use cost savings to enable you to cut prices, which in turn could enable you to gener-
ate greater market share?
Sizzle– extend the brand online. Reinforce brand values in a totally new medium. The
web scores very highly as a medium for creating brand awareness, recognition and
involvement, as explained further in Chapter 5.The online revenue contribution
A key objective for Internet marketing is the online revenue contribution. This is a measure
of the extent to which a company’s online presence directly impacts the sales revenue of
the organisation and can be used to influence resource allocation to the online channels.
Online revenue contribution objectives can be specified for different types of products,
customer segments and geographic markets. For example, in 1997, low-cost airline easyJet
set an online contribution objective of 50% by the year 2000. This established a clear
vision and resources could be put in place to achieve this. EasyJet now has an online rev-
enue contribution of 95%. Forrester (2005) provides benchmark figures of direct online
revenue contribution for different sectors in the US (forecasts for 2010 are in brackets):
Services 15% (32%)
Manufacturers 15% (32%)
Financial services 15% (28%)
Retail 14% (21%)
Total 15% (29%).The significant growth of these average figures over the next four years shows the
importance of setting objectives for the online revenue contribution.
For some companies such as an FMCG manufacturer, a beverage company or a B2B
manufacturer, it is unrealistic to expect a direct online revenue contribution. In this
case, an indirect online contribution can be stated. This considers the Internet as part of
the promotional mix and its role in reaching and influencing a proportion of customers
to purchase the product, generating trials, or in the case of a B2B company, leads. In this
case a company could set an online promotion contributionor indirect online revenue
contribution of 5% of its target market visiting the web site and interacting with the
brand. Bazett et al. (2005) give the example of a high-street chain that for every £1 of
revenue it takes on the web, £3 are spent in the store after browsing online – so it has
objectives for this and works equally hard to help these customers through such facilities
as store locators and information on the nearest store with a particular product in stock.
Complete Activity 4.3 to explore the factors that impact online revenue contribution in
different markets.Setting SMART objectives
You have probably heard before that effective objectives and measures to assess perform-
ance are SMART. SMART is used to assess the suitability of objectives set to drive
different strategies or the improvement of the full range of business processes.
Specific. Is the objective sufficiently detailed to measure real-world problems and
opportunities?
Measurable. Can a quantitative or qualitative attribute be applied to create a metric?
Actionable. Can the information be used to improve performance? If the objective
doesn’t change behaviour in staff to help them improve performance, there is little
point in it!
Relevant. Can the information be applied to the specific problem faced by the manager?
Time-related. Can the information be constrained through time?CHAPTER 4· INTERNET MARKETING STRATEGY
Online revenue
contribution
An assessment of the
direct contribution of
the Internet or other
digital media to sales,
usually expressed as a
percentage of overall
sales revenue.
Online promotion
contribution
An assessment of the
proportion of
customers (new or
retained) who are
reached by online
communications and
are influenced as a
result.