I-Marketing Interview: Nortel

Having long focused on the potential of a high-performance Internet, Nortel (NYSE: NT) Networks (NYSE: NT) now also relies on the Web to gain traction among customers and ramp up its brand visibility.

The company is developing marketing content that highlights its initiatives, including Internet protocol technologies and m-commerce services.

Amid a harsh sector-wide downturn in capital spending and a slide in demand, the Canadian telecommunications giant has aggressively sought to bolster its bottom line and stem losses by building on its core suite of optical long-haul, metro and wireless network offerings.

In an exclusive interview with the E-Commerce Times, Nortel director of global branding and advertising Bruce Horner explained how a crucial component of the company's online marketing strategy involves the preemptive placement of targeted ads.

According to Horner, this approach allows Nortel to identify and quickly capture opportunities to offset a rival's message by inserting its own ads beside competitive news and content on key Web sites.

Seeing Savings

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

Horner: Internet advertising really provides us with an opportunity to showcase what we do, and it allows us to be extremely targeted and use environments that are highly relevant to our customers to reach them with our messaging. We view that as a very advantageous asset to plus-up our overall visibility.

Another key factor for us is affordability. We do use other media, but Internet advertising is at the core. If we had a dollar to spend on advertising, that's the first place it would go.

ECT: Do you generally see better returns from using the Internet for advertising?

Horner: We do, largely because of the business that we're in and the kinds of customers we're trying to reach. They very much use the Internet to gather information and to assess their needs and options. Keeping Nortel top in mind with and visible to that audience is a lot easier to do over the Internet than it is on TV or some of the more traditional media. We do use those other media, but we usually create packages that cross multiple media properties.

Sky's the Limit

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

Horner: First and foremost, we examine the environment to make sure it's appropriate and relevant for our customers. We look for opportunities to be creative in how we deliver our message, such as rich media and unique ad placement. We're typically not interested in traditional online advertising that includes stagnant banners.

We're also looking for flexibility with Internet properties to work with us and create content that associates our name with our products and what we do. It's not about just throwing logos and ad messages out there, but creating a more relevant experience for our customers.

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

Horner: We try to negotiate properties as multiple packages and don't really walk in with set budgets for interactive and television. The goal for us is to create synergy and linkage across multiple media and we try to negotiate them with one package. It's more a matter of looking for opportunity and the most relevant environment, and however that works out, we'll make sure it fits into our overall budget.

One of the challenges we're run into is that most online components are separate P&L's (profit and loss organizations) and have to be negotiated separately, so we do end up cutting money up to go to specific areas.

The Internet is really the exciting piece of our advertising mix because it's where there are the most opportunities to be creative. You're not limited to 30 seconds. You're not limited to a page. The sky's the limit to come up with ideas and find a partner that can help you execute them.

Reaching Out

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

Horner: The strategy we've employed is to use multiple sites because the reality is our customers do that. It mirrors the media habits and consumption of the people we're trying to reach. If you look at just an individual site, the impressions and exposure it can provide is pretty limited. The approach we take is to build a plan that allows us to reach our market at different points during the day. So, we buy from a lot of sites and are extremely visible throughout the Web.

ECT: How well-suited is the Internet for branding campaigns?

Horner: It's extremely well-suited. If you can step out of the box and come in with advertising that's beyond traditional banners, then there are huge opportunities to expose your brand and build a brand identity. I think we're going to see more and more advertisers that might have limited funds do 100 percent of their brand campaigns on the Web.

ECT: How well-suited is the Internet for lead generation ?

Horner: We track how our advertising performs and take that key learning as we develop new plans, but we certainly track every lead and follow up on those leads through our sales teams.

Hit Parade

ECT: When it comes down to measuring the effectiveness of your Internet marketing campaign, what factors come into play?

Horner: It's more than just hits. We're very interested in the follow-up experience and in how many customers wanted to show information and actually put us into a consideration set rather than just a brand-awareness set. We do a tracking study that allows us to gauge the performance of what we're doing and make sure that we are moving customers to a consideration set. We acutely manage our database to track who is going to our site and what they're doing once they get there.

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

Horner: It's a growing medium and there are aches and pains not only from a technology standpoint, but also from a marketing standpoint. The biggest frustration on our side of the desk is the inability of some companies to look at interactive as part of an overall plan and not a separate P&L.

Right now the reality of the Internet -- for all its growth and hype -- is that it's not producing the ad revenues that many companies hoped it would. What we're finding, especially with some of the bigger companies, is that the interactive component is an afterthought. I think that will change, but it's certainly a frustration.

Try it All

ECT: Have you found that there are products or services that are not suited for promotion through online advertising?

Horner: I'm sure there are some, but none really come to mind. From my standpoint, I think the Web is extremely effective for lead generation as well as overall branding. I can't really think of anything that wouldn't work.

ECT: What are some of the key successful strategies that you've employed for online advertising?

Horner: We try to ensure that we're providing our customers relevant information. When we do that, our message gets more traction. The approach we've taken to develop content and provide meaningful landing places for our messages has really helped us excel in what we're doing online.

Growing Place

ECT: Based on the kind of experience you've had with Web marketing thus far, what does the future hold for online advertising -- both in terms of strategy and technology trends?

Horner: In the last six months, when the economy has been sluggish and especially in the tech sector, you keep hearing that Internet advertising is dead, but I just don't think that's the case. We'll see it continue to grow, and the way people are using the Web to advertise will change dramatically as it evolves. Just look how it's changed over the past two years.

One of the things we did early on that other advertisers are now doing is preemptive advertising, where we would run our ads in content that talked about our competitors. For instance, if somebody was doing a story on Lucent, then, boom, we were there. Depending on the story, we had different types of creative units that could be inserted to preempt that message.

The users of the Internet are ready for more sophisticated messaging and they don't really want to see banners. There are a lot of customers who are already blocking those out. That's why it's important to be able to provide something relevant and meaningful for the customer . So, if we can provide them with content that helps their experience and helps them gather information, then we're going to be a lot more effective. Traditional advertising as it is now will move more and more to content and creating meaning.

ECT: What advice do you have for a company starting to plan a new online advertising campaign?

Horner: It's important to identify your objective going in, know your audience, and know their consumption habits to really ensure that your message gets traction. You have to be extremely creative to break through, not only from the standpoint of the creative and how it's developed, but where and how it's placed. Stagnant banners, for example, are by and large overlooked and you have to do something to stand out. That's true in any medium.