Transcript Chapter8_001

E-commerce
business. technology. society.
Second Edition
Kenneth C. Laudon
Carol Guercio Traver
Copyright © 2004 Pearson Education, Inc.
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Chapter 8
E-commerce Marketing Communications
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Online Marketing Communications
 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
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Online Advertising
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Paid message on a Web site, online service or other
interactive medium, such as interactive messaging
2002: $6.3 billion spent, expected to grow to $9.1
billion by 2007
Advantages:
 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
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Online Advertising from 2000-2007
Figure 8.1, Page 445
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Online Advertising by Industry-2002
Figure 8.2, Page 446
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Forms of Online Advertisements
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Banners, pop-ups and rich media ads
Search engine marketing: Paid search engine
inclusion and placement
Sponsorships
Affiliate relationships
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Banners, Pop-ups and Rich Media Ads
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Banners: Display promotional message in a rectangular
box at top or bottom of computer screen
Pop-ups: Appear on screen without user calling for them
Pop-unders: Open underneath user’s active browser
window and do not appear until user closes active
window
Rich media ads: Employ Flash, DHTML, Java,
streaming audio and/or video
Interstitials: Provide way of placing a full-page message
between current and destination pages of user
Superstitials: Rich media ad that is pre-loaded into
browser’s cache and does not play until fully loaded and
user clicks to another page
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Types of Banner Ads
Figure 8.3, Page 447
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Online Advertising Placement Methods
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Banner swapping: Arrangements among firms
allow each firm to have its banners displayed
on other affiliate sites for no cost
Banner exchanges: Arrange for banner
swapping among firms
Advertising networks: Act as brokers between
advertisers and publishers, placing ads and
tracking all activity related to the ad
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Online Advertising Vehicles
Table 8.1, Page 450
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Most Popular Online Marketing Methods
Figure 8.4, Page 450
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Search Engine Marketing: Paid Search
Engine Inclusion and Placement
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Search engine marketing one of fastest growing and
most effective forms of online marketing
communications
Paid inclusion – firms pay for inclusion in search
engine index
Paid placement – firms pay for a guarantee that it will
appear prominently in results of relevant searches
Overture.com and Google leaders in this technology
Appropriate disclosure of paid inclusion and
placement practices an issue
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Search Engine Policies on Paid Placement
and Inclusion
Table 8.2, Page 453
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Sponsorships and Affiliate Marketing
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Sponsorship: Paid effort to tie an advertiser’s name
to particular information, event, venue in way that
reinforces brand in a positive, yet not overtly
commercial manner
 Advertorial a common form
Affiliate relationship: Permits a firm to put its logo or
banner ad on another firm’s Web site from which
users of that site can click through to the affiliate’s
site
 Sometimes called tenancy deals
 Amazon/ToysRUs an example
 Customer hijacking an issue
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Direct E-mail Marketing and the
Spam Explosion
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Direct e-mail marketing: E-mail marketing messages
sent directly to interested consumers who “opt-in” or
have not “opted-out”
Spam: Unsolicited commercial e-mail
 Spam is exploding out of control – March 2003,
45% of all Internet e-mail purportedly was spam
 Efforts to control spam:
 Filtering software (only partly effective)
 Self-regulation by industry (ineffective)
 Government regulation (no Federal legislation
yet)
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Spam Categories
Figure 8.6, Page 459
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You’ve Got Spam
Figure 8.7,
Page 460
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Other Forms of Online Marketing
Communications
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Online catalog: Provide equivalent of paperbased catalog
Online chat: Provides equivalent of help from
sales representative
Public relations: Involves communicating with
target audiences, or publics, using methods
other than advertising
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Mixing Offline and Online Marketing
Communications
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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 to drive
sales to Web site
Most successful marketing campaigns
incorporate both online and offline tactics
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Online Marketing Metrics: Lexicon
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Impressions: Number of times an ad is served
Clickthrough rate (CTR): Percentage of people who
actually click on ad
Hits: Number of http requests
Page views: Number of pages requested by visitors
Stickiness (duration): Average length of time visitors
remain at site
Unique visitors: Number of distinct unique visitors to site
Loyalty: Percentage of visitors who return in a year
Reach: Percentage of total number of consumers in a
market who visit site
Recency: Average number of days elapsed between
visits
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Online Marketing Metrics: Lexicon
(cont’d)
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Open rate: In e-mail campaign, number of customers
who open mail
Acquisition rate: Percentage of visitors who register
or visit product pages
Conversion rate: Percentage of visitors who actually
purchase something
Attrition rate: Percentage of customers who purchase
once, but never return within a year
Abandonment rate: Percentage of shoppers who
begin a shopping cart but then fail to complete the
form and leave the site
Retention rate: Percentage of existing customers who
continue to buy on a regular basis
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Customer Tracking and Marketing
Strategies Used by U.S. Companies
Figure 8.11, Page 471
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Online Marketing Communications:
Typical Clickthrough Rates
Table 8.4, Page 471
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Clickthrough Rates by Format
Figure 8.12, Page 472
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Traditional and Online Advertising Costs Compared
Table 8.6,
Page 474
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Software for Measuring Online
Marketing Results
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WebTrends: Software program that
automatically calculates activities at site, such
as abandonment rate, conversion rate, etc.
WebSideStory: Web service that assists
marketing managers
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Web Site Activity Analysis
Figure 8.13, Page 475
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The Web Site as a Marketing
Communications Tool
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Web site can be viewed as an extended online
advertisement
Domain name: First communication an e-commerce
site has with a prospective customer
Search engine optimization:
 Register with as many search engines as possible
 Ensure that keywords used in Web site description
match keywords likely to be used as search terms
by user
 Link site to as many other sites as possible
 Get professional help
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Site Design Features that Impact Online Purchasing
Table 8.8, Page 482
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