Support Material: Hackers, Hits and Chats
Keyterms: advertisement; affiliate programs; banner exchange; bartering; blog; bluetooth; branding; business model; call to action; cash flow; click fraud; click through rate (ctr); contextual; cookies; cpm, cpa, cpc; digital products; diffusion curve; discussion board; extranet; gps; hits; hypertext; impressions; interstitials; isp; keyword; lifetime value; lock-in; long tail, marginal cost; medium; multi-level marketing; opt in; news reader; permission marketing; podcast; pop-ups; portal; spam; rich media; rss; search engine; search engine marketing; search engine optimization; sms; switching costs; target audience; text link / advertisement; tipping point; unique page views; variable cost; vehicles; web ring; wiki; word of mouth; xml
PromotionOnline Advertising Issues and Trends
- Definition of Advertising
- Web Advertising: Unique Characteristics
- Marketers and Media Vehicles
- Types of Web Advertisements
- Web Advertising: A Conflict
- Designing Web Advertisements
- Advertising Metrics
- Business Models for hosting Advertisements
- Alternative Advertising Business Models
- Affiliate Marketing
- Search Engine Marketing
- Search Engine Optimization
- E-mail Advertising ... RSS
- Performance-based: Analytics
Other elements of the Promotional Mix
- Word of Mouth / Viral Marketing
- Open Source Marketing
- Social Networking Sites
Promotion is the fourth and final element of the marketing mix (product; price; place and promotion) and refers to the communications with the customer. Promotion itself comprises advertising; sales promotion; public relations and personal selling. The internet is beginning to have a profound impact on communications as a whole and promotion specifically, and all elements of the promotional mix. We will explore:
- Media Fragmentation
- Media Integration
- TV Programming: Time Shifting and Search
- Mobile Media
- Classifieds move to the Web
- online advertising issues and trends
- the impact of social media
- the internet's impact on other elements of the promotional mix
- the internet's impact on media in general
Definition of AdvertisingAdvertising is a paid form of communication via a medium from the business to the consumer. This communication is typically a call to action or a branding message. We will investigate the field of advertising as it applies to the internet.
Web Advertising: Unique CharacteristicsWhile web advertising is still a small, yet growing, part of the overall marketing budget for most businesses, one has to consider the web is more than about simply allowing companies to place advertisements. The web allows companies to develop a physical presence that allows companies to accomplish multiple tasks (advertising, transactions, customer service, public relations, data gathering and community development for example). These websites, and their effectiveness, are not quantified in the dollar amounts that are noted in the growth of the number of dollars apportioned to this medium. Other media are only supported by advertising dollars. Therefore comparing advertising dollars across media, and then relating that to the impact of each medium, simply does not give the true impact of the web as a medium to accomplish business goals.
We should also consider that customers participate in this medium. Customers create content (via social media: blogs, wikis, discussion boards etc.) that creates unique opportunities for word of mouth marketing traditional media cannot support.
Finally web advertising can take advantage of performance-based business models due to its interactive nature. This allows marketers to develop more precise marketing analytics programs.
The top 50 advertisers on the internet, as of March 2006 were led by Vonage ($22m), classmates.com ($13m) and Monster ($12m). 80% of advertisers now include the internet as part of their advertising mix.
source: Online Seizes More of the Advertising Mix
Marketers and Media VehiclesWe also need to consider that the web is comprised of two types of business-related sites (and then many more sites that are personal etc.)
Wired magazine pioneered the former by hosting the first advertisement in 1995. Wired generates its revenue by attracting an audience to its site in order to have that audience be exposed to its advertisements, it can then charge its advertisers via different models (CPM, CPC, CPA). This is a similar business model adopted by "free" TV and radio. Content is free, subsidized by the advertising revenue.
- Those that host advertisements (equivalent to media vehicles): google; Yahoo!; news sites for example
- Those that do not host advertisements (companies that use the web to communicate to their audiences).
Types of Web AdvertisementsPerformance-based search engine advertising is the fastest growing online advertising sector and represents about 40% of online advertising spend. It will soon eclipse the 'traditional' banner advertising spend. In total there are five major sources of web-space (vehicles that host advertising campaigns):
Many of the major vehicles still use third party resellers such as Doubleclick (an advertising network) to sell excess inventory, as well as selling directly to marketers. These agencies will take up to 50% of the transaction.
