MKTG 1352 Electronic Marketing by jdo47785

VIEWS: 4 PAGES: 50

									    MKTG 1352
Electronic Marketing


      Class #5
Internet Advertising
Today’s Agenda
   Questions from last class?
   Finish SEM
   Internet Advertising
   Time for group work




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MKTG 1352 – Class #5
  Advertising

      “If you build it, they will come.”


                 Not on the Internet!!!




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Internet Advertising
   Is Internet advertising an effective advertising
    medium?




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Two Questions

1.    What do advertisers want from consumers?
2.    What do consumers want from advertisers?




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1. What do advertisers want
from consumers?
   Money (sales)
   Trust
   Loyalty
   Information
   Recognition
   Awareness
   Referrals

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2. What do Customers want
from Advertisers?
   84% of consumers stated they want control
    over the types and frequency of Internet ads
    sent from a specific merchant.
   64% of consumers would trust a marketer
    more if they had control over the types of
    online communication that were sent to them.



                       Online Permissions Survey, sponsored by Dotomi, is based on
MKTG 1352 – Class #5   1,799 responses from Internet users in all major regions of the7
                       United States.
2. What do Customers want
from Advertisers?
   89% of consumers would let a trusted marketer
    share their personal interests with a third party, in
    order to increase the quality of services and
    products produced.
   82% of consumers wanted to be notified by an
    online merchant if they are provided with an
    incentive
       92 % asked to be notified if a product or promotion would
        be of great value to them based on past purchasing habits.




                          Online Permissions Survey, sponsored by Dotomi, is based on
MKTG 1352 – Class #5      1,799 responses from Internet users in all major regions of the8
                          United States.
2. What do Customers want
from Advertisers?
   To summarize, customers want advertising
    based on:
       Permission
       Value
       Relevance




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Online Advertising Continues
Rapid Growth
   eMarketer predicts that more than $12 billion will be
    spent this year on Internet advertising, double 2004
    levels.
   By 2009, that's expected to reach $22 billion.
   Search marketing continued to dominate, grabbing 40
    percent of the total online ad spending in the quarter.
   Rich media advertising rose 26 percent in the quarter

http://www.ecommercetimes.com/story/F5V2QnRSncyYYH/Online-Advertising-Continues-Rapid-Growth.xhtml




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Top Advertising Vehicles




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                                  Top 10 Internet Advertisers by Media Value,
Top Online                                         July 2005
Advertisers                                      Advertiser                                     Media                       Sector
                                                                                               Value ($
Dec 2004                                                                                         000)
                           1       Vonage                                                                20,312                 Tech
                           2       Purina VAR Pet Food                                                   18,995                 CPG
                           3       Classmates.com                                                        13,330                 Misc
                           4       Netflix.com                                                           12,674                  Ent
                           5       LowerMyBills.com                                                      11,794                   Fin
                           6       Monster.com                                                             7,090               Class
                           7       Accuquote Insurance                                                     7,043                  Fin
                           8       Ameritrade Brokerage                                                    6,509                  Fin
                           9       ShareBuilder.com                                                        6,088                  Fin
                          10       SBC Yahoo DSL                                                           5,746                Tech
                        Sectors: Auto - Automotive; Class - Classifieds; CPG - Consumer Package Goods; Date - Online Dating; Edu -
                        Education; Fin - Financial Services; H/F - Health & Fitness; M/E - Media & Entertainment; Misc - Miscellaneous; Ret -
                        Retail; Tech - Technology; T/H - Travel/Hospitality




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 MKTG 1352 – Class #5
Canadian Online Advertising
Grows 2004, 2005
   Online Revenues will exceed $500 million dollars in 2005
    Interactive Advertising Bureau of Canada (IAB).
   43 % more than the 2004 figure.
   Display ads are largest portion of the Online advertising pie at
    45 %, while Search advertising grew to 30%
   Classified/Directories/Direct Response at 22% of total
    revenue, and E-mail at 3 percent.
   Recent research by Ipsos-Reid's shows that the Internet has
    eclipsed Radio in popularity among all wired Canadians, and
    actually exceed TV in the 18-34 demographic.
   Online advertising represents 4% of the total advertising
    dollars.
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Still Only a Small Piece of the Pie
(but growing)




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 Search Advertising
   This primarily represents the money spent on
    “pay per click” search engine advertising
   Based on keyword bidding




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Banner Ads
   Nearly every web site that incorporates third-
    party advertising as part of their revenue
    model displays banner ads
   This is particularly true of consumer portal
    sites like Yahoo!, mytelus.com, msn.com etc.
    and community sites
   Clicking on a banner ad usually takes you
    directly to another web site


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Banner Ads come in all
shapes and sizes




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Paying for Banner Ad
Campaigns
   Normal click rates for banner ads are approximate 1/2 of 1 %
    (.62% in Q4 2003).
   Banner ad campaigns that generate click rates above 1% are
    considered to be highly successful.
   The cost of banner advertising is dependent on several factors,
    including:
     Size of the banner ads
     Size of the campaign budget (rates decrease with larger budgets)
     Criteria for targeting the banner ads (the more effort that goes
       into targeting a banner ad, such as tying a banner ad to a
       keyword or phrase, the higher the cost)
     Popularity of the site(s) where the banner ad is to be placed.




