Television was misperceived in its early years, when it was seen as little more than a medium for stage plays. Early broadcasts simply placed a microphone at the edge of the stage and pointed the camera toward the actors. Advertisements consisted of slightly reconfigured radio ads. Only later did advertisers and programmers realize the medium not only allowed, but also called for new approaches. The internet today is at a parallel stage in which advertisers and content providers have yet to develop marketing and content that leverages the innate capabilities of the medium.

Since the development of the internet in the early 70's, when it was used primarily for academic purposes, the reach of the internet has expanded rapidly. Today, billions of computer users worldwise have access to the world wide web. At the rate in which people are plugging in, it is safe to say that the internet will remain one of the main informational mediums of the future.

The internet differs from traditional media (television, periodicals, radio, newspapers, etc.) in one fundamental way--it's interactive. The vendors and buyers are able to communicate directly with each other. Because of this ability, sellers are able to establish meaningful relationships with buyers on an individual basis.

Communication between buyer and seller can benefit both parties. It can benefit the consumers by giving them more power. For example, direct mail companies pay large sums for lists of customers to whom they can market. Magazines and credit card companies rent out their subscriber and cardholder lists to nearly any company interested in trying to sell to those customers. However, customers capture very little of the economic value their own information creates. Instead, huge marketing companies reap the rewards. This will change, as customers become more sophisticated managers of their own information.

In addition, buyers will become better-informed shoppers. With most types of advertising, the message sent by the vendor is heavily biased. Most consumers view ads incredulously. The internet offers several ways in which consumers can communicate amongst themselves and combat consumer fraud. They can post messages on bulletin boards that are accessible to all and chat in areas where real-time written conversations are conducted.

Customers aren't the only ones to benefit from the virtual communities. Vendors can use the internet as a powerful tool for expanding their markets. Virtual communities help vendors expand by reducing search costs associated with connecting buyers with sellers, increase propensity for customers to buy through direct interaction, enhance ability to target customers and offer a greater ability to tailor and add value to existing products and services.

Where in television marketers rely more heavily upon brand images to sell their products, in an online environment they must rely more on the quality of their product. As community members come to value what other members think of a vendor's products, beyond what the vendor tells them to believe in their advertising, the community begins to take on its own branding power. Word of mouth is generally accepted as the most effective form of advertising. Satisfied customers will promote products they are pleased with and, in turn, lead others to become customers.

Online advertisers' effort will be redirected from creating brand image towards selling the product. On the internet, a buyer can see an advertisement, click on it to obtain more information, and either ask for material to be sent to their e-mail box or, in many cases, order immediately online. The objective shifts from stimulating recall to keeping the user engaged for long enough to ask for more information or to make a purchase.

Advertisers' main role online will be to generate information about potential customers, who they are and how interested they appear to be in the product, based on how deep they go into the web site. In high-ticket categories, such as homes, cars, or aircraft engines, the goal will be to establish a dialog with a potential customer, rather than to complete a transaction. This marks a fundamental shift in the nature of advertising.

As the role of advertising changes, its placement and design must change as well. The skills required in online advertising will be different from those required in existing media. Online merchandising should stimulate a purchase right there and then. It should make use of the interactive nature of the technology to make itself enticing to the viewer. It must offer relevant information quickly (within three clicks) and make online ordering easy. Advertising should not be viewed as intrusive. There should be little separation between advertising and transactions.

Successful marketers could end up enjoying a kind of customer loyalty that they can now only imagine. As a result, sales forces will be able to focus less on selling to customers and more on managing and serving them.

In my opinion, the internet will continue to become an increasingly powerful tool for both buyer and seller. In many ways, this new medium is leveling the playing field. Many small businesses are now able to compete directly with huge corporations, where before the internet they could not. It will no longer be necessary to have tremendous capital in order to control a market; just a superior product sold through an effective web site.

Daren Crudgington is an honors graduate in Marketing from San Francisco State University, and also holds degrees in Computer Science and Web Design.  This article was written in the 90's!