- Since the primary activity on the web is searching for information, search engines are an attractive source of advertising space. Search engine advertising programs such as Overture and Google AdWords allow marketers to bid on keyword phrases, such that their advertisements appear when a selected keyword phrase is used in the engines that subscribe to the advertising programs. Overture syndicates its content to Lycos, MSN and Yahoo, Google syndicates to Earthlink and AOL.
Search engine advertising allows for very targeted advertising and a great vehicle for direct marketing campaigns. It is also important to note that when at a search engine, consumers are seeking links to go elsewhere (search engines are a means to an end) thus information based advertisements are a great fit. These campaigns are also performance-based.
- Major portals are also desirable, and therefore the inventory can carry a premium rate. These portals include sites like Yahoo!, AOL, MSN.
- A third source of inventory that is still attractive to advertisers are ISPs. These sites typically host banner advertisements on third party member sites (Geocities for example). As with the second group, the volume is there, but the quality of content is not consistent, and is also subject to the whims of the individual members of the site.
- A fourth source are users' own space which has to be sold on to a third party and affiliate providers (below, such as Befree and Linkshare). These sites can also subscribe to become vehicles for the google Adwords program (blogs for example).
- A final source is the marketer's own site, as they run promotions within their site. This can be in the form of generic promotions, regardless of who is visiting the site, or promotions based on the visitor's previous purchase behavior. Amazon uses a good example of the latter as it promotes new selections that are related to previous purchases.
Advertisers typically run a campaign of advertisements, hosted on "vehicles" like Wired and Google and these advertisements are linked to target web pages that are related to the advertisements. Sometimes the target site is the advertiser's homepage, but this dilutes the effectiveness of the campaign as the target site should be related directly to the "call to action" of the banner.
While banners (468x60 pixels) are the typical "style" of advertisement, other forms include:
Pop-up advertisements are advertisements that appear in a separate window when a viewer accesses a page. The effectiveness of these types of advertisements is questionable, and they are rather annoying to the user. They also "pollute" the viewer's computer by adding an extra window that the viewer did not request.
Interstitial pages are advertisements that appear before a page is accessed. Thus when a viewer is accessing their target page, an advertising page appears first, for a specified period of time, and then disappears to be replaced by the page the viewer had requested. Again, this is not a very popular form of advertising on the web. Given the viewer had a certain expectation when accessing the page, and the delay page is a disconnect from that expectation, this can lead viewers to abandon the page they had intended to access. (The switching costs to go somewhere else are minimal!)
Page sponsorship ties the "advertisement" more closely with the content of the site/page, and can be considered a form of contextual advertising. Again, the sponsorship message will be linked to a target site and click through rates are higher. Page sponsorship is also sometimes referred to as Tenancy. Sponsorship deals can be more complex to design for, as banners are an industry standard and can therefore be placed anywhere, sponsorship messages and visuals have to be designed for the specific page that is being sponsored.
The final form of advertisement is the simple text link (hyperlink) or text-based advertisement. This is a more contextual form of advertising than the aforementioned, and prevalent with affiliate programs (below), and search engine advertising using Google Adwords or Overture. It has a higher click-through rate than other forms of advertising, but is not as effective for branding.
Web Advertising: A ConflictThere is an interesting conundrum with web advertising that does not impact traditional media advertising (TV, newspapers, radio etc.) An advertisement encourages the viewer to leave the vehicle, to visit the advertiser's page. The vehicle's goal (one would assume) is to not only attract viewers (and advertisers) but to attract viewers long enough (with compelling content) so that the viewer returns on a regular basis. Conversely the advertiser actually wants the viewer to exit the vehicle to enter the target page. Thus there is an interesting balance of goals that is a consequence of the hypertext medium.
Pop-up advertisements, interstitials, and banner advertisements whose target page appears in a separate window (polluting the viewer's machine) are designed to overcome this issue. These forms of advertising are not considered popular and break information design rules.
This conflict is not a problem for search engine marketing where the vehicle (search engine) is designed to allow customers to find links / content and go elsewhere. Thus click through rates on advertisements tends to be higher than content hosted advertisements.
Designing Web AdvertisementsWhen designing for the web, it is important to consider the flow of information that the viewer processes. Thus when designing an advertisement the designer needs to consider:
as they relate to the goal of the advertising campaign. It is simple to design advertisements that generate a high percentage of click-through (enter free to win a million!! get your free BMW! etc.) but it is important to design to encourage the right target audience to click on the advertisement to access the target page. Then consider whether the target page's design is relevant in the context of the content of the advertisement (and the goals of the advertising campaign). Attracting high click-through that is irrelevant to the advertising campaign can be very costly if the business model for the advertisements is on a click-through rate. It is also important to consider the content of the vehicle, and does it attract the precise target audience you are looking for. The web is a mass niche-medium, thus finding sites that directly relate to your product is key. This is why affiliate programs (below) can be successful, the vehicles (affiliates) are self-selecting, and presumably for the most part, doing so because they are a great fit for your audience (or will develop an entry page that is a great fit). A company bidding on selected keywords has the same effect for the search engine marketing programs. In this case an advertisement appears depending on the need of the searcher.
