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The Internet and Interactive Media
Adding Two-Way to One-Way Media
A majority of most companies’ sales and profits come from current customers.
To motivate repeat purchases, companies need to continually connect and reconnect with customers.
The media most suited for doing this are addressable, interactive media.
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The Internet PictureSenders Internet Receivers
Internet
Advertisers
Sponsors
e-CommerceMerchants
Users
Shoppers
Customers
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Communication and Technology
The information age is shifting people from manufacturing to service industries.
More complex communication requires more bandwidth.
The Internet has become the fastest-growing communication technology in history.
However, it still accounts for only a small portion of all business activities.
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Q.: Why Market in the Online Environment?
A1: Because it’s where consumers are. (Somebody has to provide the
goods and services) A2: Because it’s where the money is?
(Perhaps, for some things…) A3: Because nobody likes to be left out.
(The bandwagon moves quickly) A4: Because nobody else is there.
(An empty niche is hard to find.) A5: Because it’s not too hard to get in.
(Low correlation with success!)
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Why use the Internet?
Three strikes and you’re out! Demand risk Innovation risk Inefficiency risk
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Reducing demand risk—fewer customers want to buy a firm’s products/services
Market penetration Increase market share
Develop markets Existing products into new markets
Product development Create new products for existing
customers Diversify
New products into new markets
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Reducing innovation risk
There is an oversupply of products in most mature markets
Customers expect something new and different Increase access to:
Ideas for improving present products and services Ideas for new products and services Ideas for redesigning the delivery of products and services
Use the Internet to open communication links with customers and other stakeholders
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Reducing inefficiency risk
Lower the cost of the customer information exchange cycle
Reduce order handling costs
Reduce inventory
Reduce service delivery costs
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Transaction costs
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Disintermediation The elimination of
intermediaries such as brokers and dealers
O1 O2 On-1 On
Physical flow
Information flow
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E-market possibilitiesCorcoran, E. 1999. On-line: Amazoned. Forbes, Mar 22, 55
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The Internet
The Internet’s greatest function is as a communication link.
As a medium, it combines the characteristics of many other media such as newspapers, magazines, catalogs, TV, and directories.
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Internet Communications Objectives
To Disseminate Information To Create Awareness To Gather Research Information To Create an Image To Stimulate Trial To Improve Customer Service To Increase Distribution
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The InternetThe Internet’s most important characteristics include:
1) Shifts power from companies to customers.2) Is accessible to the majority of the population.3) Provides an extensive range of information.4) Allows for unsurpassed speed and coverage.5) Reduces the cost of selling and acquisition.
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Personal Selling on the Internet
May replace personal selling Reduces high cost of personal calls Vastly increases potential reach
May enhance personal selling efforts Provides quick, easy, information to prospects May be a source of leads May help to enhance customer data bases May stimulate trial of the goods or service May improve one-on-one communications May serve as a sales conference medium
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Internet Advertising Sponsorship
Ownership of an entire site or page Banner Ads
A portion of another owner’s page Pop-Ups
Small windows that appear automatically Interstitial
Ads appearing while waiting for a page to load Push Technologies or Webcasting
Automatic or unsolicited message delivery Links
Hypertext links to other sites, pages or locations
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Communication Networks
Network technology has helped companies improve communication both internally and externally.
Intranets and extranets are internet-based networks and proprietary communication systems for corporate communication.
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Measures of Effectiveness KEY TERMS
Hits Number of requests for a site component
Viewers Number of visits to a site
Unique visitors Number of different visitors per period
Clicks (Click-throughs) Number of visitors clicking on a banner ad
Click-through rate Ratio of click-throughs from an ad to a page
at the advertiser's website Impressions per page views
Number of times viewers view a page
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Measures of Effectiveness Online Measuring
Data on demographics, psychographics, location of access, media used, buying habits, and more.
Recall and Retention Daily user interviews to measure recall and retention
of web content viewed Nonresponse
Measures of destination after failure to click-through Surveys
On- and off-line surveys to determine usage factors Panels
Usage and attitude data obtained from a specific group
Sales Sales volume keyed to specific times and sites
Tracking Accumulation of site performance data
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Internet Advantages Target Marketing Message Tailoring Interactive Capabilities Information Access Sales Potential Creativity Exposure Speed
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Internet Disadvantages Measurement problems Audience characteristics Websnarl Clutter Potential for deception Costs Limited production
quality Poor reach
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Mail Formats and Features
Mail is the third largest medium.It accounts for approximately 20%
of all media spending.
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Strengths:
Addressable Measurable results Highly selective Demands attention
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Limitations:
High cost per message Long lead time Clutter, junk mail perception
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Phone Formats and Features
In 2000, U.S. companies spent $44.7 billion in telemarketing.
Outbound calls are those initiated by an organization.
Inbound calls are those initiated by prospects or customers.
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Technical Sophistication ofAutomated Answering Systems
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Telemarketing
Strengths:
Personalized Real-time interaction Attention-getting Measurable results
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Telemarketing
Limitations:
Costly Ugly image Intrusive
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E-mail Formats and Features
E-mail is the fastest growing interactive medium.
It can be an effective way to reach customers because it is simple to use and inexpensive.
Customer permission is an important consideration in e-mail campaigns.
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Strengths:
Addressable Can be personalized Extremely low cost Can be interactive
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Limitations:
Clutter (spam) Limited creative options
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E-Commerce
To marketers, the Internet is not only a medium but also a business platform.
Product categories with the highest volume of online sales are books, CDs, computer software, and toys and games.
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E-CommerceE-commerce is used for more than making a transaction.
Reach broad worldwide audiences Cost-effectively communicate with customers and
prospects Cost-effectively distribute brand information Provide alternative channels of distribution Provide frequently updated prices and information Improve customer service by offering access Collect instant feedback and conduct market
research
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Offline Advertising
Companies realize that they need to drive more traffic to their sites than can not be done with online advertising alone.
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Online Advertising
There are two aspects to online advertising:
Advertising offline in other media to bring customers to a site
Advertising online on websites
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Online AdvertisingAdvertising online offers a number of advantages:
Interactivity—engage in dialogue Flexibility—change information
rapidly Precise targeting—interested
consumers
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Online Public Relations
Websites can be designed to be useful to all of a company’s stakeholders.
For media relations, a site can contain: Description of a company’s business
operations Listing of all its brands and products Listing of all executives Company contact information
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Internet PrivacyInternet privacy has become an increasing concern.The FTC recommends practices for industry self-
regulation: Notice. Give clear and conspicuous notice of what
information is collected and how it will be used. Choice. Let consumers choose whether their
information can be used for any purposes besides fulfilling the transaction.
Reasonable access. Consumers should be able to access the information collected on them and have a reasonable opportunity to correct any errors or delete the data.
Adequate security. Companies should ensure proper handling of information to prevent unauthorized access.
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Promotions.com
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Hypercharged Cybermarketing
Several challenges for the 21st century organization: The speed with which changes are introduced The speed with which business is not being
conducted
To meet these challenges, companies are outsourcing more of their customer management functions.
The concept of a virtual corporation has increased the need for communication.
