1. IN ADVERTISING AND PROMOTION
INTEGRATED MARKETING
COMMUNICATIONS
IN ADVERTISING AND PROMOTION
CHAPTER 13
Internet Advertising
© 2010 South-Western, a part of Cengage Learning All rights reserved.

2. Chapter Objectives After reading this chapter you should be able to:
Appreciate the magnitude, nature, and potential for Internet advertising.
Be familiar with the two key features of Internet advertising: individualization and interactivity.
Understand how Internet advertising differs from advertising in conventional mass-oriented advertising media, as well as how the same fundamentals apply to both general categories of ad media.
Understand the various forms of Internet advertising: display ads, rich media, advertising, Web logs, search engine advertising, and advertising via behavioral targeting.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
13–2

3. Chapter Objectives (cont’d) After reading this chapter you should be able to:
Appreciate the importance of measuring Internet advertising effectiveness and the various metrics used for this purpose.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
13–3

4. The Internet As an Advertising Medium
The Internet’s Evolving IMC Roles
Building demand
Conducting transactions
Filling orders
Providing customer service
Serving as an advertising medium
Issues and Concerns
Increasing flow of advertising revenue to the Internet
Consumer control of information received
Versatility and effectiveness of Internet communications in targeting and reaching customers
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

5. The Two i’s of the Internet: Individualization and Interactivity
Recognizes that the Internet user has control over the flow of information
Interactivity:
The capabilities that the Internet gives users to select the information that they perceive as relevant
The capabilities that the Internet gives brand managers to build relationships with customers via two-way communication
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

6. The Internet Compared with Other Ad Media
Interactivity as a Disadvantage
Internet users are highly involved and goal driven (“leaning forward”) when connecting to the Internet, making them more apt to actively avoid unsolicited advertisements as clutter.
Traditional media users are more casually involved (”leaning back”), making them more receptive to advertisements embedded in the media.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

7. Internet Advertising Formats
Table 13.1
Internet Advertising Formats
Web Sites
Display or Banner Ads
Rich Media Formats
Pop-Ups
Interstitials
Superstitials
Video Ads
Blogs, Podcasts, and Social Networks
Blogs
Podcasts
Social Networks
Opt-in Versus Spam
E-zines
Wireless Advertising
Mobile Phone Advertising
Search Engine Advertising
Keyword-Matching Advertising
Content-Targeted Advertising
Advertising via Behavioral Targeting
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

8. Web Sites Uses for Web Sites Well-Designed Web Sites
As an advertisement for the company
As a venue for generating and transacting exchanges between organizations and their customers
As a link to other integrated marcom communications
Well-Designed Web Sites
Are easy to navigate
Provide useful information
Are visually attractive
Offer entertainment value
Are perceived as trustworthy
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

9. Display or Banner Ads Click-through Rates (CTRs) Banner Ad Benefits
Rates are less than 0.3%—exposure is not equivalent to attention
B2B rates are higher than B2C rates
CTRs are a function of brand familiarity:
Known-brand CTRs decrease with multiple exposures while unknown-brand CTRs increase with multiple exposures
Banner Ad Benefits
Top-of–mind (TOMA) awareness for established brands increases brand equity
Increased probability of purchasing behavior by consumers
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

10. Types and Sizes of Internet Marketing Units (IMUs)
Table 13.2
Types and Sizes of Internet Marketing Units (IMUs)
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

11. Rich Media on the Internet
Pop-Ups
Interstitials
Superstitials
Video Ads and Webisodes
Rich Media Advertising Formats
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 11

12. Blogs, Podcasts, and Social Networks
Are written by individuals to exchange their views on issues (e.g., products and brands ) with others in online forums
Are citizen journalism—online word-of-mouth
Are an interactive medium that businesses can use to connect with customers and appear more credible.
Podcasts
Are self-produced radio-style online programs to which consumers can subscribe
Enable advertisers to target consumers who have self-selected programs of interest to them
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

13. Blogs, Podcasts, and Social Networks
Allow users to interact with “friends,” share opinions and information, and create online communities
Developed by businesses enable consumers to learn from one another and to share their experiences
P&G’s “The People’s Choice”
Mattel’s Barbiegirls.com
Are presently unproven marcom tool
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

14. E-mail Advertising E-mail as a Effective Marcom Tool Opt-In E-mailing
+ Delivering advertising messages
+ Providing sales incentives to mass audiences or targeted groups
– Sending junk mail (spamming) and phishing
Opt-In ing
Is the process of marketers asking for permission to send messages to consumers
Avoids the flow of irrelevant inbound messages
Allows marketers to provide targeted information that is of interest to the receiver
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

