Interactive Marketing Services

Interactive Marketing Services:
The Cyberspace Marketing Frontier

Professor John M. McCann
Fuqua School of Business
Duke University

March 16, 1995

We are in the early stages of the information revolution that will most likely transform civilizations, societies, nations, cultures, companies, universities, and individuals. This revolution is giving us increasingly powerful and small computers, and communication bandwidth to connect the computers into vast worldwide networks. The key element of this revolution, the element that has been missing until now, is interaction ... the ability for an individual to interact with other individuals, and with machines that represent other individuals. Our interactions will increasingly occur in the new media that some call cyberspace.

Today's challenge for individuals and companies is to ascertain how they can take advantage of the new interactive world. Cyberspace represents the type new technology that can sweep aside individuals and companies as it roles into their future. They must be able to predict how this technology will impact their lives, and as Alan Kay said "The best way to predict the future is to invent it." To apply this philosophy, an individual must be able to understand and apply technologies support human interactions.

Managers of sales and marketing systems in most corporations have been focused on their "users" ... the sales and marketing managers, analysts, and planners. They built and/or acquired computer systems that would allow these managers and professionals to access and analyze data, and to prepare reports. And they worked to build networks that would allow these activities for people within the firm's buildings and in its distributed sales force.

The center of their attention was always the firm's employees and its business partners such as brokers and advertising agencies. The 1980s was a period of intense development as firms focused increased attention on understanding their consumers and customers.

While all of this was going on, a new highway was rising, the information highway. These sales and marketing systems managers could easily see that they would benefit from this development because it would provide faster, and perhaps cheaper, network connections to the people who work in the field and in the partner firms.

But as this highway began to take shape, we could begin to see that it offered other opportunities that might be too good to ignore. In particular, the information highway will provide a new media for reaching the firms' customers and consumers. Not just any old media. Not just a media that is looks like a warmed over version of the existing media. Not a media that consumers have learned to turn off. No, we have a really new media, one that provides us with a cross between the two of our most effective ways of influencing customers and consumers: selling and advertising.

Advertising is a very cheap, and at times effective, means of communicating to consumers. It suffers from the fact that it is totally one-way. The ad is placed in a medium, and it is up to the consumer to do all of the work involved in understanding and accepting its message.

A sales person is an expensive, and usually an effective, means of communicating with consumers. A good sales person will truly communicate in a two-way manner. The sales person and the consumer can direct the communication via their interactions. This is a much richer, and more expensive, form of communication.

Notice one key difference between advertising and sales. Advertising involves communicating to consumers, while selling involves communicating with consumers. What if there was some way to get the best of both worlds?

Well, the information highway is providing such a way, and it involves the concept of interaction. We are seeing billions of dollars being spent to build interactive consumer services such as video on demand and a whole new array of home shopping "channels." But these are not truly new media; they are use interactive versions of old media ... of television oriented media.

The firm knows how to deal with these new/old media .... they turn the problem (and their money) over to their advertising agency.

But there is a truly new media on the horizon. One that is computer oriented, not television oriented. Computers are a true interactive device, and giving them a new job will be easy. And effective. I am not sure the same can be said for television. It has been a passive device. Making it an interactive one may not produce a very successful environment.

No one turns on their computer, pops a beer, hits the couch, and zones out. No, that's the TV model ... the one that must be overcome by adding new capabilities to the basic television model.

No, the computer model is different. One turns it on and pays attention. In the beginning, we turned it on to interact with it. We did something, and it responded. But then we learned now to hook it to our telephone wire, and a whole new capability surfaced: we could communicate with other computer users ... with other people. We said something, and other people responded. We could interact with one person, with a few, or with many. We could broadcast our message and then sit back and see who responded.

At first, there were only a few in our audience. But then it began to grow, and grow, and grow. Now there are millions, heading towards hundreds of millions, who use this new medium, one that is called cyberspace. Its current incarnation is the Internet, a term that denotes a dynamic connection of people via their computers. Dynamic in the sense that it changes over time.

