What Customers are doing online

The evolution under way in digital marketing reflects fundamental changes in consumer behavior. Already, more and more people use the Web—instead of books, the yellow pages, libraries, car dealers, department stores, or real-estate agents—to search for information. In doing so, they often become aware of new products and compare prices.

How far will these shifts go? According to the marketing executives surveyed by McKinsey, by 2010 the Web will play a role in the first two stages of the consumer decision-making process—product awareness and information gathering—for a sizable majority of all consumers, though with notable variations among industries (see exhibit). The expectation that most consumers will seek out new products online may be a factor in the plans of companies to increase spending significantly on several digital-advertising tools they see as most useful in building brands.

A smaller proportion of customers, respondents expect, will use the Web to execute transactions or access services. Even so, 53 percent of all respondents expect that their companies will be making more than 10 percent of total sales through online channels three years from now, more than twice as many as do so today.

Further, some companies, particularly the most frequent users of the full range of online marketing tools, have already begun integrating their online and offline marketing efforts. Most, however, do not: only 42 percent run integrated campaigns, and 32 percent use online tools to influence offline sales. As online tools and techniques take on a larger role in marketing strategies, these numbers will likely grow, increasing the possibility of reaching the sizable number of online customers through successful efforts that could reap benefits offline as well.

(Excerpt from 'How companies are marketing online: a McKinsey Global Survey, September 2007)