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Chapter 7Online Interactive Communications

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Online Realities

1. Online communications offer a high degree of personalization; messages can be tailored to individuals.

2. The Internet is extremely popular as an information retrieval tool but advertising online is perceived as an intrusion.

3. Online advertising is gradually being added to the IMC mix.

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Online / Offline Communications Links

Corporate PlanCorporate Plan

Marketing PlanMarketing Plan

Advertising Plan(Traditional Media)

Advertising Plan(Traditional Media)

E-Commerce Plan

E-Commerce Plan

Online Communications

Plan

Online Communications

Plan

OfflinePurchase

OfflinePurchase

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Online Behaviour

1. Consumers visit sites and willingly divulge personal information (database and CRM potential).

2. Online communications is an effective means of reaching diverse demographic target groups.

3. The average family spends 32 hours a week online; 59% of these families have bought online.

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The Canadian Internet User

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Internet User Profile

The user profile is constantly changing as more and more people sign on.

Equal split between males and females

15 to 24 year olds are the heaviest users

Usage is higher among those with post-secondary education

Higher income households spend more time online

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Traditional Media vs Online Media

Traditional Media

Traditional Media

1. Passive in nature

2. Media targets an audience

Online MediaOnline Media

1. Interactive in nature

2. Consumers target content

Online messages reach large numbers of people in a cost-efficient manner.

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Online Communications Opportunities

1. Excellent medium for “telling a story.”

2. Mass customization (personalizing messages) is possible.

3. E-Commerce capabilities produce action.

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Online Advertising Objectives

Online advertising helps achieve numerous marketing communications objectives:

• Create Awareness

• Build Brand Image

• Offer Incentives

• Generate Leads

• Provide Customer service

E-Mail marketing and E-Commerce potential.

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Online Advertising

The effectiveness of online advertising is measured by:

• Ad Views (Impressions)

• Ad Clicks

• Ad Click Rate

• Page Views

Sites that are visited frequently and for extended periods are said to be “sticky.”

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1. Online Advertising Options

Banner

SkyscraperRectangle

Size is important; larger ads get more attention and clicks.

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Online Advertising Options

AnimatedBannersAnimatedBanners

Pop-Ups Pop-Unders

Pop-Ups Pop-Unders

RichMedia

RichMedia

A spinning or animated banner.

Ads that suddenly appear on the screen

Sophisticated, TV-style ads.

Click rates for rich media are significantly higher (3.5%) than static banners (0.5%).

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Impact of Banner Size

Size Brand Awareness

Message

AssociationBrand

Favourability

Purchase

Intent

Banner 1.8 2.4 0.3 0.2

Skyscraper 2.7 3.9 1.4 1.4

Rectangle 3.1 8.5 2.5 3.3

Based on this data, large rectangles offer the greatest benefit to advertisers.

Source: Advertising Age, January 13, 2003, p. 46.

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2. Online Sponsorships

A sponsorship is a commitment to advertise on a Web site for an extended period. Advertisers are attracted to sponsorships because of Web content.

NewsBusiness News

SportsEntertainment

NewsBusiness News

SportsEntertainment

The

come to the hook!

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3. E-Mail Advertising

Proper Use

Proper Use

ImproperUse

ImproperUse

• Opt-in Lists

• Permission-based e-mail

• Sponsored e-mail

• Invasion of Privacy

• 3rd party lists

• Spam

“Permission rented is permission lost!”

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4. Web Site Communications

Presently the best form of online communications.

• Offline ads encourage visits to sites.

• Ideal for “telling a story.”

• Can provide a “fun” experience for the visitor.

• Good for all products; encourages offline purchases

• Critically important in B2B markets today.

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Strengths and Weaknesses

StrengthsStrengths WeaknessesWeaknesses

1. Individual targeting

2. Personalized messages

3. Timing 24/7

4. Interactive (entertaining)

1. Penetration moderate

2. Privacy concerns

3. Consumer perceptions (non-commercial)

Online communications are vital for reaching youth targets.

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#5: On-line Sales Promotion

E-coupons Much higher redemption then “unsolicited

coupons” because of targeted nature, and the consumer is “opting in” to get the coupon, account for 10% of all coupon use and growing

Much cheaper to produce and execute Promotional Banners Sweepstakes

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#6: Viral Marketing

A combination of e-mail marketing and word of mouth

Encourages website visitors to forward e-mail to friends

There can be privacy issues with this type of communication

Marketers must be careful not to invade or exploit customers e-mail

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Example – L’Oreal

Product launch – Ralph perfume Target –15 to 25 year old females What they did:

Contest – win a trip for four to South Beach, Miami Sent an email to in-house database (47,500) announcing the

contest – you could triple your odds of winning by forwarding the mail to 3 people

55,257 people entered the contest - 60% of entries were from people not on the original database

Second reminder email sent to those who did not respond the first time

Contest entrants received an on-line coupon Results – 15% increase in sales

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Instant Text Messaging

Cell phones and PDAs are quickly becoming the medium of choice among youth and young adults.

1. Ideal for “guerilla” marketing strategies.

2. Balance is crucial; youth markets are skeptical about too much commercialism.

3. Will probably require an “opt-in” system much like online communications.