Internet as Marketing Tool

Today the Ukrainian Internet by number of users reaches that level when investments into its use as a tool of marketing will yield real positive results. According to conclusions of the Internet Business 2005 Conference, development of the Internet in Ukraine is on the initial stages. The number of users increases, the structure of an audience qualitatively changes toward increasing in a share of representatives of business, there is understanding of necessity of the Internet opportunities use in the sense of marketing. Now the Internet in Ukraine is quite new advertising platform, and, hence, it is the most perspective. Experience of the Russian Internet, which in the development outgoes the Ukrainian one, indicates that the companies which at this stage began to use the Internet actively in business processes, have got essential competitive advantages.

Experience of Russia

According to official data, the Russian segment of the Internet totals about 15 million users and this number constantly increases. The average user of the Russian Internet is a person of 28–30 years old, working as the medium- or top-level manager, having above average income and using the Internet every day. Concerning the number of sites: itís registered more than 200 thousand domain names; the similar situation is observed in the developed European countries - Austria, Belgium, Poland.

According to Michael Seslavinskiy, the Head of Federal Agency for Press and Mass Communications, «Today without the Runet any market, any big company and mass media of Russia canít exist». Monthly the Internet in categories «business», «auto», «computers», «digital techniques» on informativeness outgoes corresponding paper editions. According to forecasts, in the future it will certainly lead to outflow of cash from the printed press to the Internet. In addition, the volume of the Internet services market grows rapidly, the audience increases and the spectrum of services extends. The Internet goes over to a level of mass use.

Mass character of the Internet use in Russia is the basis for influx of investments and more rapid development of the Internet segment of the market. In 2004 the market of interactive services was estimated at the level of 6 million dollars per year, according to forecasts in 2006 it will increase almost twice (for comparison in Ukraine on similar services it was spent only 2 million). With increasing of volumes efficiency of the Internet, advertising use grows. Results of researches show that on rates of development Internet advertising considerably outgoes the growth of offline advertising market. Today in the environment of Russian small and average business, the Internet becomes the extremely attractive tool because it has more advantages over other media: selective influence on a target audience, quality of contact, interactivity, low cost etc.

Advantages of the Internet in the Ukrainian Market

Audience

According to the largest Ukrainian rating system bigmir.net, the unique audience of the Ukrainian Internet totals 4 292 152 users (average value for eleven months of 2005). Among them, the Kyevans share makes up 53.48 %. Users in cities with the million populations (Dnipropetrovsk, Odessa, Kharkiv, Lviv, Donetsk, Zaporozhye) make up 32.37 %.

Users, mainly, are the most active and wealthy citizens. By the way, a significant part of this audience (about 40 %) watches TV much less often than other Ukrainians. In working hours the Internet has not equal at all for neither qualitative, nor quantitative indicators of influence on an audience.

Quality of Contact

On quality of contact, the Internet concedes only to TV and outgoes outdoor advertising, advertising in printed media and on radio. It is explained by high degree of personalization of the Internet advertising, by high factor of trust and possible interactivity of the advertising message.

Interactivity of Advertising Contact

It is obviously the main competitive advantage of the Internet over other mass media. Development of technical capabilities of the Internet allows organizing maximum interactive interaction with the client, to take into account all his/her wishes, and one is serviced instantly, without waiting in queue.

Selective Influence on Target Audience

The Internet as an advertising vehicle has the broadest opportunities in interaction with a target audience. 80% of visitors come on sites through advertising and search systems in order to get information on specific topics. I. e. users are prepared to get specific information and actively perceive advertising.

One more tool of Internet advertising is contextual advertising in search systems, i. e. advertising that appears when a user requests the information on corresponding subjects. Besides there is a possibility to distribute advertising depending on time of display and topic of a site, and to demonstrate different advertising to inhabitants of different regions (banner advertising).

Cost

In comparison with use of other advertising methods, cost of campaign in the Internet is smaller by an order of magnitude. Creation of information «business card» for a small company costs up to $1000. Development of quite functional site costs several thousand dollars. As a rule, if a company orders a site that costs about $5000, its advertising budget is 10 times more at least.

Besides the specified advantages, it is also necessary to recall about an opportunity of maintaining detailed statistics, which allows determining the important characteristics of an audience and depending on them to correct the next advertising campaign. Another definitive advantage of the Internet is almost instant publication of materials and availability of the information 7 days a week 24 hours a day.

Prospects of Development

Unfortunately, all potential of the Internet in Ukraine is used not to the full extent because of misunderstanding of its advantages in comparison with traditional mass media and methods of advertising. Today the volume of the Ukrainian Internet advertising is 3 times less than in Russia. However, the Ukrainian Internet grows gradually.

Today the company, which has not an official site, is considered the outsider of the market. Now the transition is carried out from out-of-date  sites with the limited functionality to sites as full-featured marketing tools. However, due to low professional level of the majority of the Ukrainian sites developers the companies are dissatisfied with results that they have got from the sites. It, in its turn, influences the attitude to the Internet as a tool of marketing, and, hence, breaks its general development in this direction.

Experience of other countries with a high level of the Internet development shows that despite temporary difficulties Internet advertising will quickly improve itself and over time will become serious competitor to printed mass media and TV. Rates of development of Internet space of Russia, from which Ukraine is several years behind, confirm these forecasts.

So in the near future it is possible to expect growth of importance of the Internet at business doing. It is possible to predict with high accuracy that commercial companiesí interest in the Internet will increase. Commercial effectiveness of sites will grow. The next year offers of the market and the investments into it will increase.