A McKinsey global survey of marketers shows that companies are using digital tools—from
Web sites to wikis—most extensively for customer service, least in pricing. Two-thirds are using
digital tools for product development, almost as many as are advertising online.
Respondents consider online ads to be as useful for brand building as for direct response. Spending is
expected to increase on all types of online advertising vehicles over the next three years.
In 2010 just over half of all respondents expect their companies to be getting 10 percent or more
of their sales from online channels—twice as many companies as have hit that mark today.
And 11 percent expect to be spending a majority of their advertising budgets online by then.
Most companies today don’t integrate their online and offline marketing efforts; companies that use
online tools across the full spectrum of marketing activities are much more likely to do so.
Jean-François Martin
How companies are marketing online:
A McKinsey Global Survey
2
Source: July  McKinsey Quarterly survey of business executives
A survey of marketers from around the world shows where online tools are most important,
how they’re being used, and on which ones companies plan to spend more.
How companies are marketing online: A McKinsey Global Survey
Throughout the brief history of the
Internet,
expectations have run high for it to
“change everything.” A McKinsey survey of
marketing executives from around the world
shows that in marketing, things are starting to
change: companies are moving online across the
spectrum of marketing activities, from building
awareness to after-sales service, and they see
online tools as an important and effective
component of their marketing strategies.



Blogs (short for Web logs) are online journals or diaries hosted on
a Web site.
Online games include both games played on dedicated game consoles
that can be networked and “massively multiplayer” games,
which involve thousands of people who interact simultaneously through
personal avatars in online worlds that exist independently of any
single player’s activity.
Podcasts are audio or video recordings—a multimedia form of a
blog or other content. They are often distributed through aggregators,
such as iTunes.
Social networks allow members of specific sites to learn about other
members’ skills, talents, knowledge, or preferences. Commercial
examples include Facebook and MySpace. Some companies use such
systems internally to help identify experts.
Virtual worlds, such as Second Life, are highly social, three-dimensional
online environments shaped by users who interact with and
receive instant feedback from other users through the use of avatars.
Web services are software systems that make it easier for different
systems to communicate with each other automatically to pass information
or conduct transactions. A retailer and supplier, for example, might
use Web services to communicate over the public Internet and automati-
cally update each other’s inventory systems.
Widgets are programs that allow access from users’ desktops to Web-
based content.
Wikis, such as Wikipedia, are systems for collaborative publishing. They
allow many authors to contribute to an online document or discussion.
What are emerging vehicles?

In July  McKinsey surveyed  marketing executives from public and private companies around the world, representing industries such as business
services, energy, retail, technology, and telecommunications. We asked respondents about the frequency and effectiveness with which they applied Web-based,

facturing. There are also two other likely
reasons for the relatively low use of online tools:
a lack of capabilities to manage them

and the
fact that access to high-speed Internet con-
nections (required for many of these tools) is
uneven (just under half of Europeans have
it, for example, compared with  percent of
the US population).
A large group of respondents say that their
companies frequently use online tools for all
ve aspects of marketing. These companies—
with almost half of all the respondents—
are somewhat likelier to be headquartered in
Europe than the panel average (despite the lower
access to broadband there), somewhat likelier to
be in the high-tech industry, and notably less
likely to be in manufacturing. Frequent users
are also much likelier to be public companies
and to have annual revenues of  billion or
more. Not surprisingly, this group of
respondents is also the likeliest to describe
online tools as extremely important across the
whole range of marketing activities and, often,
to be using more sophisticated techniques than
other companies do.
Exhibit 1
Usage and
importance of digital

that executives also see low capabilities as a barrier to the use of many other online tools (see footnote ).
4
Source: July  McKinsey Quarterly survey of business executives
Web-based sales and services were early uses
of the Internet for marketing. Respondents say
that some approaches to them—providing
service information on Web sites, interacting
with customers via e-mail, and executing
transactions on company Web sites—are widely
used (Exhibit ). Most companies focus on
their own Web sites for both sales and services,
but some are experimenting much further
aeld:  percent of respondents in the high-tech
industry, for example, say that they are
experimenting with selling in virtual worlds.
Companies that use digital tools frequently
across the marketing spectrum are likelier than
others to be using more complex tools for
online services;  percent offer “click to call,”


and more than a quarter offer text chats with
service personnel, compared with  percent of
other companies in each case.
The exibility and degree of personalization the
Web offers would seem to make pricing another
natural area for companies to move online.
Nonetheless, companies have been slower to act
there than in any other facet of marketing, and
most don’t think online tools are particularly

Proprietary or external
e-commerce site
42
Proprietary store in
virtual world
8
86
Provision of relevant
information on Web site
78
E-mail
29
Online ‘click to call’
2
External auction site
6
Hosting a user forum on
corporate site so consumers
can help other consumers
22
Online text chat with
service person
18
Online video chat with
service person
6

A feature that allows consumers to request that a company representative call them.
5
Source: July  McKinsey Quarterly survey of business executives

Base varies insignicantly; respondents reported using more than  emerging digital-advertising vehicle.

