1. Internet Marketing Organizing for the Net

2. Topics Why worry about organization Organizational goals Legal issues for Net marketers What will the future hold?

3. Internet Marketing Matures “As our investments get bigger and bigger, there’s more of a need to show an ROI. It’s less and less a thing where we’re just learning and more an issue of moving into the mainstream and trying to create value.” – Financial Company

4. Internet Marketing Matures Crossing the “imitation barrier” requires a commitment of money, training and time –Challenge for Stage I sites is timely information –Challenge for Stage II sites is developing an information access policy: must find a balance between information sharing and protecting competitive secrets –Challenge for Stage III sites is to reorganize around individual customer information and orders Aligning Structure and Strategy

5. Internet Marketing Matures Adopting Internet Technologies Forces Change in Corporate Organizations Increasing Dispersion of Information and Decision Making Operational Design Strategy Increasing Dialogue and Collaboration Figure 14.2

6. Internet Marketing Matures Traditional Augmented Interactive Adopting Internet Technologies Forces Change in Corporate Organizations Figure 14.2 Cont. Strategy Transformed Grafted Components Traditional Organization Design

7. Internet Marketing Matures Digital Environments and Intellectual Property –Digital content and network connections make it easy to copy the features, design and content of other online sites –Imitation can lead to violations of trademark and copyright laws. Avoiding Legal Pitfalls

8. Internet Marketing Matures Network Connections and Legal Geography –Most laws apply only within the borders of the government creating the law –The Internet complicates this factor because a single Web transaction can involve multiple states, countries and/or continents in less than a second –Marketers must be aware of the commitments they are making when they use a marketing channel with a global, instantaneous reach Avoiding Legal Pitfalls

9. Internet Marketing Matures Interactivity, Performance and Privacy –Marketers need info about consumer choices, tastes and purchases HOWEVER... –They also need to be careful about how they use the information to avoid accusations of libel, defamation and transmittal of sensitive data that could result in losses of millions of dollars Avoiding Legal Pitfalls

10. Internet Marketing Departments Rising Customer Expectations –Consumers use Web performance to evaluate corporate performance –Customers demand around-the-clock service and support: online material can replace costly staffing –Customers want high quality, widespread access for portable devices such as phones, pagers and PDAs –Customers are demanding frequent updates and access to relevant information Real Time Marketing

11. Internet Marketing Departments Customers expect a fully-connected world

12. Internet Marketing Departments Rising Performance Expectations –Independent firms are measuring online commerce performance and reporting results to consumers –Marketing managers are forced to think about their technology and Web site design and the impact it has on performance Real Time Marketing

13. Internet Marketing Departments Table 14.1 – Independent Performance Measures

14. Internet Marketing Departments Timeliness –The Internet allows for instantaneous two-way communication –But marketers must create an organization and system capable of handling communication effectively Requires sophisticated technology, financial resources and a trained staff Turnaround time should be an established goal, with resources necessary to achieve that goal Real Time Marketing

15. Internet Marketing Departments Figure 14.7 – Company Difficulty with E-mail

16. Internet Marketing Departments The Unique Response Cycle –Requests requiring a response can come from e- mail, Web forms, threaded discussions, etc. 1.Attempt to match the inquiry with a known category of question (content recognition software, artificial intelligence) 2.Compare the question against previous answers 3.Send an automatic answer 4.Staff intervention may be required at any step of the cycle Real Time Marketing

17. Internet Marketing Departments Figure 14.8 – Flowchart for Automating Responses

18. Internet Marketing Departments Table 14.2 Matching Technology & Response Rates

19. Internet Marketing Departments Information Management Assign someone in the organization ongoing responsibility for tracking and changing information to keep it current (pricing sheets, product descriptions, ongoing offers, current designs, customer/tech support) Establish policies on information access –How to share information –How to access customer info quickly

20. Internet Marketing Departments Announce your privacy policy –Customers want to know how you plan to use their personal information –Inform customers what type of information you are collecting and how it will be used –The Federal Trade Commission enforces consumer privacy protection Information Management

21. Internet Marketing Departments Five Core Principles of Privacy Protection 1.Notice/Awareness 2.Choice/Consent 3.Access/Participation 4.Integrity/Security 5.Enforcement/Redress Information Management

22. Internet Marketing Departments Percent of Web Sites with an Information Practice Disclosure Information Management Percent of Web Sites Collecting Personal Information Figure 14.11 In 1998 Most Sites Collected Information But Didn’t Disclose

23. Internet Marketing Departments 1998 Data Show Low Levels of Privacy Statement Use Figure 14.10

24. Internet Marketing Departments Privacy Statement Terminology –Personal Information – Identifying info such as name, mailing address, e-mail, phone number, demographics, preferences –Privacy Policy Notice – Description of site’s information practices (what the site does with the personal information it collects from visitors) –Information Practice Statement – Describes a particular use or practice regarding consumers’ personal information (confidentiality, mailing lists, etc.) Information Management

