ELC 200 Day 15 Introduction to E-Commerce Copyright

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ELC 200 Day 15 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2011 1

Agenda Questions? n Assignment 5 Due n Assignment 6 Posted n Due March 28 before class v ELC 200 e. Commerce SP 13. pdf v n Quiz 2 April 8 v Chaps 6 -8 v Same format as before v There will be an optional assignment 9, replaces lowest assignment grade. n Begin Discussion on Ecommerce Marketing Communications n

Chapter 7 E-commerce Marketing Communications

Learning Objectives n Identify the major forms of online marketing communications. n Explain the costs and benefits of online marketing communications. n Discuss the ways in which a Web site can be used as a marketing communications tool.

Video Ads: Shoot, Click, Buy Class Discussion n What advantages do video ads have over traditional banner ads? n Where do sites such as You. Tube fit in to a marketing strategy featuring video ads? n What are some of the challenges and risks of placing video ads on the Web? n Do you think Internet users will ever develop “blindness” toward video ads as well? Copyright © 2012 Pearson Education, Inc. Slide 7 -7

Marketing Communications n Two main purposes: v Sales—promotional sales communications v Branding—branding communications n Online marketing communications v Takes many forms v Online ads, e-mail, public relations, Web sites Copyright © 2012 Pearson Education, Inc. Slide 7 -8

Online Advertising n $31. 3 billion in 2011 n Advantages: v Internet is where audience is moving v Ad targeting v Greater opportunities for interactivity n Disadvantages: v Cost vs. benefit v How to adequately measure results v Supply of good venues to display ads Copyright © 2012 Pearson Education, Inc. Slide 7 -9

Forms of Online Advertisements n n n n n Display ads Rich media Video ads Search engine advertising Mobile and local advertising Referrals E-mail marketing Online catalogs Social network, blog, app, and game advertising Copyright © 2012 Pearson Education, Inc. Slide 7 -11

Display Ads n Banner ads v Rectangular box linking to advertiser’s Web site v IAB guidelines n e. g. , full banner is 468 x 60 pixels, 13 K n Pop-up ads v Appear without user calling for them v Provoke negative consumer sentiment v Twice as effective as normal banner ads v Pop-under ads: Open beneath browser window n www. travelocity. com Copyright © 2012 Pearson Education, Inc. Slide 7 -13

Rich Media Ads n Use Flash, DHTML, Java. Script n About 5% of all online advertising expenditures n Tend to be more about branding n Boost brand awareness by 10% n Interstitials n Superstitials n Rich media Examples v http: //publisher. mediamind. com/Showcase. aspx#/c/richmedia/ Copyright © 2012 Pearson Education, Inc. Slide 7 -15

Video Ads n Fastest growing form of online advertising n IAB standards v Linear video ad v Non-linear video ad v In-banner video ad v In-text video ad n Ad placement v Advertising networks v Advertising exchanges http: //www. google. com/ads/video/ http: //www. brightroll. com/gallery/ v Banner swapping Copyright © 2012 Pearson Education, Inc. Slide 7 -17

Search Engine Advertising n 46% of online ad spending in 2011 n Types: v Paid inclusion or organic ranking n n Inclusion in search results Sponsored link areas v Keyword advertising n e. g. , Google Ad. Words v Network keyword advertising (context advertising) n e. g. , Google Ad. Sense Copyright © 2012 Pearson Education, Inc. Slide 7 -19

Search Engine Advertising (cont. ) n Nearly ideal targeted marketing n Social search v Google’s +1, Facebook’s Like n Issues: v Disclosure of paid inclusion and placement practices v Link farms v Content farms v Click fraud Copyright © 2012 Pearson Education, Inc. Slide 7 -21

