Another distinct characteristic of online marketing and e-commerce is the separation of buyers and sellers. Consumers lack the ability to inspect goods before purchasing from an online retail site; however, this dilemma is avoidable. One common method utilized currently is by the online auction company eBay. The institution of a rating system that allows buyers to rate sellers based on their transactions greatly reduces the occurrence of fraudulent activity on the behalf of sellers. Through consumer feedback and the ability of consumers to research sellers a comfort zone (although not flawless) allows for ease in transactions (Sun, 2006). As more retailers enter the Internet market this rating system occurs on numerous sites. Even reputable retailers such as Best Buy allow consumers to read reviews from other consumers whether the comments are positive or negative. Buyer seller relationships
Competition and consumer feedback benefitted in other areas on the e-commerce battlefield. For example, the insurance industry saw a drop in the cost of insurance policies compared to years past. This phenomenon is due to the ability for consumers to give feedback and search around the Internet for lower better rates and plans. The technology today allows companies to use the feedback given by consumers to their advantage by making changes based on what consumers want. Simply put in the online marketplace what consumers want they have the ability to make it happen (Sun, 2006).
No matter what troubles or drawbacks exist in the online market, the fact remains that the Internet is the new way to perform all types of selling and business interactions. With the increasing popularity of technological advancements, the old means of communications are gone by the wayside. For example, PDFs are overtaking printed goods across the nation (Jank&Kannan, 2005). According to a study conducted by Lee, Ratchford, and Talukdar (2007) on the use of the Internet for consumer research of automobiles shows that outside of the direct contact made at the chosen dealer, Internet use was almost twice as much as any other means of research. When looking at the Internet compared to other media, the Internet clearly has the upper hand. According to the findings of Stewart and Zhoa (2000), the Internet is the only means of advertising that has the following: ability to market over vast geographic areas with low cost, given interactivity, and the most amount of information given over a single medium.
With the previously discussed findings, it is easy to conjure that the Internet is a more than viable means of marketing and advertising. Before entering the Internet realm with a service or product, there are some myths about online media that needs addressing. The following is by B.L. Ochman from an article in BusinessWeek (2009, p. 14). Ochman explores a list of the online media myths.
1. Social media is cheap, if not free. Yes, many of the tools that can be employed in social media marketing are free to use. These include Google’s video-sharing site YouTube, Yahoo’s photosharing site, Flickr, the social-network building to Ning, and content aggregators such as Digg and eBay’s StumbleUpon. Free blogging tools abound too; among them are WordPress, Twitter, and FriendFeed.
To address this myth, the author states that a good budget for an effective social media marketing campaign begins at $50,000 for just a few months. It requires $50,000 to $100,000 to create even a simple site for an online community. A site is the face of the product or service, thus without such a tool an online presence simply is not the same.
2. Anyone can do it. A surfeit of whiz kids and more experienced marketers are claiming to be social media experts and even social media gurus. Search the bios of Robert Scobie’s 56,383 Twitter followers, in the index you will find: 4,273 Internet Marketers, 1,652 Social Media Marketers, 513 Social Media Consultants, 272 Social Media Strategists, 98 Social Media Gurus, and 58 Internet Marketing Gurus.
The downside to such findings is further investigation. It would be hard to find even a handful of the so-called Internet marketing whiz kids that have a professional record of accomplishment. Through such methods as online video contests where companies such as Denny’s, which hope to draw the use of social marketing by allowing the whiz kids to do it themselves, usually gain results with less than 2,000 entries. In Denny’s last effort, only ten entrants submitted their online works. Viral videos are the creation of anyone; however, when looked at by a company, most take planning and the most successful campaigns are professional. These companies do not reward entrants with breakfast.
3. You can make a big splash in a short time. Sure, sometimes a social media campaign can produce substantial and measurable results quickly.
Social media is great if one is already an Internet icon; however, becoming an icon does not happen overnight. It takes a great deal of work and planning to “become the best thing since sliced bread.” With that said, unless the company, product, or service is already part of the Internet craze, it is better to plan a marketing campaign for the long term.
4. You can do it all in house.
The answer to this myth is simple, NO! The only way to succeed in the online marketplace is the same way one succeeds in the tangible marketplace. To have great returns in the online world it takes planning, strategy, contacts, outside tools, and above all experience. Thus, unless someone is a complete operation having online marketing and advertising departments with a team of experienced professionals outsourcing an online presence provides the best results.
5. If you do something great, people will find it.
Simply put this is not true. The only way for consumers to find a product or service is to know it exists. Imagine wanting to visit an amusement park without having directions, operation times, or if it is real. The same principle applies online. The only way to have a traffic flow is the creation of it. Similarly, in order to become well known on the Internet businesses or individuals must create a Web following. A great way to create the hype about a product or service is the utilization of social networking sites such as Facebook or LinkedIn. Using these sites creates an easy way to reach a large group of potential consumers.
6. You can’t measure social media marketing results.
If there is a plan to attempt a social media route, there are ways to assess the retention and perceptions of consumers. The use of tools such as blogs and open discussions not only allow for suggestions but also allow someone to monitor the behavior and visits of consumers. The fact of the matter is that social media is a great tool; however, unless one has experience with this method traditional means may better suit the company (Ochman, 2009).