Ecommerce Chap 04


Published on

Published in: Education
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Ecommerce Chap 04

  1. 1. Chapter 4 Advertisement inElectronic Commerce © Prentice Hall, 2000 1
  2. 2. Learning ObjectivesDescribe the objectives of Web advertisement,its types and characteristicsDescribe the major advertisement methodsused on the Web, ranging from banners to chatroomsDescribe various Web advertisement strategiesDescribe various types of promotions on theWebDiscuss the benefits of push technology andintelligent agents © Prentice Hall, 2000 2
  3. 3. Learning Objectives (cont.)Understand the major economic issuesrelated to Web advertisementDescribe the issues involved in measuringthe success of Web advertisement as itrelates to different ad pricing methodsCompare paper and electronic catalogs anddescribe customized catalogsDescribe Web advertisement implementationissues ranging from ad agencies to the useof intelligent agents © Prentice Hall, 2000 3
  4. 4. Opening Vignette : CD-Max Uses E-mail Lists to AdvertiseCD- Max Enterprises A two-person business specializing in CD-ROM development Operates a resource site for information delivery Generated an e-mail list of site visitors the list is also valuable to other advertisers 50 lists were created to fit different advertisers outsourced the job of creating and maintaining the lists, and selling them to potential advertisers, to NetCreation which developed 275 lists from the names collected at CD-Max the list sales “surpassed” the company’s expectations selling e-mail lists has become a lucrative business © Prentice Hall, 2000 4
  5. 5. Web AdvertisingAdvertising is an attempt to disseminateinformation in order to affect a buyer-sellertransactionWhy Internet Advertisement? Three-quarters of PC users gave up some television time Internet users are well educated with high- income, which makes them a desired target for advertisers Ads can be updated any time with a minimal cost; therefore they are timely and very accurate © Prentice Hall, 2000 5
  6. 6. Web Advertising (cont.)Why Internet Advertisement? Ads can reach very large numbers of potential buyers all over the world Online 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. Web ads can be media rich, including voice and video Web ads can be interactive and targeted The use of the Internet is growing very rapidly © Prentice Hall, 2000 6
  7. 7. Web Advertising (cont.)Internet Advertising Terminology Ad views Effective Frequency Banner Hit Clicks (or ad clicks) Impressions Click Ratio Reach Cookie Visit CPM © Prentice Hall, 2000 7
  8. 8. Web Advertising (cont.) Interactive Marketing Consumer can click with his/her mouse on an ad for more information or send an e-mail to ask a question Mass Marketing Direct Marketing Interactive MarketingBest outcome Volume sales Customer data Customer relationshipsConsumer behavior Passive Passive ActiveLeading products Food, personal-care Credit cards, Upscale apparel, travel, products, beer, travel, autos financial services, autos autosMarket High volume Targeted goods Targeted individualsNerve center Madison Ave. Postal distribution Cyberspace centersPreferred Television, Mailing lists Online servicesmedia vehicle magazinesPreferred Storyboards Databases Servers, onscreentechnology navigators, the WebWorst outcome Channel surfing Recycling bins Logoff © Prentice Hall, 2000 8
  9. 9. Web Advertising (cont.) Internet is the fastest growing medium in historyAdoption Curves for Various Media - The Web Is Ramping Fast © Prentice Hall, 2000 9
  10. 10. Web Advertising (cont.)Targeted Advertisement (one-to-one) The Double Click (DC) Approach 3M Corp. wants to advertise its $10,000 multimedia projectors DC monitored people browsing the Web sites of cooperating companies then matches them against a database then finds those people working for advertising agencies or using Unix system (potential buyers) then builds a dossier on you, your spending, and your computing habits using “a cookie” prepares an ad for 3M projectors targeted for people whose profile matches what is needed for 3M © Prentice Hall, 2000 10
  11. 11. Web Advertising (cont.)Pros of Internet Advertisement Internet advertisements are accessed on demand 24 hours a day, 365 days a year, and costs are the same regardless of audience location Accessed primarily because of interest in the content, so market segmentation opportunity is large Opportunity to create one-to-one direct marketing relationship with the consumer Multimedia will increasingly make Web sites more attractive and compelling © Prentice Hall, 2000 11
  12. 12. Web Advertising (cont.)Pros of Internet Advertisement Distribution costs are low (just technology cost), so millions of consumers are reached at the same cost as that of reaching one Advertising and content can be updated, supplemented, or changed at any time, and are therefore always up-to-date Ease of logical navigation — you click when and where you want, and spend as much time as you desire there © Prentice Hall, 2000 12
