© 2010 South-Western, a part of Cengage Learning
All rights reserved.
PowerPoint Presentation by Charlie Cook
The University of West Alabama
Eighth Edition
Internet Advertising
CHAPTER
13
1. Appreciate the magnitude, nature, and potential for
Internet advertising.
2. Be familiar with the two key features of Internet
advertising: individualization and interactivity.
3. Understand how Internet advertising differs from
advertising in conventional mass-oriented advertising
media, as well as how the same fundamentals apply
to both general categories of ad media.
4. Understand the various forms of Internet advertising:
display ads, rich media, e-mail advertising, Web logs,
search engine advertising, and advertising via
behavioral targeting.
Chapter Objecves
After reading this chapter you should be able to:
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 13–2
5. Appreciate the importance of measuring Internet
advertising effectiveness and the various metrics
used for this purpose.
Chapter Objecves (cont’d)
After reading this chapter you should be able to:
© 2010 South-Western, a part of Cengage Learning. All rights reserved. 13–3
© 2010 South-Western, a part of
Cengage Learning. All rights

reserved.
13–4
The Internet As an Advertising Medium
The Internet As an Advertising Medium
•
The Internet’s Evolving IMC Roles
The Internet’s Evolving IMC Roles

Building demand
Building demand

Conducting transactions
Conducting transactions

Filling orders
Filling orders

Providing customer service
Providing customer service

Serving as an advertising medium
Serving as an advertising medium
•
Issues and Concerns
Issues and Concerns

Increasing flow of advertising revenue to the Internet
Increasing flow of advertising revenue to the Internet

Consumer control of information received

Consumer control of information received

Versatility and effectiveness of Internet
Versatility and effectiveness of Internet
communications in targeting and reaching customers
communications in targeting and reaching customers
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
13–5
The Two i’s of the Internet:
The Two i’s of the Internet:
Individualization and Interactivity
Individualization and Interactivity
•
Individualization
Individualization

Recognizes that the Internet user has control over the
Recognizes that the Internet user has control over the
flow of information
flow of information
•
Interactivity:
Interactivity:

The capabilities that the Internet gives users to select
The capabilities that the Internet gives users to select
the information that they perceive as relevant
the information that they perceive as relevant


The capabilities that the Internet gives brand
The capabilities that the Internet gives brand
managers to build relationships with customers via
managers to build relationships with customers via
two-way communication
two-way communication
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Cengage Learning. All rights
reserved.
13–6
The Internet Compared
The Internet Compared
with Other Ad Media
with Other Ad Media
•
Interactivity as a Disadvantage
Interactivity as a Disadvantage

Internet users are highly involved and goal driven
Internet users are highly involved and goal driven
(“leaning forward”) when connecting to the Internet,
(“leaning forward”) when connecting to the Internet,
making them more apt to actively avoid unsolicited
making them more apt to actively avoid unsolicited
advertisements as clutter.
advertisements as clutter.

Traditional media users are more casually involved
Traditional media users are more casually involved

(
(
”leaning back”), making them more receptive to
”leaning back”), making them more receptive to
advertisements embedded in the media.
advertisements embedded in the media.
© 2010 South-Western, a part of
Cengage Learning. All rights
reserved.
13–7
Internet Advertising Formats
Table 13.1
•
Web Sites
•
Display or Banner Ads
•
Rich Media Formats
•
Pop-Ups
•
Interstitials
•
Superstitials
•
Video Ads
•
Blogs, Podcasts, and Social
Networks
•

Blogs
•
Podcasts
•
Social Networks
•
E-mail
•
Opt-in Versus Spam
•
E-zines
•
Wireless E-mail Advertising
•
Mobile Phone Advertising
•
Search Engine Advertising
•
Keyword-Matching Advertising
•
Content-Targeted Advertising
•
Advertising via Behavioral Targeting
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Cengage Learning. All rights
reserved.
13–8
Web Sites
Web Sites
•

Uses for Web Sites
Uses for Web Sites

As an advertisement for the company
As an advertisement for the company

As a venue for generating and transacting exchanges between organizations and their customers
As a venue for generating and transacting exchanges between organizations and their customers

