E-commerce
Lecture 7
E-commerce Marketing Communications
Slide 7-2
Video Ads Cure Banner Blindness: String Master
Class Discussion
What advantages do video ads have over traditional banner ads? Where do sites such as YouTube fit in to a marketing strategy featuring video ads? What are some of the challenges and risks of placing video ads on the Web? Do you think Internet users will ever develop blindness towards video ads as well?
Slide 7-3
Marketing Communications
Online marketing communications:
Methods used by online firms to communicate with consumer and create strong brand expectations
Promotional sales communications:
Suggest consumer buy now and make offers to encourage immediate purchase
Branding communications:
Focus on extolling differentiable benefits of consuming product or service
Slide 7-4
Online Advertising
$24.5 billion in 2009 15% of all advertising by 2013 Advantages:
Internet is where audience is moving Ad targeting Greater opportunities for interactivity
Disadvantages:
Cost versus benefit How to adequately measure results Supply of good venues to display ads
Slide 7-5
Online Advertising from 20022013
SOURCES: Based on data from eMarketer, 2009a.
Slide 7-6
Forms of Online Advertisements
Display ads Rich media Video ads Search engine advertising In-game ads
Social network, blog, and game advertising
Sponsorships Referrals (affiliate relationship marketing)
E-mail marketing
Online catalogs
Slide 7-7
Display Ads
Banner ads
Rectangular box linking to advertisers Web site
IAB guidelines
E.g., full banner is 468 x 60 pixels, 13K
Pop-up ads
Appear without user calling for them Provoke negative consumer sentiment
Twice as effective as normal banner ads
Pop-under ads: open beneath browser window
Slide 7-8
Rich Media Ads
Use Flash, DHTML, Java, JavaScript
About 7% of all online advertising expenditures
Tend to be more about branding Boost brand awareness by 10% IAB standards limit length Interstitials Superstitials
Slide 7-9
Video Ads
Fastest growing form of online advertisement IAB standards
Linear video ad Non-linear video ad In-banner video ad In-text video ad
Formats: pre-roll, mid-roll, post-roll Ad placement
Video advertising networks
Advertising exchanges
Slide 7-10
Search Engine Advertising
Almost 50% of online ad spending in 2009
Types:
Paid inclusion or rank
Inclusion in search results Sponsored link areas
Keyword advertising
E.g., Google AdWords
Network keyword advertising (context advertising)
E.g., Google AdSense
Slide 7-11
Search Engine Advertising
Issues:
Appropriate disclosure of paid inclusion and placement practices Search engine click fraud Ad nonsense
Slide 7-12
Sponsorships and Referrals
Sponsorships
Paid effort to tie advertisers name to particular information, event, venue in way that reinforces brand in positive yet not overtly commercial manner
Referrals
Affiliate relationship marketing Permits firm to put logo or banner ad on another firms Web site from which users of that site can click through to affiliates site
Slide 7-13
E-mail Marketing and the Spam Explosion
Direct e-mail marketing
Low cost method Primary cost is purchasing addresses
Spam: unsolicited commercial e-mail
80%90% of all e-mail purportedly is spam Efforts to control spam:
Technology (filtering software)
Government regulation (CAN-SPAM and state laws)
Voluntary self-regulation by industries DMA
Slide 7-14
Percentage of E-mail That Is Spam
SOURCE: MessageLabs.com, 2009.
Slide 7-15
Spam Categories
SOURCE: Symantec, 2009. Slide 7-16
Online Catalogs
Equivalent of paper-based catalogs
Graphics-intense; use increasing with increase in broadband use
Two types:
1. Full-page spreads, e.g., Landsend.com 2. Grid displays, e.g., Amazon
In general, online and offline catalogs complement each other
Slide 7-17
Social Marketing
Many-to-many model
Uses digitally enabled networks to spread ads
Blog advertising
Online ads related to content of blogs
Social network advertising
Ads on MySpace, Facebook, YouTube, etc.
