Chapter 8 - University of Hawaii at Hilo

panicyfewInternet and Web Development

Nov 18, 2013 (3 years and 7 months ago)

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Copyright © 2004 Pearson Education, Inc.

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E
-
commerce

Kenneth C. Laudon

Carol Guercio Traver


business. technology. society.

Second Edition

Copyright © 2004 Pearson Education, Inc.

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Chapter 8

E
-
commerce Marketing Communications

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Online Marketing Communications


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


Paid message on a Web site, online service or other
interactive medium, such as interactive messaging


2002: $6.3 billion spent, expected to grow to $9.1
billion by 2007


Advantages:


Ability to target ads to narrow segments and track
performance in almost real time


Provide greater opportunity for interactivity


Disadvantages:


Concerns about cost versus benefit


Concerns about how to adequately measure
results

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Online Advertising from 2000
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2007

Figure 8.1, Page 445

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Online Advertising by Industry
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2002

Figure 8.2, Page 446

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Forms of Online Advertisements


Banners, pop
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ups and rich media ads


Search engine marketing: Paid search engine
inclusion and placement


Sponsorships


Affiliate relationships

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Banners, Pop
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ups and Rich Media Ads


Banners: Display promotional message in a rectangular
box at top or bottom of computer screen


Pop
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ups: Appear on screen without user calling for them


Pop
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unders: Open underneath user’s active browser
window and do not appear until user closes active
window


Rich media ads: Employ Flash, DHTML, Java,
streaming audio and/or video


Interstitials: Provide way of placing a full
-
page message
between current and destination pages of user


Superstitials: Rich media ad that is pre
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loaded into
browser’s cache and does not play until fully loaded and
user clicks to another page

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Types of Banner Ads

Figure 8.3, Page 447

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Online Advertising Placement Methods


Banner swapping: Arrangements among
firms allow each firm to have its banners
displayed on other affiliate sites for no cost


Banner exchanges: Arrange for banner
swapping among firms


Advertising networks: Act as brokers between
advertisers and publishers, placing ads and
tracking all activity related to the ad

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Online Advertising Vehicles

Table 8.1, Page 450

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Most Popular Online Marketing Methods

Figure 8.4, Page 450

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Search Engine Marketing: Paid Search
Engine Inclusion and Placement


Search engine marketing one of fastest growing and
most effective forms of online marketing
communications


Paid inclusion


firms pay for inclusion in search
engine index


Paid placement


firms pay for a guarantee that it will
appear prominently in results of relevant searches


Overture.com and Google leaders in this technology


Appropriate disclosure of paid inclusion and
placement practices an issue


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Search Engine Policies on Paid Placement
and Inclusion

Table 8.2, Page 453

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Sponsorships and Affiliate Marketing


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


Advertorial a common form


Affiliate relationship: Permits a firm to put its logo or
banner ad on another firm’s Web site from which
users of that site can click through to the affiliate’s
site


Sometimes called tenancy deals


Amazon/ToysRUs an example


Customer hijacking an issue

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Direct E
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mail Marketing and the
Spam Explosion


Direct e
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mail marketing: E
-
mail marketing messages
sent directly to interested consumers who “opt
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in” or
have not “opted
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out”


Spam: Unsolicited commercial e
-
mail


Spam is exploding out of control


March 2003,
45% of all Internet e
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mail purportedly was spam


Efforts to control spam:


Filtering software (only partly effective)


Self
-
regulation by industry (ineffective)


Government regulation (no Federal legislation
yet)

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Spam Categories

Figure 8.6, Page 459

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You’ve Got Spam

Figure 8.7,

Page 460

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Other Forms of Online Marketing
Communications


Online catalog: Provide equivalent of paper
-
based catalog


Online chat: Provides equivalent of help from
sales representative


Public relations: Involves communicating with
target audiences, or publics, using methods
other than advertising

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Mixing Offline and Online Marketing
Communications


Traditional offline consumer
-
oriented
industries have learned to use Web to extend
brand images and sales campaigns


Online companies have learned how to use
traditional marketing communications to drive
sales to Web site


Most successful marketing campaigns
incorporate both online and offline tactics

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Online Marketing Metrics: Lexicon


Impressions
: Number of times an ad is served


Clickthrough rate

(CTR): Percentage of people who
actually click on ad


Hits
: Number of http requests


Page views
: Number of pages requested by visitors


Stickiness

(duration): Average length of time visitors
remain at site


Unique visitors
: Number of distinct unique visitors to site


Loyalty
: Percentage of visitors who return in a year


Reach
: Percentage of total number of consumers in a
market who visit site


Recency
: Average number of days elapsed between
visits

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Online Marketing Metrics: Lexicon
(cont’d)


Open rate
: In e
-
mail campaign, number of customers
who open mail


Acquisition rate
: Percentage of visitors who register
or visit product pages


Conversion rate
: Percentage of visitors who actually
purchase something


Attrition rate
: Percentage of customers who purchase
once, but never return within a year


Abandonment rate
: Percentage of shoppers who
begin a shopping cart but then fail to complete the
form and leave the site


Retention rate
: Percentage of existing customers who
continue to buy on a regular basis

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Customer Tracking and Marketing
Strategies Used by U.S. Companies

Figure 8.11, Page 471

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Online Marketing Communications:

Typical Clickthrough Rates

Table 8.4, Page 471

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Clickthrough Rates by Format

Figure 8.12, Page 472

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Traditional and Online Advertising Costs Compared

Table 8.6,

Page 474

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Software for Measuring Online
Marketing Results


WebTrends: Software program that
automatically calculates activities at site, such
as abandonment rate, conversion rate, etc.


WebSideStory: Web service that assists
marketing managers


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Web Site Activity Analysis

Figure 8.13, Page 475

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The Web Site as a Marketing
Communications Tool


Web site can be viewed as an extended online
advertisement


Domain name: First communication an e
-
commerce
site has with a prospective customer


Search engine optimization:


Register with as many search engines as possible


Ensure that keywords used in Web 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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Site Design Features that Impact Online Purchasing

Table 8.8, Page 482