1. Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH Phone: (800)

2. Part Two: Chapter Eight Traffic Building
“A wealth of information creates a poverty of attention (注意力不足).”
Herbert Simon, Designing Organizations for an Information-rich World

3. Value and Scarcity Online
Volume of online content is growing far faster than the number of Web users

4. Value and Scarcity Online
Volume of online content is growing far faster than the number of Web users
Every site faces unique challenges to attract new visitors

5. Value and Scarcity Online
Volume of online content is growing far faster than the number of Web users
Every site faces unique challenges to attract new visitors
As Web users grow more experienced, they are less likely to explore new sites

6. Value and Scarcity Online
Volume of online content is growing far faster than the number of Web users
Every site faces unique challenges to attract new visitors
As Web users grow more experienced, they are less likely to explore new sites
The true scarcity online: user attention

7. Value and Scarcity Online

8. Rethink NYT?

9. Planning for Maximum Traffic
Drawing more visitors to a site requires a thoughtful web traffic plan
Web traffic plans should consider each of the five main traffic categories:

10. Planning for Maximum Traffic
Drawing more visitors to a site requires a thoughtful web traffic plan
Web traffic plans should consider each of the five main traffic categories:
Branding decisions (e.g. domain name)
Search engine marketing
Affiliate networks
Online banner advertising
Publicity and word of mouth(口語)
+VC?

11. Planning for Valuable Traffic
Effective traffic plans assess the volume and quality of traffic generated
Spotting broad use patterns through visualization tools helps calculate the cost and productivity of new visits
Key tool for traffic-building analysis is cost-per-action: the number of visits that end in a particular action divided by the cost of the campaign

12. Planning for Valuable Traffic
At each stage, visitors decline and costs rise

13. Traffic-Building Goals
Basic goal: best traffic at lowest cost
But how to define best traffic?

14. Traffic-Building Goals
Basic goal: best traffic at lowest cost
But how to define best traffic?
Maximum Profit
Minimum Cost-per-Action
Best Traffic with Least Cost
Maximize Actions

15. Traffic-Building Goals
Profit guidelines that include web site branding; ignore ad branding impact:
Spend on traffic sources that maximize difference between unified visit value and cost per visit
Acquire traffic as long as the cost per visit is less than the unified visit value
(指含網站品牌，其他廣告品牌效益不計, but still not clearly defined)

16. Traffic-Building Goals
Profit guidelines that ignore branding and all other impacts:
Spend on traffic sources that maximize difference between customer lifetime value and web customer acquisition cost
Acquire traffic as long as online customer value exceeds acquisition cost
(For new customers only)
(指不含品牌與其他效益, but still not clearly defined)

17. Traffic-Building Goals
Variation in Average Customer Acquisition Costs for Four Net Companies
Company
Time Period
Acquired Customers
Customer Acq. Cost
e-Commerce firms
Amazon.com
3/1997->3/2002
33,800,000
$7.70
eBay
12/1996->3/2002
46,100,000
$11.26
Online brokerages
Ameritrade
9/1997->3/2002
1,877,000
$203.44
E*Trade
12/1997->3/2002
4,117,370
$391.00
SOURCE: Gupta, Lehmann, Stuart: “Valuing Customers,” Journal of Marketing Research 41, no. 1 (Feb. 2004)

18. Search Engine
Search engine optimization
Keyword advertisement

19. Search Engine Optimization
The power of landing “Above the Fold(報紙的頭版上面)”
SOURCE: FPG/Getty Images

20. Search Engine Optimization
Top placement in search returns is key to generating organic Web traffic

21. Search Engine Optimization
Top placement in search returns is key to generating organic Web traffic
User’s willingness to investigate falls sharply as items drop on the return list

22. Search Engine Optimization
Top placement in search returns is key to generating organic Web traffic
User’s willingness to investigate falls sharply as items drop on the return list
Higher click rate on top-rated items
Few users go beyond first page or two

23. Search Engine Optimization (SEO)
Improving search engine placement
Get indexed on main search engines
Use meta-tags and develop content with appropriate keywords that trigger higher search engine rankings
Structure site content and navigation to reinforce search engine algorithms
Cultivate(培養) links from appropriate sites

24. Keyword Advertising
Clickable, text-based ads bring in billions of dollars of ad revenue
Ads steer traffic to an organization web site; fee charged only if click occurs
Competitive bidding process determines a keyword’s value

25. Keyword Advertising Evaluating keyword portfolios
Identify a site’s most relevant keywords
Test and expand list, based on conversion and click-through rates

26. Keyword Advertising Evaluating keyword portfolios Bidding and tracking
Identify a site’s most relevant keywords
Test and expand list, based on conversion and click-through rates
Bidding and tracking
Higher bids increase chance at higher keyword position
No click costs more than maximum bid
Price charged depends on intensity of competition

27. Keyword Advertising Collecting Keyword Data Keyword Phrases Clicks
Conversions
Cost per click to hold position
Conversion rate
Skylark fuel pump Position 1 62 6
$0.10
9.68%
GM fuel pump
Position 2
148 18
$0.20
12.16%
Buick parts
1246 48
$0.25
3.85%
Used Buick Skylark Position 1
8678 95
$0.23
1.09%
Buick
Position 3
362 15
$1.37
4.14%
Used car parts
17265 98
$0.34
0.57%

28. Traffic by Association
In traditional advertising, marketers put a company’s message where consumers work, live, play

29. Traffic by Association
In traditional advertising, marketers put a company’s message where consumers work, live, play
Same concept holds true online

30. Traffic by Association
In traditional advertising, marketers put a company’s message where consumers work, live, play
Same concept holds true online
Banner advertising
URL (Uniform Resource Locator) placement on shopping bags, billboards, monthly statements
Sponsorship and co-branding