Download - ECommerce Marketing Technologies and Communcations

COMP 6350 eCommerce Systems

Alexander Nikov

10. eCommerce Marketing Technologies and Communications

10-2

Teaching Objectives

• Identify the key features of the Internet audience.• Discuss the basic concepts of consumer behavior and

purchasing decisions.• Explain how consumers behave online.• Describe the basic marketing concepts needed to

understand Internet marketing.• Identify and describe the main technologies that support

online marketing.• Identify and describe basic e-commerce marketing and

branding strategies.

10-3

Teaching Objectives

• Identify the major forms of online marketing communications.

• Explain the costs and benefits of online marketing communications.

• Discuss the ways in which a Web site can be used as a marketing communications tool.

Netflix: The Next Blockbuster?Class Discussion

What was Netflix’s first business model? Why did this model not work and what new model did it develop?

Why is Netflix attractive to customers? What is Netflix’s “recommender system”? How does Netflix use data mining? Has Netflix’s changes in business model

damaged its brand permanently?

10-4

10-5

Outline

1. Consumers Online: The Internet Audience and Consumer Behavior

2. Basic Marketing Concepts

3. Internet Marketing Technologies

4. B2C and B2B E-commerce Marketing and Branding Strategies

5. Marketing Communications

6. Understanding the Costs and Benefits of Online Marketing Communications

7. The Web Site as a Marketing Communications Tool

Consumers Online: The Internet Audience and Consumer Behavior

• Around 73% (86 million) U.S. households had Internet access in 2011

• Growth rate has slowed

• Intensity and scope of use both increasing

• Some demographic groups have much higher percentages of online usage than others

– Gender, age, ethnicity, community type, income, education

10-6

10-7Source: http://pewinternet.org/Trend-Data/Online-Activities-Daily.aspx

10-8

10-9 10-10

The Internet Audience and Consumer Behavior

• Broadband audience vs. dial-up audience• Internet purchasing affected by neighborhood• Lifestyle and sociological impacts

– Use of Internet by children, teens– Use of Internet as substitute for other social activities

• Media choices– Traditional media competes with Internet for attention– TV viewing has increased with Internet usage

10-11

Consumer Behavior Models• Study of consumer behavior

– Attempts to explain what consumers purchase and where, when, how much, and why they buy

• Consumer behavior models– Predict wide range of consumer decisions

– Based on background demographic factors and other intervening, more immediate variables

10-12

A General Model of Consumer Behavior

Figure 6.1, Page 35510-13

SOURCE: Adapted from Kotler and Armstrong, 2009.

Background Demographic Factors

Culture: Affects entire nations Subculture

– Subsets formed around major social differences (ethnicity, age, lifestyle, geography)

Social networks and communities– Direct reference groups– Indirect reference groups– Opinion leaders– Lifestyle groups

Psychological profile

10-14

10-15

The Online Purchasing Decision

• Psychographic research– Combines demographic and psychological data– Divides market into groups based on social class, lifestyle,

and/or personality characteristics

• Five stages in the consumer decision process:1. Awareness of need2. Search for more information3. Evaluation of alternatives4. Actual purchase decision5. Post-purchase contact with firm

10-16

10-17

Factors that predict online buying behavior The Consumer Decision Process andSupporting Communications

Figure 6.2, Page 359

10-18

A Model of Online Consumer Behavior

• Decision process similar for online and offline behavior

• General online behavior model– Consumer skills– Product characteristics– Attitudes toward online purchasing– Perceptions about control over Web environment– Web site features: latency, usability, security

• Clickstream behavior: transaction log for consumer from search engine to purchase

10-19


10-20Figure 6.3, Page 360


• Clickstream factors include:– Number of days since last visit– Speed of clickstream behavior– Number of products viewed during last visit– Number of pages viewed– Supplying personal information– Number of days since last purchase– Number of past purchases

• Clickstream marketing– Developed dynamically as customers use Internet

10-21

Shoppers: Browsers and Buyers• Shoppers: 87% of Internet users

– 73% buyers– 15% browsers (purchase offline)

• One-third offline retail purchases influenced by online activities

• Online traffic also influenced by offline brands and shopping

• E-commerce and traditional commerce are coupled: part of a continuum of consuming behavior

10-22

Online Shoppers and Buyers


SOURCE: Based on data from eMarketer, Inc., 2011d.

