E-Active Marketing Chapter 9

Chapter Overview Internet has changed U.S. culture Global customers, competition E-active marketing  e-Commerce + Interactive marketing Consumer e-commerce Business-to-business e-commerce Interactive marketing methods

E-Commerce Selling of goods/services on the Internet >50% of U.S. households use e-commerce Online sales is 12% of total U.S. retail sales E-commerce sites also used for info gathering

E-Commerce Components Catalog Shopping cart Payment procedure Customer service  FAQs Public relations Optional elements

Cyber Shopping Categories Travel$53B Office, home, and garden$16B Computers & accessories$12B Apparel$12B

Financial Incentives Attract first-time purchaser Effective incentives  Reduced price  Free shipping  E-coupon Incentives must be meaningful and changed periodically Reduces costs through  Lower shipping costs  Lower labor costs  Lower personnel costs

Convenience Incentives E-commerce available 24/7 Used to obtain product information Update and change Web site Easy to locate merchandise Convenience services  Event registries  Popular items  Measurement charts

Concerns About E-Commerce Seller opportunism Security issues Information privacy issues Brick-and-mortar purchasing habits

Value-Added Incentives Change purchasing habits – long term Personalized shopping Examples  Merchandise available only online  Free online courses  Free information, household tips

Interactive Marketing Two-way communications Customer involvement Tracking of Internet activities Personalize targeted

Online Interactive Tactics Newsletters

Online Advertising Increase in online budgets Effective method for reaching today’s consumers Becoming “standard”  Click-through response rate – 0.27% Traditional integration - Brand spiraling

F ig Types of Online Advertising Display or banner ad Classified ads Search advertising Media/video ads Online Advertising

Banner Advertising First online advertising Accounts for 32% of online advertising Can embed videos and widgets Targeted display ads  Auction exchanges  Matches audience

Online Advertising - Rates CPMs will rise more than 75% over next 5 years Overall growth of online advertising will grow more slowly. Average CPM will rise from ~$2.66 in 2012 to $4.68 by Largely due to “Visible Impression Standard” Source: Advertising Age, October 9, 2012, “Forrester Reduces Its Forecast for Online Spending”

Online Advertising - Rates Visible Impression Standard: Advertisers pay only for ads that are visible on the screen. May mean fewer impressions; offsetting CPM gains. Online growth rate overall for 2012 ~17%, down from 20% in 2011.

Classified and Media/Video Advertising Online classified ad popular Media/video ads fastest-growing format Mobile phones and hand-held devices Dwell time, rate higher for video ads

Blogs Online musings Power of online buzz 50% go to social networks  Download coupons  Search for information  Upcoming sales  Discounts 22% read or write a product review on a blog

Company-Sponsored Blogs Effective?  Blog visitors spend more  Online 23 hours/week versus 13 Benefits  Communicate! Let customers see who you are.  Reassure shoppers  Customers can voice opinion  Company controls site Must be honest  Identify your company if you contribute significantly to a site.

Online Social Networks Facebook, YouTube, etc. Developing social network presence  Specific product page – Sprite  Posting of ads on social networks (Nike)  Possible privacy issues Consumer-generated advertising  “Crowdsourcing”

Consumer-Generated Reviews Amazon-com – leader Retailers – online reviews of brands Early adopters Implications  Negative reviews, Low ratings  Consistent quality products  Information for Marketing plans Product modifications Service strategies

Campaigns It is essential to: Integrate with other marketing channels Be based on web analytics Combine with future web analytics It is beneficial to: Integrate with Web site’s content management Integrate with a customer relationship program

Newsletters newsletters  Build brand awareness  Tie-in and drive web traffic  Customers newsletters, subscriptions  Provide value Advertising on other newsletters  Build brand awareness  Drive web traffic  Pick newsletters that are relevant

Web Site Design Ensure Web site functions properly Cost of acquiring a new customer  E-commerce company  $100  Other companies  up to $500 Design to meet function, match target market Front page often skipped Design every page with complete information