Consumer Behavior On

puppypompAI and Robotics

Nov 14, 2013 (4 years and 5 months ago)


Consumer Behavior On

The World Wide Web

Some of the exercises contain ads taken from the Internet which you are asked to evaluate
in light of consumer behavior concepts as well as what makes for effective Web ads. Other
exercises ask you to search the Internet to find ads or to interact wi
th consumer
Websites. The purpose of this section is to give you an introductory background to the Internet
to help you to do this.

An Overview of Cyberspace and Cybercommunication


World Wide Web


or “

the most popular componen
t of the Internet
(“Net”) and the main commercial component,


that portion of the Internet servers that
support a graphical interface retrieval system which organizes information into thousands of
interconnected pages or documents called
Web pages
start pages
landing pages

the introductory page or opening screen of a Websites), making
navigation simple and exciting. The Web is a digital medium that combines sound, graphic
images, video, and hypertext on a single page. Each
home page is like a book cover or gateway,
acting as the starting point to additional information.

Content providers

are the parties that provide information on the WWW known as
, which consist of one or more Web pages with related information

about a particular
topic, usually overlaid with graphics. Today marketing content providers include companies,
direct marketers, electronic retailers (
) and other organizations that have their own
Websites, as well as Websites that contain secon
dary data. The WWW is that portion of the
Internet most heavily used by advertisers (the other components, which are beyond the scope
of this book, are instant messaging or electronic relay chat; and Usenet discussion groups,
newsgroups, and electronic bu
lletin boards or boards, on which members can read messages
on a given topic, post new messages, and respond to existing messages.)

On the WWW

those who spend a considerable amount of time on the Internet

can access an immense database of in
formation in a graphical environment through the use of
programs called
Web browsers

software programs with a graphical user interface that
enables the user to display Web pages as well as navigate the Internet. In 1994, the first
commercially available
eb browser
software that accommodated graphics,
, was released (later followed by
Internet Explorer
). People could now navigate in
cyberspace by pointing and clicking on icons, making the Internet almost as user
friendly as the
online services (e.g., CompuServe, Prodigy, and America Online, all born during the
1980s). To connect to the Web, one needs to gain access in one of four ways: through a
commercial online service (e.g., America Online), a corporate gateway (e.g., AT&T’s
Service,) a local Internet Service Provider (ISP), or an educational institution.

Initially, people found it difficult to find information on the WWW

it was like trying to find a
book in the library without a card catalog. This problem cre
ated demand for another software
program, the
search engine

a computer program on the Internet where users could type in a
name, word, or phrase, and the search engine would troll the Net to locate relevant
information and Websites addresses. In rapid suc
cession a number of programs with catchy
names like Yahoo! (founded in 1994 as a bare
bones directory founded by Stanford University
students Jerry Yang and David Filo and now the Web’s most popular site, followed by MSN and
AOL), Excite, and InfoSeek emer
ged as search engines. These rapidly became high
locations, and advertisers began to advertise on them using


little, rectangular
static or animated billboards that are located on at the top of a Web page and that can serve as
a gateway
to send a consumer to an advertiser’s Web page.


the sale of goods and services on the Internet

had its genesis when in 1995
Jeffrey Bezos envisioned a new business paradigm that involved selling books online at, and Pierre Omidya
r launched eBay, an online marketplace.

Today, virtually every business, from the local florist to global corporations, has its own
Websites, and many individuals have their own home pages. Since the online services and the
search engines are the ga
teways to all of these sites, they also attract the greatest number of


landings on the site that might represent multiple requests by the same visitor and so
doesn’t represent the number of unique users

and the greatest volume of advertising. For
any college students, the WWW is the first source of information from everything from news
to term paper research to travel planning. For advertisers, the Internet is a valuable
component of an integrated marketing communication (IMC) program and, like ot
her media
advertising and promotional tools, is most effective when used in conjunction with the other
program elements.

The Internet is a
digital interactive medium

It is interesting to note that initially marketing
was interactive, with the major
ity of marketing communication being carried out by
salespeople and face
face communication in retail stores. Subsequently, marketers and
consumers relied more on mass communication, and, for the most part, interactivity left
marketing communications.

With the Internet, marketing communications increasingly involve
interaction between buyer and seller.

Advertising on the Internet is considered
interactive advertising

since, unlike traditional
advertising media, it offers the consumer an opportunity

to respond to the ad (as do other
interactive media: CD
ROM catalogs and magazines, stand
alone sales and information kiosks,
and interactive TV). Interactivity is a big plus since it gets the customer actively involved,
leading to better learning and oft
en a sale. While some observers believe these new interactive
media will totally transform the nature of advertising as we know it, others say that, like TV and
radio before it, it will simply be one more addition to the media mix. Nonetheless, given tha
consumers can make purchases over the Internet, it also ads new channels of distribution.
Most Internet advertising most closely resembles broadcast advertising in that it has sound and

Surfing the World Wide Web

An important aspect of con
sumer behavior is the consumer decision
making process. One
important stage in this process,
external search for information
, can occur online. There are
two general ways people search for information on the Internet. First is
directed search/pre
se search

(“shopping”) with purchase of one or more particular products (and even
brands) in mind. Consumers know what they are looking for and usually have some existing
information to rely on (e.g., a producer’s name, brand name, or a set of terms which describe
the product category). Here, they usually search for key/search terms in search engines as
described below. Second is

casual search
, with no particular immediate purchase
in mind. Here, the user might not have an immediate need or might h
ave a less precise view of
the information that might be available. Browsing relies heavily on

(electronic connections from one Websites to another Websites) between documents, allowing
the browser to navigate through cyberspace in a n
sequential manner.

The Web has been likened to a library lacking a card catalog

there is no central authority
that lists all possible sites accessible via the Internet. This results in

gliding in an
unplanned fashion from home page to ho
me page. There are, however, two organized ways to
find information on the WWW

purpose search tools such as browsers and search
engines, and specially designed tools, such as shopping bots:

First are
Web browsers
. You can search by pointing
your Web browser toward a
resource locator (URL

the Websites address or

, which identifies a particular
location (i.e., Web server and file on that server of the site where the information you need is
located). You can enter the URL fo
r that site in the search window (by clicking “File

Window”) of your Web browser, which takes you directly to that site’s
home page
. (The
original six top
level domains [TLDs] widely used in the U.S were: .com [commercial or
“”], .edu [educat
ion], .net [network operations], .gov [U.S. government], .mil [U.S.
military], and .org [organization. In 2001 to these were added .biz [commercial or business],
.info [unrestricted by organizational type], .name [for individuals], .pro [for accountants,
lawyers, and other professionals], .aero [for the air transport industry], .museum [for
museums], and .coop [for cooperatives]).

A second organized way to surf the Web is to use a
search engine

a computerized directory
that allows users to search t
he WWW for information in a systematic way. The big four sites
are Google, Yahoo!, MSN, and America Online. Others include Alta Vista, Excite, HotBot (gives
you a choice among three other search engines too), Infoseek, and Lycos, among others. Each
ch engine contains collections of links to documents throughout the world, and each uses
its own indexing system to help you locate the information you are looking for. Some search
for titles or headers of documents, while others search words in the docum
ents, and still others
search other indexes or directories.

All search engines allow you to enter one or more
key words
search terms

into the text
box. They then return listings of

Alternatively, you can click on a list of broad topi
(art, business, entertainment, etc.) to go to subdirectories or else home pages. Most search
engines use a best match search process and present search output (the “
retrieval set
”) in order
ranked by relevance, based on: how many of the search items we
re found in the document,
how often the search items were found in the document, where in the document the search
items were found, and proximity of the terms to one another.

It is not uncommon to find a large number of hits; if this is the case, the rule of thumb is to
scan the first 50 hits, and if these don’t provide useful information, to consider redesigning the
search strategy. The retrieval set usually takes the
form of a list of Web pages representing the
records retrieved, ranked in order of their potential relevance to the query and presenting a
certain number (say, ten) at a time. Each of these incorporates a hypertext link to the source

There are

seven types of search engines:

Hierarchical search engines

add value through human intervention in the
assignment of subject headings to records in databases. In a hierarchical search engine, all sits
fit into categories. In addition,

all sites are evaluated prior to inclusion. Such sites only contain
submissions from users

they don’t perform a search of the Web

hence, they are not
comprehensive, omitting a large portion of the information on the Web. Websites creators
may their page

for inclusion in the evaluation process. The maintenance of such directories is a
intensive process

therefore such search services are selective in the sites that are
included. However, such selection reduces the amount of garbage one often encoun
ters in an
Internet search. Yahoo! is an example of a directory built on a hierarchical, subject
guide. Others include Ask Jeeves, Excite, LookSmart, and Lycos. All sites have to fit into a
certain category/subject heading and subcategories (e.
g., Stolichnaya vodka is indexed as
Business and Economy/Companies/Drinks/Alcoholic/Vodka). Going to Business and
Economy/Companies/Sports/Snowboarding/Board Manufacturers gives almost 60 companies
that sell snowboards on the Web. Searching is via menus
of these subject headings and/or
through keyword searching.


Collection search engines
. Alta Vista, Fast, Google, and Northern Light are examples of

engines that use a

an automated program that crawls around the Web and collects

The advantage of these is that they tend to be very comprehensive. Because
there are so many sites, they rank the best matches first.


Concept search engines
. Excite is an example of a concept search engine

they use a
concept, rather than a word or a

phrase, as the basis for the search. To narrow the
original search, one clicks on one of the sites found in that search to do another search.
The percentage key gives the user an idea of how close a particular site is to his or her
concepts. For exampl
e, Ask Jeeves is a
natural language search engine

it allows users
to type in natural
language questions. Concept search engines can be a relatively
efficient and focused way of searching. The disadvantage is that they aren’t as
comprehensive as collecti
on search engines.


engines/meta search engines/mega
search engines

search multiple search
engines simultaneously for words and phrases. They then combine results, remove
duplicate entries, and /present a single listing. Examples include MetaCrawle
r, Dogpile,
and Debriefing (the latter is maintained by librarians who are constantly refining and
upgrading the site). Some of these can be found in the list of search engines when you
click on the “search” button of your browser, and others are found by

typing into the
Web browser “ (e.g.,;
. They are a quick way of searching across several search tools,
h they might not support some of the more sophisticated search facilities. There
are also specialty search engines that limit searches to specific topic areas such as law,
business, and medicine, as well as Web community sites such as


Robot search engines/search bots
. This newest type of search engine acts like meta
search tools and searches many Internet search engines in parallel. They differ from
meta search tools in that they are loaded at the local workstation rather than operatin
in client server mode. Also, they use robots (“
”) or
intelligent agents

to roam the
Internet in search of information.
Shopping bots

are specialized search bots designed to
locate and compare products. They take a query, visit shops that might ha
ve the sought
product, bring the user the results, and present them in a consolidated, compact format
that facilitates comparison shopping. Many also provide access to an order form. Some
shopping bots are comprehensive in coverage (e.g.,, N,,,, and while others
focus on a specific product range (e.g., BargainBot for books, Bargain Finder Agent for
Music and CDs, Gift finder for gifts, Price Scan for computer software a
nd hardware, and for insurance needs). Most shopping bots claim to eliminate the
searching necessary to identify the right product at the best price.

Once a search has been performed, the user needs to assign relevance rankings to
the items
retrieved. The intelligent agent uses this information in the next iteration to modify its search
operation. For example, finds the best deals for your traveling needs, while
BargainFinder (
) does so for your music needs. Some Web retailers
have designed their sites to either refuse the robot admission or to confuse the robot, as they
wish to avoid a “cheap” image.

Search engines for specific sites
. E
tailers with large catalogs of products, such as, need a search engine to support users in navigating their way through the cyber

Some search engines (e.g., Yahoo! and Lycos) serve as

(entry/starting points) for
Internet ex
ploration, and they typically offer e
mail, news, search, and games. America Online
is a well
organized Web portal from which a Web surfer can link/jump to many locations
highlighted by AOL. Commercial Websites pay portals to be featured in this way. Su
ch portals
can be

serving one industry or market (such as an ethnic market) or

serving multiple industries and markets.