  13. 13. Advertising MethodsBanners Banners are everywhere Keyword banners Random banners Benefits be customized to the target audience be customized to one-to-one targeted advertisement utilize “force advertising” marketing strategyBanner Swapping Direct link between one’s site to the other site Ad space bartering © Prentice Hall, 2000 13
  14. 14. Advertising Methods (cont.)Banner Exchanges Swapping is a problem : a match is frequently not possible Banner exchange organizations a firm submits a banner receives credit when shows others’ banners can purchase additional display credits specify what type of site the banner can be displayed on use the credit to advertise on others’ sites credit ratio of approximately 2:1 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. © Prentice Hall, 2000 14
  15. 15. Advertising Methods (cont.)Paid Advertising and Ad Agencies Advantage of using banners ability to customize them to the target audience ability to decide which market segments to focus on be customized to one-to-one targeted advertisement “forced advertising” marketing strategy is utilizedSplash Screen Capture the user’s attention Promotion or lead-in Major advantage : create innovative multimedia © Prentice Hall, 2000 15
  16. 16. Advertising Methods (cont.)URL (Universal Resource Locators) Advantages: minimal cost is associated with it submit your URL to a search engine and be listed keyword search is used Disadvantages: search engines index their listings differently meta tags can be complicated © Prentice Hall, 2000 16
  17. 17. Advertising Methods (cont.)E-mail Several million users can be reached directly Purchase e-mail addresses Send the company information; low cost A wide variety of audiences; customer database Problem: Junk mail or spamming Target a group of people that you know something about © Prentice Hall, 2000 17
  18. 18. Advertising Methods (cont.)Chat Rooms Virtual meeting ground Can be added to a business site for free Allows advertisers to cycle through messages and target the chatter again and again Advertising can become more thematic More effective than banners Used in one-to-one connection © Prentice Hall, 2000 18
  19. 19. Advertisement StrategiesInternet-base Ad Design Advertisements should be visually appealing Advertisements must be targeted to specific groups or to individual consumers Advertisements must emphasize brands and a firm’s image Advertisements must be part of an overall marketing strategy Advertisements should be seamlessly linked with the ordering process Designing Internet ads involve the following factors: © Prentice Hall, 2000 19
  20. 20. Advertisement Strategies (cont.)Internet-based Ad Design: Important Factors Page-Loading Speed Graphics and tables should be simple and meaningful. They need to match standard monitors. Thumbnail (icons graphs) are useful. Business Content Clear and concise text is needed. A compelling page title and header text is useful. The amount of requested information for registration should be minimal. © Prentice Hall, 2000 20
  21. 21. Advertisement Strategies (cont.)Internet-base Ad Design: Important Factors Navigation Efficiency Well-labeled, accurate, meaningful links are a must. Site must be compatible with browsers, software, etc. Security and Privacy Security and privacy must be assured. Option for rejecting cookies is a must. Marketing/Customer Focus Clear terms and conditions of the purchases, including delivery information, return policy, etc. must be provided. Confirmation page after a purchase, is needed. © Prentice Hall, 2000 21
  22. 22. Advertisement Strategies (cont.)Passive Pull Strategy Customer will visit a site if it provides helpful and attractive contents and display Effective and economical way to advertise, unidentified potential customers worldwide Advertising World is a non-commercial site that can guide the process of finding the customer’s wish Yahoo is a portal search engine site which can be regarded an effective aid for advertisement © Prentice Hall, 2000 22
  23. 23. Advertisement Strategies (cont.) Active Push Strategy Sending e-mails to the relevant people Obtaining the mailing list is the process of identifying target customers Mailing list generation is done in companies by using agent technology and cookies as well as by filling out questionnaires (by customers) © Prentice Hall, 2000 23
  24. 24. Advertisement Strategies (cont.)Ad as a Commodity CyberGold exchange of direct payment made by the advertisers for viewing ads consumers fill out questionnaires CyberGold distributes targeted banners the reader clicks the banner to read it and, passing some tests on its content, is paid for the effort © Prentice Hall, 2000 24
  25. 25. Implementing the StrategiesCustomized Ad Strategy Filtering the irrelevant information by providing customized ads One-to-One advertisement Customized ads can be found in PointCast personalized news and information by category (Channel) packaged by content providers, assembled by PointCast, delivered on screen savers or at prearranged times © Prentice Hall, 2000 25
