ELC 200 Introduction to E-commerce DAY 21 Copyright © 2018, 2017, 2016 Pearson Education, Inc. All Rights Reserved

Day 21 Overview Questions? Assignment 5 OVERDue Assignment 6 posted, Due November 20 Assignment 6.pdf Quiz 3 2ND ½ of Chapter 5, Chapter 6, 7 & 8 (maybe 9 also) November 20 Same format as before Learning Tracks Content Area In BlackBoard Finish Social, Mobile and Local marketing Begin Ethical, Social, and Political Issues in E-Commerce

E-commerce 2017 business. technology. society. 13th edition Chapter 7 Social, Mobile, and Local Marketing

Learning Objectives 7.1 Understand the difference between traditional online marketing and the new social- mobile-local marketing platforms and the relationships between social, mobile, and local marketing. 7.2 Understand the social marketing process from fan acquisition to sales and the marketing capabilities of social marketing platforms such as Facebook, Twitter, and Pinterest. 7.3 Identify the key elements of a mobile marketing campaign. 7.4 Understand the capabilities of location-based local marketing. Slide 3 is a list of textbook LO numbers and statements.

Mobile Marketing More than 262 million Americans use mobile phones (population is 326  80% penetration) Devices used multiple times per day By 2020, m-commerce will account for almost 50% of all retail and travel e-commerce Challenges: Mobile search Motivating consumers to click Raising fees for each click

Figure 7.6: The Growth of M-Commerce Figure 7.6, Page 460. M-commerce in the retail and travel industries is expected to grow to over $438 billion by 2020, almost equal to the amount generated by desktop-based “traditional” e-commerce. SOURCES: Based on data from eMarketer, Inc., 2016i, 2016j, 2016k, 2016l.

How People Actually Use Mobile Devices Average of 3 hours daily on mobile devices 42% entertainment 16% social networks 70% occur in home Activities are similar to desktop activities Rapidly growing smartphone m-commerce sales Mobile devices currently used more for communicating and entertainment over shopping and buying

Figure 7.7: How People Use Their Mobile Devices to Shop Figure 7.7, page 461. Tablets lead smartphones as an m-commerce shopping and buying platform, but this difference may disappear over time as better tools are developed for smartphones. SOURCE: Based on data from eMarketer, Inc., 2015b.

In-App Experiences and Ads Mobile use Apps—60% of smartphone time Almost 75% of app time spent on user’s top 3 apps Users use about 27 different apps/month App marketing Most effective are in-app ads Placed in most popular apps Targeted to immediate activities and interests

How the Multi-Screen Environment Changes the Marketing Funnel Consumers becoming multi-platform Desktops, smartphones, tablets, TV 90% of multi-device users use multiple devices to complete action View ad on TV, search on smartphone, purchase on tablet Marketing implications Consistent branding Responsive design Increased complexity, costs

Mobile Marketing Features Mobile marketing 64% of all online marketing Dominant players are Google, Facebook Mobile device features Personal communicator and organizer Screen size and resolution GPS location Web browser Apps Ultraportable and personal Multimedia capable Touch/haptic technology

Figure 7.10: The Top U.S. Mobile Marketing Firms by U.S. Revenue Figure 7.10, Page 466. Mobile advertising is still dominated by Google and its search engine, but Facebook has gained significant market share in the last four years. SOURCE: Based on data from eMarketer, Inc., 2016r.

Mobile Marketing Tools: Ad Formats Mobile marketing formats Search ads Display ads Video Text/video messaging Other: e-mail, classifieds, lead generation Mobile interface versions of social network techniques

Figure 7.11: Mobile Ad Spending by Format Figure 7.11, page 467. Search engine advertising is the most popular mobile marketing format. SOURCE: Based on data from eMarketer, Inc., 2016s.

Insight on Business: Mobile Marketing: Ford Goes 3-D Class discussion: Why do mobile devices represent such a promising opportunity for marketers? What are the benefits and the appeal of 3-D mobile advertising? Have you ever engaged with 3-D mobile ads? What types of products are best suited for 3-D ads? https://vimeo.com/90376797 https://www.youtube.com/watch?v=h6sYB49Oo9o https://www.youtube.com/watch?v=s9JT0Fs3JXM

Mobile Marketing Campaigns Mobile website (HTML5) Facebook and Twitter brand pages Mobile versions of display advertising campaigns Ad networks Apples iAd or Google AdMob Interactive content aimed at mobile user Tools for measuring responses Key dimensions follow desktop and social marketing metrics

Figure 7.12: Measuring the Effectiveness of a Mobile Marketing Campaign Figure 7.12, page 472. The effectiveness of a branding campaign utilizing the mobile platform and social marketing can be measured by examining the number of Likes, posts, page views, time on site, and unique visitors.

