I-Marketing Interview: BlueLight.com

At the helm of BlueLight.com's online marketing efforts since April 2000, Foley relies on the symbiotic relationship between Kmart's online and offline properties to lure shoppers and turn them into buyers.

BlueLight.com, which launched in 1999 and became fully owned by Kmart this month, extends Kmart's product line and retail partnerships to the Web and boasts 3 million unique visitors. On the doorstep of the back-to-school and holiday seasons, which Kmart calls "go time," Foley spoke with the E-Commerce Times about how the Internet offers an ever-changing array of tools to target core customers and to give them exactly what they need.

According to Foley, however, the Internet has not changed fundamental marketing principles.

Making Connections

ECT: What advertising advantages does the Internet offer that other media do not provide?

Foley: One great example is our Internet service provider (ISP), which is one of our strongest marketing tools. It affords us persistent branding and ownership of messaging directly on a person's computer. You log on to the Kmart ISP through an icon on your desktop. We've seen how important this is to AOL and Microsoft (Nasdaq: MSFT) today.

We present ISP users with 30-second dial-up video ads, along with banner ads for different store sections, deals and specials. We can follow that up with a BlueLight special, which is integrated into the ISP tool bar.

It's all about acquiring customers fast. We will leverage the stores as much as we can to drive customers, but we want to [bridge] that last divide, which is bringing Kmart customers online. One of the biggest barriers to getting online is cost, and we address that with our ISP.

Also, with the Internet it's easier to go out and test different channels. You can't run a TV spot and measure some kind of immediate response. The costs would be far too high.

Test Time

ECT: What steps, or series of steps, do you take when planning an online advertising campaign?

Foley: First, understand who your customer is. Really understand if this is the mother who shops at Kmart on a regular basis, or is this the techie looking for a great deal. From there come the different planning steps. The key is to find the appropriate sites that meet all the right criteria.

ECT: Should an online advertiser choose many sites on which to advertise -- or spend the same amount for a larger buy on one site?

Foley: It all depends. Last year, we went the route of having a strategic relationship with Yahoo!, and we've also done smaller buys -- like with the "BlueLight's Back" campaign in April -- with smaller sites to hit our core Kmart shopper.

I'm a big fan of testing. You might find your customer in an area that might not be the most obvious. You can look at site X, a huge site with tons of traffic. The question is: do you spend all your money there, or do you look at site Y, which hits 90 percent of our needs, but might not have the traffic? There's no harm in testing those channels. You might find that site Y has a better conversion ratio than site X for the amount of money you might spend.

Do the Math

ECT: What process do you use to determine how much of your overall advertising budget is allocated to a particular site?

Foley: A major one for me is to look strongly at ROI (return on investment). I think there is great value in branding and there's also great value in ROI. A lot of advertisers have realized that, with the Internet, this is the first time we've been able to track and measure things to the nth degree.

On the branding side, we did a partnership with Disney for the "BlueLight's Back" campaign. Here are Kmart and Disney coming together; it would be hard for me to walk out of there and say we didn't get our ROI. There's a lot of value in bringing these brands together just from a perception standpoint, and the power of having Kmart being a friend of Disney.

If you look at other channels like e-mail campaigns, where branding isn't the No. 1 objective, that's where it's really based on ROI. We send out an e-mail to a select target of prospective shoppers, be they Internet shoppers or women interested in gardening. That's when we look at ROI. I want to see that the amount of money we're spending on this audience, and what am I returning for shoppers. We look back at historical data to help define this.

Fast Forward

ECT: What are the biggest challenges of marketing via interactive media?

Foley: One of the challenges for marketers is to keep evolving with this space, which is still very undefined. And broadband is going to change things, too. Today we live in an almost static advertising world. Broadband will bring us to the next generation of the Internet, and we'll see marketing change a lot.

I've always compared the lifecycle of television to that of the Internet. TV started out black-and-white. Similarly, in 1995, when Netscape launched its first browser, everything was very text-driven. Now, we see changes in Yahoo!, producing new advertising spots for people like me who want to latch on to Yahoo's success and traffic.

The question is: how will marketers finally reach that plateau of having established a strong message across all sites, through banners ads, dynamic types of e-mail, and the like?