Advertisement in Electronic Commerce - Lecture 15

Advertisement in Electronic CommerceLecture 15Summary of Previous LectureElectronic Commerce definition.E-Commerce InfrastructureRelated DefinitionsDimensions of Electronic Commerce ProductProcessDelivery AgentCommerce DifferencesE-Commerce FieldSummary of Previous LecturePeoplePublic PolicyTechnical standards and ProtocolsOrganizationElectronic MarketTypes of E-CommerceBusiness to Consumer Business to BusinessConsumer to Consumer Summary of Previous LecturePerson to PersonConsumer to BusinessBusiness to EmployeeG2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen) Summary of Previous LectureTypes of Inter organizational systemsElectronic data interchange (EDI)ExtranetsElectronic funds transfer (EFT)Integrated messaging systemsShared databasesElectronically-supported supply chain managementBenefits of E-CommerceBenefits to organizationBenefit to customersBenefits to societyLimitations of E-CommerceToday’s Lecture ObjectivesWeb advertisement, its types and characteristicsMajor advertisement methods used on the Web, ranging from banners to chat roomsDescribe various Web advertisement strategiesDescribe various types of promotions on the WebDiscuss the benefits of push technology and intelligent agentsUnderstand the major economic issues related to Web advertisementDescribe the issues involved in measuring the success of Web advertisement as it relates to different ad pricing methodsDescribe Web advertisement implementation issues ranging from ad agencies to the use of intelligent agentsToday’s Lecture ObjectivesWhere to start?Web Advertisement: A Way to Make Money out of your ComputerWhat is Advertisement?Advertising is an attempt to disseminate information in order to affect a buyer-seller transactionInternet AdvertisementInternet Advertisement is gaining popularity because,Three-quarters of PC users gave up some television timeInternet users are well educated with high-income, which makes them a desired target for advertisersAds can be updated any time with a minimal cost; therefore they are timely and very accurateInternet AdvertisementAds can reach very large numbers of potential buyers all over the worldOnline ads are much cheaper in comparison to television, newspaper, or radio ads. Such ads are expensive since they are determined by space occupied, how many days (times) they are shown, and on how many national and local television stations and newspapers they are posted. Internet AdvertisementWeb ads can be media rich, including voice and videoWeb ads can be interactive and targetedThe use of the Internet is growing very rapidlyWeb Advertisement ExampleAdvisement bannersWeb Advertisement ExampleWeb Advertisements TerminologiesTerminologies being commonly used areAd viewsBannerClicks (or ad clicks)Click RatioCookieWeb Advertisements TerminologiesCPMEffective FrequencyHitImpressionsReachVisitAd viewsAn ad view, synonymous with ad impression , is a single ad that appears on a Web page when the page arrives at the viewer's display. Ad views are what most Web sites sell or prefer to sell. A Web page may offer space for a number of ad views. BannerA graphic image used on Web sites to advertise a product or service. Will be discussed later in this lecture.Web bannersAd ClicksAction from a user clicking on an advertisement to get more information. Number of times users click on an ad banner.“Hit Count” are very useful to determine the demand or interest in any product.Ad-Clicks statistics Within different Operating SystemsClick RatioClickthrough rate (CTR) is a way of measuring the success of an online advertising campaign for a particular website. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. For example, if a banner ad is delivered 100 times (100 impressions) and receives one click, then the clickthrough rate for the advertisement would be 1%. CookieA cookie, also known as an HTTP cookie, web cookie, or browser cookie, is usually a small piece of data sent from a website and stored in a user's web browser while a user is browsing a website. When the user browses the same website in the future, the data stored in the cookie can be retrieved by the website to notify the website of the user's previous activity. Not this CookieCost per Thousand (CPM)The letter "M" in the abbreviation is the Roman numeral for one thousand. CPM is used by Internet marketers to price ad banners. Sites that sell advertising will guarantee an advertiser a certain number of impressions (number of times an ad banner is downloaded and presumably seen by visitors.), then set a rate based on that guarantee times the CPM rate. A Web site that has a CPM rate of $25 and guarantees advertisers 600,000 impressions will charge $15,000 ($25 x 600) for those advertisers' ad banner. Effective FrequencyAn estimated amount of times a person must see a particular brand awareness commercial on a product in order to change that person’s attitude and awareness about that