05/06/2015

Business Skills for e-Commerce

Week 10
e-Commerce Marketing and Advertising Concepts

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Content
Consumers Online
Digital Commerce Marketing and Advertising
Search Engine Marketing and Advertising
Email Marketing
Social, Mobile, and Local Marketing and Advertising
Customer Relationship Management (CRM) Systems
Online Marketing Metrics
Web Analytics

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Consumers Online
Broadband and mobile
Significant inequalities in broadband access
Older adults, lower income, lower educational levels
Non-broadband household still accesses Internet via mobile or other
locations
Neighborhood effects
Role of social emulation in consumption decisions
Connectedness
Top 1015% are more independent
Middle 50% share more purchase patterns of friends
Recommender systems - co-purchase networks

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Consumers Online (cont.)

Study of consumer behavior
Social science discipline
Attempts to explain what consumers purchase and where, when, how much,
and why they buy
Consumer behavior models

Profiles of online consumers

Consumers shop online primarily for convenience

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A General Model of Consumer Behavior

Figure 6.1, Page 333 SOURCE: Adapted from Kotler and Armstrong, 2009.

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The Online Purchasing Decision

Five stages in consumer decision process
Awareness of need
Search for more information
Evaluation of alternatives
Actual purchase decision
Post-purchase contact with firm

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The Consumer Decision Process and

Supporting Communications

Figure 6.2, Page 334

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The Online Purchasing Decision (cont.)

Decision process similar for online and offline

behavior
General online behavior model
User characteristics
Product characteristics
Web site features: latency, usability, security
Attitudes toward online purchasing
Perceptions about control over Web environment

Clickstream behavior

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What Consumers Shop for and

Buy Online
Big ticket items ($1000 or more)
Travel, computer hardware, electronics
Consumers now more confident in purchasing
costlier items
Small ticket items ($100 or less)
Apparel, books, office supplies, software, and so
on
Types of purchases depend on level of
experience with the Web
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How Consumers Shop

How shoppers find online vendors
Highly intentional, goal-oriented
Search engines
Marketplaces (Amazon, eBay)
Specific retail site

10% of Internet users dont shop online

Trust factor
Hassle factors (shipping costs, returns, etc.)

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Trust, Utility, and Opportunism

in Online Markets
Two most important factors shaping
decision to purchase online:
Utility:
Better prices, convenience, speed

Trust:
Most important factors: Perception of credibility,
ease of use, perceived risk
Sellers can develop trust by building strong
reputations for honesty, fairness, delivery

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Digital Commerce Marketing and

Advertising: Strategies and Tools
Internet marketing (vs. traditional)
More personalized
More participatory
More peer-to-peer
More communal

The most effective Internet marketing

has all four features

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Multi-Channel Marketing Plan

1. Web site
2. Traditional online marketing
Search engine, display, e-mail, affiliate
3. Social marketing
Social networks, blogs, video, game
4. Mobile marketing
Mobile/tablet sites, apps
5. Offline marketing
Television, radio, newspapers
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Establishing the Customer

Relationship
Web site functions to:
Establish brand identity and customer
expectations
Differentiating product
Anchor the brand online
Central point for all marketing messages

Inform and educate customer

Shape customer experience

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Online Advertising
Online advertising
Display, search, mobile messaging,
sponsorships, classifieds, lead generation,
e-mail
Fastest growing form of advertising
Advantages:
1834 audience is online
Ad targeting
Price discrimination
Personalization

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Traditional Online Marketing and

Advertising Tools
Search engine marketing and advertising
Display ad marketing
E-mail marketing
Affiliate marketing
Viral marketing
Lead generation marketing

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Search Engine Marketing and Advertising

Search engine marketing (SEM)
Use of search engines for branding

Search engine advertising

Use of search engines to support direct sales

Types of search engine advertising

Sponsored links (keyword paid inclusion)
Keyword advertising
Network keyword advertising (context
advertising)
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E-mail Marketing
Direct e-mail marketing
Messages sent directly to interested users
Benefits include
Inexpensive
Average over 6% click-throughs for in-house lists
Measuring and tracking responses
Personalization of messages and offers

Three main challenges

Spam
Anti-spam software
Poorly targeted purchased e-mail lists

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Other Types of Traditional Online

Marketing
Affiliate marketing
Commission fee paid to other Web sites for sending
customers to their Web site
Viral marketing
Marketing designed to inspire customers to pass
message to others
Lead generation marketing
Services and tools for collecting, managing, and
converting leads

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Social, Mobile, and Local Marketing

and Advertising
Social marketing/advertising
Fastest growing type of online marketing
Enormous audiences of social networks
Four features driving growth
Social sign-on
Collaborative shopping
Network notification
Social search (recommendation)

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Social Marketing/Advertising (cont.)

Blog marketing
Educated, higher-income audience
Ideal platform to start viral campaign

Game marketing
Large audiences for social and mobile games
Used for branding and driving customers to purchase moments at
restaurants and retail stores

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Mobile Marketing and Advertising

35% of online marketing, growing rapidly
Major formats:
Display, rich media, video
Games
E-mail
Text messaging (SMS)
In-store messaging
Quick Response (QR) codes
Couponing

App marketing
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Local Marketing
Geared to users geographic location
Advertisers expected to spend around $32 billion on
online local ads in 2014
Most common local marketing tools
Geotargeting with Google Maps
Display ads in hyperlocal publications
Daily deals
Coupons

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Multi-Channel Marketing
Average American spends more than 45% of media
time on digital media channels
Consumers also multitask, using several media
Internet campaigns strengthened by using other
channels
Most effective are campaigns using consistent imagery
throughout channels

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Other Online Marketing Strategies

Several strategies are more focused than traditional
online and newer strategies
Customer retention strategies
Pricing strategies
Long Tail marketing

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Other Online Marketing Strategies

Customer retention strategies
Customization
Customer co-production
Customer service

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Pricing Strategies
Pricing
Price discrimination
Free and freemium
Versioning
Bundling
Dynamic pricing

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Marketing Automation and Customer

Relationship Management (CRM) Systems
Marketing automation systems
Track steps in lead generation from product awareness to purchase
CRM systems
Manage relationship with customers once purchase is made
Create customer profiles:
Product and usage summary data, demographic and psychographic data,
profitability measures, contact history, marketing and sales information

Customer data used to:

Develop and sell additional products
Identify profitable customers
Optimize service delivery, and so on

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A CRM System

Figure 6.10, Page 392

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Online Marketing Metrics: Lexicon

Audience size or Conversion to
market share customer
Impressions Acquisition rate
Click-through rate (CTR) Conversion rate
View-through rate (VTR) Browse-to-buy ratio
Hits View-to-cart ratio
Page views Cart conversion rate
Viewability rate Checkout conversion
Stickiness (duration) rate
Unique visitors Abandonment rate
Loyalty Retention rate
Reach Attrition rate
Recency

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Online Marketing Metrics (cont.)

Social marketing E-mail metrics
Conversation ratio Open rate
Applause ratio Delivery rate
Amplification Click-through rate
Sentiment ratio (e-mail)
Bounce-back rate

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Web Analytics and the Online

Purchasing Process
(Software that analyzes data at each stage of the customer conversion process)

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Recommended Reading and References

Laudon, K. C., Traver, C.G. (2015), E-commerce 2015
business, technology, society. Eleventh Edition, Pearson
Education.

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