Chapter 07

panicyfewInternet and Web Development

Nov 18, 2013 (3 years and 9 months ago)

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Copyright © 2010 Pearson Education, Inc.

E
-
commerce


Kenneth C. Laudon

Carol Guercio Traver


business. technology. society.

Sixth Edition

Copyright © 2010 Pearson Education, Inc.


Copyright © 2009 Pearson Education, Inc.

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Chapter 7


E
-
commerce Marketing
Communications

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Video Ads Cure Banner Blindness:

String Master

Class Discussion


What advantages do video ads have over traditional
banner ads?


Where do sites such as YouTube fit in to a marketing
strategy featuring video ads?


What are some of the challenges and risks of placing
video ads on the Web?


Do you think Internet users will ever develop
“blindness” towards video ads as well?

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Marketing Communications


Online marketing communications:


Methods used by online firms to communicate with
consumer and create strong brand expectations


Promotional sales communications:


Suggest consumer “buy now” and make offers to
encourage immediate purchase


Branding communications:


Focus on extolling differentiable benefits of consuming
product or service

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Online Advertising


$24.5 billion in 2009


15% of all advertising by 2013


Advantages:


Internet is where audience is moving


Ad targeting


Greater opportunities for interactivity


Disadvantages:


Cost versus benefit


How to adequately measure results


Supply of good venues to display ads

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Online Advertising from 2002

2013

Figure 7.1, Page 430

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SOURCES: Based on data from eMarketer, 2009a.

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Forms of Online Advertisements


Display ads


Rich media


Video ads


Search engine advertising


In
-
game ads


Social network, blog, and game advertising


Sponsorships


Referrals (affiliate relationship marketing)


E
-
mail marketing


Online catalogs

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Display Ads


Banner ads


Rectangular box linking to advertiser’s Web site


IAB guidelines


E.g., full banner is 468 x 60 pixels, 13K


Pop
-
up ads


Appear without user calling for them


Provoke negative consumer sentiment


Twice as effective as normal banner ads


Pop
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under ads: open beneath browser window

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Rich Media Ads


Use Flash, DHTML, Java, JavaScript


About 7% of all online advertising expenditures


Tend to be more about branding


Boost brand awareness by 10%


IAB standards limit length


Interstitials


Superstitials

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Video Ads


Fastest growing form of online advertisement


IAB standards


Linear video ad


Non
-
linear video ad


In
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banner video ad


In
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text video ad


Formats: pre
-
roll, mid
-
roll, post
-
roll


Ad placement


Video advertising networks


Advertising exchanges


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Search Engine Advertising


Almost 50% of online ad spending in 2009


Types:


Paid inclusion or rank


Inclusion in search results


Sponsored link areas


Keyword advertising


E.g., Google AdWords


Network keyword advertising (context
advertising)


E.g., Google AdSense

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Search Engine Advertising


Issues:


Appropriate disclosure of paid inclusion and
placement practices


Search engine click fraud


Ad nonsense




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Sponsorships and Referrals


Sponsorships


Paid effort to tie advertiser’s name to particular
information, event, venue in way that reinforces brand
in positive yet not overtly commercial manner


Referrals


Affiliate relationship marketing


Permits firm to put logo or banner ad on another firm’s
Web site from which users of that site can click
through to affiliate’s site

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E
-
mail Marketing and the

Spam Explosion


Direct e
-
mail marketing


Low cost method


Primary cost is purchasing addresses


Spam: unsolicited commercial e
-
mail


80%

9
0% of all e
-
mail purportedly is spam


Efforts to control spam:


Technology (filtering software)


Government regulation (CAN
-
SPAM and state laws)


Voluntary self
-
regulation by industries


DMA

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Percentage of E
-
mail That Is Spam

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Figure 7.6, Page 444

SOURCE: MessageLabs.com, 2009.

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Spam Categories

Figure 7.7, Page 445

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SOURCE: Symantec, 2009.

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Online Catalogs


Equivalent of paper
-
based catalogs


Graphics
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intense; use increasing with
increase in broadband use


Two types:

1.
Full
-
page spreads, e.g., Landsend.com

2.
Grid displays, e.g., Amazon


In general, online and offline catalogs
complement each other

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Social Marketing


“Many
-
to
-
many” model


Uses digitally enabled networks to spread ads


Blog advertising


Online ads related to content of blogs


Social network advertising


Ads on MySpace, Facebook, YouTube, etc.


