1. Chapter 4 Online Consumer Behavior, Market Research, and Advertisement

2. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
NetFlix Case
Problems:
Matching titles with customers, Direct competition
Solution
CineMatch: proprietary formula for matching recommendations to viewers, based on likes, friends’ likes, “collaborative filtering”
Results
60% of members select recommendations
90% customer satisfaction
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3. LEARNING ABOUT CONSUMER PURCHASING ONLINE
A GENERIC PURCHASING-DECISION MODEL
Need identification
Information search
product brokering
Deciding what product to buy.
merchant brokering
Deciding from whom (from what merchant) to buy products.
Evaluation of alternatives
Purchase decision and delivery
Postpurchase behavior
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5. LEARNING ABOUT CONSUMER PURCHASING ONLINE
PLAYERS IN THE CONSUMER DECISION PROCESS
Initiator
Influencer
Decider
Buyer
User
Single person may play all five roles, but often other people
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6. PERSONALIZATION, LOYALTY, SATISFACTION, AND TRUST IN EC
The matching of services, products, and advertising content with individual consumers and their preferences.
user profile
The requirements, preferences, behaviors, and demographic traits of a particular customer.
Personalization takes place based on the user profile
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7. PERSONALIZATION, LOYALTY, SATISFACTION, AND TRUST IN EC
The major strategies used to compile user profiles include:
Solicit information directly from the user
Observe what people are doing online
Build from previous purchase patterns
Perform marketing research
Make inferences
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8. PERSONALIZATION, LOYALTY, SATISFACTION, AND TRUST IN EC
CUSTOMER LOYALTY
A deep commitment to repurchase from a preferred seller in the future.
e-loyalty
Customer loyalty to an e-tailer or loyalty programs delivered online or supported electronically.
TRUST IN EC
trust
The psychological status of willingness to depend on another person or organization.
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MARKET RESEARCH FOR EC
Market Research
Goal is to find information and knowledge that describes the relationships among customers, products, marketing methods, and marketers
Aim is to discover marketing opportunities and issues, to establish marketing and advertising plans, to better understand the purchasing process and to evaluate marketing performance.
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MARKET RESEARCH FOR EC
Market Segmentation Research
Identify appropriate customer groups for specific products
MARKET RESEARCH FOR ONE-TO-ONE
Direct Solicitation of Information
Focus groups, surveys
Observing Customers’ Movements Online
Web logs, click stream, web mining
collaborative filtering
Use customer data to infer interest in other products
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WEB ADVERTISING
Two major types:
Creating a website to advertise products
Buying space on other websites (ie banner ads)
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WEB ADVERTISING
INTERNET ADVERTISING TERMINOLOGY
ad views
Button
click (click-through or ad click)
click-through rate
click-through ratio
conversion rate
CPM (cost per thousand impressions)
hit
Page
Stickiness, visit, unique visit
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WEB ADVERTISING
Advertising Online and Its Advantages
Cost
Richness of format
Personalization
Timeliness
Location-basis
Linking
Digital branding
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15. ONLINE ADVERTISING METHODS
BANNERS
On a Web page, a graphic advertising display linked to the advertiser’s Web page.
keyword banners
Banner ads that appear when a predetermined word is queried from a search engine.
random banners
Banner ads that appear at random, not as the result of the user’s action.
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16. ONLINE ADVERTISING METHODS
pop-up ad
An ad that appears in a separate window before, after, or during Internet surfing or when reading .
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17. ONLINE ADVERTISING METHODS
ADVERTISING
Hoaxes
Fraud
Advertising Methods and Successes
CLASSIFIED ADS
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18. ONLINE ADVERTISING METHODS
SEARCH ENGINE ADVERTISEMENT
URL Listing
Keyword Advertising
search engine optimization (SEO)
The craft of increasing site rank on search engines; the optimizer uses the ranking algorithm of the search engine (which may be different for different search engines) and best search phases, and tailors the ad accordingly.
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

19. ONLINE ADVERTISING METHODS
viral marketing
Word-of-mouth method by which customers promote a product or service by telling others about it.
Shares, likes on Facebook, Tweets, for example
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

20. ADVERTISING IN SOCIAL NETWORKS AND THE WEB 2.0 ENVIRONMENT
social network advertising
Online advertising that focuses on social networking sites.
Types of Social Network Advertising
Direct advertising that is based on your network of friends
Direct advertising placed on your social network site
Indirect advertising by creating “groups” or “pages”
Sponsored Reviews by Bloggers
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21. ADVERTISING STRATEGIES
PERSONALIZED ADS AND OTHER PERSONALIZATION
Webcasting
A free Internet news service that broadcasts personalized news and information, including seminars, in categories selected by the user.
ONLINE EVENTS, PROMOTIONS, AND ATTRACTIONS
Live Web Events
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22. SPECIAL ADVERTISING TOPICS
PERMISSION ADVERTISING
spamming
Using to send unwanted ads (sometimes floods of ads).
permission advertising (permission marketing)
Advertising (marketing) strategy in which customers agree to accept advertising and marketing materials (known as “opt-in”).
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

23. SPECIAL ADVERTISING TOPICS
ADVERTISEMENT AS A REVENUE MODEL
MEASURING ONLINE ADVERTISING’S EFFECTIVENESS
MOBILE MARKETING AND ADVERTISING
mobile advertising (m-advertising)
Ads sent to and presented on mobile devices.
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Exercises
Case 4.1 (p. 139)
Internet Exercises 11 (p. 165)
Take the perspective of a small e-tailer, looking to sell their specialize d product internationally
Internet Exercises 9 (p. 165)
Take the perspective of a small internet advertising firm, that is seeking accounts with large corporate entities.
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MANAGERIAL ISSUES
Should we integrate our Internet and non-Internet marketing campaigns?
What ethical issues should we consider?
Are any metrics available to guide advertisers?
Which Internet marketing/advertising channel should you use?
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