Transcript No Slide Title

Chapter 5
(with modifications)
J.Molka-Danielsen
Advertisement in
Electronic Commerce
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Learning Objectives
Web Advertisement
methods
Strategies
Promotion technologies
Economic issues (who pays, what benefits)
Implementation issues, catalogs, email
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Opening Case:
Advertisement in the Digital Economy
Theknot.com and Wedding411.com
Information about planning weddings
Assistance selecting vendors
Show related vendor ads
Promosinmotion.com
VW beetle cars painted with Web site logos
Real life product shows there is an on-line web site
Topbulb.com
Online catalog for light bulbs
Online displays show there is an off-line business
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Opening Case:
Advertisement in the Digital Economy
Toyota
When anyone searches altavista.com on cars, the
Toyota banner gets displayed.
Kelly Blue Book (kbb.com) new car prices has
links to Toyota site. 10,000 users in 2 months
clicked on the ad.
IBM
Uses banners linked to college campuses to
promote recruitment: “There is life after Boston
College: click to see why” (click rate 5-30%)
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Web Advertisement Terms
Advertising is an attempt to disseminate information in
order to affect a buyer-seller transaction
Internet Advertising Terminology
Effective frequency
Hit
Impressions
Reach
Visit
Ad views
Banner
Click (ad click)
Click ratio
Cookie
CPM
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Visits and Page Views
Judith Molka-Danielsen -- Site Summary –
02.02.02
Visits
Total ........................ 3,664
Average per Day .................. 9
Average Visit Length .......... 2:32
This Week ...................... 125
Page Views
Total ............... 5,751
Average per Day ................. 14
Average per Visit .............. 1.6
This Week ...................... 195
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Free & Pay tools for advertisement
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Visitors by IP address
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Site Tracking by Timezone
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Visitors by Operating System
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Referrals
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Why Ads on the Web (cont.)
Why Internet Advertisement?
3/4 of PC users gave up some TV time
Want the educated, high-income
Internet users
Update any time, at minimal cost
Reach a large number of viewers
Online ads cheaper than TV, newspaper,
or radio ads
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Why Web Advertisement (cont.)
Why Internet Advertisement?
Use text, audio, graphics, and animation
Combine games, entertainment, and
promotions
Web TV and Internet radio are attracting
more people
Web ads can be interactive and targeted
Use of the Internet is growing very rapidly
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Figure 5-1
Adoption Curves for Various Media
Source: Morgan Stanley Technology Research.
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Beginning of Web (History)
1969 ARPAnet established.
1981 BITNET university and research network. First to use
LISTSERV software for managing e-mail lists.
1983 the term Internet coined (based on TCP/IP).
1984 Gateways between BITNET and ARPAnet established.
Tim Berners-Lee (TBL) wrote the first client-browser
(Enquire) and initial specifications for HTTP and HTML. He
first envisioned the only thing the client woud do is get a statitc
page. (He is called the inventor of the Web.)
1989, (Mar) TBL working at the Swiss Institute for Particle
Physics (CERN) wrote "Information Management: A
Proposal"
1990, Oct. TBL starts work on a hypertext GUI
browser+editor and coins the term WWW, demonstrates it in
Dec.
1992, Jan. Line mode browser available by FTP.
1993, (Jan) X and Mac browsers released. 50 known
servers. (Feb) NCSA release Andreessen's "Mosaic for X”.
(Oct) Over 200 known HTTP servers.
1994, March Marc Andreessen and colleagues leave NCSA
to form "Mosaic Communications Corp" (now Netscape).
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Web Advertising (cont.)
Mass Marketing Direct Marketing Interactive Marketing
Volume sales
Best outcome
Consumer behavior Passive
Leading products Food, personal-
Market
Credit cards,
travel, autos
care products,
beer, autos
High volume
Nerve center
Madison Ave.
Preferred
media vehicle
Television,
magazines
Storyboards
Preferred
technology
Worst outcome
Customer data
Passive
Targeted goods
Postal distribution
centers
Channel surfing
Customer relationships
Active
Upscale apparel, travel,
financial services, autos
Targeted individuals
Cyberspace
Mailing lists
Online services
Databases
Servers, onscreen
navigators, the Web
Logoff
Recycling bins
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Targeted Ads (cont.)
