When consumers first adopted online shopping as a new behavior, the beneficiaries of this new business channel were often well-established vendors such as Amazon. But as technology improved and more consumers made online activity an indispensable part of their daily lives, local vendors have begun advertising online. And according to a new BIA/Kelsey’s User View Wave VII study, more consumers are finding their vendors in the digital universe.

“The Internet has indeed become an integral part of consumers’  local commercial activity,” said Steve Marshall, director of research, BIA/Kelsey. The study reveals that consumers are using more media sources than ever in their search for local goods and services. In 2008, consumers used 5.8 sources. In 2009, that number jumped to 6.5 sources and this year, a typical consumers uses up to 7.9 media sources. Here’s an example of the resources a consumer uses in their quest to locate a local vendor:

• Search engines 90%
• Online Yellow Pages 48%
• Vertical sites 24%
• Comparison shopping sites 42%

Nearly 1 in 5 consumers uses a site’s appointment scheduling feature for services ranging from health care to hair care. Local vendors should keep in mind that these contact points offer an opportunity to increase sales to customers. And as Peter Krasilovsky, vice president and program director, Marketplaces, BIA/Kelsey points out, online services like appointment scheduling allow marketers to connect directly with a client and cut down on the “increase in audience fragmentation” that has resulted from the many online media outlets competing for consumer attention.

[Source: Nearly All Consumers (97%) Now Use Online Media to Shop Locally, According to BIA/Kelsey and ConStat. Bia/Kelsey. 10 Mar 2010. Web.  18 Mar 2010]

The findings of a new e-mail marketing survey released by industry operator Implix point the way to an enhanced user experience. It’s all about video. According to Implix, more marketers will be sending out e-mails that contain video clips of everything ranging from enthusiastic customer recommendations to demos of various product features.

Implix surveyed 200 small and medium-sized businesses in early 2010 on their e-mail marketing plans. Over 8 in 10 respondents indicate they’ll be turning to video e-mail this year. In 2009, about 16% of surveyed companies had used video e-mail. The buzz about video e-mail may be based on the belief that this media form can influence conversion rates. Here are the survey findings with respect to video e-mail and conversion rates:

• Significantly increases conversion 45.5%
• Moderately increases conversion 20.4%
• No influence 5.1%
• Unsure 28.9%

Marketers believe that video e-mail is most effective when used as follows:

• Training courses 28.8%
• Product demos 22.0%
• Product promotions 19.1%
• Customer testimonials 17.8%
• Brand image messages 5.1%

Implix CEO Simon Grabowski indicates that marketers should pay attention to how they use video in e-mail campaigns. Demos succeed as short clips that highlight 2 or 3 features while customer recommendations can last as long as 8 minutes, if the speaker and the story are “appealing.” As the year progresses, look for more marketers, large and small to launch e-mail marketing campaigns that include video.

[Source: 2010 Email Marketing Trends Survey, Implix. Getresponse.com. 1 March 2010. Web. 8 March 2010; Video messages in e-mails are set for a boost in 2010, study says. Internet Retailer. 3 March 2010. Web. 9 March 2010.]

Last month I blogged about the intricate steps pharmaceutical firms are taking to follow the law when using social media tactics. In particular, most pharma companies disable the comments section on the social media sites to ensure that consumer privacy laws, especially important in this industry, are not breached. But these steps have not been sufficient to quiet the critics.

On Monday, March 1, the Center for Digital Democracy (CDD) officially asked the Food and Drug Administration (FDA) to begin “a comprehensive investigation into the use and impact of digital health marketing techniques and technologies.” The CDD is concerned that most consumers are unaware that their Web searches and other online activity enables marketers to track them and later use behavioral targeting. The FDA, which is charged with oversight of direct-to-consumer (DTC) drug advertising,  held hearings on digital marketing and regulated drugs in November 2009. While it has not proposed broad reaching legislation, the agency continues to send warning letters to drug companies, especially on “their inappropriate use of search marketing advertising.”

Another government agency, the Federal Trade Commission (FTC), has proposed guidelines with respect to digital marketing and behavioral targeting. In particular, marketers are advised to “provide ‘reasonable security’ for consumer data.”  Some of the FTC regulators have hinted that legislation may eventually be forthcoming should marketers be unable to police themselves. The increased scrutiny in the industry points to the need for pharma marketers to walk a fine line between using the power of the Internet to connect with consumers and protecting privacy.

[Sources: Chester, Jeff. CDD Asks FDA to Investigate Marketing of Drugs and Health Products. Center for Digital Democracy. 1 March 2010. Web. 4 March 2010; Davis, Wendy. Privacy Advocates. Mediapost.com Online Media Daily. 2 Feb. 2009. Web. 4 March 2010]

If consumers are spending more time online and the bottom line of small businesses keeps getting squeezed, many owners are drawing the same conclusion: Marketing via social media makes sense. The findings of the Small Business Success Index™ (SBSI), jointly carried out by Network Solutions® and the Center for Excellence in Service at the University of Maryland’s Smith School of Business indicate that the rate of social media use in the small business arena doubled between 2008 and 2009. Currently, nearly 1 in 4 small businesses uses social media.

Here are specific study findings associated with small businesses that currently use social media:

• Maintain a company page on a social networking site: 75%
• Social media is used to identify and attract new customers: 61%
• Maintain a network through a site like LinkedIn 67%
• Monitor feedback about the business 54%
• Expect social media to be profitable in the next year 45%

Early participants in social media are achieving near celebrity status in some professions. For example, survey participant Dr. Alan Glazier, CEO and Founder, Shady Grove Eye and Vision Care says, “I am now recognized as a thought leader in social networking within my profession and lastly but most importantly, my marketing budget has been reduced by more than 80%.”

As more small businesses turn to social media in the next year, they may encounter some of the negative aspects of this new form of marketing. Here’s what the survey participants outlined as the drawbacks of social media:

• Takes more time than expected 50%
• Allows people to criticize their business 17%
• Negative comments have hurt, not helped their business 6%

Despite the negative aspects of social media, more small businesses are expected to begin using tools like Facebook and LinkedIn because this form of marketing requires a minimal cash outlay during a time of continued financial duress.

[Source: Social Media Adoption by U.S. Small Businesses Doubles since 2009, Robert H. Smith School of Business, University of Maryland, 2.16.10]