© farhan mir 2008 ims e-commerce bba (hons) 7 th (advertisement in e-commerce) lecture week...

© Farhan Mir© Farhan Mir

20200808 IMSIMS

E-CommerceE-Commerce

BBA (Hons) 7BBA (Hons) 7thth

(Advertisement in E-(Advertisement in E-Commerce)Commerce)Lecture Week 10,11,12Lecture Week 10,11,12

By: Farhan MirBy: Farhan Mir


20200808 IMSIMS

Learning ObjectivesLearning Objectives

Describe the objectives of Web advertisement, its types and characteristicsDescribe the major 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 agents


20200808 IMSIMS

Understand 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 methodsCompare paper and electronic catalogs and describe customized catalogsDescribe Web advertisement implementation issues ranging from ad agencies to the use of intelligent agents

Learning Objectives Learning Objectives (cont.)(cont.)


20200808 IMSIMS

A Framework for ECA Framework for EC


20200808 IMSIMS

AdvertisingAdvertising

An attempt to disseminate information in order to affect buyer-seller transactionsCompanies must:

Deliver ads in an appropriate manner that will Deliver ads in an appropriate manner that will ‘stick’ in the minds of consumers‘stick’ in the minds of consumers

Ensure goods and services are those that meet Ensure goods and services are those that meet the needs of consumersthe needs of consumers

Ensure that advertising is not annoying and does Ensure that advertising is not annoying and does not have a negative impactnot have a negative impact


20200808 IMSIMS

HistoryHistory

The world wide web was invented by a British scientist in a research

and development lab in 1993.

Internet Marketing began one year later, with advertising in 1994 when

Hotwired.com sold the first banner ad.


20200808 IMSIMS

Online AdvertisingOnline Advertising

The Internet is the fastest growing communication media

Each year, the percentage of the advertising industry captured by the online market is growing

Utilizes ‘interactive marketing’ as it allows advertisers to interact directly with consumers


20200808 IMSIMS

Internet is the fastest growing medium in history

Web Advertising Web Advertising (cont.)(cont.)

Adoption Curves for Various Media - The Web Is Ramping FastAdoption Curves for Various Media - The Web Is Ramping Fast


20200808 IMSIMS

Internet advertising is the Internet advertising is the fastest growing marketing fastest growing marketing

channel. channel.

2001: 2001: 5.25% 5.25% 2004: 2004: 8.35% 8.35% 2007: 2007: 17.00%17.00%

PercentagPercentage of Media e of Media

Budget Budget Allocated Allocated to Online to Online

Ads:Ads:


20200808 IMSIMS

Online Advertising and Revenue Online Advertising and Revenue GenerationGeneration

Advertising revenue remains a significant source of income for many Internet-based organizationsAdvertising revenue on the Internet was $8.2 billion in the United StatesMany dot-com failures were a result of relying on online advertising revenue as the only revenue sourceYahoo.com currently relies on its advertising revenue as its major revenue source


20200808 IMSIMS


20200808 IMSIMS

Opening Case :Opening Case : CD-Max Uses E-mail Lists to AdvertiseCD-Max Uses E-mail Lists to Advertise

CD- Max Enterprises– A two-person business specializing in CD-A two-person business specializing in CD-

ROM developmentROM development– Operates a resource site for information Operates a resource site for information

deliverydelivery– Generated an e-mail list of site visitorsGenerated an e-mail list of site visitors

• the list is also valuable to other advertisersthe list is also valuable to other advertisers• 50 lists were created to fit different advertisers50 lists were created to fit different advertisers• outsourced the job of creating and maintaining outsourced the job of creating and maintaining

the lists, and selling them to potential the lists, and selling them to potential advertisers, to NetCreation which developed 275 advertisers, to NetCreation which developed 275 lists from the names collected at CD-Maxlists from the names collected at CD-Max

• the list sales “surpassed” the company’s the list sales “surpassed” the company’s expectations expectations

• selling e-mail lists has become a lucrative selling e-mail lists has become a lucrative business since thenbusiness since then


20200808 IMSIMS


20200808 IMSIMS

Web AdvertisingWeb Advertising

Advertising is an attempt to disseminate information in order to affect a buyer-seller transactionWhy Internet Advertisement?

Three-quarters of PC users gave up some Three-quarters of PC users gave up some television timetelevision time

Internet users are well educated with high-Internet users are well educated with high-income, which makes them a desired target income, which makes them a desired target for advertisersfor advertisers

Ads can be updated any time with a minimal Ads can be updated any time with a minimal cost; therefore they are timely and very cost; therefore they are timely and very accurateaccurate


20200808 IMSIMS

Ads can reach very large numbers of potential Ads can reach very large numbers of potential buyers all over the worldbuyers all over the world

Online ads are much cheaper in Online ads are much cheaper in comparison to television, newspaper, comparison to television, newspaper, or radio ads. Such ads are expensive or radio ads. Such ads are expensive since they are determined by space since they are determined by space occupied, how many days (times) they occupied, how many days (times) they are shown, and on how many national are shown, and on how many national and local television stations and and local television stations and newspapers they are posted. newspapers they are posted. Web ads can be media rich, including voice and Web ads can be media rich, including voice and videovideo

Web ads can be interactive and targetedWeb ads can be interactive and targeted

The use of the Internet is growing very rapidlyThe use of the Internet is growing very rapidly

Web Advertising Web Advertising (cont.)(cont.)

