E-commerce Chapter 7

1. Chapter 7
E-commerceMarketing Communications
Copyright © 2013 Pearson Education, Inc.

2. Class Discussion
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Video Ads:Shoot,Click, Buy
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What advantagesdovideoadshaveover
traditional bannerads?
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Where dositessuchasYouTubefit in to a
marketingstrategy featuring videoads?
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What aresomeofthe challengesandrisksof
placingvideoadsonthe Web?
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Doyouthink Internet userswill ever develop
“blindness”toward videoadsas well?

3. Marketing Communications
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Twomain purposes:
❖
Sales—promotional sales communications
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Branding—branding communications
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Online marketing communications
❖
Takes many forms
❖
Online ads, e-mail, public relations, Web sites

4. OnlineAdvertising
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$37.3 billion in 2012
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Advantages:
❖
Internet is where audience is moving
❖
Ad targeting
❖
Greater opportunities forinteractivity
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Disadvantages:
❖
Cost vs. benefit
❖
How to adequately measure results
❖
Supply of good venues to display ads

5. Online Advertisingfrom 2004–2016
Figure 7.1, Page428 SOURCES: Based on data from eMarketer, Inc., 2012a, 2012b
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6. Formsof Online Advertisements
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Display ads
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Richmedia
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Video ads
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Searchengine advertising
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Mobile andlocaladvertising
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Socialnetworkadvertising:socialnetworks,blogs,and
games
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Sponsorships
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Referrals
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E-mailmarketing
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Online catalogs

7. DisplayAds
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Bannerads
❖
May include animation
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Link toadvertiser’s Web site
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Can track user
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IABguidelines
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Pop-upads
❖
Appear without user calling for them
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Provoke negative consumer sentiment
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Twice as effective as normal banner ads

8. RichMedia Ads
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UseFlash,HTML5,Java, JavaScript
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About5%of online advertisingexpenditures
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Tendto bemore about branding
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Boostbrandawarenessby 10%
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Farmore effective than banner ads
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Interstitials
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Full-page ad between Web pages

9. VideoAds
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Fastestgrowingform of online advertising
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IABstandards
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Linear video ad
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Non-linear video ad
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In-banner video ad
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In-text video ad
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Specializedvideoadvertising networks
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Retail sitesare largest usersof video ads
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Zappos—created video for each of 100,000 product

10. SearchEngine Advertising
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46.5%of online adspendingin 2012
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Types:
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Keyword paid inclusion
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Advertising keywords
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Network keyword advertising or context
advertising
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Nearly ideal targeted marketing

11. SearchEngineAdvertising (cont.)
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Socialsearch
❖
Reviews friends recommendations,searches,
Likes, andWeb site visits
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Searchengine issues:
❖
Paid inclusion and placement practices
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Link farms
❖
Content farms
❖
Click fraud

12. Mobile andLocalAdvertising
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122millionusersaccessInternet from
smartphones,tablets
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Messaging
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Very effective for local advertising
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Display ads
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Search
❖
Video
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Localadvertising
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Enabled by mobileplatform
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50% of mobileadvertising

13. SocialAdvertising
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Socialadvertising
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Uses social graph to promote message
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Many-to-many model
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Socialnetwork advertising
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Social network sites are advertising platforms
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Corporate Facebook pages
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Twitter ads
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Promoted tweets
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Promoted trends
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Promoted accounts

14. SocialAdvertising (cont.)
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Blogadvertising
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Top tactic
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72 million readblogs
❖
Blog readers are ideal demographic
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Gameadvertising
❖
In-game billboard displayads
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Branded virtual goods
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Sponsored banners
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Branded games “advergames”

15. Sponsorshipsand Referrals
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Sponsorships
❖
Paid effort to tie advertiser’s name to particular
information, event, and venue in a way that
reinforces brand in positive yet not overtly
commercial manner
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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

16. Insight on Society: Class Discussion
Copyright © 2013 Pearson Education, Inc. Slide 7-*
Marketing to Childrenof the Web in the
Ageof Social Networks
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Whyisonlinemarketingto childrenacontroversial
practice?
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What isthe Children’sOnlinePrivacyProtectionAct
(COPPA)andhow doesit protect the privacyof
children?
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Howdocompaniesverify the ageof online users?
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Shouldcompaniesbeallowedto targetmarketing
efforts to childrenunder the ageof 13?

17. Insight on Society: Class Discussion
Copyright © 2013 Pearson Education, Inc. Slide 7-*
Marketing to Childrenof the Web in the
Ageof Social Networks
In October 2012, the operator of fan sites for
Justin Bieber, Selena Gomez, Rihanna, and others
agreed to pay a $1 million penalty for collecting
personal information from children such as names,
e-mail addresses, street addresses, and cell phone
numbers without their parents’ permission. Previously,
in May 2011, Disney’s Playdom was fined
$3 million, the largest penalty to date, for collecting
and disclosing children’s information without
parental approval.

