Past, Present, and Future E-M ARKETING /6E C HAPTER 1

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-2 C HAPTER 1 O BJECTIVES  After reading Chapter 1, you will be able to:  Explain how advances in Internet and information technology offer benefits and challenges to consumers, businesses, marketers, and society.  Distinguish between e-business and e- marketing.  Explain how increasing buyer control is changing the marketing landscape.  Understand the distinction between information or entertainment as data.  Identify several trends that may shape the future of e-marketing, including the semantic Web.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-3 T HE B ARACK O BAMA C AMPAIGN S TORY  President Obama made history by his use of e- marketing to win the 2008 election.  Barack Obama’s Internet strategy targeted year-old voters because 93% are online and used the Internet to get information and connect with friends.  His 2012 efforts added higher levels of sophistication, including the use of social media and mobile marketing.  Facebook displayed over 33 million Obama friends.  The Obama YouTube channel had over 286,000 subscribers and 288 million upload views.

M OVIE : M AN OF THE Y EAR (2006)  This movie is a political comedy-drama film directed and written by Barry Levinson and starring Robin Williams. The film also features Christopher Walken, Laura Linney, Lewis Black, and Jeff Goldblum.  In the film, Williams portrays Tom Dobbs, the host of a comedy/political talk show. With an offhand remark, he prompts 4 million people to their support; then he decides to campaign for President.  The film was released October 13, 2006 and was filmed in Toronto and Hamilton, Canada and parts of Washington, D.C. 1-4 ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

1-5 I NTERNET 101  The internet is a global network of interconnected networks.  Data move over phone lines, cables & satellites.  Internet three technical roles: providers, clients & technology infrastructure.  There are three types of access to the Internet:  Public internet  Intranet: network that runs internally in an organization.  Extranet: two joined networks that share information. Explain how advances in Internet and information technology offer benefits and challenges to consumers, businesses, marketers, and society.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-6 E- BUSINESS, E- COMMERCE, E- MARKETING  E-business is the optimization of a company’s business activities using digital technology.  E-commerce is the subset of e-business focused on transactions.  E-marketing is the result of information technology applied to traditional marketing. Distinguish between e- business and e- marketing.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-7 E-M ARKETING I S B IGGER THAN THE W EB  The web is the portion of the Internet that supports a graphical user interface for hypertext navigation with a browser such as  The web is what most people think about when they think of the Internet.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-8 E-M ARKETING I S B IGGER THAN THE W EB, C ONT.  Electronic marketing reaches far beyond the web: 1. E-marketing technologies exist without the Web (Mobile apps, CRM…) 2. Non-web Internet communications are effective marketing ( , Internet telephony e.g., Skype) 3. The Internet delivers information to more receiving items other than PCs (televisions, refrigerators…) 4. Offline electronic data collection devices such as bar code scanners receive and send data about customers and products over an intranet.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-9 T HE W EB I S O NLY O NE A SPECT OF E-M ARKETING

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-10 E-M ARKETING I S B IGGER THAN T ECHNOLOGY  The Internet provides individual users with convenient and continuous access to information, entertainment, networking and communication.  Communities form around shared photos (Flickr), videos (YouTube), and individual or company profiles (Facebook).  The digital environment enhances processes and activities for businesses.  Societies and economies are enhanced through more efficient markets, more jobs, information access, communication globalization, and more. .

G LOBAL I NTERNET U SERS ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-11

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-12 E-M ARKETING ’ S P AST : W EB 1.0  The Internet started in 1969 as the ARPANET, a network for academic and military use.  Web pages and browsers appeared in  The first generation of e-business was like a gold rush.  Companies quickly attracted sales and market share, but negative profits.  Between 2000 and 2002, more than 500 Internet firms shut down in the U.S.  By Q4 2003, almost 60% of public dot-coms were profitable.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-13 I NTERNET T IMELINE

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-14 T HE E D ROPS FROM E-M ARKETING  Gartner predicted that the e would drop, making e-business just business and e- marketing just marketing.  Nevertheless, e-business will always have its unique models, concepts, and practices.  Online search  Online data collection  The e-marketing landscape is changing rapidly due to consumer-generated content, mobile internet access, social media and disruptive technologies.

INTERNET TECHNOLOGY AND EDUCATION IN S AUDI A RABIA  In 1993, KFUPM becomes the first Saudi institution to connect to the internet.  In 1994, Internet was first introduced to KSA when state academic, medical and research institutions got access to it.  In 1997, public access to Internet was allowed.  In 1999, the Internet was provided for college and government use.  In the early 21st century, Saudi universities use Interactive Television Technology (ITT) transmitted via fiber optic lines. 15 ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

E MERGENCE OF E - LEARNING  In 2003, Aum Alqura University and KFUPM calibrated to establish e- learning center  In 2004, King Abdulaziz University established the Deanship of e-Learning and Distance Education.  In 2007, National Center for E-learning and Distance Learning was established. Also, Saudi television channels broadcast educational programs with assistance from the Ministry of Higher Education and the Ministry of Education. In addition, KSU established the Deanship of e-Learning and Distance Education.  In 2009, the first international conference e-learning and distance learning was held and organized by the Ministry of Higher Education and National Center for E-learning and Distance Learning. Also, University of Tabuk established Distance Education Unit.  In 2010, the list of distance education in higher education institutions in the KSA was officially published and approved.  In the school year , there were first distance education graduate students of King Abdulaziz University among Saudi universities ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

1-17 S AUDI A RABIA I NTERNET U SERS ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-17 The number-(million) & the percentage of the population of internet users in Saudi Arabia (2001–2011)

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-18 E-BUSINESS JUST BUSINESS?

