1. 7.1 @ Lalit Sharma, JIM E-commerce Marketing Communications

2. 7.2 @ Lalit Sharma, JIM Online Advertising Paid message on Web site, online service or other interactive medium, such as interactive messaging 2010: $21.4 billion spent, expected to grow to $24.7 billion by 2013 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

3. 7.3 @ Lalit Sharma, JIM Online Advertising from 2000-2010

4. 7.4 @ Lalit Sharma, JIM Forms of Online Advertisements Display and rich media/video ads Search engine advertising: Paid search engine inclusion and placement Sponsorships Referrals (affiliate relationship marketing) E-mail marketing Online catalogs Online chat Blog advertising

5. 7.5 @ Lalit Sharma, JIM Display and Rich Media/Video Ads Display ads –Banners –Pop-ups Rich media/video ads: Employ Flash, DHTML, Java, streaming audio and/or video

6. 7.6 @ Lalit Sharma, JIM Online Advertising Placement Methods Banner swapping: Arrangements among firms allow each firm to have its banners displayed on other affiliate sites for no cost Advertising exchanges: Act as brokers between advertisers and publishers, placing ads and tracking all activity related to ad

7. 7.7 @ Lalit Sharma, JIM Search Engine Advertising: Paid Search Engine Inclusion and Placement One of fastest growing and most effective forms of online marketing communications Types: –Paid inclusion –Paid placement –Keyword advertising: Google AdWords –Network keyword advertising: Google AdSense

8. 7.8 @ Lalit Sharma, JIM Search Engine Advertising: Paid Search Engine Inclusion and Placement (cont’d) Google, Yahoo, MSN are leaders in this technology Issues: –Appropriate disclosure of paid inclusion and placement practices –Search engine click fraud (when competitor hires third parties to fraudulently click on competitor ads to drive up costs) –Ad nonsense (Google AdSense ads that are inappropriate for content)

9. 7.9 @ Lalit Sharma, JIM E-mail Marketing and the Spam Explosion Direct e-mail marketing: E-mail sent directly to interested consumers who “opt- in” or have not “opted-out” Spam: Unsolicited commercial e-mail –Spam is exploding out of control—70%–80% of all e- mail purportedly is spam –Efforts to control spam: Technology (Filtering software) (only partly effective) Government regulation (CAN-SPAM and state laws) (largely unsuccessful) Self-regulation by industry (ineffective) Volunteer efforts (not enough)

10. 7.10 @ Lalit Sharma, JIM Spam Categories

11. 7.11 @ Lalit Sharma, JIM Other Forms of Online Marketing Communications Online catalog: Provides equivalent of paper- based catalog Blog advertising: Online ads related to content of blogs Social network advertising: Ads on MySpace, Facebook, YouTube, etc. Game advertising: downloadable ‘advergames’, placing brand-name products within games

12. 7.12 @ Lalit Sharma, JIM Targeted Marketing: Getting Personal Behavioral targeting efforts increasing; one of fastest growing online marketing techniques. Recent acquisitions by Google, Yahoo, Microsoft of firms engaged in this type of marketing have raised concerns Privacy groups are examining issues raised by targeted methods

13. 7.13 @ Lalit Sharma, JIM Online Marketing Metrics: Lexicon Metrics that focus on success of Web site in achieving audience or market share –Impressions –Click-through rate (CTR) –View-through rate (VTR) –Hits –Page views –Unique visitors –Loyalty –Reach

14. 7.14 @ Lalit Sharma, JIM Online Marketing Metrics: Lexicon (cont’d) Metrics that focus on conversion of visitor to customer –Acquisition rate –Conversion rate –Browse-to-buy-ratio –View-to-cart ratio –Cart conversion rate –Abandonment rate –Retention rate –Attrition rate

15. 7.15 @ Lalit Sharma, JIM Online Marketing Metrics: Lexicon (cont’d) E-mail metrics –Open rate –Delivery rate –Click-through rate (e-mail) –Bounce-back rate –Unsubscribe rate –Conversion rate (e-mail)

16. 7.16 @ Lalit Sharma, JIM An Online Consumer Purchasing Model

17. 7.17 @ Lalit Sharma, JIM How Well Does Online Advertising Work? Click-through rates may be low, but this is just one measure of effectiveness Research indicates that most powerful marketing campaigns include both online and offline advertising

18. 7.18 @ Lalit Sharma, JIM The Costs of Online Advertising Cost per thousand (CPI): Advertiser pays for impressions in 1,000 unit lots Cost per click (CPC): Advertiser pays pre- negotiated fee for each click ad receives Cost per action (CPA): Advertiser pays pre- negotiated amount only when user performs a specific action Hybrid: Two or more of the above models used together

19. 7.19 @ Lalit Sharma, JIM Software for Measuring Online Marketing Results WebTrends: Software program that automatically calculates activities at site, such as abandonment rate, conversion rate, etc. Visual Sciences: Web service that assists marketing managers

20. 7.20 @ Lalit Sharma, JIM Web Site Activity Analysis

21. 7.21 @ Lalit Sharma, JIM The Web Site as a Marketing Communications Tool Web site can be viewed as extended online advertisement Domain name: First communication e- commerce site has with 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

22. 7.22 @ Lalit Sharma, JIM Web Site Functionality Factors affecting effectiveness of a software interface: –Utility –Ease of use Factors in credibility of Web sites: –Design look –Information design/structure –Information focus –Responsiveness

23. 7.23 @ Lalit Sharma, JIM Factors in the Credibility of Web Sites