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Advertisement in Electronic Commerce

Advertisement in Electronic Commerce. Lecture 15. Summary of Previous Lecture. Electronic Commerce definition. E-Commerce Infrastructure Related Definitions Dimensions of Electronic Commerce Product Process Delivery Agent Commerce Differences E-Commerce Field.

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Advertisement in Electronic Commerce

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  1. Advertisement in Electronic Commerce Lecture 15

  2. Summary of Previous Lecture • Electronic Commerce definition. • E-Commerce Infrastructure • Related Definitions • Dimensions of Electronic Commerce • Product • Process • Delivery Agent • Commerce Differences • E-Commerce Field

  3. Summary of Previous Lecture • People • Public Policy • Technical standards and Protocols • Organization • Electronic Market • Types of E-Commerce • Business to Consumer • Business to Business • Consumer to Consumer

  4. Summary of Previous Lecture • Person to Person • Consumer to Business • Business to Employee • G2G (Government-to-Government), • G2E (Government-to-Employee), • G2B (Government-to-Business), • B2G (Business-to-Government), • G2C (Government-to-Citizen)

  5. Summary of Previous Lecture • Types of Inter organizational systems • Electronic data interchange (EDI) • Extranets • Electronic funds transfer (EFT) • Integrated messaging systems • Shared databases • Electronically-supported supply chain management • Benefits of E-Commerce • Benefits to organization • Benefit to customers • Benefits to society • Limitations of E-Commerce

  6. Today’s Lecture Objectives • Web advertisement, its types and characteristics • 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

  7. Today’s Lecture Objectives • 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 • Describe Web advertisement implementation issues ranging from ad agencies to the use of intelligent agents

  8. Where to start? Web Advertisement: A Way to Make Money out of your Computer

  9. What is Advertisement? • Advertising is an attempt to disseminate information in order to affect a buyer-seller transaction

  10. Internet Advertisement • Internet Advertisement is gaining popularity because, • 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

  11. Internet Advertisement • 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.

  12. Internet Advertisement • 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

  13. Web Advertisement Example Advisement banners

  14. Web Advertisement Example

  15. Web Advertisements Terminologies • Terminologies being commonly used are • Ad views • Banner • Clicks (or ad clicks) • Click Ratio • Cookie

  16. Web Advertisements Terminologies • CPM • Effective Frequency • Hit • Impressions • Reach • Visit

  17. Ad views • An ad view, synonymous with ad impression , is a single ad that appears on a Web page when the page arrives at the viewer's display. • Ad views are what most Web sites sell or prefer to sell. A Web page may offer space for a number of ad views.

  18. Banner • A graphic image used on Web sites to advertise a product or service. • Will be discussed later in this lecture.

  19. Web banners

  20. Ad Clicks • Action from a user clicking on an advertisement to get more information. • Number of times users click on an ad banner. • “Hit Count” are very useful to determine the demand or interest in any product.

  21. Ad-Clicks statistics Within different Operating Systems

  22. Click Ratio • Clickthrough rate (CTR) is a way of measuring the success of an online advertising campaign for a particular website. • The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. • For example, if a banner ad is delivered 100 times (100 impressions) and receives one click, then the clickthrough rate for the advertisement would be 1%.

  23. Cookie • A cookie, also known as an HTTP cookie, web cookie, or browser cookie, is usually a small piece of data sent from a website and stored in a user's web browser while a user is browsing a website. • When the user browses the same website in the future, the data stored in the cookie can be retrieved by the website to notify the website of the user's previous activity. Not this Cookie

  24. Cost per Thousand (CPM) • The letter "M" in the abbreviation is the Roman numeral for one thousand. • CPM is used by Internet marketers to price ad banners. • Sites that sell advertising will guarantee an advertiser a certain number of impressions (number of times an ad banner is downloaded and presumably seen by visitors.), then set a rate based on that guarantee times the CPM rate. A Web site that has a CPM rate of $25 and guarantees advertisers 600,000 impressions will charge $15,000 ($25 x 600) for those advertisers' ad banner.

  25. Effective Frequency • An estimated amount of times a person must see a particular brand awareness commercial on a product in order to change that person’s attitude and awareness about that product.

  26. Hit • A hit is a request to a web server for a file (For example a web page). • When a web page is uploaded from a server the number of "hits" or "page hits" is equal to the number of files requested. • Therefore, one page load does not always equal one hit because often pages are made up of other images and other files which stack up the number of hits counted.

  27. Impressions • It is the exact number of times a specific Web site has been accessed or viewed by a user. • A page impression acts as a counter for Web pages, informing site owners how many times their sites were visited.

  28. Web Reach • Web reach is the accessibility of the user to download a webpage. • Pages out of reach are often located on the servers which are mostly down.

