As one of the world’s largest enterprise software suppliers, industryheavyweight Oracle (Nasdaq: ORCL) generates annual revenues of more than US$10 billion through its suite of e-business offerings, including database, tools and application products as well as consulting and support services.
Looking to augment its product line amid slowing sector-wide database sales,Redwood Shores, California-based Oracle now is hoping to crack thehigh-growth application server market and has begun pouring considerableresources into the effort. To help strengthen its value proposition, thecompany is using the Internet to attract potential customers by generatingleads through highly targeted advertising content.
In an exclusive interview with the E-Commerce Times, Oracle senior vicepresident and chief marketing officer Mark Jarvis attributed the company’sonline marketing success to its use of exhaustive scientificmeasurement and data analysis. Most importantly, he said, Oracle does not turn to advertising agencies to mount and track campaigns, but keeps theentire process in-house — from copywriting for banner ads to capturing leads and closing sales.
ECT: What advertising advantages does the Internet offer that othermedia do not provide?
Jarvis: It allows us to get to a whole bunch of people that we couldn’t afford to get to in other media. It also allows us to reach people acrossthe world with considerably less money than we would need in a traditionaladvertising fashion. We think of the Internet as a global network and as away of doing marketing very differently.
For example, we really don’t do much marketing by country anymore. On theInternet, country borders don’t exist. So, instead, most of our marketing isdone by language. We currently run one Web site in 10 languages, and thatallows us to effectively get to 99 percent of the world’s population thathas access to the Internet.
ECT: And you’ve found that to be an effective tool?
Jarvis: Absolutely. You also have to bear in mind that you can do agreat deal of marketing on the Internet without spending a dime. You put upa Web site with good content on it and customers will come, they’llregister, and you can generate leads for your sales force without everhaving to do outbound marketing.
Most marketing in the traditional world iswhat I call push-based. You constantly have to push out messages to get thecustomers to respond. On the Internet, though, you don’t have to do anythingto get the customer to respond other than having good content up there.
Down to a Science
ECT: What steps or series of steps do you take when planning anonline advertising campaign?
Jarvis: We do a huge amount of analysis of Web sites we do well on.We also constantly measure the click response that we get on every Web site.We may be different from other companies in that we actually do all thatmeasurement ourselves. We do not rely on agencies. We do deals withcompanies to run advertising whereby they measure the rates and we measurethe rates, and if they fall within about 3 percent of each other, theneverything is fine. But we rely heavily on our own analysis.
To be honest, we treat online advertising like every other form ofadvertising — which is, we approach marketing as a science, not as an art.It’s all about analysis, statistics and understanding what’s happening.
ECT: What advantages do you gain by that ability to constantlyevaluate the metrics that are coming in on a particular campaign?
Jarvis: The biggest advantage is that we can pull a campaign or makecost corrections to it immediately. Going back four years, we used to spendUS$500 million a year on marketing. Now, we spend less than $300 million a yearon it and we do more marketing. We’re using the Internet to save money, notto spend it.
ECT: What process do you use to determine how much of your overalladvertising budget is allocated to a particular site?
Jarvis: We’re in two businesses at Oracle. We sell technology totechnologists, and we sell business applications to businesspeople. Gettingto a technologist is extremely easy using the Internet. Getting to someonein business is very hard using the Internet. If we are going for thetechnology audience, then we have a whole series of historical data andexperience that allows us to effectively target an individual and get themto follow a lead. Depending on what product we’re trying to advertise, thatwill totally determine what mix of online versus offline marketing we use.
Another thing that we tend to do is build communities of people who use ourtechnology and link them together. It turns out that a good deal of ourmarketing is not necessarily to new prospects but to the people who havealready registered at Oracle.com. The more people who register, then thecheaper our marketing becomes. Therefore, we do far less marketing and a lotmore content provisions.
Site by Site
ECT: Should an online advertiser choose many sites on which toadvertise — or spend the same amount for a larger buy on one site?
Jarvis: If you’re going after technologists, then picking a smallernumber of sites is generally more effective. If you’re going for businesspeople, you typically need to pick a larger number of sites and be a littlemore focused. It’s also important that you measure every site individually.We’ve come across so many people who are running banner ads on multiplesites, and when you ask them the effectiveness of one site versus another,they have no idea. They’re measuring it on a campaign level rather than on asite level. That’s a big mistake.
ECT: What are the biggest challenges of marketing via interactivemedia?
Jarvis: I don’t see many challenges. I see mainly opportunities. Ourbiggest possible challenge is taking advantage of all the ideas that wehave. We have far more ideas than we can put into practice. We spend 80percent of our money on the science of marketing and 20 percent on testingthe theories.
We have a mantra at Oracle, which is failure is an extremely good option. It’s very typical with marketers if they have a highly successful campaignthen they don’t necessarily look at why it was successful. But if they havea campaign that totally bombs, they want to understand why it failed. We doa huge amount of testing to see if our theories are correct and whenfailures occur we learn immediately from them.
ECT: How well-suited is the Internet for branding campaigns?
Jarvis: Let me object to one word you just used: brand. If I ask fivedifferent people what it means, I get five different answers. We typicallydo not talk about brand. Instead, we talk about awareness of the term Oracleand in some people’s minds that may be the brand. Most of our awareness isdone offline in print publications and on TV.
