WEBD 321 AMU Business Law Question Presentation

Instructions:

Read attached 1-4 documents attached. You can use other outside sources for support. Use PowerPoint to create slides. 15 slides minimum. Attach transcript of audio for recording in a word doc.

Complete the Midterm Project Assignment:

Explain Just-In-Time ordering

Discuss the purpose of a clickthrough

Discuss the purpose of a Customer Relationship Management(CRM) system

Discuss the four cost categories associated with site creation packages.

3Lesson 3:
Web Marketing Goals
Objectives
By the end of this lesson, you will be able to:

1.1.1: Identify specific business-to-business (B2B) and business-to-consumer (B2C)
issues in developing an e-commerce site.

1.2.5: Compare features of competitor e-commerce sites.

3.1.1: Compare the advantages and disadvantages of e-commerce and traditional
sales methods.

3.1.2: Identify business growth drivers and barriers.

3.3.1: Identify e-commerce marketing goals.

3.3.2: Determine global versus target (niche) product appeal.

3.3.3: Identify user interests specific to a target (niche) market.

3.3.4: Evaluate Internet demographics and their relevance (includes gender, culture,
age).

3.3.5: Use surveys to determine customer preferences.

3.3.7: Evaluate product-pricing ranges and price changes.

3.3.8: Evaluate product distribution factors and methods (includes cost, distance,
hard goods, soft goods).

3.3.10: Promote and advertise an e-commerce site (includes search-engine placement
options, synchronizing e-commerce promotion methods with traditional methods).
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Pre-Assessment Questions
1.
Before launching a new product on his Web site, Viktor wants to obtain more
information about his customers. What type of data will provide him with insight into
a customer’s interests, activities or opinions?
2.
What method can an online business use to ensure maximum exposure to customers
browsing the Web?
a.
b.
c.
d.
3.
Make effective use of proper procedures for search engine submissions.
Send mass mailings via e-mail to all potential customers.
Place links on the site to the Web sites of other businesses.
Use an automated response to all e-mail queries.
Which of the following represents the correct order (from top to bottom) of the
marketing pyramid?
a.
b.
c.
d.
Strategies, Goals, Tactics
Tactics, Strategies, Goals
Goals, Strategies, Tactics
Goals, Tactics, Strategies
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Marketing Overview
Products have been brought to the marketplace for hundreds of years in almost every
society. The marketer’s plans and ideas for generating interest in and offering the product
or service define marketing.
Businesses of all sizes need marketing strategies to be successful. Naturally, some
marketing strategies require more extensive planning and study before they can be
successfully launched.
Web marketing is still in its infancy, and marketing agencies and promotional campaigns
seek to determine how to market effectively using the Web.
Movie Time!
Go to CIW Online to view a movie about this topic.
Web Marketing (approx. playing time: 03:30)
All movie clips are © 2011 LearnKey, Inc.
Web Marketing Benefits
We have all heard statistics that we are directly or indirectly exposed to thousands of
advertisements each day. But what makes Web advertising different?
OBJECTIVE:
3.1.1: E-commerce
vs. traditional sales
methods
Think about spending 30 minutes using the Internet. How many advertisements are you
exposed to during this time? How many do you read? How many do you pursue? The
effectiveness with which these advertisements target your preferences and habits
depends on the marketing strategy the company designs.
The Internet provides a number of ways to present advertisements that are not available
in broadcast media. Advertising on the Web allows you to reach the consumer with
unprecedented interactivity, immediacy and reach. In this section, you will look at some
of the unique advantages of Web marketing.
Personal selection
When a person is exposed to a radio or television advertisement, he or she is generally a
passive recipient of the message. Web advertising can become a more personal selection
of the content the recipient might like to view. For example, when visiting a Web site, one
might notice an ad about a low-interest credit card. It is entirely the user’s choice
whether to find out more by clicking the link. The user may not even notice the ad.
The benefit to the advertiser is that if the user does click the ad and visit the advertiser’s
Web site, that user can be considered a qualified prospective customer. Trying to apply
that scenario to radio or television, you can see it would be very difficult to turn a person
into a prospect immediately without giving him or her information at the click of a
button.
Certainly, radio and television are giving the Web general day-to-day exposure. Most
commercials on radio and television display or announce business Web addresses.
However, radio and television lack the immediacy to stimulate customer interest.
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Convenience
Uniform Resource
Locator (URL)
A text string that
specifies an Internet
address and the
method by which
the address can be
accessed.
Imagine hearing an advertisement on your car radio with a corresponding Uniform
Resource Locator (URL) to visit for more information. Until we all have Internet access
in our vehicles, that message will not be fully effective until the listener gets to a place
that has Internet access. By that time, the whole ad may have been forgotten or may not
seem as important. On the other hand, if you saw that same ad on the Internet, you
could respond immediately.
Interactivity
Again, radio and television marketing offer very little interaction between the audience
and the medium. Radio advertising requires the consumer to listen and develop a mental
picture; television advertising presents the image to the audience. Other than those
factors, the audience’s experience is limited.
With Web marketing, users experience interactivity on a much higher level. They can be
exposed to the same elements as in television, but they have more control over where or
how they continue the experience. Another important element is that the user can
generally control the amount of time spent viewing the advertisement.
Some Web sites are considered static in design, meaning that they deliver only text
content and images. Others can be media-rich, delivering audio, video and interaction
with the Web site or other site visitors.
Online communities
mailing list server
An e-mail server
that regularly sends
e-mail messages to
a specified list of
users.
To build a loyal following for a Web business, you must build value and include
information that will keep customers coming back for more. One of the techniques used
is to build online communities. These features are services that allow customers to
interact with or gather information from other customers or people with similar interests
or viewpoints. Online communities can consist of online chat features, bulletin boards or
mailing list servers. With radio and television, the only community created might be a
discussion to see whether others have seen or heard an ad, and their opinions of it. Such
discussions are mostly for entertainment value and not necessarily a true form of
community.
Directed or opt-in e-mail
opt-in e-mail
An e-mail list service
that is created
legitimately by
subscribing only
users who
specifically request
to be added to the
list.
Many sites offer to send visitors or customers periodic e-mail messages containing
specific information that they have requested. Such information may include specials,
news or events. If you decide to use bulk e-mail to promote your online business and
products, opt-in e-mail allows you to give your customers the option of subscribing (or
opting in) to your periodic announcements by letting them authorize their addition to
your mailing list.
Customized service
Some sites allow users to customize what they view, thereby allowing them to filter the
content they want and do not want. When users return to the site, they will have a
customized view, eliminating the need to re-enter or view certain information.
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Immediate purchasing
Enabling users to purchase a product or service immediately is the most powerful tool
marketers can offer. The less time customers are required to wait after deciding to buy,
the more likely they are to complete the purchase.
Immediacy is an important advantage to marketing on the Web. If customers see
something they want, the seller or business will want to complete the sale as fast as
possible. The longer the wait, the more time customers have to find better prices or
products or change their minds.
Global reach
Even the largest radio or television ad campaign does not have the reach that the
simplest Web page can have. Enabling businesses with an unlimited and largely
unrestricted resource to compete on a global scale is empowering. Until recently, global
exposure was just a dream to most businesses, but now it is almost taken for granted.
These elements have created a new marketer-consumer experience. As Web marketing
exists today, marketers are still learning how to be consistently effective, and many
organizations are attempting to fine-tune Web marketing to get the best results.
Targeted reach
The Web offers the ability to design a marketing message very specifically for a niche
market. For example, you can place a banner ad on a Web site that deals with a subject
of interest to your target marketplace. A quickly developing area of targeted advertising is
to advertise in Web logs (blogs).
Examples of Successful Web Marketing
OBJECTIVE:
1.2.5: Competitor
e-commerce sites
Which businesses are doing a successful job of Web marketing? Trying to narrow the
answer to just a few is difficult, but we will isolate several businesses for classroom
study. One of the reasons this question is so difficult is that actual figures may not be
conclusive or even available.
The next few examples are profiles of Web businesses that are marketing successfully.
These selections were based on public information taken from financial reports of online
sales from the 12 months ending in December 2000. We will study how these businesses
designed their sites and how they take advantage of the previously mentioned benefits of
Web marketing. The following selections cover both B2B and B2C e-commerce pursuits.
Dell Inc.
Dell Inc. is a rapidly growing computer systems company that sells worldwide. As of
December 2000, Dell was ranked first in worldwide PC shipments.
Dell’s online store opened in July 1996. It sold U.S. $41.4 billion in products and services
to millions of consumers in fiscal year 2004. Sales were expected to increase by 20
percent in fiscal year 2005, based on the revenue data in the first three quarters.
Site visitors can research, customize and obtain price quotes on the Dell product line;
order systems online; and track orders from manufacturing through shipping.
Additionally, Dell offers detailed online customer support, and gives business customers
personalized information about their organizations’ approved configurations and pricing.
Figure 3-1 shows a sample Dell home page.
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Figure 3-1: Dell home page
hyperlinks
Embedded
instructions within a
text file that link it to
another point in the
file or to a separate
file.
Dell’s business model focuses on creating a direct connection with the customer. This
approach allows the company to price very competitively because of the direct sale. Dell
offers low prices but still provides fully customizable computers and tailored customer
service. Dell’s Web site is built as a custom ASP.NET application. An ASP.NET application
is one built using Microsoft’s Visual Studio .NET. It executes code on the server and
renders the Web page as HTML.
Much of Dell’s online business is based on Internet marketing. Dell leverages the benefits
of Internet marketing in the following ways.