Local and Location-Based Marketing Targets messages to users based on location Marketing of location-based services Location-based services Provide services to users based on location Personal navigation Point-of-interest lists Reviews Friend-finders, family trackers Consumers have high likelihood of responding to local ads

The Growth of Local and Location-Based Mobile Marketing Prior to 2005, nearly all local advertising was non- digital Google Maps (2005) Enabled targeting ads to users based on IP address and general geographic location Smartphones, Google’s mobile maps app (2007) Enabled targeting ads based on GPS Location-based mobile marketing Expected to triple over next five years

Figure 7.13: Local, Mobile, and Location-Based Mobile Marketing Figure 7.13, Page 474. Local online marketing will account for $45 billion in marketing expenditures in 2016, with location-based mobile expected to account for $12.8 billion of that amount. SOURCES: Based on data from eMarketer, Inc., 2016b, 2016c, 2016e.

Location-Based Marketing Platforms Google Android OS, Google Maps, Google Places, AdMob, AdWords Facebook Apple iOS, iAd Twitter Others: YP, Pandora, Millenial Media

Location-Based Mobile Marketing Technologies Two types of location-based marketing techniques Geo-aware techniques Identify location of user’s device and target ads, recommending actions within reach Proximity marketing Identify a perimeter around a location and target ads and recommendations within that perimeter Identifying locations GPS signals Cell-tower locations Wi-Fi locations (IP address)

Why Is Local Mobile Attractive to Marketers? Mobile users more active, ready to purchase than desktop users Over 80% of U.S. smartphone users use mobile devices to search for local products, services 50% visit a store within 1 day of local search 18% make a purchase

Location-Based Marketing Tools Geo-social-based services marketing – FourSquare Swarm Location-based services marketing Mobile-local social network marketing Proximity marketing In-store messaging Location-based app messaging

Location-Based Marketing Campaigns Location-based considerations Action-based, time-restrained offers and opportunities Target demographic and location-aware mobile user demographics Strategic analysis of marketspaces Measuring marketing results Table 7.17 Same measures as mobile and web marketing Metrics for unique characteristics Inquire Reserve Click-to-call Friend Purchase

E-commerce 2017 business. technology. society. 13th edition Chapter 8 Ethical, Social, and Political Issues in E-commerce

Learning Objectives 8.1 Understand why e-commerce raises ethical, social, and political issues. 8.2 Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy. 8.3 Understand the various forms of intellectual property and the challenges involved in protecting it. 8.4 Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues. 8.5 Identify major public safety and welfare issues raised by e-commerce. Slide 3 is a list of textbook LO numbers and statements.

The Right to Be Forgotten: Europe Leads on Internet Privacy Class Discussion Is Google responsible for the accuracy of links to other information? Why or why not? Why do European and American views on privacy protection differ so dramatically? https://www.nytimes.com/interactive/2016/01/29/technology/dat a-privacy-policy-us-europe.html How can the different perspectives on privacy be managed in a global environment like the Internet? GDPR is coming http://www.eugdpr.org/

Understanding Ethical, Social, and Political Issues in E-commerce Internet, like other technologies, can: Enable new crimes Affect environment Threaten social values Costs and benefits must be carefully considered, especially when there are no clear-cut legal or cultural guidelines See table 8-1 , all the if 8 features that makes eCommerce great for business has implications

A Model for Organizing the Issues Issues raised by Internet and e-commerce can be viewed at individual, social, and political levels Four major categories of issues: Information rights Property rights (intellectual property) Governance (jurisdiction) Public safety and welfare

Figure 8.1: The Moral Dimensions of an Internet Society Figure 8.1, Page 500. The introduction of the Internet and e-commerce impacts individuals, societies, and political institutions. These impacts can be classified into four moral dimensions: property rights, information rights, governance, and public safety and welfare.

Basic Ethical Concepts Ethics Study of principles used to determine right and wrong courses of action Responsibility Accountability Liability Laws permitting individuals to recover damages Due process Laws are known, understood Ability to appeal to higher authorities to ensure laws applied correctly

Analyzing Ethical Dilemmas Process for analyzing ethical dilemmas: Identify and clearly describe the facts Define the conflict or dilemma and identify the higher-order values involved Identify the stakeholders Identify the options that you can reasonably take Identify the potential consequences of your options

Candidate Ethical Principles (page 504) Golden Rule Universalism Slippery Slope Collective Utilitarian Principle Risk Aversion No Free Lunch The New York Times Test The Social Contract Rule

Privacy and Information Rights Moral right of individuals to be left alone, free from surveillance or interference from other individuals, organizations, or state Information privacy: Four premises Right to control information collected about them “Right to be forgotten” Right to know when information is collected and give consent “Informed consent” Right to personal information due process Right to have personal information stored in a secure manner

