Marketing on the Web – Part 1
MGMT 230
WEEK 8
This class will cover…
• The impact of the Internet on the
marketing mix
• The internet marketing toolbox
– Pay-per-click advertising on search engines
– Social media marketing overview
General aims of Web marketing: Acquisition,
Conversion, and Retention of Customers
• The first step in doing business on the Web is to
ACQUIRE or draw visitors to the site itself –
driving traffic
• The second step is CONVERTING those first time
visitors into customers by persuading them to
make a purchase or register with the site, etc.
• Customers who return to the site one or more
times after making their first purchases are
RETAINED customers (site stickiness is important).
The 4Ps of the
marketing mix in
transition
The impact of the Internet on the traditional
marketing mix framework
• Product – new products, the rise
of the “prosumer”
• Price – dynamic pricing,
comparison pricing,
bidding……..FREE!
• Place – direct distribution of
digital products, supply chain
management, channel integration
• Promotion – new social and
communications media,
measurable advertising
• Strong trend towards
personalization and away from
the mass (undifferentiated)
market affecting all the elements
of this framework
• The Six “I”s Framework
–
–
–
–
–
–
Interactivity
Intelligence (market)
Individualization
Integration
Industry restructuring
Independence of
location
MacDonald and Wilson. The New
Marketing, 2002
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Interactivity
• The internet is not TV
• Conversation, not broadcast
• Pull, not push
• Active rather than passive (lean-forward medium)
• Social Networking / User Generated Content / Web 2.0
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
[Market] Intelligence
• By the very act of using the internet, we are
“telling” marketers what we want:
• Passively
• Clickstream data
• Web analytics
• Actively
• Social network updates, photos, videos, reviews, forum
postings etc
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Individualization
Same message to all customers or
segments
Traditional
media
Message tailored to each customer or micro-segment
New
media
• The market of
one: based on
the information
about customers
that we provide,
and that is
collected
automatically
and monitored
constantly
• Amazon for
example
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Integration
• Online marketing is very readily integrated
into a marketing communications strategy
• Web channels complement and integrate with
offline marketing channels
– EXAMPLES?
• Call a customer service rep for assistance
• Movie trailers on YouTube
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Industry restructuring and
Independence of location
INDUSTRY RESTRUCTURING
• Disintermediation –
traditional
intermediaries used by
marketers disappearing
• Re-intermediation new
intermediaries (eg.
PayPal)
• Business models
challenged
LOCATION INDEPENDENCE
• Increased reach to
global markets
• Increased exposure
• Increased competition
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Product trends online
• Digital value – adding value to products
through online means
• Digitization – product or place?
• Personalization – individualized products and
the “prosumer”
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Digital goods distribution
• Any product that can be digitized can be delivered
over the Internet
• Online distribution costs are significantly lower
– No inventory problems
– No product depletion
• Completely new business models based on digital
distribution methods
• Internet becomes a direct substitute for an offline
distribution channel eg. online banking
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Some industries that are undergoing rapid
change due to Internet forces affecting
product and place
•
•
•
•
•
Recorded Music industry
Video/DVD rental industry
Newspaper and magazine publishing
Banking
Book publishing / Textbook publishing
• Forces for change:
– Digitizable product
– Self service
– Direct to consumer shift
– Personalization
Pricing
• Internet influences – buyer and seller
perspectives of price
• Moving from free to fee (and freemium)
• Price comparisons / transparency
• Choice!
