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Mktg350 lecture 08262013
- 1. Online & New Media Business of Digital SNC-MKTG350 August 26, 2013
- 2. Tonight’s Agenda: Business of Digital • Web sales vs. brick and mortar retail • Fee for service vs. ad sales subsidizing free • Online advertising sales vs. magazine, radio and newspaper sales • Size of mobile phone and tablet ad sales, mobile/web app production
- 4. Web Sales
- 5. Brick & Mortar Sales, Gen Merch
- 6. Brick & Mortar Sales, Clothing
- 7. Brick & Mortar Sales, Furniture
- 8. 3 Key Ideas • Web sales = 8% retail sales • $216B projected 2013 • Economies bounce back
- 9. The Internet is FREE!
- 10. The cost of FREE! • Domain name $12-20 per year • Hosting/Servers $10-150 per year • Site build $0-100,000 one time • Site design $0-50,000 one time • Site content $0-5,000 per month • Site maintenance $0-10,000 per month
- 11. The Internet is FREE! • Google made $14Billion in 2012 (1) • Apple Apps generated $9Billion in 2012 (2) • Facebook made $5Billion in 2012 (3) • Craigslist grossed $126Million in 2012 (4) • Fandango estimated $72Million in 2012 (5)
- 12. Fee-for-Service Types Business models differ based on which assets are captured online: – Customer transaction: to capture revenue • Ie., eBay, Amazon, Gap.com, HP.com – Customer data: to capture data about customer’s purchasing needs • Ie., Facebook, Amazon’s recommendations, Google – Customer relationship: ability to influence customer’s behaviors • Content providers like NewYorkTimes.com, Fandango, Salon.com
- 13. Online Service Models Business Model Description Revenue Source Content Provider Provides content Advertising model or subscription or both Direct-to-Customer Sells goods or services to consumer Direct revenue Intermediary Creates a marketplace, brings buyers and sellers, facilitates transactions Per transaction percentage, advertising model or subscription Virtual Community Facilitates online community, common interest, typically doesn’t engage with users Advertising model or subscription or both
- 14. 3 Key Ideas • Multiple paths to revenue • Does advertising have to be intrusive? • Is money the only value you can get from a customer?
- 16. Media Audience Growth Source: Pew Research Center, State of the News Media, 2012
- 17. Digital Media Sales Volume
- 18. Mobile Revenue
- 19. Mobile Mindset
- 20. Mobile Mindset Suggests people want to experience news and events and shows in multiple ways: programmed and unstructured TV Producers and Internet site publishers want to move that 27% up: TV use ratings can only tell you if the TV is “on”. Online engagement tracking can tell you how many people are talking about a show or event, so “layered” engagement is better for attracting advertisers.
- 21. 3 Key Ideas • Which media generated $65B in revenue in 2012 • Which media grew -4% in 2012? • Why is mobile important to digital?
- 22. Next session: • Read Chapter 5: Don’t Make Me Think • Writing for the web: – Short and sweet – Verbs first – Use images – Descriptive linking • Using our blog site
Editor's Notes
- Source: Nielsen
- Forrester – the best place to go for infoConsider how the tools have changed and improved since 2010What's driving the growth? More consumers are shopping online every day. Last year, 167 million consumers — 53% of the U.S. population — purchased something online. That number is expected to grow to 192 million, or 56% of the population, by 2016. The study also projects that consumers' average yearly online spending will increase from $1,207 per person in 2011 to $1,738 per person by 2016.
- What happened after July 2008? Colorado shooting, 600 SBX locations closed, underperformingGM suspended their dividendSub=prime mortgages in the news, foreclosures at highest point.Unemplyment hits 5.7%Europe trying to stave off inflationNY Gov resigns on ethics charges
- Say the word “analog”1 packet = 1024 bits … or 1 byte1000 bytes = 1 kB1000 squared = 1 megaByte1000 cubed = 1 gigaByte1000 to the 4th = 1 teraByte
- We don’t like moneyInformation should be freeOpen source is a virtueEven parts of the WSJ and New York Times are free!Server capacity doubling every year…why would anyone charge for it?
- Apple Apps expected (in link) to generate $12B in 2013, $22B in 2016.