12-1 Copyright © 2009 Pearson Education Canada CHAPTER 12 Interactive Media

12-2 Copyright © 2009 Pearson Education Canada Learning Objectives  Describe the various elements of internet communications  Identify the key organization members that constitute the online advertising industry  Evaluate the various advertising models available to marketing organizations Continued…

12-3 Copyright © 2009 Pearson Education Canada Learning Objectives (cont.)  Identify key aspects of online audience measurement systems  Assess the potential of the internet as an advertising medium  Describe and apply various models of pricing and buying online advertising

12-4 Copyright © 2009 Pearson Education Canada Interactive Media Wireless technology, internet, cell phones, portable music players, and PDAs represent a new advertising environment challenging marketers.  Technology is rapidly advancing, but marketers have been slow to respond. Why?  generation gap between aging marketing decision-makers and the younger, tech savvy target markets.

12-5 Copyright © 2009 Pearson Education Canada Traditional Advertising Versus Interactive Communications  Traditional advertising  Organizations target customers  Interactive communications  Customers target information that is of interest to them Control has shifted from the advertiser to the customer.

12-6 Copyright © 2009 Pearson Education Canada Interactive Advertising The digital revolution is being led by Canadians – we are the world leaders in internet usage per capita and we now consumer 20% of our media online.  In 2006, online advertising revenues reached $1.01 billion, an 80% increase over  Heaviest users:  higher income households  those with post-secondary education  18 to 44 years old

12-7 Copyright © 2009 Pearson Education Canada The Internet and Internet Usage Internet  A network of computer networks linked together to act as one World Wide Web  The collection of websites on the internet For websites, unlike any type of medium, the consumer controls whether he or she will see the information  Websites also provide a means of collecting information about visitors (through contests and surveys)

12-8 Copyright © 2009 Pearson Education Canada Internet Culture and Behaviour

12-9 Copyright © 2009 Pearson Education Canada The Online Advertising Industry Sellers Buyers Ad Agency/ Web Design Measurement companies Service companies facilitate effective use of online advertising. Traditional ad agencies have acquired digital-media agencies or integrated them into organization. Boutique shops pioneered online advertising. Advertisers, agencies buy space. Publishers, ad networks sell space.

12-10 Copyright © 2009 Pearson Education Canada Interactive Communications Strategy Establish objectives and then choose interactive media options from:  Internet  Mobile communication device  Video games  Social media networks

12-11 Copyright © 2009 Pearson Education Canada Interactive Communications Strategy Behavioural targeting  Delivery of ads based on consumer's previous surfing behaviour tracked by cookies.  A cookie is an electronic identification tag sent from a Web server to a browser to track a person’s browsing patterns.  Users agree to accept cookies while giving up private information about how they use the Internet.

12-12 Copyright © 2009 Pearson Education Canada To attract advertisers accurate measurement is essential. Web publishers compile data in web server logs including:  Page views  Numbers of unique visitors  Number and length of visits  Independent third parties, such as Nielsen/Net Ratings and Media Metrix provide audited information about Web usage. Visit the press room at Nielsen/Net Ratings for more data.Nielsen/Net Ratings Audience Measurement

12-13 Copyright © 2009 Pearson Education Canada Internet ads are measured for effectiveness based on:  Impressions  Clicks (clickthroughs)  Clickthrough Rate  Visitor  Visits  Stickiness – website that has the average visitor return to the site several times each month and view several pages on that site. Online Advertising Effectiveness

12-14 Copyright © 2009 Pearson Education Canada The goal of advertising is to motivate a purchase. Online advertising may: 1.Create brand awareness 2.Stimulate interest and preference 3.Distributing incentives and contest information 4.Provide a means to make a purchase 5.Provide a means to contact an advertiser 6.Acquire data about real/potential customers Online Advertising

12-15 Copyright © 2009 Pearson Education Canada 1.Display Advertising 2.Online Video 3.Search Advertising 4.Sponsorships 5. Advertising (Permission-based) 6.Webcasting (webisodes) Online Advertising Alternatives

12-16 Copyright © 2009 Pearson Education Canada Banner Advertising Alternatives Banner Skyscraper Rectangle Leaderboard

12-17 Copyright © 2009 Pearson Education Canada The quality of online advertising is improving as video graphics are added. Banners  Rectangle  Big box  Leaderboard  Skyscraper Animated Banners and Interactive/Rich Media  Expandable Banner  Videostrip  Push down banner  Floating ad  Window ad  Wallpaper ad Banner Advertising Alternatives

12-18 Copyright © 2009 Pearson Education Canada  An advertiser commits to an extended relationship with another website.  Sponsorships allow for a successful campaign without having to drive traffic to a brand’s website.  Consumers trust brands they visit repeatedly, therefore, a second brand (a sponsor) may be perceived positively by the association. Sponsorships

12-19 Copyright © 2009 Pearson Education Canada There are two types of advertising: 1.Permission-based 2.Sponsored  Similar to direct mail, advertisers use house lists and rented lists that include “opt-in” names and addresses. Advertising

12-20 Copyright © 2009 Pearson Education Canada  Targeting Capability  Tracking & Accountability  Timing  Interactivity and Action  Acceptance of Online Advertising  Consumer Frustration  Privacy Concerns Advantages Disadvantages Advantages & Disadvantages of Online Advertising

12-21 Copyright © 2009 Pearson Education Canada CPM is the price charged for displaying an ad 1,000 times. Options include:  Run of Site  Run of Category  Keyword Targeting  As degree of targeting increases, the CPM increases. Internet Advertising Rates and Buying Space

12-22 Copyright © 2009 Pearson Education Canada  Since clicking is the desired action, advertisers feel they should only pay when the banner ad is clicked on, on a cost-per-click basis.  This system tends to devalue advertising and punish the website financially if the ad does not attract an audience. In the offline advertising world, the media are not responsible for an action being taken. That is left to the message! The job of the media is to offer access to an audience, not to share in the responsibility for the quality of the advertising itself. Pay-for-Performance Model

12-23 Copyright © 2009 Pearson Education Canada  A Web site charges a set amount for the length of time the ad appears on the site (week, month, quarter).  Sponsorships are commonly sold on this basis as is some banner advertising. Flat-Fee Model

12-24 Copyright © 2009 Pearson Education Canada Other Forms of Online Marketing Communications  Podcasting  Blogging  Company and Brand Websites

12-25 Copyright © 2009 Pearson Education Canada  Traditional media can drive traffic to corporate websites for opportunities to “tell the whole story.”  Websites can provide product knowledge and other information to move customers to purchase decisions.  Media combinations that include television, print, and websites generate higher awareness and preference scores than just television and print. Company and Brand Websites

12-26 Copyright © 2009 Pearson Education Canada Mobile Communications Opportunities for advertisers to communicate with consumers exist through:  Text messaging  Video messaging

12-27 Copyright © 2009 Pearson Education Canada Video Game Advertising (Advergaming) The integration of brands into video games, both games played online and games purchased directly by consumers.

12-28 Copyright © 2009 Pearson Education Canada Social Network Media A social network connects people with different types of interests at one website. Different types of networks are:  Broad-reach sites (MySpace, YouTube, Facebook)  Demographically focused sites (issue-based interests,  Specific topic sites (Dogster – a dog lover’s site)  Consumer-generated content delivered on social networks often carry more weight with consumers than marketer-generated content.