Samantha Liss, senior director of brand marketing for CDNOW, who has been with the company through its successes and failures, has this advice for managers of e-commerce businesses who are struggling to balance building a brand with the need to turn a profit.

"They need to understand the return that their marketing investments will provide. For instance, if they are going to adverstise on the radio, make sure they understand the market's awareness of their brand, pre- and post-advertising, as well as sales pre- and post-advertising, so that they can get a clear picture of the ROI.

"The same idea goes for marketing partnerships--a brand should go into partnerships with a clear understanding of the value they are going to get and what the potential return is on that value. If you are doing a deal just to make sure the competition doesn't get it first, you are probably going to wind up paying too much and losing in the end."

Analysts also emphasize that it's essential to focus on building customer loyalty, and to continually evaluate important site statistics, such as the marketing cost per visitor, the revenue per visitor and the conversion rate, to make sure your tactics are helping you actually achieve your objectives. Above all, don't discount traditional business practices.

"In addition, an extremely integrated approach is important," adds Liss. "Make sure that the message you are communicating matches the site experience. If you make sure the customer comes first, you will most likely come out on top somewhere down the line."