10-23

What Consumers Shop for and Buy Online

• Big ticket items ($500 or more)– Travel, computer hardware, consumer electronics– Consumers now more confident in purchasing costlier items

• Small ticket items ($100 or less)– Apparel, books, office supplies, software, etc.– Sold by first movers on Web

• Physically small items• High margin items • Broad selection of products available

10-24

What Consumers Buy Online


SOURCES: Based on data from Internet Retailer, 2011.

10-25

How Consumers Shop

How shoppers find online vendors– Search engines—59%– Marketplaces (Amazon, eBay)—28%– Direct to retail sites—10%– Other methods—3%

Online shoppers are highly intentional– Look for specific products, companies, services

StumbleUpon Recommender systems

10-26

Table 6.7, Page 366SOURCES: Based on data from eMarketer, Inc., 2011d.

10-27

Trust, Utility, and Opportunism in Online Markets

• Two most important factors shaping decision to purchase online:

1. Utility: • Better prices, convenience, speed

2. Trust:• Asymmetry of information can lead to opportunistic

behavior by sellers• Sellers can develop trust by building strong reputations for

honesty, fairness, delivery

10-28

10-29

Outline1. Consumers Online: The Internet Audience and Consumer Behavior







Basic Marketing Concepts

• Marketing – Strategies and actions to establish relationship with

consumer and encourage purchases of products and services

– Addresses competitive situation of industries and firms

– Seeks to create unique, highly differentiated products or services that are produced or supplied by one trusted firm

• Unmatchable feature set• Avoidance of becoming commodity

10-30

Feature Sets

• Three levels of product or service1. Core product

• Core benefit of product, e.g., cell phone

2. Actual product• Characteristics that deliver core benefits• E.g., cell phone and music player with wide screen that connects

through wireless networks to Internet

3. Augmented product• Includes additional benefits beyond core benefits• Basis for building the product’s brand• E.g., product warranty, after-sale support

10-31

Feature Set


Products, Brands, and the Branding Process

• Brand: – Expectations consumers have when consuming, or thinking

about consuming, a specific product– Most important expectations: quality, reliability, consistency,

trust, affection, loyalty, reputation

• Branding: process of brand creation• Closed loop marketing• Brand strategy• Brand equity

10-33

Marketing Activities: From Products to Brands


10-34

Segmenting, Targeting, and Positioning

• Major ways used to segment, target customers– Behavioral– Demographic– Psychographic– Technical– Contextual– Search

• Within segment, product is positioned and branded as a unique, high-value product, especially suited to needs of segment customers

10-35 10-36

Are Brands Rational? • For consumers, a qualified yes:

Brands introduce market efficiency by reducing search and decision-making costs

• For business firms, a definite yes: Brands a major source of revenue

Lower customer acquisition cost

Increased customer retention

Successful brand constitutes a long-lasting (though not necessarily permanent) unfair competitive advantage

10-37

Can Brands Survive the Internet? Brands and Price Dispersion

• Early postulation: “Law of One Price”; end of brands

• Instead:

– Consumers still pay premium prices for differentiated products

– E-commerce firms rely heavily on brands to attract customers and charge premium prices

– Substantial price dispersion

– Large differences in price sensitivity for same product

– “Library effect”

10-38

10-39

nash-equilbrium.com

10-40








The Revolution in Internet Marketing Technologies

• Three broad impacts:1. Scope of marketing communications broadened 2. Richness of marketing communications increased3. Information intensity of marketplace expanded

• Internet marketing technologies:• Web transaction logs• Cookies and Web bugs• Databases, data warehouses, data mining• Advertising networks• Customer relationship management systems

10-41 10-42

10-43

Web Transaction Logs• Built into Web server software• Record user activity at Web site• WebTrends: leading log analysis tool• Provides much marketing data, especially combined

with:– Registration forms– Shopping cart database

• Answers questions such as:– What are major patterns of interest and purchase?– After home page, where do users go first? Second?

