Chapter 9
Marketing and Advertising
in E-Commerce
Learning Objectives
1. Describe factors that influence online consumer
behavior.
2. Understand the decision-making process of online
consumer purchasing.
3. Discuss the issues of e-loyalty and e-trust in
electronic commerce (EC).
4. Understand segmentation and how companies are
building one-to-one relationships with customers.
5. Explain how consumer behavior can be analyzed
for creating personalized services.
Learning Objectives
6. Understand consumer market research in ecommerce.
7. Describe the objectives of Web advertising and its
characteristics.
8. Describe the major advertising methods used on
the Web.
9. Learn mobile marketing concepts and techniques.
10. Describe various online advertising strategies and
types of promotions.
11. Understand some implementation issues.
Learning About Online
Consumer Behavior
• A Model of Consumer Behavior Online
Influential factors
o The attitude-behavior decision process
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• The Major Influential Factors
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Consumer Characteristics
Merchant and Intermediary-Related Factors
Product/Service Factors
EC Systems
Environmental Factors
EC Model of Online Consumer Behavior
The Consumer
Purchasing Decision Process
• A Generic Purchasing-Decision Model
o Need identification
o Information search
• *Product brokering
• *Merchant brokering
o Evaluation of alternatives
o Purchase and delivery
o Post-purchase activities
The Consumer
Purchasing Decision Process
• Players in the Consumer Decision Making
Process
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Initiator
Influencer
Decider
Buyer
User
• Shopping Cart Abandonment
Loyalty, Satisfaction, and
Trust in E-Commerce
• *Customer Loyalty
o *E-loyalty
• Satisfaction in EC
Loyalty, Satisfaction, and
Trust in E-Commerce
• Trust in EC
o *Trust
o EC Trust Models
• *Online trust
o How to Increase Trust in EC
• Improve Your Website
• Objective Third-party Seals
• Establish Trustworthiness
o Other Methods For Facilitating Trust
• *Reputation-based Systems
• Online Word of Mouth
Mass Marketing, Market Segmentation,
and Relationship Marketing
• From Mass Marketing to One-to-One Marketing
o Mass Marketing and Advertising
o *Market Segmentation
o Relationship (One-to-One) Marketing
• *Relationship marketing
• *One-to-one marketing
• How One-to-One Relationships Are Practiced
From Mass Marketing to
Segmentation to One-to-One
The One-to-One Marketing Cycle
Sources: Compiled from Greenberg 2 010 and the authors’ experience
Personalization and
Behavioral Marketing
• Personalization in E-Commerce
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*Personalization
*User profile
*Cookie
Web Cookies for Data Collection
Using Personalized Techniques to Increase Sales
Personalization and
Behavioral Marketing
• Behavioral Marketing and Collaborative
Filtering
o *Behavioral Targeting
o *Collaborative Filtering
o Other Methods
• Rule-based filtering
• Content-based filtering
• Activity-based filtering
o Legal and Ethical Issues in Collaborative Filtering
o Social Psychology and Morphing in Behavioral Marketing
o Use of Customer Database Marketing
Market Research
for E-Commerce
• Objectives and Concepts of Market
Research Online
o What Are Marketers Looking For in EC Market
Research
Market Research
for E-Commerce
• Representative Market Research Approaches
o Data Collection and Analysis
o Online Surveys
• Web-Based Surveys
• Online Focus Groups
o Hearing Directly from Customers
o Data Collection in Social Networks and Other Web 2.0
Environments
o Observing Customers’ Movements Online
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*Transaction Logs
*Clickstream behavior
Cookies and *Web Bugs
*Spyware
o Web Analytics and Mining
o Clickstream Analysis
• *Clickstream data
• *Web mining
Market Research
for E-Commerce
• Limitations of Online Market Research and
How to Overcome Them
o Privacy Issues in Market Research
• Biometric and Smartphone Marketing Helps
Market Research
o *Biometric
o *Mobile market research
Web Advertising
• Overview of Web Advertising
o *Interactive marketing
o The Advertising Cycle
• Basic Internet Advertising Terminology
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*Ad views
*Button
*Click (ad click)
*CPM (cost per mille, i.e., thousand impressions)
*Conversion rate
*Click-through rate/ratio (CTR)
*Hit
*Landing page
*Page
The Advertising Cycle
Web Advertising
• Why Internet Advertising?