Personal selection — Dell has an extensive online and offline advertising campaign
targeting people who are interested in purchasing computers. Dell advertises using
banner ads on other Web sites that provide hyperlinks to the company’s site. The
company knows that the people who see the site have chosen to visit and are
interested in computers. When users click a Dell ad, they are taken directly to the
Dell Web site for further research, system customization and online purchasing.

Interactivity — The Dell site is highly interactive, allowing potential customers to
search for computers to fit their needs, customize computers online, obtain price
quotes and buy the computers.

Integration — Dell’s marketing presence includes targeted banner advertisements,
press coverage, direct mail advertising and television advertising. The site offers
customers numerous pre-purchase information options and advertises additional
items. A form for requesting a catalog or e-mail newsletter is also available.

One-to-one service — Besides the extensive customization options described
previously, Dell’s customers can access personalized pages detailing customized
product configurations and pricing, order and inventory tracking, and customer and
technical support.
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OBJECTIVE:
1.1.1: B2B and B2C
development issues
3-7

Online purchasing — Purchasing is supported by product information and
customization options. Dell also offers competitive pricing on its refurbished systems.

Global reach — The Dell site is translated into various languages and customized for
various countries.
In addition, Dell addresses the special needs of business-to-business customers through
its Premier account service and portal. The Premier portal allows a company with a
Premier account to create a customized Web site that contains product information for
approved products only. Pricing information can be separately negotiated for each
Premier account, allowing volume discounts and other pricing benefits to be reflected
automatically. Various reports are also available to allow a business to view information
about the purchases its employees make.
Cisco Systems Inc.
Cisco Systems® is a major supplier of networking products. Cisco’s networking and
computing products allow people to access or transfer information between computer
systems. Figure 3-2 shows the Cisco home page.
Figure 3-2: Cisco Systems home page
Founded in 1984, Cisco produces routers, switches and hubs that connect the Internet.
In 2003, Cisco received 90 percent of its orders over the Internet. The company also uses
the Internet to reduce costs. In 2003, it saved U.S. $2.1 billion by offering key services,
such as technical support and customer training over the Web, and by using the Web to
streamline the supply chain and optimize the workforce.
Due to the nature of its products, Cisco’s online business can be characterized as
business-to-business. Much of this online business relies on the benefits of Web
marketing.
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
Personal selection — Cisco allows site visitors to select from many types of
networking products. It also categorizes these products, allowing users to easily
identify those products that would best suit their needs.

Interactivity — The Cisco site offers online material and educational information to
enable visitors to make sound choices.

Integration — The Cisco site includes links from targeted banner advertisements
and press coverage. A form for requesting a catalog or e-mail newsletter is also
available.

One-to-one service — The Cisco site offers configuration tools to help buyers
determine those components that meet their needs.

Online purchasing — Cisco offers different purchasing options. Products can be
ordered directly from Cisco or from an authorized partner or distributor. This option
gives buyers more control over selection and pricing.

Global reach — The Cisco site is translated into various languages and customized
for various countries.
Amazon.com
Amazon.com claims to offer the “earth’s biggest selection,” with millions of books,
software, videos and CDs at discount prices. The company has been in business since
July 1995 and is growing fast, both in the number of customers it has and in the range of
product types it provides. However, until 2003, the company posted multimillion dollar
losses. Finally, in 2003, the company reported a net income of U.S. $35.3 million. Figure
3-3 shows the Amazon.com home page.
Figure 3-3: Amazon.com home page
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Amazon.com’s existence depends entirely on the Internet, and the company is changing
both Internet commerce and publishing industry standards. It has regularly been
recognized as one of the top 10 visited sites, as a leading online shopping site, and as the
largest bookseller in the United States, online or offline.
button
advertisement
A type of online
advertisement in
which small buttons
announcing other
ads are placed on
a Web site. Typically
120 x 60 or 80 x 60
pixels.
Its major marketing leads come from extensive use of targeted banner and button
advertisements, public relations and the Amazon.com Associates program, an online
franchise program. Approximately 60 percent of the company’s orders come from
returning customers.
Amazon.com has created a billion-dollar business based on Internet marketing. The
company takes advantage of all the benefits of Internet advertising.

Personal selection — Amazon.com has an extensive targeted advertising campaign
and a rigorous public relations push, ensuring that anyone who might be interested
hears about the company. Therefore, those who click an Amazon.com advertisement
are interested consumers and their desire to buy Amazon products is potentially
high.

Interactivity — The Amazon site is highly interactive, offering the user several ways
to find the right product, listen to music samples, watch video clips and read reviews.

Integration — Banner advertisements link to the Web site, which has almost no
external links. Direct e-mail is integrated into the book search, and, during the
purchasing process, the company requests the user’s permission to periodically send
information.

One-to-one service — Cookies and customer accounts are used to identify repeat
visitors. When customers return to the site from the computer at which they made an
earlier purchase, or when they log on, they receive a list of recommended products
based on their purchasing history.

Online purchasing — Amazon.com provides detailed product information, including
book cover copy, tables of contents, customer reviews and other product-specific
details. Its patented one-click payment technology for repeat visitors makes it easy to
finalize a purchase.

Global reach — The company operates international sites for Canada, the United
Kingdom, Germany, Japan, France and China.
Now that you have seen these marketing elements at work, you should have a better idea
of how Web marketing has more depth and greater potential than traditional advertising.
Marketing Goals
OBJECTIVE:
3.3.1: Marketing
goals
Defining what you want your business to achieve is how goals are created. Before any
significant steps can be taken on a project, certain areas and ideas must be carefully
considered. Goals that coincide with the company’s direction must be established.
Although many questions can help start the process, a common initial question is:

What is my business trying to accomplish?
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Possible answers include the following:

We want to improve customer service and satisfaction.

We want to gain access to different markets.

We want to sell new products.

