As the Internet was transformed in the 80s from a “research only network” to allow commercial activities, organizations realized that the sheer number of users connected to the network and the very low cost of reaching out to them, made the Internet an attractive medium for advertising. Almost all media planners now consider the Internet as a viable advertising vehicle and almost all marketers agree.
(IAB, 1997) cites the following reasons for considering the Internet in the media plan of the marketer.
- Television audiences are migrating to the Internet and this trend is expected to continue. A Forrester Research Inc. (http://www.forrester.com) report in the summer of 1997 says that about 78% of PC users took time from television viewing to spend on computers.
- The Internet is the fastest growing medium in history. The Web reached 50 million users in just four years, while it took the television 13 years and the radio 38 years to reach this milestone.
- On-line advertisement revenues are expected to reach $9 billion by 2002.
- The users of the Internet have the demographics which are a marketer’s dream – young, well-educated, and earning high incomes.
- The current younger generation, which is familiar with Internet technology, will be the future consumer generation, making the Internet an excellent communication medium.
Though most organizations are using the Web for advertising their products and services, the following categories are seen more on the Web.
- Digital products: Products that can be delivered over the network like software packages and information packets.
- Products where search costs can be reduced: Products such as cars and services such as travel, which require more information search prior to purchase.
- Products with assured quality: Books and music CDs
- Well known branded products: Visa credit cards
- Products where time and location are crucial: Flowers
Surveys show that the profile of the Internet users is shifting towards that of average consumers. When this happens, the following product categories have the best potential for advertising over the Internet in the future.
- Products where all related services can be brought together: Real estate, travel, hotel, medical and restaurant services
- Products which can be customized by the consumer: Apparel, financial services, and software
- Entertainment products: Movies and music on demand, events, leisure
- Business-to-business marketing
Thus, the Internet is seen by marketers as a medium with very good potential as a promotional vehicle. In order to understand the characteristics of this new medium, we take up for discussion in the next section, the communication model of the Internet.