Slide1: Online Marketing Vince Kellen


Some big caveats: Some big caveats The internet is new (relative to other technologies) Marketing and advertising is very new (first banner ad in 1994) The internet is growing rapidly Marketing approaches from radio, TV and print are being applied to the internet The rules are changing Behavior is changing The internet user population is changing What works today probably won’t work tomorrow!


Sources for this lecture: Sources for this lecture Net Results: Web Marketing That Works USWeb/CKS and Rick E. Bruner, Hayden Books Numerous web sites, articles, research organizations (Forrester, Jupiter)


Online Marketing ROI Objectives: Online Marketing ROI Objectives Brand Building Direct Marketing Online Sales Customer Support Market Research Content Publishing Services


Brand building: Brand building A brand is a set of differentiating promises that link a product or service with its customers (Stuart Agres, VP, Young & Rubicam, as reported in the Industry Standard) Interactivity of the web means that users interact with brand more intimately than ever before Brands are old Brands exist in the minds of consumers While the debate rages about whether brands are important or not, clearly more and more people will interact with brands online (Jupiter Communications says 16 million households by 2002) Brand advertising, more than a call to action, banner ads, etc., needs a sustainable visual burned into the consumers’ subconscious


Brand building: Brand building Studies show the brand value of an internet banner ad is greater than the value of the click through (1997 IAB Online Advertising Effectiveness Study) Increases in bandwidth and rich media will drive increases in brand advertising, or so some say However, delivering the brand promise is all important too! Peopod, best known online grocery brand, stock and financial performance have been hurt as company lost site of consumer needs (“Brands Aren’t Everything,” Evan I Schwartz, Industry Standard) However, delivering the brand promise is all important too!


Problems with online brand ads: Problems with online brand ads Small banner space can’t compete with TV richness Click through rates, introduced in 1994 at www.wired.com, averaged 2% in 1997 now hover at .5%. Users are ignoring banner ads Offline brand advertising works because of the distance between ad and sale. With one-click buying one-click away is the same true online? Online is changing to make purchases available in the banner Online brand advertising is $3 billion (Jupiter and Forrester) TV ads promoting web sites: $3.5 billion Smart money is looking offline for brand advertising 5 years from now, the Internet will be another channel to take into consideration as companies optimize their mix Dylan Tweney, Infoworld, October 4, 1999


Direct Marketing: Direct Marketing Web’s self selecting nature means that web surfer’s are more educated and have higher average household incomes Real-time targeted marketing using technology (collaborative filtering, neural nets, rule based systems) becomes possible Service providers for targeted banner ads (e.g., www.DoubleClick.com) provide targeted Matching ads with editorial becomes possible (think of the newspaper equivalent) Direct Marketing and Brand Building are complimentary Who clicked? What do we know about them? How do you track a click through to a sale across time?


Marketing pyramid: Marketing pyramid


Marketing pyramid: Marketing pyramid How many and what kind of impressions/interactions do you need at one level to move someone to the next level? How many banner ad impressions yield a click to your site? How many visits to a site yield a purchase? How many purchases (or interactions) yield a high-value customer?


Online Sales: Online Sales When we think of internet marketing, we think of e-commerce web sites While typically focused on the Internet, Internet marketing can drive sales offline as well While business to consumer (B2C) sales are hot right now, business to business (B2B) is right behind and 6-10X bigger B2B has a more complex legacy system, product messaging problem, hence complicating the marketing problem Many B2B sites require much tighter contact with channel (broker, dealer agreements, etc.) Marketing is focused at channel and at end-user


Customer service and support: Customer service and support FAQs, newsgroups, automated e-mail responses, chat, web-based bulletin boards, complex searchable databases, inbound e-mail routing Still a rich and relatively unexplored opportunity Some Internet intermediaries e.g., www.WebAnswers.com Lots of 3rd party products/services


Customer support benefits: Customer support benefits Revenue enhancement Serve repeat customers well Potential cross-sell capabilities Cost of maintaining versus getting new customers Cost avoidance Less call center staff needed Soft benefits Barrier for new customer exit: just learned the online support channel Support is a Brand channel


Market Research: Market Research Data can be collected from surveys, online registration for value-add services (WSJ.COM) Purchase 3rd part data (A.C. Neilsen - consumer demographic data, channel supplied data - e.g., grocery stores to CPG firms) and combine with web traffic data to understand your market Collect traffic data as users interact with the web site


