conventional vs. internet marketing promotions - relevance to the hong kong market class: mkt6215b...

Conventional vs. Internet Marketing Promotions - Relevance to the Hong Kong Market

Class: MKT6215B

Professor: Alan Tse

Team: Amy Lui, Anthony Lau, Edwin Poon, Sarah Cheng, Terence Lee

ContentsGeneral Overview - From Conventional Marketing to

Internet Marketing promotion

Characteristics of Internet Marketing promotion

Internet Marketing Challenges

Internet Marketing in Hong Kong

Case Study - HSBC Marketing Campaign

Conclusion

Conventional Marketing Promotion

• Strategy: Mass Brand Marketing

• Media– Newspaper

– Outdoor Display

– Direct Mailing

– Phone Selling (with preprinted materials)

– Radio

– TV

Conventional Marketing Promotion

• Characteristics– Single promotion message

– Cost effective for large but simple society

– Mass Media Channels

– Mostly One-Way Communications

– Easy to execute and control

– Predictable based on experience

– Scalable

– “Interruption Marketing”

– Becoming less effective in the cluttered up market

Internet Marketing

• Impacts to the Marketing world– 2-way communications

– May improve marketers’ understanding of consumer needs

– Creative approaches made easier

– Measurability of Internet Ads and Tailored Pricing lead to similar expectation on Conventional Marketing

Internet Marketing Channels

• Banner Ads

• E-Newsletters

• Editorial Sections

• Email Marketing (Most Cost Effective! *)– Retention-based, Sponsored, or Acquisition-

based

Internet Marketing Challenges

• New Technologies, Old Goal

• Know how to best use the new tools

• From awareness to actual purchase

• Shift of Power to Customers

• Better Market Information

• Sophisticated Customer Management


• General Trends– Increased awareness and acceptance

– click rate of online ads increased from 0.35% to 0.59%

– 60% of online users were aware of the ads

– Brand awareness of online ads was 32%

– 80% respondents found ads more interactive

– 71% respondents found ads more informative

Source: Survey by Hong Kong Productivity Council (3/2000 – 1/2001)


• Characteristics of Online Advertisement

– Revenue: HK$167 million for the first nine months of 2000

– Modes:

• 51% banner ads

• 45% content sponsorship

• Only 4% emails and e-Newsletters !


• Characteristics (continued)

– Most frequently advertised products

• Consumer goods (54%)

• Telecommunication services (11%)

• Computer products (12%)

• Business services (8%)

• Financial services (7%)


• Characteristics (continued)– Pricing: “hybrid basis”, i.e., mix of

impression-based pricing and performance-based compensation

– Methods of Payment• 91% cash

• Exchanges of business opportunities

• Bartering”, or exchanges of advertisements


• Factors hindering growth– Still in infancy stage

– Small proportion of all marketing revenue

– Concentration on technology-related goods, financial services, and small dot-com’s

– Banner ads in popular websites in Hong Kong were advertisements relating to the websites themselves

– Top 20 dot-com’s in Hong Kong relied heavily on conventional marketing

Source: AC Nielsen e-Rating research conducted in late 2000


• Factors hindering growth (continued)

– Companies are reluctant to invest in online advertising until the online marketing industry becomes more mature

– Shortage of advertising revenues in turn slows down the development of Internet Marketing


• Summary

– Efficient, cost effective

– 2-way, interactive communication

– New challenge on customer relationship management

– Conventional Marketing still dominates

Case Study: The 1st Email Marketing Campaign of the HSBC e-Banking Business Team

Some background information to begin with…

• 6500 offices in 79 countries, with assets over US$673 billion at 31/12/2000

• 70% of HK bankable population have at least one account with HSBC

• First brochureware-intensive website launched in 1998

• Online@hsbc was launched 8/2000 by Project Leapfrog which started in 6/2000

Some background information to begin with…

• By 2/2001, HSBC has become the biggest online banking provider in HK, with 130,000 customers registered through online@hsbc (80% according to AC Nielsen)

• Achieved 1 million daily hit rate and 1.3 million unique visitors per month

• Online@bsbc services include applications for Credit Cards, Loan, Insurance, and security accounts

Challenges…

• No e-commerce Customer Relationship Management (CRM) system implemented nor sufficient data warehousing capability to “mine” the customer information collected online

• Need an effective email broadcasting engine

Overall objectives of the 2001 email campaigns…

• In 2/2001 HSBC budgeted HK$2M to :

– Collect 240,000 email address by end of 2001

– Run email marketing campaigns yielding a target of 20% click-through rate by end of 2001

Overall tactics of the 2001 email campaigns:

• Develop email marketing campaigns on revenue generating products – insurance, loan, credit card, and Investment products

• Test Cross-selling techniques

• Leverage viral marketing techniques

• Create synergy with offline marketing campaigns

1st email campaign:The Sony Lucky Draw• A lucky draw featuring Sony products worth HK$40,000

• Run from 1 to 25 March 2001

• Cost: HK$149,000– 28%: Design & Creative work

– 45%: Email broadcasting services

– 27%: Prizes & Incentives

• Simple 2-step online entries1. Email address

2. HKID number and 5 personal preferences

Objectives of the 1st email campaign

• Clean HSBC’s existing emails list

• Collect valid email address

• Collect HKID for future mapping purpose

• Collect customers’ lifestyle information

• Evaluate viral marketing through users’ invitation to family members and friends to participate in the lucky draw

Step 1: email address

Step 2: HKID & 5 preferences

How does it compare to conventional campaigns?

• Shorter Campaign Lead Time: 4 weeks from project proposal to campaign kick-off

• Easier content amendment during the campaign

• Lower Cost: HK$108,770 for 31,797 emails broadcasted, excluding prizes and incentives – 75% ~ 90% lower than conventional direct mailing campaigns


• Higher response rate: 10.4% compared to 2% ~ 3% for conventional direct mailing campaigns. The visit rate was 772,214 hits during the campaign period of 1-25 March 2001

• Convenient to introduce “Referral Program” simply by adding a Forwarding function

• Effective viral marketing: higher response rate from potential customers (1,014 emails) if they are referred by family members and friends


• Lower unit cost of acquisition: email addresses were acquired at HK$6.2 each compared to HK$20 ~ HK$100 per unit feedback from conventional direct mailing

• High click through rate on banner: 2.5% compared to industry average of 0.4%


• Shorter response lead time: campaign closed immediately on 25/3/2001 without having to wait for 2 to 4 more weeks for mail-in responses

• Quicker response to customers: lucky draw results were delivered to public only 5 days after the cut-off date

Conclusion

• Higher response rate

• Lower unit cost

• Shorter campaign rollout time

• Better data utilisation through software applications

• Customers are happier with Permission Marketing instead of Interruption Marketing

• Marketers must overcome the challenges to enjoy the benefit

Cost HK$149,000

Emails Collected / Collected with HKID)

23,899 / 11,755

Lucky Draw visit rate 772,214 hits

Emails opened 5,817 (17.71%)

Emails opened AND Lucky Draw participated

3,419 (10.41%)

Responses originating from HSBC homepage

8,725

Responses from “friend-get-friend”

477 referrals and 1,014 emails collected

Responses on banner ads & messages on HSBC websites

19,054

Email acquisition cost HK$6.20/Each

conventional vs. internet marketing promotions - relevance to the hong kong market class: mkt6215b...

Documents