Jupiter: E-Marketers Urged To Diversify
Despite the huge volume of traffic portal sites offer commerce players, revenue expectations for portal tenancy deals are often overly ambitious and are destined to be unrealized, according to research released yesterday by online market researchers Jupiter Communications, New York.
By 2002, online commerce driven directly by the primary portals will grow only slightly, from 18% in 1999 to 20% by 2002. Jupiter analysts advised commerce players to diversify their marketing strategies as a way to reach the rapidly growing audience of online buyers.
The research, delivered at the Jupiter Shopping Forum in Miami, revealed that while 92% of commerce executives with current portal deals surveyed believe that portal tenancy deals help drive sales, more than 60% of those executives indicate that the same deals contribute less than one-third of total online sales. The result: Fewer than 5% of these executives categorize themselves as “highly likely to renew” their current agreements.
Portals tether their contract structure to what they deliver best–mass traffic. Therefore, commerce players need to be more aggressive, establishing performance-based partnerships to reach their sales and customer goals.
“Commerce players simply have not demanded enough from their portal partners,” Marc Johnson, director of Jupiter’s Digital Commerce Strategies research practice, said in a statement. “While they offer an effective means to drive traffic, primary portals do not help commerce players retain customers. Portals must develop compelling loyalty programs that help deliver repeat purchases for commerce partners, or they will risk losing the ability to garner huge anchor tenancy deals.”
Jupiter advises commerce players to view portal tenancy deals as just one of several acquisition and retention tactics to capture a greater share of online revenue. Affiliate programs, affinity sites, and off-line marketing all represent necessary areas for marketing investment.