• Why Internet Advertisement?Why Internet Advertisement?


20200808 IMSIMS

Interactive MarketingWeb Advertising Web Advertising (cont.)(cont.)

– Consumer can click with his/her mouse on an ad for more Consumer can click with his/her mouse on an ad for more information or send an e-mail to ask a questioninformation or send an e-mail to ask a question

Volume salesVolume salesCustomer dataCustomer dataCustomer relationshipsCustomer relationshipsPassivePassive PassivePassive ActiveActive

Food, Food, personal-personal-care care products, products, autosautos

Credit Credit cards, cards, travel, travel, autosautos

Upscale Upscale apparel, apparel, travel, travel, financial financial services, autosservices, autos

High volumeHigh volume Targeted goodsTargeted goodsTargeted individualsTargeted individuals

TelevisioTelevision, n, magazinmagazineses

Mailing Mailing listslists

Online Online servicesservicesStoryboardsStoryboards DatabasesDatabases Servers, Servers, onscreen onscreen navigators, the navigators, the WebWeb

Mass MarketingMass Marketing Direct MarketingDirect Marketing Interactive MarketingInteractive Marketing

Best outcomeBest outcomeConsumer behaviorConsumer behaviorLeading productsLeading products

MarketMarket

PreferrePreferred media d media vehiclevehiclePreferred Preferred technologtechnologyy

Worst outcomeWorst outcomeChannel Channel surfingsurfing

Recycling Recycling binsbins

LogoffLogoff


20200808 IMSIMS

Advertising MethodsAdvertising MethodsBanners

Banners are everywhereBanners are everywhere

Keyword bannersKeyword banners

Random bannersRandom banners

BenefitsBenefitsbe customized to the target audience

be customized to one-to-one targeted advertisement

Banner SwappingDirect link between one’s site to the other siteDirect link between one’s site to the other site

Ad space (a source of revenue for many Ad space (a source of revenue for many companies)companies)


20200808 IMSIMS

Banner AdvertisingBanner Advertising

Most common form of online advertisingSo prevalent many users have developed “banner blindness”Banners can be distributed in a variety of waysBanner success is most often measured by “click through rate”Banners build brand awareness and increase purchase probability


20200808 IMSIMS

Splash ScreenCapture the user’s attentionCapture the user’s attention

Promotion purposePromotion purpose

Major advantage : create innovative Major advantage : create innovative multimediamultimedia

Advertising Methods Advertising Methods (cont.)(cont.)


20200808 IMSIMS

E-mailSeveral million users can be reached Several million users can be reached directlydirectly

Purchase e-mail addressesPurchase e-mail addresses

Send the company information; low costSend the company information; low cost

A wide variety of audiences; customer A wide variety of audiences; customer databasedatabase

Problem: Junk mail or spammingProblem: Junk mail or spamming

Target a group of people that you know Target a group of people that you know something aboutsomething about



20200808 IMSIMS

Chat RoomsVirtual meeting groundVirtual meeting ground

Can be added to a business site for freeCan be added to a business site for free

Allows advertisers to cycle through Allows advertisers to cycle through messages and target the chatter again messages and target the chatter again and againand again

More effective than bannersMore effective than banners

Used in one-to-one connectionUsed in one-to-one connection



20200808 IMSIMS

Pop UpsPop Ups

Pop ups are becoming increasing popular (and frustrating! In other situations….solution in the last lines)

Very intrusive form of advertingVariety of methods used to attract and Variety of methods used to attract and keep user’s attentionkeep user’s attention

Internet users and ISPs can provide software packages to block pop ups (Pop-Up Stopper)


20200808 IMSIMS

URL (Universal Resource Locators)Advantages:Advantages:

minimal cost is associated with itsubmit your URL to a search engine and be listedkeyword search is used

Disadvantages:Disadvantages:search engines index their listings differently

But still very useful method to advertise But still very useful method to advertise



20200808 IMSIMS

Keyword SearchKeyword Search

Currently the fastest growing venue for internet marketingControl $1.3 billion marketing dollars ~Jupiter Research

Search engines are now full-fledged media companies


20200808 IMSIMS


20200808 IMSIMS

Advertisement StrategiesAdvertisement StrategiesInternet-base Ad Design

Advertisements should be visually appealingAdvertisements should be visually appealing

Advertisements must be targeted to specific Advertisements must be targeted to specific groups or to individual consumersgroups or to individual consumers

Advertisements must emphasize brands and a Advertisements must emphasize brands and a firm’s imagefirm’s image

Advertisements must be part of an overall Advertisements must be part of an overall marketing strategymarketing strategy

Advertisements should be seamlessly linked with Advertisements should be seamlessly linked with the ordering processthe ordering process

Designing Internet ads involve the following Designing Internet ads involve the following factors:factors:


20200808 IMSIMS

Internet-based Ad Design: Important Factors

Advertisement Strategies Advertisement Strategies (cont.)(cont.)