Which search engine should you use? The best search engines cover about 30 percent of the
estimated pages ou
t there. Drs. Steve Lawrence and C. Lee Giles of the NEC Research Institute
of Princeton, NJ found northern Light, Snap, and Alta Vista as reported in the July 8, 1999 issue
of the scientific journal

to index more of the Web (16%) than other popular

engines. In terms of freshness (the time it takes a search engine to index changes made to
pages) they found Alta Vista, Excite, and Hotbot to be the most up
date search engines. Also
popular are Yahoo!,, MSN, and Lycos. However, by 2
002, Google had become so
dominant that to “Google” something or someone

that is, to search the Web for that thing or

had become considered a verb.

It is a good idea to use multiple search tools since there is surprisingly little overlap betw
the major search engines. You will get different results with different search engines because
retailer and manufacturers pay to be linked to search engines.

are efficient since
they search multiple search engines simultaneously.

There are also specialty search engines that limit searches to specific topic areas such as law,
business, and medicine as well as Web community sites such as These
niche or “vertical” search engines only search within a narrow band of i
nterest. They are
sometimes called

(a contraction of “vertical” and “portal”), and they might also offer
expert reviewers and provide the “best” recommended sites in a given area.

Blog search engines

such as Technorati, Blogdigger, BlogPulse,, or
Google Blog Search. If you’re looking for very current information (such as today’s buzz), these
are useful.

Searching is on the basis of full text and/or product categories.

The p
rocedure for searching is:


Get to the search engine, either by clicking on the “search” button in the browser or by
typing the search engine’s URL (e.g.,
) in the search window.


Enter your search request
(keyword[s]) in the search engine’s search window. Although
different search engines use slightly different rules for controlling the parameters of
your search, there are certain rules of
Boolean logic/search language

(remember the
“new math” diagrams tha
t illustrated the inclusivity or exclusivity of sets with AND, OR,
and AND NOT?) that can generally be used <Operators>:

Use a
plus sign

(+) in front of a word to indicate that it must appear in each Web
page of the query results (e.g., hotels+San+Fransis
co). Without the plus sign the
word isn’t considered mandatory.

Use a
minus sign


in front of any word that shouldn’t be included in any Web page
in the search results (e.g., Cars

Enclose a multiword phrase in
quotation marks

to tell the search engine to list only
sites that contain those words in that exact order (e.g., “Seattle Preparatory


works like the plus sign, indicating that all the words joined by AND must
appear in the document (e.g., to find documents
that contain the words
wizard, oz,
, enter: wizard AND Oz AND movie).

joins words, at least one of which must appear in the document (e.g., to find
documents that contain the word dog or puppy, type: dog OR puppy). OR is often
used to broaden
a search (e.g.: (travel OR tourism OR cruises OR cruising OR
vacations OR vacationing OR vacationers) AND (Caribbean OR Bermuda OR Jamaica
OR Virgin Islands))


is similar to the minus sign and is used to exclude words in the
document, word
s that are likely to match your search requirements but have
nothing to do with the search topic. (Thus, to find documents that contain the word

but not the word
, enter: pets AND NOT dogs; e.g.: Dolphins NOT NFL).

should be used when words s
hould be near each other (e.g., Moon NEAR

() Parentheses
are used to group portions of Boolean queries together (e.g., to find
documents containing the word

and either


type “fruit AND
(banana OR apple”).

Title search
allows yo
u to search for titles of web documents (e.g., “title:Mars” or
“t:Mars” will retrieve all documents with the word “Mars”).

* Wild card

(e.g., eco* will return economy, economics, ecology, etc.)

Some Hints for Searching

Be specific
. Tying in “DVD Play
ers Reviews” will give you a better set of results
than the more general “DVD Players.”

Add quotation marks
. Keep exact phrases and proper names intact by enclosing
them in quotation marks. Use words most likely to be used (e.g., try “John F.
Kennedy” an
d “born” rather than “John F. Kennedy” and “birth date”).

Use the “advanced Search” feature tool. For example, you can scour only certain kinds of
documents by excluding pages with certain words.


After typing the search request, click on the search butt
on. (The search engine then
searches the entire Web or a subset of the Web to locate sites meeting your search


In a period of several seconds to up to a minute or more, the search engine returns a list
of sites containing the information that

meets your criteria. Look at the top or bottom
of the current page to see how many sites are listed. If there are too many, you can
either just look at those at the top of the list (click on a link to go to a document) since
those should be the best mat
ches, or start over and narrow your search (e.g., by typing
in additional terms, using AND, or using NOT).

Websites are also discovered via word
mouth communication as well as checking
favorite Websites on others’ home pages.

The World Wide Web a
s an Advertising Medium


Of all the options available to Internet advertisers, the WWW holds the greatest potential.
It is like no other communication medium because of its ability to combine several of the
unique qualities of the other media (i.e., print, sound, and visua
l) into one, while allowing for
way communication between advertiser and customer. It allows for detailed and full
graphics, audio transmission, delivery of in
depth messages, 24
hour availability, and two
information exchanges between the a
dvertiser and the customer. A Web page can provide
corporate and product information as well as allow the consumer to make a purchase. The
primary difference between the Web and the other three cyberadvertising media is that while
they are

media and

might therefore be resented by consumers, the Web is a


the consumer actively searches for the advertiser’s home page.

Consumer benefits
for browsing using the Internet include: convenience, saving time, saving money, breadth of
information, and comparison shopping. Te key to online marketing is customization and one
one selling., for example, knows each
of its customer’s preferences, so it can
offer books to suit each individual’s interests.

Web audiences

As in offline marketing online marketing has two broad target markets: consumers and
businesses. The
consumer market

to consumer or “b
c”) is upscale and leads an
active lifestyle; they use the Internet largely to save time and for convenience. Although the
Internet consumer market grew rapidly in the late 90s, growth has slowed in the early twenty
first century due to the “digital d
ivide” between those who can and can’t afford PCs and online
access, the existence of some adults who feel no need for the Internet, and ex
users who feel the
Internet doesn’t meet their needs. The trend in target marketing on is toward niche marketing.
Consumers are more likely to spend time on a site if there is information of specific interest
them. For instance, profitable pet supplier Waggin’ Tails specializes in high
margin products,
unlike the defunct, which tried to do it all.

business (“b
b”) market
(not the concern of this book) is much larger,
with over 90% of all businesses having a Websites. Businesses use the Web to acquire product
information efficiently without having to make a phone call or wait fo
r a salesperson to visit. A
marketer can reach thousands of prospects it wouldn’t have otherwise been able to reach, and at
a significantly reduced cost.

Web objectives
. Unlike other media, the Internet is a hybrid of media. In part it is a

medium, allowing companies to create awareness, provide information, form
and change attitudes, and create a brand or organizational image, all
. But the Internet is also a
direct response
medium, allowing users to both pu
and sell products via

the direct selling of goods and services on the Internet (or,
from the consumer’s perspective, we guess you could call it, uh, Windows shopping). Thus,
firms can have both
communications objectives

sales objecti
, as well as


Communications objectives


Create awareness

Web advertising can create awareness about both the company and its
products and brands.

Disseminate information.

Early use of the Internet for commer
cial purposes was to provide
depth information about a company’s products and services. In b
b marketing, this is
virtually mandatory as most buyers now expect a firm to have a site providing detailed
information about its offerings. In the governm
ent sector contracts are often put out to bid
on the Internet. Many consumer marketers use the Internet to communicate more product
information, with ads often referring consumers to the Websites. A surrogate for amount
of information gathered is amount
of time users spending on a site


Create and change attitudes

toward the organization and its offerings via persuasion and

Create an image
. Many Websites are designed to reflect the image a company wishes to
portray. > However,

banner ads tend to be poor at this.

Websites can also have behavioral or sales objectives.
involves the direct
selling of goods and services on the Web.
Behavioral objectives


Gaining or increasing Websites registrations

imulate trial

through electronic coupons. These can either be printed from a Web page or
requested online for mail delivery.

Stimulate site visits/drive traffic to the Websites

(e.g., via banner ads which pop up when you
visit another site), which can b
e measured by
through rates
(click through rates are
typically .25% or less).

Miscellaneous objectives


Improving customer service
. Companies can improve customer service and build customer
relationships by providing information,
answering inquiries, and offering an opportunity to
register complaints.

Increasing distribution
. Websites can be used as an exclusive Websites or in addition to
mortar sites

(traditional retail stores) for product distribution. Most successful

are businesses that operate in both the physical and virtual worlds, allowing consumers to
toggle back and forth between the two. Also, such fence
straddlers are able to leverage
their existing assets of stores, catalogs, powerful brands, and the like ac
ross both realms.
Any company can spend $25,000 to put up a Websites, but then they must spend $150
million building distribution outlets and customer service centers, plus launching a
marketing campaign; traditional marketers already have they in place.
And., consumers are
increasingly ordering big
ticket items like digital cameras, computers, and appliances online,
and then picking them up in nearby stores like Sears and Circuit City. This helps consumers
get the goods faster and be able to inspect them

before taking them. For instance, Merck
Medco clobbered Net upstarts and PlanetRx. Websites can also be used to
distribute coupons and samples. Through

relationships among Websites in
which companies cross
promote one another
’s products and each is credited for sales that
accrue to its own site

companies have increased their exposure base by linking to other
sites for purposes of creating awareness as well as distributing their product. For example,
some sites sell products f
or other companies without ever taking physical possession of the

Creating customer experiences

This is the total experience the customer has with the
brand on the Internet

including how customers enter and navigate what type of visuals
and moveme
nt they get, how they get a response and in what form or format, and simply
how the online brand experience “feels.”

Developing a relationship with the customer

relationship marketing
) by encouraging
frequent interaction with the site.

Build a database

by having consumers

with the site, i.e., fill out an electronic form
requesting additional information (e.g., name, e
mail address, mailing address or zip code,
and basic demographic information).

Gather research information
. Companies can learn
more about their target markets

demographics as well as buying behavior, a practice known as

and yielding
. However, a
privacy issue

has arisen regarding the quantity and nature of
information collected about consumers. Information is sometimes collected with the
consumer’s agreement, as when they fill out surveys or registration forms in return for
receiving sales promotions like sam
ples and electronic coupons. However, data is often also
collected involuntarily without their awareness due to the use of.

(not the Mrs.
Fields type!)

tiny files (information tags) placed on (downloaded to) users’ hard drives by
servers on Websi
tes they visit (usually without their knowing it) so that a Websites can
identify a particular person

or at least a particular browser (preferences, login
information, and so forth)

the next time it visits a particular site. Cookies collect
clickstream in

(literally the sequence of pages and what on those pages buyers
click on and where when online) about your interaction, including where you visit, how long
you stay there, how frequently you return to certain pages, where on a site you click, and

even your electronic address. They allow Websites to give users different information
depending on whether they are first time vs. repeat visitors. Cookies came about because
Websites needed to recognize return visitors to offer them customized informat
ion and
service. However, cookies raise privacy concerns for visitors, who are typically unaware of
the cookies (unless they’ve programmed their computer to warn them when a cookie is
about to be placed). But, cookies don’t personally identify Web users.

Names, addresses,
lists of favorite Websites, and other backend records of consumer activity aren’t accessible
via cookies; rather, cookies build marketer
specific anonymous profiles of visitor activities.
Simply, users are tracked anonymously with encr
ypted identification numbers.

Also used to gather surfers’ personal data is

programs secretly downloaded
without users’ consent and buried in a user’s computer to monitor their online activities,
resulting in delivery of pop
up ads. Ano
ther is known as

software hat Internet
advertising firms download to PCs with user permission that tracks users’ Web surfing and
feeds the data to an advertiser. The adware then hits surfers with pop
up ads based on their

Types of Web


The Internet is a broad net, ranging from websites to search advertising. There are several
formats/channels for delivering interactive Web ads, the most common being corporate
Web/home pages, search engine advertising, and e
advertising. We’ll also briefly overview
several other kinds of Internet advertising.

