1. Advertisement in Electronic Commerce
Lecture 15

2. Summary of Previous Lecture
Electronic Commerce definition.
E-Commerce Infrastructure
Related Definitions
Dimensions of Electronic Commerce
Product
Process
Delivery Agent
Commerce Differences
E-Commerce Field

3. Summary of Previous Lecture
People
Public Policy
Technical standards and Protocols
Organization
Electronic Market
Types of E-Commerce
Business to Consumer
Business to Business
Consumer to Consumer

4. Summary of Previous Lecture
Person to Person
Consumer to Business
Business to Employee
G2G (Government-to-Government),
G2E (Government-to-Employee),
G2B (Government-to-Business),
B2G (Business-to-Government),
G2C (Government-to-Citizen)

5. Summary of Previous Lecture
Types of Inter organizational systems
Electronic data interchange (EDI)
Extranets
Electronic funds transfer (EFT)
Integrated messaging systems
Shared databases
Electronically-supported supply chain management
Benefits of E-Commerce
Benefits to organization
Benefit to customers
Benefits to society
Limitations of E-Commerce

6. Today’s Lecture Objectives
Web advertisement, its types and characteristics
Major advertisement methods used on the Web, ranging from banners to chat rooms
Describe various Web advertisement strategies
Describe various types of promotions on the Web
Discuss the benefits of push technology and intelligent agents

7. Today’s Lecture Objectives
Understand the major economic issues related to Web advertisement
Describe the issues involved in measuring the success of Web advertisement as it relates to different ad pricing methods
Describe Web advertisement implementation issues ranging from ad agencies to the use of intelligent agents

8. Web Advertisement: A Way to Make Money out of your Computer
Where to start?
Web Advertisement: A Way to Make Money out of your Computer

9. What is Advertisement?
Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction

10. Internet Advertisement
Internet Advertisement is gaining popularity because,
Three-quarters of PC users gave up some television time
Internet users are well educated with high-income, which makes them a desired target for advertisers
Ads can be updated any time with a minimal cost; therefore they are timely and very accurate

11. Internet Advertisement
Ads can reach very large numbers of potential buyers all over the world
Online ads are much cheaper in comparison to television, newspaper, or radio ads. Such ads are expensive since they are determined by space occupied, how many days (times) they are shown, and on how many national and local television stations and newspapers they are posted.

12. Internet Advertisement
Web ads can be media rich, including voice and video
Web ads can be interactive and targeted
The use of the Internet is growing very rapidly

13. Web Advertisement Example
Advisement banners

14. Web Advertisement Example

15. Web Advertisements Terminologies
Terminologies being commonly used are
Ad views
Banner
Clicks (or ad clicks)
Click Ratio
Cookie

16. Web Advertisements Terminologies
CPM
Effective Frequency
Hit
Impressions
Reach
Visit

17. Ad views
An ad view, synonymous with ad impression , is a single ad that appears on a Web page when the page arrives at the viewer's display.
Ad views are what most Web sites sell or prefer to sell. A Web page may offer space for a number of ad views.

18. Banner
A graphic image used on Web sites to advertise a product or service.
Will be discussed later in this lecture.

19. Web banners

20. Ad Clicks
Action from a user clicking on an advertisement to get more information.
Number of times users click on an ad banner.
“Hit Count” are very useful to determine the demand or interest in any product.

21. Ad-Clicks statistics Within different Operating Systems

22. Click Ratio
Clickthrough rate (CTR) is a way of measuring the success of an online advertising campaign for a particular website.
The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage.
For example, if a banner ad is delivered 100 times (100 impressions) and receives one click, then the clickthrough rate for the advertisement would be 1%.

23. Cookie
A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is usually a small piece of data sent from a website and stored in a user's web browser while a user is browsing a website.
When the user browses the same website in the future, the data stored in the cookie can be retrieved by the website to notify the website of the user's previous activity.
Not this Cookie

24. Cost per Thousand (CPM)
The letter "M" in the abbreviation is the Roman numeral for one thousand.
CPM is used by Internet marketers to price ad banners.
Sites that sell advertising will guarantee an advertiser a certain number of impressions (number of times an ad banner is downloaded and presumably seen by visitors.), then set a rate based on that guarantee times the CPM rate. A Web site that has a CPM rate of $25 and guarantees advertisers 600,000 impressions will charge $15,000 ($25 x 600) for those advertisers' ad banner.