We want to automate our business process to reduce costs.
Although it is a very basic question, the answer (or answers) an owner chooses is
significant and is the root of larger questions to be answered later. If the real objective is
identified early, the project will have a sharper focus and will be more likely to meet its
goals successfully.
In the sections that follow, you will examine each of the previous four answers to see how
they relate to the company’s marketing goals.
Improving customer service
The impetus for moving to the Internet for e-commerce is not always to sell more
products. Instead, a valid goal might be to increase customer satisfaction by offering
more responsive customer service.
An example of a company that uses the Internet to achieve this goal is Federal Express
(FedEx). The company turned to the Internet, but not to ship more packages, although
that decision may have incidentally increased business. Instead, FedEx decided to invest
in Internet technology to better automate processes, to promote an already world-class
business model, to better serve customers and to save money. This automation and
customer service improvement saved the company thousands of dollars monthly on
customer service, while improving customer satisfaction.
FedEx ships more than 3 million packages every day. The two parties to every delivery are
the sender and the recipient. Thus, FedEx could receive millions of calls to its toll-free
number from people who want to check the status of their deliveries, at a potentially
prohibitive cost to FedEx. However, with a tracking number and a visit to the company’s
Web site, customers can now obtain that information online.
In the following lab, you will visit the Dell Web site and examine the customer service
options available. Suppose you have been hired by a company to improve business
through its Web site. The company currently handles customer service using a technical
support hotline. However, recent complaints have surfaced about long hold times. You
will examine the customer service features offered by Dell and answer questions about
how these features could be used to meet the company’s marketing goals.
Lab 3-1: Examining customer service options on the Internet
In this lab, you will look at the Dell Web site and examine how it attracts and retains
customers by offering excellent customer service through the Web.
1.
Browser: Navigate to www.dell.com. Dell’s home page is shown in Figure 3-4.
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Figure 3-4: Dell home page
2.
Examine the features on the site. How does Dell segment its business? Which options
represent business-to-business customers? Which options represent business-toconsumer customers?
3.
Click the Home & Home Office link. Your screen should resemble Figure 3-5.
Figure 3-5: Home & Home Office page
4.
Locate the Support options (see Figure 3-6). You might need to scroll down to see
them.
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Figure 3-6: Service & Support section
5.
Explore each of the options and consider how these options help attract and retain
customers.
In this lab, you viewed the Dell Web site and examined its various customer service
features.
Accessing different markets
If the goal is to gain access to markets that were previously inaccessible, the focus
changes. Do you want to be an international marketer? Ten years ago, this task would
have been daunting, even for large businesses. After all, contacts or partners in foreign
countries had to be established and then a strategy of distributing goods or services had
to be planned. Finally, payments, conversion rates, letters of agreement and letters of
credit all had to be discussed and formalized. And after such preparation, the market
could still prove to be inactive and unresponsive.
The process of reaching international customers can appear easy. Offer a product,
establish a Web presence, promote the site, take credit card orders and ship the product.
In some cases, the task can be that easy, but such cases are rare. However, the Web has
made access to different markets faster, cheaper and easier.
localization
The process of
translating Web
content into a
specific language in
order to market
products globally.
If you plan to reach a global market, you must also determine whether to localize your
Web site. Localization can be very expensive and time consuming. To localize a Web site
effectively requires that you hire individuals who are knowledgeable about the language
and culture of the marketplace you are attempting to reach. Your marketing message
must also reflect specific cultural differences.
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Accessing different markets does not guarantee that an e-commerce business will
succeed. As with traditional market penetration, all the factors need to be examined to
see whether the business can succeed. After those factors have been evaluated, the
actual implementation will be easier than it would have been using traditional methods.
In the following lab, you will visit the Dell, Barnes & Noble, and Habitat For Humanity
Gift Shop sites to identify their current market penetration and to analyze the results of
accessing different markets. Suppose you have been hired by Habitat For Humanity Gift
Shop to globalize its operations. You would need to provide examples of e-commerce
businesses that sell to a global marketplace and identify the issues associated with
globalizing the Habitat For Humanity Gift Shop.
Lab 3-2: Determining market globalization efforts and plans
In this lab, you will look at how the Dell and Barnes & Noble Web sites handle
globalization. You will also consider the Habitat For Humanity Gift Shop site in terms of
its current marketplace and how suitable it is for globalization.
1.
Browser: Navigate to the Dell Web site (www.dell.com). Type Argentina in the
search field (see Figure 3-7) and search for information specific to Argentina.
Figure 3-7: Choose A Country/Region list
2.
Review the Argentina-specific information returned by the search (see Figure 3-8).
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Figure 3-8: Dell site product information for Argentina
3.
Click the country selection drop-down list in the upper-left corner of the page (circled
in the previous figure), and select Argentina. A version of the Web site localized for
Argentina will appear (see Figure 3-9).
Figure 3-9: Dell site information for Argentina
4.
Consider the importance of globalization to Dell’s marketing strategy, and write your
thoughts in the space provided.
5.
Browser: Navigate to the Barnes & Noble Web site (www.barnesandnoble.com). See
Figure 3-10.
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Figure 3-10: Barnes & Noble home page
6.
Look for localized versions of the site. Are localized versions available?
7.
Locate information about shipping and deliveries by clicking About Shipping near
the bottom of the page (see Figure 3-11).
Figure 3-11: Shipping and delivery information
8.
Look for information on shipping to international locations. Is international shipping
available? What are the restrictions?
9.
Look for information on customs and tariffs. How does Barnes & Noble handle
customs and tariffs?
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10. Consider the importance of a global marketplace to Barnes & Noble’s marketing
strategy. How important do you think the global marketplace is to the company’s
strategy?
11. Consider the barriers to globalization on the site. What barriers to reaching a global
marketplace might arise with this site?
In this lab, you examined how three e-commerce sites handle globalization. You also
considered the effects of globalizing the Habitat For Humanity Gift Shop site.
Selling new products
Return On
Investment (ROI)
Profit earned as a
result of a project
relative to the value
of resources
required to
complete it.
Needless to say, new products that are introduced properly to the market and generate
revenue are exciting for any company. Bringing a new product to market with traditional
means can be very costly. As a result, many products never reach the market because
they are considered too high-risk when compared with the Return On Investment (ROI).
E-commerce has opened up an entirely new model for delivering new products to the
market. The risk that your business or company faces to introduce a product online is
much lower. However, you must ensure that the product is suitable for online sale.
Questions you might ask include the following:

Is the product perishable? If so, it will require special shipping, and shipping charges
might be prohibitive.

Is the product bulky or heavy? If so, does the cost of shipping it outweigh the benefits
of offering it online?

Will consumers buy the product without being able to see it in person or try it on (an
item of clothing, for example)? Some consumers are hesitant to buy clothing before
trying it on.

Is the project subject to legal regulations? Alcohol, cigarettes or pharmaceuticals can
be distributed over the Internet, but companies must take special precautions to
make sure the product is distributed legally.
Promotion of the product can take many forms and budget sizes. Assume that we are not
talking about the enormous ad campaigns that many of the “dot.com” companies
formerly conducted. With a well-placed, methodical, relatively inexpensive marketing
campaign, the product can find its market niche and be a success.
In the following lab, you will consider how the Habitat For Humanity Gift Shop would
introduce a new product. Suppose you have been hired by the Habitat For Humanity Gift
Shop to help market its expanded product line. You would need to analyze the current
site, consider product suitability and discuss the ramifications of offering specific
products.
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Lab 3-3: Introducing new products on the Internet
In this lab, you will look at the Habitat For Humanity Gift Shop site to identify the need
for introducing any new products, and you will consider the ramifications of introducing
new products.
1.
Browser: Navigate to the Habitat For Humanity Gift Shop Web site.
2.
The Habitat For Humanity Gift Shop is considering selling handmade furniture.
Consider whether handmade furniture is a suitable addition to the product line.
What factors will influence your decision? What changes would the addition of this
product require?
3.
List three products that would be appropriate to add to the Habitat For Humanity
Gift Shop catalog. Discuss how you would add them to the site. Write your answers
in the space provided.
In this lab, you analyzed the changes needed to introduce a new product on the Habitat
For Humanity Gift Shop site.
Automating business processes
The more processes that can be moved away from manual labor or processing, the more
efficient the business will become. Again, this statement does not fit all business models,
but it is true as a general rule.
If someone approached Rolls-Royce Motor Cars to sell the idea of thorough automation in
the assembly line, the idea would probably encounter serious resistance. Conversely, Dell
relies heavily on the automation of its Web site’s ordering and customer service
processes.
just-in-time (JIT)
ordering
The practice of
ordering only as
much inventory as is
needed to fill
existing and nearterm predicted
orders.
For many businesses, automating certain processes is part of a natural evolution and a
byproduct of staying competitive in the market. Automation allows an e-commerce
business to stay competitive with other businesses that have embraced the technology.
When processes have been automated, the interchange with other automated systems
becomes possible. This capability allows a company to save money by reducing the
number of employees necessary to perform a job. It also allows companies to optimize
their supply chain. Adopting a just-in-time (JIT) ordering methodology helps companies
compete by reducing the excess inventory stored at any point in time.
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One of the challenges facing businesses today as they continue to adopt e-commerce
strategies is choosing technologies that will carry them forward without requiring
restructuring. Later in the course, you will study the standard frameworks that
businesses are choosing for their e-commerce strategies.
In the following lab, you will visit the Habitat For Humanity Gift Shop site and analyze
where automation can be used to reduce costs. Suppose you have been hired by Habitat
For Humanity Gift Shop as a consultant to determine how the business can reduce its
costs. You might consider automating certain processes after examining other ecommerce sites. You could analyze the Habitat For Humanity Gift Shop site to identify
points at which automation will help reduce costs.
Lab 3-4: Determining automation benefits for an e-commerce site
In this lab, you will look at the Habitat For Humanity Gift Shop site to see whether you
can identify any processes that might benefit from automation.
1.
Browser: Navigate to the Habitat For Humanity Gift Shop Web site.
2.
Examine the Habitat For Humanity Gift Shop site and list some processes that you
think would benefit from automation. Some of these elements may be related to other
issues you discovered in previous labs. Other elements might be implemented in later
labs.
A.
________________________________________________________________________________
________________________________________________________________________________
B.
________________________________________________________________________________
________________________________________________________________________________
C.
________________________________________________________________________________
________________________________________________________________________________
3.
Compare ideas with your classmates.
4.
If Time Permits: Visit one or more of the other profile sites to see how automation
could be implemented or improved.
In this lab, you evaluated whether automation could be used to improve the Habitat For
Humanity Gift Shop site.
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Web Marketing Strategies
When you are ready to implement your goals, you need to consider marketing strategies.
Strategies are small, incremental steps taken toward a goal. Think of marketing as a
pyramid (see Figure 3-12). At the top of the pyramid are the goals. The next level includes
the strategies, and below that are the tactics. Strategies are based on specific tactics.
Goals
Strategies
Tactics
Figure 3-12: Marketing pyramid
Tactics are the building blocks of strategies. Strategies are the building blocks of goals.
All work together to create an effective marketing campaign.
OBJECTIVE:
3.3.10: E-commerce
site promotion
For example, assume that the goal is to enter new markets. The strategy would be to
target new customers. The tactic would be to advertise to specific customers who would
use the product or service.
Web marketing strategies can include many focus areas, including the following:

