Marketing and Advertising in E-Commerce Chapter 9 Marketing and Advertising in E-Commerce

Learning Objectives Describe factors that influence online consumer behavior. Understand the decision-making process of online consumer purchasing. Discuss the issues of e-loyalty and e-trust in electronic commerce (EC). Understand segmentation and how companies are building one-to-one relationships with customers. Explain how consumer behavior can be analyzed for creating personalized services.

Learning Objectives Understand consumer market research in e-commerce. Describe the objectives of Web advertising and its characteristics. Describe the major advertising methods used on the Web. Learn mobile marketing concepts and techniques. Describe various online advertising strategies and types of promotions. Understand some implementation issues.

Learning About Online Consumer Behavior A Model of Consumer Behavior Online Influential factors The attitude-behavior decision process The Major Influential Factors Consumer Characteristics Merchant and Intermediary-Related Factors Product/Service Factors EC Systems Environmental Factors

EC Model of Online Consumer Behavior

The Consumer Purchasing Decision Process A Generic Purchasing-Decision Model Need identification Information search *Product brokering *Merchant brokering Evaluation of alternatives Purchase and delivery Post-purchase activities

The Consumer Purchasing Decision Process Players in the Consumer Decision Making Process Initiator Influencer Decider Buyer User Shopping Cart Abandonment

Loyalty, Satisfaction, and Trust in E-Commerce *Customer Loyalty *E-loyalty Satisfaction in EC

Loyalty, Satisfaction, and Trust in E-Commerce EC Trust Models *Online trust How to Increase Trust in EC Improve Your Website Objective Third-party Seals Establish Trustworthiness Other Methods For Facilitating Trust *Reputation-based Systems Online Word of Mouth

Mass Marketing, Market Segmentation, and Relationship Marketing From Mass Marketing to One-to-One Marketing Mass Marketing and Advertising *Market Segmentation Relationship (One-to-One) Marketing *Relationship marketing *One-to-one marketing How One-to-One Relationships Are Practiced

From Mass Marketing to Segmentation to One-to-One

The One-to-One Marketing Cycle Sources: Compiled from Greenberg 2 010 and the authors’ experience

Personalization and Behavioral Marketing Personalization in E-Commerce *Personalization *User profile *Cookie Web Cookies for Data Collection Using Personalized Techniques to Increase Sales

Personalization and Behavioral Marketing Behavioral Marketing and Collaborative Filtering *Behavioral Targeting *Collaborative Filtering Other Methods Rule-based filtering Content-based filtering Activity-based filtering Legal and Ethical Issues in Collaborative Filtering Social Psychology and Morphing in Behavioral Marketing Use of Customer Database Marketing

Market Research for E-Commerce Objectives and Concepts of Market Research Online What Are Marketers Looking For in EC Market Research

Market Research for E-Commerce Representative Market Research Approaches Data Collection and Analysis Online Surveys Web-Based Surveys Online Focus Groups Hearing Directly from Customers Data Collection in Social Networks and Other Web 2.0 Environments Observing Customers’ Movements Online *Transaction Logs *Clickstream behavior Cookies and *Web Bugs *Spyware Web Analytics and Mining Clickstream Analysis *Clickstream data *Web mining

Market Research for E-Commerce Limitations of Online Market Research and How to Overcome Them Privacy Issues in Market Research Biometric and Smartphone Marketing Helps Market Research *Biometric *Mobile market research

Web Advertising Overview of Web Advertising *Interactive marketing The Advertising Cycle Basic Internet Advertising Terminology *Ad views *Button *Click (ad click) *CPM (cost per mille, i.e., thousand impressions) *Conversion rate *Click-through rate/ratio (CTR) *Hit *Landing page *Page

The Advertising Cycle

Web Advertising Why Internet Advertising? Advertising Online and Its Advantages Cost Media richness Easy updating Personalization Location-based Linking to shopping Traditional Versus Online Advertisement

Online Advertising Methods: From E-Mail to SEO and Video Ads Major Categories of Ads Classified Ads Display Ads Interactive Ads *Banners *Random banners *Static banners *Pop-up banners *Personalized banners *Live banners Benefits and Limitations of Banner Ads *Banner swapping *Banner exchanges

Online Advertising Methods: From E-Mail to SEO and Video Ads Pop-Up and Similar Type Ads *Pop-up ad Pop-up Videos *E-Mail Advertising *E-mail Marketing Major Advantages and Limitations of E-Mail Advertising Implementing E-Mail Advertising E-Mail Hoaxes Fraud

Online Advertising Methods: From E-Mail to SEO and Video Ads Search Engine Advertisement and Optimization *Search Advertising Keyword Advertising URL Listing *Search engine optimization (SEO) Sponsored Ads (Paid Inclusion) Google: The Online Advertising King Google’s Major Advertisement Methods: AdWords and AdSense

The Process of Search Engine Optimization

Online Advertising Methods: From E-Mail to SEO and Video Ads *Viral marketing (viral advertising) Video Advertising *Viral video Consumer-Generated Videos *Interactive Videos Video Click-Throughs Live Interactive Videos *Advergaming (in-game advertising) Augmented Reality Advertisement Advertising in Chat Rooms and Forums

IAB Model of Video Advertising Source: Interactive Advertising Bureau. “A Digital Video Advertising Overview.” January 2008. iab.net/media/fi le/dv-report-v3.pdf (accessed July 2014). Used with permission.

Mobile Marketing and Advertising Mobile Marketing and Mobile Commerce *Mobile marketing *Mobile advertising (m-advertising) Mobile Interactive Advertising Types of Mobile Ads Short Message Ads Location-Based Ads Viral Mobile Marketing Mobile Marketing and Advertising Campaigns

Process of Mobile Advertising

Mobile Marketing and Advertising Mobile Marketing Implementation Guidelines Tools to Support Mobile Advertisement Mobile Ad Trends

Advertising Strategies and Promotions *Permission Advertising Other Advertising Strategies Affiliate Marketing and Advertising *Affiliate marketing *Affiliate network Paying People to Watch Ads Selling Space by Pixels Personalized Ads Advertising as a Revenue Model *Pay per click (PPC) Choose-Your-Own-Ad Format

Advertising Strategies and Promotions Online Events, Promotions, and Attractions Live Web Events for Advertising Localization in Advertising *Localization Developing an Online Advertising Plan Set up advertising goals Identify target customer Choose media and advertising tools Develop action and implementation plans Develop performance measurement and monitoring plans Execute plans and evaluate performance Advertising on Facebook

Life Cycle of Advertising Plans

Managerial Issues Do we focus on value-creating customers? Which Internet marketing/advertising channel(s) do we use? What metrics do we use to guide advertisers? What is our commitment to Web advertising? Should we integrate our Internet and non-Internet marketing campaigns? Who will conduct the market research? Should we use mobile coupons? What ethical issues should we consider in online marketing?

Summary Factors influencing online consumer behavior. The online consumer decision-making process. Increasing loyalty and trust. Market segmentation and building one-to-one relationships with customers. Online personalization.

Summary EC consumer market research. Objectives and characteristics of Web advertising. Major online advertising methods. Mobile marketing. Various advertising strategies and types of promotions. Implementation topics.