Search Engine Advertising n Issues: v Appropriate disclosure of paid inclusion and placement practices v Search engine click fraud n Who’s Clicking the AD? v Ad nonsense n For a Small Business Search Engine Optimization, SEO, is the best “bang for your buck” http: //www. searchenginejournal. com/55 -quick-seo-tips-evenyour-mother-would-love/6760/ v http: //tools. seobook. com/ v Copyright © 2010 Pearson Education, Inc. Slide 7 -22

SEO Keywords n Keywords are key Think of the search terms your customers will be using v Use as Meta-tags, embed in the online content and in the domain name v Examples Biker, Maine Custom Chopper, Bobber, Old School Bikes, Aroostook County Choppers v Group brainstorming & focus groups n Tools n n http: //www. google. com/sktool/# n http: //www. wordstream. com/keyword-niche- finder/ n http: //advertising. microsoft. com/smallbusiness/adcenter-downloads/microsoftadvertising-intelligence Copyright © 2010 Pearson Education, Inc. Slide 7 -23

Get more (free) links to your page n Register with search engines http: //www. google. com/addurl/? continue=/addurl v http: //www. bing. com/webmaster/Submit. Site. Page. aspx v n Get linked in directories http: //www. dmoz. org/docs/en/add. html v http: //www. seomoz. org/directories v Industry specific v Geographic specific v Use social networking Sites Put URL on walls n Blogs start your own blog n Forums use URL in your posting n Provide content that other sites will index (ancillaries) n Copyright © 2010 Pearson Education, Inc. Slide 7 -24

Mobile and Local Advertising n 91 million users access Internet from smartphones, tablets v Messaging n Especially effective for local advertising Display ads v Search v Video v n Local advertising Enabled by mobile platform v 60% of mobile advertising v Google Places v Copyright © 2012 Pearson Education, Inc. Slide 7 -25

Sponsorships and Referrals n Sponsorships v Paid effort to tie advertiser’s name to particular information, event, and venue in a way that reinforces brand in positive yet not overtly commercial manner n Referrals v Affiliate relationship marketing v Permits firm to put logo or banner ad on another firm’s Web site from which users of that site can click through to affiliate’s site Copyright © 2012 Pearson Education, Inc. Slide 7 -26

E-mail Marketing and the Spam Explosion n Direct e-mail marketing v Low cost, primary cost is purchasing addresses n Spam: Unsolicited commercial e-mail v Approximately 75% of all e-mail v Efforts to control spam: n Technology (filtering software) n Government regulation (CAN-SPAM and state laws) n Voluntary self-regulation by industries (DMA ) n Volunteer efforts Copyright © 2012 Pearson Education, Inc. Slide 7 -27

Online Catalogs n Equivalent of paper-based catalogs n Graphics-intense; use increasing with increase in broadband use n Two types: v Full-page spreads, e. g. , Landsend. com v Grid displays, e. g. , Amazon. com n In general, online and offline catalogs complement each other Copyright © 2012 Pearson Education, Inc. Slide 7 -29

Social Advertising n Social advertising v Uses social graph to promote message v Many-to-many model n Social network advertising v Social network sites are advertising platforms n Corporate Facebook pages n Twitter ads v Promoted tweets v Promoted trends v Promoted accounts Copyright © 2012 Pearson Education, Inc. Slide 7 -30

Social Advertising n Blog advertising v Blogs difficult to monetize Audience size n Subject matter n Search engines have difficulty indexing n n Game advertising v In-game billboard display ads v Branded virtual goods v Sponsored banners v Downloadable “advergames” Copyright © 2012 Pearson Education, Inc. Slide 7 -31

Insight on Society: Class Discussion Marketing to Children of the Web in the Age of Social Networks Why is online marketing to children a controversial practice? n What is the Children’s Online Privacy Protection Act (COPPA) and how does it protect the privacy of children? n How do companies verify the age of online users? n Should companies be allowed to target marketing efforts to children under the age of 13? n Copyright © 2012 Pearson Education, Inc. Slide 7 -32

