The impact of the internet on marketing

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Nov 24, 2013 (3 years and 8 months ago)

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MBA 563

Marketing Technology

Introduction

The impact of the internet on
marketing

Week 1

What is internet marketing?


Online marketing/
eMarketing

/ digital marketing
/ web marketing / internet marketing?



The application of the internet and related digital
technologies in conjunction with traditional
communications to achieve marketing objectives


……Dave Chaffey



http://www.smartinsights.com/digital
-
marketing
-
strategy/online
-
marketing
-
mix/definitions
-
of
-
emarketing
-
vs
-
internet
-
vs
-
digital
-
ma
rketing/

Why study internet marketing?


Over the past 20 years traditional marketing practices have
been transformed


October 27, 1994


first banner ad


Digital marketing continues to grow and attract marketing dollars
(Gartner:
US Digital Marketing Spending Report 2013
)


The influence of Web 2.0 in the late 90s and early 2000s, product
digitization, and now the impact of mobile computing


Continuing strong growth in business
-
to
-
consumer and business
-
to
-
business
eCommerce


New skills, knowledge and strategies in high demand in the
business world


very strong demand in this area


Marketers need to understand technology and collaborate
with IT colleagues


Course outline and resources

Course website:

http://web.viu.ca/thomasb/mba563.html

..and

http://web.viu.ca/thomasb/weekly_mba563.html

The 4Ps in transition

The impact of the Internet on the traditional
marketing mix framework


Product


new products, the rise
of the “prosumer”


Price



dynamic pricing,
comparison pricing,
bidding……..FREE!


Place



direct distribution of
digital products, supply chain
management, channel integration


Promotion



new social and
communications media,
measurable advertising


Strong trend towards
personalization and away from
the mass (undifferentiated)
market affecting all the elements
of this framework







The Six “I”s Framework


I
nteractivity


I
ntelligence (market)


I
ndividualization


I
ntegration


I
ndustry restructuring


I
ndependence of
location




MacDonald and Wilson. The New
Marketing, 2002

Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Interactivity


The internet is not TV



Conversation, not broadcast



Pull, not push



Active rather than passive (lean
-
forward medium)



Social Networking / User Generated Content / Web 2.0

Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


[Market] Intelligence


By the very act of using the internet, we are
“telling” marketers what we want:


Passively


Clickstream data


Web analytics


Actively


Social network updates, photos, videos, reviews, forum
postings etc


Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Individualization


The market of
one: based on
the information
about customers
that we provide,
and that is
collected
automatically
and monitored
constantly



Amazon

for
example



Traditional
media

Same message to all customers or
segments

New

media

Message tailored to each customer or micro
-
segment

Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Integration


Online marketing is very readily integrated
into a marketing communications strategy



Web channels complement and integrate with
offline marketing channels


EXAMPLES?


Call a customer service rep for assistance


Movie trailers on YouTube


Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Industry restructuring and
Independence of location

INDUSTRY RESTRUCTURING


Disintermediation


traditional
intermediaries used by
marketers disappearing


Re
-
intermediation new
intermediaries (
eg
.
PayPal)


Business models
challenged

LOCATION INDEPENDENCE



Increased reach to
global markets



Increased exposure



Increased competition


Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Product trends online



Digital value


adding value to products
through online means



Digitization


product or place?



Personalization


individualized products and
the “prosumer”

Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Digital goods distribution




Any product that can be digitized can be delivered
over the Internet


Online distribution costs are significantly lower


No inventory problems


No product depletion


Completely new business models based on digital
distribution methods


Internet becomes a direct substitute for an offline
distribution channel eg. online banking



Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Some industries that are undergoing rapid
change due to Internet forces affecting
product and place



Recorded Music industry


Video/DVD rental industry


Newspaper and magazine publishing


Banking


Book publishing


Textbook publishing



Forces for change:


Digitizable product


Self service


Direct to consumer shift


Personalization

Pricing


Internet influences


buyer and seller
perspectives of price


Moving from free to fee (and freemium)


Price comparisons / transparency


Dynamic pricing





Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Going from free to paid


Big issue now is persuading people to pay
for something they used to get for “free” or
finding some other strategy to monetize


Some strategies


Freemium
: provide basic service at no cost,
with upgraded or enhanced service being
charged for
eg
.


Flickr


LinkedIn


Shockwave.com (casual games)




Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Online promotion


We will look at the many new techniques
available to marketers to promote goods and
services online


Permission marketing


Online PR and the new transparency


The big value of internet marketing


ability to
measure results and therefore performance
based

Source:
eMarketing

eXcellence
. 2012.
Smith &
Chaffey


Owned, earned and paid media


Definitions from Dave Chaffey


Paid media: “media where there is investment to pay for visitors,
reach or conversions through search, display ad networks or affiliate
marketing.” (online and offline)



Earned media: “publicity generated through PR invested in targeting
influencers to increase awareness about a brand. Of course, it’s still an
investment. Earned media also includes word
-
of
-
mouth that can be
stimulated through viral and social media marketing and includes
conversations in social networks, blogs and other communities.”


Owned media: “media owned by the brand. Online this includes a
company’s own websites, blogs, mobile apps or their social presence
on Facebook, LinkedIn or Twitter. Offline owned media may include
brochures or retails stores.”

http://www.smartinsights.com/digital
-
marketing
-
strategy/customer
-
acquisition
-
strategy/new
-
media
-
options/

Owned, earned & paid media
(Chaffey)

http://www.smartinsights.com/digital
-
marketing
-
strategy/customer
-
acquisition
-
strategy/new
-
media
-
options/

Owned, earned and paid media:
role, benefits & challenges

http://www.smartinsights.com/digital
-
marketing
-
strategy/customer
-
acquisition
-
strategy/new
-
media
-
options/

The internet
marketing
toolbox

Blogging

Mobile

General
social
networks

Niche social
networks

Search engine
optimization

AR, VR

eMail

Search
advertising

Twitter

Interactive
display
advertising

Video