product. HitA hit is a request to a web server for a file (For example a web page).When a web page is uploaded from a server the number of "hits" or "page hits" is equal to the number of files requested. Therefore, one page load does not always equal one hit because often pages are made up of other images and other files which stack up the number of hits counted. ImpressionsIt is the exact number of times a specific Web site has been accessed or viewed by a user.A page impression acts as a counter for Web pages, informing site owners how many times their sites were visited. Web ReachWeb reach is the accessibility of the user to download a webpage.Pages out of reach are often located on the servers which are mostly down.Web VisitNumber of users visiting a web page or website. It is often recorded as a counter.Different Count formatsInteractive MarketingWeb AdvertisingConsumer can click with his/her mouse on an ad for more information or send an e-mail to ask a questionVolume salesCustomer dataCustomer relationshipsPassivePassiveActiveFood, personal-care products, beer, autosCredit cards, travel, autosUpscale apparel, travel, financial services, autosHigh volumeTargeted goodsTargeted individualsMadison Ave.Postal distribution centersCyberspaceTelevision, magazinesMailing listsOnline servicesStoryboardsDatabasesServers, onscreen navigators, the WebMass MarketingDirect MarketingInteractive MarketingBest outcomeConsumer behaviorLeading productsMarketNerve centerPreferred media vehiclePreferred technologyWorst outcomeChannel surfingRecycling binsLogoffInternet is the fastest growing medium in historyWeb AdvertisingWeb AdvertisingTargeted Advertisement (one-to-one)The Double Click (DC) Approach3M Corporation wants to advertise its $10,000 multimedia projectorsDC monitored people browsing the Web sites of cooperating companiesthen matches them against a databasethen finds those people working for advertising agencies or using Unix system (potential buyers)then builds a file on you, your spending, and your computing habits using “a cookie”prepares an ad for 3M projectorstargeted for people whose profile matches what is needed for 3MWeb AdvertisingsPros of Internet AdvertisementInternet advertisements are accessed on demand 24 hours a day, 365 days a year, and costs are the same regardless of audience locationAccessed primarily because of interest in the content, so market segmentation opportunity is largeOpportunity to create one-to-one direct marketing relationship with the consumerMultimedia will increasingly make Web sites more attractive and compellingInternet Advertising -- ProsDistribution costs are low (just technology cost), so millions of consumers are reached at the same cost as that of reaching oneAdvertising and content can be updated, supplemented, or changed at any time, and are therefore always up-to-dateEase of logical navigation — you click when and where you want, and spend as much time as you desire thereAdvertising MethodsBannersBanners are everywhereKeyword bannersRandom bannersBenefitsbe customized to the target audiencebe customized to one-to-one targeted advertisementutilize “force advertising” marketing strategyBanner SwappingDirect link between one’s site to the other siteAd space exchangeBanner ExchangesSwapping is a problem : a match is frequently not possibleBanner exchange organizations a firm submits a bannerreceives credit when shows others’ bannerscan purchase additional display creditsspecify what type of site the banner can be displayed onuse the credit to advertise on others’ sitescredit ratio of approximately 2:1Advertising MethodsBanner Exchange organization Example : Link Exchange offers help in banner design, provides membership in newsgroups, delivers HTML tutorials, and even runs contests. It acts as a banner-ad clearing house for more than 200,000 small Web sites. It also monitors the content of the ads of all its members.Paid Advertising and Ad AgenciesAdvantage of using bannersability to customize them to the target audienceability to decide which market segments to focus onbe customized to one-to-one targeted advertisement“forced advertising” marketing strategy is utilizedSplash ScreenCapture the user’s attentionPromotion or lead-inMajor advantage : create innovative multimediaAdvertising MethodsBanner Exchange WebsiteURL (Universal Resource Locators)Advantages:minimal cost is associated with itsubmit your URL to a search engine and be listedkeyword search is usedDisadvantages:search engines index their listings differentlymeta tags can be complicated Advertising MethodsE-mailSeveral million users can be reached directlyPurchase e-mail addressesSend the company information; low costA wide variety of audiences; customer databaseProblem: Junk mail or spammingTarget a group of people that you know something aboutAdvertising MethodsChat RoomsVirtual meeting groundCan be added to a business site for freeAllows advertisers to cycle through messages and target the