Banner advertising
Banner ads (display banners
), the most basic and common form of
Web advertising, are paid placements of pictorial banners and videos that app
ear on corporate,
entertainment, or media Websites that have high traffic. They resemble billboards, spread
across the top, bottom, right, left, or center of a Web page, and contain text, images, and
sometimes animation. Although some banner ads are stri
ctly display ads, most want to get the
viewer to click on them to go to the advertiser’s website, including a link (or
hot link
) to the
advertiser’s own home page. Thus, the ad must not only catch attention amidst clutter with
just a few words and vivid

graphics but also entice visitors to click on the ad to jump to the
advertiser’s home page (therefore more and more of them are animated). This can be done
via offering a deal or having a sales promotion (e.g., a contest). Through hyperlinking, to the
advertiser’s home page, the customer can learn more about the particular product. <Exhibit
17.26> shows a banner ad for Talk City on the
National Enquirer
Website. ). Banner ads
sometimes contain electronic commerce capability, i.e., products can be orde
red directly from
the banner ad. A variation on the banner ad is the

a tall, skinny banner ad running
down the left or right side of a website. Their response rate can be ten times higher than
banner ads’ response rates.

Many high
ic sites that provide information content (e.g., Yahoo! Finance and MSN
Money) contain banner ads, allowing the advertiser to get a high level of exposure. Other sites
have lower exposure but are more targeted (e.g., a running shoe brand could advertise o
n a site
devoted to information on running). Cost ranges from a few hundred dollars a month to about
$500,000 per day (about the same as a :30 on a very popular TV show) on leading portals like
&Yahoo and MSN, depending on the number of visitors and how t
argeted they are. The spots
are so hot that the portals, like the TV networks, sell them long in advance.

Banners have evolved. In 1999, they were like print ads, containing simple graphics and
text. By 2001 banner ads could alternate images,
by 2003 some contained animation, and by
2006 rich
media technology let viewers select from a rotating wheel of embedded videos and
use pull
down menus without leaving the Web page.

A cousin of the banner ad is the
button ad


an ad
smaller than a tradition. And,
as a condition for prime real estate, portals demand that advertisers buy inventory on their less
popular pages. Buttons resemble icons

they are usually square (sometimes rectangular) in
shape usually located at the bottom
left or side of a Web page, and they contain only a
corporate or brand name or a logo. Since buttons take up less space than banners, they also
cost less. Also, ads larger than traditional banner ads are gaining popularity among online

<Practical Tips #2 Creating Effective Banner Ads> Attention
getting elements include copy,
color, and graphics, in that order. Some tips for creating effective banner ads include:

action words
, e.g., “press,” “enter,” and “click here.”


it can increase response rates by 30 to 40%.

bright, contrasting colors

rather than nondescript dull colors such as beige and gray.
Best are yellow, orange, blue, and green, rather than reds and blacks.

of the banner ad to the We
bsite on which it appears is important. Both its
content and design/style should relate to the Website.


is important

users expect this. With lower click
through rates today (less
than .1% today, vs. .25 to .5 percent in 2000 and 10 to 40 pe
rcent when banner ads
were first introduced), banners must display their interactivity even before they are
clicked on.


is important

as in print ads, larger sizes are generally more effective at attracting
attention and interest, but they also cost


should be done for all elements of the banner ad. It often takes lots of trial
and error to determine what works best by running ads for predetermined periods to
see what kinds of responses occur.


the banner ad constantly is
important since the life of a banner ad is very

<Designing Banners> Some additional tips:

Yellow, orange, blue, and green are the best
bright colors


gives you more value since it allows increased space by rotating copy.

Download times

r 28.8 modems shouldn’t be too slow. This requires judicious use of
enhancements such as graphics, animation, and sound.

of the ad in the lower corner

of the Web page next to the scroll bar increases
the number of
ad clicks

(the number of times users click on an ad banner) and
click rate

the percentage of ad views that result in an ad click; how often
a viewer responds to a banner ad by clicking on it to go to the advertiser’s home page.

Incentive banners

increase click

Company and/or brand name

should be included to generate awareness.

through block

(??) is very helpful.

Unfortunately, the percentage of consumers who click on banner ads has rapidly declined
because consumers real
ize that they take them away from the Website they are visiting, as
their novelty has worn off, and as their static nature has made them boring and even invisible
(“banner blindness”) compared with newer technologies. Today about .1% of consumers click

them, vs. 10 to 40 percent when banner ads were first introduced , although banners closely
tied to a website can get up to a 7% response rate. Also, banner ads are considered to be
intrusive and annoying by many consumers. Plus, they increase page loa
d times due to their
complex graphics and animation. In fact, there are now
ad blocker

programs (e.g., AdWipe)
that allow consumers to load pages sans banner ads. Consequently, some advertisers are
ditching banner ads totally, instead using old
d TV spots to drive traffic directly to their
websites, rather than through intermediaries like portals.

<Web Advertising> The ideal is to make Internet advertising have the visual impact

of TV and the interactivity available on the Internet. The trend
is to make ads more involving
and interactive. Thus, increasingly advertisers are using
enhanced banner ads

banner ads
with complete information already in them, as opposed to having to click for additional
information. Some also include
rich media

on software technologies, like Shockwave,
Java, Acrobat, and Enliven

audio plug
ins, media streaming, or some other enhancement.
Generally, these ads with full motion, animation, and sound perform better than traditional
banner ads because they allow
. Consequently, click
through rates are 2%
whereas click
through rates for typical display ads hover between .1
.2%. However, their
complex graphics and animation increase Web page load times. Creative agencies usually work
with rich
dia companies, like Eyewonder, DoubleClick, PointRoll, and Unicast, to develop the

Also, the trend is to replace small banner
size ads with larger
display ads

that mimic
traditional newspaper and magazine ad types.

The trend is moving awa
y from banner ads and experimenting with games (e.g., the Bounty
Match Game in which the consumer identifies and matches spills),
up ads (
open a separate
window containing an ad and an invitation to link to another related site) <14

Also incr
easingly popular are keyword
activated banner ads or
smart banners
, which pop up
when users input keywords in a major search engine. For instance, auto
- could buy a
smart banner that is prompted only when users type the keyword “auto.”
Interactive banner
, which came into being in the mid
2000s, spring to life when the Web surfer crosses them
with the cursor (no click necessary).
Performance ads
are display ads that allow advertisers to
use data analysis and user
tracking technologie
s to match ads more closely with prospects and
measure mouse clicks and other actions so advertisers pay only when ads deliver.

Corporate home pages/Websites
Corporate home pages/Websites
. The most basic
mode of Internet advertising is to

establish a
corporate home page

and a number of linked subsequent pages providing further
information which serve as a
. Here, a marketer makes available detailed information
about the firm and its products. <Exhibit 15.1 Hot Hot Hot> <Exhibit 17.
23> These range from
being reminiscent of product brochures to full
fledged showrooms with a searchable library of
stories and data about the firm, its brands, etc. Domain names (URLs) should be intuitive or
easily guessed (e.g., and

descriptive to increase chances that
visitors who don’t know the domain name can find your site. Domain names should also be
unique and memorable. Firms such as VeriSign, idNames, and Godaddy Software, Inc. assist
companies in identifying, registering,
and managing domain names. Others, like 1 & 1, offer
hosting that includes maintenance of domain names, website connectivity, e
mail accounts,
and some limited applications for as little as about $10 per month.

home page

welcome page
start p
landing page
) represents the consumer’s “first
look’ at the website. Therefore, it plays a pivotal role in gaining and maintaining consumers’
attention, either driving them further into the Web site or away from it. Home page “essentials
include inf
ormation clearly identifying the company and its brands, what is inside the Website,
and how to contact the company. Including much more than these “essentials,” such as
complex graphics, might make the home page too complex and slow to download. The home

page can be one to several pages long, but short is usually better, with hyperlinks offering
routes to additional information. It can be thought of as an alternative “storefront”

a location
where people can come to find out more about the company and its


The nature of these sites varies

some companies treat them as a

to promote
their products; others try to create a “cool” information and entertainment environment that
people will often visit; and still others treat it as an onli
catalog store

virtual storefront

where merchandise can be purchased (

There are two types of websites.
Corporate (brand) websites

are not designed to directly
sell merchandise but rather to build customer goodwill, collect custome
r feedback, and inform
customers. For example, you can’t buy anything at P&G’s Tide to Go brand site, but you can
learn how to use this stain remover stick, watch recent ads, and share “Tide to Go” saves the
day!” stories with others. Another example is
Unilever's, where
consumers can share thoughts, view ads and viral videos, and download self
assessment tools and workbooks.
Marketing websites
engage consumers in an interaction that
will move them closer to a direct purc
hase or other marketing outcome. Thus, websites can be
hard sell

(designed to stimulate an immediate purchase) or
soft sell

(indirectly promote the
product via informational or lifestyle presentations). The Saturn site is more hard sell,
providing inform
ation on the product line, prices, and closest dealers. It is interactive in that
consumers can request brochures, communicate their comments and questions to the Saturn
Corp., and locate a dealer when ready to buy., one of the most
consumer goods websites, has an archive of parenting advice heavily indexed by search
engines. The Absolut vodka site <Exhibit 17.24> is more soft sell, providing entertainment by
letting surfers create music mixes enhanced with flashing, moving images.

Crayola’s FamilyPlay
site <Exhibit 17.25> is also soft sell, being lifestyle oriented. Visitors can read bedtime stories,
search for local childcare providers, and find hints on how to get kids to help with housework,
while kids can color with computeri
zed crayons.
How does all of this help Crayola? The
company name is prominently displayed and it creates a positive brand image.

If the hard
sell approach is used, it is important to make the information useful. For example,
P&G places tips abo
ut treating stains and using Tide detergent on its site. But Tide also has a
Candystand game site where users can soil a shirt and then wash it. We’ll discuss Websites
more in Part III below.

Some companies also set up channels on YouTube that incl
ude information, videos, and
video sharing.

mail is now the number one most
used Internet application (search is number two). As
you might have noticed, the volume of e
mail messages has been growing exponentially over
the past several years,

with the average consumer with an electronic mailbox receiving about
five messages a day in 2002. Until about 2000, e
mail advertising wasn’t widespread because
consumers resented it as being too intrusive. However, with better targeting and
based e

mails are sent only to customers who request them), plus advanced
features like personalized audio messages, color photos, and streaming video, e
advertising grew rapidly in the first few years of the new Millennium. In the
wake of the
anthrax threat that surfaced in September and October 2001, this usage among direct
marketers was given a further jolt.

mail ads are commonly used to follow up previous customer searches, alert consumers to
new promotions and cross
l them, or attract new customers (by buying contacts from a lead
generation company). In fact, permission e
mail marketing is the fastest, most flexible direct
marketing medium. Sending e
mail is virtually free and much quicker than sending something
ough the U.S. postal service. However, in general, e
mail marketing is not replacing direct
mail; rather, it is being used to alert customers and prospects that a direct mail package is
coming through the postal service to ease concerns over mail from an
unknown source.

The best way to get an e
mail list is to use a
house list

internally generated by collecting e
mail addresses from customers, prospects, and Website visitors. Companies develop profiles of
characteristics of their best customers.

List rental

based on these profilers is another option,
although it brings higher opt
out rates. Companies like the DM Group maintain a list of e
groups, each of which has a list of e
mail addresses. <e
mail marketing list solicitation>


entails ensuring that an e
mail list is ‘clean”

of top quality. Always find out
how names and addresses were acquired. Also, ask how often the recipients’ interest and their
mail addresses are verified

ideally twice a year or more often. List
providers should, at a
minimum, supply information on list members’ age, sex, and zip code.