15. E-mail Advertising (cont’d)
magazines (E-zines)
Are free magazine-like publications that deliver specialized content and credible advertising messages to targeted audiences
Wireless Advertising (WiFi)
Allows users to connect to the Internet through WiFi hotspots
Offers significant marcom potential in its ability to message consumers with pertinent offers from stores close to their location.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

16. The Special Case of Mobile Phones
Cellular Phones as the Third Screen
Mobility and universal coverage
WiFi technology for Internet Access
Short Messaging System (SMS) for text messaging
Multimedia Messaging Service for graphics and sounds
Music, game, video, and ringtone downloads
Marcom Issues
Invasion of privacy—negative consumer responses to unsolicited messages
Limited advertising space on cell screens
Gaining consumer acceptance of opt-in advertising
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

17. Search Engine Advertising (SEA)
Is fastest growing form of Internet advertising—about 40% of online advertising spending
Includes a variety of well-known services (e.g.; Google, MSN Search, and Yahoo!) that people use when seeking information
Attempts to place messages in front of people when their natural search efforts indicate they are interested in buying a particular good or service
Makes use of paid keywords to increase the odds that a firm’s product or service will be included in the search results and appear as a sponsored link
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

18. Figure 13.1
The Role of Keywords in Increasing the Odds That Ready Consumers Encounter Your Ad
Step 1: Prospective purchasers of a specific good or service perform natural search using one or more search engines to locate that item.
Step 2: Matches to Internet shopper’s search are generated by Google or another search engine.
Step 3: Alongside the matches are sponsored links that correspond to the keyword(s) entered by the shopper.
Step 4: These sponsored links appear because companies offering the searched item purchased corresponding keywords from the search engine company.
Step 5: Shoppers may click through to a sponsored Web site and purchase a desired item or, at least, consider this Web site for future purchases.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

19. Purchasing Keywords and Selecting Content-Oriented Web Sites
Keyword Matching Advertising
Advertisers bid for keywords by indicating how much they are willing to pay each time an Internet shopper clicks (cost per click, CPC) on a sponsored link to reach their website as a result of a search.
Content-Targeted Advertising (AdSense)
A Google program that enables advertisers to run ads on sites with content related to their products or services
Google acts as an ad agency placing ads and receiving a commission
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

20. Purchasing Keywords and Selecting Content-Oriented Web Sites (cont’d)
Click Fraud
Occurs when a competitor or other party clicks on a sponsored link repeatedly in order to harm the other advertiser.
Occurs when employees of content-oriented websites click on links to advertised Web sites to increase revenue.
Fraud estimates range from 5% to 20%
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

21. Advertising via Behavioral Targeting
Involves directing online advertisements only to consumers showing an interest in a particular product or service by their site-selection behaviors.
Involves the use of “cookies” that record the activities of visitors to web sites—regarded by some users as an invasion of their privacy
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

22. Brand Name Fundamentals
Distinguishable from competitors
Compatible with desired image
Facilitates consumer learning
Memorable and pronounceable
Suitable for global use
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

23. Measuring Internet Ad Effectiveness
How many people clicked through a particular Web ad?
What actions were taken following click throughs or site visits?
What are the demographic characteristics of these people?
Is this form of online advertising yielding a suitable return on investment?
Questions to Ask
How many visited a particular Web site?
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 23

24. Metrics for Measuring Internet Ad Performance
Exposure value or popularity of Web site or Internet ad
Number of users exposed to an ad
Number of unique visitors
Click-through rate
Ability of site to attract and hold users’ attention and the quality of customer relationships
Average time per visit
Number of visits by unique visitors
Average interval between user visits
Usefulness of Web site
Proportion of repeat visitors
Ability to target users
Profile of Web-site visitors
Visitors’ previous Web-site search behavior
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

25. Metrics for Measuring Internet Ad Performance
Click-through Rate (CTR)
The percentage of people who are exposed to an Internet-delivered ad and actually clicked on it
Cost per Thousand Impressions (CPM)
Assesses how much (on a per-thousand-impressions basis) it costs to place an online ad
Measures when an ad comes on to the eyeballs of the user (opportunity-to-see, OTS) but provides no real information about the actual effect of the advertisement
© 2010 South-Western, a part of Cengage Learning. All rights reserved.

26. Metrics for Measuring Internet Ad Performance (cont’d)
Cost per Action (CPA)
The number of users who actually click on a display or rich-media ad to visit a brand’s Web site, register their names on the brand’s web site, and purchase the advertised brand
© 2010 South-Western, a part of Cengage Learning. All rights reserved.