1. MARK 430 INTRODUCTION The impact of the internet on marketing Week 1

2. What is internet marketing? Online marketing/ eMarketing / digital marketing / web marketing / internet marketing? The application of the internet and related digital technologies in conjunction with traditional communications to achieve marketing objectives ……Dave Chaffey http://www.smartinsights.com/digital-marketing-strategy/online-marketing-mix/definitions-of-emarketing-vs-internet-vs-digital-marketing/

3. Why study internet marketing? Over the past 20+ years traditional marketing practices have been transformed – October 27, 1994 – first banner adfirst banner ad – Digital marketing continues to grow and attract marketing dollars – The influence of “Web 2.0” in the late 90s and early 2000s, product digitization, and now the impact of mobile computing – Continuing strong growth in business-to-consumer and business-to- business eCommerce New skills, knowledge and strategies in high demand in the business world – very strong demand in this areavery strong demand in this area Marketers need to understand technology and collaborate with IT colleagues

4. TECHNOLOGIES

5. Some technologies used in marketing Web (HTML 5 / CSS 3) Instant messaging SMS (Text messaging) “over-the-top” messaging via data (eg. Viber, WhatsApp) Voice and Video over IP (VOIP) eMail P2P file exchange / streaming technologies Location-awareness / location based services (LBS) Mobile Apps (native to mobile operating systems) Augmented Reality (AR) Near-field communication (NFC) iBeacon and Bluetooth Low Energy Virtual reality (VR) Voice and image recognition

6. Consumer Devices Mobile – Cell phones and smart phones – eReaders – Tablets – Wearables (glasses, watches, rings, bands, tattoos etc) Desktop – Personal computers (desktop and laptop) – Gaming consoles – VR/AR headsets and motion detectors Internet of Things (IoT)

7. OWNED, EARNED, AND PAID MEDIA

8. Owned, earned and paid media Definitions from Dave Chaffey – Paid media: “media where there is investment to pay for visitors, reach or conversions through search, display ad networks or affiliate marketing.” (online and offline) – Earned media: “publicity generated through PR invested in targeting influencers to increase awareness about a brand. Of course, it’s still an investment. Earned media also includes word-of-mouth that can be stimulated through viral and social media marketing and includes conversations in social networks, blogs and other communities.” – Owned media: “media owned by the brand. Online this includes a company’s own websites, blogs, mobile apps or their social presence on Facebook, LinkedIn or Twitter. Offline owned media may include brochures or retails stores.” http://www.smartinsights.com/digital- marketing-strategy/customer-acquisition- strategy/new-media-options/

9. “Owned” media Owned media: “media owned by the brand. Online this includes a company’s own websites, blogs, mobile apps or their social presence on Facebook, LinkedIn or Twitter [etc]” Dave Chaffey Dave Chaffey One of Dell’s twitter accounts Starbucks on Pinterest

10. “Earned” media Earned media: “Earned media also includes word-of-mouth that can be stimulated through viral and social media marketing and includes conversations in social networks, blogs and other communities.” Dave ChaffeyDave Chaffey Liking, sharing, and commenting on a Starbucks’ Facebook post Comments posted to the Skyrim Reddit pages (not owned by Bethesda)

11. “Paid” media Paid media: “media where there is investment to pay for visitors, reach or conversions” Dave Chaffey Dave Chaffey Instagram sponsored post Twitter promoted account Google Adwords PPC advertising

12. Owned, earned & paid media (Chaffey) http://www.smartinsights.com/digital- marketing-strategy/customer-acquisition- strategy/new-media-options/

13. Owned, earned and paid media: role, benefits & challenges http://www.smartinsights.com/digital- marketing-strategy/customer-acquisition- strategy/new-media-options/

14. Owned: Website Analytics, Data management Law, Regulation, ethics Planning and management Demographics Market research Being found Domains, usernames, hashtags Content & technologies Text, video, images, AR, VR Social media (owned & earned) Advertising Email / messaging The bigger picture of internet marketing