Table 8.2: The FTC’s Fair Information Practice Principles DESCRIPTION Notice/Awareness (core principle) Sites must disclose their information practices before collecting data. Includes identification of collector, uses of data, other recipients of data, nature of collection (active/inactive), voluntary or required, consequences of refusal, and steps taken to protect confidentiality, integrity, and quality of the data. Choice/Consent (core principle) There must be a choice regime in place allowing consumers to choose how their information will be used for secondary purposes other than supporting the transaction, including internal use and transfer to third parties. Opt-in/opt-out must be available. Access/Participation Consumers should be able to review and contest the accuracy and completeness of data collected about them in a timely, inexpensive process. Security Data collectors must take reasonable steps to assure that consumer information is accurate and secure from unauthorized use. Enforcement There must be a mechanism to enforce FIP principles in place. This can involve self-regulation, legislation giving consumers legal remedies for violations, or federal statutes and regulation.

Privacy in the Public Sector: Privacy Rights of Citizens Public sector privacy rights have long history First Amendment  freedom 0f speech Fourth Amendment  protection from unreasonable search and seizure Fourteenth Amendment  No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. Constitutional, implied privacy rights did not cover collection and use of personal information 1974 Privacy Act (for federal agencies) Federal and state law to protect individuals against unreasonable government intrusion See tables 8.3 & 8.4

Privacy in the Private Sector: Privacy Rights of Consumers Privacy issues rose with first large-scale, nationwide computerized systems Credit card systems, credit rating agencies Historically, few claims to privacy in public, open markets Emergence of Internet has created enormous collections of personal data Ideal environment for business and government to invade personal privacy of consumers Google, Amazon, Netflix, etc.

Information Collected by Websites Data collected includes Personally identifiable information (PII) Anonymous information Types of data collected Name, address, phone, e-mail, Social Security number Bank and credit accounts, gender, age, occupation, education Preference data, transaction data, clickstream data, browser type

Key Issues in Online Privacy of Consumers Top concerns Profiling and ad targeting Social network privacy Sharing of information by marketers Mobile phone privacy Of less concern Monitoring employees Sharing of health information Surveillance to prevent terrorism

Marketing: Profiling, Behavioral Targeting, and Retargeting (1 of 2) Creation of data images that characterize online individual and group behavior Anonymous profiles Personal profiles Advertising networks Track consumer and browsing behavior on Web Dynamically adjust what user sees on screen Build and refresh profiles of consumers Google's AdWords program

Marketing: Profiling, Behavioral Targeting, and Retargeting (2 of 2) Facial recognition tools Business perspective: Increases effectiveness of advertising, subsidizes content Enables sensing of demand for new products Critics' perspective: Undermines expectation of anonymity and privacy Enables price discrimination The harm of false data

Social Networks and Privacy Encourage sharing personal details Pose unique challenge to maintaining privacy Facebook Facial recognition technology and tagging Serving ads to users not on Facebook Sharing information with third parties Personal control over personal information vs. organization's desire to monetize social network

Mobile Devices: Location-Based Privacy Issues Smartphone apps Funnel personal information to mobile advertisers for targeting ads Track and store user locations Track users’ use of other apps Twitter’s “Find Friends” feature U.S. Supreme Court rules that police need warrant prior to searching a cell phone for information

Consumer Privacy Regulation: The FTC (1 of 2) Fair Information Practice (FIP) principles Informed consent: Opt-in and opt-out Harm-based approach “Do Not Track” mechanism Recent emphasis is to give consumer rights regarding collected personal information

Consumer Privacy Regulation: The FTC (2 of 2) FTC’s new privacy framework Scope: Applies to all commercial entities Privacy by Design: Companies should promote consumer privacy throughout the organization and at all stages in the development of products Simplified Choice: Companies should simplify consumer choice Greater Transparency

Consumer Privacy Regulation: The Federal Communications Commission (FCC) 2015 classification of broadband Internet service providers as similar to public utility services and subject to FCC regulation 2016 FCC approved new privacy rules for ISPs Must notify users of privacy options or obtain user consent to collect information Service cannot be contingent on users surrendering privacy

Privacy Policies Website Terms of Use Notices Recent study showed these polices would take average reader 8 hours to read Have conflicting statements Little oversight and comparison between policies of different companies

The European Data Protection Directive European privacy protection much stronger than in United States 1998 European Commission's Directive on Data Protection (1998) Safe harbor 2015 E.U. General Data Protection Regulation (GDPR) Privacy Shield Privacy environment has turned against U.S. firms like Facebook and unfettered collection and use of personal data

Industry Self-Regulation Online Privacy Alliance (OPA) Privacy seal programs like TRUSTe Network Advertising Initiative (NAI) Ad Choices Program In general, self-regulation has not succeeded in reducing American fears of privacy invasion or reducing the level of privacy invasion

