ELC 200 Day 14 Copyright © 2007 Pearson Education, Inc.

Agenda Exam 2 will be Nov 8 Questions? Assignment 5 posted Due Oct 28, 2010 @ 11:05 PM assignment 5.pdf Assignment 6 will be posted by next class 2 left after the 6th Exam 2 will be Nov 8 Chap 6, 7 & 8 Same format as before 70 min Points penalty for going over time limit Begin E-commerce Marketing Communications

Time Penalty for Exam 2 1 Min  -1 points 2 Min  -2 points Copyright © 2010 Pearson Education, Inc.

Chapter 7 E-commerce Marketing Communications Copyright © 2009 Pearson Education, Inc. Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Online Advertising from 2002–2013 Figure 7.1, Page 430 SOURCES: Based on data from eMarketer, 2009a. Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Display Ads Banner ads Pop-up ads http://www.travelocity.com/ Rectangular box linking to advertiser’s Web site IAB guidelines E.g., full banner is 468 x 60 pixels, 13K (changed in 2009) IAB-Ad-Unit-Guidelines-Update-20091029.pdf 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 http://www.travelocity.com/ Copyright © 2010 Pearson Education, Inc.

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 Rich media Example http://www.unicast.com/Showcase.aspx Copyright © 2010 Pearson Education, Inc.

IAB Guidelines For Rich media Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

http://www. billhartzer http://www.billhartzer.com/pages/user-centric-results-of-eye-tracking-study-google-versus-bing/ Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Search Engine Advertising Issues: Appropriate disclosure of paid inclusion and placement practices Search engine click fraud Who’s Clicking the AD? Ad nonsense For a Small business Search Engine Optimization, SEO, is the best “bang for your buck” http://www.searchenginejournal.com/55-quick-seo-tips-even-your- mother-would-love/6760/ http://www.seocopter.com/ http://back-links.org/category/seo-tutorials/ Copyright © 2010 Pearson Education, Inc.

Sponsorships and Referrals Paid effort to tie advertiser’s name to particular information, event, venue in way that reinforces brand in positive yet not overtly commercial manner http://www.webmd.com/ Referrals Affiliate relationship marketing Permits firm to put logo or banner ad on another firm’s Web site from which users of that site can click through to affiliate’s site Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Percentage of E-mail That Is Spam Figure 7.6, Page 444 SOURCE: MessageLabs.com, 2009. Copyright © 2010 Pearson Education, Inc.

Spam Categories Figure 7.7, Page 445 SOURCE: Symantec, 2009. Copyright © 2010 Pearson Education, Inc.

Equivalent of paper-based catalogs Online Catalogs Equivalent of paper-based catalogs Graphics-intense; use increasing with increase in broadband use Two types: Full-page spreads, e.g., Landsend.com Grid displays, e.g., Amazon In general, online and offline catalogs complement each other Copyright © 2010 Pearson Education, Inc.

Uses digitally enabled networks to spread ads 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” http://advergames.com/ Placing brand-name products within games Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Why did Neiman Marcus’ first effort fail? Insight on Business Are the Very Rich Different from You and Me? Class Discussion Why have online luxury retailers had a difficult time translating their brands and the look and feel of luxury shops into Web sites? Why did Neiman Marcus’ first effort fail? Why did Tiffany’s first effort fail? Visit the Armani Web site. What do you find there? Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Online Marketing Metrics Conversion of visitor to customer Acquisition rate Conversion rate Browse-to-buy-ratio View-to-cart ratio Cart conversion rate Checkout conversion rate Abandonment rate Retention rate Attrition rate E-mail metrics Open rate Delivery rate Click-through rate (e-mail) Bounce-back rate Copyright © 2010 Pearson Education, Inc.

An Online Consumer Purchasing Model Figure 7.9, Page 465 Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Comparative Returns on Investment Figure 7.10, Page 467 SOURCE: Industry sources; author estimates. Copyright © 2010 Pearson Education, Inc.

The Costs of Online Advertising Pricing models Barter Cost per thousand (CPM) Cost per click (CPC) Cost per action (CPA) Online revenues only Sales can be directly correlated Both online/offline revenues Offline purchases cannot always be directly related to online campaign In general, online marketing more expensive on CPM basis, but more effective Copyright © 2010 Pearson Education, Inc.

Web Site Activity Analysis Figure 7.11, Page 472 Copyright © 2010 Pearson Education, Inc.

What are some of the services offered by Omniture’s SiteCatalyst? Insight on Technology It’s 10 P.M. Do You Know Who Is on Your Web Site? Class Discussion What are some of the services offered by Omniture’s SiteCatalyst? Why would you as a Webmaster be interested in these services? Why is site analysis and customer tracking so important to online marketing? How did HP use SiteCatalyst? Copyright © 2010 Pearson Education, Inc.

The Web Site as a Marketing Communications Tool Web site as extended online advertisement Domain name: First communication e-commerce site has with prospective customer Search engine optimization: Register with as many search engines as possible Ensure keywords used in site description match keywords likely to be used as search terms by user Link site to as many other sites as possible Get professional help Copyright © 2010 Pearson Education, Inc.

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 Copyright © 2010 Pearson Education, Inc.

Factors in the Credibility of Web Sites Figure 7.12, Page 477 SOURCE: Based on data from Fogg, et al, 2003. Copyright © 2010 Pearson Education, Inc.

Table 7.9, Page 478 Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc.   Publishing as Prentice Hall Copyright © 2010 Pearson Education, Inc.