Implementation of marketing strategy: Marketing communications MARK 430

Marketing process  Target your market  Position your product  Communicate to your target audience  Communication  Advertising  Personal selling

2 main goals of marketing communication  Brand advertising – aim is to build awareness of a product by putting the brand name and product benefits in front of users  Develop positive attitudes prior to purchase  Direct-response advertising – seeks to motivate action – BUY!

Online communications media types MediumAdvantagesDisadvantages Website / personalized website Communicate rich, detailed information that users can navigate at will; can track users and customize site accordingly Narrow reach Banner adsLink directly to buying opportunity; easy to measure effectiveness; wide reach; potential for effective targeting Low attention and click-through rates; short life; limited ‘pass-along’ audience; very high clutter; fleeting exposure InterstitialsCatch user’s attention; link to buying opportunityCan annoy users; limited ‘pass- along’; audience Rich mediaAttention getting; link to buying opportunityCan annoy users without broadband access Dynamic ad placement Serves up customized ads to users in real timeDifficult to execute well; can annoy users and/or other advertisers Search enginesGood credibility; high believability; guarantee of position available; significant audience at major sites High competition; information overload; limited ‘pass-along’ Classified and listings Relatively inexpensive; potential for wide exposure; qualified audience Clutter Opt-in High demographic selectivity; high credibility; significant flexibility; proven high click-through rates; absolutely inexpensive; some pass-along Requires substantial user base before effective; high clutter Mass High reach; inexpensive; flexibleLow attention and significant resentment (spam image)

Marketing communications we will look at over the next few weeks  This week: online advertising (banners, interstitials and rich media)  Week after study break: search engine marketing  Following week: and viral marketing

What difference does the Internet make to advertising?  Traditional form of one-way, one-to-many mass advertising no longer necessary or appropriate  Web provides a highly targeted, receptive audience  Web advertising can be interactive, and therefore by definition, more engaging  Web provides a mechanism for instant action  Immediate gratification of the consumer not available with print, TV or radio advertising  Consumers complain more about web advertising than about other forms of advertising

Internet advertising  Advertising is non-personal communication of information through various media  Usually persuasive in nature about products  Usually paid for by an identified sponsor  Paid space on a website or in an is considered internet advertising  The process of selling advertising on the Internet is very similar to offline media – web companies create content then sell advertising space to advertisers  But also include the situation where a content provider will pay to include that content on another firm’s site (sponsored content = advertising)

The importance of Internet advertising  Began in 1994 with banners on Hotwired.com  Saw strong growth until (on a par with the drop in advertising spending in all media)  Now on the upswing again, as dissatisfaction with traditional media grows (see link to reading)  The importance of the Internet as an advertising medium varies across industries. Most advertising comes from following categories  consumer related advertising (30%)  computing (18%)  financial services (12%)  media (12%)  business services (9%)

How successful is web advertising?  Banner ad click-through rates are very low  around 1% of users actually click on a banner ad  of that 1%, around 5% actually follow through with a transaction  The web is very good at person-to-person interactive services, and at promoting product loyalty  Growth has been in interactive ads using “rich media”  Said to be twice as effective as traditional banners  Big payoff is in the capability to track ad effectiveness and ability to respond to change very quickly

Web site advertising formats  Began as static banners in the mid 1990s, added animation, then moved to the use of “rich media”  Interactive formats, including:  Banners  Buttons  Skyscrapers  Pop-ups, pop-unders, interstitials  Floater ads and Shoshkele (United Virtualities) Floater ads and Shoshkele  Rich media gallery (Macromedia)Rich media gallery  For examples of all kinds of web advertising, go to  Eyeblaster

Aggregate number of user clicks on a banner ad Ad Clicks Number of times a banner ad is downloaded to a user’s browser and presumably looked at Ad Views (Impressions) Percentage of ad views that are clicked upon; also “Ad Click Rate” Click-Through Formula used to calculate what an advertiser will pay to an Internet publisher based on number of click-throughs a banner generates CPC (Cost-per-Click) Cost per thousand impressions of a banner ad; a publisher that charges $10,000 per banner and guarantees 500,000 impressions has a CPM of $20 ($10,000 divided by 500) CPM Paying for, and measuring usage Online media have varied payment schemes – unlike traditional media which is usually priced on a pay for placement basis (based on ratings) Going beyond click-through rates: Clickstream data gives you the whole picture of a consumers movements before, during and after viewing an advert

Complexities of online advertising  Designing interactive rich media is challenging  Non-linear – consumer can take many paths  Getting the right balance between intrusive and engaging  Tracking effectiveness  Online ads delivered to individuals rather than to mass markets – makes placement and tracking much more complex  Technical complexity of rich media adverts mean closer ties between the advertiser and the media seller  Ad placement  Disagregated medium means ads must be placed with several Internet publishers to reach audiences

Helping marketers deal with these complexities  Workflow software to help in the buying, selling, and managing of managing of online ads – eg. SolbrightSolbright  Macromedia and DoubleClick’s joint product to help manage both the creation and measurement of ad effectiveness  DART Motif DART Motif

Advertising to wireless devices  Huge growth potential  PDAs, cellphones, laptops etc now widely used  Big question is – would mobile users rather pay for content, or will they tolerate advertisements in exchange for free content  Answer is not clear because of several factors  low bandwidth  small screen size  different techniques needed to track ad effectiveness  by-the-minute payment for air-time by user

Viewing advertising in exchange for viewing content  A growing trend as content providers try to make sense of business realities  - view ad before gaining access to site  - view ad in exchange for getting access to complete magazine article

The future of web advertising  Web technology allows for many interesting multimedia advertising formats  These catch attention when they first appear, but quickly become intrusive and annoying  Big backlash against pop-ups  Marketing fundamentals will prevail: Success is about reaching the right audience with the right message at the right time