Chapter 4: Advertisement in Electronic Commerce ppt

1 © Prentice Hall, 2000 Chapter 4 Advertisement in Electronic Commerce 2 © Prentice Hall, 2000 Learning Objectives  Describe the objectives of Web advertisement, its types and characteristics  Describe the major advertisement methods used on the Web, ranging from banners to chat rooms  Describe various Web advertisement strategies  Describe various types of promotions on the Web  Discuss the benefits of push technology and intelligent agents 3 © Prentice Hall, 2000  Understand the major economic issues related to Web advertisement  Describe the issues involved in measuring the success of Web advertisement as it relates to different ad pricing methods  Compare paper and electronic catalogs and describe customized catalogs  Describe Web advertisement implementation issues ranging from ad agencies to the use of intelligent agents Learning Objectives (cont.) 4 © Prentice Hall, 2000 Opening Vignette : CD-Max Uses E-mail Lists to Advertise  CD- 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 5 © Prentice Hall, 2000 Web Advertising  Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction  Why 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 6 © Prentice Hall, 2000  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 Web Advertising (cont.)  Why Internet Advertisement? 7 © Prentice Hall, 2000  Internet Advertising Terminology  Effective Frequency  Hit  Impressions  Reach  Visit Web Advertising (cont.)  Ad views  Banner  Clicks (or ad clicks)  Click Ratio  Cookie  CPM 8 © Prentice Hall, 2000  Interactive Marketing Web Advertising (cont.)  Consumer can click with his/her mouse on an ad for more information or send an e-mail to ask a question Volume sales Customer data Customer relationships Passive Passive Active Food, personal-care products, beer, autos Credit cards, travel, autos Upscale apparel, travel, financial services, autos High volume Targeted goods Targeted individuals Madison Ave. Postal distribution centers Cyberspace Television, magazines Mailing lists Online services Storyboards Databases Servers, onscreen navigators, the Web Mass Marketing Direct Marketing Interactive Marketing Best outcome Consumer behavior Leading products Market Nerve center Preferred media vehicle Preferred technology Worst outcome Channel surfing Recycling bins Logoff 9 © Prentice Hall, 2000  Internet is the fastest growing medium in history Web Advertising (cont.) Adoption Curves for Various Media - The Web Is Ramping Fast  Targeted Advertisement (one-to-one) Web Advertising (cont.)  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 10 © Prentice Hall, 2000 [...]... 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 Advertisement Strategies (cont.) Internet-based Ad Design: Important Factors Page-Loading Speed Graphics... 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 Advertisement Strategies Internet-base Ad Design Advertisements should be visually appealing Advertisements... 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 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... payment Integration with intranet workflow Integration with inventory and accounting system Integration with supplier’s extranet Relationship to paper catalogs © Prentice Hall, 2000 35 Customized Catalog Identify the interesting parts out of the whole catalog Tool for aiding customers to concentrate on their needs LiveCommerce creating catalogs with branded, value-added capabilities locate the information... 2000 24 Implementing the Strategies Customized 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 Implementing the Strategies...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... 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 Online Catalogs (cont.) 3) Integration with business processes Integration with order taking and fulfillment Integration with electronic. .. 2000 12 Advertising Methods Banners 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 strategy Banner Swapping Direct link between one’s site to the other site Ad space bartering © Prentice Hall, 2000 13 Advertising Methods (cont.) Banner Exchanges Swapping is a problem... 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 © Prentice Hall, 2000 to read ads 28 Push Technology Benefit : instead of spending hours searching the Web, people can have the information... 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 Intelligent Agents Product Brokering . can be media rich, including voice and video  Web ads can be interactive and targeted  The use of the Internet is growing very rapidly Web Advertising (cont.)  Why Internet Advertisement? 7 ©. Recycling bins Logoff 9 © Prentice Hall, 2000  Internet is the fastest growing medium in history Web Advertising (cont.) Adoption Curves for Various Media - The Web Is Ramping Fast  Targeted Advertisement. ordering process  Designing Internet ads involve the following factors: 20 © Prentice Hall, 2000  Internet-based Ad Design: Important Factors Advertisement Strategies (cont.)  Page-Loading