2007 Thomson South-Western

Overview of Integrated Marketing

Communications

Chapter Fifteen

• Appreciate the magnitude, nature, and potential for Internet advertising.

• Be familiar with the two key features of Internet advertising, individualization and interactivity.

• Understand how Internet advertising differs from advertising in conventional mass-oriented advertising media, as well as how the same fundamentals apply to both general categories of ad media.

Chapter Fifteen Objectives

• Understand the various forms of Internet advertising: display ads, rich media, e-mail advertising, Weblogs, search engine advertising, and advertising via behavioral targeting.

• Appreciate the importance of measuring Internet advertising effectiveness and the various metrics used for this purpose.

Chapter Fifteen Objectives

The 2 I’s of the InternetIndividualization:

Refers to the fact that the Internet user has control over the flow of information

Interactivity:

Allows for users to select the information they perceive relevant & for brand managers to build relationships with customers via two-way communication.

The Internet Compared With Other Ad Media

• The Internet’s interactivity feature can actually be a disadvantage rather than an advantage.

• The Internet user is in a “leaning forward” mentality, as opposed to a TV viewer who can be said to be “leaning back.”

• The more active Internet user may be more apt to actively avoid advertisements.

Display or Banner Ads

- Click-through-rates to banner ads are very small, averaging less than .3%

- Exposure not equivalent to attention- Online advertisers have turned to new technology

and bigger ad sizes to capture attention. - Cookies are being used to track online behavior

and to direct ads to consumers that are in line with their interests.

Rich Media: Pop-Ups, Interstitials, Superstitials, and Video Ads

• Pop-Ups: Ads that appear in a separate window.

• Interstitials: Ads that appear between two content Web pages.

• Superstitials: short, animated ads that play over or on top of a Web page.

• Online video ads: audio-video ads that are similar to 30-second TV commercials but are shortened to 10-15 seconds and compressed.

Blogs as an Advertising Format

Advertisers can purchase blogads on a weekly or monthly basis.

Podcasting is an audio version of blogging. These are self-produced radio-style programs. Consumers can choose the programs that are of interest to them.

E-mail Advertising

• Expenditures on e-mail advertising in the U.S. amounted to just less than $300 million in 2005, dramatically less than what was predicted a few years ago.

• Marketers have “spoiled the commons” with spam and junk messages.

• Approximately two-thirds of all commercial e-mail messages are spam.

Opt-In E-mailing Versus Spam

• Opt-In E-mailing is the process of asking for permission to send messages to consumers.

• Marketers have a better shot at giving only information that is of interest to the receiver.

Phishing

• Illegal practice where criminals send e-mail messages that appear to be from legitimate businesses and extract personal data from people on phony websites like their credit card and ATM numbers.

E-mail magazines (E-zines)

• E-zones are free magazine-like publications that deliver credible advertising messages that are clearly designated as such.

The Special Case of Wireless E-mail Advertising

• Wi-Fi allows users to connect to the Internet using low-power radio signals instead of cables.

• Hotspots are growing in number.

• Advertising has the potential to reach consumers when they are within walking distance of stores with pertinent offers.

Mobile Phones and Text Messaging

• As of 2005, there were 180 million mobile phone subscribers in the U.S. and hundreds of millions more around the world.

• Short Message Systems (SMS) allow users to send and receive text messages.

• Dubbed the “third screen” meaning, TV, computers, and now phones are portals for ads information, and entertainment.

• Marketing uses for cellular phones is still in its infancy.

Search Engine Advertising (SEA)

• SEA commandeered 40% of the $9.6 billion U.S, marketers spend on online advertising.

• Search engines like Google, Yahoo!, Ask Jeeves, and MSN Search account for three-quarters of all Internet searches.

• Attempts to place advertising in front of people precisely when they need it.

• Keywords help to increase the odds your product or service will be seen.

SEA is Not Without Problems

• Click Fraud occurs when a competitor or other party clinks on a sponsored link repeatedly in order to harm the other advertiser.

• Fraud also occurs when employees of content-websites click on links to generate revenue.

• Fraud estimates range from 5% to 20%

Advertising Via Behavioral Targeting

• Behavioral targeting directs online advertisements to those who have shown themselves to be interested due to their surfing behaviors.

• This form of targeting can be seen by some as an invasion of their privacy.

How many people

clicked through a particular web ad?

How many visited a particular Web site?

What are the demographic

characteristics of these people?

What actions were taken following click-throughs?

Measuring Internet Ad Effectiveness

The Tools of Internet Audience Measurement

1. Server Log file analysis

2. Surveys of sample users using recall measurement

3. Electronic measurement of a sample of Internet users

Log File Analysis

Provides a census of all user activity at a particular Web site.

• Tracks machines • Provides no

information about the people who request specific files.

• Can’t distinguish real people from “robots” and “spiders.”

Surveys

• Problems: memories are fallible

• People overstate their use of popular Web sites and undervalue their use of less popular sites.

• People give responses that put them in a positive light.

Surveys gather web site habits

and demographic information

Electronic Measurement

Media Matrix and Nielson Media Research

Attach software tracking meters to computers of randomly selected Internet users. All web activity is tracked and the company can run detailed reports to summarize results.

The Metrics of Internet Advertising

• Click-through rates

• Cost per thousand impressions (CPM)

– Measures when an ad comes on to the eyeballs of the Internet user (OTS-opportunity to see) but provides no real information about the actual effect of the advertisement.

The Metrics of Internet Advertising

• CPA (Cost per Action)

• The number of users who actually – Click on a display or rich-media ad– Visit a brand’s Web site – Register their names on the brand’s web site– Purchase the advertised brand