25. Effective Frequency
An estimated amount of times a person must see a particular brand awareness commercial on a product in order to change that person’s attitude and awareness about that product.

26. Hit
A hit is a request to a web server for a file (For example a web page).
When a web page is uploaded from a server the number of "hits" or "page hits" is equal to the number of files requested.
Therefore, one page load does not always equal one hit because often pages are made up of other images and other files which stack up the number of hits counted.

27. Impressions
It is the exact number of times a specific Web site has been accessed or viewed by a user.
A page impression acts as a counter for Web pages, informing site owners how many times their sites were visited.

28. Web Reach
Web reach is the accessibility of the user to download a webpage.
Pages out of reach are often located on the servers which are mostly down.

29. Different Count formats
Web Visit
Number of users visiting a web page or website. It is often recorded as a counter.
Different Count formats

30. Web Advertising Interactive Marketing
Consumer can click with his/her mouse on an ad for more information or send an to ask a question
Mass Marketing
Direct Marketing
Interactive Marketing
Best outcome
Consumer behavior
Leading products
Market
Nerve center
Preferred media vehicle
Preferred technology
Worst outcome
Volume sales
Customer data
Customer relationships
Passive
Active
Food, personal-care products, beer, autos
Credit cards, travel, autos
Upscale apparel, travel, financial services, autos
High volume
Targeted goods
Targeted individuals
Madison Ave.
Postal distribution centers
Cyberspace
Television, magazines
Mailing lists
Online services
Storyboards
Databases
Servers, onscreen navigators, the Web
Channel surfing
Recycling bins
Logoff

31. Web Advertising
Internet is the fastest growing medium in history

32. Web Advertising Targeted Advertisement (one-to-one)
The Double Click (DC) Approach
3M Corporation wants to advertise its $10,000 multimedia projectors
DC monitored people browsing the Web sites of cooperating companies
then matches them against a database
then finds those people working for advertising agencies or using Unix system (potential buyers)
then builds a file on you, your spending, and your computing habits using “a cookie”
prepares an ad for 3M projectors
targeted for people whose profile matches what is needed for 3M

33. Web Advertisings Pros of Internet Advertisement
Internet advertisements are accessed on demand 24 hours a day, 365 days a year, and costs are the same regardless of audience location
Accessed primarily because of interest in the content, so market segmentation opportunity is large
Opportunity to create one-to-one direct marketing relationship with the consumer
Multimedia will increasingly make Web sites more attractive and compelling

34. Internet Advertising -- Pros
Distribution costs are low (just technology cost), so millions of consumers are reached at the same cost as that of reaching one
Advertising and content can be updated, supplemented, or changed at any time, and are therefore always up-to-date
Ease of logical navigation — you click when and where you want, and spend as much time as you desire there

35. Advertising Methods Banners Banners are everywhere Keyword banners
Random banners
Benefits
be customized to the target audience
be customized to one-to-one targeted advertisement
utilize “force advertising” marketing strategy
Banner Swapping
Direct link between one’s site to the other site
Ad space exchange

36. Advertising Methods Banner Exchanges
Swapping is a problem : a match is frequently not possible
Banner exchange organizations
a firm submits a banner
receives credit when shows others’ banners
can purchase additional display credits
specify what type of site the banner can be displayed on
use the credit to advertise on others’ sites
credit ratio of approximately 2:1

37. Banner Exchange organization
Example : Link Exchange offers help in banner design, provides membership in newsgroups, delivers HTML tutorials, and even runs contests. It acts as a banner-ad clearing house for more than 200,000 small Web sites. It also monitors the content of the ads of all its members.

38. Advertising Methods Paid Advertising and Ad Agencies
Advantage of using banners
ability to customize them to the target audience
ability to decide which market segments to focus on
be customized to one-to-one targeted advertisement
“forced advertising” marketing strategy is utilized
Splash Screen
Capture the user’s attention
Promotion or lead-in
Major advantage : create innovative multimedia

39. Banner Exchange Website

40. Advertising Methods URL (Universal Resource Locators) Advantages:
minimal cost is associated with it
submit your URL to a search engine and be listed
keyword search is used
Disadvantages:
search engines index their listings differently
meta tags can be complicated

41. Advertising Methods E-mail
Several million users can be reached directly
Purchase addresses
Send the company information; low cost
A wide variety of audiences; customer database
Problem: Junk mail or spamming
Target a group of people that you know something about

42. Advertising Methods Chat Rooms Virtual meeting ground
Can be added to a business site for free
Allows advertisers to cycle through messages and target the chatter again and again
Advertising can become more thematic
More effective than banners
Used in one-to-one connection

