MARKETING COMMUNICATIONS PROJEC

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Chapter Nine

Digital Marketing

E-active marketing is the term coined for this chapter. It combines the two major components of e-commerce and interactive marketing. Both activities are vital to an organization’s online presence.

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Companies shifting dollars to online communication

Changes consumer communications and interactions with companies

Pushing to “real-time” communications

http://www.youtube.com/watch?v=3SuNx0UrnEo

Companies now employ individuals to monitor Twitter and social media sites

Companies are rapidly shifting expenditures to online communications. Web 2.0 changes the way consumers communicate with each other and their interactions with companies. It is pushing “real-time” communications. Instant communications and instant service are the mode of operation for Web 2.0. It is especially important for companies to respond instantly to negative events and not let online chatter grow. Most companies now hire individuals to monitor social media and the Web for what people are saying and then to respond to situations that need attention.

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E-Commerce

Click-only operations to bricks-and-clicks

B2C and B2B online commerce

Online sales 8 percent of retail activity

Search online for information

May buy online

May buy in a retail store

Selling goods and services on the Internet is e-commerce. E-commerce consists of click-only operations that sell exclusively online and bricks-and-clicks that operate both a retail store and are online. E-commerce is being conducted in both the consumer sector and the B-to-B sector. Online sales now account for nearly 8% of total retail activity. Many luxury shoppers prefer to shop online with 45% of ultra-affluent (Income above $250,00) saying they prefer online shopping. While some consumers still prefer shopping in retail outlets, many will search online for information.

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F I G U R E 9 . 1

E-Commerce Web Site Components

Catalog

Product information

Product navigation

Shopping cart

Save or wish basket

Payment system

Easy, quick, convenient checkout

Store locator

Customization functionality

Customer reviews or feedback options

Operating a successful e-commerce site requires several components. There must be some type of catalog that provides production information and allows consumers to easily navigate to various products. A shopping cart allows individuals to save items until they are ready to checkout. Many sites have a wish basket where they can put items they hope to buy in the future. The payment system needs to include multiple forms of payment. It also should be easy, quick, and convenient to use. If the e-commerce site also has retail outlets or the product is sold in retail stores, then the site needs a retail locator that allows people to type in their zip code and locate the nearest retail outlet. Most consumers want customization functionality, which means the site is customized to individual consumers based on their browsing and purchase history. The site should also provide for customer reviews and have feedback options.

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E-Commerce Incentives

Financial incentives

Convenience incentives

Value-based incentives

CyberBait

Cyberbait is any lure or attraction that brings people to a Web site. The various forms of incentives to encourage people to visit a Web site are finance-, convenience-, and value-based. These incentives are especially important for clicks-only businesses.

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F I G U R E 9 . 3

Top U.S. Online Search Providers

Source: Adapted from “Top 10 U.S. Search Providers, Home & Work,” Nielsen Internet, https://en-us.nielsen.com/rankings/insights/rankings/internet, accessed February 22, 2010.

Most traffic to an e-commerce site is driven from a search engine. The number one search engine today is Google, which accounts for about 2/3 of all product searches.

Google Search Yahoo Search MSN/Bing Search AOL Search Ask.com Search Others 0.663000000000002 0.145 0.109 0.015 0.019 0.0490000000000001

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Seller opportunism

Security issues

Privacy issues

Purchasing habits

F I G U R E 9 . 4

Reasons Consumers are Wary of Purchasing Online

Some consumers are still leery of purchasing products online. Four reasons for this reluctance: 1) Seller opportunism – fear that the business is not legitimate and is out to cheat them; 2) Security issues – fear that their credit card number will get stolen or worse, identity theft; 3) Privacy issues – information about them will be sold to other businesses; 4) Purchasing habits – they prefer shopping in a store where they can see the merchandise. Companies need to address all of these issues. But, overtime, these issues will become less of a concern as people become more comfortable with online purchases.

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Interactive Marketing

Two-way communication and involvement

Internet ideal medium

Can track activity

Personalize messages

Emphasizes two primary activities

Targeting individuals

Engageing consumers

Interactive marketing is the development of marketing programs that create two-way communications and enhance engagement of consumers with the brand. The Internet is the ideal medium for interactive marketing. It can track activity, where a person goes and what they do. It can personalize messages. The emphasis of interactive marketing is two-fold – to target individuals and to engage consumers.

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F I G U R E 9 . 6

Interactive Marketing Objectives

Source: Based on Larry Jaffee, “Follow the Money,” Promo, 20, No. 11 (November 2007 Sourcebook), pp. 5-10.

This graph shows the marketing objectives for using interactive marketing. The reasons vary widely from branding, building brand loyalty, building an e-mail list, and generating sales, to driving people to the Web site.