- The content of the vehicle
- The content of the advertisement
- The content of the target page and subsequent pages
While animation in the banner advertisement may be a good thing to attract attention, you need to determine if the vehicle you are using allows animated banner advertisements. Advertisements essentially impact the overall design of the vehicle's page, so this may not always be the case. Rich media advertising (using flash, real player and mpeg standards) are beginning to evolve. These may be more engaging, but it is important to understand the vehicle's restrictions and the viewers' capabilities in terms of viewing the advertisement.
Advertising MetricsWhen determining how many viewers are exposed to an advertisement we often hear a myriad metrics cited. The following are the most common:
It is important to understand the specifics of these metrics as one determines the business model used to pay for the advertisements.
- Hits: This is the number of files served when the page is accessed x the number of times the page is accessed. This term is the term that is most often quoted in the media, but it is either used incorrectly, or is simply misleading. The simplest way to increase the number of hits a page receives over time is to simply add an additional graphic to the page (add a file that will be served each time the page is requested)!
- Impressions: This is the number of times the page is viewed over a period of time. This is a better measure of the real use of the page. It is also the same number as the number of times an advertisement is served from that page.
- Unique Page Views: This is the number of unique viewers of the page over a period of time. This looks at how many unique exposures an advertisement receives over time.
Business Models for Hosting AdvertisementsThe following are the more common business models that are being used by vehicles to host advertisements.
As advertisers and their hosts negotiate the appropriate business model, a mix of models can occur, that pays for impressions, and for actions that the viewers take. Given the unique nature of the accountability of the web as a medium, CPC and CPA are becoming more popular, especially with the growth of search engine marketing as an advertising form.
- CPM: Cost per thousand. This is a term used in traditional media advertising. The advertisement is costed at a fixed price per 1,000 viewers of the advertisement. This price has been declining over time for a couple of reasons:
CPMs have fallen dramatically since the inception of the web.
- The inventory available for hosting advertisements keeps increasing as more web vehicles evolve.
- Viewers are reducing their click through rate on advertisements, therefore they are deemed less effective as they might otherwise have been.
- CPC: Cost per Click. This is a charge associated with the number of viewers that actually click on the advertisement to go to the target site. This is a more effective use for advertisers as it takes advantage of the hypertext medium and only charges for those users that actually take action. Thus the marketer knows exactly how much it is paying for each "eyeball" that is being delivered to its target site. The Overture.com search engine pioneered this for Search Engine Marketing. The media vehicles, hosting with a CPC model, are getting paid for direct performance, although they are compromised with their lack of control over the design (and call to action message) of the advertisement. A bad design may equate to a low CTR (Click-through rate), therefore low earnings for the host. Conversely, a design that encourages the wrong target audience to click on the advertisement can prove very expensive to the advertiser, as once the target site is visited, the viewer is not interested in the product. The CPC model also does not reward hosts for the branding effect of the advertisement. Thus, those that simply view the advertisement, but do not click-through, are still being exposed to the message, and therefore branding can occur overtime.
- CPA: Cost per Action. This is similar to CPC, but goes one step further and associates the charge with a transaction from the target site, rather than simply a charge for reaching the target site (cookies enable a site to track a customer throughout its path of the site, and thus can associate a transaction with an advertisement). An action could be a lead (CPL: Cost per Lead) or a sale (CPS: Cost per Sale). This has all the same advantages and disadvantages as the CPC model for both advertisers and vehicles, except the advertiser does not fall into the trap of paying for "eyeballs" that do not take action. For the advertiser the advertising charge is now a variable cost for the product as the advertiser knows exactly how much it is paying per customer (or per lead for CPL). This model is therefore preferred by advertisers.
Alternative Advertising (Business) ModelsDue to the youth of the web as a medium, and the many evolving companies trying to establish a presence, where cash flow is a premium, a few creative alternatives have spawned to avoid paying for advertising space.
- Bartering: Much advertising space is not actually paid for by the advertiser, but is traded such that the advertiser also offers the vehicles some product in return, or advertising space in return. This is common even on very popular sites.