43. Advertisement Strategies
Internet-base Ad Design
Advertisements should be visually appealing
Advertisements must be targeted to specific groups or to individual consumers
Advertisements must emphasize brands and a firm’s image
Advertisements must be part of an overall marketing strategy
Advertisements should be seamlessly linked with the ordering process
Designing Internet ads involve the following factors:

44. Advertisement Strategies
Internet-based Ad Design: Important Factors
Page-Loading Speed
Graphics and tables should be simple and meaningful. They need to match standard monitors.
Thumbnail (icons graphs) are useful.
Business Content
Clear and concise text is needed. A compelling page title and header text is useful.
The amount of requested information for registration should be minimal.

45. Advertisement Strategies
Internet-base Ad Design: Important Factors
Navigation Efficiency
Well-labeled, accurate, meaningful links are a must.
Site must be compatible with browsers, software, etc.
Security and Privacy
Security and privacy must be assured.
Option for rejecting cookies is a must.
Marketing/Customer Focus
Clear terms and conditions of the purchases, including delivery information, return policy, etc. must be provided.
Confirmation page after a purchase, is needed.

46. Advertisement Strategies
Passive Pull Strategy
Customer will visit a site if it provides helpful and attractive contents and display
Effective and economical way to advertise, unidentified potential customers worldwide
Advertising World is a non-commercial site that can guide the process of finding the customer’s wish
Yahoo is a portal search engine site which can be regarded an effective aid for advertisement

47. Advertisement Strategies
Active Push Strategy
Sending s to the relevant people
Obtaining the mailing list is the process of identifying target customers
Mailing list generation is done in companies by using agent technology and cookies as well as by filling out questionnaires (by customers)

48. Advertisement Strategies
Ad as a Commodity
CyberGold
exchange of direct payment made by the advertisers for viewing ads
consumers fill out questionnaires
CyberGold distributes targeted banners
the reader clicks the banner to read it and, passing some tests on its content, is paid for the effort

49. Implementing the Strategies
Customized Ad Strategy
Filtering the irrelevant information by providing customized ads
One-to-One advertisement

50. Meta-Malls Coordinator
Implementing the Strategies
Comparison Aid as Medium of Advertisement
Customer
Meta-Malls
Customer Assistant
Direct Visit
Meta-Malls Coordinator
Summary
and Index
Database
Product
Database
Mall
Operator A B C

51. Online Events, Promotions and Attractions
How to attract Web surfers to read Internet ads
There are dozens of innovative ideas; here are some examples :
Yoyodyne Inc. conducts give-away games, discounts, contests & sweepstakes. Its entrants agree to read product information of advertisers ranging from Major League Baseball to Sprint communication.
Netzero and others offer free Internet access in exchange for viewing ads.
uses real people to help you. uses live people to talk to you over the phone and then “push” material and ads to your computer.

52. Lucent.com Web attraction

53. Push Technology
Benefit : instead of spending hours searching the Web, people can have the information they are interested in delivered automatically to their desktop via Web technology and the Internet

54. Push Technology Pointcasting Analogous to mass customization
Transmits the most relevant information directly to the user
Push on the Intranet
Companies use push technology to set up their own channels to pointcast important internal information to either their own employees (on intranets) and/or their supply chain partners (on extranets)
The Future of Push Technology
Drawback : the bandwidth requirements are large
Experts’ prediction : the technology will never fly

55. Intelligent Agents
Intelligent Agents are automatic programs, which run separately and are capable of performing different advertisement related functions. For example,
Product Brokering Agents
Knows the customer’s profile
Tailors an ad to the customers, or asks them if they would like to receive product information
Alerts the users to new releases, recommends products based on past selections, or constraints specified by the buyers

56. Today’s Misconception

57. Summary Today we have been learnt How to advertise on the Web?
Web Advertisement
Web Advertisement Terminologies
Ad views
Banner
Clicks (or ad clicks)
Click Ratio
Cookie
CPM

58. Summary Effective Frequency Hit Impressions Reach Visit
Pros of Internet Advertisement
Double Click Approach
Advertisement Methods
Banners and Banner Exchanges
Banner Swapping

59. Summary Advertisement Strategy Push Technology Implementing Strategy
Internet Based Ad Design
Passive Pull Strategy
Active Push Strategy
Ad as a Commodity
Push Technology
Implementing Strategy
Intelligent Agents