ECT: How well-suited is the Internet for lead generation?
Jarvis: All of our online activities are linked into leads, 100percent. We analyze a campaign from leads right through to sales. I’ll betwe’re the only company in the world that can ultimately tell you exactly howmuch a marketing campaign costs, how much revenue was generated from it, howmany leads came in, and how many of those turned into sales. It’s veryscientific. That requires a huge amount of information sharing acrossmultiple organizations and we do it.
Banners Paying Off
ECT: What advantages have you gained through running a banner adcampaign?
Jarvis: Banner ads work particularly if you use the word “free.” Weincrease our click-through rate by a factor of 11 when we use that word. So,you’ll see we do run a lot of banner ads that do contain “free.” Generally,we’re offering people free software or an information kit. It’s sort of likeyou scratch my back and I’ll scratch yours. You come to our Web site andprovide us with information including your e-mail address so that we can thensend you the appropriate materials. Right now our banner ads, compared tothe industry average, are generating three to four times more leads thananyone else we’ve looked at.
I also think it’s important to take time off from a Web site and then comeback to it. If you pick the same Web site and run banner ads constantly,then you’re going to see a rapid drop off. Sometimes we may call a six-weekhiatus to a particular Web site simply because we feel like it’s gettingtired and then we’ll go back in again with some new offer.
E-Mail Takes Lead
ECT: What advantages have you gained through marketing in e-mailnewsletters?
Jarvis: Everyone tells you that the traditional way to get toexecutives is to send them things through the mail. That’s total rubbish.Direct mail doesn’t work at all. We generate more leads online than we dofrom any direct mail campaign.
In fact, I once had a bet with all of my marketing folks here. About threeyears ago, I banned all direct mail and I was hated for two weeks by all ofthe traditional marketing people who said it was blasphemy. So, I asked thema very simple question: How many of you open your mail everyday? And itturned out a number of the people who were complaining didn’t even knowwhere their mailbox was.
I don’t read any of my mail everyday, but I do read every single e-mail Ireceive. The average executive does exactly the same. They spend time onplanes reading e-mail, but their assistants are filtering their mail andbasically trashing all of that expensive direct mail that companies areinvesting huge fortunes in. However, we do a huge amount of e-mailmarketing. We issue more than 100,000 e-mails a day from Oracle formarketing purposes.
Shades of Off
ECT: What kinds of e-mail messages are you sending out?
Jarvis: They’re targeted by information we’ve received from usersover a period of time. We also offer them the ability to totally opt-out orto only opt-out of specific campaigns. We find that allows us to get to amuch broader number of people with considerably less money.
Given the fact that users can have multiple shades of off — ranging from receiving absolutely nothing to receiving an occasional e-mail — that’s fine. People accept that.
ECT: What pitfalls should an online advertiser avoid?
Jarvis: I would absolutely not listen to your advertising agency inany way, shape, or form because they probably know less about it than youdo. The whole Internet marketing game is completely unchartered territory.There are very few experts, particularly among advertising agencies. I don’tthink there has been a book written yet that could be considered the Bibleyet of e-marketing.
Therefore, much of it comes down to people learning from their ownexperience. This is one area where every company should not invest inletting others learn about it. They should invest in themselves. We writeall of our own copy and all of our own banner ads. We do all our measurementand at any point in time we can tell you what our No. 1 site andleast-performing sites are. Every day we make changes to our marketingcampaign as a result. It’s a very different discipline than traditionalmarketing.
ECT: Based on the kind of experience you’ve had with Web marketingthus far, what does the future hold for online advertising — both in termsof strategy and technology trends?
Jarvis: As the traditional banner ad is becoming a little bland andpeople totally don’t even notice it nowadays, I think that the whole scienceassociated with online advertising has just hit the tip of the iceberg.There’s a huge amount still to learn. What actually happens to a lead afterit gets captured by a company is still a black hole. Most of the effortsover the next few years are going to be affecting what you do once youcapture those leads. That will eventually result in interactive marketingbecoming more efficient and targeted.
The last thing you want to do with a person who clicked on a banner ad inthe past is to have that same ad appear in their browser again. That’s theproblem with billboards. Once you’ve driven past it, you’ve seen it. If youknow that a person has clicked on a banner ad and, as a result, bought aparticular product from you, then your interest is in actually sellingthem other related products. That’s going to take a huge amount of scienceway beyond just interactive advertising. It’s also going to involve thelinkage of all the systems that a company uses to run its business.
Web Ads for Less
ECT: What advice do you have for a company starting to plan a newonline advertising campaign?
Jarvis: Start small, don’t spend a lot of money, make sure youunderstand how every dollar is being spent and measure everything that comesout of it. Otherwise, you’ve just blown $5 million and have no idea why. Donot use the Internet as an add-on. Instead, you have to take some of thethings you’re already doing and eliminate them.
If you’re a marketer and you go to the CEO to ask for a couple of milliondollars to run an Internet campaign, the CEO should kick you out of hisoffice. The average marketer should be going to the CEO and say that byusing the Internet we’re spending, for example, $270 million instead of $300million. Your costs should go down when you use the Internet for marketing.It’s an opportunity to save money, not to spend money. That’s the attitudeyou have to have with the Internet.