- Banner exchange: Advertisers participate in a banner exchange program, that allows the advertiser to display its advertisements on other sites on the participating network, in return for allowing banners from the network to be displayed on its site.
- Web ring: creating or joining a web ring can allow you to participate in a group of sites with similar interests, this may help gain more exposure to your target audiences.
Affiliate AdvertisingAffiliate Programs are an alternative category of advertising for companies, and a potential source of revenue for company affiliates (those individuals subscribing to affiliate programs). An affiliate program is styled after the concept of using your customers to attract more customers, and for doing so the affiliate receives a reward, essentially adding an economic incentive to word of mouth marketing. Thus it is a form of Multi-Level Marketing. In fact, some affiliate programs are multi-tiered, thus the affiliate is rewarded not only for the sales of merchandise, but for recruiting new affiliates and the sale of their merchandise.
The business model for affiliate schemes is similar to the CPC or CPA as mentioned above. The affiliate receives either a cut for delivering "eyeballs" (CPC) OR for delivering a lead (CPL) or sale (CPS). The advantage of an affiliate scheme, over a straight advertising banner campaign using the aforementioned models, is simply it puts the onous on the potential affiliate to subscribe to the scheme, rather than the advertiser trying to find advertising space on media vehicles. It also targets customers to host the advertisements. Small businesses, which do not have the scale necessary to create a traditional advertising campaign can use an affiliate program model. Affiliate marketing takes advantage of the long tail phenomenon of the internet, matching niche products with niche audiences efficiently.
A positive side effect of an affiliate program is the number of inbound links it can generate for a site. Inbound links help a site with its search engine optimization (noted later.) The downside of an affiliate program over a traditional advertising campaigns are based on the potential for click fraud and the cost of tracking. Affiliates can potentially manipulate their earning potential, especially with programs that are based on a CPC model.
A company can take a couple of approaches as it develops its affiliate program. It can develop its own affiliate program, as Amazon.com and bn.com have done. Or it can outsource its affiliate program to others.
In house programs carry the risk of not tapping into the networks that the major affiliate programs have developed. It can make sense for a company to work with multiple networks so as not to exclude potential sales. This can be done in conjunction with an in-house program for the larger marketers. BeFree is the leading third party scheme, and sells software and provides a large network (in theory, in practice it comprises a few large affiliates). Linkshare is another popular affiliate network as is buy.at in the UK.
Search Engine Marketing (Optimization)Search engine marketing is continuing to grow in importance as the use of search engines by internet users continues to be a growing trend in terms of what consumers do online (search engines rank second to e-mail in terms of online consumer behaviour). Search engine marketing comprises two broad categories:
Google (the most popular engine) and other engines now provide not only organic results, but also offer advertisements based on the keyword phrases used by a searcher. These advertisements appear typically in the right hand column (or identified as sponsored links above the search results) and are clearly distinguished from the regular results. The two key advertising networks a marketer can use are Google's Adwords and Yahoo!s Overture. Each network allows marketers to bid on keyword phrases, and depending on other bidders and a specified budget the advertisement will display when the appropriate keyword phrase is used by the consumer. Search engine advertising is attractive for small businesses who do not have the scale for traditional campaigns (the long tail) yet are looking for highly targeted campaigns. Niche audiences are able to find niche products efficiently, and visa versa.
- Search Engine Optimization
- Search Engine Advertising
Search Engine OptimizationAs an aspect of Search Engine Marketing, Search Engine Optimization (SEO) is a critical marketing task. Essentially a marketer needs to determine which keyword phrases are important to the visibility of its site, and then attempt to gain a front page listing (the organic results) on a search engine when users use the appropriate keyword phrases. The term 'google juice' has been used to describe some of the tactics for SEO. Things that impact a search engine ranking include:
- Relevance of the keywords to the title tag
- Relevance of the keywords to the body text (keyword density)
- Relevance of the keywords to the URL
- Number of inbounds links to the page / site
- Relevance of the keywords to the anchor text of inbound links (to see this work key in "miserable failure" in google)
- Freshness of the content
E-mail Advertising ... RSSMost of us are recipients of e-mail advertisements, and perceive the majority as spam e-mail in our in basket. It is surprising that we receive it if its perception is that it does not work. But of course that is not the case, e-mail advertising still works to a degree, if done correctly.