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MKTG 1352 – Class #5
Banners Just Like Print Ads
     Interactive advertisers originally thought they
      could command a premium for interactivity, but
      the premium was set too high
     The impact of banner ads is more like traditional
      media
         Improved awareness, branding, etc.
         The expectation of immediate sales has been adjusted
          to also value the “view through” rate: some action will
          be taken within a certain period of time after the ad has
          been viewed (e.g. 30 days), but not immediately




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Sponsorship:
An Alternative
to Banner Ads


 Sponsorship
    Links




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Banner ads versus sponsorships


 Banner ads: small
 rectangles that appear
 on the top, bottom,
 and sides of the
 content on a variety of
 web sites.


                           Sponsorships: long-
                           term promotional
                           agreements with a few
                           sites.
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Sponsorship Opportunities
   Targeted content - Specific
    areas within your site that
    appeal to special interests
   E-mail
   Contests/surveys
   Webinars
   Subscriptions -
    Economist.com has offered
    sponsored subscriptions (Day
    Pass) which they sell as a
    lead generation tool for
    advertisers
   Blogs
   Streaming video

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Pop-Ups and Pop-Unders
   Pop-Up ads are windows that pop-up after
    you click on a hyperlink to go to another web
    page.
   Pop-Ups appear on top of other browser
    windows
   Pop-under ads are served "behind" all open
    browser windows
   Pop-Up ads can be annoying, because they
    represent "in your face" advertising.

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MKTG 1352 – Class #5
Pop-Ups and Unders
   Costs are at least twice those of banner ads
   Pop-up ads originated with adult-content Web
    sites, but have become prevalent at
    mainstream sites (including PCWorld.com).
   By July 2003, pop-up and pop-under ads hit
    their peak at 8.7 % of all online ads but have
    declined steadily since


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Why did pop-ups become so
pervasive?


       They are 13 times more
     effective at generating clicks
        than standard banners!!



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Beware Anti Pop-Up Software
   About 20 % of surfers use pop-up blocker software
    (some advertisers think this is as high as 80%)
   Available as a standard feature in IE, Firefox, Safari,
    etc.
   Mozilla's Firefox actually enables its users to block all of
    a Web page's display advertising by installing an
    extension for the browser.
     Firefox represents about 7 % of the browser market
       though it's surpassed Netscape. (Microsoft's Internet
       Explorer still has roughly 84 % market penetration.)
   Google and Yahoo toolbars also offer this feature


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Rich Media
   The next wave in advertising?
       As people have broadband connections the usage and
        effectiveness of rich media will increase for branding
        purposes and "indirect response" advertising
   Some of the many forms:
       Interstitials
       Banners
       Floating
       Full Screen

    http://www.webqem.com/portfolio/index.cfm?section=search_results



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Rich Media
   More effective than traditional ads (pop-ups
    or banners)
       5 times the click through rate
       Twice the post impression conversion
       Big improvements in brand awareness
       Better latent impact
   Drawbacks:
       Higher production costs
       Can be annoying for dial-up or “high-speed lite”
        users
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Rich Media




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Mobile Advertising
   Current examples
   Mobile advertising revenues are expected to capture 2% of
    online advertising spend
   Over the next few years 88% of all handsets sold globally to be
    video-enabled
   Microsoft and others like Thumbdance offer mobile content
    channels
   Lighteningcast launched a mobile video advertising solution that
    allows mobile providers to insert ads into both real-time
    broadcast and on-demand video content.




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Ad Pricing Models




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Internet Advertising Agencies
   To manage a banner ad campaign,
    companies normally outsource to advertising
    agencies such as Doubleclick or 2/47 Media.
   Internet advertising agencies have
    advertising partners -- web sites where they
    place banner ads.




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Metrics Used by Advertisers to Evaluate Online
Advertising Campaigns Effectiveness




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 Advertisers Too Heavily Focused
 on Quantitative Metrics
   Advertisers continue to focus heavily on a few
    quantitative results such as cost per click and
    cost per customer
   Some metrics have been ignored, such as such
    as Customer Lifetime Value and Cost per Shift in
    brand perception.
   Tracking immediate response, extended
    response, cross-channel response, and brand
    impact before calculating ROI is essential.