As a link to other integrated marcom communications
As a link to other integrated marcom communications
•
Well-Designed Web Sites
Well-Designed Web Sites

Are easy to navigate
Are easy to navigate

Provide useful information
Provide useful information

Are visually attractive
Are visually attractive

Offer entertainment value
Offer entertainment value

Are perceived as trustworthy
Are perceived as trustworthy
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Cengage Learning. All rights
reserved.
13–9
Display or Banner Ads
Display or Banner Ads
•
Click-through Rates (CTRs)
Click-through Rates (CTRs)

Rates are less than 0.3%
Rates are less than 0.3%
—e
—e
xposure is not equivalent
xposure is not equivalent
to attention
to attention

B2B rates are higher than B2C rates
B2B rates are higher than B2C rates

CTRs are a function of brand familiarity:
CTRs are a function of brand familiarity:

Known-brand CTRs decrease with multiple exposures while
Known-brand CTRs decrease with multiple exposures while
unknown-brand CTRs increase with multiple exposures
unknown-brand CTRs increase with multiple exposures
•
Banner Ad Benefits

Banner Ad Benefits

Top-of–mind (TOMA) awareness for established
Top-of–mind (TOMA) awareness for established
brands increases brand equity
brands increases brand equity

Increased probability of purchasing behavior by
Increased probability of purchasing behavior by
consumers
consumers
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Cengage Learning. All rights
reserved.
13–10
Types and Sizes of Internet Marketing Units (IMUs)
Table 13.2
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13–11
Rich Media on the Internet
Rich Media on the Internet
Pop-Ups
Interstitials
Superstitials
Video Ads and
Webisodes
Rich Media
Advertising Formats

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reserved.
13–12
Blogs, Podcasts, and Social Networks
Blogs, Podcasts, and Social Networks
•
Blogs
Blogs

Are written by individuals to exchange their views on
Are written by individuals to exchange their views on
issues (e.g., products and brands ) with others in
issues (e.g., products and brands ) with others in
online forums
online forums

Are citizen journalism
Are citizen journalism
—online word-of-mouth
—online word-of-mouth

Are an interactive medium that businesses can use to
Are an interactive medium that businesses can use to
connect with customers and appear more credible.
connect with customers and appear more credible.
•
Podcasts
Podcasts


Are self-produced radio-style online programs to
Are self-produced radio-style online programs to
which consumers can subscribe
which consumers can subscribe

Enable advertisers to target consumers who have
Enable advertisers to target consumers who have
self-selected programs of interest to them
self-selected programs of interest to them
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reserved.
13–13
Blogs, Podcasts, and Social Networks
Blogs, Podcasts, and Social Networks
•
Social Networks
Social Networks

Allow users to interact with “friends,” share opinions
Allow users to interact with “friends,” share opinions
and information, and create online communities
and information, and create online communities

Developed by businesses enable consumers to learn
Developed by businesses enable consumers to learn
from one another and to share their experiences
from one another and to share their experiences

P&G’s “The People’s Choice”

P&G’s “The People’s Choice”

Mattel’s Barbiegirls.com
Mattel’s Barbiegirls.com

Are presently unproven marcom tool
Are presently unproven marcom tool
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13–14
E-mail Advertising
E-mail Advertising
•
E-mail as a Effective Marcom Tool
E-mail as a Effective Marcom Tool

+ Delivering advertising messages
+ Delivering advertising messages

+ Providing sales incentives to mass audiences or
+ Providing sales incentives to mass audiences or
targeted groups
targeted groups

–
–
Sending junk mail (spamming) and phishing
Sending junk mail (spamming) and phishing
•

Opt-In E-mailing
Opt-In E-mailing

Is the process of marketers asking for permission to
Is the process of marketers asking for permission to
send messages to consumers
send messages to consumers

Avoids the flow of irrelevant inbound messages
Avoids the flow of irrelevant inbound messages