The web is unobtrusive, thus a marketer needs a means to reach out to its customers, and e-mail is certainly method for doing that that can then link directly to the marketer's website (RSS and subscriptions, noted below is another method). With good design, and good use of subject headers, the effectiveness of the e-mail can increase. One has to consider the receiver has to undertake three transactions. Firstly, open the e-mail (a function of the design of the subject header) and then read the e-mail (a function of the design of the content of the e-mail) and click through to a website (a function of the call to action). The economics of this type of marketing make much more sense than direct mail campaigns, since the marginal cost of sending an additional e-mail is zero, the cost is associated only with developing the content of the e-mail and buying the e-mail list.
E-mail advertising can fall into three categories:
- Many marketers use "opt-in" e-mail options on their website, that encourages customers and viewers to "subscribe" to the site to receive updates. This is very important, and important for the site, when delivering those updates to do so, on a regular basis, with content that is relevant and interesting, and using a subject header that works. Thus e-mail advertising with this form can prove very effective, and is a marketing opportunity that companies cannot afford to miss. This form of advertising has be referred to as Permission Marketing. A user is encouraged to "opt-in" to receive e-mail updates (user gives permission), the company provides incentive to keep the user engaged over a series of e-mails (either through offering compelling content, ability to win prizes etc.) and through the series of e-mails the company is able to educate the user on the merits of the product. Thus the marketer is able to take advantage of the unique combination of the web and e-mail to develop a series of communications that keeps the individual customer engaged, not simply one time communications, typical of more traditional advertising. The FastCompany article Permission Marketing highlights this topic.
- The second form of e-mail advertising is the form we typically do not like, the unsolicited spam mail we receive, in droves, if our e-mail address is somewhere on the internet, or has been resold to mailing lists. While this is perceived as poor marketing, the economics suggests it can be more effective than traditional direct mail. Spam is rendering inboxes a pretty 'cluttered' medium.
- The third form of e-mail advertising is simply placing advertisements in e-mail newsletters that users subscribe. This is similar to running advertisements on a web vehicle, although this is an e-mail vehicle. Marketers make an assumption that their audience can view rich media e-mail.
E-mail programs such as TargetX offer e-mail campaign solutions. E-mail programs can provide pretty detailed analytics to assess the success of a campaign. This can include the number of e-mails opened, the click throughs from e-mail to the target site etc.
A couple of e-mail lists you may want to subscribe to if these topics really interest you:
Given that customers' e-mail inboxes are getting over run with spam, the inbox is becoming less viable as a medium to receive marketing messages. Marketers are exploring generating content with an XML feed (RSS) that allows customers to subscribe to the appropriate feeds. This is a form of 'opt in' is prefered by (sophisticated) customers who now have complete control over when to opt in and when to opt out (unsubscribe). Currently news readers, needed to read this content, are in the early stages of the diffusion curve, and thus only have small audiences. Once Internet Explorer 7 launches with a built in news reader, this type of customer content management may become more popular. Companies that set up blogs, and have customers subscribe to those blogs are in effect already doing this and will be well positioned for the forthcoming IE 7.
Much of web marketing is shifting to performance-based marketing (PPC). Examples of this include search engine advertising and affiliate programs (both noted above). Thus companies are able to determine exactly how much they are paying for each visitor to its landing page (site) and can even track this to a transaction (with cookies etc.) Thus if the cost of getting a new visitor to the site is known, and the business knows how many site visitors it needs in order to create a transaction, a company can be more precise about its marketing spend to achieve specific results. Added to this is the ability to use databases to determine the average lifetime value of a customer, and a company can then determine how much it is willing to spend to acquire new customers.
We can see this type of calculation occuring with a company like HostMySite (HSM). HSM uses search engine marketing (for example) to generate a certain number of leads. HSM will understand how many leads it needs to generate a specific number of sales. If it needs more leads, it can increase its advertising spend, as long as the expenditure does not mean the cost of each new customer is greater than the lifetime value of each customer (LVC) it gets to subscribe. HSM faces the challenge of customer churn (the greater the churn, the less the LVC), which it can try to manage with excellent customer service. Thus HSM may choose to invest more in customer service in order to retain customers than on customer acquisition.
Word of Mouth / Viral Marketing
A unique characteristic of the web that we identified earlier is customers' participation with the media. Unlike other media, customers also create content. This content can be about products and services and particularly experiences with products and services. This type of content is quite compelling in terms of helping new consumers make buying decisions. Customers participate in content creation in the following 'social media':
Marketers can actively encourage customers to participate in its marketing campaigns with deliberate word of mouth campaigns. One example that was very successful was the Subservient Chicken campaign from Burger King. A google search cites 341,000 results for this search signaling the wide reach of the buzz this campaign attracted.
