E­commerce: Business. Technology. 
Society

E­commerce   

business. technology. society.

seventh edition

Kenneth C.
Laudon
Carol Guercio
Traver
 Copyright © 2011 
Pearson Education, Inc.
Copyright © 2011 Pearson Education, Inc.


Chapter 7: E­commerce Marketing 

Communications

Chapter 7
E-commerce Marketing
Communications

 Copyright © 2011 
Pearson Education, Inc.
Copyright © 2010 Pearson Education, Inc.
Copyright © 2011 Pearson Education, Inc.

Slide 7­2


Video Ads: Shoot, Click, Buy
Class Discussion






What advantages do video ads have over
traditional banner ads?
Where do sites such as YouTube fit in to a
marketing strategy featuring video ads?
What are some of the challenges and risks of
placing video ads on the Web?
Do you think Internet users will ever develop
“blindness” towards video ads as well?

 Copyright © 2011 
Pearson Education, Inc.

Slide 7­3


Marketing Communications
 Two

main purposes:


Sales

– promotional sales
communications

Branding

 Online

– branding communications

marketing communications

Takes

many forms

Online

ads, e-mail, public relations, Web

sites
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­4


Online Advertising

 $25

billion, 15% of all advertising
 Advantages:
 Internet

is where audience is moving
 Ad targeting
 Greater opportunities for interactivity

 Disadvantages:
 Cost

versus benefit
 How to adequately measure results
 Supply of good venues to display ads

 Copyright © 2011 
Pearson Education, Inc.

Slide 7­5


Online Advertising from 2002­2014

 Copyright © 2011 
Figure 7.1, Page 432
Pearson Education, Inc.

SOURCES: Based on data from eMarketer, Inc.,

2010a
Slide 7­6


Forms of Online Advertisements










Display ads
Rich media
Video ads
Search engine advertising
Social network, blog, and game advertising
Sponsorships
Referrals (affiliate relationship marketing)
E-mail marketing
Online catalogs

 Copyright © 2011 
Pearson Education, Inc.

Slide 7­7



Display Ads


Banner ads
 Rectangular
 IAB




box linking to advertiser’s Web site

guidelines

e.g. Full banner is 468 x 60 pixels, 13K

Pop-up ads
 Appear

without user calling for them

 Provoke
 Twice

negative consumer sentiment

as effective as normal banner ads

 Pop-under


ads: Open beneath browser window
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­8


Rich Media Ads
 Use

Flash, DHTML, Java, JavaScript

 About

7% of all online advertising
expenditures

 Tend
 Boost

to be more about branding

 IAB

brand awareness by 10%

standards limit length

 Interstitials


Superstitials
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­9


Video Ads



Fastest growing form of online advertisement
IAB standards


Linear video ad



Non-linear video ad



In-banner video ad



In-text video ad


Ad placement


Advertising networks



Advertising exchanges



Banner swapping

 Copyright © 2011 
Pearson Education, Inc.

Slide 7­10


Search Engine Advertising
 Almost

50% of online ad spending in 2010

 Types:
 Paid

inclusion or rank

Inclusion in search results

 Sponsored link areas


 Keyword


advertising

e.g. Google AdWords

 Network

keyword advertising (context
advertising)

 e.g. Google AdSense
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­11


Search Engine Advertising (cont’d)
 Nearly

ideal targeted marketing
 Issues:
Disclosure

of paid inclusion and

placement practices
Click fraud
Ad nonsense
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­12


Mobile Advertising
 Half

of U.S. Internet users access
Internet with mobile devices

 Currently

small market, but fastest
growing platform (35%)

 Google

and Apple in race to develop
mobile advertising platform

 AdMob,

iAd

 Copyright © 2011 

Pearson Education, Inc.

Slide 7­13


Sponsorships and Referrals
 Sponsorships
 Paid

effort to tie advertiser’s name to
particular information, event, venue in a
way that reinforces brand in positive yet not
overtly commercial manner

 Referrals
 Affiliate

relationship marketing

 Permits

firm to put logo or banner ad on
another firm’s Web site from which users of
that site can click through to affiliate’s site
 Copyright © 2011 
Pearson Education, Inc.