10-44

10-45

1s from the web transaction log of azimuth-interactive.com

10-46

10-47

Tracking Files Allow users browsing activities to be tracked as they move

from site to site Four types of tracking files

– Cookies • Small text file Web sites place on visitor’s PC every time they

visit, as specific pages are accessed• Provide Web marketers with very quick means of identifying

customer and understanding prior behavior

– Flash cookies– Beacons (“bugs”)

• Tiny (one pixel) graphic files embedded in e-mail messages and on Web sites

• Used to automatically transmit information about user and page being viewed to monitoring server

– Apps 10-48

10-49

Firefox cookies dialog box Databases

• Database: stores records and attributes• Database Management System (DBMS):

– Software used to create, maintain, and access databases

• SQL (Structured Query Language): – Industry-standard database query and manipulation language used in a

relational database

• Relational database: – Represents data as two-dimensional tables with records organized in

rows and attributes in columns; data within different tables can be flexibly related as long as the tables share a common data element

10-50

A Relational Database View of E-commerce Customers


Data Warehouses and Data Mining

• Data warehouse:

– Collects firm’s transactional and customer data in single location for offline analysis by marketers and site managers

• Data mining:– Analytical techniques to find patterns in data, model behavior of

customers, develop customer profiles

• Query-driven data mining

• Model-driven data mining

• Rule-based data mining

• Collaborative filtering

10-52

Data Mining and Personalization

Figure 6.13, Page 38210-53

SOURCE: Adomavicius and Tuzhilin, 2001b ©2001 IEEE.

Customer Relationship Management (CRM) Systems

• Record all contacts that customer has with firm • Generates customer profile available to everyone in firm

with need to “know the customer”• Customer profiles can contain:

– Map of the customer’s relationship with the firm– Product and usage summary data– Demographic and psychographic data– Profitability measures– Contact history – Marketing and sales information

10-54

A Customer Relationship Management System

Figure 6.10, Page 389 10-55 10-56








Generic Market Entry Strategies

10-57Figure 6.15, Page 389

Establishing the Customer Relationship

Advertising networks– Ad server selects appropriate ad based on cookies,

Web bugs, backend user profile databases Advertising exchanges

– Auction ad slots over many advertising networks Permission marketing Affiliate marketing

10-58

How an Advertising Network such as DoubleClick Works

Figure 6.12, Page 39410-59


Viral marketing Blog marketing Social network marketing

– Driven by social e-commerceSocial sign-onCollaborative shoppingNetwork notificationSocial search (recommendation)

Mobile marketing

10-60


Social marketing and wisdom of crowds– Large aggregates produce better estimates and

judgments, e.g.,“Like” buttonFolksonomiesSocial tagging

Mobile platform marketing Local marketing Brand leveraging

10-61

Customer Retention

Mass marketing Direct marketingMicromarketing Personalized, one-to-one marketing

– Segmenting market on precise and timely understanding of individual’s needs

– Targeting specific marketing messages to these individuals– Positioning product vis-à-vis competitors to be truly unique

Personalization– Can increase consumers sense of control, freedom– Can also result in unwanted offers or reduced anonymity

10-62

The Mass Market-Personalization Continuum

Figure 6.13, Page 407 10-63

Net Pricing Strategies

• Pricing– Integral part of marketing strategy– Traditionally, prices based on:

• Fixed cost • Variable costs • Market’s demand curve

• Price discrimination– Selling products to different people and groups based

on willingness to pay

10-64

10-65

A demand curveNet Pricing Strategies (cont.)

• Free and freemium– Can be used to build market awareness

• Versioning– Creating multiple versions of product and selling essentially

same product to different market segments at different prices

• Bundling– Offers consumers two or more goods for one price

• Dynamic pricing– Auctions– Yield management– Flash marketing

10-66

10-67

The demand for bundles of 1-20 goods Channel Management Strategies

• Channels – Different methods by which goods can be distributed and sold

• Channel conflict – When new venue for selling products or services threatens or

destroys existing sales venues

– E.g., online airline/travel services and traditional offline travel agencies

• Some manufacturers are using partnership model to avoid channel conflict

10-68

1. Research has shown that many consumers use the Internet to investigate purchases before actually buying, which is often done in a physical storefront. What implication does this have for online merchants? What can they do to entice more online buying, rather than pure research?

2. Name four improvements Web merchants could make to encourage more browsers to become buyers.

3. Name the five stages in the buyer decision process, and briefly describe the online and offline marketing activities used to influence each.

4. What are the components of the core product, actual product, and augmented product in a feature set?

5. Name some of the drawbacks to the four data mining techniques used in Internet marketing.

6. Compare and contrast the four marketing strategies used in mass marketing, direct marketing, micromarketing, and one-to-one marketing.

7. Why do companies that bundle products and services have an advantage over those that don’t or can’t offer this option?

