytics plan.
A GENERIC STRATEGIC APPROACH
A generic strategic approach
A framework for
A logical sequence and
a series of activities
leading to the setting
of marketing objectives
and the formulation of
plans for achieving
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It can be argued, however, that there is a need for more responsive strategic process
models where reaction can occur to events in the marketplace. Mintzberg and Quinn
(1991) and other authors commenting on corporate strategy, such as Lynch (2000), dis-
tinguish between prescriptive and emergent strategy approaches. In the prescriptive
strategy approach, similar to Figure 4.4, Lynch identifies three elements of strategy –
strategic analysis, strategic development and strategy implementation, and these are
linked together sequentially. Strategic analysis is used to develop a strategy, and it is then
implemented. In other words, the strategy is prescribed in advance. Alternatively, the dis-
tinction between the three elements of strategy may be less clear. This is the emergent
strategy approach where strategic analysis, strategic development and strategy implemen-
tation are interrelated. It can be suggested that the emergent strategy approach is an
essential part of any e-business strategy to enable response in a highly dynamic environ-
ment. This approach is best able to respond to sudden environmental changes which can
open strategic windows. Strategic windows may occur through changes such as introduc-
tion of new technology (the Internet is the obvious example here!), changes in regulation
of an industry, changes to distribution channels in the industry (again the Internet has
had this impact), development of a new segment or redefinitions of markets (an example
is the growth in leisure and health clubs during the 1990s).
CHAPTER 4 · INTERNET MARKETING STRATEGY
Figure 4.4 A simple framework for Internet marketing strategy development
Create / update
The three core areas of
interrelated and are
through a significant
change in environment.
Based on preliminary findings by Brian Smith, Daniel et al. (2002) have suggested
that planning styles adopted by organisations for e-commerce will be governed by a
combination of market complexity and turbulence. Smith identifies three main modes
of strategy development:
1 Logical rational planning. Uses analytical tools and frameworks to formulate and imple-
2 Pragmatic incremental. Strategy develops in response to minor adjustments to the
3 Subjective visionary. Strategy is the result of a leader, typically dominant or charismatic.
Daniel et al. suggest that in low-complexity high-turbulence markets vision and incre-
mentalism will be dominant, that in high-complexity low-turbulence markets rational
planning approaches are dominant, and that in highly complex, turbulent markets all
three styles may be required.
Kalakota and Robinson (2000) recommend a dynamic, emergent strategy process spe-
cific to e-business. The elements of this strategy approach are shown in Figure 4.5. The
emphasis is on responsiveness with continuous review and prioritisation of investment
in new Internet applications. Clearly, the quality of environment scanning and informa-
tion collection, dissemination and analysis and the speed of response will be key for
organisations following such a responsive, emergent approach. One example of an
approach to collecting this market event data is competitive intelligence orCI.
We will now start reviewing the four main stages of Internet marketing strategy
A GENERIC STRATEGIC APPROACH
A process that
relevant, accurate and
Figure 4.5 Dynamic e-business strategy model
Source: Adapted from description in Kalakota and Robinson (2000)
The situation review or analysis is best known as a marketing audit of the current effec-
tiveness of marketing activities within a company together with environmental factors
outside the company that should govern the way the strategy is developed. These princi-
ples can be readily applied to review online marketing effectiveness and internal
capabilities. Strategic analysis or situation analysis involves review of:
the internal capabilities, resources and processes of the company and a review of its
activity in the marketplace;
the immediate competitive environment (micro-environment) including customer
demand and behaviour, competitor activity, marketplace structure and relationships
with suppliers and partners. These micro-environment factors were reviewed in
Chapter 2 and are not considered in detail in this chapter;
the wider environment (macro-environment) in which a company operates, which
includes economic development and regulation by governments in the form of law
and taxes together with social and ethical constraints such as the demand for privacy.
These macro-environment factors including the social, legal, economic and political
factors were reviewed in Chapter 3 and are not considered further in this chapter.
Now complete Activity 4.1, which illustrates the type of analysis that needs to be per-
formed for an Internet marketing situation analysis.
Internal audit or analysis
The internal audit will review the existing contribution that the Internet marketing
channel is currently delivering in relation to other channels and in relation to the
CHAPTER 4 · INTERNET MARKETING STRATEGY
Collection and review of
information about an
resources and external
marketplace factors in
order to inform
Situation analysis for an e-commerce operation
To introduce the different types of Internet marketing analysis required as part of situation
You are a newly incumbent e-commerce manager in an organisation that has operated a B2B
e-commerce presence for two years in all the major European countries. The organisation sells
office equipment and has been an established mail-order catalogue operation for 25 years.
The UK, Germany, France and Italy each have their own localised content.
List the e-commerce-related questions you would ask of your new colleagues and research
you would commission under these headings:
external analysis (micro-economic factors);
external analysis (macro-economic factors).
Assessing the current contribution of the Internet to the organisation
To assess the contribution and the effectiveness of Internet marketing involves the com-
pany in reviewing how well its online presence is meeting its goals. So this activity
overlaps with that on strategic goal setting discussed in the next section. Assessing effec-
tiveness also requires a performance measurement or web analytics system to collect and
report on data effectiveness. We cover this topic in more detail in Chapter 9. At this point,
note that these different levels of measures can be usefully used to assess effectiveness:
1 Business effectiveness
This will include the contribution of the site directly or indirectly to sales and how well
it is supporting business objectives. The relative costs of producing, updating and pro-
moting the site will also be reviewed as part of a cost–benefit analysis.
2 Marketing effectiveness
These measures may include:
leads (qualified enquiries);
customer retention and loyalty;
online market (or audience share);
For large organisations, these measures can be assessed for each of the different mar-
kets a company operates in or for product lines produced on the web site. The way in
which the elements of the marketing mix are utilised will also be reviewed.
3 Internet effectiveness
These are specific measures that are used to assess the way in which the web site is used,
and the characteristics of the audience. They are described in more detail in Chapter 9.
According to Smith and Chaffey (2005) key performance indicators (KPIs) include:
unique visitors – the number of separate, individual visitors who visit the site;
total numbers of sessions or visits to a web site;
repeat visits – average number of visits per individual;
duration – average length of time visitors spend on a site;
subscription rates such as the number of visitors subscribing for services such as an opt-
in e-mail and newsletters;
conversion rates – the percentage of visitors converting to subscribers (or becoming
attrition rates through the online buying process;
churn rates – percentage of subscribers withdrawing or unsubscribing;
click-through rates (CTR) from third-party sites to your own.
The internal audit will also include a resource analysis. This involves assessing the capabil-
ities of the organisation to deliver its online services. Aspects that can be reviewed include:
Financial resources – the cost components of running an online presence, including
site development, promotion and maintenance. Mismatch between current spend
and required spend to achieve visibility within the online marketplace should be
reviewed using tools such as Hitwise and Netratings which can be used to assess
online market share.
Review of the
and human resources
of an organisation and
how they are utilised in
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