Targeted Advertisement (one-to-one)
The DoubleClick (DC) Approach—3M /ciro,
wants to advertise its $10,000 multimedia
projectors
DC monitors people browsing the Web sites of
cooperating companies
Matches them against a database
Finds those people working for advertising
agencies or using Unix system (potential
buyers)
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Targeted Advertisement (cont.)
Targeted Advertisement (one-to-one)
The Double Click (DC) Approach for 3M Corp.
(cont.)
Learn about you, your spending, and your
computing habits using ‘a cookie’
Prepares an ad for 3M projectors targeted
for people whose profile matches what is
needed for 3M
DoubleClick shares revenue with
cooperating partners (incentive for 3M
allowing the ads, also promote partners)
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Web Advertisement (cont.)
Summary: Pros of Internet Advertisement
Internet ads accessed on demand (24/365)
costs are the same regardless of audience
location (larger geographic spread)
Accessed because of INTEREST, so market
segmentation opportunity is large
Opportunity for one-to-one marketing
Multimedia will get better, make web ads
better
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Evaluate the Ad Methods
Banners--banners are everywhere
Keyword banners
Random banners
Banner Limitations
Banner Benefits
Can be Customized
Use push “force
advertising”
Direct link to advertiser
(shoppers don’t have to
search)
Multi media capabilities
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High cost
Declining click ratio—
viewers may think its
annoying
Size of banners is too
small (not noticed)
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Advertisement Methods (pricing schemes.)
Banner swapping
Direct link between 2 sites. (bartering 1-to-1)
Banner exchanges (can be 3rd party)
1. Firm submits a banner
2. Receives credit (less than 1-to-1) when they
show others’ banners
3. Can purchase additional display credits
4. Specify what type of site where the banner is
displayed (another business, or portal site)
5. Use the credit to advertise on others’ sites (2:1)
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Evaluate the Ad Methods (cont.)
Standard (pop up boxes that look like
newspaper or magazine ads) and classified
ads
Micro-sites
5 advertising sizes larger than banners
Pop-up boxes at sites they are linked to
Classified ads
Special sites (classifieds2000.com)
Free or for fee depending upon size
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Evaluate the Ad Methods (cont.)
E-mail
Same benefits:
Access many, low costs, can use databases
to target groups.
Same Problems:
Purchase of e-mail addresses hurts trust
Increasing Junk mail
Increasing Spamming
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Cookies can be disabled by the user.
Only the information
that you provide, can
be stored in a cookie.
The site cannot know
your e-mail name
unless you choose to
type it. Allowing a
Web site to create a
cookie does not give it
or any other site access
to the rest of your
computer, and only the
site that created the
cookie can read it.
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Cookies after one 30 sec. visit
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Evaluate the Ad Methods (other
opportunities.)
Mobile phones
Interactive one-to-one ads
Location, situation, weather-related ads
Splash Screen (better effects)
Capture the user’s attention
Promotion or lead-in (Molde Jazz Festival, its
optional so the viewer can skip it.)
Major advantage: create innovative multimedia
(Gives more of an experience.)
Spot leasing
Permanent space on popular portal or Web page
Ads may be small and expensive
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Evaluate the Ad Methods (cont.)
URL (Universal Resource Locators) on Search
Engines.
Advantages:
Minimal cost is associated with it
Submit your URL to a search engine and be
listed
Keyword search is used
Disadvantages:
Search engines index their listings differently
Meta tags can be complicated
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Evaluate the Ad Methods (cont.)
Chat Rooms
Virtual meeting ground
Free to add this feature to a business site
Advertisers can search the messages and
target the chatter again and again (but
annoying!)
Can be more effective than banners
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Advertisement Strategies
Tips for Internet-based Ad Design
Visually appealing
Targeted to specific groups
Emphasize brands and a firm’s image
Part of an overall marketing strategy
Seamlessly linked with the ordering process
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Advertisement Strategies (cont.)
Internet-based ad design: important factors
Page-loading speed
Graphics and tables—simple, meaningful,
and match standard monitors
Thumbnail (icon, graphs) are useful
Business content
Clear and concise text with compelling
page title and header text
Minimal amount of information requested
for registration
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Advertisement Strategies (cont.)
Internet-based Ad Design: Important Factors (cont.)
Navigation efficiency and compatibility
Links—well-labeled, accurate, meaningful
Site—compatible with browsers, software, etc.
Security and privacy
Security and privacy must be assured
Must provide option for rejecting cookies
Marketing Customer Focus
Clear terms/conditions of the purchases—delivery
information, return policy, etc.