Behavioral Targeting n Interest-based advertising (behavioral targeting) n Social marketing n Personal information sold to third party advertisers, who deliver ads based on profile v Search engine queries, browsing history, offline data n Ad exchanges v Enable advertisers to retarget ads at users as they browse v 16% online ads are targeted Copyright © 2012 Pearson Education, Inc. Slide 7 -33

Mixing Offline and Online Marketing Communications n Most successful marketing campaigns incorporate both online and offline tactics n Offline marketing v Drive traffic to Web sites v Increase awareness and build brand equity n Consumer behavior increasingly multi- channel v 60% consumers research online before buying offline Copyright © 2012 Pearson Education, Inc. Slide 7 -34

Insight on Business: Class Discussion Are the Very Rich Different from You and Me? n Why have online luxury retailers had a difficult time translating their brands and the look and feel of luxury shops into Web sites? n Why did Neiman Marcus’ first effort fail? n Why did Tiffany’s first effort fail? n Visit the Armani Web site. What do you find there? Copyright © 2012 Pearson Education, Inc. Slide 7 -35

Online Marketing Metrics: Lexicon n Measuring audience size or market share v Impressions v Click-through rate (CTR) v View-through rate (VTR) v Hits v Page views v Stickiness (duration) v Unique visitors v Loyalty v Reach v Recency Copyright © 2012 Pearson Education, Inc. Slide 7 -36

Online Marketing Metrics (cont. ) n Conversion of visitor to customer v Acquisition rate v Conversion rate v Browse-to-buy-ratio v View-to-cart ratio v Cart conversion rate v Checkout conversion rate v Abandonment rate v Retention rate v Attrition rate Copyright © 2012 Pearson Education, Inc. n Social networking v User insights v Interaction insights n E-mail metrics v Open rate v Delivery rate v Click-through rate (e-mail) v Bounce-back rate Slide 7 -37

How Well Does Online Advertising Work? n Ultimately measured by ROI on ad campaign n Highest click-through rates: Search engine ads, permission e-mail campaigns n Rich media, video interaction rates high n Online channels compare favorably with traditional n Most powerful marketing campaigns use multiple channels, including online, catalog, TV, radio, newspapers, stores Copyright © 2012 Pearson Education, Inc. Slide 7 -39

Comparative Returns on Investment Figure 7. 8, Page 474 SOURCES: Based on data from e. Marketer, Inc. 2010 c, Direct Marketing Association (DMA), 2009, authors’ estimates. Copyright © 2012 Pearson Education, Inc. Slide 7 -40

The Costs of Online Advertising n Pricing models v v n Online revenues only v n Sales can be directly correlated Both online/offline revenues v n Barter Cost per thousand (CPM) Cost per click (CPC) Cost per action (CPA) Offline purchases cannot always be directly related to online campaign In general, online marketing more expensive on CPM basis, but more effective Copyright © 2012 Pearson Education, Inc. Slide 7 -41

Insight on Technology: Class Discussion It’s 10 P. M. Do You Know Who Is On Your Web Site? n What are some of the services offered by Adobe’s Site. Catalyst? n Why would you as a webmaster be interested in these services? n Why is site analysis and customer tracking so important to online marketing? n How did National Geographic use Site. Catalyst to its benefit? Copyright © 2012 Pearson Education, Inc. Slide 7 -43

The Web Site as a Marketing Communications Tool n Web site as extended online advertisement n Domain name: An important role n Search engine optimization: v Search engines registration v Keywords in Web site description v Metatag and page title keywords v Links to other sites Copyright © 2012 Pearson Education, Inc. Slide 7 -44

Web Site Functionality n Main factors in effectiveness of interface v Utility v Ease of use n Top factors in credibility of Web sites v Design look v Information design/structure v Information focus n Organization is important for first-time users, but declines in importance v Information content becomes major factor attracting further visits Copyright © 2012 Pearson Education, Inc. Slide 7 -45