- discussion boards
- social networking sites
- directly to retail sites like amazon (with product recommendations)
- sites like epinions
source: Dissecting 'Subservient Chicken'; The Word on Word of Mouth
Hotmail 'pioneered' word of mouth marketing on the internet as it introduced its service with a 'tag line' at the bottom of each e-mail suggesting the recipient get free e-mail at hotmail. Since this e-mail was received from a trusted source (the sender) it was as if the sender was sending the advertisement to the recipient. Hotmail's growth curve started slowly, reached a 'tipping point' and then grew very quickly, a typical growth curve of a product that benefits from viral marketing.
Whether marketers make deliberate efforts to do this or not, word of mouth can still play a role in helping brand products and services (i.e. marketers cannot deliberately opt out of word of mouth occuring). This form of 'free marketing' (free as in freedom of speech) highlights the notion that marketers are actually losing some of their direct control over the marketing of their products. This 'free' content is also easy to find thanks to search engines.
A critical element to the success of any word of mouth marketing is the fundamental quality of the product / service in the first place.
Open Source Marketing
A variant of the word of mouth phenomenon is the idea of Open Source marketing. Essentially getting your customers involved in the process of product development and promotion (this is also known as customer co-creation).
A good example of this is the recent Firefox competition, Firefox Flicks. The project description is as follows:
Create a 30-second ad, in any style (live action or animated,) that brings Firefox to life for the millions of Web users who have yet to discover Firefox and the better Web experience it delivers.
By engaging customers in the process of co-creation a company is also then more likely to gain positive word of mouth. Examples of other companies doing this include Nike: Art of Speed and MasterCard: Priceless. Providing customers more access to and ownership in the marketing process will likely create a more loyal core audience for the product. It is pretty clear that only a small segment of a customer base will participate in these types of campaigns (it takes work on the part of the customer) but these 'lead customers' are also a critical resource for a company in terms of connecting with the market. James Cherkoff, a marketing consultant based in the UK, explores this issue on his blog.
One of the main word of mouth vehicles used by consumers are blogs. Blogging is a recent phenomenon, but is growing rapidly (the number of blogs doubles every six months, technorati is tracking 35.3 million blogs as of April 2006). Bloggers typically fall into the following category:
Companies can employ blogs in a deliberate marketing campaign (see: The Diva Marketing Blog: Biz Blog Profile Series for examples). Customers can blog about their experience with products they 'consume'.
- personal blogs
- political blogs
- employee blogs (see discussion on Public Relations)
Blogs are a great "checks and balances" mechanism to mainstream media (now known as MSM). Blogs allow consumers of traditional media to start the conversation, that is then picked up by MSM or to continue a conversation started by MSM that was likely to be dropped.
There is a 'heirarchy' within the blogosphere. 'A list' bloggers get pretty wide readership and have many blogs linking to them (which provides good 'google juice' for their exposure) and many subscriptions. That being said search allows everyone a voice, so a news story can be broken by a blogger who really has a limited audience initially, but is then linked to by other bloggers who find the story at search engines. The type of content that comes from blogs is what I have labeled 'Free Marketing'.
A wiki is a web-based content space that allows multiple authors to edit the same pages. It records a revision history in order to be able to track new edits and roll back revisions when necessary. The following are two examples that illustrate how wiki content can be important to the marketing process.
Wikipedia, which is the most recognized wiki, includes over 1 million consumer edited articles edited by upwards of 800,000 'wikipediacians'. If one does a google search on University of Delaware Football, as of May 5, 2006, the second entry is a wikipedia article on the topic, started 2 months prior to the search, by a University of Delaware student for a class project. This article is only second to the 'official' University of Delaware Football page. Consider how the University's Public Relations office needs to factor in the content of wikipedia, which is principally managed and created by its 'customers'. Congress was recently caught for being a little over zealous in its policing of some of its wikipedia entries: Congress caught making false entries in Wikipedia.
A second example of a wiki creating content that can influence 'customers' in parallel with marketers' content is the Clear Admit: School Choice section of the Clear Admit Wiki. Here MBA applicants are able to share their decision making process in terms of which school they ultimately chose to attend. This content (which is readily accessible via google) is very interesting for future applicants when it comes time to choosing which schools to apply.
Both the above examples are good illustrations of 'Free Marketing' at work.
Podcasting has given anyone the opportunity to create audio (and video) content that users can listen to and then subscribe. Popular podcasts can gain word of mouth and be passed along in blogs and other media.
