Marketing and the Internet:

This paper reviews the research to-date on how the Internet is impacting marketing. It focuses mainly on academic research published in US journals, but includes selected material from other sources. It covers internet adoption and usage; online purchasing behavior; internet advertising; internet economics and pricing; channels and intermediaries and online marketing strategy. The final section gives overall conclusions and briefly lists some opportunities for future research. Contrary to earlier hype, the Internet does not change the fundamental principles of marketing. Nor has its impact to-date – e.g. on consumer behavior, advertising, pricing, channels, intermediaries, strategy and globalization – been anything like as dramatic as predicted. Nevertheless, it has already had some effect on all of these areas. For instance, it is emerging as a flexible, fast-growing advertising medium and as a significant direct channel in many markets (PCs, books, music, travel, and even cars). It has led to some reduction in average prices and in price dispersion. It is bringing into the mainstream previously exotic business models such as auctions, electronic markets, and brand communities. Most of its successes have come from established businesses with ‘bricks and clicks’ strategies which use the Internet to supplement existing activities but rarely to generate much direct revenue We expect its impact to increase steadily over the next ten years, as the technology improves, its availability and usage continue to grow, and businesses learn better how to use it within their wider marketing strategy. Earlier expectations about the Internet were so overblown that the reality was bound to disappoint. But by any normal standards, it is a fast-growing young medium with wide-ranging effects across the whole marketing spectrum.