Web site design

Online promotion campaigns

Targeted marketing programs

Search engine placement methods

Traditional promotion campaigns
The most effective marketing strategies typically involve multiple components that make
up an integrated marketing plan. Also important is ongoing tracking and evaluation,
which enables you to determine what is or is not working successfully.
Web site design
Hypertext Markup
Language (HTML)
The traditional
authoring language
used to develop
Web pages for
many applications.
The era of quickly designed Hypertext Markup Language (HTML) pages has evolved into
one of more sophisticated Web sites. Many site design considerations are beyond the
scope of this course. However, because site design is part of a marketing strategy, you
will review some major components later.
Site owners should understand the reasons for Web site design: not necessarily the
aesthetics of the design, but rather its functionality. The site itself needs goals, which
should be supported by design strategies, which are, in turn, supported by tactics.
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Online promotion campaigns
To develop product awareness, a promotion campaign should be implemented. If you are
targeting those already using the Internet, an online promotion will direct traffic to the
site. Like site design, online promotion has some tested elements that should be followed
for the most effective results. We will discuss the strategies and tactics of online
promotions in a later lesson.
Targeted marketing programs
An online promotion campaign defines how the audience sees the message. It might be a
broadcast message suitable for a wide range of potential consumers or a targeted
message. The targeted marketing program determines who should see the message and
why.
For example, an online promotion might include banner ad placement on other Web sites.
However, the Web sites that are chosen and the reasons for selecting them depend on the
target market. If ads to promote a new home-cleaning product are placed on a Web site
that focuses on sports and sporting events, the ads are probably not well targeted. If the
same ads are placed on a site that focuses on home improvement topics, the ads are
better targeted.
Search engine placement methods
If customers do not see the ads or hear about your business from another source, the
only way they will find you is through search results. A problem with this method is
ensuring that the site will place in the top 10 results returned. Unfortunately, there is no
way to guarantee such placement.
Each search engine has its own method of cataloging Web sites, ranking them and
returning results. Many companies now offer services to increase your chances of getting
top-10 results through persistent and proper procedures during submissions.
One useful resource for learning how to best place and list a site with search engines can
be found at Search Engine Watch (http://searchenginewatch.com). Search Engine Watch
continually monitors the techniques and changes that the major search engines use,
allowing submitters to achieve optimal placement. It also offers a periodical e-mail update
to which users can subscribe.
Growth Drivers and Barriers in E-Commerce
For businesses trying to enter new markets, factors that encourage growth are called
drivers, and those that limit growth are called barriers. Being able to identify these
factors and determine their effects can make the difference between profits and losses.
Drivers
OBJECTIVE:
3.1.2: Growth drivers
and barriers
Following are some areas in which growth drivers exist in e-commerce.
Access — A larger customer base can increase profit potential.
Around-the-clock service — Time zones are no longer a hindrance to business.
Standardized data interchange formats — Electronic Data Interchange (EDI) and
Extensible Markup Language (XML) allow businesses to exchange and use electronic data
both internally and with vendors, suppliers and customers.
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Increasing bandwidth — More options are becoming available for high-speed Internet
connections to allow media-rich content to be delivered more consistently.
Enabling technology — Easy-to-use technology is allowing more businesses to enter
e-commerce.
Cost — Options to implement e-commerce are available for minimal costs.
Ease of access — Internet access is becoming more widespread and, in some cases, a
daily necessity.
Critical mass — The growing acceptance of the Internet indicates that pursuing
e-commerce makes economic sense now.
Physical location — Some businesses no longer need physical stores to be successful.
Diversification of offerings — Companies can expand on new and existing products and
services.
Centralization — An online business need not be geographically dispersed. In some
cases, however, cost benefits may result from such disbursement.
Barriers
Following are some areas in which growth barriers exist in e-commerce.
Fragmented data and data formats — Although data can be interchanged, data formats
have not yet been standardized. However, many businesses are turning to XML to
describe data.
Fear of change — Some demographic groups continue to be wary of computers in
general, specifically of online shopping and providing personal information over the
Internet.
Large segmentation — Defining the target market is more difficult because the audience
is so much larger today.
Rapid change — The models that work today on the Internet might not perform well or
might become obsolete in the future.
Increased competition — Easier market entry has also increased the number of
businesses vying for customer attention.
Physical location — Physical store locations, in which customers can handle the
products before buying them, give customers a feeling of security because they can
return to the location if problems occur.
Saturation — Product or service uniqueness is becoming more difficult to attain.
Cost — Large-scale projects can require sizable up-front investments.
Restrictions — Although few laws and restrictions exist so far, regulation will probably
increase. Because this area is experiencing rapid change, keeping track of current
regulations, especially applicable foreign regulations, can be difficult.
Distribution — Some products sold online can be difficult to ship.
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Selecting and Positioning Your Product
A key consideration with any retail initiative is to carefully select the products and
services you will offer. This consideration holds true for e-commerce ventures as well as
more traditional ones. In fact, when selecting products and services for sale online, you
must consider additional factors. Key questions you will need to answer include the
following:

Is the product or service a hard good or a soft good? (You will learn about hard goods
and soft goods in the following section.)

How much will the product cost?

Is the market for the product a global market or a niche market?
frequently asked
questions (FAQ)
A summary of
answers to questions
on a given topic;
usually found on
business or
informational Web
sites.

Is the product available to purchase locally?

How will you distribute the product?

How will you support the product? Will you need to offer technical support or will an
online frequently asked questions (FAQ) page suffice?
OBJECTIVE:
3.3.8: Product
distribution factors
Some businesses offer software, music, news or advice, which are referred to as soft
goods or digital goods. The term “soft goods” means that the product or service can be
distributed via an electronic method, such as the Internet. The selling company can
immediately distribute its products for free or for a charge. These products offer
immediate gratification because the user can quickly download or view the product or
service.
Hard goods vs. soft goods
A business that sells items such as computer hardware, clothes or books has hard goods
for sale. Even though the goods can be purchased online, the delivery method typically
requires the Post Office or a similar mail carrier.
Whether a product is a hard good or a soft good can affect its success in online sales.
Consider the previous discussion of successful e-commerce sites. Most of those
companies offer hard goods: Most of them sell computers, networking equipment and
telecommunications devices, and a few sell books and music.
Are hard goods more successful than soft goods? The answer depends more on the
product’s suitability for online selling. Consider perishables: They are hard goods, but are
not very successful online. However, some other hard goods, such as personal
computers, can be successfully sold online. What about soft goods? Services such as
online project management are not very successful, whereas music downloads are very
popular.
Other considerations that affect product success can include the following.

Complexity — Is physical interaction with business personnel required to order or
set up the product or service? Complex products are difficult to market online.

Information intensity — Does the product require intensive pre-purchase
information gathering? These products are more easily marketed online.