And it is a connection that no one owns. It was designed that way. If no one owned it, then no one could take it away. Who can steal something that no one owns? It was conceived in the cold war era and brought to life so that there were many paths among the machines. If one failed, or if one fell into the wrong hands, it could be bypassed. There would be others who would bear the load; many others. It was conceived by a democracy to be a democracy.

Since no one owns it, then we can treat it as a common good, something to be nurtured by those who care the most. That is what has happened. People, usually individuals, have taken it upon themselves to develop tools that enhance, expand, and extend the Internet. We have Gophers, Fingers, Webs, and Mosaics. All developed to make the life of the individual a little bit better through communication with other individuals through computers.

The result is a new medium that is growing faster than any other medium in recent time. Why? The answer seems to be interaction. People can interact in a new way, and they find that to be very appealing. They can interact with each other, and they can interact with other people's computers. That is the beauty of the Internet. A person can sit at his or her computer and interact with millions of other computers.

Talk about mind extension. The Internet might not be the ultimate, but it is close. I can buy a computer for a thousand dollars, plus a few hundred for some communication software. Then I connect to the Internet and I find tens of thousands of people who invite me to connect to their computers. I can play games, retrieve information, look up data, listen to talk shows, watch videos, retrieve images from space, acquire software ... all without ever asking anyone's permission. Or even communicating with anyone.

But if I want communication, I can get it. Boy, can I get it. There are millions of people out there who want to communicate with me. To discuss hundreds of different topics.

So, we can see that the Internet is about interactions. Interactions between people and machines, and interactions among people via machines.

Interaction in cyberspace for commercial purposes is the new frontier for marketing and sales. it provides a new medium that will likely prove to be more successful than television, radio, and print. Why? The answer is interaction, of course. Cyberspace gives us the cross between selling and advertising, and it gives it to us in a way that could be very cost effective.

Forget convergence because that term implies equality. Two or more entities are converging to produce a new entity composed of the equal parts. Forget convergence; think absorption. Computers and television are not converging; computers will absorb television for the purpose of interaction. Otherwise, television will remain its old self. What will change will be the remote control, which is the computer part of television. We will see the remote control evolve into a more obvious computer, one that is hooked electronically to other computers on the other end of the cable.

Today, the remote control is hooked to the TV; tomorrow it will be hooked to another computer, as well as the TV. The TV will continue to be a dumb boob tube that bores us to sleep or provides a constant drone in the background as we go about our work.

The truly interesting part of television will be absorbed by the computer, and we will refer to it as video to distinguish it from the other data types that we can and will manipulate with our computer. We will get the video from the cable, from the air, from disks, from our camera, and from other computers. And we will generate it via our computers and cameras. It will be something we can interact with.

In this world of interaction, who must emerge? And where will we find this person? An obvious place to look is in the advertising agencies because they are in the communication business. But that is not a very fruitful place for us because they are very busy working with the old media, whether in its old incarnation or in its new interactive television version.

No, that is not the place to find the people who will lead our firms through the new frontier. This frontier is primarily a computer frontier. Perhaps we need to expand our terminology to something like a networked, multimedia, computer frontier. But the important aspect is that it is computer intensive.

It is our belief that this new frontier provides a new opportunity for marketing managers and professionals. One that is exciting and challenging. But also one that is dangerous and foreboding.

Why should it be both exciting and dangerous. It is exciting because it is old and comfortable territory ... computer territory. It is dangerous because it involves using computers to interact with an entirely new group of people: customers and consumers. Dangerous because you have to know more about marketing, selling, and advertising than you ever dreamed about.

Do you allow this new frontier to be tamed by the advertising agency, or do you take the leadership role? If you elect to grab for this brass ring, you must be prepared to enter uncharted waters; uncharted in two dimensions. First, no one knows how to use computer-based media to effectively market to consumers. Second, most computing professionals and managers know very little about marketing, sales, and advertising.

It is my goal to help you through these waters, and for me to help you, you must help me. If you provide me with a relatively small level of resources, I can provide you with an environment for experimenting with cyberpace and for learning about marketing, sales, advertising, and consumer behavior. Together we can learn how to conquer this new frontier, the cyberspace marketing frontier.