Public Relations offices can take advantage of podcasting. A company can highlight certain key executives who can then podcast, or perhaps podcast about products specifically. These interviews can be made available on the company's web-site, and users can subscribe to the podcasts such that when new podcasts are created, subscribers will be automatically notified via the RSS feed.
'Consumers' can also podcast, and podcasting is certainly allowing many people to create their own content and make it available for others to subscribe and listen. Mandorichard is such an example. The author, Richard Gordon, has this to say on his site:
From 1997 to 1999, I wrote a weekly technology column in the News Journal (Wilmington, DE). Well, that column is history. I don't miss the deadlines, but I admit to sometimes missing "my soapbox." So, with the new technology that combines audio files and RSS feeds, I can resume inflicting my opinions on the world.
source: Social Media Spending to Hit $757M in 2010; PenguinRadio
Social Networking Sites
MySpace is the current leader among Social networking sites with approximately 75 million users (May 2006) and adding more than 200,000 new users a day. Other popular social networking sites include Facebook and Friendster.
Users of these sites are connecting with each other and sharing their ideas and opinions. MySpace is also a "channel" for music bands to launch their music, and the site has recently launched channels for Film and Comedy for independent filmakers and comedians to promote their work.
There are two types of marketing opportunities this type of site provides. In the first instance it has created a platform where independent 'artists' of all forms can promote their work (for example: Panama). The best they can hope for is their work becomes 'viral' as the users of the site share with each other their experience with the content. The site can also get exclusive releases of new material in advance of a more general release. This can help create buzz among the many users of the site.
A second marketing opportunity is to take advantage of the page views of the site and run site promotions. Given the audience of these types of sites promotions will likely work better if they take advantage of the site's functionality (i.e. gaining a page on MySpace from which a sponsor can then connect with 'friends': The Family Guy).
source: AD$ WILL BE NEWEST FRONTIER FOR SOCIAL NETWORKING SITES
Its not just for advertising: Sales Promotions; Public Relations and Personal Selling
The internet has had an impact on all elements of the promotional mix. We will now look at its impact on each of these elements.
Sales promotions are designed to offer incentives to create a sale. Incentives can include a variety of tactics (contests, coupons, free trials etc.) that can be enhanced by the web.
DealCatcher is an example of a site that offers coupons for a variety of partner companies (such as Dell). Note you can actually subscribe, via RSS to feeds by keyword with this system ensuring you are aware of the latest deals of which you may be interested. These coupons are designed to stimulate sales in the short run. While these types are sites are targeted to price sensitive shoppers, they are useful for partner companies to stimulate demand in a product to unload inventory (late in the product lifecycle) or generate sales of new products (early in the product lifecycle).
Contests are another popular means to stimulate interest in a company or product or service. A quick survey of Online Sweepstakes.com indicates that there are many contests available to consumers on the web.
An interesting example of a promotion that integrates offline content is the use of TV programs being launched in iTunes to get a taste of the show (discussed below).
Free trials of digital products are common on the web. Given the cost structure it might make sense to offer a trial version for free in order to acquire lock-in. A risk with this strategy is that the free version is good enough there is no need to move up to the paid product.
Many sales promotions combine with advertising to get the message to the customer.
Traditional "Command and Control" (what is said, where and when) Public Relations is becoming less relevant in the world of the web and word of mouth. That does not mean that public relations is no longer viable, it means that public relations needs to adapt to this new media landscape. Rather than presume entire control over the messaging, PR needs to embrace the blogosphere in two broad ways. Firstly, determine a strategy for blogging itself. Should the company allow employees to blog or not? If so, are there blogging 'rules' that need to be developed? If allowing employees to blog is part of the strategy, how active should PR be in encouraging employees to blog? Should employee bloggers get press releases prior to traditional media, the same time, or later? Should the bloggers be actively encouraged to blog only company news, industry news, personal news or a combination?
Southwest have recently launched their corporate 'PR' blog. Its initial incarnation came for some criticism for not 'exploiting' its very positive affinity with its customers. Likely the feedback Southwest has received will help it develop a more appropriate blog strategy. Microsoft has many employees blog, the most commonly cited employee blog is Scobleizer. This blog has a sense of transparency and authenticity as Robert is not afraid to discuss Microsoft's competitors in a positive light when they are doing things well. This enables Robert to also 'talk up' Microsoft when he feels it is warranted as he is not percieved as being overly biased.
The second issue, which is critical whether the company actively blogs or not, is how to 'listen' and engage the blogosphere. This was discussed when discussing marketing research in general.