To avoid wasting time and money sending e
mail to non
prospects, who will treat it as spam,
it is best to use
, which targets users who have vol
untarily signed up receive
commercial e
mail about topics of interest. This is especially important when prospecting for
new customers as, without your permission to send a message, it might be perceived as

unsolicited commercial e
mail for things li
ke Viagra, pornography, get
rich quick schemes, mail
order brides, mortgages, and loans. (Spam is named after the Monty Python sketch in which a
couple in a restaurant attempt to order breakfast, but discover, to their dismay, that every item
in the menu
contains Spam. Worse, each time he waitress recites names of dishes, such as
“Spam, egg, Spam, Spam, bacon and Spam,” a group of Vikings at the next table loudly sing,
“Spam, Spam, Spam, Spam, drowning out other conversations in the same manner e
mail spa
disrupts online communication.)
Double opt

lists are even better because they require
subscribers to confirm their sign
up via e
mail. You can build a prospect list by enticing
consumers to visit your website, providing special offers to those who o
pt in to your list.

Marketers can easily find out about who wants to receive e
mail by using registration forms
on their Websites which include these “opt
in” or “opt
out” checkboxes. They can also collect
mail addresses via direct mail response

devices like business
reply cards as well as third
sources (such as list broker For example, if you permit,

New York Times
mail you information about specific promotions, articles that will appear, books on sale, etc.
It i
s always a good idea to give consumers the opportunity to “unsubscribe’ or opt out of
receiving further e
mail messages.

mail’s strong advantage is its efficiency: for just pennies per contact typically $30 per
thousand for basic consumer lists
to $150 CPM for highly targeted consumer lists, and $100 to
$300 for business lists), companies can send targeted messages to people who actually want to
receive them. Also, e
mail ads allow companies to track how many people open the e
and who c
licks through to the Website. And, it is a very rapid way to send communications and
receive back direct responses.

A major disadvantage is commercial clutter

these days our in
boxes are filled with e
from hundreds of companies

. Thus, many Internet Service Providers (ISPs)
block mass e
mailings and many consumers download e
mail filters or ignore some of their
email messages. Therefore, it’s important for marketers to negotiate with ISPs over how many
messages may be sent at

once. . Delivered messages should clearly define why the recipient is
receiving the message (“You are receiving this message because you subscribed to…”).

out information should always be provided at the bottom of the message for any
who wishes to unsubscribe. In fact, the Controlling the Assault of Non
Pornography and Marketing Act of 2003 (the CAN
SPAM Act), the first federal law regulating
unsolicited junk e
mail. makes illegal misleading subject lines (regarding the cont
ents or subject
matter of the e
mail) in bulk commercial e
mails; mandates that an e
mail’s “From” and “To”
and routing information (including the original domain name and e
mail address) be accurate
and identify the sender; requires unsolicited e
mail to
include a means for recipients to “opt
out” to a return e
mail address or other Internet
based response mechanism; that a sender’s
message contain a clear and conspicuous notice that a message is an advertisement or
solicitation and that the recipient can
opt out; and the sender’s valid physical postal address. In
short, while the law doesn’t ban spam, it does require that unsolicited commercial e
mail be
accurate and honest and that consumers be able to opt out of receiving it.

. There are three fo
rmats you can use: plain text, HTML, and rich media. Generally, text
based messages work best with b
b audiences who, even though they have broadband,
don’t want to wait for messages to download. HTML (graphics) works better with consumer
HTML appeals to the heart, while text appeals to the head.

A trend is to use
rich e

mail messages that use streaming audio and video and
allow recipients to place orders within the e
mail message. If you have compelling audio or
video conten
t, or if your product requires demonstration, consider rich media. Companies have
begun using
video e
mailing commercials to consumers. For example, prior to the
launch of “Survivor,” CBS e
mailed a miniature version of a TV commercial, and the b
and ‘N
Sync sent a video commercial to many of their fans. E
commercials can track who watches, for
how long, and to whom (if anyone) they forward it. They are fairly popular with consumers,
with 46% claiming to like streaming adds online as much as TV ad
s, while only 25% of
consumers like Internet advertising in general. Unfortunately, the streaming ads only fill a
small portion of the TV screen, no more than a few inches high and wide, to reduce loading

Another trend is viral marketing. One

way to attract customers to your Website or
otherwise get more customers involved with your e
commerce efforts is via
viral marketing

creating an ad that is so informative or entertaining that consumers will want to pass it along to
others. Viral market
ing entails getting customers to pass your marketing message so that it
spreads like the flu, passed by word of mouth from one friend to several more, each of whom
spreads the message to several of their friends, etc., until there’s a full
blown epidemic a
products are flying off of the shelves. It involves creating an e
mail so compelling

graphically or by using an incentive

that customers want to pass it along. The beauty is that
when an e
mail comes from a friend, the recipient is much more li
kely to open and read it.

For example, one of the early users of viral marketing was Hotmail

at the bottom of each of
their e
mails was a message that said, “GET YOUR FREE E
Packard featured a button allowing readers t
o forward an informational newsletter to friends
or colleagues. Customers can be invited to visit the marketer’s Website for more details, in
which case viral success is measured by click
throughs (typically 5 to 15 per cent of those
receiving viral messa
ges click through to the links).

Customers can be offered incentives to forward your message, such as discounts (e.g., IKEA
offered customers discount coupons for forwarding e
mail postcards), free merchandise (e.g.,
refer 10 friends to Procter &

Gamble’s Website for Physique shampoo, and you’ll get a free
sized styling spray and be entered in a sweepstakes to win a year’s supply of the
shampoo), and sweepstakes (e.g., “Like this site? Click to recommend it and you can win
$10,000). To cu
rtail spamming, limit the number of pass
alongs you reward customers, and
reassure customers that you won’t keep their e
mail addresses without their permission.

A few hints on copywriting for e

Short, digestible copy blocks and bulleted lists w
ork well, because most people scan their e
mail before reading it, and the average person’s attention span is much shorter online than
when reading offline direct marketing media.

In the subject line mention your offer and, if it is well known, your brand
name. This will
improve your open rate in a world of cluttered e
mail boxes.

Most e
mail advertisers drive campaign responders to a Website via a link in the e
message. It is a good idea to provide multiple links

at least one toward the top and anot
at the bottom of the message.

It is good practice to give recipients the opportunity to unsubscribe at any time.

Test, test, test. Via testing responses to different variables, you can optimize them. Such
variables include the offer (e.g., $10 off
vs. 10% off), subject line, message format (text,
HTML, or rich media) and incentives (such as sweepstakes and contests).

Response in e
mail marketing is a two
step process. First is

response rate
which is the percentage of viewer
s who click on an active link in the message and are delivered
to your Website. Second is

the percent on the site who buy or otherwise respond.

A variation on this sporadic campaign e
mail marketing is regularly scheduled, recurring e
il campaigns, such as an e
newsletter or a weekly sale announcement. This becomes
anticipated, valued communication with recipients.

Unfortunately, some consumers are cutting back on the commercial e
mails they read and
on opening attachments becau
se they no longer trust in e
mail. Consequently,
open rates

how often recipients click “open” for e
mail marketing messages

are declining. This is due to:


About two
thirds of e
mail is now junk e


These are scams to filch personal
information. Phishers trick consumers into
surrendering personal data by posing as a bank or e
commerce site (e.g., eBay, PayPal)
and requesting personal information. The result is identity theft

cybercrooks use the
personal data to pose as a customer an
d buy goods.

Computer viruses

Hackers send sophisticated worms and viruses can muck up peoples’
computers and even command infected PCs to send spam and phishing schemes.

However, the response rate for an unsolicited email campaign is many times higher
than for a
banner ad.

. After banner ads and corporate web pages, next most common (although
becoming less popular) are


one company paying to sponsor or support another
advertiser’s content, usually a Website

either a p
ublisher’s special content Web pages (e.g.,
news, financial information) or of special event pages (e.g., the Super Bowl site) or an e
newsletter for a limited time (usually for one or several months), and they are the second most
common form of Inter
net advertising. For example, Scotts, the lawn
garden products firm,
sponsors the Local Forecast section on In exchange for sponsorship support,
companies are given extensive recognition on the site, such as through integrating the
or’s brand with the publisher’s content (as a sort of advertorial, e.g., providing tips and
tricks on product use) or with banners and buttons on the page. Because of their high cost,
sponsorships are most common on sites with high traffic, where the opp
ortunity for exposure is

In exchange for sponsorship support, companies are given extensive recognition on the site,
such as through integrating the sponsor’s brand with the publisher’s content (as a sort of
, or advertising con
taining editorial material, e.g., providing tips and tricks on
product use) or with banners and buttons on the page. Because of their high cost, sponsorships
are most common on sites with high traffic, where the opportunity for exposure is greatest.
big three portals are Yahoo! (where the Movies and Marketplace sections are almost
always “sponsored by” a major movie studio and brokerage, respectively), MSN< and AOL.
Home page placement on these is getting harder to secure, and orders must be placed m
to a year in advance.

There are two types of sponsorships. In
regular sponsorships

a company pays to sponsor a
section of a site, e.g., Clairol sponsors a page on; Turbo Tax sponsors a page of
Netscape’s financial section. Second i
content sponsorship
, in which the sponsor not only
provides money to associate with a Website but also participates in providing the content.

. These are windows that literally pop up in front of when you in front of a certain
site when
you access that site or in a new window in front of the site’s window (either while
you wait for the page to load or after it has loaded). Their cousins, designed to elude pop
blockers, are
under (pop
behind) ad

ads that appear in a separate window

someone visits a Website and underneath that Website, becoming visible only when a browser
is closed. They are usually larger than a banner ad but smaller than a full screen. Sometimes
they contain an invitation to visit another related site, in wh
ich case the advertiser pays a
per click


the price advertisers pay based on the number of clicks an online ad generates
through rates are about 2%, twice as high as that of banner ads.

Unfortunately, pop
ups eat up valuable bandwidth, slowing downloads from the Internet.
Also, they are quite obtrusive and hence are considered hated by people even more than
banner ads

up ads make Web viewing like swatting flies. Consumers now of
ten use pop
up blockers, and all the major Internet service providers offer pop
up filters, either for a charge
or for free. Federal and state legislation now limits such windows when they are triggered by
adware and spyware.

Consequently, in late 2002

America Online announced that they were phasing out pop
up ads,
they have fallen out of favor, and their future is highly uncertain.

One improvement on traditional pop
up ads are those based on
behavioral targeting

technology that via cookies cook

small text files that Web servers and ad networks place on
users’ hard drives that recognize when Website visitors are seeking a particular product or
service and then serves an ad relevant to their search at a later date on another page. For

a Web surfer could be looking art real estate listings on their daily newspaper site on
Monday, and then on Thursday while reading the sports section, would be served an ad from a
estate agent. Most cookies do not contain personally identifiable dat
a and instead rely on
randomly assigned numbers to label Internet users. Advantages are that consumers see more
relevant messages, and advertisers get their messages to the right consumers.

. Meaning “in between,”


splash pages
, or
) are a subset of pop
up ads, and they are animated ads that appear on
your screen as full
page ads or as large pop
up boxes for about 20 seconds while you are
waiting for the content of a Webs
ites that you have clicked on to download. They create a TV
like experience, and they often contain an invitation to link to another related site.
Although some people find them annoying because they interrupt the search process and can
slow d
own access time to the destination page, many people like them, and they tend to
generate higher recall than banner ads.

. While not everyone considers them a type of advertising, links involve an
opportunity to link to an advertiser’s Web
sites from another Websites. E.g., by clicking on the link on, someone can visit the Nike site to get information on sports
related products.

Classified ad Websites
. Search engines or local newspapers around the country spon
many classified advertising Websites. Like newspaper classified sections, they are organized by
category, so you can search for homes, cars, jobs, computer equipment, etc. The search can be
narrowed to your hometown or expanded nationwide. Many offe
r free ads because ad
banners or other advertisers support them.

Links to corporate Websites then appear when one types in keywords into search engines.
If you build a Website without consideration of how it will rank in the major search engines,

have basically built a billboard in the woods. On search engines corporate Website owners can
select the terms that are relevant to their site and determine what to pay on a per
click basis
for each. The higher they bid, the higher in the search sit
es their site appears. Firms such as can help you achieve better search engine rankings.