• Dynamic pricing
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Online promotion
• There are many new techniques available to
marketers to promote goods and services
online
• Permission marketing
• The big value of internet marketing for
promotion – ability to measure results and
therefore performance based
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
THE INTERNET MARKETING
TOOLBOX – OWNED, EARNED, AND
PAID MEDIA
The big picture
of internet
marketing
Planning and
management
Email /
messaging
Domains,
usernames,
hashtags
Being
found
Demographics
Market research
Advertising
Own
Website
Social
media
(owned
&
earned)
Content &
technologies
Text, video,
images, AR, VR
Analytics,
Data
management
Law,
Regulation,
ethics
The internet marketing toolbox
Blogging
Video
Mobile
Interactive
display
advertising
Twitter
General
social
networks
The internet
marketing
toolbox
Search
advertising
Niche social
networks
Search engine
optimization
eMail
AR, VR
Owned, earned, and paid media
• Owned media: “media owned by the brand. Online
this includes a company’s own websites, blogs,
mobile apps or their social presence on Facebook,
LinkedIn or Twitter [etc]” Dave Chaffey
• Earned media: “Earned media also includes word-ofmouth that can be stimulated through viral and
social media marketing and includes conversations in
social networks, blogs and other communities.” Dave
Chaffey
• Paid media: “media where there is investment to pay
for visitors, reach or conversions” Dave Chaffey
Owned, earned and paid media:
role, benefits & challenges
http://www.smartinsights.com/digitalmarketing-strategy/customer-acquisitionstrategy/new-media-options/
SEARCH ENGINE ADVERTISING (PAY
PER CLICK) – “PAID MEDIA”
Search engine marketing – 2 major
methods
Search engine marketing is the umbrella concept
OBJECTIVE IS TO BE IN THE TOP FEW SEARCH RESULTS
1.
Search engine optimization (SEO) – relies on the content of
web pages plus inbound link quality – called organic
positioning (we looked at this in Week 4)
2.
Search engine advertising: Pay-Per-Click (Today’s class)
BOTH RELY ON THE CONCEPT OF KEYWORDS /
PHRASES
Paid listings
(advertisements)
Organic
listings
Internet advertising formats (IAB report for 2014)
Search engine advertising – why is it so
popular with marketers?
• Search engines allow marketers to bid on specific key words ie. buy their way to the top
• Performance model is attractive (no clicks on the ad, no
payment for the ad)
• Less consumer resistance that other forms of advertising (but
remember that the click-through-rate is still quite low –
around 2%)
• Print directory versus search advertising for SME?
–
–
–
–
Effectiveness can be directly measured
Speed of execution and “tweaking” of advertising copy
Speed of consumer response
Usually more cost-effective
The importance of keywords / key phrases in
PPC advertising
• Keywords are the search terms people type into
search engines
– in search engine advertising the keywords / key
phrases are the terms that “trigger” the
advertising when someone types them into the
search box (the page must be relevant to the
keywords or Google will regard it as deceptive
advertising)
• The concept of the “landing page”
Bidding on keywords: how search engine
advertising works
• The position of the ad on the page is not just related
to the bid price, and is not decided in advance
• At the moment a person types in a search query and
presses enter a real-time auction takes place to
decide the position of the ad
– Google uses a combination of the bid price or cost
per click (CPC) and the ad relevancy or clickthrough rate (CTR) - the “Quality Score”
• CPC x CTR = Google AdRank Understanding Ad
Rank
• Geo-targeting (language and location)
• Setting a daily budget
Not just search results pages
• PPC advertisements purchased from search
engines also appear across their advertising
networks
– These ads are triggered in a different way
• Google Adsense is for publishers
One of the problems with PPC advertising? Click
fraud
• Two main types of click fraud:
– Search engine click fraud: artificially raising a competitor’s marketing
costs or exhausting their budget to remove them from their position in
the listings (usually on very high cost or competitive key terms)
– Publisher click fraud: artificially raising a publisher’s income from
AdSense
• Estimated 10% to 15% of ad clicks are fake, representing roughly $1
billion in annual billings (Business Week, 2006).
• Search firms have put tools in place to detect and prevent click fraud
(but have still been sued by advertisers)
• Where are we now with click fraud?
• Mobile clicks in error are now an increasing problem
• Display advertising is now the target of massive ad fraud (we will talk about this
next week)
Paid search versus SEO
Paid search
SEO
•
Results can be seen immediately
through increased traffic.
•
•
•
But : no spending = no results
•
•
Greater control over which keywords
are most associated with their
company, brands, products or
services.
•
•
•
Additional metrics are available,
which means more detailed Web
analytics that yield sophisticated
knowledge from the data.
Results are gradual – can take months
But the results can persist –
maintaining position over time
Searchers find it more acceptable
than advertising
Can be complex and may require
external expertise
One process – many results (tends to
bring results across many search
engines, not just one)
http://www.iab.net/insights_research/947883/1675/708987
DO BOTH!
