Online marketing Dr Tim King 6 th May

Online marketing Dr Tim King 6 th May 2010

Free Business Models l For the fun of it l Donation funded (wikipedia) l Land grab to gain early users l Funded by adverts – That you can pay to turn off (Spotify) – That you can pay for a premium service (downloads) l Funded by selling information about users l Funded by sellers (e. Bay) l Part of a wider service (BBC, cars) l Free software, pay if you like it (guiltware) l Free software, pay for maintenance (Linux, AVG) 2/12

Paid-for Business Models l Try before you buy – Poor quality short clips – Free trial – but licence key cracks are common l Pay per use – Software as a service – Genealogy sites – Betting l Licence / subscription – Digital Rights Management (everlasting vs annual) l Per item – Amazon, e. Buyer 3/12

Users add value l Network externality – The effect a user has on the value of a site to other users – A site/service is more attractive if your mates use it – My. Space / Facebook; Yahoo / Google / Bing – Google Talk / AOL / MSN l Produce content targeted at your users – You produce it (Newspapers, slate) – Let them produce it (Facebook, You. Tube) l Chicken and egg problem – How to get the site started? • Twitter used two large monitors at a festival • Provide superset of competitor 4/12

Personalisation (1) l Know your customer – Where do visitors come from and why • Google Analytics – Profile typical users when they visit a web site • Time and path to make purchase decision – Read ad, click ad, browse site, choose item, checkout, pay • Purchase history • Amount of research done – Profile users through loyalty cards • Nectar – They know everything you have ever bought – Use multiple landing sites 5/12

Personalisation (2) l Keep in touch with your customers – Cookies • Welcome back Tim – Collect email addresses – Email newsletters • Lastminute • Loyalty discounts (Maplin) 6/12

Personalisation (3) l Know your customer type – User database • Address/postcode -> socio economic indicator • Gender • Age -> Register with Data Protection Registrar • 60 “bins” 5 classes x 2 genders x 6 age groups – (kids, teens, dinky, married with kids, empty nesters, retired) – Disposable income – Disposable leisure time – Recommendation • People who bought this also bought that – Data from your own site – Amazon really can recommend music or books you might like • Data mining – People who buy this on cold winter Fridays in Slough also buy that 7/12

Customer support l Identify meaning of email – Auto-respond with the answer l Classify once human response given – So next time it will auto-respond l Expose database as FAQ – So they don’t send the email at all l Always give the option of human interaction 8/12

Brand awareness l Single most important piece of data – Hard to gain and easy to lose l People buy from a known name – Sense of trust • Marks and Spencer – Perceived value • Cheap reliable airline => Cheap reliable mobile – Peer pressure • Nike, Rolex, Dolce and Gabanna, Ferrari l Brands can expand – Virgin • Active, Atlantic, Books, Brides, Broadband, Cosmetics, Credit card, Drinks, Galactic(!), Games, Holidays, Limobike, Megastore, Mobile, Trains, Wines – Apple • From computers to i. Pods to i. Phones 9/12

Advertising l Google – Buy your brand name • Coke – – Careers Corporate Responsibility The Coca-Cola company Press Centre – Buy your supplier’s brand name • Nike – JDSports – Buy your competitors’ brand name • Ford – Adverts for Seat dealer – Buy your target • Nike (Boycott Nike), Coke (Killer. Coke) 10/12

Successful business models l Google – – – l Acquiring Double. Click gives it over 80% of web advertising Acquiring You. Tube gives it millions more viewers Providing a simple way to advertise gets it plenty of customers Has Microsoft Office firmly in its sights Mobile android and voice Plenty. Of. Fish – – – Run by a single guy from his apartment Free dating site In the global top 40 web sites Runs Google Ad. Sense adverts Gets paid over $5 m per year by Google 11/12

Conclusion l Continuous evolution --- update – – – l 28 K/s -> 50 M/s Still pictures -> movies 2 D -> 3 D Newsgroups -> online communities -> Twitter Games -> Second Life Evolving economics – Many people make a living online • Buying and selling on ebay • Property developer in Second Life l What’s next? 12/12