10-69

QUESTIONS

The fact that many consumers use the Internet to research products before actually making purchases has many implications for online merchants because it suggests that e-commerce is a major conduit and generator of offline commerce.

This could mean that e-commerce and traditional commerce should integrate to alleviate the concern.

It is very important for online merchants to build the information content on their sites to attract browsers, put less attention on selling, per se, and offer products in offline settings where users feel more comfortable and secure.

10-70

1. Research has shown that many consumers use the Internet to investigate purchases before actually buying, which is often done in a physical storefront. What implication does this have for online merchants? What can they do to entice more online buying, rather than pure research?

2. Name four improvements Web merchants could make to encourage more browsers to become buyers.

• Target the goal-oriented, intentional shoppers with communications directed at them.• Design Web sites to provide easy-to-access and simple-to-use product information.• Make it easier to comparison shop.• Make it easier to return merchandise.• Create policies for better credit card and personal information security.• Make it easier to locate items on the Web site.• Create customer service facilities where users can get the answers to their questions

and product advice.• Increase delivery speeds.• Present products more clearly.• Create loyalty reward programs.• Make the buying process quicker to complete.

10-71

3. Name the five stages in the buyer decision process, and briefly describe the online and offline marketing activities used to influence each.

• Awareness of Need: Mass media advertising on television, radio, in print media, targeted banner ads, interstitials, and targeted event promotions online, are used to promote the recognition of need in buyers.

• Search for Information: People use catalogs, print ads, mass media, store visits, and product raters (e.g., Consumer Reports offline), search engines, online catalogs, visits to Web sites, and targeted e-mails from merchants online to search for products.

• Evaluation of Alternatives: Offline consumers use reference groups, opinion leaders, the mass media, store visits, and product raters; online, they use search engines, online catalogs, visits to Web sites, product reviews, and user evaluations to evaluate the alternatives.

• Actual Purchase Decision: Promotions, direct mailings, mass media, and various print media affect the actual purchase decision offline; online promotions, lotteries, discounts, and targeted e-mail push the actual purchase decision online.

• Post-Purchase Contact with Firm: Post purchase loyalty is inculcated by firms offline using warranties, service calls, parts and repair services, and through consumer groups. Online, post purchase loyalty is encouraged through the use of communities of consumption, newsletters, e-mails to customers, and online product updates.

10-72

4. What are the components of the core product, actual product, and augmented product in a feature set?

• In a product feature set, the components of the core product are the core benefits a customer receives from buying the basic product.

• The actual product consists of the set of characteristics designed to deliver the product’s core benefits.

• For example, the components of the actual product may consist of a brand name that signals a strong product, reducing consumer risk and anxiety about a product and the features and capabilities that the product will deliver.

• The augmented product consists of the additional benefits the consumer receives.• These include:

– warranties, – support and repair personnel, – installation and delivery guarantees, – credit terms, and – any additional post-sales support that a company offers.

10-73

5. Name some of the drawbacks to the four data mining techniques used in Internet marketing.

• The drawbacks to rule-based data mining are that there may be million of rules, many of them nonsensical, and many others of only short duration.

• Therefore, these rules need extensive culling and validation. • All of the four data mining techniques face difficulties in that there can be millions of

affinity groups and other patterns in the data that are temporal or meaningless. With all data mining techniques, it becomes tricky to isolate the valid, and therefore profitable, data and then act on it quickly enough to make sales.

10-74

6. Compare and contrast the four marketing strategies used in mass marketing, direct marketing, micromarketing, and one-to-one marketing.

• Mass marketing, which is appropriate for products that are relatively simple and attractive to all consumers, uses national media messages aimed at a single national audience with a single national price.

• Direct marketing on the other hand, is directed at particular market segments that are deemed to be “likely purchasers” and uses direct mail or phone messages. Direct marketers generally do not offer wide price variations, but will offer special deals to loyal customers. It is most often used for products that can be stratified into several different categories.

• Micromarketing is the first form of true database marketing. It is aimed at geographical units such as neighborhoods or cities, or specialized market segments. Prices are dynamically adjusted to reflect market conditions and competitor pricing, and this can even be done on a daily basis.

• Personalized one-to-one marketing is suitable for products (1) that can be produced in very complex forms, depending on individual tastes, (2) whose price can be adjusted to the level of personalization, and (3) where the individual’s tastes and preferences can be effectively gauged. The marketing message is changed based upon the merging of internal behavioral, transaction, and demographic data.

