I-Marketing Interview: Oracle

As one of the world's largest enterprise software suppliers, industry heavyweight Oracle (Nasdaq: ORCL) generates annual revenues of more than US$10 billion through its suite of e-business offerings, including database, tools and application products as well as consulting and support services.

Looking to augment its product line amid slowing sector-wide database sales, Redwood Shores, California-based Oracle (Nasdaq: ORCL) now is hoping to crack the high-growth application server market and has begun pouring considerable resources into the effort. To help strengthen its value proposition, the company is using the Internet to attract potential customers by generating leads through highly targeted advertising content.

In an exclusive interview with the E-Commerce Times, Oracle senior vice president and chief marketing officer Mark Jarvis attributed the company's online marketing success to its use of exhaustive scientific measurement and data analysis. Most importantly, he said, Oracle does not turn to advertising agencies to mount and track campaigns, but keeps the entire process in-house -- from copywriting for banner ads to capturing leads and closing sales .

Going Global

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

Jarvis: It allows us to get to a whole bunch of people that we couldn't afford to get to in other media. It also allows us to reach people across the world with considerably less money than we would need in a traditional advertising fashion. We think of the Internet as a global network and as a way of doing marketing very differently.

For example, we really don't do much marketing by country anymore. On the Internet, country borders don't exist. So, instead, most of our marketing is done by language. We currently run one Web site in 10 languages, and that allows us to effectively get to 99 percent of the world's population that has access to the Internet.

ECT: And you've found that to be an effective tool?

Jarvis: Absolutely. You also have to bear in mind that you can do a great deal of marketing on the Internet without spending a dime. You put up a Web site with good content on it and customers will come, they'll register, and you can generate leads for your sales force without ever having to do outbound marketing.

Most marketing in the traditional world is what I call push-based. You constantly have to push out messages to get the customers to respond. On the Internet, though, you don't have to do anything to get the customer to respond other than having good content up there.

Down to a Science

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

Jarvis: We do a huge amount of analysis of Web sites we do well on. We also constantly measure the click response that we get on every Web site. We may be different from other companies in that we actually do all that measurement ourselves. We do not rely on agencies. We do deals with companies to run advertising whereby they measure the rates and we measure the rates, and if they fall within about 3 percent of each other, then everything is fine. But we rely heavily on our own analysis.

To be honest, we treat online advertising like every other form of advertising -- which is, we approach marketing as a science, not as an art. It's all about analysis, statistics and understanding what's happening.

ECT: What advantages do you gain by that ability to constantly evaluate the metrics that are coming in on a particular campaign?

Jarvis: The biggest advantage is that we can pull a campaign or make cost corrections to it immediately. Going back four years, we used to spend US$500 million a year on marketing. Now, we spend less than $300 million a year on it and we do more marketing. We're using the Internet to save money, not to spend it.

Two Targets

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

Jarvis: We're in two businesses at Oracle. We sell technology to technologists, and we sell business applications to businesspeople. Getting to a technologist is extremely easy using the Internet. Getting to someone in business is very hard using the Internet. If we are going for the technology audience, then we have a whole series of historical data and experience that allows us to effectively target an individual and get them to follow a lead. Depending on what product we're trying to advertise, that will totally determine what mix of online versus offline marketing we use.

Another thing that we tend to do is build communities of people who use our technology and link them together. It turns out that a good deal of our marketing is not necessarily to new prospects but to the people who have already registered at Oracle.com. The more people who register, then the cheaper our marketing becomes. Therefore, we do far less marketing and a lot more content provisions.

Site by Site

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

Jarvis: If you're going after technologists, then picking a smaller number of sites is generally more effective. If you're going for businesspeople, you typically need to pick a larger number of sites and be a little more focused. It's also important that you measure every site individually. We've come across so many people who are running banner ads on multiple sites, and when you ask them the effectiveness of one site versus another, they have no idea. They're measuring it on a campaign level rather than on a site level. That's a big mistake.

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

Jarvis: I don't see many challenges. I see mainly opportunities. Our biggest possible challenge is taking advantage of all the ideas that we have. We have far more ideas than we can put into practice. We spend 80 percent of our money on the science of marketing and 20 percent on testing the theories.

We have a mantra at Oracle, which is failure is an extremely good option. It's very typical with marketers if they have a highly successful campaign then they don't necessarily look at why it was successful. But if they have a campaign that totally bombs, they want to understand why it failed. We do a huge amount of testing to see if our theories are correct and when failures occur we learn immediately from them.

Brand New

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

Jarvis: Let me object to one word you just used: brand. If I ask five different people what it means, I get five different answers. We typically do not talk about brand. Instead, we talk about awareness of the term Oracle and in some people's minds that may be the brand. Most of our awareness is done offline in print publications and on TV.

