What is the difference between Online Marketing and eCommerce?

As I was preparing my presentation for EyeForTravel Asia Distribution Summit in March, I had an epiphany ("a sudden, intuitive perception of or insight into the reality or essential meaning of something, usually initiated by some simple, homely, or commonplace occurrence or experience.")

Simple question:

What is the difference between Online Marketing and eCommerce?

This is a very simple question, but confounds most people. When I give people my business card with the title "Director, eCommerce", I often get questions like "what does ecommerce do?", "so you look after the online marketing?" or "So you are like a webmaster right?".

Simple SAT answer:

Online Marketing is to eCommerce LIKE Marketing is to Sales! (DING! the light goes on.)

I know, I know.. there are those of you out there cringing. Yes there is a huge gray overlapping area between Online Marketing and eCommerce, but ask yourselves:

What are the core objectives of Online Marketing and eCommerce?

Online Marketing is about representing your brand out there in all relevant media. This includes brand advertising in mainstream websites as well as web 2.0 sites, SecondLife, blogs, viral marketing campaigns, email marketing campaigns, etc. etc. The primary KPI for Online Marketing are the impressions, opens, and the click-through-rates (CTR) - eyeballs you attract to your site or microsite. This is not unlike "traditional" Marketing, even if you include reputation management (i.e. PR) into this mix.

eCommerce is about the money. It is the virtual storefront. It is the keyword group on the PPC campaign that generate the best Return-on-ad-spend(ROAS). And by Return, I mean DOLLARS (US$ or otherwise, cash or credit). It is about "Show me the eMoney!". So yes, eCommerce looks after the actual site, but from a platform, security, and usability perspective as it relates to getting that user to BUY BUY BUY. If we - eCommerce people - thought that it would generate the highest revenue, our website would just be a white page with a booking engine. The primary KPI for eCommerce is revenue, period (or "full stop"). So when we look at a PPC campaign or affiliate marketing proposal or Facebook app, we try to figure the $$$ that we think we can get from it.

Online Marketing looks from the advertising and branding perspective and tries to figure out what kind of eyeballs we can attract and how many of those eyeballs will book - maybe not today, maybe not tomorrow, but sooner or later.

eCommerce looks from the shopkeeper perspective and asks "Who is going to buy today? right now! Where do I find them? What do I have to do to get people into my store? What do I have to do to make them book? What features, functionality and what price will they accept?"

In "traditional" Sales & Marketing, the teams play on different playing fields. Marketing has it media plans, advertising budgets and printed materials, and Sales has their customer relationships, sales calls, salesforce.com, and tradeshows. They occasionally cross path at tradeshows and brochure development. However, in the online world, there is one huge confusing marketplace that includes both Online Marketing and eCommerce. The divisions are blurred and the point at which marketing converts to a sales is also not very clear.

Yes there is a huge gray area, and it is an over-simplification by saying "Online Marketing is to eCommerce LIKE Marketing is to Sales". But if we understand this fundamental difference, then Online Marketer and eCommerce Managers can begin to work together to formulate strategy. One that will - in the short-, medium-, to long-term - optimize ...
... um...
... revenue.

MUWHAHAHA.... MUWHAHAHA......!

PS: Just some wikipedia definition on: online marketing and ecommerce

News: Consumers Use Search Engines To Look for Hotels

Is this news? Really?

This was reported by hotelmarketing.com which pointed to the original content on Travolution.co.uk. More details also came from UTalkMarketing.com as BDRC - the company that conducted the research - did not seem to issue any press releases or publish studies.

According to Travolution: "Almost three out of five consumers used a search engine to find a hotel... overshadowing the 36% who browse direct on a accommodation provider’s website"

Well this fits almost exactly into what I blogged about regarding M & C's traffic. See this graphic here from that post:


Travolution: "The BDRC said bookings are increasingly being carried out on hotel sites but third parties such as Expedia (40%), Lastminute.com (36%) and Ebookers (22%) continue to feature prominently during the research stage."

Firstly, we really need to formalize this "Research Stage". I spoke at EyeForTravel in Singapore a couple of weeks back and used this slide:

I will post more on this Web 2.0 presentation another time, but the Research Phase is very important but harder to quantify as people are going everywhere. It takes seconds to pop in another query into Google so why not?

Also from UTalkMarketing:
1) "Expedia is the top website visited for browsing (40%), however business travellers still prefer to book through the hotel website."

There are many reasons for this... another post I think....

2) "In 2008 64% of leisure travellers booked online - as opposed to just 4% in 2000. Likewise business travellers are up 70% in 2008 from 11% in 2000"

And 60% of these leisure and business travellers use a search engine to do their research and shopping. Just wanted to re-emphasize that.