Contact — Is the product or service best marketed through physical contact? If so, it
will be more difficult to market online.
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Product pricing
OBJECTIVE:
3.3.7: Productpricing ranges
A very expensive or very inexpensive item might not sell well on the Internet because
buyers generally want to see very expensive items to check quality, and the cost in
shipping and time delays for an inexpensive item might make it less appealing. Both
types of products could still be marketed online, however. Both Toyota (expensive
products) and Coca-Cola (inexpensive products) have strong online marketing campaigns
driving traffic to their retail channels.
Moderately priced items are more easily sold online. Also, products requiring frequent
price or offering changes might be an excellent choice for online marketing because
changing pricing or product descriptions in a database or Web catalog is relatively easy.
On the other hand, changing prices in printed catalogs can incur heavy expenses.
One important point to consider when pricing your products is whether the distributors
or manufacturers of the product have any pricing restrictions. Some wholesalers depend
on brick-and-mortar business to generate interest for their products, and want to ensure
that these companies are not driven out of business by Internet discounters. These
distributors and manufacturers might require businesses to agree not to cut prices below
a certain margin.
The way you handle pricing changes is also important to your marketing strategy.
Consider the fringe benefit of reducing prices overtly (in other words, explicitly indicating
the new price that replaces the old price) instead of covertly (in other words, updating the
Web site content to reflect only the new price). If done covertly, consumers may not notice
the price reduction even though they would still reap the benefit of lower prices. However,
if done overtly, consumers will not only reap the benefit of lower prices but will probably
have a more favorable impression of the business as one that offers great sales or
discounts.
You should manage price changes carefully so as to avoid upsetting customers who have
made recent purchases at the old (higher) price. If you make overt price changes too
often, customers might start postponing purchases as long as possible, hoping to get the
item at a lower price. You can minimize this concern with a 30-day rebate (the seller
drops the price and the buyer can request a rebate) or similar program.
Global (mass) vs. niche (micro) markets
OBJECTIVE:
3.3.2: Global vs.
target (niche)
A product’s appeal can be categorized in one of two ways. The first is a global (or mass)
market appeal, in which need is not constrained by geography and a large number of
potential customers exists. For example, computer hardware is not specific to any
geographic location; thus, it has a global (mass) appeal and is a suitable product for
online marketing. Computer hardware has no geographical constraints and is a highly
desirable product worldwide.
The other type of appeal is a niche market appeal, which has a smaller target audience
and need. Niche (micro) markets might also be served globally, but they target a very
select audience. Niche marketing tries to work its way into daily life. For example, the
market for mobile dog-grooming services is not constrained significantly by geography
(as, for example, surfboards would be) because dog owners live all over the world, but the
number of potential customers is still limited by other factors.
OBJECTIVE:
3.3.3: User interests
specific to niche
markets
Niche markets require a different marketing strategy from that of global markets. You
must carefully target the individuals who should receive your marketing message. Instead
of using broadcast advertising techniques, you must identify the interests of those who
will most likely want the product you are selling, and you must use those interests to
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design your advertising campaign. For example, if you are selling baseballs, it would be
better to buy advertising space on a Web site that publishes sporting event results than
on a general interest news site. Blogs are becoming a popular choice for niche market
advertising because they often have tightly targeted content.
Product distribution and availability
OBJECTIVE:
3.3.8: Product
distribution factors
Product distribution depends largely on the distinction between hard goods and soft
goods. Hard goods must be shipped, whereas soft goods may be shipped, but are typically
delivered online. The methods used for hard goods distribution will probably be
determined by the cost and the importance of the delivery.
Product availability is another important consideration. Does the product have other local
distributors or retailers? If so, the product will be more difficult to sell online.
For example, a business that wants to sell cellular and wireless phones online will face
extensive competition from other online companies and those with physical stores. For
online marketers, such competition is one of the most difficult barriers to overcome.
When a retailer has a physical location, a customer can walk into the store, examine the
product in person, and then buy it. In this type of transaction, the customer has easy
access to the product and a place to return it if necessary.
The question then becomes: Why would the customer choose to buy a cellular or wireless
phone online? Perhaps the online marketer can offer the phone for a lower price. What
about shipping charges? The cost of shipping can eliminate the discount advantage of
shopping online. What about a return policy? If the customer has to return the phone, he
or she may be required to pay the shipping and may not be able to use the phone in the
interim. On the other hand, if the phone is purchased at a storefront, the customer can
return it for immediate repair or replacement. Online marketers face serious challenges
with issues of this type.
Ease of shipment is another important consideration for online sellers of hard goods. Is
the product large, small, perishable or fragile? The legality of the product in various
jurisdictions must also be considered, as must customs laws in various countries.
The problems discussed here may seem less like distribution and availability issues and
more like product-choice marketing issues, but the two areas are closely connected and
the lines are less distinct than they are with traditional marketing. Customer service is a
major selling point that will help online businesses compete with traditional retailers.
Later in the course, we will discuss effective customer and product service.
Important product availability and distribution questions
Considering the following questions will help you formulate some of your product policies.

Is the product a hard or a soft good?

Is the product available locally to the customer?

Will the cost of shipping outweigh the benefits of online purchasing?

Who will be responsible for the cost of return shipping for unsatisfactory products?

Can the product be shipped easily?

Is the product governed by laws or regulations for shipping and customs?
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Identifying Your Target Market
After selecting the products and services you will sell, you must identify who will buy
them. Knowing your customers is important to ensuring that your marketing message
reaches the right people. After you understand your customers, you can use the following
types of data to hone your marketing strategy:

Demographics

Psychographics

Focus groups

Surveys
Demographics
OBJECTIVE:
3.3.4: Internet
demographics
Demographics is the study of groups of people based on common characteristics. Good
marketers base their decisions largely on demographic studies. Demographic studies of
various groups, called populations, have been conducted for many years so that
marketers can learn how to best target prospective customers. Some of the most common
demographic characteristics studied are as follows:

Age

Gender

Race

Income

Location

Education
When marketers understand the details of these characteristics, they can generalize
about the group. They can then target a certain market segment and predict responses
somewhat successfully based on experience.
When marketers have this type of information, they can best devise their campaigns to
reach the target audience. For example, an advertising campaign for marketing a product
that appeals to teen-agers will be very different from one that markets a product that
appeals to seniors. The ads will differ in message, presentation and positioning.
In the following lab, you will examine demographic information. Suppose you have been
hired by a company to help it launch an e-commerce site that will sell a variety of products.
You would need to identify market concerns based on current demographic data.
Lab 3-5: Exploring demographics
1.
Browser: Enter www.pewinternet.org and click Latest Trends to visit the Pew
Internet & American Life Project Latest Trends page, as shown in Figure 3-13. This
organization tracks Internet access demographics in the United States.
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Figure 3-13: Pew Internet & American Life Project Latest Trends page
2.
Click the Who’s Online link to display current demographic information (see Figure
3-14).
Figure 3-14: Demographics of Internet Users
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Consider the ways in which this demographics information supports a company’s
decision to sell the following products online. Rate the products in terms of whether
they will be easy or difficult to market on the Internet. Justify your reasons.
A. Geriatric vitamins
B. Telescopes and telescopic cameras
C. Expensive jewelry
D. Music videos
4.
Redisplay the Latest Trends page. If the demographics appear in a pop-up window,
close it.
5.
Click Demographics in the Report Topics drop-down list and click Go. The Reports:
Demographics page should appear.
6.
Locate the “Older Americans and the Internet” article. Click the Learn More link and
read the beginning of the article. How does this influence your answers in Step 3?
Remember that these statistics are from only one source. Highly accurate demographics
are available, but usually have an associated access fee. The following link provides a
Yahoo! listing of other statistics and demographics:
http://dir.yahoo.com/Computers_and_Internet/Internet/Statistics_and_Demographics/
Psychographics
Psychographics is defined as a science that can help anticipate the specific positive,
negative or neutral psychological impact of words, symbols, shapes, textures, colors,
fonts or even scale on consumer target market groups. These ideas offer a significant
creative advantage to developers of corporate identities, promotional tools and advertising
campaigns.
Though lifestyles can be measured several ways, the most popular method is to analyze
people’s choices in the following areas.

Activities and Interests — what people do with their time, including work, hobbies,
vacation and entertainment

Priorities — what is important to people, such as family, home, community and
achievements

Opinions — what people think about a variety of topics, including themselves, social
issues, economics, politics and culture
This information can be combined with demographics so that marketers can develop a
detailed focus on their target market.
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Focus groups
Another tool marketers have to evaluate product and service marketing concepts is
market testing through focus groups. Focus groups can consist of employees in the
marketing organization, or they may be outsourced. One outsourcing company providing
this service is i.think inc. (www.ithinkinc.com).
Properly administered, focus groups can provide a great deal of information about the
target audience and their buying habits. However, you must carefully select the people
who will participate in the focus group to make sure they represent the target consumer
for your product. For example, if you are selling beauty products online, you will want to
ensure that your focus group includes users who currently use beauty products.
Surveys
OBJECTIVE:
3.3.5: Customer
preference surveys
Surveys also help connect the marketer with the audience. A common type of survey is
one administered after a consumer has made a purchase. This type of survey can be used
to measure the customer’s satisfaction with the online shopping experience and to obtain
information about the customer’s perception of your company. Even answers to a few
simple questions can help alert you to potential problems with your site and give you
insight into your customers.
Market survey data can also be useful in helping you develop a targeted marketing
strategy. A survey of this type can gather both demographic and psychographic data.
Market survey development is a special art, and must be performed carefully to generate
valid data. The base of users surveyed must be broad enough to be meaningful.
A number of companies offer market survey services, including:

MindField (www.mindfieldonline.com)

InsightExpress (www.insightexpress.com)

i.think inc. (www.ithinkinc.com)
Other companies offer software that allows you to build your own surveys, including
Perseus (www.perseus.com) and Grapevine (www.grapevinesurveys.com).
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Case Study
Pet Project
Critter Comforts is a manufacturer of high-quality pet beds, shelters and habitats. It
currently has stores in six major cities in the United States. Its current demographics are
as follows:

Sixty (60) percent of sales are to customers more than 50 years old.

Seventy-five (75) percent of sales are to customers with annual incomes higher than
$60,000.