25. Internet Marketing Departments The Net leads companies to question their marketing organizational structures Closed-loop marketing is easier to achieve with a management structure that’s different from traditional marketing organizations –Traditional ways of organizing include By geography By product By customer –Net marketers find that organizations based on customers make the most sense Customer Management

26. Internet Marketing Departments Customer Management Figure 14.12 Alternative Organizational Emphasis

27. Internet Marketing Departments In a customer management view, specialization occurs by customer portfolio Each manager –“Owns” a group of customers –Is responsible for them regardless of where they’re located or what products they buy This allows the online marketer to offer a consistent interface with the customer And it enables marketers to get to know their customers better Customer Management

28. Internet Marketing Departments The Net facilitates a customer management type of organization because customers can be served regardless of their physical location However, it requires customer managers to know about a much broader range of product and service solutions Customer management organizations work only if managers can effectively draw on a wide range of resources in a company Intranets, extranets, and the Internet make this possible Customer Management

29. Potential Legal Problems The pace of online competition creates serious problems for online marketers and their legal staffs. There is not time for lengthy reviews of pre-published materials SOLUTION... Marketers must have a better understanding of society’s legal rules such as trademark and copyright laws, impact of information accuracy, and rules about unsolicited communication

30. Potential Legal Problems Domain Names As of January 1999, there were more than 43.2 million domains registered Steps to ensure a domain name is legally registered: 1.Obtain the domain name from an authorized domain name registration organization 2.Make sure they domain name does not violate existing trademark or copyright

31. Potential Legal Problems Domain Names U.S. courts have consistently ruled that existing businesses and organizations retain their domain name rights even if they have not taken action to secure the name This prevents exploitation by cyber squatters If two companies have conflicting claims, the first person to secure the domain name wins It is recommended to register multiple domain names for your site in order to accommodate user typing errors, misspellings, etc.

32. Potential Legal Problems Personal Jurisdiction Legal action may be brought against your company either at your headquarters, where business was transacted, where a harm occurs, or where a contract was created... Virtually anywhere! International differences raise concerns because of differing standards for freedom of speech, criticism, and political debate There are also distinctions between civil and criminal, commerce versus presence, and issues of contract

33. Potential Legal Problems Taxes You can avoid paying sales tax in an online transaction two ways: 1.Purchase from a firm that has no presence in your state 2.Purchase and download information from a company in a state tax on downloaded info is exempt

34. Real-Time Legal Issues Copyright Figure 14.14 – A Copyright Flowchart for Using Material

35. Real Time Legal Issues Inaccurate Information These areas warrant caution: –Web-site usage data could end up in credit reports and used to judge a person’s credit worthiness –Community building tools (e-mail and chat) provide consumers with a forum to criticize specific individuals or companies The sponsoring site could be wholly or partially liable

36. Real-Time Legal Issues Push Techniques Includes e-mail, buddy lists, automatic updates to software, and services such as Pointcast and WebTV –It is illegal in California to send unsolicited e- mail without the true domain name of the e- mail source –ISPs in California have the legal authority to stop spammers from sending high volumes of unsolicited mail

37. Looking Forward A $1000 computer can perform a trillion operations per second The majority of text will be entered with continuous speech recognition Most routine business transactions take place between a human and a virtual personality There is high-speed wireless access to the Web Translating telephones will be common (speech-to-speech translation) Thirty More Years of Digital Power 2009

38. Looking Forward A $1000 computer has roughly the computing power of the human brain Computers are largely invisible – and embedded almost everywhere Three-dimensional VR displays – using glasses and contacts – are used routinely Most learning comes through simulated, software-based teachers The vast majority of transactions include a simulated person Thirty More Years of Digital Power 2019

39. Looking Forward A $1000 computer has the computing capacity of the 1000 human brains Visual- and auditory-link implants permit input and output between human users and the worldwide computing network Direct neural pathways will be pioneered for high-speed connection to the human brain Automated agents are learning on their own and have accessed all human- produced information Thirty More Years of Digital Power 2029

40. Looking Forward If these projections are close, marketers will have to figure out how –Marketing humans interact with human customers –Marketing digital agents interact with human customers –Marketing humans interact with customer digital agents –Marketing digital agents interact with customer digital agents The 21 st Century Consumer

41. Looking Forward Lessons from the past Machines are evolving rapidly; humans are not Software agents and digital tools won’t substitute for social needs Status, equity and experience, in addition to efficiency, will continue to drive purchases in the future Competition is fierce during major transitions, and companies will battle to to acquire new users while holding on to the ones they have The 21 st Century Consumer