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SAN FRANCISCO, Nov 23 (Reuters) - As traditional companies wade cautiously into the waters of Internet advertising, Internet companies are moving in the opposite direction, from pure online campaigns to major offline advertising.
In particular, electronic commerce companies such as eBay (http://www.ebay.com), Go2Net (http://www.go2net.com), Egghead.com (http://www.egghead.com) and Cyberian Outpost (http://www.outpost.com) recently introduced their first print, television and radio campaigns, making it clear that Internet companies are beginning to understand the importance of offline branding.
"Branding value is clearly very important in determining who's going to win on the Internet, and it's hard to build a real brand without getting it through TV and print," said Darryl Peck, chief executive of Cyberian Outpost, an online computer store.
The Connecticut-based company launched the first of a two-part television and print campaign last week. The current 90-day campaign includes a humorous but daring TV spot that aims to gain brand awareness simply by catching the viewer's attention.
The ad, created by Cliff, Freeman and Partners in New York, attempts to make an impression by using a cannon to fire a gerbil through a cutout "O" of a sign that reads "Outpost.com."
Peck said he is planning a follow-up campaign that would be more informative with specifics about the Web site's offerings. "There's no question that TV is a good way to get people talking. It's part of the risk we're taking here, but we think it's worth it," he said.
Evan Neufeld, an analyst at New York-based Internet research firm Jupiter Communications said, "It's a definite trend, and it's new, but it's also Marketing 101. The media is fragmented, so you can't advertise in just one place. We've always said not to put all your eggs in one basket."
According to Neufeld, the Internet business has evolved into a more sophisticated industry in which companies can no longer rely on banner ads and word-of-mouth to establish themselves, especially if they want to become a major player.
"It used to be guerrilla marketing -- and it still is for people who don't have money -- but the general thing we've seen is that the price of admission has gone up if you want to become an e-commerce brand," said Neufeld.
Rex Briggs, an analyst with market research firm Miller Brown Interactive, agreed, adding: "There is a realization that whoever can build a relationship with the consumer early on in their entry into the Web is better off. Consumers have a very open-minded attitude when they first go online but they lock in their opinion once they're there."
Briggs pointed to Yahoo (http://www.yahoo.com) as a classic example of a company that jumped ahead of its search engine competitors through its strong branding campaign via television.
Although its competitors, such as Infoseek (http://www.infoseek.com) and Excite (http://www.excite.com) subsequently followed with their own offline campaigns, they never caught up with Yahoo, which was able to capture a significant market share just by being the first on TV.
Since then, there has been a steady stream of Internet companies vying for brand awareness among consumers through offline ads, triggering mini-campaign wars in some industries.
In the latest one, online bookstore barnesandnoble.com (http://www.barnesandnoble.com) launched a new advertising campaign on Friday to compete with Amazon.com's offline campaign. The ads, created by TBWA Chiat/Day in New York, feature popular authors such as Tom Clancy, Stephen King and Frank McCourt.
"Without question, we view offline advertising as critical. Online advertising wouldn't introduce you to consumers who are in the queue to buy the first product online, or for that matter to buy their first home computer," said Ben Boyd, a spokesman for barnesandnoble.com. "Offline advertising is for my parents in South Carolina, to make them aware that we're there."
Neufeld noted that many Internet companies are deciding to spend money on offline advertising, which tends to be costlier than banner ads and other forms of advertising on the Internet, because of a surge in the number of households online. "As it goes from 18 million households online to 20, 30, 40 million, it gets more important. This has been the year that e-commerce has been validated. It's woken a lot of people up," he said.
The evidence is in the emerging competition between online computer hardware and software stores such as Egghead.com, Cyberian Outpost and Beyond.com (http://www.beyond.com). The first two launched TV and print campaigns last week and the latter is preparing a television campaign.
"I think it's going to accelerate," Neufeld predicted.
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