2. Copyright © 2004 Pearson Education, Inc. Slide 8-1 E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. Second Edition

3. Copyright © 2004 Pearson Education, Inc. Slide 8-2 Chapter 8 E-commerce Marketing Communications

4. Copyright © 2004 Pearson Education, Inc. Slide 8-3 Online Marketing Communications Promotional sales communications: Suggest consumer “buy now” and make offers to encourage immediate purchase Branding communications: Focus on extolling differentiable benefits of consuming product or service

5. Copyright © 2004 Pearson Education, Inc. Slide 8-4 Online Advertising Paid message on a Web site, online service or other interactive medium, such as interactive messaging 2002: $6.3 billion spent, expected to grow to $9.1 billion by 2007 Advantages:  Ability to target ads to narrow segments and track performance in almost real time  Provide greater opportunity for interactivity Disadvantages:  Concerns about cost versus benefit  Concerns about how to adequately measure results

6. Copyright © 2004 Pearson Education, Inc. Slide 8-5 Online Advertising from 2000-2007 Figure 8.1, Page 445

7. Copyright © 2004 Pearson Education, Inc. Slide 8-6 Online Advertising by Industry-2002 Figure 8.2, Page 446

8. Copyright © 2004 Pearson Education, Inc. Slide 8-7 Forms of Online Advertisements Banners, pop-ups and rich media ads Search engine marketing: Paid search engine inclusion and placement Sponsorships Affiliate relationships

9. Copyright © 2004 Pearson Education, Inc. Slide 8-8 Banners, Pop-ups and Rich Media Ads Banners: Display promotional message in a rectangular box at top or bottom of computer screen Pop-ups: Appear on screen without user calling for them Pop-unders: Open underneath user’s active browser window and do not appear until user closes active window Rich media ads: Employ Flash, DHTML, Java, streaming audio and/or video Interstitials: Provide way of placing a full-page message between current and destination pages of user Superstitials: Rich media ad that is pre-loaded into browser’s cache and does not play until fully loaded and user clicks to another page

10. Copyright © 2004 Pearson Education, Inc. Slide 8-9 Types of Banner Ads Figure 8.3, Page 447

11. Copyright © 2004 Pearson Education, Inc. Slide 8-10 Online Advertising Placement Methods Banner swapping: Arrangements among firms allow each firm to have its banners displayed on other affiliate sites for no cost Banner exchanges: Arrange for banner swapping among firms Advertising networks: Act as brokers between advertisers and publishers, placing ads and tracking all activity related to the ad

12. Copyright © 2004 Pearson Education, Inc. Slide 8-11 Online Advertising Vehicles Table 8.1, Page 450

13. Copyright © 2004 Pearson Education, Inc. Slide 8-12 Most Popular Online Marketing Methods Figure 8.4, Page 450

14. Copyright © 2004 Pearson Education, Inc. Slide 8-13 Search Engine Marketing: Paid Search Engine Inclusion and Placement Search engine marketing one of fastest growing and most effective forms of online marketing communications Paid inclusion – firms pay for inclusion in search engine index Paid placement – firms pay for a guarantee that it will appear prominently in results of relevant searches Overture.com and Google leaders in this technology Appropriate disclosure of paid inclusion and placement practices an issue

15. Copyright © 2004 Pearson Education, Inc. Slide 8-14 Search Engine Policies on Paid Placement and Inclusion Table 8.2, Page 453

16. Copyright © 2004 Pearson Education, Inc. Slide 8-15 Sponsorships and Affiliate Marketing Sponsorship: Paid effort to tie an advertiser’s name to particular information, event, venue in way that reinforces brand in a positive, yet not overtly commercial manner  Advertorial a common form Affiliate relationship: Permits a firm to put its logo or banner ad on another firm’s Web site from which users of that site can click through to the affiliate’s site  Sometimes called tenancy deals  Amazon/ToysRUs an example  Customer hijacking an issue