Search Engine Marketing

related advertising was pioneered by Overture (now Yahoo Search Marketing),
although Google’s dominance as

an Internet search engine popularized the technique. Search
is now the second
used Internet application, with over 40% of consumers using search
engines as their No. 1 resource when researching a purchase online. The fast
growing search
engine indu
stry (led by Google, Yahoo!, and Microsoft’s MSN) employs

digital robots
that crawl through cyberspace, scouring the billions of pages in the Worldwide Web. They
catalog all the words in the pages using criteria like how many times they’re viewed,

and what
other pages they link to.

Given that there are so many Websites out there,

attracting visitors

to a site is a challenge.
When a typical search turns up thousands of results, it makes sense for marketers to make sure
that their company’s
name pops up near the top of the list because research shows that
consumers seldom go beyond the first couple of pages of search results. Smart marketers
track their search
engine placement or the percentage of visitors who come to their company’s
e from a portal or search engine.

There are three types of search. One is
natural search

pure search

search engines
build an index ranking links by relevance on various criteria without accepting payment to be
influenced by marketers. Resul
ts are ranked by the highest scores against the criteria, with the
results fluctuating daily. Marketers do not pay the search engine to try to influence results.

However, marketers can use
search engine

manipulating Website content so
that search engines display the site in their search results:

(1) The most important criterion for getting to the top of search engine results on Google is

those little clickable, underlined mentions on websites that take you from one

web page to the next. The key is to get other Websites and blogs to link back to yours. Many
sites offer “link exchanges” or even links for sale. However, Google weights more heavily more
heavily trafficked Websites such as the MySpace online communit
y and Yahoo’s Flickr photo
sharing site. Also, sites with a blog, which gets comments from users, also help you rise to the
top. Also, most local chambers of commerce and trade associations have websites and will link
to member websites.

(2) A cle
ar website title helps, as does descriptive copy that includes the
terms). The homepage should have descriptive text about the company and products that
gently incorporates the one or two keyword phrases you are concentrating on. (Google

offers a
free toll for keyword tips at

Search engine rankings also can be improved by actions such as changing


descriptive wording in the coding of Web pages that help search engines categorize and index
them. Changing
title tags

HTML tags used o define the text in the top line a Web browser

the words that appear visibly at the very top of the browser that descri
be the page you’re
viewing, I.e., the title of the document or page at hand

can help too. The value of these tags
lies in how descriptive they are. Search engines give the words in title tags a lot of weight in
their relevancy ranking formulas.


developers design their Web pages with the hope of increasing their sites’ visibility on
search engines, a process known as
search engine optimization (SEO)
. SEO involves tapping into
the free (unpaid) listings every search engine has, as opposed to sung
search marketing to get
sponsored links. There are consultants and internet advertising companies such as Weblinx
( who help businesses with SEO. For example, a tag for a site on bananas might
include such keywords as “banana,” “fruit,’ and po
tassium” so the site will be listed in search
results should someone look up those terms. Specific keywords (e.g., “men’s pants,” not just
‘pants”) work best. Changing page titles, good design (easy to navigate without a lot of fancy
things like animatio
n and pull
down menus and frames), adding inner links (linking one page on
the site to another page on the site), reciprocal linking to popular sites, descriptive “tags” (Web
page titles), and clean URLs (no gibberish, like .com/%20=30.html)can also improv
e search
engine rankings. Consultants can help a marketer to get better search results. Also, marketers
can register with various search engines, including,,, and to appear as part of their
organic listings



A second general option is
search engine marketing

paid search, sponsored


search marketing
contextual ads)

marketers pay search engines and portals to
be included in search index so that their name and a link

or a little text ad pops up first or on
the top of or to the right side of search results. All major search engines offer ways for Website
creators to submit sites for free, but most encourage payments to ensure that an advertiser’s
site be listed high i
n a search engine’s search results. Therefore, to attract customers to her
Website, an advertiser (or its online ad buyer such as Doubleclick, aQuantive, 24/7 Real Media,
or AdTech) can also purchase from a search engine
words so that the advert
banner, known as a keyword ad
appears whenever users select that keyword for a search.
This is known as
keyword search advertising

based keyword ads
. It is also
contextual advertising

a system through which ads get served up

online to an
individual viewer of a Web page based on the content the viewer is reading.

Placing ads near search results offers the appeal of all


where the
consumer is actively searching (e.g., yellow Pages directories, clas
sified newspaper ads, and
of purchase displays). This is done since most consumers and businesspeople look only at
the first few pages of search results. Specialized companies like can help
marketers with their SEO efforts.

ere are two methods of sponsored search:
paid placement

(about 80%)


Most search engines offer
paid placement

advertisers bid against each other (as
with eBay) or just pay to be displayed for a key phrase like “sleeping bag.” For exam
Google’s advertising program, AdWords, allows companies to buy or bid on keywords such as
“blinds” or “wallpaper.” .” Advertisers pay Google only when a user clicks on an ad (from a
penny to over a dollar a click). Advertisers can do geo
by zip code and run their ads
only during certain time slots. Some crafty companies also buy terms related to rivals.

based search
entails bidding on keywords for prime spots on search engines, with
bidding marketers paying to top t
he list of results for users who search for, say,
“banking” on Google’s AdWords or on Yahoo Search Marketing Solutions (a keyword
advertising unit of Yahoo that sells key word advertising appearing on Yahoo and Microsoft’s
MSN). The more popular the keywo
rds, the higher the price. Therefore, instead of bidding on
generic keywords like Caribbean cruise” and cell phone,” smart advertisers bid on more specific
terms like “Bahamas cruise” or “wireless plan,” both to save money and to attract the most
ed prospects.

For example, when a user searched using the keywords “diapers” or “infant care” on
portals Lycos or Excite, she was greeted with a Huggies banner ad. This linked to the Huggies
Website, which provided tips on baby care, chat wit
h other parents, access to other baby links,
and additional information about Huggies products. Many e
tailers customize their

where the searcher is first directed

to a specific keyword.

Google and Yahoo base positioning not just on the highest dollar bids but also on the
effectiveness of the ad based on how often the ad is clicked on. Thus, an advertiser who bids
less but whose ad is clicked on ore often can get to the top of the se
arch results.

Paid results appear near the unpaid search results. These search
related ads are featured as
and marked as “
sponsored listings
” at the top or side of the search results and are often shaded
a different color. Thus, if you type “bird
watching” into Google, you find not only the usual
motley array of sites but also ads for binoculars, birdhouses, and guidebooks. Most search
engines use
click (CPC) pricing
click, per
impression pricing

for every click
on a paid plac
ement listing, the advertiser pays the search engine a fee (from 5 cents to $100
per click, averaging around 50 cents). Others let advertisers pay a flat monthly fee. . For
example, Yahoo and America Online charge up to $300,000 for 24 hours. AOL also o
ffers pay
call pricing, whereby advertisers pay when prospects call them in responding to their online
ads. Ads show up based on both the price an advertiser is willing to pay and the quality of the
advertiser’s ad, as determined by an algorithm that
considers such things as an ad’s click history
and landing page. The higher the quality, the lower the price the advertiser must pay.

To use Google’s search, sign up at and set a budget (e.g., $1 a day, $100 a day).
Most advertisers fin
d that for every $1 they spend on clicks, they get back at least $5 in
revenues. Then, figure out the keywords you want to use

more targeted keywords cost less
and are more efficient. Then, bid on a price

the higher you pay, the higher your ranking.
gle shows you during the bidding process where you’re likely to land. Finally, write your
Google ad. They give you only 25 characters for the headline, which should contain a clear
customer benefit (e.g., for water heaters, “Save money and water at home”
). The second line
of text is for qualifications (e.g., “energy efficient” for the water heater), followed by a call to
action (e.g., “25% off through the end of January”).

A second form of sponsored search is
paid inclusion

many search engine
s (including
MSN and Lycos but not Google and AOL) accept a fixed fee to guarantee buyers’ sites will
appear in search results. However, unlike the clearly marked advertised links of paid
placement, these paid inclusions are virtually invisible, simply be
ing mixed in with the
unadvertised results. That is, they appear among the search results, looking like any of the
other Web links that appear. These camouflaged ads attract far more interest than regular
scattershot Internet ads since they give people w
hat they are already looking for.

The ethical issue of deception arises in that purchasing keywords on search engines can
compromise the accuracy, objectivity, and relevance of searches. However, defenders of the
practice say it provides users with

better information and that search results are still displayed
in order of relevance, i.e., paid ads get no preferential treatment (an assumption open to
dispute). The sponsored links aren’t labeled as such because presumably that would scare
away the pu
blic from relevant sites.

Purchasing keywords on search engines is crucial, for a Jupiter Research 2001 research study
showed that the places consumers go to decide where to shop online were; search engines (72%),
online retailer URLs (68%), price com
parison sites (25%), product rating sites (16%), merchant
rating sites (11%), and other (11%).

Such keyword banner ad sponsorship on major search engines cost $50 to $90+ CPM in
2000 but is now often in the single digits. Search engines charge ei
ther a flat monthly fee or a
impression fee (based on how many people see the ad, or at least have the opportunity to
see it). Now, most search engines charge based on

cost per
when a user
actually clicks on an ad banner to vis
it the advertiser’s home page. Click
through rates are
typically 2 to 3 percent. Thus, popular words (more likely to be searched) command higher

When submitting paid inclusion data, companies typically fill out a spreadsheet with
on on product details, along with the search words and phrases for which they’d like to

Contacting the numerous sites and negotiating advertising contracts on each one for 2 through
7 would be a nearly impossible task. Thus, most advertiser
s work through
advertising networks
or search
advertising providers such as Yahoo Search Marketing Solutions, DoubleClick,
ValueClick, and that act as brokers for Websites and advertisers or ad agencies,
much like independent media buying s
ervices, connecting sites wanting to sell ad space with
advertisers and agencies. Ad networks pool hundreds or even thousands of pages together from
small websites as well as from the less visited pages of large sites that would otherwise go
unsold, and t
hey facilitate advertising across these pages. This allows advertisers to gain wide
exposure, including on the smaller sites, and it results in lower CPMs.

Advertising exchanges

are ad networks that run
style exchanges to facilitate
transactions between advertisers and media buyers. DoubleClick, Yahoo, Microsoft, and others
run the exchanges, allowing websites to put up ad space for auction. They auction every ad in
time to the highest bidd
er. Online ad networks participate in the exchange by putting their
publishers' remnant inventory up for sale, and by buying relevant inventory on behalf of their

Some marketers appoint in
house search managers to monitor the ad networks and

their own
agencies since many networks won’t tell advertisers where their ads are appearing since the
websites they work with don’t want to drag down the rates of their main pages. Some hire search
ad agencies that are dedicated to the complicated and som
ewhat dry field of search
advertising, like iProspect in Watertown MA. Some ad networks sell things like text ads, display
ads, and video ads.

The problem is monitoring each site for content and traffic. A few Web masters have tried to

the system by artificially increasing the number of page requests.
Click fraud

is also a
problem, and it takes three forms (1)

some competitors click on ads just to drive up their rival’s
advertising bills, (2) website owners click on ads on their own si
tes to drive up their advertising
revenue, and (3) fraudsters arrange for people to click o ads recycled from Yahoo and Google
appearing on small websites. Regarding (3), Google and Yahoo claim they filter out most
questionable clicks and either don’t cha
rge for them or reimburse advertisers that have been
wrongly billed. However, there are
parked websites

sites with little or no content except for
lists of Internet ads, often supplied by Google or Yahoo, many of which are the source of click
fraud. Ther
e also are
read sites

that pay members small payments to visit other websites,
often to generate fake clicks on parked websites.

Some unethical webmasters have set up automated clicking models (robotized software)
called “Hitbots” or “Clickb
ots,” which click away all day and cost the advertiser. Web
publishers get their friends or pay people to click ads so they can make more money. Academics
and consultants estimate that 10
20% of ad clicks are fake. Search engine giants like Yahoo and
ogle say that’s an exaggeration and that they catch most bad clicks before advertisers are
charged and give refunds for illicit clicks.

