E-commerce Marketing
Communications
7.1
@ Lalit Sharma, JIM
Online Advertising
• Paid message on Web site, online service or other
interactive medium, such as interactive messaging
• 2010: $21.4 billion spent, expected to grow to $24.7 billion
by 2013
• 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
7.2
@ Lalit Sharma, JIM
Online Advertising from 2000-2010
7.3
@ Lalit Sharma, JIM
Forms of Online Advertisements
• Display and rich media/video ads
• Search engine advertising: Paid search
engine inclusion and placement
• Sponsorships
• Referrals (affiliate relationship marketing)
• E-mail marketing
• Online catalogs
• Online chat
• Blog advertising
7.4
@ Lalit Sharma, JIM
Display and Rich Media/Video Ads
• Display ads
– Banners
– Pop-ups
• Rich media/video ads: Employ Flash,
DHTML, Java, streaming audio and/or video
7.5
@ Lalit Sharma, JIM
Online Advertising Placement Methods
• Banner swapping: Arrangements among
firms allow each firm to have its banners
displayed on other affiliate sites for no cost
• Advertising exchanges: Act as brokers
between advertisers and publishers, placing
ads and tracking all activity related to ad
7.6
@ Lalit Sharma, JIM
Search Engine Advertising: Paid Search Engine
Inclusion and Placement
• One of fastest growing and most effective
forms of online marketing communications
• Types:
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7.7
Paid inclusion
Paid placement
Keyword advertising: Google AdWords
Network keyword advertising: Google AdSense
@ Lalit Sharma, JIM
Search Engine Advertising: Paid Search Engine
Inclusion and Placement (cont’d)
• Google, Yahoo, MSN are leaders in this
technology
• Issues:
– Appropriate disclosure of paid inclusion and placement
practices
– Search engine click fraud (when competitor hires third
parties to fraudulently click on competitor ads to drive up
costs)
– Ad nonsense (Google AdSense ads that are inappropriate
for content)
7.8
@ Lalit Sharma, JIM
E-mail Marketing and the Spam Explosion
• Direct e-mail marketing: E-mail sent
directly to interested consumers who “optin” or have not “opted-out”
• Spam: Unsolicited commercial e-mail
– Spam is exploding out of control—70%–80% of all email purportedly is spam
– Efforts to control spam:
• Technology (Filtering software) (only partly effective)
• Government regulation (CAN-SPAM and state laws) (largely
unsuccessful)
• Self-regulation by industry (ineffective)
• Volunteer efforts (not enough)
7.9
@ Lalit Sharma, JIM
Spam Categories
7.10
@ Lalit Sharma, JIM
Other Forms of Online Marketing
Communications
• Online catalog: Provides equivalent of paperbased catalog
• Blog advertising: Online ads related to content
of blogs
• Social network advertising: Ads on MySpace,
Facebook, YouTube, etc.
• Game advertising: downloadable ‘advergames’,
placing brand-name products within games
7.11
@ Lalit Sharma, JIM
Targeted Marketing: Getting Personal
• Behavioral targeting efforts increasing; one of
fastest growing online marketing techniques.
• Recent acquisitions by Google, Yahoo,
Microsoft of firms engaged in this type of
marketing have raised concerns
• Privacy groups are examining issues raised by
targeted methods
7.12
@ Lalit Sharma, JIM
Online Marketing Metrics: Lexicon
• Metrics that focus on success of Web site in
achieving audience or market share
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7.13
Impressions
Click-through rate (CTR)
View-through rate (VTR)
Hits
Page views
Unique visitors
Loyalty
Reach
@ Lalit Sharma, JIM
Online Marketing Metrics: Lexicon (cont’d)
• Metrics that focus on conversion of visitor
to customer
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7.14
Acquisition rate
Conversion rate
Browse-to-buy-ratio
View-to-cart ratio
Cart conversion rate
Abandonment rate
Retention rate
Attrition rate
@ Lalit Sharma, JIM
Online Marketing Metrics: Lexicon (cont’d)
• E-mail metrics
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7.15
Open rate
Delivery rate
Click-through rate (e-mail)
Bounce-back rate
Unsubscribe rate
Conversion rate (e-mail)
@ Lalit Sharma, JIM
An Online Consumer Purchasing Model
7.16
@ Lalit Sharma, JIM
How Well Does Online Advertising Work?
• Click-through rates may be low, but this is just
one measure of effectiveness
• Research indicates that most powerful
marketing campaigns include both online and
offline advertising
7.17
@ Lalit Sharma, JIM
The Costs of Online Advertising
• Cost per thousand (CPI): Advertiser pays
for impressions in 1,000 unit lots
• Cost per click (CPC): Advertiser pays prenegotiated fee for each click ad receives
• Cost per action (CPA): Advertiser pays prenegotiated amount only when user performs
a specific action
• Hybrid: Two or more of the above models
used together
7.18
@ Lalit Sharma, JIM
Software for Measuring Online Marketing Results
• WebTrends: Software program that
automatically calculates activities at site,
such as abandonment rate, conversion rate,
etc.
• Visual Sciences: Web service that assists
marketing managers
7.19
@ Lalit Sharma, JIM
Web Site Activity Analysis
7.20
@ Lalit Sharma, JIM
The Web Site as a Marketing Communications
Tool
• Web site can be viewed as extended online
advertisement
• Domain name: First communication ecommerce site has with 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
7.21
@ Lalit Sharma, JIM
Web Site Functionality
• Factors affecting effectiveness of a software
interface:
– Utility
– Ease of use
• Factors in credibility of Web sites:
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7.22
Design look
Information design/structure
Information focus
Responsiveness
@ Lalit Sharma, JIM
Factors in
the
Credibility
of Web
Sites
7.23
@ Lalit Sharma, JIM