Technology Solutions Solutions include Spyware blockers Pop-up blockers and ad blockers Secure e-mail, anonymous remailers Cookie managers Disk/file erasing programs Public key encryption None address core issues of consumer privacy What information is collected and how it is used Consumer rights

Privacy Protection Privacy protection as a business Privacy advocacy groups Limitations on the right to privacy Edward Snowden & NSA Prism program Law enforcement and surveillance USA Freedom Act Apple’s iPhone 6 and encryption Use of personal data by government agencies

Insight on Technology: Apple: Defender of Privacy? Class Discussion Are there circumstances that warrant the invasion of personal digital information and property? Do you think the All Writs Act of 1789 should be applicable to today’s technology-driven privacy issues? Should citizens charged with a crime or convicted criminals have any rights to privacy? How does Apple’s view on privacy differ from those of Facebook’s and Google’s?

Intellectual Property Rights All tangible and intangible products of human mind Major ethical issue: How should we treat property that belongs to others? Major social issue: Is there continued value in protecting intellectual property in the Internet age? Major political issue: How can Internet and e-commerce be regulated or governed to protect intellectual property?

Intellectual Property Protection Three main types of protection: Copyright Patent Trademark law Goal of intellectual property law: Balance two competing interests—public and private Maintaining this balance of interests is always challenged by the invention of new technologies

Copyright Protects original forms of expression (not ideas) from being copied by others for a period of time “Look and feel” copyright infringement lawsuits Fair use doctrine Digital Millennium Copyright Act of 1998 First major effort to adjust copyright laws to Internet age Implements WIPO treaty that makes it illegal to make, distribute, or use devices that circumvent technology-based protections of copyrighted materials Safe-harbor provisions

Patents Grant owner 20-year monopoly on ideas behind an invention Invention must be new, non-obvious, novel Encourages inventors Promotes dissemination of new techniques through licensing Stifles competition by raising barriers to entry Apple vs. Samsung patent wars

E-commerce Patents 1998 State Street Bank & Trust vs. Signature Financial Group Business method patents 2014 Alice Corporation: Supreme Court rules that software does not make a basic business method or abstract idea patentable E-commerce patents Amazon: One-click purchasing Akamai: Internet content delivery global hosting system

Trademarks Identify, distinguish goods, and indicate their source Purpose Ensure consumer gets what is paid for/expected to receive Protect owner against piracy and misappropriation Infringement Dilution Federal Trademark Dilution Act and Trademark Dilution Revision Act Uniform Rapid Suspension System (URS)

Trademarks and the Internet Cybersquatting and brand-jacking Anticybersquatting Consumer Protection Act (ACPA) Cyberpiracy Typosquatting Metatagging Keywording Linking and deep linking Framing

Trade Secrets Business procedures, formulas, methods of manufacture and service delivery May not be unique or novel Trade secrets are (a) secret (b) have commercial value to owner (c) owner has taken steps to protect 2016 Defend Trade Secrets Act

Who Governs the Internet and E-commerce? Mixed mode environment Self-regulation, through variety of Internet policy and technical bodies, co-exists with limited government regulation ICANN : Domain Name System Internet can be easily controlled, monitored, and regulated from a central location

Taxation Non-local nature of Internet commerce complicates governance and jurisdiction issues Sales taxes Governments in Europe and U.S. rely on sales taxes MOTO retailing tax subsidies E-commerce tax subsidy Internet Tax Freedom Act

Insight on Business: Internet Sales Tax Battle Class discussion: Given the nature of the Internet, should sales tax be based on the location of the consumer rather than the seller? What are the different approaches Amazon has taken with respect to sales taxes? Are bricks-and-clicks retailers disadvantaged by local sales tax laws?

Net Neutrality All Internet activities charged the same rate, regardless of bandwidth used Netflix and YouTube together consume about 50% of bandwidth in United States Prior to 2015, ISPs could throttle high-volume users February 2015, FCC ruled that broadband service providers should be viewed and regulated as public utilities Large carriers preparing challenges to ruling

Public Safety and Welfare Protection of children against pornography and privacy infringement Passing legislation that will survive court challenges has proved difficult Efforts to control gambling and restrict sales of drugs and cigarettes Prevent All Cigarette Trafficking Act Unlawful Internet Gambling Enforcement Act Increase in number of states allowing online gambling

Insight on Society: The Internet Drug Bazaar Class discussion: What's wrong with buying prescription drugs online, especially if the prices are lower? What are the risks and benefits of online pharmacies? Should online pharmacies require a physician's prescription? How do online pharmacies challenge the traditional business model of pharmacies and drug firms? What are the challenges in regulating online pharmacies? Who benefits and who loses from online pharmacies?