Search advertising is relatively inexpensive. As noted, the advertiser usually pays on a cost
per click basis,
which averages about 35 cents per click (vs. $1
lead average for yellow
pages). Click
through rates are typically 2 to 3 percent. The money is split between the portal
that generates the traffic (e.g., Yahoo, MSN, and America Online) and the search
provider (e.g., Yahoo Search Marketing Solutions, with the search engine pocket about two
thirds and the search
advertising provider getting one

One advantage of paid search is that advertisers can easily collect information on
consumer online behavior

it is
. Another advantage of paid search is that the ads
are targeted to people who are actively looking to buy solutions to problems. Therefore, readers
don’t consider it intrusive. Consequently, Google click
rates are a bit over 5%,
compared with rates of .2% for online ads in general. And, advertisers can easily collect
information on consumer online behavior.

Most search engines now also offer free e
mail services, such as Microsoft’s Hotmail, Yahoo,

and Google’s Gmail. All of these serve up ads. Google’s computers automatically scan the body
of messages for keywords used to tailor the ads. Then sponsored ads and (unpaid) related links
are displayed in the right
hand margin of the screen (just as t
hey are on Google’s search pages).

Google also has a program, originally created as a bonus program for advertisers who use
Google AdWords (which puts sponsored ads at the top of search results at Google’s own site),
but now available to anyone with

a website or blog, called AdSense. Through AdSense, Google
clients get to tout their wares beyond Google’s home page on thousands of partner websites and
blogs maintained by small businesses and bloggers representing 80% of the Web. To participate,

owners sign up at, which reviews the site. Once a small piece of
computer code language is implanted on an accepted site, Google matches ad links from its
warehouse of clients to appropriate sites. Each site contains Ads by Google lin
ks. Publishers
split revenue with Google. Google has two places for publishers to create sites for free: and During the site creation process, Google asks if the
publisher would like to add Google ads (AdSense) to the site
and offers a form to fill out.

Affiliate marketing programs/networks
ffiliate marketing

is a partnership in which
one company drives business to another company. It is a web
based marketing practice in which
a business (e.g.,, wh
ose affiliates post banners on their websites)
rewards one or more affiliates for each visitor, subscriber, customer, and/or sale brought about
by the affiliate's marketing efforts.
These are strategic relationships by etailers such as Amazon
nd other sites boost site visitors and e
commerce sales. In an affiliate relationship or “linking
agreement,” one site (e.g., Amazon) asks another site to help send traffic via a promotional link
designed by the marketer for the affiliates

usually a banne
r ad, button, or part of the text. A
performance (performance
based) system of compensation is used

payments to
affiliates are usually made per site visitor, qualified lead, or e
commerce sales (5 to 10 percent
commissions) that the affiliate deli
vers; consequently, there are no up
front advertising costs.
Affiliate management services can help marketers with many such affiliations manage their
affiliate marketing systems. Each affiliate’s site should be checked periodically to make sure its
ent is still appropriate.

Web video(streaming audio and video)
Web video (online video, streaming online
audio and video

entails placing TV

and radio
like commercials into video and
music clips sent to surfers as they visit con
tent networks. Advertisers can have their
commercials inserted by firms such as RealNetworks, NetRadio, and MusicVision. Firms such
as NBC Universal, News Corp., YouTube, Joost, and have websites that stream
mostly free video of popular TV shows

and movies, news/current events, and music videos
supported by advertising. Many videos run for 10 minutes or less (e.g.,
LonelyGirl 15
, and
Prom Queen
LonelyGirl 15
, a pioneer, featured a young female diarist
narrating her life in a series

of YouTube videos on her own YouTube channel, causing legions of
fans to ask: “Is she real or scripted? She was scripted.
LonelyGirl 15

attracted product
placements and sponsorship deals.). Such videos often begin with


ally 15
video ads that run prior to streaming content. These

short advertising spots
are immune to fast
forwarding, although viewers can click away from the commercials. The
videos can also contain overlays

clickable graphics that appear over a v
ideo and allow people
to opt into some sort of advertising. Advertisers pay for such clicks.

Webisodes (video webcasting)

are original animated mini
video episodes
for the Internet

similar to TV shows with recurring episodes. These

are short films (such as by
BMW featuring its car involved in chases and plot twists and Ikea’s “Easy to Assemble”) use
streaming audio and video. They were all the rage online before the Internet bubble burst in
2001. In 2005 they returned, this time a
s advertising vehicles.

Video webcasts can also include news announcement, product demos, and informational and
training videos for channel partners and employees. . Using webcasting tools, you can track who
is viewing your webcast.

Mobile marketing (mobile commerce, m

marketing and advertising over wireless networks so consumers can use their Internet
smartphones, e
readers, portable entertainment players, and other wireless devices to get
t/price and store information, find store locations, obtain coupons and make purchases. .
The Mobile Marketing Association defines


as the use of wireless media,
primarily cellular phones, to deliver content and encourage direct response
within a cross
communication program. Mobile marketing includes instant messaging, video messages and
downloads, and banner ads on mobile websites. Cell phones, MP3 players, wireless e
devices like Blackberry, pagers, and other wireless device

third screen

(tiny screen, in
addition to TV and PC/Internet)

are exploding as new media. Best practice is to get
consumers’ permission prior to contact them to sending messages.

Wireless advertising messages (WAM)
consist of commercial messages sent directly to
consumers’ wireless services.

Wireless websites

are different from Internet websites: They are typically accessed from a
device’s menu of sports, news, stock market quotes, and other headings. The sites

use a similar
network as the Internet, but it has different addresses and sites streamed for the small screen.
These sites are lacing sports scores and news digests with banner ads. Carriers and content
providers split revenues. Specialty agencies, suc
h as Third Screen Media, design third



Text messages and instant messaging
Text messaging (
Short Message Service

allows users to keyboard brief messages into a cell phone to be received by a computer or mobile
nt messaging
entails two people chatting with each other from their computers,
and it’s more of a dialogue than is text messaging.
IM/TM advertising
, primarily in the form of
text alerts/
product notices,

lets marketers engage customers interactively. Un
fortunately, most
people in the U.S. view it as an invasion of privacy. Therefore, advertisers must offer relevant
information and letting customers
opt in
. Customers typically do this by typing in a four
digit “
short code
” to, say, enter a sweeps
takes, play a game, or download a ring tone or screen
saver. They can also opt in to receive promotional offers, news updates, sports scores, movie
listings, and other value
added items.


Wireless Web ads
. These appear on someone else’s mobile webs
ite. Typically, a mobile Web
page has one at each at the top and bottom so as not to clutter tiny screens. Users can click on
links to get further information or buy (3 to 5% typically do, versus .2% for Internet ads).
Companies should build special mob
ile sites, because regular ones don’t translate well to super
small screens.

Video ads
. Companies are creating 10
second to several
minute video ads for mobile phones.
Cell phone video services can be used to access video ads, known as

Mobile social networking communities
. There are social networking platforms where mobile
users can interact with other mobile users (e.g., Sprint Nextel’s Hookt, Sprint Nextel’s The
Lounges, Amp’d Mobile’sAmp’d Lounge, and Cool Talk on

Here, marketers can:

: Target messages to segmented community members in an interactive way

: Do research to get customer insights

Spread word
: This is done by targeting passionate consumers and giving them
info and ent
ertainment worth spreading

: Set up social networking sites to help customers support each other

: Join with customers to help run your business, such as though joint product
ideation and design.

device applications
. These

cations, or apps, make mobile shopping easier.
Branded apps are mostly free, although some charge a nominal fee. They include games,
information (e.g., a documentary), and utility (e.g., Sherwin
Williams’ paint
color selection,
Kraft’s 99
cent iFoo Assis
tant with 7,000 recipes, a dish of the day, and a grocery store

Mobile shopping sites
. These are offered by retailers (e.g., Amazon, EBay, Toys R Us,
Walgreens, Wal
Mart, Best Buy) and others (e.g., Google). They typically offer fewer
ures than regular websites but are sized for small screens and easier to navigate. Some
allow consumers to check out, while others direct users back to their regular websites for the
final purchase.

Mobile Marketing Advantages

highly targeted (espec
ially teens and young adults), but increasingly can be used for
direct mass reach

informative: give users current, relevant information

interactivity: users can respond instantly to offers , answer the following questions about
this new product

personal an
d intimate

always on 24/7

relatively low cost (e.g., 2 cents to send a text message, $35 to $50 for wireless Web

contact people wherever they go, including points of purchase.
based services
(LBS) can be used to locate people or objects usi
ng GPS, Wi
Fi, or triangulation, which
calculates location based on cell
tower signals. Marketers can use LBS to serve location
relevant promotions, such as latte coupons for consumers on their way to a particular
coffee shop.

Use to distribute branded

services and utilities consumers can download on their
carrier networks or via some sort of handset storefront.

Mobile Marketing Disadvantages

Unwanted ads generate bad will since most users pay for the minutes of data usage.
Subscribers prefer useful ads, such as those aimed at subscribers on the go who are
searching for restaurants, gas stations, movies, or stock prices, or those offering coup
or free services. Such sites have sponsors.

The challenge of achieving immediacy

content should be very frequently updated since
this is what consumers expect.

text advertising
text advertising
involves attaching ads to selected w
ords on
newspaper and other media websites. The ads pop up in small windows when a reader moves a
cursor over highlighted, double
underlined words in a story. Pausing over a link produces a
bubble containing text, voiceover, or even video. Publishers ar
e paid based on how many times
readers scroll over a word. In
text ads draw a higher response than banner ads (about 3%
vs. .2%).

web widget

is a small, self
contained software application yielding
looking content that can run on a desktop or website when plugged into a web
application like a browser, desktop, blog, home page, social networking page, or mobile phone.

widgets are portable chunks of code that can be installed and executed within any
separate HTML
based web page by an end user. Other terms are used to describe a web widget
including: gadget, badge, module, application, capsule, snippet, mini and flake.

Some common
widgets include weather guides
, clock faces, news updates, scoreboards,
stock lists, calculators,
calendars, and stock tickers, all
displayed in little floating boxes on screen.

Marketers use
widgets two ways: (1) creating branded widgets in h
ope that some consumers will find them
compelling enough to add to their social networking profiles and personal blogs, and (2)
advertising within existing widgets with wide distribution. The cost of creating a widget is very
low, as is the cost of distri
buting one compared with media advertising, although markets can be
socked with fees every time someone embeds a widget on, say, their MySpace page.

Web 2.0

A.k.a. the “real
time Web,” Web technologies that encourage the collaboration and
open sharing of

information. This is
user (consumer)
generated content
on which advertisers
can advertise. It includes
social media
: weblogs (blogs), video
based blogs (vlogs), podcasts,
social networking sites, video
sharing sites, wikis, virtual worlds, widgets, cons
umer reviews,
and any other formats where the individuals who use it create or distribute the majority of the


Blogs and Vlogs.

(short for

Web logs) (sometimes called
conversational media
are essentially frequently updated (typi
cally daily), self
published Web diaries/online journals or
informal, usually interactive Websites/online discussion sites. They consist of personal
observations and excerpts on a topic of interest to a particular target audience, usually from other
es, typically hosted by a single person who serves as discussion facilitator (a

sometimes called the
chief blogger
, written in an informal style. Many blogs enable readers to
post comments, usually anonymously, making them more interactive than
regular websites.
They usually contain links to other websites and blogs that the bloggers consider relevant.

Anyone can set one up for free by visiting a site such as, TypePad, WordPress,
or SixApart to set up an account. Technical su
pport costs about $2,500 to $5,000 a year.

In the early 2000s blogs began being used as marketing communications tools

bogs. They first gained widespread attention in 2004 when Howard Dean fans blogged to
promote his campaign for the De
mocratic presidential nomination. Today the

blogging world

is rapidly growing.