Game advertising
Downloadable advergames Placing brand-name products within games
Slide 7-18
Insight on Society
Marketing to Children of the Web in the Age of Social Networks
Class Discussion
Why is online marketing to children a controversial practice? What is the Childrens Online Privacy Protection Act (COPPA) and how does it protect the privacy of children? How do companies verify the age of online users? Should companies be allowed to target marketing efforts to children under the age of 13?
Slide 7-19
Behavioral Targeting
Web as Database of Intentions Behavioral targeting
Combines real-time information on visitors online behavior with offline identity, consumptive information Data analyzed to develop profiles Ads delivered based on profile Hundreds of versions of ad for different profile groups
One of fastest growing online marketing techniques Raises privacy concerns
Slide 7-20
Mixing Offline and Online Marketing Communications
Most successful marketing campaigns incorporate both online and offline tactics
Offline marketing
Drive traffic to Web sites
Increase awareness and build brand equity
Consumer behavior increasingly multi-channel
60% of consumers research online before buying offline
Slide 7-21
Insight on Business
Are the Very Rich Different from You and Me?
Class Discussion
Why have online luxury retailers had a difficult time translating their brands and the look and feel of luxury shops into Web sites? Why did Neiman Marcus first effort fail? Why did Tiffanys first effort fail?
Visit the Armani Web site. What do you find there?
Slide 7-22
Online Marketing Metrics: Lexicon
Measuring audience size or market share
Impressions Click-through rate (CTR) View-through rate (VTR) Hits Page views Stickiness (duration) Unique visitors Loyalty Reach Recency
Slide 7-23
Online Marketing Metrics
Conversion of visitor to customer
Acquisition rate Conversion rate Browse-to-buy-ratio View-to-cart ratio Cart conversion rate Checkout conversion rate Abandonment rate Retention rate Attrition rate
Slide 7-24
E-mail metrics
Open rate Delivery rate Click-through rate (e-mail) Bounce-back rate
An Online Consumer Purchasing Model
Slide 7-25
How Well Does Online Advertising Work?
Ultimately measured by ROI on ad campaign
Highest click-through rates: search engine ads, permission e-mail campaigns
Rich media, video interaction rates high
Online channels compare favorably with traditional channels Most powerful marketing campaigns use multiple channels, including online, catalog, TV, radio, newspapers, stores
Slide 7-26
Comparative Returns on Investment
SOURCE: Industry sources; author estimates. Slide 7-27
The Costs of Online Advertising
Pricing models
Barter Cost per thousand (CPM) Cost per click (CPC) Cost per action (CPA)
Online revenues only
Sales can be directly correlated
Both online/offline revenues
Offline purchases cannot always be directly related to online campaign
In general, online marketing more expensive on CPM basis, but more effective
Slide 7-28
Web Site Activity Analysis
Slide 7-29
Insight on Technology
Its 10 P.M. Do You Know Who Is on Your Web Site?
Class Discussion
What are some of the services offered by Omnitures SiteCatalyst? Why would you as a Webmaster be interested in these services? Why is site analysis and customer tracking so important to online marketing? How did HP use SiteCatalyst?
Slide 7-30
The Web Site as a Marketing Communications Tool
Web site as extended online advertisement Domain name:
First communication e-commerce site has with prospective customer Register with as many search engines as possible Ensure keywords used in site description match keywords likely to be used as search terms by user Link site to as many other sites as possible Get professional help
Slide 7-31
Search engine optimization:
Web Site Functionality
Main factors in effectiveness of interface
Utility Ease of use
Top factors in credibility of Web sites
Design look Information design/structure Information focus
Organization is important for first-time users, but declines in importance
Information content becomes major factor attracting further visits
Slide 7-32
Factors in the Credibility of Web Sites
SOURCE: Based on data from Fogg, et al, 2003. Slide 7-33
Slide 7-34
