Transcript Online Advertising

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Online Advertisements
Agenda
1. Social Networks and Online Communities
2. E-commerce Marketing Concepts
3. E-commerce Marketing Communications
1. Social Networks and Online
Communities
Social Networks and Online
Communities
• Internet began as community building technology for
scientists, researchers
• Early communities limited to bulletin boards, newsgroups
• 2002: Mobile Internet devices, blogs, sharing of rich
media began new era of social networks
• Social networks one of most common Internet activities
What Is an Online Social Network?
• Online area where people who share common ties can
interact
• Participants do not necessarily share goals
• Portals and social networks:
• Moving closer together
• Portals adding social network features
• Community sites adding portal-like services
• Searching
• News
• E-commerce services
Top Social Network Sites, 2013
SOURCE: Based on data from comScore, 2013b.
Turning Social Networks into
Businesses
•Social networks monetizing audiences through
advertising
•LinkedIn – fees for professional recruiters,
premium services
•Business use of social networks
• Marketing and branding tool
• Reaching younger audience than Web sites and e-mail
• Listening tool
• Monitoring online reputation
U.S. Ad Spending on Social Networks
2014
SOURCES: Based on data eMarketer, Inc., 2014h.
Social Network Features and Technologies
• Profiles
• Instant messaging
• Friends network
• Message boards
• Network discovery
• Online polling
• Games, widgets, apps
• Chat
• Favorites
• Discussion groups
• E-mail
• Experts online
• Storage
• Membership management
Types of Social Networks and Their
• Early social network
sites relied on subscriptions. Today
Business
Models
primarily advertising
• General communities:
• Offer opportunities to interact with general audience
organized into general topics
• Advertising supported by selling ad space on pages and
videos
• Practice networks:
• Offer focused discussion groups, help and knowledge
related to area of shared practice
Types of Social Networks and Their Business
Models
(cont’d)
• Interest-based social networks:
• Offer focused discussion groups based on shared interest in some
specific subject
• Usually advertising supported
• Affinity communities:
• Offer focused discussion and interaction with other people who
share same affinity (self or group identification)
• Advertising and revenues from sales of products
• Sponsored communities:
• Created by government, non-profit or for-profit organizations for
2. E-commerce Marketing
Concepts
The Consumer Decision Process and Supporting
Communications
Marketing Activities: From Products to Brands
The Revolution in Internet Marketing
Technologies
• Three broad impacts:
• Scope of marketing communications broadened
• Richness of marketing communications increased
• 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
Data Mining
and
Personalizati
on
SOURCE: Adomavicius and Tuzhilin, 2001b ©2001 IEEE.
The Mass Market-Personalization
Continuum
3. E-commerce Marketing
Communications
Online Advertising
• 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
Online Advertising from 2004–
2016
SOURCES: Based on data from eMarketer, Inc., 2012a, 2012b
Forms of Online Advertisements
• Display ads (banners, pop-ups)
• Rich media (Flash, HTML5, Java, JavaScript, 5% of online ad expenditures.
Includes interstitials)
• Video ads (linear, non-linear, in-banner, in-text)
• Search engine advertising
• Social network, blog, and game advertising
• Sponsorships
• Referrals (affiliate relationship marketing)
• E-mail marketing
• Online catalogs
Online Marketing Metrics: Lexicon
• Metrics that focus on success of Web site in achieving
audience or market share
• According to Laudon and Guercio-Traver (2010), in
order to understand the process of attracting
prospects to your web property by way of marketing
communications and converting them into customers,
you will need to become familiar with Web marketing
terminology.
Driving Shoppers to the Site
Impressions
• Number of times an advertisement is served.
Click-through-rate (CTR)
• The percentage of times an advertisement is clicked.
Driving Shoppers to the Site
Hits
• Number of HTTP requests. (Caveat: Hits can be misleading as a
measure of Web site activity because a “hit” does not equal a
page. A single page may account for several hits if the page
contains multiple images or graphics. A single Web site visitor
can generate hundreds of hits. For this reason, hits are not an
accurate representation of Web traffic or visits, even though
they are generally easy to measure; the sheer volume of hits
can be huge – and sound impressive – but not be a true
measure of activity.)
