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Marketing Communications E-commerce business. technology. society. Fourth Edition Kenneth C. Laudon Carol Guercio Traver Copyright © 2007 Pearson Education, Inc. Slide 7-1 Chapter 7 E-commerce Mar ke ting Commun ica tions Copyright © 2007 Pearson Education, Inc. Slide 7-2 Video Ads Cure Banner Blin dness: String Master Class Discussion What advantages do video ads have over traditional stationary banner ads? Where do sites like YouTube fit in to a marketing strategy featuring video ads? What are some of th e ch a llenges an d r is ks o f placing video ads on the Web? Do you think Internet users will ever develop ‘blindness’ towards video ads as well? Copyright © 2007 Pearson Education, Inc. Slide 7-3 Actiontuners.com Copyright © 2007 Pearson Education, Inc. Slide 7-4 Marketing Communications Online marketing communications: Methods used by online firms to communicate with consumer and create strong brand expectations Promotional sales communications: Suggest consumer “buy now” and make offers to encourage immediate purchase Branding communications: Focus on extolling differentiable benefits of consuming product or service Many forms of online marketing communications: online advertising , email marketing, public relations, and Web sites Copyright © 2007 Pearson Education, Inc. Slide 7-5 Online Advertising Paid message on Web site, online service or other interactive medium, such as interactive messaging 2007: $21. 4 billion spent, expected to grow to $24. 7 billion by 2010 Advantages: Adults (age 18-34) are using the Internet Ability to target ads to narrow segments and track performance in almost real time Provide greater opportunity for interactivity Disadvantages: Concerns about cost versus benefit Concerns about how to adequately measure results Copyright © 2007 Pearson Education, Inc. Slide 7-6 Online Advertising from 2000-2011 Figure 7.1, Page 419 SOURCES: Based on data from eMarketer, 2007a, 2005a; IAB/PricewaterhouseCoopers, 2007, 2005; Universal McCann, 2007, 2005. Copyright © 2007 Pearson Education, Inc. Slide 7-7 Forms of Online Advertisements Display and rich media/video ads SeaSearchrch eenginengine adadvertising:vertising: PaidPaid seasearchrch engine inclusion and placement Spon sors hi ps Referrals (affiliate relationship marketing) E-mail marketing Online catalogs Online chat Blog advertising Copyright © 2007 Pearson Education, Inc. Slide 7-8 Table 7.2: Online Advertising Spending for Selected Formats Format 2007 2011 % Change Paid search $8, 624 $16, 590 92% Rich media/video $1,755 $5,481 212% Display ads $4,687 $8,190 75% Classified $3,638 $6,930 90% Referrals $1,733 $3,675 112% Sponsorships $535 $504 -6% E-mail $428 $630 47% Total $21, 400 $42, 000 96% Copyright © 2007 Pearson Education, Inc. Slide 7-9 Display Ads Banners Display promotional message in a rectangular box on a computer screen Sometimes feature Flash video and animations or animated GIFs Pop-ups and pop-unders Banners and buttons appearing on screen without user calling for them Althouggyggh the most annoying form of marketing communication, twice as effective than normal banner ads in terms of click-through rates, simply because users unintentionally click on the ads while trying to close them. Copyright © 2007 Pearson Education, Inc. Slide 7-10 TfDilAdSifidbTypes of Display Ads Specified by Interactive Advertising Bureau (IAB) Copyright © 2007 Pearson Education, Inc. Slide 7-11 Rich Media/Video Ads Rich media/video ads: Employ Flash, DHTML, Java, streaming audio and/or video The fastest growing form of online advertising: about 212% from 2007 to 2011 Advantage: Boost brand awareness (by 10%) rather than driving sales Interstitial ads Placing full-page message between current and destination pages of a user MttilltthtdftdMove automatically to the requested page after ad is read for some time Good interstitial ads have option to “skip through” or “t“stop ”f” for users w ho aren ’tit’t interest tded Copyright © 2007 Pearson Education, Inc. Slide 7-12 Rich Media/Video Ads Superstitial ads Offere d by Viewpo in t Rich media ad that can be any size up to full screen 900 x 500, and file size up to 600KB Differ from interstitials in that they are pre-loaded into browser’ s cache and don’t play until fully loaded After ad is fully downloaded , it waits until the user clicks to another page before popping up in a separate window Copyright © 2007 Pearson Education, Inc. Slide 7-13 Table 7.3: Web Sites That US Online Video Viewers Visit to Watch Videos Once a Week or More Web Site Percentage of Respondents YouTube 42% Television network, e.g., Abc.com 41% News site, e.g., CNN.com 35% Yahoo 25% Google 24% MySpace 19% iTunes 7% Other 19% Total (have watched online video) 74% Have never watched online 26% Copyright © 2007 Pearson Education, Inc. Slide 7-14 Search Engine Advertising: Paid Search Engine Inclusion and Placement One of fastest growing (from 1% of total online advertising spending in 2000 to >40% in 2007) and most effective forms of online marketing communications Huge audience: 