E-Marketing: A Consumer Behavior Perspective Professor: Jacques Nantel, Ph.D

Director: RBC Financial group Chair in e-CommerceHEC Montréal

May 2006 

World Wide

• More and more people have access to the Web or other forms of e-commerce

• More and more are seeking information through the Web before buying

• More and more are actually buying on the Web

Source: eMarketer Sept 2005

U.S. e-retailing as a % of total Retail

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Active Home Internet Users by Country, November 2005

Country October2005

November2005

Change (%) One-MonthChange

Australia 9,935,596 9,887,757 -0.48 -47,838

Brazil 11,729,619 12,529,892 6.82 800,273

France 16,165,914 16,855,607 4.27 689,693

Germany 30,839,556 31,840,403 3.25 1,000,846

Italy 17,342,870 16,923,740 -2.42 -419,130

Japan 39,634,969 39,122,810 -1.29 -512,159

Spain 10,482,927 11,055,277 5.46 572,349

Sweden 4,852,251 4,810,817 -0.85 -41,434

Switzerland 3,510,823 3,602,570 2.61 91,747

UnitedKingdom

23,369,623 23,586,055 0.93 216,432

UnitedStates

142,174,091 142,704,415 0.37 530,325

Total 310,038,240 312,919,343 0.93 2,881,103

Source: Nielsen//NetRatings, 2005

But unlike what was thought 3 years ago

• With some exceptions (music) the Web doesn’t belong to pure players

• The Web doesn’t belong neither to conventional retailers

• The Web is truly Multi-Channel

Why are consumers active on the Web?

– Accessibility– Diversity– Customization – Prices

2- Relationship Marketing versus Mass marketing

Marketing through the Web

• How to get known

• Personalization and customization

How to get known

1. Your name

2. External advertising

3. Organic optimisation

4. Paid optimisation

5. Web advertising

How do consumers surf on the net while looking for a product or a service ?

Source: The e-tailing group (April 2004)

0% 5% 10% 15% 20% 25% 30%

Alternative Portals (eBay, Amazon etc)

Comparative portals

Traditional portals

Dont know

Affiliate Marketing

Search engine

E-mail

Catalogue

Direct to the URL

How do consumers surf on the net while looking for a product or a service ?

Source: The e-tailing group (April 2004)

0% 5% 10% 15% 20% 25% 30%

Alternative Portals (eBay, Amazon etc)

Comparative portals

Traditional portals

Dont know

Affiliate Marketing

Search engine

E-mail

Catalogue

Direct to the URL

25%

Optimisation on search engines

• Organic

• Paid

Basics of search engine optimisation

• Write good content• Use key Words (keyword, meta-tag)• Your domain name (URL)• Think about spelling • Write descriptive page titles • Use real headings • Use search engine friendly URLs • Get linked to • Use valid, semantic, lean, and accessible

markup • Don’t try to fool the search engines

Paid positions

• There is a nominal, one-time activation fee for Google AdWords. After that, you pay only for clicks on your keyword-targeted AdWords ads, or for impressions on your site-targeted AdWords ads. You can control your costs by telling us how much you're willing to pay per click or per impression and by setting a daily budget for spending.

For example, a new advertiser paying in USD can activate his/her AdWords account with just US$5.00, and can then choose a maximum cost-per-click (CPC) from US$0.01 - US$100.

Basic tools

• Web logs• http://www.alexa.com/• http://www.wordtracker.com

Personalization(Wind Jerry (2001) Journal of Interactive Marketing

Personalization

• Reduces acquisition costs

• Increases loyalty

• Increases AOV

More than just transactions the Web is also a matter of information • On a site

– Cookies– Password

• Through consortiums (Double click)– Cookies– Ad Servers

• Third parties – Microsoft Passport– N-case – 180Solutions - MetricsDirect

What is done with it ?

• Site Personalization

• Cross Marketing

• Affiliate marketing

• Adapted advertising– http://www.180solutions.com/pages/

advertisers.aspx

Basic metrics

• CPM

• CTR

• CPC

• AOV

Strategies are getting more focused

2000 2004No of impressions 180 milliards 980 milliards

No of Web users 137 millions 193 millions

No sites/week. 41 268Ad market 8$ milliards 9.6$ milliardsCTR 2% 0,41%CPM 25$ 10.30$CPC 25$/20=1.20$ 10.30$/4=2.60$

More focused strategies