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HED 460 In-Class #7 Discuss 2 things you read about privacy that were surprising to you Why do you think Internet retailers are spending less $$ on traditional.

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Presentation on theme: "HED 460 In-Class #7 Discuss 2 things you read about privacy that were surprising to you Why do you think Internet retailers are spending less $$ on traditional."— Presentation transcript:

1 HED 460 In-Class #7 Discuss 2 things you read about privacy that were surprising to you Why do you think Internet retailers are spending less $$ on traditional advertising media than they did 2 years ago?

2 HED 460 Internet Advertising 1999/2000 saw huge amounts of e- tail advertisements 22% consumers were unable to recall any specific Internet advertisements (post-holiday) Pure-play e-tailers budget nearly 2x as much for advertising as multichannel

3 HED 460 Mulitichannel Advantage Name recognition Low cost mechanisms web address in advertising for stores, catalogs, store receipts, bags, other advertising media

4 HED 460 E-tailer’s Mktg. Budget

5 HED 460 Online Retailer Mkt. Spend

6 HED 460 Why Increased Online? Traditional mediums did not work Broad focus vs narrow focus needed Difficult to target specific markets with TV, radio, newspaper Online is easier to target small discrete groups

7 HED 460 Budget Allocation

8 HED 460 Strategy Rapid growth mode awareness and acquisition Growth rates slow customer loyalty and repeat business currently less than 1/5 budget on customer retention

9 HED 460 Effective for Acquisition Personalized/targeted email 45% effectiveness for pure-play 13% for multichannel Cross-promos in catalog and “deals” with portals, ISP’s, community sites 17.9% effectiveness with multichannel Other web site links and direct mail 10.3% effectiveness with multichannel

10 HED 460 Ad Revenues

11 HED 460 Types of Media Banner ads

12 HED 460 Banners Ad with clickable link to web site Brand Awareness Targets customers Inexpensive Annoying Low click through rates Undifferentiated

13 HED 460 Types of Media Affiliates/Associates (usually outsourced) Content sites receive financial incentive to sell other companies’ products or display their ads (CPA vs. CPM) Affiliate gets a % of the sale (5-15%) Affiliate receives no payment to display ad Volume yields greater revenues/profits Low risk to advertiser

14 HED 460 Affiliates/Associates

15 HED 460 Affiliates/Associates

16 HED 460 Affiliates/Associates

17 HED 460 Types of Media Interstitials (5-10 seconds) Messages delivered to browser as viewer awaits for page to download Grabs attention Ties offers to specific online behavior Delays access to new page Page loading delays Intrusion factor

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