The web offers exhaustive content that can support a customer as he / she searches for product information. This can both help a sales person (who can now focus more on the important details of the sale) and hurt the sales person (who is no longer the gatekeeper to all the important product information). Much of personal selling is building relationships with customers, this can now be more of the focus of sales people given the content that is available online. There are certainly instances where sales people are being disintermediated (re: travel agent's role).
Sales people can certainly benefit by the use of social media such as blogs and podcasts. These tools can be used to engage audiences, stimulate interest in products that are ultimately sold offline in a personal selling context.
The internet is also a great channel for companies to support their sales people via extranets. Thus an organization can offer extensive, real time, information to its sales force, as they are out in the field selling.
The big three networks, ABC, NBC and CBS used to have access to huge audiences (up to 90% of TV viewers in the 1970s) which allowed marketers a means to reach large audiences very easily. Over the past 30 years we have seen a proliferation of media and a consumer who is more discerning in terms of the messaging that will connect. Cable TV began the erosion of the large network audiences, Fox added to the number of big networks, and now we have not only the internet to contend, but also Satellite TV and Satellite Radio for example. We also have a proliferation in media devices that serve the content (cell phone, PDA), even to include less conventional media such as the back of the fortune cookie message. This makes for a very complex environment for advertisers to reach their appropriate audiences.
source: Media Fragmentation and the Rise of the Internet, by Darrell West; Media Fragmentation: Ads are everywhere!
We discussed media convergence very early in the course, with a focus on how the internet is challenging traditional media and business models. We used the newspaper as an example. Here we should note how the internet is being used to promote other media. A specific example that is emerging is the use of iTunes to promote new TV shows and to archive old shows for viewing. Thus the web can be used as an additional revenue stream for old content (the long tail effect: old shows are now available when the customer wants, not when the TV decides to air the shows) while it is also being used as a teaser to get customers interested in new shows (Sales Promotion: Trial). TV stations can run promotions of the new shows and point their viewers to download the trailers, or first episode. Once customers have viewed an episode or two they are likely to then be excited to see the show unfold on the TV.
Fox has recently announced its will let its affiliates show some of its prime time shows, online, the day after the show first airs.
source: TV Online; CBS Jumps on the Bandwagon
TV Programing and TimeshiftingDigital Video Recorders such as Tivo are beginning to give consumers more control over their viewing behaviour. This is a potential threat to the traditional business model of TV programming (advertising supported). TiVo also provides a pretty useful search functionality to TV program management. It will be interesting to see if these types of products shift up the diffusion curve beyond the early adopter base of users they have.
DVRs are another threat to the traditional network programming, "interruption" advertising supported model, that is already eroded by cable TV programming and satellite TV. Consumer choice is now being further enabled by the consumer control of determining what is being shown (better search); the ability to 'subscribe' to types of content (ensuring you do not miss your favourite type of content); the ability to subscribe to product classes of advertisements; and the ability to skip the advertisements used to support the economics of the content.
source: The Vanishing Mass Market; TiVo Offers Subscriptions to Branded Content
Cell phones and PDAs are offering the opportunity for marketers to now deliver messages not only at the right time, but also based on positioning: the right place. Marketers are also using the mobile phone as a medium to encourage consumers to text in messages. Out bound promotions, using SMS, are typically an offer (sales promotion) rather than a branding message. They are useful for retailers to generate foot traffic for example, sending messages to people within the vicinity of the retail establishment. In bound promotions are typically designed to build databases of customers. Technologies like GPS and Bluetooth with further develop this field (for outbound promotions).
There is a key distinction between the types of campaigns being executed via mobile devices (phones). Mobile marketing as a result of simply using the device (cell phone) to collect data from customers (build a customer database: enter competition etc.): example McDonald's RUMAC versus sending marketing messages based on a customer's location, via the mobile device (sending a text message to those in a retail mall that your store has a dollars off offer for a particular product line.)
source: MobHappy; mobile marketing association;
Classifieds Move to the Web
As the internet gains a share of the advertising spend it is important to look at which particular type of advertising are attractive for the web. To this point online auction sites (eBay for example) are starting to challenge the traditional classified advertisements that are common in print media, such as newspapers. Craigslist is another popular medium to connect buyers and sellers that would have traditionally used classified advertisements. Craigslist is the leading classifieds service of any medium at this point. It serves approximately 7 million new advertisements a month.
Advertising that typically appears in the printed Yellow Pages is likely to begin moving to the web once local search becomes more actively adopted. Google, MSN and Yahoo! each have local search options they are developing.