15. THE 4PS IN TRANSITION

16. The impact of the Internet on the traditional marketing mix framework Product – new products, the rise of the “prosumer” Price – dynamic pricing, comparison pricing, bidding……..FREE! Place – direct distribution of digital products, supply chain management, channel integration Promotion – new social and communications media, measurable advertising Strong trend towards personalization and away from the mass (undifferentiated) market affecting all the elements of this framework The Six “I”s Framework – Interactivity – Intelligence (market) – Individualization – Integration – Industry restructuring – Independence of location MacDonald and Wilson. The New Marketing, 2002 Source: eMarketing eXcellence. 2012. Smith &Chaffey

17. Interactivity The internet is not TV Conversation rather than broadcast Pull (inbound marketing) rather than push (outbound marketing) Active rather than passive (lean-forward medium) Social Networking / User Generated Content Source: eMarketing eXcellence. 2012. Smith &Chaffey

18. [Market] Intelligence By the very act of using the internet, we are “telling” marketers what we want: Passively Clickstream data Web analytics Actively Social network updates, photos, videos, reviews, forum postings etc Source: eMarketing eXcellence. 2012. Smith &Chaffey

19. Individualization The market of one: based on the information about customers that we provide, and that is collected automatically and monitored constantly Amazon for example Amazon Traditional media Same message to all customers or segments New media Message tailored to each customer or micro-segment Source: eMarketing eXcellence. 2012. Smith &Chaffey

20. Integration Online marketing is very readily integrated into a marketing communications strategy Internet channels complement and integrate with offline marketing channels Source: eMarketing eXcellence. 2012. Smith &Chaffey

21. Industry restructuring and Independence of location INDUSTRY RESTRUCTURING Disintermediation – traditional intermediaries used by marketers disappearing Re-intermediation new intermediaries (eg. PayPal) Business models challenged (eg. Uber) LOCATION INDEPENDENCE Increased reach to global markets Increased exposure Increased competition Source: eMarketing eXcellence. 2012. Smith &Chaffey

22. Product trends online Digital value – adding value to products through online means Digitization – product or place? Personalization – individualized products and the “prosumer” Source: eMarketing eXcellence. 2012. Smith &Chaffey

23. Digital goods distribution Any product that can be digitized can be delivered over the Internet Online distribution costs are significantly lower – No inventory problems – No product depletion – Reduction of friction in transactions Completely new business models based on digital distribution methods Internet becomes a direct substitute for an offline distribution channel eg. online banking Source: eMarketing eXcellence. 2012. Smith &Chaffey

24. Some industries that are undergoing rapid change due to Internet forces affecting product and place Recorded Music industry Video/DVD rental industry Newspaper and magazine publishing Banking Book publishing “Sharing economy” industries (Taxis, hotels) Forces for change: – Digitizable product – Self service – Direct to consumer shift – Personalization

25. Pricing Internet influences – buyer and seller perspectives of price Moving from free to fee (and freemium) LinkedIn Shockwave.com (casual games) Newspaper “paywalls” Price comparisons / transparency Dynamic pricing Source: eMarketing eXcellence. 2012. Smith &Chaffey

26. Online promotion We will look at the many new techniques available to marketers to promote goods and services online The big value of internet marketing – Ability to measure results (performance based) – Ability to use unmediated data about customer behaviour and preferences Source: eMarketing eXcellence. 2012. Smith &Chaffey

27. COMMUNICATION AND PERMISSION IN THE MARKET SPACE (LAW, ETHICS, AND PRIVACY)

28. Overview: Establishing trust and confidence in the online world – Privacy Gaining trust through “permission marketing” The relationship marketing model

29. How concerned are people about online privacy? Survey of Canadians on Privacy-Related Issues (Stats Can 2013) – scroll down for graphs Survey of Canadians on Privacy-Related Issues – 66% are very concerned about privacy – Top privacy concerns relate to finances, online security and identity theft – Growing sense that protection of personal information is diminishing – Most not confident about knowledge of privacy implications of new technologies – Growing sense of increased importance of protecting privacy in future – Canadians reluctant to share personal information with organizations

30. 2013 survey data re privacy from Pew Anonymity, Privacy, and Security Online – Pew Internet (September 2013) Anonymity, Privacy, and Security Online Security concerns continue to rise 86% of internet users have taken steps online to remove or mask their digital footprints 55% of internet users have taken steps to avoid observation by specific people, organizations, or the government.