The Economist: Facebook is not a business

Ran across this article from the venerable Economist.com that led in with the by-line:

"Social networking will become a ubiquitous feature of online life. That does not mean it is a business"

YES!!!! I finally get some validation to what I have been saying here, here , in Dec 2007, and in Nov 2007: Facebook does not have a business model worth USD 15 billion.

The article likens AOL's recent purchase of Bebo for USD 850million to Microsoft's purchase of Hotmail back in 1997 for USD 400million and made Sabeer Bhatia very rich.

"Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing—web-mail then, social networking now—can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right."

Free webmail is great. They are everywhere now, and Microsoft, AOL, Google, and Yahoo! are the largest providers. Microsoft wanted the subscribers and relaunched Hotmail under passport.com (remember that one?) to try to get these people onto an eCommerce gateway/platform. After that failed, passport.com became live.com to get people onto their search/online gaming/lifestyle/entertainment platform. All the while, people are still getting their free webmails, and their email account space has increased from a measly in 2MB in 1997 to a whopping 5GB or so in 2008.

"Social networking appears to be similar in this regard. The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's 'social networking inventory as a whole' was proving problematic and that the 'monetisation work we were doing there didn't pan out as well as we had hoped.' Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either."

So as that old Wendy's lady says, "WHERE'S THE BEEF?!??!"

The argument is that it is very useful for users, but it will be like "air" (needed, but free).

“We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.”

But wait! There's more:

"The problem with today's social networks is that they are often closed to the outside web. The big networks have decided to be 'open' toward independent programmers, to encourage them to write fun new software for them. But they are reluctant to become equally open towards their users, because the networks' lofty valuations depend on maximising their page views—so they maintain a tight grip on their users' information, to ensure that they keep coming back. As a result, avid internet users often maintain separate accounts on several social networks, instant-messaging services, photo-sharing and blogging sites, and usually cannot even send simple messages from one to the other. They must invite the same friends to each service separately. It is a drag."

Total drag. I mean I have accounts on Linked In, Facebook, WIWIH, Xing, Evite, Socialzr and a few others that I can't even remember who they are much less user name and passwords. (Please do not look me up in those networks and add me as your "friend".) I have heard so many people saying that they resisted getting a Facebook account, but were so bombarded with invites that they eventually gave in. And then what happens? "On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off." (i.e. you forget the user name and password.) OR Social Networking becomes Social, NOT Working.

Go on read the Economist article. I know it is the Queen's English but you will enjoy it nonetheless.

One last thing the article notes: "Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users."

Well this all ties in very well with what I have been saying about Consumer Computing Services... Another piece of the pie that those BIG guys are fighting for.

You read it here first....

China's Internet & Search Market

I ran across a Techcrunch article with some stats about China's Internet.

First off, as of October of 2007, China has 95.7 million internet users which is a little more than half that of the US.
Comscore's numbers are based on their 2 million user panels worldwide, but how large is that panel in China. Anyhow, I would not mind getting my hands on those establishment surveys that they did to get the baseline of these projections.

OK, so here are the top web properties in China:
I have not looked at this data in a couple of years but what a change!!!

1) We all knew that Baidu was taking the market by storm and flirted with Google before she decided to be an independent woman.

2) But tencent was a two-bit player 5 years ago and is now the top dog. I wonder what is their browser penetration now in this market

3) Sina is still hanging on, but where the heck is NetEase and Sohu? These three were the top of their games.

4) The foreigners like Microsoft, Google and Yahoo have made great strides, but are still not in the top 3.

OK so here are some other places in this region where the local "start ups" kick the big US companies' collective butts. ( except for Yahoo! Jap)

Interesting stuff...

Microsoft & Yahoo now talking

Just read from Yahoo! News that Microsoft and Yahoo! "senior management" met on Monday.

According to them, Yahoo! has been talking to Google, MySpace and AOL about alliances in order to increase Microsoft's offer price find alternative avenues to ward off a hostile takeover.

Y! also recently did an "Investor Presentation" which gives really rosy numbers and projections (again with the same goal.)

"The board cited Yahoo!'s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision. Yahoo!'s board of directors is continuing to evaluate all of its strategic alternatives to maximize value for Yahoo! stockholders."

Bravo for looking after the stockholders. Oh.. who are Yahoo!'s largest stockholders and what do they want?

No. 1) Capital Research which owns 14% of Yahoo! has not said anything about deal. However, they also own 6% of Microsoft and have talked to Microsoft about this deal.

No. 2) Legg Mason (80 million shares, wants a deal)

So what about these new projections by Yahoo!?