70 m illion Amer icans (>40% o f on line popu la tion ) use a search engine daily, almost comparable to email user pppopulation In total, generating around 8 billion searches per month Can be very effective by responding with ads matching the interests of users, creating click-through rate of 10- 12% Copyright © 2007 Pearson Education, Inc. Slide 7-16 Search Engine Marketing Revenues Copyright © 2007 Pearson Education, Inc. Slide 7-17 Search Engine Advertising: Paid Search Engine Inclusion and Placement Types: PidiliPaid inclusion Paid placement Keyword advertising Merchants buy keywords through bidding for rankinggy and visibility of their ads on search result page Google AdWords, Yahoo PrecisionMatch, Microso ft adCen ter Network keyword advertising: Google AdSense Copyright © 2007 Pearson Education, Inc. Slide 7-18 Search Engine Advertising: Paid Search Engg()ine Inclusion and Placement (cont’d) Google, Yahoo, MSN are leaders in this technology Issues: Appropriate disclosure of paid inclusion and placement practices Search engine click fraud When competit or hires thir d par ties to frau du len tly c lic k on competitor ads to drive up costs) When site publisher fraudulently clicks on ads posted on their sites to increase ad revenue One variation is by using “click bots” that automatically click on ads from hundreds of different IP addresses Fraudsters call up a search results page where their competitor’ ads appear, and do not click on competitor ads, resulting in low ad popularity rank, which can result in their being pushed down the rank order of ads Ad nonsense (Google AdSense ads that are inappropriate for content) Copyright © 2007 Pearson Education, Inc. Slide 7-19 Sponsorships and Affiliate Marketing Sponsorship: Paid effort to tie advertiser’s name to particular information, event, venue ithtifbdiititin way that reinforces brand in positive, yet not overtly commercial manner EWbMdE.g., WebMd.com prov idliktitides links to its sponsor like Philips’ product such as defibrillators Affiliate relationship: 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’ssite s site Copyright © 2007 Pearson Education, Inc. Slide 7-20 E-mail Marketing and the Spam Explosion Direct e -mail marketing: E-mail sent directly to interested consumers who “opt-in” or have not “opted-out” Much cheaper compared to traditional direct mail: $5-$10 per 1,000 VS $500- $700 per 1,000 Spam: Unsolicited commercial e-mail Spam is exploding out of control—70%–80%ofall% of all e-mail purportedly is spam Efforts to control spam: • Technology (Filtering software) (only partly effective) • Government regulation (CAN-SPAM and state laws) ((gylargely unsuccessful) • Self-regulation by industry (ineffective) • Volunteer efforts (not enough) Copyright © 2007 Pearson Education, Inc. Slide 7-21 Percentage of E-mail That Is Spam Figure 7.6, Page 434 SOURCE: Based on data from MessageLabs.com, 2007. Copyright © 2007 Pearson Education, Inc. Slide 7-22 Spam Categories Figure 7.7,Page, Page 435 SOURCE: Symantec, 2007. Copyright © 2007 Pearson Education, Inc. Slide 7-23 Other Forms of Online Marketing Communications Online catalog Provides equivalent of paper -based catalog Was popular in early years, but quickly went out because pages took so long to load Recently has gained back in popularity due to 54% of online households now own broadband high-speed connections in 2007 Blog advertising: Online ads related to content of blogs Social network advertising: Ads on MySpace, Facebook, YouTube, etc. Game advertising: downloadable ‘advergames’, ppglacing brand-name products within games Copyright © 2007 Pearson Education, Inc. Slide 7-24 Targeted Marketing: Getting Personal Behavioral targeting efforts increasing; one of fttfastest growi ng onli ne mar ktithiketing techniques. Recent acquisitions by Google, Yahoo, Microsoft of firms engaged in this type of marketing have raised concerns Privacy groups, FTC are examining issues raised byyg targeted methods Copyright © 2007 Pearson Education, Inc. Slide 7-26 Mixing Offline and Online Marketing Communications The original idea of moving all traditional marketing based on mass media toward online approach did not happen Traditional offline consumer-oriented industries have learned to use Web to extend brand images and sales campaigns Online companies have learned how to use traditional marketing communications (printed media an dTV)tdid TV) to drive sa les tWbitto Web site Most successful marketing campaigns incorporate both online and offline tactics Copyright © 2007 Pearson Education, Inc. Slide 7-27 Online Marketing Metrics: Lexicon Metrics that focus on success of Web site in achieving audience or market share Impressions – no. of times an ad is served Click-through rate (CTR) – % times an ad is clicked View-through rate (VTR) – % times an ad is not clicked immediately but Web site is visited within 30 days Hits – no. of http requests Page views – no. of pages viewed Stickiness (duration) – average length of stay at a Web site Unique visitors – no.
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