Google local business listings (not SEO)
• Very important for local businesses to keep
their information updated with Google via
Google My Business
• This impacts the business listings that appear
when someone does a local search
– Relate to reviews and distance from searcher
(especially important on mobile)
SOCIAL MEDIA MARKETING
“OWNED AND EARNED MEDIA”
The growth of the participative web
• The First Generation Web (1989 – 2003-ish)
– Publishing medium; predominantly one-way / asymmetrical
• The Next Generation: Web 2.0 – What is Web 2.0? (Tim O’Reilly).
• The Machine is Us/ing Us - the classic viral video by Mike Wesch
from 2007
– The participative web
– Publishing tools in the hands of users – communication now 2-way. The
web is “us”
– User-generated content
– Focus on the user/participant
• Media becomes gradually more “social” in the early to mid 2000s
–
–
–
–
–
2002: Friendster
2003: MySpace
2004: Facebook
2005: YouTube, Reddit
2006: Twitter
Social media
• "a group of Internet-based applications that build on
the ideological and technological foundations of Web
2.0, and that allow the creation and exchange
of user-generated content.“ Andreas Kaplan and Michael
Haenlein
• Also sometimes called “consumer-generated media”
“Social” media includes…
• “The online tools and platforms that people use
to share opinions, insights, experiences and
perspectives with each other.”
Catherine Seda
• Includes
–
–
–
–
–
–
Social networking sites (many types)
Blogs and microblogs
Wikis
Podcasts and vodcasts
Forums
User Generated Content of all kinds
Type of social network
Some examples
Business/professional networking
LinkedIn
Social Q&A
Quora, Yahoo Answers
General social communities
Facebook, Google+, My Space, Pinterest, Reddit
Blogs & microblogs
WordPress, Twitter, Plurk, Tumblr, LiveJournal
News sharing / creation
NewsVine, NowPublic, Slashdot
Social bookmarking / curation
Delicious, Pinboard, StumbleUpon, Flipboard
Video / photo sharing
YouTube, Vine, Vimeo, UStream, Livestream,
Flickr, Instagram, SnapChat, Twitch
Virtual / social gaming worlds
SecondLife, WoW, Minecraft, LBP
Subject specialist / niche communities
Nature Network, Goodreads, Jamendo, Flixter,
Soundcloud,
Document sharing / collaboration
Slideshare, Google Docs, Prezi
Product-based communities
Amazon, eBay, Dell
Location-based (check-in) services
Foursquare, Gowalla
Reviews and ratings
Yelp, TripAdvisor, Amazon reviews
Messaging
WhatsApp, Skype, Viber, WeChat, SnapChat
Frequency of social media site use
• Facebook, Instagram,
and Twitter have highest
engagement levels, with
multiple daily usage.
Pew Research Internet Project. Social Media Update 2013
Demographics
• Facebook popular across a diverse mix of demographic
groups
• Pinterest - women are four times as likely as men to be
Pinterest users
• LinkedIn - especially popular among college graduates
and higher income households.
• Twitter and Instagram - younger adults, urban
dwellers, and non-whites.
• Substantial overlap between Twitter and Instagram
user bases
• Demographics of key social networking platforms
Pew Research Internet Project. Social Media Update 2013
Marketing using social networking
sites: still experimenting
• We are in an “attention economy”
– People’s attention is the scarce resource today
• Marketers should go where the people are, not
expect the people to come to them
– Behavioural and contextual advertising
– Brand presence eg. Facebook, Twitter, Google + Viral
marketing – spreading memes
– Earning trust – by using an “authentic voice”
– Generating traffic / interest
– Enhancing reputation
– Customer support
Owned and earned in social media
• Owned media
– An organization’s own Facebook page, Twitter
account, Pinterest account etc
• Earned media
• Likes, comments, shares on Facebook
• Retweets, mentions, favourites on Twitter
• Repins, favourites, comments on Pinterest
• Big problems for marketers with decreasing “organic”
reach – especially on Facebook
The Edgerank algorithm tweaked to reduce
organic reach
• Analysis of more than 100 brand
pages - organic reach was around
6 percent, a decline of 49 percent
from October 2013
• For large pages with more than
500,000 Likes, organic reach hit 2
percent in February 2014
• “Organic reach of the content
brands publish in Facebook is
destined to hit zero. It’s only a
matter of time.”
• Marketers being pushed to paid
media
http://social.ogilvy.com/facebook-zero-considering-life-after-the-demise-of-organic-reach/