Look up “online marketing” in Wikipedia (or click here) and you’ll get a description of four different models. Let’s take a look at each.
E-commerce
As you would imagine, e-commerce is simply the selling of goods online. Need to be a new widget? Go to your favorite online widget store, pick your favorite, pay through a secured browser (sites with the security feature SSL, or secured socket layer, encrypt all of your payment information to protect you from hackers), have it shipped to you and voila – just like going to the old brick & mortar store, but you never have to leave the comfort of your couch.
Publishing
Selling advertising online. You’ve probably noticed many of your favorite sites – blogs, news & entertainment sites, even other business sites – now have banners or sidebars full of advertisements. Easy money for the host, cheap advertisement for the business.
Affiliate marketing
Closely related to the publishing model, affiliate marketing establishes a relationship between a business and affiliate sites where the business rewards the affiliates whenever they refer new visitors or customers to their site. Affiliates can often do this via advertising, or they may do it by plugging the business through reviews or recommendations.
Lead-based websites
Lead-based websites generate income by pointing their visitors to primary sellers. An example of this might be a site that offers reviews of the latest digital cameras and provides links to sellers (Amazon, Buy.com, etc.) that then allow the reader to make a purchase.
The upsides to online marketing are many. Keyword searches, often via use of search engine optimization, can bring interested buyers directly to your virtual storefront. Geo marketing or geo targeting takes advantage of geolocation software, which pinpoints the viewer’s location and allows the business to tailor the information that is displayed to be most appealing to a given region. A large chain of sporting good stores, for example, might do well to market snow skis in Colorado but would rather showcase their water skis to visitors from Florida. Geo marketing allows them to do just that. Cost is another upside to online marketing, as the price of creating an online presence that allows your to reach a huge internet audience can well be a fraction of the costs associated with traditional marketing strategies.
Of course there are some drawbacks, too. Businesses have to design sites without knowing what kind connection the viewer on the other end may have – too complicated a site, and the guy still using dial-up will give up on your page before it’s even done loading. Also, many consumers are still wary of buying without the benefit of personal inspection, or may not want to wait for delivery of the item. Still others are leery of giving personal information online, even with promises of “secured” sites.
All in all online marketing is an economical and effective tool for merchants to reach their consumers. Any business today would be wise to consider it.