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e-commerce

Kenneth C.Laudon

Carol GuercioTraver

business. technology.society.eighth edition

Copyright © 2012 Pearson Education, Inc.


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Chapter 7E-commerce Advertising


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Copyright © 2012 Pearson Education

advertise and brand products

Figure out how to package advertising messages more directly with thevideos, Figure out how to piggyback advertising onto user-generated videos andtry to

measure the impact on sales Figure out how to show ad while video plays without destroying viewingexperience

Video Ads: Shoot Clic!

"uyClass #iscussion $hat advantages do video ads have over

traditional banner ads%

$here do sites such as &ouTube 't in to a

mar!eting strategy (eaturing video ads%

$hat are some o( the challenges and ris!s o()lacing video ads on the $eb%

#o you thin! *nternet users +ill ever develo),blindness to+ards video ads as +ell%


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Actiontuners.com


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Learning b/ectives

*denti(y the ma/or (orms o( onlinemar!eting communications

0nderstand the costs andbene'ts o( online mar!etingcommunications

#iscuss the +ays in +hich a $eb

site can be used as a mar!eting communications tool

http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/http://actiontuners.com/


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1ar!eting Communications

T+o main )ur)oses:Sales—promotional sales communications

Branding—branding communications

nline mar!etingcommunications

Takes many formsnline ads, e-mail, public relations, !eb

sites

Slide 7-7


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nline Advertising

2aid message on $eb site onlineservice or other interactive mediumsuch as interactive messaging

345.4 billion in 6755 8see ne9t ig.; Advantages:

"nternet is where audience is moving #d targeting $ #bility to target ads to narrow

segments and track performance in almost realtime

%reater opportunities for interactivity #isadvantages:

&ost vs' bene(t)ow to ade*uately measure results Supply of good venues to display ads

Slide 7-9



nline Advertising (rom 6774.5 2age ?>6Slide 7-10

SOURCES: Based on data from eMarketer, Inc., 2011a



orms o( nline

Advertisements #is)lay ads 8banners and )o)-u)s; @ich media ads

Video ads

Search engine advertising 1obile and local advertising

@e(errals 8aliate relationshi) mar!eting;

E-mail mar!eting

nline catalogs Social net+or! blog a)) and game

advertising

Slide 7-11



#is)lay Ads

"anner ads+ectangular box linking to advertisers !eb

site

"nteractive #dvertising Bureau "#B. guidelines e'g', full banner is /01 x 02 pixels, 345

2o)-u) ads#ppear without user calling for them

6rovoke negative consumer sentiment Twice as e7ective as normal banner ads, since

users unintentionally click on the ads whiletrying to close them

6op-under ads$ pen beneath browser window

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@ich 1edia Ads

0se lash #BT1L ava avaScri)t

About =D o( all online advertisinge9)enditures

Tend to be more about branding

"oost brand a+areness by 57D *nterstitials

Su)erstitials

Slide 7-15



Video Ads

astest gro+ing (orm o( onlineadvertising

*A" standards

8inear video ad9on-linear video ad

"n-banner video ad

"n-text video ad

Ad )lacement#dvertising networks, e'g' :ouble&lick

#dvertising exchanges

Banner swapping

Slide 7-16

Summari;ed in next Table



Search Engine Advertising ne o( (astest gro+ing 8see ne9t ig.; and

most eective (orms o( online mar!etingcommunications

?FD o( online ad s)ending in 6755

Ty)es:

6aid inclusion or rank see next ahoo 6recision=atch, =icrosoft ad&enter

9etwork keyword advertising context advertising. e'g', %oogle #dSense, >ahoo &ontent=atch

Slide 7-18


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Copyright © 2012 Pearson Education Slide 7-19


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Copyright © 2012 Pearson EducationCopyright © 2009

Pearson Ed!ation"Slide 7-21


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Search Engine Advertising

8cont.;

early ideal targeted mar!eting Social search %oogles ?3, Facebooks 8ike

*ssues: :isclosure of paid inclusion and placement practices$ 0


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1obile and Local Advertising

H5 million users access *nternet(rom smart)hones tablets=essaging

Aspecially e7ective for local advertising:isplay ads Search ideo

Local advertising Anabled by mobile platform with location services 02@ of mobile advertising and to increase to C2@

by


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S)onsorshi)s and @e(errals

S)onsorshi)s6aid e7ort to tie advertisers name to

particular information, event, and venue ina way that reinforces brand in positive yet

not overtly commercial mannerA'g', !eb=d'com o7ers 6hilips to describe

their home de(brillators on !eb=d site@e(errals#Eliate relationship marketing6ermits (rm to put logo or banner ad on

another (rms !eb site from which users ofthat site can click through to aEliates site

A'g', #ma;ons logo posted onto personal!eb sites Slide 7-24


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E-mail 1ar!eting and the

S)am E9)losion #irect e-mail mar!eting 8ow cost, primary cost is purchasing addresses, D-


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2ercentage o( E-mail That *s S)am

igure >.= 2age ?I>Slide 7-26

SOURCE: Symantec MessageLas, 2010.


