The Internet as Communication The importance of interactivity Implications for mix elements Issues for perspectives

A Resource for Communication n A unique medium n A context for content –Distinction between information and vehicle that conveys it –Distinction between context/vehicle and infrastructure that conveys it n A context with multiple vehicles –Forms of marketing communications

Characterizing Communication n Components –Source –Message –Receiver n Processes –Encoding (by source) –Decoding (by receiver) n Component x process interactions

Parsing the Internet n Marketing communication as a noun –A noun is a thing E.g., a message and its form A “Download Netscape Now!!!! Button n Marketing communication as a verb –A verb is an act E.g., the process of sharing information Interactivity between source and receiver Interactivity between receiver and content

Source and Receiver Interactivity n Size of the targeted audience –Broadcast One-to-many E.g., TV and radio –Narrowcast One-to-some (focused) E.g., Cable channels, protected servers –Pointcast One-to-one E.g., Direct mail,

Source and Content Interactivity n Role of user control over message –User preferences –Computing constraints n User as active participant –Pull (selectivity) vs. push of traditional media All forms (broad, narrow, point) can be pushed with the Internet Internet enables pull, too

Effects of Interactivity on Content n Use communication to match product to needs –Individualized offering = personalization –Differently driven by push and pull Pull is user-initiated Push is marketer-initiated –The difference may affect the quality of personalization

Marketing Mix Implications n Communication and Product Strategy –Mass customization with communication –Two requirements Receiver-content interactivity Modularization –Customization characteristics A continuum (mass production to personalization) Processes of customization Forms of customization Relation to personalization

Communication and Price Strategy n From static to dynamic pricing –Limits to fixed price models Better for low differentiation, low elasticity Internet ==> price trans.==> price sensitivity n The Internet and alternative models –Real-time pricing: fun w/supply & demand –Role of infomediaries Auctions Companies as price-setting middlemen (Priceline)

Communication and Distribution n Internet as point-of-sale n Decision making for online channel –Central role of exchanging information –Possible scenarios Destination sites –Fully-fledged channel (all aspects managed via online communication) Micro-sites –In-depth brand information, externally hosted Other uses of marketing communications

Communication and Promotion n Advertising is a big deal ($4.62B, 1999) n Two forms: text-based, multimedia – = text-based –Multimedia = web-based Banners Buttons Interstitials Banners rule

Ad Type Popularity

All About Ads… n Pricing models for online ads –CPM –Click-through –Flat-fee n What’s it worth: ROAI # of impressions purchased * avg. click-through rate * avg. customer turnover (visitors to customers) * avg. net profit/sale = expected return.

Other Forms of Promotion n Sales promotions –Short-term incentives –Coupons, contests n Public relations –Corporate and brand image –All unpaid-for exposure Site content Events (e.g., Rosie’s kids on eBay) n Personal selling

Issues for Perspectives n For marketers –How to track effect of communications? Site-centric Consumer-centric n For consumers –Medium effects on search, choice, memory n For Policy Makers –User control and spam –Local legislation and global reach n For Technologists –Remembering preferences, adaptive customization