Many companies let employees keep blogs related to the corporation for a particular product,
thereby making the firm more transparent. For example, at G
eneral Motor’s Fastlane Chairman
Bob Lutz gives an inside look at the company (, and at Microsoft’s
Scobleizer employee Robert Scoble keeps a blog (scobleizer.word

Often the goal is to get consumers or the media excit
ed about a good or service. Also,
companies permit or even encourage employees to create blogs because they can help to
personalize what is often perceived as a faceless corporation, answering the question: “Who are
the guys in the cubes?” Company websit
es link to such blogs. A corporate blog can also serve
as a forum for a CEO or senior manager to convey to their publics information about what they
are doing and why.

To attract readers, the employees must be honest, providing insider “dirt,” rather

than serving
as propaganda mouthpieces for the company. For example, at the GM Smallblock Engine Blog,
employees and customers rhapsodize about Corvettes and other GM cars. Stonyfield Farm has
several blogs about yogurt. The power of talking or bloggin
g (from the verb “to blog”) is that it
appears in a personal, natural, conversational tone of voice rather than in marketing
speak or
corporatese, thereby giving the company or brand a personality. Stripped of the typical style of
advertising, marketing b
logs in their soft
sell style almost appear as an unbiased source, although
the target knows it originates from a marketer. Thereby, blogs can build trust and a relationship
with customers who ordinarily tune out marketing messages. For example, General
car czar Robert Lutz and other GM executives keep a blog at

where they encourage consumer feedback. Starbucks sponsors

Marketers also pay consumers with money or free products to blog about their products. The
FTC requires that bloggers disclose such relationships, and both the blogger and the advertiser
are liable for any misleading or unsubsta
ntiated claims.

Blogs are much less expensive to build and maintain than are websites. Marketers can sign
up for a blog on one of the provider Websites like Google’s,;, and If you’re willing to

pay for a more professional look, go to, which charge around $15 per month to maintain the blog. At one of these you can
peruse the templates and click on one you like. Then, write something interesting about your
firm or products. Bloggers

can measure the number of clicks from their blog to Websites and
measure the number of daily visits. However, you’ll need to appoint or hire someone to write
and monitor the blog posts and responses.

Blogs lure more traffic to a firm’s website bec
ause it improves the chances the site will reach
the top of search
engine results. Also, they encourage customer feedback about new products
and services.

On the downside, the blogosphere has become crowded and id difficult to control.

A blog sh
ould be updated at least two or three times a week (at a minimum once a month) since
readers are likely to return to a blog if they find fresh material, plus one of a blog’s main
functions is to add pages to a firm’s otherwise static website. Also, unlike

many other forms of
Internet marketing, it is only one
way communication. And, blogs have become fertile ground
for spammers to create

fake blogs with ads.

Blog search engines such as Google Blog Search, Technorati, Icerocket,, PubSub Concepts, BlogPurse, and Feedster are now indexing Blogs. For
those who want to go deeper, firms like Intelliseek and BuzzNetrics use
web log monitoring

sophisticated software analyzes the blogosphere for corporate clients. Companies use this
information of constantly updated consumer opinion for marketing and new product
development ideas. You can also type into Google and blog search engines the name
of the
company or brand, followed by a space and then relevant keywords like “awesome” and “sucks”
to see what customers are saying.

Another use of blogs is to advertise on others’ blogs. They are cheap and can generate buzz.
For instance, retail
ers are creating blogs to promote brand awareness and generate sales. For
example,, an online retailer of designer fashions, updates customers on fashion
related news through its blog Flypaper ( The blog must be informat
(e.g., the Bluefly blog posts information on styles, designs, and fashion faux pas)

the message
gets dismissed if it’s no more than an ad. However, the advertiser lacks control over what is
being said on an independent blog. Monitoring services like
Cymfony, CyberAlert, E
), and Intelliseek (
) monitor
postings on blogs, Usenet discussion group
s, and other Internet chat areas.

Blogs are also a great tool to stay in touch with customers allowing give
take between the
author and readers.

A variation is the

video blog, which began to take off in 2004. They are similar to
dcasts, except that videos, rather than songs or audio, are downloaded to a computer or cell

Business Week
tracks the blogosphere at


is a form of blogging that allows users(friends, fami
and more recently, businesses, employees, and consumers) to write brief text updates (usually
less than 200 characters) and publish them, either to be viewed by anyone or by a restricted
group which can be chosen by the user. These messages can be subm
itted by a variety of means,
including text messaging, instant messaging, email, MP3 or the web. The most popular service
is called Twitter, where you can sign up for a handle. Users, called Twitterers (the A
listers are
called the
), set up an

account and use it to send tiny instant messages (140 characters
maximum) called “tweets” to everyone’s PC or cell phone who chooses to receive their feeds,
called “followers”. Posts, which answer the question, “What are you doing?,” can be read in real
time or on the Twitterer’s Web page. Marketers monitor rants and raves about their products on
Twitter and can respond to them. Marketers can become Twitterers with a following that
monitors their status updates. For example, JetBlue ‘s Cheeps are limited
time deals. Marketers
can also hire celebrities to post favorable tweets about their brand (i.e., brand endorsements).
The marketing power of Twitter lies in the posts’ brevity and voluntary audience. Marketers can
expand their following when their fol
lower re
tweet (RT), i.e., repost, their messages

Podcasting and Vodcasting

are digital files/recordings (and
are video
files/recordings) of a radio
style show (audio recordings) or video clip that people create and
post on the Web. (Any audio clip can be turned into a podcast with software available for free
on the Web.) People can either listen online or downl
oad the shows from the Internet and listen
whenever they want on their computer’s or mobile device’ digital music players (iTunes jukebox
website is the leading destination for podcast downloads.).

Both startups and established firms use podcasting

to connect with customers, employees,
and investors. They’re showing up on firms’ websites. Some podcasts are straightforward
marketing (less likely to be listened to), while others are more entertainment, with only passing
reference to corporate creator
s. For example, Whirlpool features interviews with real people

moms balancing work and family, dads staying home to raise kid, and Nestle Purina published
podcasts on animal training and behavioral issues.

The key is to create engaging content

sightful, educational, or entertaining. Depending
on inherent interest, podcasts typically run from 5 to 45 minutes. They are informal and often
conversational. There are no set rules of frequency, but listeners should know when they can
expect a new po
dcast. Other marketing materials can promote the podcast.

Most independent podcasters are mimicking TV’s early model by signing up sponsors to pay
for the content so listeners get shows for free. Sponsorships usually involve a 15

or 30
o ad at the beginning of the podcast. Monthly prices range from a few thousand dollars to
over $50,000. For instance, Volvo sponsors podcasts on Autoblog.

As audience metrics improve, some podcasters are moving to the radio model of charging a
cific cost per thousand.

Others are exploring consumer subscriptions (typically a few dollars a month) and pay

Online social networks

and Video
sharing Sites
Online social networks (web

are online places where consu
mers congregate, socialize, and exchange
information and opinions, including
social networking sites
virtual worlds
networking sites

are interactive cybercommunities in which consumers can comment on or
contribute to the medium’s content where

people can interact. Users create their own pages,
where they post information on their interests, favorite games, movies, and even brands. Users
can search for others with similar interests. Marketers can either participate in existing
communities or
else set up their own.

Marketers should spend time understanding the dynamics, rules, and language of a social
networking site before attempting to establish a presence there. Marketers generate buzz by
posting status updates announcing sales promo
tions, special events, and the like, and creating fun
brand profiles (profile pages) on mass social networking sites like, Facebook,
LinkedIn (a business professionals’ networking site where individuals and firms can post profiles
of themselves

and job offers, sometimes called “My Space for grownups”), Bebo, and Ning. The
brand profile pages allow marketers to promote their brand with photos, customer reviews, etc.,
make sales, provide information, and offer branded applications such as rington
es that users can
add to their own pages. For example, Burger King’s mascot, The King, purports to be a 52
old from Miamui. American Eagle Outfitter’s MySpace page is mostly an ad for the youth
oriented clothing chain, but it also features discussio
n forums that cover topics from fashion to
store employment. Also, using data MySpace and some other social networking sites provide on
user profiles, advertisers can target them with very specific ads, which raises privacy concerns.
Brands can encourage

interactions by including pages where users can “poke” brands (interact
with them) or write on their walls. Advertising on social networking sites like eook can be very
targeted because of public information users share on their profiles, such as their h
ometown, ,
college they attended, hobbies and interests, and group affiliations.

. Firms also post videos on video
sharing sites like (where they can establish
channels) and Flickr, which are viewed by thousands on the site and then sent
to millions more
virally as
viral videos
. A video forwarded by a trusted friend instantly adds credibility to a
marketer’s message. For instance, Hewlett
Packard sponsored a contest for the best video
featuring an HP calculator.

There are also mor
e targeted social networking sites, i.e.,
vertical social networks
, which
cater to the specialized interests of their members, such as BabyCenter and Imeem, a music and
media social networking site. They are less cluttered, and users tend to trust them an
d their ads
more than the major social networking sites.

Marketers can establish their own brand websites or
brand communities,
promoting them in
offline ads

Consumers can get information, ply games, get tools, read blogs, receive special
insider offers, etc. using such sites for a hard
sell pitch is a no
no. For instance, at
you can “meet friends, make music, perform” with the help of music

software. Kellogg and Jenny Craig both offer online support groups for women trying to lose
weight. has a community” link offering links to Nike running clubs and a runner’s
network where users can create personal profiles and inte
ract with other community members.

Other brand communities are established by consumers, such as, established
by Nike users. Here, members can post topics, communicate privately with other members,
respond to polls, etc.

s can monitor these sites to see what consumers are saying about their brands.
Metrics include time spent on the site, friend bases, and how many times their brand is
mentioned on a site. Although negative and even ugly comments are at times posted, mark
must accept this as part of the Web culture.

A very popular social networking site is Linden Labs’ Second Life, an Internet
based 3
virtual world(community)

a simulated fantasy world where

3D cartoon
representations of players

live, i
nteract with other avatars, love, plat, and try to get rich, using
Linden dollars, easily traded for U.S, dollars at an official currency site.

Created in 1999, Second Life came to international attention via mainstream news media in
late 2006 and e
arly 2007. A downloadable client program enables its users, called "Residents", to
interact with each other through motional avatars, providing an advanced level of a social
network service. Residents can explore, meet other Residents, socialize, particip
ate in individual
and group activities, create and trade items (virtual property) and services from one another.
Residents can buy an “island” for an initial fee of $1,650, plus a monthly fee. For instance,
Coldwell Banker opened a virtual office to sell
virtual real estate in Second Life, visitors can
visit Nissan Island, and IBM built a replica of its Almaden Research Center. Marketers can also
pay real cash to occupy real estate in Second Life.

Social networking sites engage the power of ongoin
(e.g., fans on Facebook).
As a result, network members are more likely to respond to messages on the site, including ads,
if they blend in with the social context.

Disadvantages of advertising on social networking sites are that us
ers pay little attention to
the ads since they are so engrossed with talking to their friends and posting pictures, therefore
response rates are low, users feel the ads are an intrusion (especially notification of friends’
purchases), and there is a risk i
n running ads beside user
generated content. Also, results are
hard to measure, and Such Web communities are largely user controlled.

Customer Review Sites

Consumers now prowl the Web in search of recommendations or warnings by other

found on
customer review sites.
listing sites by Google (
is the most desired home for local businesses, and local business owners can sign up for a listing
at to create a listing), Yahoo, and others such

as Yelp, Citysearch,
and AOL Local let consumers rave about their favorite businesses or complain about poor
service, allowing consumers to get credible personal opinions about local businesses and
services. The reviews can help dramatically raise a webs
ite’s visibility in search engines, with
reviews and star ratings often cited in search results. For example, a search for “Los Angeles
chiropractor” returns not only links to websites but also a 10
item list of local chiropractors with
their addresses, r
eviews, star ratings, and a local map at the top of the page.

