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Small Business Digest


Health And Beauty Sector Being Exploited By Firms, Using New Online Techniques, Local Focus

Just recently, FREBREEZE, a new consumer product offering went online and promoted free coupons for anyone willing to download them.  It is the latest example of consumer products utilizing the Internet to drive store traffic.

One of the more personal shopping sectors is the health and beauty products area.  For many of these companies, it is catch-up time as smaller, more nimble competitors have been on-the-web for several years.

Health and beauty is another example of how the nimbleness of smaller firms can result in strong market positioning due to the relatively low-cost of the Internet.  A recent survey showed that many new home businesses are offering products and services aimed at this very personal market.  In fact, a plumbing of new ventures by this newsletter showed that 11% of all respondents of companies under a year of age were in this sector.

Ironically, they may have happened on a rapidly growing sector but one where competition for the Internet space is expected to heat up in the next three to four years.

Another approach is to use such offerings as to create marketing campaigns aimed at potential customers within the immediate geographic area of a smaller health and beauty entrepreneur.  Since health and beauty is such a personal sell, gaining clients from within a limited, nearby area can drive sales while taking advantage of a limited marketing budget.  A campaign based on local ads can drive foot traffic and enable the entrepreneur to put a personal touch into the campaign.
Health and beauty marketers are not the biggest spenders on Web advertising. But the personal care sector is among the fastest-growing online. eMarketer estimates that the CPG industry will spend $470 million on online advertising this year, up from $390 million in 2005. By 2010, 13.8% of all health and beauty sales will be made online, up from 5.6% in 2005, according to Forrester Research.

There's a vast, untapped audience at stake. They include aging boomers struggling to hold onto their youth and Gen Y folks starting families and careers. More than 85% of these groups are online and waiting to be reached. But they are also sophisticated Internet users, not likely to respond to old-style online marketing, according to eMarketer's latest report, Health and Beauty Marketing: Meet Your Online Customers. Marketers are experimenting with new ways -- microsites to promote viral campaigns, podcasts, Web games and online video broadcasts -- to reach their target audiences and break through the clutter.

Search is a crucial marketing technique to reach personal care customers. Consumers have become skilled at searching online for what they want, whether it is product information or brick-and-mortar retail outlets to purchase goods and services. A Hitwise study showed that 75 of the top 100 search terms across all categories in February 2006 contained brand names, and an average of 85% of the brand name searches resulted in a visit to one of the brand owner's sites. Sponsored links and banner ads were found to be far less influential. "Companies should be defending their brands online and bringing traffic to their microsites by buying their brands as keywords at the very least," says Lisa Phillips, eMarketer senior analyst and author of the report.

About eMarketer

eMarketer is "the First Place to Look" for market research, analysis and trends related to e-business, online marketing and emerging technologies. eMarketer aggregates and analyzes data from over 2,000 sources and brings it together in a suite of services offering customers the most comprehensive compilation of up-to-date e-business and online marketing statistics in the world. Visit for more information.

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