  29. Web Visit • Number of users visiting a web page or website. It is often recorded as a counter. Different Count formats

  30. Mass Marketing Interactive Marketing Direct Marketing Best outcome Volume sales Customer relationships Customer data Consumer behavior Passive Active Passive Food, personal-care products, beer, autos Upscale apparel, travel, financial services, autos Credit cards, travel, autos Leading products Market High volume Targeted individuals Targeted goods Cyberspace Postal distribution centers Nerve center Madison Ave. Preferred media vehicle Television, magazines Online services Mailing lists Servers, onscreen navigators, the Web Preferred technology Storyboards Databases Worst outcome Channel surfing Recycling bins Logoff Web Advertising • Consumer can click with his/her mouse on an ad for more information or send an e-mail to ask a question • Interactive Marketing

  31. Web Advertising • Internet is the fastest growing medium in history

  32. Web Advertising • Targeted Advertisement (one-to-one) • The Double Click (DC) Approach • 3M Corporation 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 file 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

  33. Web Advertisings • 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 Web sites more attractive and compelling

  34. Internet Advertising -- Pros • Distribution costs are low (just technology cost), so millions of consumers are reached at the same cost as that of reaching one • Advertising and content can be updated, supplemented, or changed at any time, and are therefore always up-to-date • Ease of logical navigation — you click when and where you want, and spend as much time as you desire there

  35. 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 exchange

  36. Advertising Methods • Banner Exchanges • Swapping is a problem : a match is frequently not possible • Banner exchange organizations • a firm submits a banner • receives credit when shows others’ banners • can purchase additional display credits • specify what type of site the banner can be displayed on • use the credit to advertise on others’ sites • credit ratio of approximately 2:1

  37. Banner Exchange organization • Example : Link Exchange offers help in banner design, provides membership in newsgroups, delivers HTML tutorials, and even runs contests. It acts as a banner-ad clearing house for more than 200,000 small Web sites. It also monitors the content of the ads of all its members.

  38. Advertising Methods • Paid Advertising and Ad Agencies • Advantage of using banners • ability to customize them to the target audience • ability to decide which market segments to focus on • be customized to one-to-one targeted advertisement • “forced advertising” marketing strategy is utilized • Splash Screen • Capture the user’s attention • Promotion or lead-in • Major advantage : create innovative multimedia

  39. Banner Exchange Website

  40. Advertising Methods • URL (Universal Resource Locators) • Advantages: • minimal cost is associated with it • submit your URL to a search engine and be listed • keyword search is used • Disadvantages: • search engines index their listings differently • meta tags can be complicated

  41. Advertising Methods • E-mail • Several million users can be reached directly • Purchase e-mail addresses • Send the company information; low cost • A wide variety of audiences; customer database • Problem: Junk mail or spamming • Target a group of people that you know something about

  42. Advertising Methods • 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

  43. Advertisement Strategies • Internet-base Ad Design • Advertisements should be visually appealing • Advertisements must be targeted to 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:

  44. Advertisement Strategies • Internet-based Ad Design: Important Factors • Page-Loading Speed • Graphics and tables should be simple and meaningful. They need to match standard monitors. • Thumbnail (icons graphs) are useful. • Business Content • Clear and concise text is needed. A compelling page title and header text is useful. • The amount of requested information for registration should be minimal.

  45. Advertisement Strategies • Internet-base Ad Design: Important Factors • Navigation Efficiency • Well-labeled, accurate, meaningful links are a must. • Site must be compatible with browsers, software, etc. • Security and Privacy • Security and privacy must be assured. • Option for rejecting cookies is a must. • Marketing/Customer Focus • Clear terms and conditions of the purchases, including delivery information, return policy, etc. must be provided. • Confirmation page after a purchase, is needed.

  46. Advertisement Strategies • Passive Pull Strategy • Customer will visit a site if it provides helpful and attractive contents and display • Effective and economical way to advertise, unidentified potential customers 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

  47. Advertisement Strategies • Active Push Strategy • Sending e-mails to the relevant people • Obtaining the mailing list is the process of identifying target customers • Mailing list generation is done in companies by using agent technology and cookies as well as by filling out questionnaires (by customers)

  48. Advertisement Strategies • Ad as a Commodity • CyberGold • exchange of direct payment made by the advertisers for viewing ads • consumers fill out questionnaires • CyberGold distributes targeted banners • the reader clicks the banner to read it and, passing some tests on its content, is paid for the effort

  49. Implementing the Strategies • Customized Ad Strategy • Filtering the irrelevant information by providing customized ads • One-to-One advertisement

  50. Customer Meta-Malls Customer Assistant Meta-Malls Coordinator Mall Operator A Mall Operator B Mall Operator C Direct Visit Product Database Product Database Product Database Implementing the Strategies • Comparison Aid as Medium of Advertisement Summary and Index Database

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