Internet Marketing Networks

Critical Implications Ubiquity Accessibility by all Expectations What do users think equals success Sharing Efficiency through reciprocity Specialization Networks allow marketers to specialize Virtual value activities Delivering useful information

Ubiquity Metcalfe’s Law Value of a network increases with the square of the number of participants Individual network value Linear growth based on number of communications Community value Fast growth based on the sum of individual values Main driver for business, governments and organizations

Network Value Different networks have different values to individuals This value difference drives marketers

Downside of Ubiquity Presence of undesirable persons Spam Avoid being an “undesirable” Restrictions on use Opt-out provisions Opt-in provisions No sharing

Self-Fulfilling Expectations Hype and celebrity nature of marketers Create illusion of rapid growth Economic value People want to associate with a winner William Shatner Endorsements must be convincing and believable

Sharing Low connection costs What impact will MTS’s desire for higher rates have? Network computing – The Mainframe Strikes Back (almost) WebTV Virtual hosting Cost factors – size of site and volume of traffic Sharing time zones Hewlett-Packard and disk drive support

Specialization Alliances Fast, cheap and easy to expand Danger Don’t let your brand get lost in the alliance

Virtual Value Activities Gathering Bringing information from anywhere Organizing Information architecture Form, function, theme of information Selecting and Synthesizing Segmentation and personalization Distributing Publishing on the web

Why the Internet Works Reliability Redundancy and packet switching Efficiency Scalability Ability to grow

Why It Doesn’t Breakdowns The wind that blew down Churchill Delays and lags Access lags – limited transmission capacity Transmission lags – ISP to ISP connections Server lags – congestion and power Deep Blue and Amazon

Intranets Internal sites separated from the public internet Used for: Proprietary information Focuses on employee communication Process oriented Creates a learning organization

Extranets Core of business-to-business commerce Allow for greater personalization and community features Used in supply chains – GE’s Trading Process Network