Award prizes Branding Build loyalty Build E-mail list Collect personal data Generate leads Generate sales Offer incentives Drive to Web site Generate additional leads 0.171 0.589 0.532 0.498000000000001 0.27 0.411 0.551 0.365 0.544 0.308

Percent of Total

Mobile Marketing

Smartphones (43%)

Ways people use

Social device

Search product information

Method of shopping

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Figure 9.3 Types of Mobile Marketing

Display ads

Search ads

Video advertising

Text messages

In-app advtg

QR Codes

Geo-targeting

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F I G U R E 9 . 8

US Online Ad Spending by Format

Source: Based on “Online Ad Spending Consolidates Among Search, Banners, Video,” eMarkter Digital Intelligence, February 3, 2012, www.smarketer.com/articles/print.aspx?R=1008815.

Online advertising represents a highly effective method for reaching today’s consumers, especially the younger, more Internet-savvy market. Four distinct forms of online advertising exist – display or banner ads, classified ads, search ads, and media/video ads.

Banners Classified Media/Video Search Other 0.226 0.057 0.136 0.492 0.0890000000000001

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Search Engine Optimization

Largest category of online expenditures

80% of Web traffic begins with a search

Results of SEO

Click rate 5% (0.2% for online ads)

The largest category of online expenditures is now for search engine optimization (SEO). About 41% of online advertising is for SEO. About 80% of Web traffic begins with an online search, so having a presence in that search process is important. SEO can be reached in three different ways. First, is paid insertions where the advertisers pay to have their Web site appear as the result of a search. Second, is paid search ads that will appear on the page. Third, natural or organic emergence. This is the best because it is natural and the result of the search engine’s algorithms. It takes time to be near the top of natural or organic search results, but yields the best results. SEO advertising typically has a click rate of 5%, compared to 0.2% for online ads.

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Online Social Networks

75% of Internet users participate in social media

Facebook

Twitter

About 75% of Internet users participate in social media to some degree. The most popular social media site is Facebook. It now has 310 million users worldwide. It offers companies display ads. Companies can have their own pages and people can sign up to be a fan. It is an efficient way to offer discounts and special promotions. Twitter is a micro-blogging service. Most companies are now monitoring Twitter to find out what consumers are saying about their business and what consumers are thinking, in general. It is also an excellent way of interacting with customers. Ford recently identified 100 bloggers to test their Fiesta and post comments. Coca-Cola sponsored Expedition 206, a 275,00 mile trip to 206 countries. The winners posted comments and videos on the Internet. Social media is now a major part of integrated marketing communications.

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Blogs

Online musings

Power of online buzz

Blogs are online musings, written content put on the Web for others to read. Some blogs permit visitor comments, others do not. Blogs provide a venue for people to talk online and can generate considerable online buzz, especially for hot topics. A survey of online users found that about 47% go to social networks to download coupons and search for information about products. About 45% access social networks to learn about upcoming sales and to obtain discounts on products. About 22% read or write a product review on a blog.

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Consumer-Generated Advertising

Crowdsourcing

Goal is to create consumer buzz

Consumer-generated ads

Created for television

YouTube

Viewed as more genuine

Contests for consumer-generated ads

A recent trend is consumer-generated advertising. Crowdsourcing is the term used when companies seek consumer-generated ads. It is an alternative to using ad agencies or doing the work in-house. But, the ultimate goal is to create consumer buzz. Consumer-generated ads have been created for television. They are often spread via the Internet and posted on YouTube. Consumer-generated ads are viewed as more genuine than company-created ads. Contests are now being held to solicit consumer ads.

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Consumer-Generated Reviews

Amazon.com – leader

Best Buy – online reviews of brands

Early adopters

Implications

Negative reviews

Low-star ratings

Consistent quality products

Information for

Marketing plans

Product modifications

Service strategies

Consumer-generated reviews have grown in popularity. The leader is Amazon.com. They offer reviews on most books and items sold. They encourage customers to write reviews for other customers. Best Buy also offers customer reviews on various brands. Customer reviews are a good way to reach early adopters. Customer reviews can have some negative implications if a company or brand receives negative reviews and low-star ratings. This information can be used for developing marketing plans, for product modifications, and for creating service strategies. Customer reviews have driven companies to focus more on consistent product quality.

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E-Mail

E-mail newsletters

Build brand awareness

Drive Web traffic

Customers sign up for newsletters

Provide value

Free subscription

Tie-in with Web site

E-mail is an important component of interactive marketing. It can be easily integrated with other channels of communication. It can resemble information that is posted on the Web site. E-mail campaigns offer the advantage of having Web analytics for analysis of effectiveness. Web analytics can be used to measure how many people visit a Web site, where they go on the site, how long they stay at each place on the site, and who abandons the shopping cart before making a purchase. By using Web analytics, companies can target specific individuals, such as those who abandon their shopping carts. These targeted e-mails have a much higher conversion rate. Companies can use e-mail newsletters to build brand awareness and drive Web traffic. Newsletters should provide value, the subscription should be free, and the content should tie into the Web site.

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Viral Marketing

Message passed from one consumer to another

E-mail

Blogs

Form of advocacy or word-of-mouth endorsement

Viral marketing messages