10-75

7. Why do companies that bundle products and services have an advantage over those that don’t or can’t offer this option?

• Although consumers are apt to have very diverse ideas about the value of a single product, there is much more agreement on the value of a bundle of products.

• This often results in a price per product people are willing to pay for a bundle that is higher than the price they would be willing to pay for each product sold separately.

• Bundling reduces the variance in the market demand for goods, meaning that more people are willing to pay the same price for the bundle of goods.

• Bundler firms can pay higher prices to their suppliers for content, and they can charge higher prices to their customers for their bundles than can single good firms.

10-76

10-77








Video Ads: Shoot, Click, BuyClass Discussion

• What advantages do video ads have over traditional banner ads?

• Where do sites such as YouTube fit in to a marketing strategy featuring video ads?

• What are some of the challenges and risks of placing video ads on the Web?

• Do you think Internet users will ever develop “blindness” towards video ads as well?

10-78

10-79 10-80

Marketing Communications

Two main purposes:

– Sales—promotional sales communications

– Branding—branding communications

Online marketing communications

– Takes many forms

– Online ads, e-mail, public relations, Web sites

10-81

Online Advertising

• $31 billion in 2011• Advantages:

– Internet is where audience is moving– Ad targeting– Greater opportunities for interactivity

• Disadvantages:– Cost versus benefit– How to adequately measure results– Supply of good venues to display ads

10-82

Online Advertising from 2002–2015


SOURCES: Based on data from eMarketer, 2011a.

Forms of Online Advertisements 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

10-84

Display Ads

• Banner ads

– Rectangular box linking to advertiser’s Web site

– IAB guidelines

• E.g., full banner is 468 x 60 pixels, 13K

• Pop-up ads

– Appear without user calling for them

– Provoke negative consumer sentiment

– Twice as effective as normal banner ads

– Pop-under ads: open beneath browser window

10-85 10-86

Rich Media Ads

• Use Flash, DHTML, Java, JavaScript

• About 5% of all online advertising expenditures

• Tend to be more about branding

• Boost brand awareness by 10%

• IAB standards limit length

• Interstitials• Superstitials

10-87 10-88

Types of display ads

Video Ads

• Fastest growing form of online advertisement• IAB standards

– Linear video ad

– Non-linear video ad

– In-banner video ad

– In-text video ad

• Formats: pre-roll, mid-roll, post-roll• Ad placement

– Advertising networks– Advertising exchanges– Banner swapping

10-89 10-90

Search Engine Advertising

• Almost 46% of online ad spending in 2011• Types:

– Paid inclusion or rank• Inclusion in search results• Sponsored link areas

– Keyword advertising• E.g., Google AdWords

– Network keyword advertising (context advertising)• E.g., Google AdSense

10-91 10-92

Search Engine Marketing Revenues

Search Engine Advertising (cont.)

Nearly ideal targeted marketing Social search

– Google’s +1, Facebook’s Like Issues:

– Disclosure of paid inclusion and placement practices– Link farms– Content farms– Click fraud

10-93 10-94

Importance of rank for customer viewing by type of search

10-95

A paid listing on YahooMobile and Local Advertising

91 million users access Internet from smartphones, tablets– Messaging

Especially effective for local advertising– Display ads– Search– Video

Local advertising– Enabled by mobile platform– 60% of mobile advertising

10-96

Sponsorships and Referrals• Sponsorships

– Paid effort to tie advertiser’s name to particular information, event, venue in way that reinforces brand in positive yet not overtly commercial manner

• Referrals

– Affiliate relationship marketing

– 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

10-97

E-mail Marketing and the Spam Explosion

• Direct e-mail marketing – Low cost method – Primary cost is purchasing addresses

• Spam: unsolicited commercial e-mail– 75% of all e-mail purportedly is spam– Efforts to control spam:

• Technology (filtering software) • Government regulation (CAN-SPAM and state

laws)• Voluntary self-regulation by industries DMA

Volunteer efforts10-98

Percentage of E-mail That Is Spam

10-99Figure 7.5, Page 449

SOURCE: MessageLabs.com, 2010.

Spam Categories

Figure 7.7, Page 44510-100

SOURCE: Symantec, 2009.

