What have managers who have launched initiatives on the Web learned about how to organize for digital marketing? In order to find out, we studied twelve Fortune 500 consumer goods and services companies with a presence in interactive media. Our research revealed that businesses tend to pass through four stages of development as their marketing goes online. The lessons learned by the pioneers suggest ways for other marketers to decide how best to organize themselves to reach the digital consumer.

Four stages of development

Most companies are only now beginning to learn how to set up their marketing organizations to take advantage of the unique characteristics of network-based environments. They are engaged in a learning process that will typically go through four stages (Exhibit 1):

Ad hoc activity. As companies establish a basic online presence, their effort is led by self-selected individuals. There is no formal organization dedicated to digital marketing, nor are there dedicated skills in place.

At one major commercial bank, a group of 20 employees—mainly from technical areas, but also from marketing and corporate affairs—began meeting every few weeks on a voluntary basis, seeking to exchange ideas and to set up and maintain a Web site...