Well the bottom of that Investor Presentation says it all:

"This press release contains forward-looking statements that involve risks and uncertainties concerning Yahoo!'s projected financial performance (including without limitation the statements and information in the quotations from management in this press release), as well as Yahoo!'s strategic and operational plans. Actual results may differ materially from the results projected."

Just do it, Jerry... Come over to the Dork's Side.

"Online Research Drives Offline Sales"

Interesting article from eMarketer on the above.


Basically the web influenced 3.5 times more sales than what was done online. Obviously this data is for and about businesses that have both retail physical ("brick and mortar") and online stores, but it does show the influence that the web has. With respect to the travel industry, this is similar to understanding how online marketing and ecommerce (by suppliers and OTAs) effect traditional travel agent sales.




Ok so the above chart is clear as mud. But essentially what we want to understand is "how much % of the total retail sales is that 3.5 times web-influenced sales?" So if we do some simple assumptions and calculations:

Total Physical Retail Sales = 43.14 + 18.28 + 13.94 +2.44 = 77.8%
Web-influenced Retail Sales = 3.5 X (100-77.8-3.95-0.47) = 73.28%

Hahahahah... so the web influenced almost ALL Physical retail sales. Yes, I know I have taken some liberty with my assumptions, but this is the US market data. It is not inconceivable that most people will do some research online before they go out and buy some medium to big ticket items (USD 100+).



Alright, so here is the "real" data that we want... well not really. This says that web-influenced retail + web purchases = 15% of the total retail, in other words, web purchases make up 15% / ( 1 + 3.5) = 3.33 % of retail purchases. Which seems low, but then I think this data includes ALL RETAIL sales - as in, 7-11, gas stations, Starbucks, restaurants (?), etc. It does say it "excludes travel sales".

So we are nowhere close to understanding the effect of the web on offline commerce (0Commerce - which could also stand for "old Commerce") for businesses that have both channels. The 73.8% number is great but does not have sound data to back it up.

Interesting, this is the classic advertising problem of "Half of all my advertising is wasted. I just don’t know which half!" Most online marketing and advertisements are measurable, but really only when we talk about clicks, pageviews, and at best leads (I am excluding PPC from this statement because as far as I am concerned, PPC is a sales channel rather than an advertising medium). The intangible aspects of brand awareness, mindshare, and influence are not measurable unless we strap a brain scanner to users and connect that to the web.

So maybe as marketers, we have only progressed a little bit. Not "half" of my advertising is wasted, but perhaps something like I know:

- 30% works for sure because people visit my website (and of those perhaps 2% purchased)
- The other 70% I don't know much about as it relates to driving brand awareness and offline purchases.
- I know based on studies like the above that half of the 70% works but I don't know which half !!!!!

Travel Agent Commissions (a la Black Eyed Peas rap)

Survey says that "Hotel commission most important income source for agents". See hotelmarketing.com article here. Also Expedia got a revenue boost from hotels as well.

I am reading the article and listening to Black Eyed Peas, so as a hotelier, the question to travel agents comes to my mind:

If we are so important to travel agents, then "Where's the love, y'all?"

(You know this tune. Start singing the following out loud to my edited lyrics below. Come on... You know you wanna.)

What's wrong with the world mama?
PeopleAgents living like aint got no mamas karmas
I think the whole worlds world wide web's addicted to the drama
Only attracted to the things that bring you trauma cost them nada
Overseas Hoteliers yeah we tryin to stop terrorism push hedonism
But we still got terrorists extortionists here livin
In the USA the big CIA 'pedia the Bloodz Orbitz and the Crips C-Trips and the KKK Travel'ci-tay
But if you only have love for your own race OTA
Then you only leave space to discriminate reduce rate
And to discriminate reducing rate only generates hate leads to disintermediate
And if you hatin compete you're bound to get irate lower rate
Yeah madness is margins are what you demonstrate obliterate
And that's exactly how anger failure works and operates propagates
You We gotta have love the spread just to set it straight operate
Take control of your mind sales and meditate mediate
Let your soul gravitate to the love spread y'all

People killing people dying Agents selling, hotels dying
Children Rev Man'ger hurtin you hear them crying
Can you practice what you preach promise that you'll not breach?
Would you turn the other cheek? Would you not just slap our cheek?
Father Father Father AHLA... AHLA... AHLA...** help us
Send some guidance from above
Cause people agents got me, got me questioning
Where is the love spread...?
Where is the love spread...?
Where is the love spread...?

**(AHLA = American Hotel & Lodging Assoc)

Now all I need a karaoke machine and a video cam, and this will be on YouTube.