principles of internet marketing

Slide 1: 

PRINCIPLES OF INTERNET MARKETING NAPA CONSULTING GROUP

Topic: Internet Marketing : 

2 Topic: Internet Marketing E-Marketing vs. marketing Internet demographics Advantages New contagions of information Impact on Product Mix New innovation paradigm

First A Few Facts : 

3 First A Few Facts E-Marketing ≠ sales Marketing plan ≠ e-Marketing plan Most organizations have no: Marketing strategy Marketing plan e-Marketing plan Brand advocacy strategy Good news: The Internet keeps on growing Bad news: Getting harder to be found

Baseline Definition of e-Marketing : 

4 Baseline Definition of e-Marketing “…identifying, understanding, collaboratively creating, and meeting a segment of human and social needs, wants, desires, wishes digitally.” Adaptation of Philip Kotler’s original definition of marketing.

Customer Integrated Into Process : 

5 Customer Integrated Into Process Monologue One way Mass communication Static No interaction among customers Shotgun approach Hard to identify customers Hard to manage customers BEFORE AFTER Dialogue One-to-one marketing Real-time Dynamic Collaborative Segmented Rich customer interaction Rich customer data Customer Customers Supplier Supplier Internet

E-Marketing:More Than Just Your Website : 

6 E-Marketing:More Than Just Your Website ACME Branded site Site linking Small businesses B2B partners Industry Business resource Hubs - Regional - By industry - By application Portals Verticals Search engines - Regionally - Worldwide Outsource Partners Admin portal Regional Agent communities - By industry - By application - Portals First time visitors from search engines. Partners Other Blogs Other Blogs Forum A B C A B C PORTAL

Global Online Population : 

7 Global Online Population Currently about 1.2 billion Projected to grow to 1.8 billion by 2010

Websites Worldwide : 

8 Websites Worldwide Netcraft November 2006 survey In May 2007, the number reported was a little over 118 million worldwide 70 million blogs in just 4 years. 120K blogs being added each day.

U.S. Online Ad Spending:5.9% of the $285 billion total U.S. advertising market in 2006 : 

9 U.S. Online Ad Spending:5.9% of the $285 billion total U.S. advertising market in 2006 Source: Wall Street Journal, May 25, 2007, pg. B1 $16.9

Advantages : 

10 Advantages Democratization of advertising Reach: Collapsing barriers of time & space Lower risk of product / services innovation Lower cost / higher ROI Digitization of all information Virtual supply chains Virtual markets Virtual real-time interaction with customers & suppliers Scalability Ability to coalesce and reach increasingly fragmented markets Streamline business process

Strategic Advantages : 

11 Strategic Advantages Create new sources of competitive advantage More direct distribution model Reengineer the supply chain Invent new business models Target underserved segments Lower price barrier New delivery methods to reduce capital expenditure and pricing Create more efficient marketplace Create a “virtuous cycle”

Benefit of Creating A “Virtuous Cycle” : 

12 Benefit of Creating A “Virtuous Cycle” Reduce the risk of guessing by letting the community define the need, want, problem, and value proposition Speed development cycles Create precise features / value Create brand advocates Community endorsement Community and feedback loop integral part of shaping product

Recognize Elements of Value Creation: Generic Value Chain : 

13 Recognize Elements of Value Creation: Generic Value Chain Visual representation of what organizations do to create value. Margin is the difference between Customer Perceived Value (CPV) and cost. The primary and second activities attribute to cost. Primary Activities Support Activities Cost Profit = $ Price (Customer Perceived Value) + Source: Porter’s value chain

Traditional Industry Supply Chain : 

14 Traditional Industry Supply Chain OEM SERVICE PROVIDER VAR Reseller End User Look to bypass intermediaries. Each entity looks very little beyond the next partner in the food chain. Incremental value added. Value Chain Value Chain Value Chain Typical Service Provider Supply Chain Production based value creation. (transforming inputs into outputs) Commerce based value creation. (arbitrage)

Rearrange Your Supply Chain: Create More Strategic & Symbiotic B2B Relationships : 

15 Rearrange Your Supply Chain: Create More Strategic & Symbiotic B2B Relationships Think in terms of solving the common objectives, interests, and obstacles. Pursue common challenges. Pursue common goals. Remove common obstacles. Achieve collective profitability How? By removing inefficiencies and duplicity of efforts in each discrete value chain. Collaborate together to link strategies, validate new applications, how to market them, how to price them, and how to launch them, The basic principle is to leverage, link, and coordinate resources at a strategic level towards achieving the same fundamental goals. OEM Service Provider VAR Reseller End User Value Chain Value Chain Value Chain Build more strategic & symbiotic value chain. GOAL Reduce duplicity Reduce costs Leverage resources Increase value