Content publishing/services: Content publishing/services The recipe is simple and well known (newspaper model) Publish content Aggregate eyeballs Charge others to advertise Yahoo, Excite, CNET, HotWired www.adknowledge.com 2,000+ sites accepting ads CPM (cost per impression per thousand) is declining Online Advertising Report


Web value propositions: Web value propositions Interactive Personal Infocentric Instantaneous Measurable Flexible Interlinked Economical


Personal: Personal Not just personalized, but personal Interactive ranging from real-time to asynchronous Coke Classifieds Companies can conduct virtual focus groups on their site Companies can lurk and learn X-Files Fan Forum Message Board Demographic personalization Technographic personalization (www.browsers.com) User’s internet domain (aol.com, etc) Browser type and version Time of visit


Personalization Techniques: Personalization Techniques Collaborative filtering System learns associations between items (pages) based on behavior (click stream) System then pairs content to users based on what other people with similar behavior have done in the past “Flocking” syndrome Simple agents Bayesian networks Neural Networks (Autonomy) Rule Based Systems Cluster Analysis and Rule Based Systems Combinations (Blue Martini) Fuzzy Logic (NetPerceptions) Genetic Algorithms (NetPerceptions)


Infocentric: Infocentric Data well - need to drink Boring consumer staples problems Tide’s home page DePaul University Alumni Relations Web Site (www.alumni.depaul.edu) Alumni search Job posting Resume posting


Instantaneous: Instantaneous News sites (CNN.COM) Real time or near real time marketing Personalization engines can learn on the fly AA Net SAAver Fares program (Timely push) www.strategy.com for up to the minute stoke quotes pushed via fax, voice-mail, e-mail, pager


Measureable: Measureable Things you can measure Click through rates Web site traffic analysis (click stream) Data consumption analysis (not the same as click stream!) Problems Mirrors, caches, proxy servers can obfuscate measurement Hits, clicks, visits, page requests, page views may take on different interpretations to different vendors/service providers Click to purchase relies on cookies which can have problems (multiple users on the same PC, clear cookie cache etc.)


Flexible: Flexible Database driven sites introduce new levels of flexibility Marketing campaigns can be revised and altered quickly Personalization not only tailors the message, but makes for a very flexible medium - users can rearrange home pages (my.yahoo.com)


Interlinked: Interlinked This is the power of the web The value of the network increase exponentially with the number of nodes Surprisingly, many web sites are afraid of so-called exit links (they don’t want people to leave their site - as if they can stop you!) Aggregators of links - gateway content Link partnerships, mutual cross-linking Linking netiquette - can you use someone else’s url without their permission?


Economical: Economical Obvious For etailers, the results are simple: web stores sell much more than the BAM counterparts at a great savings However, marketing costs and construction costs are rising Reduced clickthrough rate e-commerce site construction between $1-3 million (Forrester)


Somewhat free marketing techniques: Somewhat free marketing techniques


Search Engines: Search Engines Page title Density Closeness to the domain name meta tags, headlines, body text - repeat search words Keyword guidelines One theme per page (don’t put golf and tennis on the same page) Avoid spamdexing Look at top site source code Develop pages for specific search engines Register your page (submitted url - AltaVista) Read http://searchenginewatch.com


Home Page Source: Home Page Source HotWired Source WebAnswers Source Microsoft Source HotSauce.com source HotSauceAmerica.com Source


Domain brand: Domain brand Register the domain and its variants .net, .org misspellings, anti-urls Register product names Catchy, short Readable at highway billboard speeds (hotjobs.com) Pick phrase different from but associated with company Patent lawyers using patents.com Use trademarked names Domain brokers (www.domains.com, www.domainnames.com) Research domain ownership http://www.networksolutions.com/cgi-bin/whois/whois


Online Communities: Online Communities Usenet, 30,000+ forums, a.k.a. newsgroups Searching for news groups (www.deja.com) Read, understand, lurk before you leap Contribute, don’t advertise Spammers get run out of town Seeding discussions Mailing lists, a.k.a., listservs Searching for lists (www.liszt.com) Both mailing lists and newsgroups attract those seriously committed to their topics (generally) Also check out bulletin board message groups (iVillage.com)