o Advertising Online and Its Advantages
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Cost
Media richness
Easy updating
Personalization
Location-based
Linking to shopping
o Traditional Versus Online Advertisement
Online Advertising Methods: From
E-Mail to SEO and Video Ads
• Major Categories of Ads
o Classified Ads
o Display Ads
o Interactive Ads
• *Banners
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*Random banners
*Static banners
*Pop-up banners
*Personalized banners
*Live banners
Benefits and Limitations of Banner Ads
*Banner swapping
*Banner exchanges
Online Advertising Methods: From
E-Mail to SEO and Video Ads
• Pop-Up and Similar Type Ads
o *Pop-up ad
o Pop-up Videos
• *E-Mail Advertising
o *E-mail Marketing
o Major Advantages and Limitations of E-Mail Advertising
o Implementing E-Mail Advertising
• E-Mail Hoaxes
• Fraud
Online Advertising Methods: From
E-Mail to SEO and Video Ads
• Search Engine Advertisement and Optimization
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*Search Advertising
Keyword Advertising
URL Listing
*Search engine optimization (SEO)
• Sponsored Ads (Paid Inclusion)
• Google: The Online Advertising King
o Google’s Major Advertisement Methods: AdWords and
AdSense
The Process of
Search Engine Optimization
Online Advertising Methods: From
E-Mail to SEO and Video Ads
• *Viral marketing (viral advertising)
• Video Advertising
o *Viral video
o Consumer-Generated Videos
o *Interactive Videos
• Video Click-Throughs
• Live Interactive Videos
o *Advergaming
(in-game advertising)
• Augmented Reality Advertisement
• Advertising in Chat Rooms and Forums
IAB Model of Video Advertising
Source: Interactive Advertising Bureau. “A Digital Video Advertising
Overview.” January 2008. iab.net/media/fi le/dv-report-v3.pdf (accessed July 2014). Used with permission.
Mobile
Marketing and Advertising
• Mobile Marketing and Mobile Commerce
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*Mobile marketing
*Mobile advertising (m-advertising)
Mobile Interactive Advertising
Types of Mobile Ads
• Short Message Ads
• Location-Based Ads
• Viral Mobile Marketing
o Mobile Marketing and Advertising Campaigns
Process of Mobile Advertising
Mobile
Marketing and Advertising
• Mobile Marketing Implementation
Guidelines
• Tools to Support Mobile Advertisement
• Mobile Ad Trends
Advertising Strategies
and Promotions
• *Permission Advertising
• Other Advertising Strategies
o Affiliate Marketing and Advertising
• *Affiliate marketing
• *Affiliate network
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Paying People to Watch Ads
Selling Space by Pixels
Personalized Ads
Advertising as a Revenue Model
• *Pay per click (PPC)
o Choose-Your-Own-Ad Format
Advertising Strategies
and Promotions
• Online Events, Promotions, and Attractions
o Live Web Events for Advertising
• Localization in Advertising
o *Localization
• Developing an Online Advertising Plan
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Set up advertising goals
Identify target customer
Choose media and advertising tools
Develop action and implementation plans
Develop performance measurement and monitoring plans
Execute plans and evaluate performance
• Advertising on Facebook
Life Cycle of Advertising Plans
Managerial Issues
1. Do we focus on value-creating customers?
2. Which Internet marketing/advertising channel(s)
do we use?
3. What metrics do we use to guide advertisers?
4. What is our commitment to Web advertising?
5. Should we integrate our Internet and non-Internet
marketing campaigns?
6. Who will conduct the market research?
7. Should we use mobile coupons?
8. What ethical issues should we consider in online
marketing?
Summary
1. Factors influencing online consumer
behavior.
2. The online consumer decision-making
process.
3. Increasing loyalty and trust.
4. Market segmentation and building
one-to-one relationships with
customers.
5. Online personalization.
Summary
6. EC consumer market research.
7. Objectives and characteristics of
Web advertising.
8. Major online advertising methods.
9. Mobile marketing.
10.Various advertising strategies and
types of promotions.
11.Implementation topics.