Game advertising


Downloadable “advergames”


Placing brand
-
name products within games


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Insight on
Society

Marketing
to Children of the Web in the

Age
of Social Networks

Class Discussion


Why is online marketing to children a controversial
practice?


What is the Children’s Online Privacy Protection Act
(COPPA) and how does it protect the privacy of
children?


How do companies verify the age of online users?


Should companies be allowed to target marketing
efforts to children under the age of 13?

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Behavioral Targeting


Web as “Database of Intentions”


Behavioral targeting


Combines real
-
time information on visitors online
behavior with offline identity, consumptive information


Data analyzed to develop profiles


Ads delivered based on profile


Hundreds of versions of ad for different profile groups


One of fastest growing online marketing
techniques


Raises privacy concerns


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Mixing Offline and Online Marketing
Communications


Most successful marketing campaigns
incorporate both online and offline tactics


Offline marketing


Drive traffic to Web sites


Increase awareness and build brand equity


Consumer behavior increasingly multi
-
channel


60% of consumers research online before buying offline


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Insight on Business

Are the Very Rich Different

from You and Me?

Class Discussion


Why have online luxury retailers had a difficult time
translating their brands and the look and feel of
luxury shops into Web sites?


Why did Neiman Marcus’ first effort fail?


Why did Tiffany’s first effort fail?


Visit the Armani Web site. What do you find there?

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Online Marketing Metrics: Lexicon


Measuring audience size or market share


Impressions


Click
-
through rate (CTR)


View
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through rate (VTR)


Hits


Page views


Stickiness (duration)


Unique visitors


Loyalty


Reach


Recency

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Online Marketing Metrics


Conversion of
visitor to customer


Acquisition rate


Conversion rate


Browse
-
to
-
buy
-
ratio


View
-
to
-
cart ratio


Cart conversion rate


Checkout conversion
rate


Abandonment rate


Retention rate


Attrition rate


E
-
mail metrics


Open rate


Delivery rate


Click
-
through rate

(e
-
mail)


Bounce
-
back rate


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An Online Consumer Purchasing Model

Figure 7.9, Page 465

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How Well Does Online Advertising
Work?


Ultimately measured by ROI on ad campaign


Highest click
-
through rates: search engine ads,
permission e
-
mail campaigns


Rich media, video interaction rates high


Online channels compare favorably with traditional
channels


Most powerful marketing campaigns use multiple
channels, including online, catalog, TV, radio,
newspapers, stores

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Comparative Returns on Investment

Figure 7.10, Page 467

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SOURCE: Industry sources; author estimates.

Copyright © 2010 Pearson Education, Inc.

The Costs of Online Advertising


Pricing models


Barter


Cost per thousand (CPM)


Cost per click (CPC)


Cost per action (CPA)


Online revenues only


Sales can be directly correlated


Both online/offline revenues


Offline purchases cannot always be directly related to online
campaign


In general, online marketing more expensive on CPM
basis, but more effective

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Web Site Activity Analysis

Figure 7.11, Page 472

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Insight on Technology

It’s 10 P.M. Do You Know Who Is

on Your Web Site?

Class Discussion


What are some of the services offered by
Omniture’s SiteCatalyst?


Why would you as a Webmaster be interested
in these services?


Why is site analysis and customer tracking so
important to online marketing?


How did HP use SiteCatalyst?

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The Web Site as a Marketing
Communications Tool


Web site as extended online advertisement


Domain name:


First communication e
-
commerce site has with
prospective customer


Search engine optimization:


Register with as many search engines as possible


Ensure keywords used in site description match keywords
likely to be used as search terms by user


Link site to as many other sites as possible


Get professional help

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Web Site Functionality


Main factors in effectiveness of interface


Utility


Ease of use


Top factors in credibility of Web sites


Design look


Information design/structure


Information focus


Organization is important for first
-
time users,
but declines in importance


Information content becomes major factor attracting
further visits

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Factors in the
Credibility of
Web Sites

Figure 7.12, Page 477

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SOURCE: Based on data from Fogg, et al, 2003.

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Table 7.9, Page 478

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