Driving Shoppers to the Site
Stickiness
• (Duration)Average length of stay at a Web site.
Unique Visitors
• Number of unique visitors in a period.
Loyalty
• Measured variously as the number of page views,
frequency of single-user visits to the Web site, or
percentage of customers who return to the site in a year to
make additional purchases.
Driving Shoppers to the Site
Reach
• Percentage of Web site visitors who are potential
buyers; or or percentage of total market buyers who
buy at the site.
Recency
• Time elapsed since the last action taken by a buyer;
such as Web site visit or purchase.
Driving Shoppers to the Site
Acquisition Rate
• Percentage of visitors who indicate an interest in the
Web site’s product by registering or visiting product’s
pages.
Conversion Rate
• Percentage of visitors who become customers.
Driving Shoppers to the Site
Browse to Buy Ratio
• Ratio of items purchased to products viewed.
View to Cart Ratio
• Ratio of “Add to Cart” clicks to product views.
Cart Conversion Rate
• Ratio of actual orders to “Add to Cart” clicks.
Driving Shoppers to the Site
Checkout Conversion Rate
• Ratio of actual orders to checkouts started.
Abandonment Rate
• Percentage of shoppers who begin a shopping cart
purchase, but then leave the Web site without
completing a purchase (similar to Checkout
Conversion Rate).
Driving Shoppers to the Site
Retention Rate
• Percentage of existing customers who continue to buy
on a regular basis (similar to Loyalty).
Attrition Rate
• Percentage of customers who do not return during the
next year after making an initial purchase.
Email Metrics
Open Rate
• Percentage of email recipients
who open the email and are
exposed to the message.
Delivery Rate
• Percentage of email recipients
who received the email.
Click-through Rate (Email)
• Percentage of email recipients
who clicked through to offers.
Bounce-back Rate
• Percentage of emails that
could not be delivered.
Unsubscribe Rate
• Percentage of recipients who
click unsubscribe.
Conversion Rate (Email)
• Percentage of recipients who
actually buy.
The Costs of Online Advertising
• Cost per thousand (CPM): Advertiser pays for
impressions in 1,000 unit lots
• Cost per click (CPC): Advertiser pays pre-negotiated
fee for each click ad receives
• Cost per action (CPA): Advertiser pays pre-negotiated
amount only when user performs a specific action
• Hybrid: Two or more of the above models used together
Search Engine Advertising
• Almost 46.5% of online ad spending in 2012
• 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
An Online
Consumer
Purchasing
Model
Web Site Activity Analysis
Click-through Rates by Format 2005–2008
SOURCES: Doubleclick, 2007a, b; eMarketer, Inc., 2007c; author estimates.
How Well Does Online Advertising Work?
•Ultimately measured by ROI on ad campaign
•Highest click-through rates: Search engine ads,
Permission e-mail campaigns
•Online channels compare favorably with traditional
•Most powerful marketing campaigns use multiple
channels, including online, catalog, TV, radio,
newspapers, stores
Comparative Returns on Investment
SOURCES: Based on data from eMarketer, Inc. 2010b, Direct Marketing Association (DMA), 2009.
E-mail Marketing and the Spam Explosion
• Direct e-mail marketing: E-mail sent directly to
interested consumers who “opt-in” or have not “optedout”
• Spam: Unsolicited commercial e-mail
• Spam is exploding out of control—92% of all e-mail
purportedly is spam
• Efforts to control spam:
•Technology (Filtering software) (only partly effective)
•Government regulation (CAN-SPAM and state laws) (largely
unsuccessful)
Question
References
Electronic Commerce
• Copyright © 2015 Pearson Education, Inc.
• Copyright © 2012 Pearson Education, Inc.
• Copyright © 2011 Pearson Education, Inc.
• Copyright © 2007 Pearson Education, Inc.