Slide 7­14



E­mail Marketing and the 
Spam Explosion
 Direct

e-mail marketing

 Low

cost, primary cost is purchasing
addresses

 Spam:

Unsolicited commercial e-mail

 Approx.

90% of all e-mail
 Efforts to control spam:
 Technology

(filtering software)
 Government regulation (CAN-SPAM and state
laws)
 Copyright © 2011 
 Voluntary self-regulation by industries (DMA ) Slide 7­15
Pearson Education, Inc.


Percentage of E­mail That Is Spam


 Copyright © 2011 
Figure 7.6, Page 448
Pearson Education, Inc.

SOURCE: Symantec MessageLabs,
2010

Slide 7­16


Online Catalogs
 Equivalent

of paper-based catalogs

 Graphics-intense;

use increasing with
increase in broadband use

 Two

types:

1.

Full-page spreads, e.g. Landsend.com

2.


Grid displays, e.g. Amazon

 In

general, online and offline catalogs
complement each other

 Copyright © 2011 
Pearson Education, Inc.

Slide 7­17


Social Marketing
 “Many-to-many”

model
 Uses digitally enabled networks to spread
ads
 Blog

advertising

 Online

 Social
 Ads

 Game


ads related to content of blogs

network advertising:
on MySpace, Facebook, YouTube, etc.

advertising:

 Downloadable

“advergames”
 Copyright © 2011 
 Placing brand-name products within games
Pearson Education, Inc.

Slide 7­18


Insight on Society

Marketing to Children of the Web in the 
Age of Social Networks 
Class Discussion

Why is online marketing to children a
controversial practice?
 What is the Children’s Online Privacy Protection
Act (COPPA) and how does it protect the privacy
of children?
 How do companies verify the age of online

users?
 Should companies be allowed to target
 Copyright © 2011 
marketing efforts to children under the age of


Pearson Education, Inc.

Slide 7­19


Behavioral Targeting



Interest-based advertising
Data aggregators develop profiles
 Search

engine queries
 Online browsing history
 Offline data (income, education, etc.)

Information sold to 3rd party advertisers, who
deliver ads based on profile
 Ad exchanges
 Privacy concerns
 Consumer resistance
 Copyright © 2011 



Pearson Education, Inc.

Slide 7­20


Mixing Offline and Online Marketing 
Communications
 Most

successful marketing campaigns
incorporate both online and offline tactics
 Offline marketing
 Drive

traffic to Web sites
 Increase awareness and build brand equity
 Consumer

behavior increasingly multi-

channel
 60%

consumers research online before
 Copyright © 2011 
buying offline
Pearson Education, Inc.

Slide 7­21



Insight on Business

Are the Very Rich Different 
From You and Me?
Class Discussion

 Why

have online luxury retailers had a
difficult time translating their brands and
the look and feel of luxury shops into Web
sites?

 Why

did Neiman Marcus’ first effort fail?

 Why

did Tiffany’s first effort fail?

Visit the Armani Web
 Copyright © 2011 
Pearson Education, Inc.
find there?


site. What do you

Slide 7­22


Online Marketing Metrics: Lexicon
 Measuring

audience size or market share

 Impressions
 Click-through

rate (CTR)
 View-through rate (VTR)
 Hits
 Page views
 Stickiness (duration)
 Unique visitors
 Loyalty
 Reach
 Copyright © 2011 
 Recency
Pearson Education, Inc.

Slide 7­23


Online Marketing Metrics (cont’d) 
 Conversion

of

visitor to customer
 Acquisition rate
 Conversion rate
 Browse-to-buy-ratio
 View-to-cart ratio
 Cart conversion rate
 Checkout conversion

 E-mail

metrics

 Open

rate
 Delivery rate
 Click-through rate
(e-mail)
 Bounce-back rate

rate
 Abandonment rate
 Retention rate
 Attrition rate
 Copyright © 2011 Pearson Education, Inc.

Slide 7­24


An Online Consumer Purchasing Model


 Copyright © 2011 
Figure 7.8, Page 469
Pearson Education, Inc.

Slide 7­25