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					    In-Class #7

 Discuss 2 things you read about
  privacy that were surprising to
  you
 Why do you think Internet
  retailers are spending less $$ on
  traditional advertising media
  than they did 2 years ago?
                               HED 460
     Internet Advertising
   1999/2000 saw huge amounts of e-
    tail advertisements
   22% consumers were unable to recall
    any specific Internet advertisements
    (post-holiday)
   Pure-play e-tailers budget nearly 2x
    as much for advertising as
    multichannel
                                    HED 460
         Mulitichannel Advantage
 Name recognition
 Low cost mechanisms

       web address in advertising for
        stores, catalogs, store receipts,
        bags, other advertising media


                                            HED 460
     E-tailer’s Mktg. Budget

45       40.5
40
35
30
25                21.4         Pure-Play
20                             Multichannel
                               Store
15
10                       5.5
5
0
                Budget            HED 460
Online Retailer Mkt. Spend
 70         62    64

 60

 50
      38
                           34
 40
                                  Online
 30                               Offline

 20

 10

 0
      Q4 1999    Q3 2000

                                HED 460
        Why Increased Online?
   Traditional mediums did not work
       Broad focus vs narrow focus needed
 Difficult to target specific markets
  with TV, radio, newspaper
 Online is easier to target small

  discrete groups

                                      HED 460
Budget Allocation

     18

                     Acquisition
                     Awareness
                     Retention

                49




33


                           HED 460
          Strategy
   Rapid growth mode
       awareness and acquisition
   Growth rates slow
     customer loyalty and repeat
      business
     currently less than 1/5 budget on

      customer retention
                                     HED 460
        Effective for Acquisition
   Personalized/targeted email
     45% effectiveness for pure-play

     13% for multichannel

   Cross-promos in catalog and “deals” with
    portals, ISP’s, community sites
     17.9% effectiveness with multichannel

   Other web site links and direct mail
     10.3% effectiveness with multichannel
                                         HED 460
Ad Revenues
50%   46%
45%
40%
35%
30%             28%
25%
20%
15%                        9%                                     Media
10%                                   6%         4%
 5%
 0%
      Banners


                Sponsors




                                      Referral


                                                 Interstitial
                           Classif.




                                                                HED 460
       Types of Media
   Banner ads




                        HED 460
        Banners
   Ad with clickable link to web site
     Brand Awareness
     Targets customers

     Inexpensive

     Annoying

     Low click through rates

     Undifferentiated

                                         HED 460
          Types of Media
   Affiliates/Associates (usually outsourced)
     Content sites receive financial incentive
      to sell other companies’ products or
      display their ads (CPA vs. CPM)
     Affiliate gets a % of the sale (5-15%)

     Affiliate receives no payment to display
      ad
     Volume yields greater revenues/profits

     Low risk to advertiser
                                          HED 460
Affiliates/Associates




                        HED 460
Affiliates/Associates




                        HED 460
Affiliates/Associates




                        HED 460
          Types of Media
   Interstitials (5-10 seconds)
      Messages delivered to browser as
       viewer awaits for page to download
      Grabs attention

      Ties offers to specific online behavior

      Delays access to new page

      Page loading delays

      Intrusion factor

                                          HED 460

				
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posted:9/22/2011
language:English
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