chatter again and againAdvertising can become more thematicMore effective than bannersUsed in one-to-one connectionAdvertising MethodsAdvertisement StrategiesInternet-base Ad DesignAdvertisements should be visually appealingAdvertisements must be targeted to specific groups or to individual consumersAdvertisements must emphasize brands and a firm’s imageAdvertisements must be part of an overall marketing strategyAdvertisements should be seamlessly linked with the ordering processDesigning Internet ads involve the following factors:Advertisement StrategiesInternet-based Ad Design: Important FactorsPage-Loading SpeedGraphics and tables should be simple and meaningful. They need to match standard monitors.Thumbnail (icons graphs) are useful.Business ContentClear and concise text is needed. A compelling page title and header text is useful.The amount of requested information for registration should be minimal.Advertisement StrategiesInternet-base Ad Design: Important FactorsNavigation EfficiencyWell-labeled, accurate, meaningful links are a must.Site must be compatible with browsers, software, etc. Security and PrivacySecurity and privacy must be assured.Option for rejecting cookies is a must.Marketing/Customer FocusClear terms and conditions of the purchases, including delivery information, return policy, etc. must be provided.Confirmation page after a purchase, is needed.Advertisement StrategiesPassive Pull StrategyCustomer will visit a site if it provides helpful and attractive contents and displayEffective and economical way to advertise, unidentified potential customers worldwideAdvertising World is a non-commercial site that can guide the process of finding the customer’s wishYahoo is a portal search engine site which can be regarded an effective aid for advertisementAdvertisement StrategiesActive Push StrategySending e-mails to the relevant peopleObtaining the mailing list is the process of identifying target customersMailing list generation is done in companies by using agent technology and cookies as well as by filling out questionnaires (by customers) Advertisement StrategiesAd as a CommodityCyberGoldexchange of direct payment made by the advertisers for viewing adsconsumers fill out questionnairesCyberGold distributes targeted bannersthe reader clicks the banner to read it and, passing some tests on its content, is paid for the effortImplementing the StrategiesFiltering the irrelevant information by providing customized adsOne-to-One advertisementCustomized Ad StrategyProductDatabaseMallOperator AProductDatabaseMallOperator BProductDatabaseMallOperator CMeta-Malls CoordinatorCustomerMeta-MallsCustomer AssistantDirect VisitSummaryand IndexDatabaseImplementing the StrategiesComparison Aid as Medium of AdvertisementOnline Events, Promotions and AttractionsHow to attract Web surfers to read Internet adsThere are dozens of innovative ideas; here are some examples :Yoyodyne Inc. conducts give-away games, discounts, contests & sweepstakes. Its entrants agree to read product information of advertisers ranging from Major League Baseball to Sprint communication.Netzero and others offer free Internet access in exchange for viewing ads.www.egghead.com uses real people to help you. www.lucent.com uses live people to talk to you over the phone and then “push” material and ads to your computer.Lucent.com Web attractionBenefit : instead of spending hours searching the Web, people can have the information they are interested in delivered automatically to their desktop via Web technology and the InternetPush TechnologyPointcastingAnalogous to mass customizationTransmits the most relevant information directly to the userPush on the IntranetCompanies use push technology to set up their own channels to pointcast important internal information to either their own employees (on intranets) and/or their supply chain partners (on extranets)The Future of Push TechnologyDrawback : the bandwidth requirements are largeExperts’ prediction : the technology will never flyPush TechnologyIntelligent AgentsIntelligent Agents are automatic programs, which run separately and are capable of performing different advertisement related functions. For example, Product Brokering AgentsKnows the customer’s profileTailors an ad to the customers, or asks them if they would like to receive product informationAlerts the users to new releases, recommends products based on past selections, or constraints specified by the buyersToday’s MisconceptionSummaryToday we have been learnt How to advertise on the Web?Web AdvertisementWeb Advertisement TerminologiesAd viewsBannerClicks (or ad clicks)Click RatioCookieCPMSummaryEffective FrequencyHitImpressionsReachVisitPros of Internet AdvertisementDouble Click ApproachAdvertisement MethodsBanners and Banner ExchangesBanner SwappingSummaryAdvertisement StrategyInternet Based Ad DesignPassive Pull StrategyActive Push StrategyAd as a CommodityPush TechnologyImplementing StrategyIntelligent Agents