All customers live in the United States.
Rocky has been hired to create a Web site for Critter Comforts. The company’s primary
objective is to expand its customer base. Rocky recommends implementing an ecommerce site and advertising in search engines and on general interest Web sites, such
as Yahoo! and MSN. He also suggests advertising on television in those cities in which
Critter Comforts already has a store.
*
*
*
As a class, discuss the following issues with regard to Critter Comforts:

How suitable is the product for sale over the Internet? What characteristics of the
product might make Web marketing difficult?

Is the market a global market or a niche market?

How might selling the product on the Web expand the Critter Comforts customer
base?

Should Rocky have recommended globalization?

What are the current customer demographics?

How would you recommend advertising that better targets the anticipated customer
base?
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Lesson Summary
Application project
Early Web marketing was based on traditional theories and ideas. As the Internet
evolved, marketers had to change their thinking quickly to incorporate new methods that
would translate into successful online sales.
Take a moment to reflect on the changes you have noticed in Web marketing over the
years. What patterns have you noticed? If you are a veteran Web user, you might be able
to remember a time when there was little or no advertising. Over the years, ad
progression has involved links, then banner ads, then rotating banners, animated
banners, and more recently, smaller pop-up windows requiring some sort of user action,
such as reading, making a selection or closing the window. Has one type of advertising
captured your attention more than others? Why?
Skills review
In this lesson, you examined and identified Web marketing goals and strategies. You
discussed the drivers and barriers associated with growth in e-commerce, and you
learned the advantages and disadvantages of hard and soft goods. You also learned about
demographics and their role in Web marketing.
Now that you have completed this lesson, you should be able to:

1.1.1: Identify specific business-to-business (B2B) and business-to-consumer (B2C)
issues in developing an e-commerce site.

1.2.5: Compare features of competitor e-commerce sites.

3.1.1: Compare the advantages and disadvantages of e-commerce and traditional
sales methods.

3.1.2: Identify business growth drivers and barriers.

3.3.1: Identify e-commerce marketing goals.

3.3.2: Determine global versus target (niche) product appeal.

3.3.3: Identify user interests specific to a target (niche) market.

3.3.4: Evaluate Internet demographics and their relevance (includes gender, culture,
age).

3.3.5: Use surveys to determine customer preferences.

3.3.7: Evaluate product-pricing ranges and price changes.

3.3.8: Evaluate product distribution factors and methods (includes cost, distance,
hard goods, soft goods).

3.3.10: Promote and advertise an e-commerce site (includes search-engine placement
options, synchronizing e-commerce promotion methods with traditional methods).
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Lesson 3: Web Marketing Goals
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Lesson 3 Review
1.
How does Web marketing create a more personalized approach than radio or
television advertising?
2.
Why is the risk of introducing a new product online lower than it is for a business
with a physical store?
3.
Why do moderately priced products sell better online than very expensive or very
inexpensive products?
4.
Why do marketers rely on demographic statistics?
5.
What is psychographics and how do marketers rely on it?
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4Lesson 4:
Online Product
Promotion
Objectives
By the end of this lesson, you will be able to:

1.1.1: Identify specific business-to-business (B2B) and business-to-consumer (B2C)
issues in developing an e-commerce site.

3.1.3: Establish and protect a brand (includes trademark registration).

3.1.4: Identify the relevance of blogging to e-commerce.

3.2.4: Avoid questionable practices (includes spam, spyware, selling user
information).

3.3.6: Obtain browser and operating-system use patterns.

3.3.9: Implement banner exchange networks and referrer programs.

3.3.10: Promote and advertise an e-commerce site (includes search-engine placement
options, synchronizing e-commerce promotion methods with traditional methods).

3.3.11: Implement online marketing strategies (includes incentive plans, banner ads,
blogging, acceptable e-mail marketing practices).
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Pre-Assessment Questions
1.
Alan has an online business that provides health tips. He has agreed to put ads from
a business that sells drugstore products on his Web site. In return, the online drug
store agrees to place ads on its Web site directing people to Alan’s site. Which type of
online promotion method is Alan using?
a.
b.
c.
d.
2.
What is the difference between a clickthrough and an impression?
a.
b.
c.
d.
3.
Banner exchange
Referrer site
Banner ad
Targeted e-mail
Clickthrough represents the number of times an ad is downloaded, whereas
impressions represent the percentage of ad viewings that resulted in a user’s
accessing an ad.
Clickthrough represents the number of times a user clicks an ad, whereas
impressions represent the number of times an ad is downloaded.
Clickthrough is the percentage of ad viewings that resulted in a user’s
accessing an ad, whereas impressions represent the total number of times an
ad appears on one of the Web site’s pages in a single visit.
Clickthrough is the percentage of ad viewings that resulted in a user’s
accessing an ad, whereas impressions represent the number of times an ad
is downloaded.
You want to make sure that search engines do not index the images on a Web
page. What tag would you use to specify this?
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Online Promotion Overview
A basic marketing tenet is that if customers do not know about a product, they cannot
buy it. Product awareness results from promotion. Promotion means making others
aware of something or someone. Types and methods of promotions are practically
unlimited.
Some promotions are driven by marketing campaigns, and others may be driven by
public opinion or demand. Promotions can be positive or negative. All promotions are
designed to build awareness.
Our discussion of promotions focuses on the vehicle, not the message. The vehicle is the
promotion method — that is, the means by which you are putting yourself in front of
potential consumers. The message is the actual promotion, what you have to say to your
potential consumers. For example, an Internet radio promotion is “how” people get the
message, making it the vehicle. The message is what listeners get from radio exposure.
Your ad campaign will define both the vehicle and the message.
Types of online product promotion
You will examine several types of online promotion. Some should be familiar, and others
may not be. You will also consider the characteristics that make these promotions
successful. Following is a list of common types of online promotion:

Banner ads

Banner exchange

Referrer sites

Blogs and blogads

Pop-up and related ads

Search engine placement

Spam e-mail

Targeted e-mail

Opt-in e-mail
Online marketing growth
Internet commerce continues to grow. A 2004 study by the Dieringer Research Group
found that nearly 100 million adults had made online purchases in the previous year (see
www.imediaconnection.com/content/3972.asp). In the United States, marketers scaled
back money spent on online advertising between 2000 and 2002, but much of this was
due to the failure of a huge number of Internet-based businesses during that period. In a
global February 2006 study by Web Trends Inc., 57 percent of respondents indicated that
the Internet was at the center of their marketing strategy or would be in the next year.
Only 4 percent of respondents said that they had no plans for Internet marketing.
Sources of information about online marketing trends include the following:

ClickZ Network Solutions for Marketers (www.clickz.com)

iMedia Connection (www.imediaconnection.com)