Local business marketers often try to game the system by e
mailing customers with web
addresses for review sites, asking them to write a review. Unfortunately, some unethical
marketers w
rite fake reviews or aggressively seek favorable reviews by offering incentives like
iPods and gift certificates.

There are many other recommendation sites, like music
recommendation site iLike that steers
customers to tunes they are likely to enjoy.

Chat rooms

chat rooms

groups of people sharing special interests can contact one another and
hange information and opinions. These can either be part of a marketer’s website or

Other Types of Cybermarketing

There are several other types of cybermarketing in addition to advertising:

Virtual malls
. A
virtual mall
online mall
is a gateway to a group of Internet storefronts
that provides access to mall sites by simply clicking on a storefront or category of store.
These can be global in scope, such as Mall Internet or CyberShop, or these can have a more
local flavor, such as th
e Virtual Mall from West Boston. These sites can attract browsers
much as stores attract window shoppers. They are typically organized by product category,
with each category offering click
throughs to stores, leading to corporate websites and
home pages

Sales promotions
. Sampling, coupons, and sweepstakes and contests are big on the
Internet in order to encourage people to visit or return to a Websites. Internet coupons can
be printed out from distributor and manufacturer sites. Sites offer many

things, like free e
mail, instant messaging, telephone services and sample computer programs (e.g., AOL disks,
downloads of trial versions of software). Often, as a condition of obtaining such goodies
and to enter sweepstakes and contests, marketers requ
ire consumers to divulge all
important personal data like address, phone number, and income.

Companies such as Coupons Online (
), Catalina’s Valupage
Websites (
), and

distribute coupons over the
Internet, including the sites of other commercial online services. Coupons Online and
Catalina both allow Netizens to print out

coupons and then take them to the store for

Sweepstakes and contests are also popular for driving people to marketers’ Websites. For
example, at you can enter a contest for a free BMW, or go to the Bria water site
and get a chance

to win $500,000. Incentive programs are also popular.

Some on
line merchants offer short
term sales just like brick
mortar stores. For
instance, Eddie Bauer’s home page featured a two
day sweater sale, and offered
a free DVD playe
r with a $250 purchase.

Event marketing
. Special events such as the Super Bowl and the Oscars have set up
Websites. The sites are promoted during the program, sponsors get their logos on the sites
with links to their own home pages, and they have an

opportunity to provide editorial
content for the event site.

Sales support
. While the Internet has served as an efficient substitute for salespeople for
some firms, other companies have used the Web to enhance and support their selling
efforts. Home p
ages typically have an e
mail option for those wishing to request further
information. Thus, the Net can provide a great source for leads for the sales force to follow
up on, and these leads become part of a prospect database. Also, through trial
rations and/or samples offered online, customers can determine if an offering is
worth requesting a sales call for.

Public Relations
. Many companies devote a portion of their Websites to public relations
activities like providing corporate information
, developing positive e
mail relationships, and
developing a media relations Website (providing news stories, press kits, etc.).

Managing the Brand in an E
. The Internet provides consumers an efficient
way to communicate with one anoth
er. Communities are formed via Usenet groups, Listservs,
instant messaging, and even Web pages or Websites built around special interests, such as
iVillage or MediaBistro, or sponsored by corporations as a benefit to their customers (e.g.,
Microsoft Corp.
’s free computer game
geek community,
, Martha Stewart Living
Omnimedia’ Inc.’s free online community of cooking and gardening enthusiasts at
. Through these communities, participants chat, exchange ideas,
and ask and answer questions.

One trend is for marketers to foster a sense of community on their Websites

a natural for the
Web considering its ability to pull millions of people
together at once. Relationships between
customers can be built through means such as moderated chat rooms (Internet relay chat

an expensive 24/7 proposition), bulletin boards, and incentives for people to bring in new

Sometimes, online co
mmunities form around particular brands. Members create detailed Web
pages devoted to the brand. They share their experiences in using the brand: likes, dislikes,
suggestions for buying replacement parts or getting the brand serviced, etc. Marketers can

thereby monitor word
mouth communications.

Unfortunately, some of this word
mouth communication is negative, as when a company
has disgruntled customers or employees. Such people engage in cyberventing

griping about
companies on the Interne
t. Forums for this catharsis range from message boards at sites like
Yahoo! And to company
specific sites like (a site for peeved United
Airlines customers and employees. Such gripe sites (or “bitch boards” as their known in
e circles) can be monitored to discover perceived and actual company and brand
problems, as well as to correct misinformation and false rumors.

Most corporations sponsoring online community sites require new members to register, and
that’s when markete
rs should ask for permission to direct market, i.e., ask members to opt in).
Online communities usually ask new members for permission to send them informative weekly
or monthly e
mail newsletters and explain that these newsletters will also contain some
targeted advertising, generally in the form of text
based advertising messages placed between
informational articles containing the corporate sponsor’s products. These e
mail newsletters’
primary goal is to enhance relationships with customers. For insta
nce, Procter and Gamble’s
free monthly newsletter, HomeMadeSimple, offers all kinds of practical advice in areas such as
décor, cooking, and household cleaning. The NFL’s weekly newsletter, Newsletter, is
customized by team, and then further tailo
red to the fan’s specific interests in the team. Fans
are informed when they register that they will be monitored to allow for better customized
information. When e
mails are sent to community members, they should always be given the
option to opt out of

the list.

Another trend is for consumer marketers to imitate their business
business brethren and
set up
, which allow them to establish an alliance with their suppliers and business
partners to build a Websites that is beneficial to all parties. For instance, an advertiser could
create an extranet with Wal
Mart as the sponsor and center it on parenting.

One more trend learned from b
b marketers is to partner with another firm and create a

a site within a site where sponsors’ content is integrated into the look and feel of
the host site, often a media site.

Advantages and Disadvantages

of the Internet

There are a number of

of advertising and marketing on the Internet.

Highly selective target marketing of a quality audience
. Internet ads can be highly targeted
to specific groups with minimal waste coverage. In bu
business marketing only the
most interested prospects will bother visiting. In consumer marketing personalization and
other targeting techniques help sites to become more tailored to individual needs. By
purchasing keywords and using cookies, a
dvertisers can reach potential consumers when
they are ready to buy. The market is upscale in nature.

Enormous audience
. The Internet is the only truly global medium.

Message tailoring
. Highly targeted markets help here, as does the interactive nature

of the

Information intensiv
e. Lots of information can be presented if desired. A given site can
offer a wealth of information on a company, product specifications, costs, purchase
information, etc. Links will direct users to even more informa
tion if they wish. This is
consistent with a major use of the Internet

to gather information.


There is the ability to monitor who is viewing ads and responding to them.

Interactive capabilities
. More than any other medium, the Internet all
ows consumers to
directly interact with an advertiser, increasing customer involvement and satisfaction, and
building a relationship between the advertiser and the customer. Marketers can speak
, not
, customers. This
virtual reality

environment si
mulates a direct experience for
users, resulting in more confidently held and enduring attitudes.

time information
. The Net allows for lots of flexibility as sites can be constantly

Sales potential
. As we’ll discuss, the Internet can be

a great direct response medium to
generate sales, offering immediate response rivaled only by personal selling.

Opportunities for creativity
. The multi
sensory nature of the Internet makes it one that
offers lots of opportunities for creativity (like T
V). This can enhance a company’s image and
increase customer interest and involvement, leading to repeat visits.

Widespread exposure
. Especially small companies with limited budgets can gain access to
the world for a fraction of the cost of traditional m

The Internet also has its

. Internet ads are fairly inexpensive when measured on a CPM basis for a banner ad
(about $5 to $50 on most sites, with an average of about $50, although a major site like
Yahoo very targeted ads can r
un as much as $150 CPM, and rates are higher for home pages
compared with subsequent pages). This compares to $5 for outdoor, $12 for TV, and $35
for a 4
color ad in a major consumer magazine). However, the absolute cost is relatively
moderate, ranging f
rom a few hundred dollars locally to $100,000 or more per month for a
major Websites. <Exhibit 17.16>. The reason CPM is high on certain sites is because

audiences are 1. highly targeted and upscale, and 2. highly motivated to shop/seek
information an
d to buy <Exhibits 17.17/17.18>. As with all media, CPM is for opportunities
for exposures, not actual exposures, as there’s no reliable way to know how many people
who call up a Web page look at its advertising. Absolute cost is relatively low because
<back to

Exhibit 17.16> the total number of exposures is relatively low. Also, the cost for
producing banner ads and websites is comparatively low. While it is possible to establish a
site inexpensively, establishing and maintaining a good site is beco
ming more costly.

. Web advertising fits well into an integrated marketing communications

it is easily integrated and coordinated with other forms of promotion. Offline
ads can carry the Websites’s URL. Web banner ads, like outdoor
billboards, can include
images and slogans from broadcast and print campaign ads. Sales promotions such as
contests and coupons can be featured on Websites.

From the consumer’s perspective there are also several compelling advantages:

. The Intern
et offers the fastest way to access information on a company and its

. Electronic marketing increases customer convenience by breaking down
many of the barriers caused by time and space, thereby adding time and place utility.
Consumers can shop 24 hours a day without leaving the comfort of their home or office,
avoiding c
rowded shopping malls in the process.

Greater availability of information, including price information

Greater variety to choose from

Not intrusive/interruptive (forced on consumers)
. Consumers seek out Web advertising and
are therefore highly engag
ed with it and view it as credible. Marketers aren’t interrupting

they are delivering it!

From a managerial perspective there are some downsides to Internet marketing:

Measurement problems
. There is a big problem with accurately estimating exposur

are highly uncertain how many people see or notice Internet ads. Different research
services report widely different numbers. Also, numbers reported become quickly
outdated. These problems are discussed more in D. below.

Privacy and security con
. Some consumers are leery of using the Internet because of
privacy and security concerns.

concerns the fear that data collection occurs without
consumers’ knowledge or permission or that marketers engage in unauthorized use of their
l information. Privacy is also violated when consumers’ data is sold to other
marketers without the customers’ permission. Consumers are therefore reluctant to give
out personal data that might be important to the marketer.

cyber crim
such as credit card theft and hacking into corporate Websites to get things such as
customer lists or customer credit card numbers. Therefore, marketers must put in place
appropriate encryption systems to protect the consumer’s data.

Declining impact
. As the novelty of Web advertising wears off and as the medium becomes
, there seems to be less tolerance for it. In 2001, there were over 20
million Websites with the “.com” domain name. More people now claim to actively avoid
b ads (through means such as software that blocks banner ads and e
mail solicitations),
and the number who say they notice Web ads is down (a reason for the reported decline in
banner ad effectiveness). Some consumers are tired of computers by the time th
ey get
home from work and don’t wish to spend their leisure time shopping online. And, browsing
online can be time
consuming since high
quality images take time to download, especially if
a lot of users are trying to download them at once, a phenomenon kn
own as
. Net
net, the impact of Web advertising is uncertain.

Limited production quality
. Although it is improving, net advertising doesn’t offer the high
quality production of many other media, although the gap is narrowing.

Limited reach
Only about half the population is connected to the Net, due to the high cost
of personal computers and technology impediments for many people (especially the elderly
and poorly educated). Also, only a small percentage of sites are captured by any given
arch engine

Constant updating/site maintenance
. Staffing is required to keep the site’s content up to
date 24/7.

Channel conflict
. Traditional retailers might dislike competing with the manufacturer’s
Websites, and consequently give less support to or eve
n discontinue carrying the producer’s

From a consumer perspective, there are also some drawbacks to getting information and
shopping online:

Lack of security
. While a person’s financial liability is usually limited to $50, the damage to
her cr
edit rating can last for years.

Buying sight unseen
. For certain experience goods such as clothing and furniture, the
consumer usually wants to see the item up close and personal before buying.

Expensive to order and then return
. Because consumers are buying without actually seeing
the items, and since exact colors might not reproduce on computer monitors, consumers
often end up returning merchandise. Even though most e
tailers have very liberal return
policies, customers can s
till get stuck with large return shipping charges.