INTERNET MARKETING : INTEGRATING ONLINE AND OFFLINE STRATEGIES Chapter 1 Internet Marketing Enters the Mainstream

2 THE INTERNET IS CHANGING THE WAY WE LIVE AND WORK In What Ways?

3 EVOLUTION OF THE INTERNET Slow Growth from 1957 Through s: The Cold War spawns the ARPAnet 1960s and 70s: Slow growth—limited to scientists and researchers around the world 1980s: TCP/IP; National Science Foundation operated the backbone, banned commercial traffic

4 EVOLUTION OF THE INTERNET 1990s Through Present: Boom to Bust to Stable Growth 1991: Gopher and HTML 1993: Mosaic 1995: Yahoo! Throughout the 1990s: Venture Capital Dollars Chasing Untried Business Models 2000 and 2001: Business Failures and Disappearance of Market and Venture Capital 2004 On: Rapid Growth in Users, Content, and Sales (B2C and B2B); Emergence of New Players Like Google

5 CONTINUED EVOLUTION – WEB 2.0 The Web As Common Platform Collaborative Knowledge Creation, Sharing  Links, Mashups, Blogs, Podcasts, Social Networks And Many Others Rich User Experiences

6 SABRE From An Efficient Internal System To A Successful Information Product 1950s and 60s - Used to Support American Airlines Operations 1970s - Deployed Into Travel Agencies 1980s - Customers Allowed Network Access 1990s - Travelocity and GetThere Spun Off As Independent Company

7 INTERNET PLAYS A ROLE IN THE LIVES OF A MAJORITY OFAMERICANS

8 Consumers Use The Internet For Many Reasons. The Primary Ones Are Communication Information

9 HOW ARE TRADITIONAL BUSINESSES USING THE INTERNET?

10 NET PLAYS INCREASINGLY LARGE, STRATEGIC ROLE IN MARKETING

11 Internet Marketing Is Increasing Because It Can Be Precisely Targeted Cost is Low Relative To Other Channels It Is Measurable And Can Be Held Accountable For ROPI

12 UNIQUE CHARACTERISTICS/BENEFITS Common Platform Perfect Information Global Interactive Distance Is No Longer Relevant  Size Is Relevant To Brand Strength and Resources Always On Many-to-Many

13 EFFECT ON BUSINESS PROCESSES Cost Quality Customer Access Choice

14 TRANSFORMATIONAL CHANGE The Overall Effect of the Unique Characteristics of the Internet is an Important Shift of Power/Control TO THE CUSTOMER.

15 THE INTERNET MARKETING PARADIGM

16 THE GENERIC OBJECTIVES Customer Acquisition Customer Conversion Customer Retention Customer Value Growth

17 THE MARKETING INPUTS Internet Business Models Interactive Channels  Websites, , Wireless, Misc. Offline Channels  Mass Media, Events, Sponsorships, PR Social and Regulatory Issues

18 THE MARKETING ACTIONS Advertising and Promotion  Direct Response  Brand Development E-Commerce Customer Service and Support

19 INTERNET INFRASTRUCTURE STACK

20 INCREASED PRODUCTIVITY Moore’s Law Metcalfe’s Law Computing Power Doubles; Cost is Cut in Half Power of the Network Increases Geometrically With Each New Connection

21 STRATEGIC DRIVERS OF THE INTERNET ECONOMY 1.Information Gives Greatest Value Added 2.Distance No Longer Matters 3.Speed Is Of The Essence 4.People Are The Key Assets 5.Growth Is Accelerated By The Network 6.Marketers Can Deal with Customers 1 to 1 7.Demand Can Be Predicted More Accurately 8.Transaction & Coordination Costs Decrease 9.Customers Have Power 10.Economy Characterized by Choice, Abundance

22 SUMMARY Growth and Innovation Continue Businesses are Taking Advantage of the Unique Characteristics of the Internet Key Marketing Objectives  Customer Acquisition, Conversion Retention, Value Growth Complex Technological Infrastructure Strategic Drivers Of The New Information-Driven Economy Internet Has Re-Written Many Economic Rules-BUT  Good Business Processes Essential  Profitability/ROI Required Integral Part of Marketing Activities  Traditional/New Economy  Large/Small  Global/National/and increasingly Local