Saturday, June 21, 2014

The Effectiveness of Push vs. Pull in Online Marketing

Marketing strategy is arguably one of the major components of running a successful business. Without customers you have no sales, revenue or reason to exist. Online marketing is still in its infancy and will continue to grow and develop for the foreseeable future. A study by Spilker-Attig & Bettel (2010) analyzed the effectiveness of push and pull strategies at an online retailer by using 2.7 million orders across different price points. 

People regularly confuse the subtle but important difference between marketing and sales. Marketing is the long-term oriented strategy and sales are short-term customer-specific transactions (Homburg, et. al., 2007).  Marketing focuses on a larger demographic and casts a wide net while sales is focused more on specific activities that pin-point customers. 

All sales are based on interactivity between the company and its customers. Connectivity is seen as an important variable in online advertisement (Roehm & Haugtvedt, 1999).  The way in which the customer is attracted to a particular product/service and how they find that offering is the connective reaction between customer and company. 

Advertisements can generally take a central or peripheral route. The central route is used when customers are highly motivated and are willing to cognitively process the ad which changes attitude toward the product (Tam & Ho, 2005). The peripheral route is taken when low motivation is present and can temporarily change the attitude. 

Advertisements seek a central or peripheral route based upon the advertising channel used. For example, push strategies are more akin to centralized routes and make use of pop up displays, emails, and other company initiated methods. Pull strategies focus on search engine ranking, sponsored stories, and other customer initiated contacts. Think of putting it in your customers face or drawing your customers’ interest. 

The authors found that there was a significant differences of effectiveness between push and pull strategies. Clicks on price comparison websites, affiliate loyalty sites, and search engines produced higher purchase responses. Both cheap and expensive products responded well to search-engine market position. Higher cost products responded to affiliate loyalty programs. 

The study helps highlight how a number of push channels do not get the response rate companies desire. The internet is an amebic system that holds hundreds of millions of users it is generally better to develop organic methods of pulling customer interest. Focusing in areas where your target market is likely to be found, catering to your customer demographics, and drawing interest through key concepts and words seems to have the highest return rates.  

Pilker-Attig, A. & Brettel, M. (2010). Effectiveness of online advertising channels: a price-level-dependent analysis. Journal of Marketing Management, 26 (3/4). 

Roehm, H., & Haugtvedt, C. (Eds.). (1999). Understanding interactivity of cyberspace advertising. Mahwah, NJ: Lawrence Erlbaum.

Tam, K.Y., ôc Ho, S.Y (2005). Web personalization as a persuasion strategy: An elaboration likelihood model perspective. Information Systems Research, 16(3), 271-291.

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