Affinity sites: Affinity sites Inbound link generators Complementary sites - experience based marketing (e.g., link various sites pertaining to a wedding event) Some affinity sites charge for the link (www.clicktrade.com) Uber-links (leading resources within a group, e.g., Star Trek fans) Measuring inbound links Jump pages with a redirect Special pages made for the affinity site link Announcement sites - Yahoo http://dir.yahoo.com/Computers_and_Internet/Internet/World_Wide_Web/Announcement_Services/ Awards, reviews, cool sites (ZDNet.com reviews) http://www.zdnet.com/yil/filters/channels/reviews.html


Contests, Promotions, Sweepstakes: Contests, Promotions, Sweepstakes Sweepstakes (see www.sweepstakesonline.com), see Furniture, www.furniture.com Online chat sweepstakes: users had to be tuned in chat room at a certain time to win (like a radio station sweepstake) Companies freely donated products to give away Yahoo history of promotions Halloween and Valentine’s Day treasure hunts Live online chats with TB stars, cross-promoted with NBC prime time programming 1996 Find the Y Dilbert sweepstake (The “Y” in Yahoo was missing) Amazon - Greatest Story Ever Told - John Updike, best submissions won $1,000 and the honor of sharing a byline


Promotions, etc.: Promotions, etc. Push content, HTML based e-mail Personalized e-mail etailer customer survey promotion Place the url on everything etailer catalog house had the url on the cover of the catalog. Added it to every page, online sales jumped noticeably url on e-mails, all off-line promotions and advertising Events listings http://events.yahoo.com/


Public Relations: Public Relations Standard PR techniques, internet distribution Personalize don’t commoditize Prioritize news content Become a source. Target publications/reporters. Plan well ahead of the announcement and drop e-mails or place phone calls. Contact addresses and editorial calendars are often online Call reporter before the release is distributed Know the outlet’s reporting cycle


PR Distribution: PR Distribution www.PRNewswire.com www.Businesswire.com Sending releases to your own e-mail list Format for e-mail Don’t use binaries 60 or so characters per line


Other PR: Other PR Speaking opportunities Opinion pieces E-mail newsletters, smaller web magazines welcome contributors Call-in radio shows Publish/issue a report or survey Celebrate a milestone Present an award


Paid advertising: Paid advertising Key issues CPM/CTR, impressions versus click through Cost per lead, per click, per sale, CPW Brand advertising is needs to know CPM If you are measuring results, CTR is important Do the math At averages of $33 per CPM and .5% CTR rate, 1,000 impressions costs $33 and yields 5 click throughs for a cost of $6.60 per CTR What percent of CTR makes a purchase - 5%?


The debate over banner ads: The debate over banner ads Some say Shrinking click through rates Banner size to small for proper branding Broadband and rich media still won’t work Others say Brand advertising does work with banner ads (1997 IAB Online Advertising Effectiveness study) Rich media does expand brand presentation capabilities The future says The question for most organizations is how do they handle the mix between online and offline advertising iVillage radio spots and Go network TV spots


Issues around dropping CTR rates: Issues around dropping CTR rates Some research shows CTR is related to immediacy. Users click on what they need immediately Perhaps the proliferation of content and dramatic increase of users causes this reduction (or are users tuning out?) Creative treatment of the banner does make a difference Nearly all online users use other media Synergistic effect across media (TV and Web is well known) Tie ads to keyword searches to improve CTR (e.g., travel agencies advertise on Infoseek for searches that include the word “travel”) www.MBInteractive.com


Targeted paid advertising : Targeted paid advertising Demographics Income, age, geography, family size Technographics Browser, domain, user-supplied data Psychographics Behavior: click stream, data consumption Perhaps the present and future is for those organizations that mix and match between different sets of characteristics and different sets of algorithms to achieve better targeting


Spiral Branding: Spiral Branding Use TV, radio, print drive traffic Use the web to get the customer involved (content, etc.) Collect e-mail addresses (sweepstakes?) Use e-mail to remind them to return to the TV and the Web Sports channel reminds you to visit At the site you interact with the fantasy league The league uses e-mail to remind you of a pre-game show “Secrets of Spiral Branding” Jesse Berst, ZDNet


Spiral Branding: Spiral Branding TV, radio, print Interest, passive, attention, richness Online Involvement, active, intention, rewards Email Interaction, retention, relationship TV/Radio,Print - Online - Email Interest, involvement, interaction Passive, active, interactive Attention, intentions, retention Richness, rewards, relationship


Spiral Branding: Spiral Branding Use each media for it’s best purpose Do it fast, get something up know Iterate constantly, make improvements each time around the spiral