Role Of E –

Commerce In

Marketing Communication

The importance of the webOnline is no longer a niche channel worthy of investment for the future. It is a significant channel now and should be actively managed.

Advantages:Internet is where audience is movingAd targetingGreater opportunities for interactivity

Disadvantages:Cost versus benefitHow to adequately measure results

Supply of good venues to display ads

The Battle for Attention on the Web As consumers become more tech-savvy, businesses must work harder to grab their attention.

5 General Digital Marketing Stats

1. The average person now spends more time online than with TV and all other media (newspapers, magazines, etc.) combined. (Branding Bricks)

2. Total spending on Internet advertising is predicted to grow 12.9% next year. The Internet will become the largest medium for advertising in 2016 (ahead of TV). (MediaPost)

3. Less than 8% of total B2B product sales are closed directly through the Internet, versus 15% for B2C products. (The CMO Survey)

4. Social ad spending has doubled over the past two years. (iMedia Connection)

5. By 2019 mobile advertising will represent 72% of all digital ad spending. (Payfirma)

Online Advertising from 2005–2014

Global 400 million users of Internet worldwide

Electronic Payment Of Bills And Banking Will Cost US Postal Service $17bn Over 10 Years.

Online Advertising by Industry

Where are the opportunities? There are three main opportunities that online sales present:1. Incremental revenues:

The internet is a level playing field in terms of sales and marketingEveryone can attract new clients through very targeted and measurable marketingGlobal distribution reach is available to all, not just the major brands that have global networks

2. Reduced cost of sale:A brand web site has the lowest cost of saleEnables business to be “channel shifted” from more expensive channels, such as travel agency or call centresA strong brand web site enables the reliance on OTAs to be reduced and relationships to be renegotiated in order to bring down the overall cost of sale

3. Enhanced brand loyalty and client relationships A direct client should be retained for future marketing and relationship buildingA customer booking through an OTA is likely to remain loyal to the booking channelActively seek to build relationships with clients delivered through OTAs for future, cheaper marketing

Top Left Is The Most Valuable Area Of The Page

Summary and examples of transaction alternatives between businesses, consumers and governmental organisations

Exhibit 1.5: A Comprehensive Framework for your e-commerce strategy

Media Infrastructure

e-Commerce Strategy

Public Policy

Technology Infrastructure

Capital Infrastructure

The Battle for Attention on the WebSticky content keeps customers’ attention.

sticky content information or features that entice visitors to stay for long periods of time and return frequently

It helps to keep them on your Web site long enough to make a purchase.

Ways to Make Your Site Sticky

Another way e-commerce companies create sticky sites is with dynamic content.

dynamic content Web site information that frequently changes or is updated

Information in Log Files

The Battle for Attention on the WebYou can use the number of unique visitors to track spikes and dips in site traffic.

site traffic the total activity on a site

Another problem is spoof e-mail.spoof e-mail e-mail in which the sender’s address is forged to appear as if it came from a legitimate source

Spoof e-mail usually contains an urgent warning for the customer to update credit-card or other personal information, with a link provided to a “trusted” company site. When customers click the link, they are taken to a fake page where identity thieves wait to steal their private information.

Forms of Online Advertisements

Display and rich media adsSearch engine advertising: Paid search engine inclusion and placementSponsorshipsReferrals (affiliate relationship marketing)E-mail marketingOnline catalogsOnline chatBlog advertising

Display and Rich Media AdsDisplay ads

BannersPop-ups and pop-unders

Rich media ads: Employ Flash, DHTML, Java, streaming audio and/or video

InterstitialsSuperstitials

Online Advertising Placement Methods

Banner swapping: Arrangements among firms allow each firm to have its banners displayed on other affiliate sites for no costBanner exchanges: Arrange for banner swapping among firmsAdvertising networks: Act as brokers between advertisers and publishers, placing ads and tracking all activity related to the ad

Search Engine Advertising: Paid Search Engine Inclusion and Placement

One of fastest growing and most effective forms of online marketing communicationsTypes:

Paid inclusionPaid placementKeyword advertisingNetwork keyword advertising

Search Engine Advertising: Paid Search Engine Inclusion and Placement (cont’d)

Google and Yahoo (Overture.com) leaders in this technologyIssues

Appropriate disclosure of paid inclusion and placement practicesSearch 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)

Sponsorships and Affiliate Marketing

Sponsorship: Paid effort to tie an advertiser’s name to particular information, event, venue in way that reinforces brand in a positive, yet not overtly commercial manner Advertorial a common form

Affiliate relationship: Permits a firm to put its logo or banner ad on another firm’s Web site from which users of that site can click through to the affiliate’s site Sometimes called tenancy deals Amazon/Toys “R” Us an example Customer hijacking an issue

E-mail Marketing and the Spam ExplosionDirect e-mail marketing: E-mail marketing messages sent directly to interested consumers who “opt-in” or have not “opted-out”Spam: Unsolicited commercial e-mail Spam is exploding out of control—Estimated 60%–70% of

all Internet e-mail purportedly was 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)

Display and Rich Media Ads

Display adsBannersPop-ups and pop-unders

Rich media ads: Employ Flash, DHTML, Java, streaming audio and/or video

InterstitialsSuperstitials

Mixing Offline and Online Marketing CommunicationsTraditional offline consumer-oriented industries have learned to use Web to extend brand images and sales campaignsOnline companies have learned how to use traditional marketing communications to drive sales to Web siteMost successful marketing campaigns incorporate both online and offline tactics

Online Marketing Metrics: LexiconMetrics that focus on success of Web site in achieving audience or market share

ImpressionsClick-through rate (CTR)View-through rate (VTR)HitsPage viewsStickiness (duration)Unique visitorsLoyaltyReachRecency

Online Marketing Metrics: Lexicon (cont’d) Metrics that focus on conversion of visitor to customer

Acquisition rateConversion rateBrowse-to-buy-ratioView-to-cart ratioCart conversion rateCheckout conversion rate Abandonment rateRetention rateAttrition rate

Online Marketing Metrics: Lexicon (cont’d)E-mail metrics

Open rateDelivery rateClick-through rate (e-mail)Bounce-back rateUnsubscribe rateConversion rate (e-mail)

An Online Consumer Purchasing ModelFigure 8.11, Page 473

How Well Does Online Advertising Work?Click-through rates may be low, but these are just one measure of effectivenessResearch indicates that most powerful marketing campaigns include both online and offline advertising

The Costs of Online Advertising

Cost per thousand (CPM): Advertiser pays for impressions in 1,000 unit lotsCost per click (CPC): Advertiser pays pre-negotiated fee for each click ad receivesCost per action (CPA): Advertiser pays pre-negotiated amount only when user performs a specific actionHybrid: Two or more of the above models used together

Software for Measuring Online Marketing Results

WebTrends: Software program that automatically calculates activities at site, such as abandonment rate, conversion rate, etc.WebSideStory: Web service that assists marketing managers

Social Marketing“Many-to-many” model

Uses digitally enabled networks to spread adsBlog 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

Benefits of online marketing

A generic internet marketing strategy development process

Internet, Intranet, & Extranet

The relationship between access to intranets, extranets and the Internet