Confirmation page after a purchase
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Advertisement Strategies (cont.)
Pull (Passive) Strategy
Site itself provides attractive contents and display
Use a non-commercial site that guides the
process of finding customer requests
Yahoo— portal search engine site as an effective
aid for advertisement
Push (Active) Strategy
Sending e-mails or pop-up ads from collected
cookie information.
Obtaining mailing lists, cookie files.
Mailing list generation—use agents, cookies,
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questionnaires
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Advertisement Strategies (cont.)
Associated Ad Display Strategy
Associate the content of a Web page with a
related ad like:
Search Yahoo on a topic, a banner
pops up offering “search for books at”
Amazon.com
Barnesandnoble.com
Keyword banners
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Eudora E-mail on covering the add
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Ad Payment Strategies (cont.)
Ads as a commodity
CyberGold (MyPoints.com)
Direct payment made by the advertisers
for ads viewed
CyberGold distributes targeted banners
Reader clicks the banner, passes some
tests on its content, and is paid for the
effort
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Advertisement Strategies (cont.)
Viral marketing—word-of-mouth over the
Internet
Forwarded e-mail messages from sites
“Advocacy marketing”—hotmail.com
Each e-mail sent invited free hotmail service
Company grew from 0 to 12 million in 18
months
Downsides
E-mail hoaxes
Spread of viruses
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Comparison Sites as medium for
advertisement
Customer learns about alternative products
and where to purchase: the least cost place
Source: Korean Engine (no longer in business).
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Online Events, Promotions,
and Attractions
Enticing Web surfers to read Internet ads
Yoyodine, Inc.
Give-away games, discounts, contests,
sweepstakes
Entrants agree to read product information
of advertisers
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Online Events, Promotions,
and Attractions (cont.)
Enticing Web surfers to read Internet ads
Use real people to help you (Egghead)
Uses phone interviews that lead to material and
ads sent to your computer (Lucent)
Retailers give special offers as shoppers “check
out”
Run sweepstakes (Netstakes, no skills necessary)
Offer free internet access (Netzero), or free
samples (freesamples.com)
Use company logo as cursor
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Push Technology (only partly discussed)
Push on the Intranet (Push technology I would refer to
as pervasive technology. It has greater importance than
just marketing. Discuss in a later lecture.)
Companies set up their own channels to pointcast important
internal information to:
their own employees (on intranets)
their supply chain partners (on extranets)
The Future of Push Technology
Drawback: the bandwidth requirements are large
Experts’ prediction: the technology will never fly (difficult to
implement on the current Internet.)
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Effectiveness and Pricing of Advertisement
Methods for measuring advertisement
effectiveness, conducting cost benefit analyses,
pricing ads
Interactivity
Exposure Models
Multiple of number of
guaranteed ad views
Based on how customer
interacts with the ad view
Number of hits
How much time was spent
viewing the ad
Click-Through
Number of times
customers click on banner
Only effective for large
corporations
Actual Purchase
Referral fee based on
customers moving to ad site to
make a purchase
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Online Catalogs as a form of
advertising
Evolution of online catalogs
Consist of product database, directory and search
capability and presentation function
Replication of text in paper catalogs –orMore dynamic, customized and integrated
Ready-made catalogs: same catalog to all
customers
Customized Catalogs: customized contents
and display depending upon the customers
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Online Catalogs (cont.)
Electronic catalogs allow integration of
Order taking and fulfillment
Electronic payment
Intranet workflow
Inventory and accounting system
Suppliers’ extranet
Relationship to paper catalogs
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Customized Catalogs
Customization systems can:
Create branded, value-added
capabilities
Allows user to compose order
Individualize prices, products, and
display formats
Automatically identify the characteristics
of customers based on the transaction
records
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Special Advertisement Topics
How much to advertise
Permission advertisement
Measuring, auditing, and analyzing
Web traffic
Self-monitoring of traffic
Internet ad standards
Localization
Internet radio for localization
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Special Advertisement Topics (cont.)
Major Web ad players
Advertising agencies and Web site
developers
Market research providers
Traffic measurement and analysis
companies
Networks/rep firms
Order processing and support
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Managerial Issues
Where to get attention: Find the most visited
sites
Company research: make vs. buy
Integrated marketing campaigns: Web
advertising coordination with traditional
advertisement
Ethical Issues
Integrating advertisement with ordering and
other business processes
Content is critical
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