18. E-mailMarketing andthe
SpamExplosion
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Direct e-mail marketing
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Primary cost is purchasing addresses
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Spam:Unsolicited commercial e-mail
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Approximately 72%of all e-mail
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Efforts to controlspam:
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Technology (filtering software)
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Government regulation (CAN-SPAMand state laws)
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Voluntary self-regulation by industries (DMA)

19. Percentageof E-mailThat Is Spam
Figure 7.5, Page450 SOURCE: Based on data from Symantec, 2012.
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20. BehavioralTargeting
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Usingconsumeroffline andonlinebehaviorto
modify advertising message
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Personalinformation soldto thirdpartyadvertisers,
who deliver adsbasedon profile
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Search engine queries, browsing history, social network data,
offline data
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Adexchanges:
❖
Enable advertisers to retarget ads at users as they browse
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75%of U.S.advertisersemploysomeformof
behavioral targeting

21. Mixing Offline andOnline
Marketing Communications
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Most successfulmarketingcampaigns
incorporateboth online andoffline tactics
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Offline marketing
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Drives traffic to Web sites
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Increases awareness and builds brand equity
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Consumerbehaviorincreasinglymulti-
channel
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80% consumers research online before buying offline

22. Insighton Business: Class Discussion
Copyright © 2013 Pearson Education, Inc. Slide 7-*
Arethe Very RichDifferent
from Youand Me?
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Whyhaveonline luxury retailers hada
difficult time translatingtheir brandsandthe
lookandfeel of luxury shopsinto Web sites?
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WhydidNeimanMarcus’first effort fail?
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WhydidTiffany’s first effort fail?
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VisittheArmaniWebsite.What doyoufind
there?

23. Online Marketing Metrics: Lexicon
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Audiencesizeor
market share
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Impressions
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Click-through rate(CTR)
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View-through rate(VTR)
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Hits
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Pageviews
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Stickiness (duration)
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Unique visitors
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Loyalty
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Reach
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Recency
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Conversionto
customer
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Acquisition rate
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Conversionrate
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Browse-to-buy-ratio
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View-to-cart ratio
❖
Cart conversion rate
❖
Checkoutconversion
rate
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Abandonment rate
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Retention rate
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Attrition rate

24. Online Marketing Metrics (cont.)
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Socialmarketing
❖
Grossrating points
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Applause ratio
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Conversation ratio
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Amplification
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Sentiment ratio
❖
Duration of engagement
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E-mailmetrics
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Open rate
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Delivery rate
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Click-throughrate
(e-mail)
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Bounce-back rate
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Unsubscribe rate
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Conversion rate (e-mail)

25. AnOnline ConsumerPurchasing Model
Figure 7.6, Page463
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26. HowWell DoesOnline
Advertising Work?
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UseROIto measuread campaign
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Highestclick-throughrates:Searchengine
ads,permissione-mail campaigns
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Richmedia, videointeraction rates high
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Onlinechannelscomparefavorablywith
traditional
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Most powerful marketingcampaignsuse
multiple channels,includingonline, catalog,
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27. ComparativeReturnson Investment
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Figure 7.7, Page465 SOURCES:Industry sources;authors’estimates

28. TheCostsof OnlineAdvertising
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Pricingmodels
❖
Barter
❖
Cost perthousand (CPM)
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Cost per click(CPC)
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Cost peraction (CPA)
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Online revenues only
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Sales can be directly correlated
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Bothonline/offline revenues
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Offlinepurchases cannot always be directly related to online
campaign
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In general,onlinemarketingmoreexpensiveon
CPMbasis,but more effective

29. Web SiteActivity Analysis
Figure 7.8, Page469
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30. Insight on Technology: Class Discussion
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It’s 10 P.M. DoYouKnowWho Is
onYourWeb Site?
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What are someof the servicesoffered by
Adobe’sSiteCatalyst?
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Whywouldyouasawebmasterbe
interested in theseservices?
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Whyissiteanalysisandcustomertrackingso
important to onlinemarketing?
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HowdidNBCUniversaluseSiteCatalystto its
benefit?

31. TheWeb SiteAsa Marketing
Communications Tool
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Effective userequires
❖
Appropriate domain name
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Proper Web sitedesign
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Search engine optimization
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Search enginesregistration
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Keywords in Web site description
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Metatags and page title keywords
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Links to other sites

32. Web SiteFunctionality
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Main factorsin effectivenessof interface
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Utility
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Ease ofuse
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Topfactorsin credibility of Web sites
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Design look
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Information design/structure
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Information focus
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Forfirst-time users,organizationis key
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Forreturn users:Information ismajor factor

33. Factorsin the
Credibility of
Web Sites
Figure 7.10, Page475
SOURCE:Basedon data from
Fogg,et al., 2003.
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34. Table 7.9, Page476
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