Usage: blogs = %, social networks = %, wikis = %, widgets = %, virtual worlds = %, online games = %.
How is your company’s current
spending on digital-advertising
vehicles allocated?
Which, if any, of the following
digital-advertising vehicles does
your company use?
% of respondents whose companies use given
digital tool/technique
1
Average of responses, % of digital-ad
spending
2
E-mail
n = 231
83 31
Display ads
n = 206
73 33
Paid keyword search
n = 175
63 30
Branded sponsorship
n = 135
48 25
Referrals
n = 109
39 18

campaigns will also increase.
Exhibit 4
Becoming more
digital by 2010

Base varies insignicantly; respondents reported using more than  digital-advertising vehicle; gures may not sum to %,
because of rounding.

Blogs, online games, social networks, virtual worlds, widgets, wikis.
Do you expect spending on each
of these digital-advertising vehicles
to decrease, increase, or stay
the same over the next three years?
Compared with traditional media, how
efcient is each of the digital-advertising
vehicles your company uses in reaching
your company’s goals?
% of respondents
Less efficient More efficient
% of respondents
1
Paid keyword search
n = 175
609
5110
E-mail
n = 231
507
Branded sponsorship
n = 135

20
69
3
8
25
59
6
9
19
74
6
35
54
3
8
31
55
9
6
12
64
1
24
7
Source: July  McKinsey Quarterly survey of business executives
Marketers say that online tools help them meet
their goals throughout the customer decision-
making process, sometimes in ways that
contravene the common wisdom about how
these tools are best used. Search advertisements,


Exhibit 5
Objectives vary among
users of digital tools
Online ads: Meeting many needs, hitting many barriers
% of respondents whose companies use each digital tool/technique
1

Respondents reported using more than  digital-advertising vehicle; gures may not sum to %, because of rounding.
What marketing goal do you try to achieve with each of the following
digital-marketing vehicles?
Overall
E-mail, n = 231
Paid keyword search, n = 175
Display ads, n = 206
Branded sponsorship, n = 135
Referrals, n = 109
Video ads, n = 94
Podcasts, n = 70
Emerging vehicles, n = 149
Brand building
25
5
27
36
55
13
33
22
19

Direct response
22
33
29
27
7
27
17
5
9
Top 4 digital-marketing
tools used

“How businesses are using Web .: A McKinsey Global Survey,” The McKinsey Quarterly, Web exclusive, March .
8
Source: July  McKinsey Quarterly survey of business executives
Exhibit 6
Adoption barriers
Another frequently cited barrier—insufcient
metrics to measure impact—is counterintuitive
because the ease of measuring returns on
investments is among the key selling points of
vehicles such as paid search.

It’s particularly
notable that more than half of all current
advertisers see insufcient metrics as a barrier—
a proportion signicantly higher than it is
among nonadvertisers. On the other hand,
it’s also notable that some common fears, such

at agency
18 9
Not enough high-quality inventory
2
available for purchase
12 4
Brand risk
11 7
Too labor intensive
9 7

For more about measuring returns on online investments, see Thomas D. French, “Confronting proliferation . . . in online media: An interview with Yahoo!’s
senior marketer,”
The McKinsey Quarterly, Web exclusive, June .
9
Source: July  McKinsey Quarterly survey of business executives
Collaborative tools such as blogs, wikis, and
social networks are being used in advertising,
product development, and customer service. At
the simplest level, for instance,  percent
of the respondents say that their companies host
user forums for customers to help one another.
Just over a third of all survey respondents—and
just over half of those whose companies
advertise online—say that their companies use
some kind of collaborative or interactive tool
to advertise. About  percent are using these
tools for customer retention, which ts into the
common understanding that they help build
relationships between customers and companies.

The contributors wish to thank Nicole Baumüller for her signicant role in the execution of this survey.
Contributors to the development and analysis of this survey include Jacques Bughin, a director in McKinsey’s Brussels ofce;
Christoph Erbenich, a principal in the Frankfurt ofce; and Amy Shenkan, a consultant in the San Francisco ofce.
Copyright ©  McKinsey & Company. All rights reserved.
The evolution under way in digital marketing
reects 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 we surveyed, by  the
Web will play a role in the rst 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 (Exhibit ).
The expectation that most consumers will seek
out new products online may be a factor in the
plans of companies to increase spending
signicantly 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,  percent of all
respondents expect that their companies will be
making more than  percent of total sales
through online channels three years from now,

63
83
58
54
41
44
45
34
32
35
33
30
44
61
47
36
Total
High tech
Financial services
Manufacturing
What customers will be doing online