Disintermediate : 

16 Internet Disintermediate OEM Service Provider Reseller End User Look for new ways to disintermediate the supply chain. Leverage business models or disintermediate to capture sources of competitive advantage. ASP, On Demand, or B2B relationships to capture cost savings and revenue sharing. Every step along the way (middleman or channel) is a cost point. Each step that can be optimized means a cost savings that can contribute to more competitive offering. Web Centric New players like are disintermediating the old supply chain. In doing so, converting cost savings as a source of competitive advantage. $ cost $ cost Value Chain Value Chain Value Chain $ cost $ Price $ cost Value Chain

Baseline Guidelines : 

17 Baseline Guidelines Create an E-marketing plan Choose top level domain name early Choose & trademark branded domains Design & linkage Relationship of all internal websites to target customers, industry sites, suppliers, business sites, portals, blogs Infrastructure: Who will host sites, applications, and associated servers SEO plan and strategy for your websites Indexing Real-time analytics Communication utilities E-mail, IM, real-time voice, weblogs E-mail list management and opt in / out best practice (CAN-SPAM ACT) Online advertising or “soft branding” E-commerce site Drive traffic

New Paradigm : 

18 New Paradigm Sell your idea first Find your actors (audience) first Size does not matter - PlentyOfFish Reduce risk by pushing control out Value creation increases at the edge Decentralize authority, process, and IP Transparency creates value Truth travels fast Price alone is not sustainable Reengineer your value chain Skip intermediaries wherever possible Reinvent your business models Change the status quo

Impact on Product Mix : 

19 Impact on Product Mix Product / service strategy Shared risk through open collaboration Place (channel) Actors & marketspace Agents Pricing Hypercompetitive Convert traffic to advertisement revenue Promotion Community Customer support 24 X 7 Virtual FAQ, forums, electronic

Old 4Ps Paradigm : 

20 Old 4Ps Paradigm 4Ps Value Creator Customer Product Place Pricing Promotion Almost no feedback loop. Higher risk of innovation and guessing market.

New Innovation Paradigm : 

21 New Innovation Paradigm Democratization of 4Ps paradigm Citizen branding Collective collaboration Collective risk sharing Collective product innovation Collective IP ownership Citizen marketers will sell “remarkable” ideas Innovators should adopt the 1% rule If you don’t find the “sneezers” or connectors, the 80/20% rule won’t matter Work backwards Build your brand around your idea first. If the community you are targeting does not coalesce and rally around the idea, continuing to build the product is irrelevant Create your own “blue ocean” If you play it safe and go by the rules of your industry, value chain, and business model – you’re dead! Most industries and markets are saturated and highly concentrated.

New Paradigm:Collaborative Open Innovation : 

22 New Paradigm:Collaborative Open Innovation 4Ps Value Innovator Customer Product Brand Capturing customer interaction creates tremendous value and reduces risk. Promotion

Contagions : 

23 Contagions New mediums for communicating information virally among your actors WOMM widget bliget chicklet buzztracker mashup delicious social media social bookmarking SMO trackback digg tag typelist blogroll viral marketing buzz marketing vblog podcasting contentcasting

Slide 24: 

24 92% PREFER WOM RECOMMENDATION 91% LIKELY TO BUY ON RECOMMENDATION

Additional Resources : 

25 Additional Resources ISBN 0-538-87573-9

Applications / Hosted Services : 

26 Applications / Hosted Services Hosted Blogs Blogger WordPress Typepad Movable Type Yahoo 360 Others: http://www.forbes.com/bow/b2c/category.jhtml?id=311 Forum Vbulletin PhPBB Invision SMF Jive Forums Content Management Systems (CMS) eZPublish Joomla WebGUI Mambo HotBanana E-commerce platforms Monster Commerce Pro GoEmerchant OSCommerce Zen Cart ShopSite Pro E-mail Marketing Constant Contact Lyris EmailLabs JangoMail ExactTarget SafeUnsubscribe Analytics Urchin Google FeedBurner VisiStat CoreMetrics http://www.websitemagazine.com

Slide 27: 

27 Kameran Ahari http://gotastrategy.typepad.com Napa Consulting Group e-marketing & strategy consultant