  26. 26. Implementing the Strategies (cont.) Comparison Aid as Medium of Advertisement Customer Meta-Malls Customer Assistant Summary Meta-Malls Coordinator and Index Database Mall Mall Mall Operator Operator Operator Direct A B C Visit Product Product Product Database Database Database© Prentice Hall, 2000 © Prentice Hall, 2000 26
  27. 27. Online Events, Promotions and AttractionsHow to entice Web surfers to read Internet ads There are dozens of innovative ideas; here are some examples : 1 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. 2 Netzero and others offer free Internet access in exchange for viewing ads. 3 uses real people to help you. uses live people to talk to you over the phone and then “push” material and ads to your computer. © Prentice Hall, 2000 27
  28. 28. Online Events, Promotions and Attractions (cont.) 4 CyberGold (, Goldmine ( and others connect you with advertisers who pay you real money to read ads and explore the Web. 5 Netstakes runs sweepstakes that requires no skills; in contrast with contests. You register only once and can randomly win prizes (see Prizes are given away in different categories. The site is divided into channels, each has several sponsors. They pay Netstakes to send them traffic. Netstakes runs online ads both on the Web and in several hundred thousand e-mail lists that people requested to be on. 6 Free PCs will be given soon in exchange for obligation to read ads. © Prentice Hall, 2000 28
  29. 29. Push TechnologyBenefit : instead of spending hours searchingthe Web, people can have the informationthey are interested in delivered automaticallyto their desktop via Web technology and theInternetPre-specification profile, selection ofappropriate content, and download selection4 types of push technology self-service delivery mediated delivery aggregated delivery direct delivery © Prentice Hall, 2000 29
  30. 30. Push Technology (cont.)Pointcasting Analogous to mass customization Transmits the most relevant information directly to the userPush on the Intranet Companies 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 Technology Drawback : the bandwidth requirements are large Experts’ prediction : the technology will never fly © Prentice Hall, 2000 30
  31. 31. Intelligent AgentsProduct Brokering Knows the customer’s profile Tailors an ad to the customers, or asks them if they would like to receive product information Alerts the users to new releases, recommends products based on past selections, or constraints specified by the buyers © Prentice Hall, 2000 31
  32. 32. Economics and Effectiveness of Advertisement Payments are based on: Exposure Models (CPM) Click Through Interactivity Actual Purchase Other Methods © Prentice Hall, 2000 32
  33. 33. Online CatalogsTo merchants, the objective of catalogs isadvertisement and promotionThe purpose of catalogs to customers isproviding a source of information and pricecomparisonsConsist of product database, directory andsearch capability and presentation functionReplication of text in paper catalogsMore dynamic, customized and integrated © Prentice Hall, 2000 33
  34. 34. Online Catalogs (cont.)1) Dynamics of information presentation Static Catalogs: The catalog is presented in textual description and static pictures. Dynamic Catalogs: The catalog is presented in motion pictures and graphics and possibly sound.2) Customization Ready-made Catalogs: Merchants offer the same catalog to any customer. Customized Catalogs: Deliver customized contents and display depending upon the characteristics of customers. © Prentice Hall, 2000 34
  35. 35. Online Catalogs (cont.)3) Integration with business processes Integration with order taking and fulfillment Integration with electronic payment Integration with intranet workflow Integration with inventory and accounting system Integration with supplier’s extranet Relationship to paper catalogs © Prentice Hall, 2000 35
  36. 36. Customized CatalogIdentify the interesting parts out of the whole catalogTool for aiding customers to concentrate on their needsLiveCommerce creating catalogs with branded, value-added capabilities locate the information compose their order individualized prices, products, and display formatsLet the system automatically identify thecharacteristics of customers based on the transactionrecords © Prentice Hall, 2000 36
  37. 37. Special Advertisement Topics To Advertise or Not How Much to Advertise Auditing and Analyzing Web Traffic Self Monitoring of Traffic Internet Standards Localization © Prentice Hall, 2000 37
  38. 38. Special Advertisement Topics (cont.) The Major Web Ad Players Advertising agencies and Web site developers Finding market research providers Traffic measurement and analysis companies Networks/rep firms Order processing and support © Prentice Hall, 2000 38
  39. 39. Managerial IssuesMake Vs. Buy (Ad agencies)Finding the Most Visited SitesCompany ResearchCommitment to Web AdvertisingEthical IssuesIntegration : Advertisement,Ordering, Other Processes © Prentice Hall, 2000 39