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nline Catalogs

EJuivalent o( )a)er-basedcatalogs

$as )o)ular in early years but

Juic!ly +ent out because )agestoo! so long to loadGra)hics-intense use increasing

+ith increase in broadband use

T+o ty)es:Full-page spreads, e'g', 8andsend'com%rid displays more popular., e'g', #ma;on'com

*n general online and oinecatalogs com)lement each other

Slide 7-27


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Social Advertising

Social advertisingHses social graph to communicate brand

images and promote sales#dopts =any-to-many model

Social net+or! advertisingSocial network sites are advertising platforms

&orporate Facebook pages Twitter ads

6romoted tweets$ advertiser pay to show their tweets inusers search results as IpromotedJ 6romoted trends$ advertisers pay to move their hashtags

to the top of Twitters Trends 8ist 6romoted accounts$ advertiser pay to have their branded

account moved to the top of their I!ho to FollowJ

Slide 7-29


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Social Advertising

"log advertising Blogs diEcult to moneti;e

#udience si;e$ Few blogs attract large audiences

SubKect matter$ =ost blogs are highly personal and idiosyncratic

Search engines have diEculty indexing

Game advertising "n-game billboard display ads$ e'g', )ondas &+-L

billboard ad in &ar Town

Branded virtual goods$ 6lacing brand-name products

within games, e'g', C-33s Farmille virtual drink Sponsored banners, e'g', 9at %eo logo on Bola

Branded grames advergames.$ Sponsored games createdby companies to promote brands, e'g', &oca-&ola, Burger5ing

Slide 7-30


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"ehavioral Targeting

*nterest-based advertising 8behavioraltargeting;: 0sing search Jueries and clic!son results to target consumers

Social mar!eting: 0sing )ersonal )ro'les)osts Li!es and )hotos to targetconsumers

2ersonal in(ormation sold to third )artyadvertisers +ho deliver ads based on)ro'le Search engine *ueries, browsing history, oMine data

Ad e9changes nline, real-time auction where data aggregators sell personal

tracking info to advertisers Anable advertisers to retarget ads at users as they browse 30@ online ads are targeted

Slide 7-32


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1i9ing ine and nline

1ar!eting Communications1ost success(ul mar!eting

cam)aigns incor)orate both online

and oine tacticsine mar!eting

:rive traEc to !eb sites

"ncrease awareness and build brand e*uity

Consumer behavior increasinglymulti-channel 02@ consumers research online before buying oMine

Slide 7-33


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nline 1ar!eting 1etrics:

Le9icon 1easuring audience siMe or mar!etshare "mpressionsN no' of times an ad is served &lick-through rate &T+. N @ times an ad is clicked iew-through rate T+. N @ times an ad is not clicked

immediately but !eb site is visited within 42 days )its N no' of http re*uests 6age views N no' of pages viewed Stickiness duration. N average length of stay at a !eb

site

Hni*ue visitors N no' of uni*ue visitors in a period 8oyalty N no' of pages viewed, fre*uency of single user

visits to the site, @ customers who return to site in a year +each N @ site visitors who are potential buyers or @

total market buyers who buy at a site +ecency N time elapsed since last action, e'g', site visit or

purchase, taken by a buyerSlide 7-35


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nline 1ar!eting 1etrics 8cont.;

Conversion o(visitor tocustomer #c*uisition rate &onversion rate Browse-to-buy-ratio iew-to-cart ratio &art conversion rate

&heckout conversionrate #bandonment rate +etention rate #ttrition rate

Socialnet+or!ingHser insights

"nteraction insights

E-mail metricspen rate

:elivery rate &lick-through rate

e-mail.

Bounce-back rate

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An nline Consumer 2urchasing 1odel

igure >.> 2age =7HSlide 7-38


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Bo+ $ell #oes nline

Advertising $or!% 0ltimately measured by @* on ad cam)aign

Bighest clic!-through rates: Search engine

ads )ermission e-mail cam)aigns @ich media video interaction rates high

nline channels com)are (avorably +ithtraditional

1ost )o+er(ul mar!eting cam)aigns usemulti)le channels including online catalogTV radio ne+s)a)ers stores

Slide 7-39


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Com)arative @eturns on *nvestment

igure >.I 2age =56

S0@CES: "ased on data ( rom e1ar!eter *nc. 6757c#irect 1ar!eting Association 8#1A; 677H authorsN

estimates.

Slide 7-41


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The Costs o( nline

Advertising

2ricing models Barter $ exchange of ad space for something of e*ual value

&ost per thousand &6=.

&ost per click &6&.

&ost per action &6#. $ pays only when user performs a

speci(c action, e'g', registration or purchase nline revenues only

Sales can be directly correlated with online marketing e7orts

"oth onlineOoine revenues

Mine purchases cannot always be directly related to onlinecampaign

*n general online mar!eting moree9)ensive on C21 basis but moreeective in )roducing sales

Slide 7-42


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$eb Site Activity Analysis

igure >.H 2age =5=Slide 7-45


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The $eb Site as a

1ar!eting CommunicationsTool $eb site as e9tended online

advertisement

#omain name: An im)ortant role Search engine o)timiMation 8SE;:Search engines registration$ +egister with as

many search engines as possible

5eywords in !eb site description=etatag and page title keywords8inks to other sites by placing advertising to

your site, create !eb sites with links to yourmain site, and entering into aEliate

relationships with other sites Slide 7-47


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$eb Site unctionality

1ain (actors in eectiveness o(inter(aceHtility Aase of use &redibility and trust

To) (actors in credibility o( $eb sites8see ne9t ig.;:esign look "nformation designstructure "nformation focus

rganiMation is im)ortant (or 'rst-time users but declines in im)ortance "nformation content becomes maKor factor attracting

further visits

Slide 7-48


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actors inthe

Credibility o($eb Sites

igure >.57 2age =65

SOURCE: Based on data from !ogg, et a"., 200#.

Slide 7-49


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Table >.H 2age =66

Slide 7-50


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