31. Other current concerns about privacy There is a big tension between what marketers want to know about people, and how comfortable people are in providing that data Marketers need to find the right balance Some examples – Canadian Privacy Commission video on social networking Canadian Privacy Commission video on social networking – What Facebook is for (#funny) What Facebook is for – The evolution of Facebook Privacy (2005 – 2010) The evolution of Facebook Privacy – Facebook privacy – 6 years of controversy Facebook privacy – 6 years of controversy – Google Street View (Neck Point Park) Google Street ViewNeck Point Park

32. What is the current legal framework in Canada with respect to online privacy?

33. Legal Protection of Internet Privacy A major concern of Internet users is that their personal data is used only for the purpose it was provided Legislation in Canada – PIPEDA (Personal Information Protection and Electronic Documents Act) PIPEDA (Personal Information Protection and Electronic Documents Act) – All businesses and other organizations had to comply by Jan 1, 2004 Note this is federal legislation – there is also provincial-level privacy legislation

34. Privacy requirements Information about an identifiable individual – Name, address, gender, age, ID numbers – Sensitive information (religion, union affiliations, sexual orientation, medical records etc) Identify purpose for which info is being collected Knowledge and consent of individual is required Use only for the purpose for which it was collected Keep it secure Make public your policies and practices about how private information is deal with

35. Privacy Policies Organizations carry out this legal requirement by providing information in privacy policies Policy must address information collected automatically from log files and cookies, as well as personal information actively provided by the user – Example: FutureShopFutureShop – Example: Microsoft CanadaMicrosoft Canada Trust can also be increased by the use of “trustmarks” from 3 rd party providers such as TrusteTruste

36. Privacy and cookies Cookies are a boon to marketers – just a few of the uses (video explanation from Google):video explanation from Google – Personalization – Advertising and ad networks – Shopping carts – Recognizing returning visitors – Tracking click-through from advertising to purchase They also offer big advantages to web site users However – they are also the cause of many privacy concerns

37. Types of cookies There are several types of cookie – Persistent cookies – Single session cookies – First-party cookies – Third-party cookies – these are the ones that cause concern No one-to-one correspondence between computer (cookie) and user Issue for marketers – In Canada we must disclose how cookies are used in Privacy Policy – EU policy now requires web sites to get users permission to capture data using cookiesget users permission to capture data using cookies – Creeping out the customers by “going too far” Behavioural re-targeting (based on previous actions, not demographics) is being called “stalking”

38. New legal framework for Canada “In order to build consumer trust and confidence in conducting e-business in Canada the Government of Canada is committed to establishing clear rules to protect the privacy of personal information in the new 'virtual' marketplace. This is being done through the implementation of Federal privacy legislation, and implementation of the new anti-spam legislation.”implementation of the new anti-spam legislation Industry Canada Summary of the new anti-spam legislation (CASL) Summary of the new anti-spam legislation – Very strict consent framework is one of the most notable points – Applied to all “electronic communication” not just email – Best practices in marketing is now the law – We will look at the requirements in more detail when we look at email marketing

39. We can also build trust and confidence by using “permission marketing” techniques

40. Permission marketing Term coined by Seth Godin (1999) Underpins the notion of relationship marketing The antithesis of “interruption marketing” and the answer to the problem of clutter – Permission marketing is….. anticipated, relevant and personal Often begins with some sort of incentive that customers “opt-in” (remember that opt-in is now required by law)

41. Permission as a basic principle on the web Don’t ask for personal information too early in a process Don’t ask for it until it is needed Remember, once you have customer information, all contact should be “anticipated, relevant, and personal” (and used only for the purpose(s) that they explicitly gave consent for)

42. Framework of relationship marketing Aim is to build long-term relationship with individual customer – built on loyalty – one to one marketing Measured by Return on Marketing Investment (ROMI) and Customer Lifetime Value (CLTV) metric rather than simply sales transactions Rationale is that customer acquisition costs much more than customer maintenance Strategy built using “sense and respond” communications – Both timely and relevant to the customer – based on previous interactions with the company – Amazon.com and “sense and respond” Amazon.com and “sense and respond” Loyalty happens only with “permission” and by instilling trust