Interactive Advertising Bureau (IAB) (www.iab.net)
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International marketing
It is important to remember that with online marketing, you might have less control over
the specific audience that sees your ad. When posting ads to popular portals and search
engines, you do not always know where the ad will be seen. This may not be your desired
result, depending on your marketing plan. If you are interested in attracting international
customers, you should consider using localized online advertisements with appropriate
regional placements.
E-Commerce Promotion Considerations
As with all other aspects of site design and implementation, several issues will influence
your online promotion decisions. You must consider who your audience is and what, if
any, exposure they might have had to your business or product in the past. Established
businesses will typically have an established identity. Moving to the Internet does not
necessarily mean that you should significantly change that identity. With a new business
or service, you are establishing your identity and must keep in mind that word travels
fast on the Internet. Your initial attempts at carving out your niche in the marketplace
may propagate so far and so fast that you will not be able to change that niche in the
future.
B2B vs. B2C marketing
OBJECTIVE:
1.1.1: B2B and B2C
development issues
As has been the case throughout the discussion of site development, your marketing
decisions will be influenced by whether you are developing a B2B or a B2C site. The
vehicle used to get your message out can be different between the two, as can the content
and tone of your advertising message.
Some general statements about marketing within a certain category can be made, but few
if any definite rules. In general, a B2B site will be held more strictly to standards of
professional conduct. The B2B customer is likely to be less forgiving of what might be
considered obtrusive advertising, such as pop-up ads or spam e-mail. This characteristic
of the B2B customer does not mean that a B2B site’s options are necessarily that limited.
Some types of mass marketing, such as banner ads and opt-in e-mail, are acceptable,
and even expected. For example, many B2B sites send out periodic newsletters that
usually contain more advertising than any real news.
The market is likely to be more accepting if a B2C site uses more aggressive marketing
tactics, within reason. For example, it is not unusual for a B2C site to send daily e-mail
announcements advertising current specials to former and current customers. Even the
limited use of potentially annoying vehicles, such as pop-up ads, is acceptable as long as
they are kept to a minimum. Even though consumers say that they do not like pop-up
ads, they still click many of those ads.
E-Commerce Site Categories
Most Web sites that are involved with online advertising can be divided into two groups,
publishers and marketers, based on how they benefit from the advertising. Publishers
make money by carrying the ads. Marketers purchase ad space and make money by
having people respond to the ad message.
Many sites (and even some companies) depend on ad revenues, which are a primary
revenue stream. One type of Web site in that category is the Web portal. Yahoo!, for
example, is a portal. A portal is a Web site that many people visit and use to explore and
participate in activities on the Internet. On Yahoo!, many advertisers pay for space to
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place their ads. In return, Yahoo! offers Internet users reasons to come to the Yahoo! site
so that the ads can be seen.
Some of these services include the Yahoo! search engine, Yahoo! Mail, news, stock quotes
and auctions. All these features are reasons that Internet users return to Yahoo! and that
it is considered a portal.
Most of these services are free, so the only form of revenue that Yahoo! can generate is to
charge marketers money to place their advertising on the Yahoo! Web site. This structure
makes Yahoo! an ad revenue-supported Web site.
publisher site
A site whose primary
focus is selling ad
space as a means
of revenue.
A publisher site must contain space for the marketer’s message, but that message will
probably not constitute the bulk of a site: The ratio of content to advertising tends to be
higher than on a marketer site. However, a marketer site will focus on advertising for its
own products only rather than selling ad space for other sites, with some exceptions
described later in this lesson. Publisher sites that contain heavy advertising and little
content will not draw as many visitors; they may reap short-term profits, but their longterm viability will suffer.
Publisher sites usually include a relatively large number of short marketing messages
created by different companies. These messages can be communicated in a brief visit,
and their efficacy is often measured in terms of how many users leave the publisher’s site
to access the advertiser’s site. Publishers, then, have a much lower stake in keeping
users at their sites, with repeat visits typically more important to them than long visits.
clickthrough
An ad viewing or
browser redirection
resulting from a user
clicking a banner
ad.
Through its traffic volume and repeat visits, the publisher site offers visibility. Rates for
placing ads are often based on the frequency with which the ads appear on the publisher
site and the number of times that the ad results in a potential customer being redirected
to the advertiser’s site. After a customer arrives at a Web site to purchase something (as a
result of clicking a banner ad), the destination site receives a clickthrough. That means
a Web user saw a banner ad on another site that interested him or her, and clicked it to
go to the site offering the product or service. Some publisher sites base ad rates on a
click-per-view basis, charging a per clickthrough rate.
Portal sites often entice visitors to register so that they can customize the content
displayed to their particular likes and needs. This feature also enables the portal site to
better identify targeted ads matched to the visitors’ likes and dislikes, improving
clickthrough and profitability. You will also see this in search engines, with targeted ads
appearing based on the text entered as your search string.
Because publishers can rely on repeat visits, they can use a value model that is not
advisable for marketers. Publishers can provide directory and search engine sites, whose
value consists chiefly in providing links away from the site. These types of sites are
among the most successful advertising sites online.
marketer site
A site whose primary
focus is selling
products or services
for revenue.
The second category is a marketer site, which differs from a publisher site in the
following manner. The marketer site is the clickthrough destination, typically hoping to
sell you a product or service rather than redirect you to another location. Therefore, a
user will see very few banner ads for other products at other Web sites because the
marketer site does not want to make it too convenient or too tempting to leave for another
site. Links that take visitors away from the site, if any, are kept to a minimum.
To understand this, consider the world of brick-and-mortar businesses. If you went to
McDonald’s, you could order a Big Mac. But if the menu carried an ad directing you to
Burger King for a Whopper, that ad would have a negative effect on the number of Big
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Macs sold. Marketers use this same principle for visitors to their sites. They want to sell
something, not send the customer elsewhere to make a purchase.
A marketer has a strong interest in keeping the visitor at the site as long as possible,
because the longer the visitor stays, the more chances the marketer has to convey the
message. Depending on the product or service, the marketer may provide links to other
sites that offer complementary products or services. For example, a site that offers
sporting equipment may provide a link to another site that sells tickets to sporting
events. One complements the other and will not cause users to leave and buy the same
type of products elsewhere.
A marketer site will often include related content that would tend to keep you at the site
longer. Using the same example, a site that sells sporting equipment, the site could also
offer related services, such as:

Instructions for the proper care and use of sporting equipment.

Official or sanctioned rules and requirements for sports and games.

League management services.

