© 2006 Pearson Education Canada Inc Canadian Advertising in Action Chapter 12 Internet Communications

© 2006 Pearson Education Canada Inc Learning Objectives  Describe elements of internet communications  Identify members of online advertising industry  Evaluate online advertising models  Identify online audience measurement systems  Assess the internet as an advertising medium  Describe and apply models of pricing and buying online advertising

© 2006 Pearson Education Canada Inc Elements of the Internet World Wide Web A cost-effective method of communications to and from customers. Offers opportunities for personal, one-to-one relationships with customers.

© 2006 Pearson Education Canada Inc Internet User Profile The user profile varies and is constantly updated. Current profile:  Equal split male/female  Heaviest users: higher income households those with post-secondary education 15 to 44 years old

© 2006 Pearson Education Canada Inc Uses of the Internet

© 2006 Pearson Education Canada Inc Internet & Interactivity  Richer interactive media  Multi-faceted interactive marketing strategies  Sophisticated data collection, feedback, and targeting Online advertising is using:

© 2006 Pearson Education Canada Inc Online Advertising The goal of advertising is to motivate a purchase. Online advertising may: 1.Create brand awareness 2.Stimulate interest and preference 3.Provide a means to make a purchase 4.Provide a means to contact an advertiser 5.Acquire data about real/potential customers

© 2006 Pearson Education Canada Inc The Online Advertising Industry Sellers Buyers Agency/ Design Agency/ Design Infra- structure Infra- structure Publishers, advertising networks sell space. Advertisers, agencies buy space. Boutique shops pioneered online advertising. Service companies facilitate effective use of online advertising.

© 2006 Pearson Education Canada Inc Online Advertising Models Presently, banner advertising comprises the majority of advertising, but advertisers are looking at other options. Internet ads are measured for effectiveness based on:  Impressions  Clicks  Clickthrough Rate  Visits

© 2006 Pearson Education Canada Inc Online Advertising Alternatives 1.Banner Advertising 2.Sponsorships 3. Advertising (Permission-based) 4.Corporate Websites 5.Text Messaging (SMS)

© 2006 Pearson Education Canada Inc Banner Advertising Banner Skyscraper Rectangle Button

© 2006 Pearson Education Canada Inc Banner Advertising Alternatives The quality of online advertising is improving as video graphics are added. Banners and Buttons Skyscrapers and Rectangles Animated Banners Interactive Banners Interstitials (Pop-ups & Pop-unders) Superstitials (Rich Media)

© 2006 Pearson Education Canada Inc Effectiveness of Banner Advertising Which of these have you seen and what were your responses? Banners and Buttons Skyscrapers and Rectangles Animated Banners Interactive Banners Interstitials (Pop-ups & Pop-unders) Superstitials (Rich Media)

© 2006 Pearson Education Canada Inc Sponsorships An advertiser commits to an extended relationship with another Web site. Sponsorships allow for a successful campaign without having to drive traffic to a brand’s Web site. Consumers trust brands they visit repeatedly, therefore, a second brand (a sponsor) may be perceived positively by the association.

© 2006 Pearson Education Canada Inc Advertising There are two types of advertising: 1.Permission-based 2.Sponsored Similar to direct mail, advertisers use house lists and rented lists that include “opt-in” names and addresses.

© 2006 Pearson Education Canada Inc Corporate Websites Traditional media can drive traffic to corporate websites for opportunities to “tell the whole story.” Websites can provide product knowledge and other information to move customers to purchase decisions. Media combinations that include television, print, and websites generate higher awareness and preference scores than just television and print.

© 2006 Pearson Education Canada Inc Information Collection The collection of accurate information is enhanced by the placement of a cookie in a user’s personal computer. 1.A cookie is an electronic identification tag sent from a Web server to a browser to track a person’s browsing patterns. 2.Users agree to accept cookies while giving up private information about how they use the Internet.

© 2006 Pearson Education Canada Inc Audience Measurement To attract advertisers accurate measurement is essential. Web publishers compile data in web server logs including:  Page views  Numbers of unique visitors  Number and length of visits Independent third parties, such as Nielsen/Net Ratings and Media Metrix provide audited information about Web usage. Visit the press room at Nielsen/Net Ratings for more data.Nielsen/Net Ratings

© 2006 Pearson Education Canada Inc Online Communications Advantages & Disadvantages Targeting Capability Tracking and Accountability Timing Interactivity and Action Selective Reach Consumer Frustration Privacy Concerns Advantages Disadvantages

© 2006 Pearson Education Canada Inc CPM Buying Model CPM is the price charged for displaying an ad 1,000 times. Options include:  Run of Site  Run of Category  Key Word Targeting As degree of targeting increases, the CPM increases.

© 2006 Pearson Education Canada Inc Pay-for-Performance Model Since clicking is the desired action, advertisers only pay when the banner ad is clicked on. They pay on a cost-per-click basis. Web publishers dislike this method since they are not responsible for the quality of the creative, a factor that stimulates clicking. Publishers display an ad in good faith.

© 2006 Pearson Education Canada Inc Flat Fee Buying Model A Web site charges a set amount for the length of time the ad appears on the site (week, month, quarter). Sponsorships are commonly sold on this basis as is some banner advertising.

© 2006 Pearson Education Canada Inc Principles of Interactive Communications Based on the text and our discussions, can you identify eight strategic considerations for Internet Advertising? See page 396 in the text.