WEB 1.0 V. WEB 2.0 ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-19

M ARKETING I MPLICATIONS OF I NTERNET T ECHNOLOGIES  E-business & e-marketing opportunities flowing form the internet’s unique properties:  Lower costs.  Trackable measurable results.  Global reach.  Personalization.  One-to-one marketing.  More interesting campaigns.  Better conversion rates (increased purchases)  Twenty-four-hour marketing. ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-20

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-21 E-M ARKETING T ODAY : W EB 2.0  Web 2.0 technologies connect people with each other through social media, which have created opportunities and challenges for marketers.  Power shift from sellers to buyers. Consumers trust each other more than companies. Market and media fragmentation. Online connections are critical Everyone is a content producer. Information transparency. Social commerce. Explain how increasing buyer control is changing the marketing landscape.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-22 E-M ARKETING T ODAY : W EB 2.0, C ONT.  Customer Engagement Involves connecting with a user emotionally and intellectually Crowdsourcing is one way to engage online users, the practice of outsourcing ads, product development, and other tasks to people outside the organization Understand the distinction between information or entertainment as data.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-23 E-M ARKETING T ODAY : W EB 2.0, C ONT.  Content Marketing A strategy involving creating and publishing content on Web sites and in social media Marketers are beginning to see themselves as publishers

E-M ARKETING T ODAY : W EB 2.0, C ONT.  Inbound Marketing  Web companies getting found online rather than interrupting family activities  Components are: Content (blogs, video, eBooks or white paper.pdf files), Social networks (,, blogs) Search engines  One challenge: Developing Social Media Metrics Voice of the customer Does not measure site engagements Does not track amount of conversation ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-24

E-M ARKETING T ODAY : W EB 2.0, C ONT.  New Technologies  Wireless networking and mobile computing 4G is a fourth-generation high speed wireless technology.  Cutting the cord Consumers are increasingly cancelling their landlines and televisions and going wireless ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-25

E-M ARKETING T ODAY : W EB 2.0, C ONT.  New Technologies (Cont.)  Appliance Convergence  A receiving appliance is not the same as the media type. Computers can receive digital radio and television transmissions, and the Web Computers, PDA’s, and cell phones allow all types of two-way digital transmissions  Appliances like the LG internet refrigerator are many appliances in one: Television, Internet access, Message center, Stereo ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-26

1-27 A PPLIANCE CONVERGENCE (LG) ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 27

E-M ARKETING T ODAY : W EB 2.0, C ONT.  Exciting New Technology-Based Strategies  One-click delivery  Voice navigation  Many others constantly emerging ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-28

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-29 P OWER S HIFT F ROM C OMPANIES T O I NDIVIDUALS

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-30 A CQUIRING A C USTOMER FROM S OCIAL M EDIA

1-31 ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 31 O THER O PPORTUNITIES A ND C HALLENGES I N WEB 2.0  Internet adoption matures.  Online retail sales matures.  Search engines are now reputation engines.  Image recognition takes root  Improved online and offline strategy integration  Intellectual capital rules  Decline of print media  Online fund- raising increases  Location-based services  The long tail  Everything is “FSTR”

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-32 T HE F UTURE : W EB 3.0  Semantic web  Marketers want to give customers information when and where they want it – information on demand  Sir Tim Berners-Lee, coinventor of the WWW, has been working on technology to organize online data for greater user convenience  Users can easily find information based on its type.  The semantic Web utilizes HTML-like tags to give information well-defined meaning  Examples: a person, contact information, next available appointments, or restaurant menus Identify several trends that may shape the future of e-marketing, including the semantic Web.

©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-33 T HE F UTURE : W EB 3.0, C ONT.  Semantic web, Cont.  The value of the semantic Web is information on demand.  Experts believe the semantic Web will become a reality over the next decade.  The Gartner Group believes it will arrive by 2026

S TEPPING S TONES TO W EB 3.0  Web 3.0 will probably feature  Higher bandwidth  Faster connection speeds  Artificial intelligence  Seamless social networking  Modular Web applications  Predictions include wearable computing, 3D printing, big data, Google Wallet, and cloud computing ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-34

S TEPPING S TONES TO W EB 3.0, C ONT.  Key technologies that affect marketing strategies include:  Any channel, any device, anywhere – Bring your own everything  Smarter things  Big data and global scale computing at small prices  The human way to interact with technology  Near field communication  The voice of the customer is on file  3D print at home ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-35

INTERNET-TIME ANALOGY ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL Atomic1929 Quartz Crystal 1600’s Mechanical 1583 AD Pendulum 3500 BC Sundial Internet is here in 2013

E VOLUTION FROM W EB 1.0 TO W EB 3.0 ©2014 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 1-37 Web 1.0 Web 2.0 Web 3.0 Semantic Web Content creator (cc)Consumer (c) cc & c

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1-39 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 © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall