With a countless number of Web sites trying to attract Internet users, branding and convenience is key to a company’s success online, said Bob Pittman, chief operating officer and prexy of America Online, during the keynote address Thursday at Variety’s second annual Interactive Marketing Summit in Rancho Mirage, Calif.
“Consumer behavior, not technology, is driving this business,” Pittman said. “We live in America, and brands win.”
The approach to branding must be tailored to the particularities of the Internet, of course, which effect consumer behavior: in the realm of e-commerce, for example, they don’t have to fight the rush during the holidays or make it to a store before it closes.
Buying by night
About 46% of AOL’s 16 million subscribers use the service to purchase goods online, usually at night, Pittman said.
“Convenience is king,” he said. “Americans are obsessed with saving time. Everyone will pay a premium to save time.”
Pittman believes the future holds an Internet-based economy. “What we’re looking at,” he said, “is the birth of a new industry. It’s developing at a faster pace than any other technology that’s ever existed.”
With a computer in about 50% of U.S. households, and two-thirds of those online, Pittman expects the Web to continue stealing away viewers from the TV networks.
“The Internet has been the only tool powerful enough to steal time away from TV viewing,” he said.
According to a study conducted by Roper, Pittman noted, about 78% of Internet users polled said they spend less time watching television.
And that, Pittman said, is attracting more major advertisers to the Internet — a medium that can generate about $120 billion in ad revenues online alone, and a 30% viewer response from banner ads, compared with traditional direct mail campaigns that barely generate a 1% return.
But advertisers, especially entertainment-based companies, could be spending far more: prior to the keynote speech, Andrew Batkin, CEO of Interactive Marketing, said that while entertainment spending on the Internet is up 25%, it’s still not enough.
“The average marketing budget for a movie is now $25 million,” he said. “Every movie studio should spend $1 million of that on the Internet for each film they have.”
When marketing their brands, Pittman said Web-based companies have to acknowledge the differences between the opinions of “the technology-obsessed” and those of the mass market — and learn what the latter wants.
Pittman also suggested that companies gauge how their Web sites are performing by the amount of time users spend on their sites, not the number of visits they get.
As for AOL’s recent tie-in with Warner Bros.’ ‘Net-based romantic comedy “You’ve Got Mail,” Pittman said, “It was the first movie that didn’t treat online as something weird. It was an interesting tool to tell us where we are today.”