– Page-Loading SpeedPage-Loading Speed• Graphics and tables should be simple and Graphics and tables should be simple and

meaningful. They need to match standard meaningful. They need to match standard monitors.monitors.

• Thumbnail (icons graphs) are useful.Thumbnail (icons graphs) are useful.

– Business ContentBusiness Content• Clear and concise text is needed. A compelling Clear and concise text is needed. A compelling

page title and header text is useful.page title and header text is useful.• The amount of requested information for The amount of requested information for

registration should be minimal.registration should be minimal.


20200808 IMSIMS

Navigation EfficiencyNavigation Efficiency

Well-labeled, accurate, meaningful links are a must.

Site must be compatible with browsers, software, etc.

Advertisement Strategies Advertisement Strategies (cont.)(cont.)

• Internet-base Ad Design: Important Internet-base Ad Design: Important FactorsFactors


20200808 IMSIMS

CyberGold (www.cybergold.com), Goldmine (www.goldmine.com) and others connect you with advertisers who pay you real money to read ads and explore the Web.

Netstakes runs sweepstakes that requires no skills; in contrast with contests. You register only once and can randomly win prizes (see http://webstakes.com). 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.

Free PCs will be given soon in exchange for obligation to read ads.

Online Events, Promotions and Online Events, Promotions and Attractions Attractions (cont.)(cont.)


20200808 IMSIMS

Benefit : 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 InternetPre-specification profile, selection of appropriate content, and download selection

Push TechnologyPush Technology


20200808 IMSIMS

Also known as “Pointcasting”Analogous to mass customizationAnalogous to mass customization

Transmits the most relevant information directly to Transmits the most relevant information directly to the userthe user

Push on the IntranetCompanies use push technology to set up their Companies use push technology to set up their own channels to pointcast important internal own channels to pointcast important internal information to either their own employees (on information to either their own employees (on intranets) and/or their supply chain partners (on intranets) and/or their supply chain partners (on extranets)extranets)

The Future of Push TechnologyDrawback : the bandwidth requirements are largeDrawback : the bandwidth requirements are large

Experts’ prediction : the technology will never flyExperts’ prediction : the technology will never fly

Push Technology Push Technology (cont.)(cont.)


20200808 IMSIMS

Online CatalogsOnline Catalogs

To merchants, the objective of catalogs is advertisement and promotion

The purpose of catalogs to customers is providing a source of information and price comparisons

Consist of product database, directory and search capability and presentation function

Replication of text in paper catalogs

More dynamic, customized and integrated


20200808 IMSIMS

1) Dynamics of information presentationStatic Catalogs: The catalog is presented in Static Catalogs: The catalog is presented in textual description and static pictures.textual description and static pictures.

Dynamic Catalogs: The catalog is presented in Dynamic Catalogs: The catalog is presented in motion pictures and graphics and possibly motion pictures and graphics and possibly sound.sound.

2) CustomizationReady-made Catalogs: Merchants offer the Ready-made Catalogs: Merchants offer the same catalog to any customer.same catalog to any customer.

Customized Catalogs: Deliver customized Customized Catalogs: Deliver customized contents and display depending upon the contents and display depending upon the characteristics of customers.characteristics of customers.

Online Catalogs Online Catalogs (cont.)(cont.)


20200808 IMSIMS

Customized CatalogCustomized CatalogIdentify the interesting parts out of the whole catalog

Tool for aiding customers to concentrate on their needs LiveCommerce

creating catalogs with branded, value-added creating catalogs with branded, value-added capabilitiescapabilities

locate the informationlocate the information

compose their ordercompose their order

individualized prices, products, and display individualized prices, products, and display formatsformats

Let the system automatically identify the characteristics of customers based on the transaction records

Customized, Interactive and Dynamic Catalogs (Remember the Ford Company Website!)


20200808 IMSIMS


20200808 IMSIMS

Is There a Negative Side to Is There a Negative Side to Online Advertising?Online Advertising?

Pressure to create new online advertising formats came following the dot-com crash

Result was an explosion of creative ways to engage users in the ads using sound, animation, etc.

User experience began to decline


20200808 IMSIMS

Managerial IssuesManagerial Issues

Make Vs. Buy (Ad agencies)

Finding the Most Visited Sites

Company Research

Ethical Issues

© farhan mir 2008 ims e-commerce bba (hons) 7 th (advertisement in e-commerce) lecture week...

Documents