Schedules for major sports teams.
Content of this type has two benefits for the marketer site. It addresses the primary goal
of keeping potential customers at the site as long as possible. It also gives customers a
reason to visit the site repeatedly, whether or not they purchase anything during the
initial visit.
Banner Ads
OBJECTIVE:
3.3.11: Online
marketing strategies
Banner advertising is the most abundant form of online promotion. Banner ads have
been used for many years, so their effectiveness has been tested over time. In 2002,
banner ads accounted for 32 percent of online spending, down from 36 percent in 2001.
Despite an ongoing drop as a percentage of total online spending, banner ads continue to
be essential to online marketing.
conversion rate
The percentage of
site visitors who
decide to purchase
goods or services
from that site (in
other words, visitors
who are
“converted” into site
customers).
Some will say that banner ads are not effective, but statistics indicate that they are. The
average response rate to banner ads for the Web is between 0.5 and 1.0 percent, which is
comparable to other forms of media response rates. In fact, some studies show that Web
banner ads have higher awareness rates than television ads. These rates are partially due
to Web users’ active participation in the medium, whereas television is a passively
received medium. When banner ads are responded to, conversion rates (from visitor to
customer) are approximately 60 percent within the first 30 minutes.
Banner ads seem to be effective up to four exposures per user. The user response to ads
increases for each exposure up to four, after which it begins to drop.
OBJECTIVE:
3.1.3: Brands and
trademarks
Banner ads do seem to increase site traffic and lead to sales, but they do not appear to
increase brand awareness. Brand awareness is created on the Web site for the product or
service, through the extensive use of a logo or slogan. Studies indicate that the best
branding technique is to have the business’s logo on every page of the site.
Banner ads should not be considered a magic advertising solution. Many Internet users
are unhappy with the proliferation of banner ads. However, most of their frustration is
directed not toward the advertisers but toward the sites hosting the banner ads. At one
time, the biggest concern for advertisers was that potential customers might have
configured their Web browsers not to allow the browser to download graphics.
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Ad-blocking tools have become more sophisticated, with tools designed specifically to
block banner ads.
Banner ad terminology
You need to be familiar with some terms as they relate to banner ads. The terms in Table
4-1 identify different aspects of banner ad use.
Table 4-1: Banner ad terminology
Ad Term
Definition
Ad clicks
The number of times users click a banner ad
Ad rotation
Automatically changing ads in a given ad space, administered by the
server or an ad broker
Ad view
See Impressions
Banner
An ad on a Web page that links to the advertiser’s site
Booked space
The number of impressions sold for an ad space
Coalition for
Advertising
Supported
Information and
Entertainment
(CASIE)
Founded in May 1994 by the Association of National Advertisers (ANA)
and the American Association of Advertising Agencies (AAAA) to guide
the development of interactive advertising and marketing; www.casie.org
Clickthrough
The user act of clicking in response to an ad
Clickthrough rate
(CTR)
The percentage of ad viewings that results in a user clicking an ad
Click rate
See clickthrough rate
Click stream
Recorded path of a user’s Web page visits
Cost per click
(CPC)
An Internet marketing formula used to price banner ads; advertisers pay
Internet publishers based on the number of clicks a specific ad banner
receives; cost generally ranges from U.S. $0.10 to $0.20 per click; also
referred to as “pay-per-click”
Cost per thousand
(CPM)
The cost for a particular ad based on intervals of 1,000 impressions. See
impressions.
Hit
Each instance of a Web server sending a file to a browser; recorded in
the server log file; generated for every element of the requested page,
including graphics, text and objects (e.g., if a user views a page
containing four graphics, five hits will be recorded in the server log —
one for the page itself and one for each of the four graphics); used to
measure server workload; a poor guide to visitor traffic measurement
because it represents element requests rather than the actual number of
visitors
Impressions
The number of times an ad banner is downloaded and presumably seen
by visitors; correspond to net impressions from traditional media;
accuracy is affected by browser caching of images and screen size versus
page size
A Web site with a CPM rate of U.S. $20 is charging for each 1,000 times
the banner is downloaded. If the site could guarantee 500,000
downloads, it could charge $10,000 for the ad ($20 times 500 thousands
of impressions).
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Table 4-1: Banner ad terminology (cont’d)
Ad Term
Definition
Log file
A file that tracks actions that have occurred; maintained by Web servers
to list every request made to the server; with log analysis tools, helps site
managers determine where visitors are coming from, how often they
return and how they navigate through a site (including how long they
stayed)
Page views
The number of times a user requests a page containing a particular ad
Unique users
The number of different users who visit a site within a specific time
period
Visits
A sequence of requests made by one user at one site; any user activity
within a 30-minute time frame is considered one visit
Effective banner ads
Studies indicate that the highest clickthrough rate occurs between the third and fourth
impressions by a given user. There are also several steps you can take to make a banner
ad more interesting, which can increase clickthrough rates. Curb the temptation to make
the ad too busy or confusing, which will lose the essential message.
Traditional banner ads sometimes lack visual interest, but Bluestreak
(www.bluestreak.com) has provided an alternative. Bluestreak creates banners that allow
the viewer to interact with the ad before being linked to the destination. Many banners
are on display in the Bluestreak site’s gallery.
Questions
Questions initiate user action and entice site visitors to click the banner. Questions can
include phrases such as “Do you …?” or “Have you …?” or “Are you looking for …?”
Questions may also contain the words “free,” “quick” or “try.”
Calls to action
A phrase can tell the user to take action. The most common call to action on banner ads
is “Click here.” Others include “Go,” “Find,” “Last chance” or “Help.” These ads have
become less effective with increased use because users are bombarded with increasingly
desperate calls to action.
Refreshed banners
A banner ad will “burn out” and clickthrough rates will fall as users repeatedly see the
same ad. Changing the banner periodically helps increase clickthrough. Yahoo! claims
that burnout occurs in two weeks.
Standard sizing
Standard banner ad sizes should be used. Most publisher sites will require that the
banner comply with these standard sizes before they will display it. Examples of these
sizes are presented later in this lesson.
Minimal file size
Most users’ chief complaint about the Web is slow or impaired speed. If users must wait
for the banner to download, they could become distracted, frustrated or bored. As with all
Web design, download speed must be a key consideration. Making the banner ad file as
small as possible will help shorten download time.
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Animation
Web marketers once believed that animated banner ads received a higher clickthrough
rate than static ads. This model is changing and more ads are static. One of the other
drawbacks of animated banners is larger file size, resulting in longer downloads.
Rich media ads
The next step up from animation, rich media, such as video clips, Flash presentations
and similar content, are used in banner ads to catch the consumer’s interest. As with
other types of rich content, file size and download time are potential concerns.
True claims
Do not claim something on the banner that is not really what users will experience or
learn if they do click through. Such false claims only frustrate users, who will probably
click the Back button and not stay at the site. If you are paying for the ad based on the
clickthrough rate, you want to attract only customers who are in your target market.
Visual quality
The banner should be visually attractive and have a high-quality look. Poorly designed
banners have lower clickthrough rates. Color combinations work better for the average
visitor than black and white or gray and white. Note that some color combinations blend
together when seen by individuals with colorblindness.
Obvious hyperlinks
To help make the banner appear as an obvious link, applying a blue border around the
image is sometimes helpful. Also, it is common to have a link labeled “Click here” in plain
text under the ad.
Banner sizes
Both the IAB and CASIE have developed standard banner ad sizes (see
www.iab.net/standards/adunits.asp). Figures 4-1 through 4-8 show examples of the
most commonly used ad sizes. As mentioned earlier, Web sites selling advertising space
will require that advertisers provide a banner based on these sizes because these sizes
typically correspond to their rate schedules.
Banner Ad
Figure 4-1: Full banner (468 x 60 pixels)
Banner Ad
Figure 4-2: Full banner with vertical navigation bar (392 x 72 pixels)
Banner Ad
Figure 4-3: Half banner (234 x 60 pixels)
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Banner Ad
Figure 4-4: Vertical banner (120 x 240 pixels)
Banner Ad
Figure 4-5: Square button (125 x 125 pixels)
Banner Ad
Figure 4-6: Button 1 (120 x 90 pixels)
Banner Ad
Figure 4-7: Button 2 (120 x 60 pixels)
Banner Ad
Figure 4-8: Micro button (88 x 31 pixels)
The Ad Unit Task Force meets twice a year and reviews the effectiveness of new formats
as they are released.
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Choosing banner ad space
Choosing a Web site on which to advertise can have significant effects on the campaign.
One of the benefits advertisers have when using banner ads is the ability to precisely
target their markets.
If an ad were to be placed randomly on a Web site such as www.yahoo.com, it would not
be considered a targeted placement. Yahoo! would offer extremely high visibility, but it
does not target a specific market. Tens of thousands of people use the Yahoo! Web site as
a portal.
Placing a banner ad on a site that is more specific to a market can result in better
clickthrough. For example, imagine that a company has developed a new golf club it
wants to market. Placing a banner on Yahoo! would give it high visibility, but not
necessarily a high clickthrough rate. If the ad were placed on the official Web site of the
Professional Golfers’ Association (www.pga.com), the same number of impressions would
probably have a higher clickthrough rate.
OBJECTIVE:
3.3.11: Online
marketing strategies
Targeted placement is one reason that choosing a site on which to advertise is an
important decision. Due to the complex nature of ad placement, many companies are
turning to advertising representatives to place banner ads on the Web. These advertising
representatives can save the advertiser considerable time and effort by knowing where
the most effective ad placement would be. They can also find other Web businesses that
are willing to place ads on other sites. They make their money by taking a percentage of
the revenue paid by the advertiser.
Many business and publisher Web sites have a rate card, which is used as the basic
guide to determine how much banner ad placement will cost. By visiting a Web publisher
site and looking for the link to “advertise,” you should be able to locate the rate card and
determine approximately how much ad placement will cost.
However, the ad market is continually changing. If current trends continue, you might
find in the future that some of the choicest ad real estate is no longer available. Some
sites that traditionally acted as publisher sites no longer accept banner ads, instead
finding different revenue streams such as annual subscriptions. This trend is in response
to consumer complaints that banner ads are distracting and annoying. There is a growing
trend for some sites to use the lack of banner ads as a way of helping entice users to that
site.
Finding ad space
Finding ad space on a popular portal or other publisher site can be a problem. Many sites
no longer provide a direct link to advertising rates, preferring to work through an
advertising representative. It is often not cost-effective for a portal site to manage its own
ad space.
Portals that do directly manage their own ad space have typically stopped publishing
their ad rates, preferring instead to have a sales representative contact you directly to
negotiate ad rates. One reason for this is that most sites do not have a single set rate, but
will quote a rate based on the visibility you want and the size of your advertising budget.
In the following lab, you will investigate how Web portals manage advertising. Suppose
you are looking at designing a new marketing campaign based on banner ads. One recent
change you will find is that the Yahoo! portal site no longer publishes its ad rates, which
is becoming the rule.
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Lab 4-1: Determining ad rates at individual sites
In this lab, you will visit sites on which you would like to advertise, and you will
investigate the ad rates.
1.
Browser: Navigate to www.yahoo.com.
2.
Click the Advertise With Us link at the bottom of the page (see Figure 4-9).
Figure 4-9: Yahoo! advertising link
3.
Review the information requested.
4.
Click Small Business Center.
5.
Review the other advertising options offered.
6.
Browser: Navigate to www.excite.com.
7.
Click Advertise On Excite (see Figure 4-10). You will be redirected to AJinteractive,
a site that manages advertising for Ask.com, the MaxOnline Network, Excite and
iWon.
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Figure 4-10: Excite advertising link
In this lab, you saw how advertising is managed for Yahoo! and Excite. Until recently,
these sites published their ad rates, but now require you to contact the companies for
advertising information.
Advertising Representatives
OBJECTIVE:
3.3.11: Online
marketing strategies
Trying to locate the proper Web site on which to advertise can be a time-consuming and
difficult task. Advertising representatives can help with decisions and placement choices,
and usually can achieve greater success. These representatives and their organizations
have well-established networks and statistical data that can help the marketer plan and
execute a successful ad campaign.
A recent trend is Internet advertising that specifically targets a regional market. For
example, Local Launch! (www.locallaunch.com/) helps advertisers develop local Internet
marketing plans. Regional marketing can provide a more efficient use of the marketing
budget because it more directly targets the consumer and, in many cases, is less
expensive than sites with a large national or international audience.
In the following lab, you will visit an advertising representative Web site. Suppose you
need to find a location for your ads, but the sites you visit do not provide an advertising
link. As fewer major sites manage their own advertising, advertising representatives
become a key link in your advertising plan. Each advertising representative has a specific
list of sites supported.
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Lab 4-2: Visiting an advertising representative Web site
In this lab, you will visit a sample advertising representative site.
1.
Browser: Enter www.winstarinteractive.com. See Figure 4-11.
Figure 4-11: Winstar Interactive Media
2.
Click Check Out Our Site Roster Of Top Media Brands. Review the site list (Figure
4-12).
Figure 4-12: Winstar Interactive Media site roster
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Lesson 4: Online Product Promotion
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3.
Click one of the company links to navigate to the client Web site.
4.
Determine whether the site provides a link to advertising rates. Many sites…