I-Marketing Interview: Cisco Systems - Part 1

At a time when computer network security is a top priority for many company executives, networking kingpin Cisco (Nasdaq: CSCO) Systems (Nasdaq: CSCO) is enjoying a spot at center stage.

The 18-year-old company inked nearly US$5 billion in sales last quarter as it met steady demand for network equipment.

Analysts view Cisco as a bellwether for the technology sector and even for the overall economy, and they are eager to extrapolate trends based on the firm's quarterly reports.

A self-described "tribal elder" at the company, vice president of worldwide marketing communications Jere King, has overseen all of Cisco's advertising and marketing activities for six years. She recently spoke with the E-Commerce Times about Cisco's unique advantage in online advertising and about how the Internet saves her money and earns her customers.

Magic Medium

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

King: There are six features that make the Internet exciting. First, its immediacy. You can get a message out very quickly without the two- to three-month lag time you might have in traditional media, so it gives you a time-to-market advantage.

Second, its ability to create an individualized dialogue with customers as opposed to a broad-brushed broadcast. Somebody can see an ad and respond to us easily, and we can respond back. This is exceptionally appealing to improve targeting and segmenting.

Third, our ability to track it. It allows us to know who is interested and what they are interested in. We can follow their behavior and ensure their needs get met, which is not as easy to do in other advertising media.

Fourth, its ability to be global. We get as many customers from outside the United States responding to programs as we do from inside.

Fifth, cost. The Internet is typically a lower-cost medium. And sixth, it has wonderful capabilities that combine the best of broadcast and print. The Internet is capable of not just text or graphics. So, we can do something that is video-based, with audio, animation and a lot of power and emotion, if you have the right broadband infrastructure to support it.

Target Shooting

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

King: We take the same steps as we do in traditional media. It is the basics of who do you want to speak to, what do you want to message. Fundamentally, you come to the conclusion of what is the right media to reach that audience. Sometimes it is exclusively online, and sometimes it is a combination of online and offline. I might reach some decision-makers offline, but if I bring them online, there is so much more I can do with them. We often combine online and offline activities.

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

King: We tend to choose fewer sites with broader coverage versus many sites. Most online advertising is, by its nature, very targeted. The online medium is far more targeted and segmented than others. Based on the results of our own campaigns, we know there are 10 to 12 media properties that give us the majority of good, solid responses. If it is a focused, product-specific marketing program, chances are we will be very targeted in the media we choose.

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

King: We have lots of analyses and reports that look at the yields from particular sites, what kind of clickthrough rates we had, and the cost per clickthrough. We look at a lot of metrics over time, and ultimately we arrive at what we think is the appropriate amount of media to invest for the clickthrough and response rates we want back.

Bending the Box

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

King: One challenge is getting good information on the media buy. It is still in its infancy. You must make sure you have a skill set within your company that really understands the medium. Do not treat an online ad as though it were just like a print ad. It is knowing how to optimize a medium that is still fairly new. Most people did not do anything of any substance or significance until the last several years. We are all still learning a bit.

Another challenge is that some customers are more used to the Internet than others. Some business decision-makers are not likely interacting with the Internet as much as network administrators. You have to vary what you do based on who you are trying to reach, and choose a medium that is comfortable for them. In our favor at Cisco is that our core audience -- network users and buyers -- has a strong affinity for the online world.

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

King: I think it has limited appeal for overall brand building. If you think you are going to build awareness for your brand through a series of small banner ads, history has proven that does not work. Thinking more out of the box for building a brand online is very important.

The projects that are most successful are joint sponsorships of Web sites where you build your brand awareness by offering a service in sponsorship of another company so you can align yourself with a particular service or product.

You should offer a service, or education, or something the consumer really wants, so they can understand what your brand is all about. Banner ads assist with some brand building, but they are very limited in what they can communicate.

Herding Customers

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

King: It is terrific. It has the promise and the ability to interact with customers one-on-one, and it is infinitely trackable, so it is perhaps the best medium of all for lead generation.

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

King: The banner ads we run are normally linked into a larger, integrated program. For example, many customers today are concerned about network security because of September 11th and network viruses. We have run a series of print ads, banners ads, online seminars, online technical talks and traditional seminars.

Banner ads are good at getting people out from where they are investigating information. They are very good herding devices. A customer might be on a news site that talks about network security. If you can link into their interest at that time through a banner ad based on a keyword, you can drive them from that area of interest back into your overall campaign.

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

King: This has been a very effective approach for us because so many of our customers have opted in to stay up-to-date on subjects via e-mail . We have a high percentage of very comfortable network users. For them, e-mail is efficient and direct. It goes right to their mailboxes, and they can respond to it immediately or pass it along to a colleague. And it is of little cost to us -- maybe a penny or two per e-mail.

Go on to Part 2.