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MKTG 1352 – Class #5
Integrated Marketing
Communications (IMC)
   Integrated Marketing Communications (IMC)
    postulates that a variety of communication
    disciplines must work together to ensure
    maximum clarity, consistency and
    communication impact.
   Communication disciplines include: advertising,
    computer-mediated communication, direct
    marketing, sales promotion, and public
    relations.


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IMC (continued)
   Integration of the message allows the
    development of a unique and strong
    brand image.
       IMC = Promotion (in the 4 P’s)
   Examples: URL Everywhere (prints ads,
    direct mail brochures, letterhead, Email,
    business cards, schwag, etc.)


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IMC on Super Bowl Sunday
   Super Bowl Ads
       Go Daddy.com used URL, blog and controversy
        to create buzz for an ad pulled mid game in 2005
       Here‟s this year‟s ad
       Ability to view the ads over again on website (at a
        fraction of the $2.5 million cost)
       AOL conducted an online poll for the best Super
        Bowl ad


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Top Gaining Super Bowls
Advertiser Web Sites (2005)
     Super Bowl Sunday Compared to the Average of
       the Four Previous Sundays (2005)
     Total U.S. Source: comScore Media Metrix
                                                Site Traffic
                                                % Change
     BUDWEISER.COM                                     594%
     GODADDY.COM                                       378%
     OLYMPUSAMERICA.COM                                363%
     Apple iTunes                                      172%
     CADILLAC.COM                                      171%
     AMERIQUESTMORTGAGE.COM                             98%
     Subway                                             97%
     PIZZAHUT.COM                                       91%
     PHILADELPHIAEAGLES.COM                             89%
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The Telus IMC Example
   Telus, the dominant local phone
    company, practices IMC with
    common elements:
       Simple messages in plain language
       Animals/nature themes
       Vibrant colours on a white background
       Music!
       Multiple media: TV, Radio, Billboards,
        DM, Web, Email, Telemarketing, Print,
        Coffee Sleeves, POP Display Ads




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MKTG 1352 – Class #5
Telus (continued)
   Business lines use different themes for their
    campaigns in each quarter
   Benefits to Telus:
       Cost savings: simple creative re-used in different
        mediums for each campaign lowers costs
       Consistent, simple message reinforced by
        different mediums



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Telus (continued)
   IMC challenges:
       Coordinating the work and schedules of multiple
        agencies or selecting the lead agency for a
        campaign
       Forcing agencies to use creative content that may
        not be theirs




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IMC Makes Measurement Difficult
   Measuring the effectiveness of one media
    over another is hard when practicing
    Integrated Marketing Communications (IMC)
   Post-campaign research might help, but it is
    expensive and probably not accurate (which
    medium really triggered a response or sale?)
   Landing pages are often used
       Only tracks immediate response for click through
       Most people don‟t remember the complex url
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View
Through
versus
Click
Through




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Behavioral Targeting
Offering ads based on contextual or behavioral factors
   The content of the site
   Behavioral variables:         Demographic/psychographic
     Sites you have visited       variables:
     Searches performed            Geography
     Content viewed                Day part/day of week
     Products have you             Gender
      purchased                     At work/at home
     Client site                 “Technical” variables:
      visits/conversions
                                    Connection speed
     Email/newsletter list
                                    Browser/OS
      membership
                                    ISP/domain
     User interest category

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3 Types
1.       Single site
         Provide ads based on what content you have
          seen or your browsing and purchasing behavior
          on a given site
            E.g Snapple Meal Replacement and iVillage




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MKTG 1352 – Class #5
3 Types
2.       Ad Networks
            Tracking behavior across sites using ad network
             using 3rd party cookies
             Advertising.com, 24/7 Real Media, Drive
              Performance Marketing
3.       Desktop based
            Adware and Spyware




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Adware / Spyware
   “Adware”: programs bundled with other downloaded
    software that monitor consumers' Web browsing and
    serve them ads based on their online habits (e.g.
    toolbars, freeware)
   „”Spyware” is Adware that tracks a user's personal
    information and passes it on to third parties, without
    the user's authorization or knowledge.
       Huge privacy concerns and outcry
   Limited appeal
       Works for consumer-products where people are willing to
        give up personal data in exchange for something of value
        (i.e. music downloads)


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MKTG 1352 – Class #5
Next Class
   Lab Assignment #1 Due (Word doc is on
    WebCT in Lectures section)
   Personalization and Permission Marketing
   In-Class Permission Marketing Exercise
   Group Project Working Time




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