Online Catalogs

• Equivalent of paper-based catalogs

• Graphics-intense; use increasing with increase in broadband use

• Two types:

1. Full-page spreads, e.g., Landsend.com

2. Grid displays, e.g., Amazon

• In general, online and offline catalogs complement each other

10-101 10-102

Beval’s Online Catalog

Social Advertising

Social advertising– Uses social graph to promote message– Many-to-many model

Social network advertising– Social network sites are advertising platformsCorporate Facebook pagesTwitter ads

– Promoted tweets– Promoted trends– Promoted accounts

10-103

Social Advertising (cont.)

Blog advertising – Blogs difficult to monetize

Audience size Subject matter Search engines have difficulty indexing

Game advertising– In-game billboard display ads– Branded virtual goods– Sponsored banners– Downloadable “advergames”

10-104

Behavioral Targeting

Interest-based advertising (behavioral targeting) Social marketing Personal information sold to third party advertisers,

who deliver ads based on profile– Search engine queries, browsing history, offline data

Ad exchanges– Enable advertisers to retarget ads at users as they browse– 16% online ads are targeted

10-105

Mixing Offline and Online Marketing Communications

• Most successful marketing campaigns incorporate both online and offline tactics

• Offline marketing

– Drive traffic to Web sites

– Increase awareness and build brand equity

• Consumer behavior increasingly multi-channel

– 60% of consumers research online before buying offline

10-106

10-107






6. Understanding the Costs and Benefits of Online Marketing

Communications


Online Marketing Metrics: Lexicon

• Measuring audience size or market share– Impressions– Click-through rate (CTR)– View-through rate (VTR)– Hits– Page views– Stickiness (duration)– Unique visitors– Loyalty– Reach– Recency

10-108

10-109 10-110

Online Marketing Metrics

• Conversion of visitor to customer– Acquisition rate– Conversion rate– Browse-to-buy-ratio– View-to-cart ratio– Cart conversion rate– Checkout conversion rate – Abandonment rate– Retention rate– Attrition rate

• Social networking– User insights– Interaction insights

• E-mail metrics– Open rate– Delivery rate– Click-through rate

(e-mail)– Bounce-back rate

10-111

An Online Consumer Purchasing Model

Figure 7.7, Page 47110-112

How Well Does Online Advertising Work?

• Ultimately measured by ROI on ad campaign

• Highest click-through rates: search engine ads, permission e-mail campaigns

• Rich media, video interaction rates high

• Online channels compare favorably with traditional channels

• Most powerful marketing campaigns use multiple channels, including online, catalog, TV, radio, newspapers, stores

10-113 10-114

Comparative Returns on Investment

Figure 7.10, Page 46710-115

SOURCE: Based on data from eMarketer, Inc. 2010b, Direct Marketing Association (DMA), 2009.

The Costs of Online Advertising

• Pricing models– Barter– Cost per thousand (CPM)– Cost per click (CPC) – Cost per action (CPA)

• Online revenues only– Sales can be directly correlated

• Both online/offline revenues– Offline purchases cannot always be directly related to online campaign

• In general, online marketing more expensive on CPM basis, but more effective

10-116

10-117 10-118

10-119 10-120








Web Site Activity Analysis

Figure 7.9, Page 477 10-121

The Web Site as a Marketing Communications Tool

Web site as extended online advertisement

Domain name: An important role

Search engine optimization: – Search engines registration– Keywords in Web site description– Metatag and page title keywords– Links to other sites

10-122

Web Site Functionality

• Main factors in effectiveness of interface– Utility– Ease of use

• Top factors in credibility of Web sites– Design look– Information design/structure– Information focus

• Organization is important for first-time users, but declines in importance– Information content becomes major factor attracting

further visits

10-123

Factors in the Credibility of Web Sites


10-124SOURCE: Based on data from Fogg, et al, 2003.

10-125Table 7.9, Page 478

1. Explain the difference between marketing and marketing communications.

2. What kinds of products are most suited to being advertised online?

3. What is the difference between an interstitial ad and a superstitial ad?

4. What are some of the reasons for the decline in click-through rates on banner

ads today? How can banner ads be made more effective?

5. What is the difference between hits and page views? Why are these not the

best measurements of Web traffic? Which is the preferred metric for traffic counts?

6. What are the key attributes of a good domain name?

7. What are some of the steps a firm can take to optimize its search engine

rankings?