Allows marketers to provide targeted information that
Allows marketers to provide targeted information that
is of interest to the receiver
is of interest to the receiver
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reserved.
13–15
E-mail Advertising (cont’d)
E-mail Advertising (cont’d)
•
E-mail magazines (E-zines)
E-mail magazines (E-zines)

Are free magazine-like publications that deliver
Are free magazine-like publications that deliver
specialized content and credible advertising
specialized content and credible advertising
messages to targeted audiences

messages to targeted audiences
•
Wireless E-mail Advertising (WiFi)
Wireless E-mail Advertising (WiFi)

Allows users to connect to the Internet through WiFi
Allows users to connect to the Internet through WiFi
hotspots
hotspots

Offers significant marcom potential in its ability to
Offers significant marcom potential in its ability to
message consumers with pertinent offers from stores
message consumers with pertinent offers from stores
close to their location.
close to their location.
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13–16
The Special Case of Mobile Phones
The Special Case of Mobile Phones
•
Cellular Phones as the Third Screen
Cellular Phones as the Third Screen

Mobility and universal coverage
Mobility and universal coverage

WiFi technology for Internet Access

WiFi technology for Internet Access

Short Messaging System (SMS) for text messaging
Short Messaging System (SMS) for text messaging

Multimedia Messaging Service for graphics and sounds
Multimedia Messaging Service for graphics and sounds

Music, game, video, and ringtone downloads
Music, game, video, and ringtone downloads
•
Marcom Issues
Marcom Issues

Invasion of privacy
Invasion of privacy
—n
—n
egative consumer responses to
egative consumer responses to
unsolicited messages
unsolicited messages

Limited advertising space on cell screens
Limited advertising space on cell screens

Gaining consumer acceptance of opt-in advertising
Gaining consumer acceptance of opt-in advertising
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reserved.
13–17
Search Engine Advertising (SEA)
Search Engine Advertising (SEA)
•
Search Engine Advertising (SEA)
Search Engine Advertising (SEA)

Is fastest growing form of Internet advertising
Is fastest growing form of Internet advertising
—about
—about
40% of online advertising spending
40% of online advertising spending

Includes a variety of well-known services (e.g.;
Includes a variety of well-known services (e.g.;
Google, MSN Search, and Yahoo!) that people use
Google, MSN Search, and Yahoo!) that people use
when seeking information
when seeking information

Attempts to place messages in front of people when
Attempts to place messages in front of people when
their natural search efforts indicate they are interested
their natural search efforts indicate they are interested
in buying a particular good or service
in buying a particular good or service

Makes use of paid keywords to increase the odds that

Makes use of paid keywords to increase the odds that
a firm’s product or service will be included in the
a firm’s product or service will be included in the
search results and appear as a sponsored link
search results and appear as a sponsored link
© 2010 South-Western, a part of
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reserved.
13–18
The Role of Keywords in Increasing the Odds
That Ready Consumers Encounter Your Ad
Figure 13.1
Step 1: Prospective purchasers of a specific good or service perform natural
search using one or more search engines to locate that item.
Step 2: Matches to Internet shopper’s search are generated by Google or
another search engine.
Step 3: Alongside the matches are sponsored links that correspond to the
keyword(s) entered by the shopper.
Step 4: These sponsored links appear because companies offering the
searched item purchased corresponding keywords from the search
engine company.
Step 5: Shoppers may click through to a sponsored Web site and purchase
a desired item or, at least, consider this Web site for future
purchases.
© 2010 South-Western, a part of
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reserved.
13–19
Purchasing Keywords and Selecting
Purchasing Keywords and Selecting

Content-Oriented Web Sites
Content-Oriented Web Sites
•
Keyword Matching Advertising
Keyword Matching Advertising

Advertisers bid for keywords by indicating how much
Advertisers bid for keywords by indicating how much
they are willing to pay each time an Internet shopper
they are willing to pay each time an Internet shopper
clicks (cost per click, CPC) on a sponsored link to
clicks (cost per click, CPC) on a sponsored link to
reach their website as a result of a search.
reach their website as a result of a search.
•
Content-Targeted Advertising (AdSense)
Content-Targeted Advertising (AdSense)