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

Jarvis: All of our online activities are linked into leads, 100 percent. We analyze a campaign from leads right through to sales. I'll bet we're the only company in the world that can ultimately tell you exactly how much a marketing campaign costs, how much revenue was generated from it, how many leads came in, and how many of those turned into sales. It's very scientific. That requires a huge amount of information sharing across multiple organizations and we do it.

Banners Paying Off

ECT: What advantages have you gained through running a banner ad campaign?

Jarvis: Banner ads work particularly if you use the word "free." We increase our click-through rate by a factor of 11 when we use that word. So, you'll see we do run a lot of banner ads that do contain "free." Generally, we're offering people free software or an information kit. It's sort of like you scratch my back and I'll scratch yours. You come to our Web site and provide us with information including your e-mail address so that we can then send you the appropriate materials. Right now our banner ads, compared to the industry average, are generating three to four times more leads than anyone else we've looked at.

I also think it's important to take time off from a Web site and then come back to it. If you pick the same Web site and run banner ads constantly, then you're going to see a rapid drop off. Sometimes we may call a six-week hiatus to a particular Web site simply because we feel like it's getting tired and then we'll go back in again with some new offer.

E-Mail Takes Lead

ECT: What advantages have you gained through marketing in e-mail newsletters?

Jarvis: Everyone tells you that the traditional way to get to executives is to send them things through the mail. That's total rubbish. Direct mail doesn't work at all. We generate more leads online than we do from any direct mail campaign.

In fact, I once had a bet with all of my marketing folks here. About three years ago, I banned all direct mail and I was hated for two weeks by all of the traditional marketing people who said it was blasphemy. So, I asked them a very simple question: How many of you open your mail everyday? And it turned out a number of the people who were complaining didn't even know where their mailbox was.

I don't read any of my mail everyday, but I do read every single e-mail I receive. The average executive does exactly the same. They spend time on planes reading e-mail, but their assistants are filtering their mail and basically trashing all of that expensive direct mail that companies are investing huge fortunes in. However, we do a huge amount of e-mail marketing. We issue more than 100,000 e-mails a day from Oracle for marketing purposes.

Shades of Off

ECT: What kinds of e-mail messages are you sending out?

Jarvis: They're targeted by information we've received from users over a period of time. We also offer them the ability to totally opt-out or to only opt-out of specific campaigns. We find that allows us to get to a much broader number of people with considerably less money.

Given the fact that users can have multiple shades of off -- ranging from receiving absolutely nothing to receiving an occasional e-mail -- that's fine. People accept that.

Experience Counts

ECT: What pitfalls should an online advertiser avoid?

Jarvis: I would absolutely not listen to your advertising agency in any way, shape, or form because they probably know less about it than you do. The whole Internet marketing game is completely unchartered territory. There are very few experts, particularly among advertising agencies. I don't think there has been a book written yet that could be considered the Bible yet of e-marketing.

Therefore, much of it comes down to people learning from their own experience. This is one area where every company should not invest in letting others learn about it. They should invest in themselves. We write all of our own copy and all of our own banner ads. We do all our measurement and at any point in time we can tell you what our No. 1 site and least-performing sites are. Every day we make changes to our marketing campaign as a result. It's a very different discipline than traditional marketing.

What's Next

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?

Jarvis: As the traditional banner ad is becoming a little bland and people totally don't even notice it nowadays, I think that the whole science associated with online advertising has just hit the tip of the iceberg. There's a huge amount still to learn. What actually happens to a lead after it gets captured by a company is still a black hole. Most of the efforts over the next few years are going to be affecting what you do once you capture those leads. That will eventually result in interactive marketing becoming more efficient and targeted.

The last thing you want to do with a person who clicked on a banner ad in the past is to have that same ad appear in their browser again. That's the problem with billboards. Once you've driven past it, you've seen it. If you know that a person has clicked on a banner ad and, as a result, bought a particular product from you, then your interest is in actually selling them other related products. That's going to take a huge amount of science way beyond just interactive advertising. It's also going to involve the linkage of all the systems that a company uses to run its business.

Web Ads for Less

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

Jarvis: Start small, don't spend a lot of money, make sure you understand how every dollar is being spent and measure everything that comes out of it. Otherwise, you've just blown $5 million and have no idea why. Do not use the Internet as an add-on. Instead, you have to take some of the things you're already doing and eliminate them.

If you're a marketer and you go to the CEO to ask for a couple of million dollars to run an Internet campaign, the CEO should kick you out of his office. The average marketer should be going to the CEO and say that by using the Internet we're spending, for example, $270 million instead of $300 million. Your costs should go down when you use the Internet for marketing. It's an opportunity to save money, not to spend money. That's the attitude you have to have with the Internet.