copyright © 2004 pearson education, inc. slide 8-1 e-commerce kenneth c. laudon carol guercio...

Copyright © 2004 Pearson Education, Inc. Slide 8-1

E-commerce

Kenneth C. Laudon

Carol Guercio Traver

business. technology. society.Second Edition


Chapter 8

E-commerce Marketing Communications


Online Marketing Communications

Promotional sales communications: Suggest consumer “buy now” and make offers to encourage immediate purchase

Branding communications: Focus on extolling differentiable benefits of consuming product or service


Online Advertising Paid message on a Web site, online service or other

interactive medium, such as interactive messaging 2002: $6.3 billion spent, expected to grow to $9.1

billion by 2007 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


Online Advertising from 2000-2007Figure 8.1, Page 445


Online Advertising by Industry-2002Figure 8.2, Page 446


Forms of Online Advertisements

Banners, pop-ups and rich media ads Search engine marketing: Paid search engine

inclusion and placement Sponsorships Affiliate relationships


Banners, Pop-ups and Rich Media Ads Banners: Display promotional message in a rectangular box

at top or bottom of computer screen Pop-ups: Appear on screen without user calling for them Pop-unders: Open underneath user’s active browser

window and do not appear until user closes active window Rich media ads: Employ Flash, DHTML, Java, streaming

audio and/or video Interstitials: Provide way of placing a full-page message

between current and destination pages of user Superstitials: Rich media ad that is pre-loaded into

browser’s cache and does not play until fully loaded and user clicks to another page


Types of Banner AdsFigure 8.3, Page 447


Online Advertising Placement Methods

Banner swapping: Arrangements among firms allow each firm to have its banners displayed on other affiliate sites for no cost

Banner exchanges: Arrange for banner swapping among firms

Advertising networks: Act as brokers between advertisers and publishers, placing ads and tracking all activity related to the ad


Online Advertising VehiclesTable 8.1, Page 450


Most Popular Online Marketing MethodsFigure 8.4, Page 450


Search Engine Marketing: Paid Search Engine Inclusion and Placement

Search engine marketing one of fastest growing and most effective forms of online marketing communications

Paid inclusion – firms pay for inclusion in search engine index

Paid placement – firms pay for a guarantee that it will appear prominently in results of relevant searches

Overture.com and Google leaders in this technology Appropriate disclosure of paid inclusion and

placement practices an issue


Search Engine Policies on Paid Placement and InclusionTable 8.2, Page 453


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/ToysRUs an example Customer hijacking an issue


Direct E-mail Marketing and the Spam Explosion

Direct 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 – March 2003,

45% of all Internet e-mail purportedly was spam Efforts to control spam:

Filtering software (only partly effective) Self-regulation by industry (ineffective) Government regulation (no Federal legislation

yet)


Spam CategoriesFigure 8.6, Page 459


You’ve Got SpamFigure 8.7,

Page 460


Other Forms of Online Marketing Communications

Online catalog: Provide equivalent of paper-based catalog

Online chat: Provides equivalent of help from sales representative

Public relations: Involves communicating with target audiences, or publics, using methods other than advertising


Mixing Offline and Online Marketing Communications

Traditional offline consumer-oriented industries have learned to use Web to extend brand images and sales campaigns

Online companies have learned how to use traditional marketing communications to drive sales to Web site

Most successful marketing campaigns incorporate both online and offline tactics


Online Marketing Metrics: Lexicon Impressions: Number of times an ad is served Clickthrough rate (CTR): Percentage of people who actually

click on ad Hits: Number of http requests Page views: Number of pages requested by visitors Stickiness (duration): Average length of time visitors remain at

site Unique visitors: Number of distinct unique visitors to site Loyalty: Percentage of visitors who return in a year Reach: Percentage of total number of consumers in a market

who visit site Recency: Average number of days elapsed between visits


Online Marketing Metrics: Lexicon (cont’d)

Open rate: In e-mail campaign, number of customers who open mail

Acquisition rate: Percentage of visitors who register or visit product pages

Conversion rate: Percentage of visitors who actually purchase something

Attrition rate: Percentage of customers who purchase once, but never return within a year

Abandonment rate: Percentage of shoppers who begin a shopping cart but then fail to complete the form and leave the site

Retention rate: Percentage of existing customers who continue to buy on a regular basis


Customer Tracking and Marketing Strategies Used by U.S. CompaniesFigure 8.11, Page 471


Online Marketing Communications: Typical Clickthrough RatesTable 8.4, Page 471


Clickthrough Rates by FormatFigure 8.12, Page 472


Traditional and Online Advertising Costs ComparedTable 8.6,

Page 474


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


Web Site Activity AnalysisFigure 8.13, Page 475


The Web Site as a Marketing Communications Tool

Web site can be viewed as an extended online advertisement

Domain name: First communication an e-commerce site has with a 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


Site Design Features that Impact Online PurchasingTable 8.8, Page 482

copyright © 2004 pearson education, inc. slide 8-1 e-commerce kenneth c. laudon carol guercio...

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