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Friday, April 22, 2005

Online Dos Not Cannibalize But Turbocharges Offline!!

Fred writes The Truth About Online Canibalization is that it doess not canibalize offline,but turbocharges it. Excerpts with edits and comments:

Fred offers a few powerful examples as proof points:
1 - The South Beach Diet. When the book was doing OK, the publishers cut a deal where Waterfront paid for the rights to create subscription based online newsletters with diet tips. Waterfront then went into the paid search market and bought a huge amount of keywords around the south beach diet theme and drove traffic to the South Beach Diet website where they sold these online newsletter subscriptions and the sales of the book took off. It turns out that all this online advertising, which the publisher was not paying for and in fact got paid for, were having a huge crossover effect on the sales of the book itself.
2 - Seth Godin's regularly puts his books in pdf form on the web for free months before his publisher releases them in print. The viral spreading of the pdf version of the book creates buzz, word of mouth, and thought leadership for Seth's book.
3 - Yankee Hotel Foxtrot - Wilco recorded this album and its label, Reprise, decided they didn't like it and didn't want to release it but released it on the Internet. For free. Then they went shopping for a new label. They eventually found one, Nonesuch, and they released the album in CD format at the normal price and the record sold more than any record they had ever released at the time. It was a huge hit for the band and took them to a new level.
4 - The New York TImes - They worry that it is canibalizing sales of the paper. The New York Times website gets more readers than its paper version. That it reaches more people. That its online ads are seen more than its paper ads(This data may need to be verfied).Its journalists have larger online audiences than offline audiences.. Across the US and in foriegn countries, The New York Times is reaching vast new audiences that it would never have reached in paper form. An interesting read here.
5 - Catalogs. An online cataguer thinks that more online sales means he takes less phone calls and more orders are processed by computers. It's like going from bank tellers to ATMs. It's been great for his business. And he'll still put out his catalogs every month because its another form of marketing that works for him.
My Take: I entirely agree with Fred - No Doubt online does not cannibalise but advances easy reach and more sales - numerous studies suggest that several consumers look at websites - before making the actual purchase either online or offline. Recenty Dow Jones announced more profits from online compared to traditioanl media(This in my opinion reflects two things: Online making tradtional media reach to larger people and rise of online world can't be resisted - better embrace it -Indiactions are that combined strength of both online and offline readership of WSJ is larger than traditional print media readership).Retailers can definitely experience that buyers of all trendy and unique things surf online, do their research before any purchase - In the online world through comparison shopping, targetted advertising, promotional schemes, personalisation and preference patterns all provide unique value that can potentially drive offline sale as well quite significantly.Add mobile technologies and online world - the combination can really create deep impact in the offline world.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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