8. List and describe some Web site design features that impact online purchasing.

10-126

QUESTIONS

1. Explain the difference between marketing and marketing communications.

• Marketing encompasses all of the actions a firm takes to establish a relationship with the consumer and encourage the sale of products. Marketing communications focuses strictly on methods of communicating the brand name and communications that directly promote sales. Marketing includes such things as packaging, product placement/arrangement, and departments of a physical store or on a Web site. Marketing communications encompass all methods by which consumers will receive audio, visual, text-based, or any other exchange with a company to strengthen brand name or promote the sale of products.

10-127

2. What kinds of products are most suited to being advertised online?

• high-consideration, information-intensive products that consumers will typically want to research prior to purchasing. Computer hardware, automotive, and financial services companies are among the heaviest online advertisers for this reason. Financial and travel services, which have significant online commercial potential, are also well suited to Internet advertising.

10-128

10-129

Interstitial ads are placed between the current Web page a user is viewing and the destination page for the link they have clicked. The interstitial ad typically gives way automatically to the page the user has requested after allowing enough time for the ad to be read. Interstitials use “dead time” in between the loading of requested pages. However, users may become annoyed because they believe that while they are waiting for the ad to load, the page they want to view is delayed. Superstitials, on the other hand, are preloaded into the cache of the browser and do not play until they are fully loaded. When the file is completely downloaded, just like an interstitial, it will wait until the user clicks a link to move to a new page before it opens in a separate window.

3. What is the difference between an interstitial ad and a superstitial ad?

4. What are some of the reasons for the decline in click-through rates on banner ads today? How can banner ads be made more effective?

• Click-through rates on banner ads have declined because the Web has become inundated with them.

• People have had to find ways to cope with the over-stimulation. • One means of coping with sensory overload is input filtering, or filtering out the vast

majority of messages that a person is being bombarded with. • Users have learned to recognize banner ads or anything that looks like one and will

immediately close them before they have even had a chance to fully load.• Essentially, this can be considered an adoption curve. • At first, people will want to try something new, but eventually there will be more

people who have already done that something new compared to the newcomers.• These people will become less and less inclined to do it again until you end up with

what appears to be declining engagement. • Basically, banners used to be exotic and “cool” and now they are banal and

unavoidable. • Banner ads can be made more effective if they are targeted to a specific audience

(using pre-identified user profiles), to specific occasions, or to particular keyword search arguments.

10-130

5. What is the difference between hits and page views? Why are these not the best measurements of Web traffic? Which is the preferred metric

for traffic counts?

• Hits are the number of http requests received by a server, whereas page views are the number of pages requested by visitors.

• Hits can be a misleading measure of site activity because one page view can include many hits if the page contains multiple images or graphics.

• Page views are also an inaccurate measure of site activity because of the increased usage of Web pages that use frames to divide the page into separate sections.

• This will cause one page to generate multiple hits: one for each frame on the page.• The preferred metric for traffic counts is unique visitors, which counts the number of

new visitors to a site, regardless of how many pages they view.

10-131

6. What are the key attributes of a good domain name?

• Short• Memorable• Not easily confused with other domain names• Difficult to misspell• Reflects the nature of the company’s business• Preferably a dot-com suffix

10-132

7. What are some of the steps a firm can take to optimize its search engine rankings?

• Register with as many search engines as possible so that a user looking for similar sites has a chance of coming across yours.

• Make sure that keywords used in your Web site description match keywords likely to be used by prospective customers. Most search engines read home page title tags, metatags, and other text on the home page in order to index the page.

• Link the site to as many other sites as possible because some search engines rank sites based upon the number of links from other sites. The assumption is that the more links there are to a site, the more useful the site must be (link popularity).

10-133

8. List and describe some Web site design features that impact online purchasing.

• Compelling experience: Sites that offer entertainment and interactivity along with commerce or that are perceived as “fun” to use, are more successful in attracting and retaining visitors.

• Short download times: Sites that take too long to download will experience higher abandonment rates, although this can be diminished somewhat by providing online amusement to distract the consumer.

• Simplicity of design: The most important aspects of site design for generating sales are product list navigation and choice features that save consumers time.

• Interactive consumer decision aids: Recommendation agents (programs) that are used to recommend a product based on the consumer completing a survey, a review of the consumer’s profile, or based on the purchases of other consumers who have bought the same product can also drive sales.

• Responsiveness to consumer inquiries: Prompt and complete responses through automated customer response systems or online customer service centers can also positively affect return visits and purchases.

10-134

Download - ECommerce Marketing Technologies and Communcations

Top Related