17. Copyright © 2004 Pearson Education, Inc. Slide 8-16 Direct E-mail Marketing and the Spam Explosion Direct e-mail marketing: E-mail marketing messages sent directly to interested consumers who “opt-in” or have not “opted-out” Spam: Unsolicited commercial e-mail  Spam is exploding out of control – March 2003, 45% of all Internet e-mail purportedly was spam  Efforts to control spam:  Filtering software (only partly effective)  Self-regulation by industry (ineffective)  Government regulation (no Federal legislation yet)

18. Copyright © 2004 Pearson Education, Inc. Slide 8-17 Spam Categories Figure 8.6, Page 459

19. Copyright © 2004 Pearson Education, Inc. Slide 8-18 You’ve Got Spam Figure 8.7, Page 460

20. Copyright © 2004 Pearson Education, Inc. Slide 8-19 Other Forms of Online Marketing Communications Online catalog: Provide equivalent of paper- based catalog Online chat: Provides equivalent of help from sales representative Public relations: Involves communicating with target audiences, or publics, using methods other than advertising

21. Copyright © 2004 Pearson Education, Inc. Slide 8-20 Mixing Offline and Online Marketing Communications Traditional offline consumer-oriented industries have learned to use Web to extend brand images and sales campaigns Online companies have learned how to use traditional marketing communications to drive sales to Web site Most successful marketing campaigns incorporate both online and offline tactics

22. Copyright © 2004 Pearson Education, Inc. Slide 8-21 Online Marketing Metrics: Lexicon Impressions: Number of times an ad is served Clickthrough rate (CTR): Percentage of people who actually click on ad Hits: Number of http requests Page views: Number of pages requested by visitors Stickiness (duration): Average length of time visitors remain at site Unique visitors: Number of distinct unique visitors to site Loyalty: Percentage of visitors who return in a year Reach: Percentage of total number of consumers in a market who visit site Recency: Average number of days elapsed between visits

23. Copyright © 2004 Pearson Education, Inc. Slide 8-22 Online Marketing Metrics: Lexicon (cont’d) Open rate: In e-mail campaign, number of customers who open mail Acquisition rate: Percentage of visitors who register or visit product pages Conversion rate: Percentage of visitors who actually purchase something Attrition rate: Percentage of customers who purchase once, but never return within a year Abandonment rate: Percentage of shoppers who begin a shopping cart but then fail to complete the form and leave the site Retention rate: Percentage of existing customers who continue to buy on a regular basis

24. Copyright © 2004 Pearson Education, Inc. Slide 8-23 Customer Tracking and Marketing Strategies Used by U.S. Companies Figure 8.11, Page 471

25. Copyright © 2004 Pearson Education, Inc. Slide 8-24 Online Marketing Communications: Typical Clickthrough Rates Table 8.4, Page 471

26. Copyright © 2004 Pearson Education, Inc. Slide 8-25 Clickthrough Rates by Format Figure 8.12, Page 472

27. Copyright © 2004 Pearson Education, Inc. Slide 8-26 Traditional and Online Advertising Costs Compared Table 8.6, Page 474

28. Copyright © 2004 Pearson Education, Inc. Slide 8-27 Software for Measuring Online Marketing Results WebTrends: Software program that automatically calculates activities at site, such as abandonment rate, conversion rate, etc. WebSideStory: Web service that assists marketing managers

29. Copyright © 2004 Pearson Education, Inc. Slide 8-28 Web Site Activity Analysis Figure 8.13, Page 475

30. Copyright © 2004 Pearson Education, Inc. Slide 8-29 The Web Site as a Marketing Communications Tool Web site can be viewed as an extended online advertisement Domain name: First communication an e-commerce site has with a prospective customer Search engine optimization:  Register with as many search engines as possible  Ensure that keywords used in Web site description match keywords likely to be used as search terms by user  Link site to as many other sites as possible  Get professional help

31. Copyright © 2004 Pearson Education, Inc. Slide 8-30 Site Design Features that Impact Online Purchasing Table 8.8, Page 482