A Google program that enables advertisers to run ads
A Google program that enables advertisers to run ads
on sites with content related to their products or
on sites with content related to their products or
services
services

Google acts as an ad agency placing ads and
Google acts as an ad agency placing ads and
receiving a commission
receiving a commission
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Cengage Learning. All rights
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13–20
Purchasing Keywords and Selecting
Purchasing Keywords and Selecting
Content-Oriented Web Sites (cont’d)
Content-Oriented Web Sites (cont’d)
•
Click Fraud
Click Fraud

Occurs when a competitor or other party clicks on a
Occurs when a competitor or other party clicks on a
sponsored link repeatedly in order to harm the other
sponsored link repeatedly in order to harm the other
advertiser.
advertiser.

Occurs when employees of content-oriented websites
Occurs when employees of content-oriented websites
click on links to advertised Web sites to increase
click on links to advertised Web sites to increase
revenue.
revenue.

Fraud estimates range from 5% to 20%
Fraud estimates range from 5% to 20%
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13–21
Advertising via Behavioral Targeting
Advertising via Behavioral Targeting
•
Behavioral Targeting
Behavioral Targeting

Involves directing online
Involves directing online
advertisements only to
advertisements only to
consumers showing an
consumers showing an
interest in a particular
interest in a particular
product or service by their
product or service by their
site-selection behaviors.
site-selection behaviors.

Involves the use of “cookies”
Involves the use of “cookies”
that record the activities of
that record the activities of
visitors to web sites
visitors to web sites
—
—
regarded by some users as
regarded by some users as

an invasion of their privacy
an invasion of their privacy
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reserved.
13–22
Brand Name Fundamentals
Brand Name Fundamentals
Compatible with
desired image
Distinguishable
from competitors
Suitable for
global use
Memorable and
pronounceable
Facilitates
consumer
learning
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13–23
Measuring Internet Ad Effectiveness
Measuring Internet Ad Effectiveness
How many people clicked
through a particular Web ad?
What actions were taken following
click throughs or site visits?
What are the demographic

characteristics of these people?
Is this form of online advertising
yielding a suitable return on investment?
Questions
to Ask
How many visited
a particular Web site?
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Cengage Learning. All rights
reserved.
13–24
Metrics for Measuring Internet Ad Performance
Metrics for Measuring Internet Ad Performance
•
Exposure value or popularity of
Exposure value or popularity of
Web site or Internet ad
Web site or Internet ad

Number of users exposed to
Number of users exposed to
an ad
an ad

Number of unique visitors
Number of unique visitors

Click-through rate
Click-through rate
•

Ability of site to attract and hold
Ability of site to attract and hold
users’ attention and the quality
users’ attention and the quality
of customer relationships
of customer relationships

Average time per visit
Average time per visit

Number of visits by unique
Number of visits by unique
visitors
visitors

Average interval between user
Average interval between user
visits
visits
•
Usefulness of Web site
Usefulness of Web site

Proportion of repeat visitors
Proportion of repeat visitors
•
Ability to target users
Ability to target users

Profile of Web-site visitors

Profile of Web-site visitors

Visitors’ previous Web-site
Visitors’ previous Web-site
search behavior
search behavior
© 2010 South-Western, a part of
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13–25
Metrics for Measuring Internet Ad
Metrics for Measuring Internet Ad
Performance
Performance
•
Click-through Rate (CTR)
Click-through Rate (CTR)

The percentage of people who are exposed to an
The percentage of people who are exposed to an
Internet-delivered ad and actually clicked on it
Internet-delivered ad and actually clicked on it
•
Cost per Thousand Impressions (CPM)
Cost per Thousand Impressions (CPM)

Assesses how much (on a per-thousand-impressions
Assesses how much (on a per-thousand-impressions
basis) it costs to place an online ad
basis) it costs to place an online ad


Measures when an ad comes on to the eyeballs of
Measures when an ad comes on to the eyeballs of
the user (opportunity-to-see, OTS) but provides no
the user (opportunity-to-see, OTS) but provides no
real information about the actual effect of the
real information about the actual effect of the
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