The Internet as Communication

1. The Internet as Communication The importance of interactivity Implications for mix elements Issues for perspectives

2. A Resource for Communication • A unique medium • A context for content • Distinction between information and vehicle that conveys it • Distinction between context/vehicle and infrastructure that conveys it • A context with multiple vehicles • Forms of marketing communications

3. Characterizing Communication • Components • Source • Message • Receiver • Processes • Encoding (by source) • Decoding (by receiver) • Component x process interactions

4. Parsing the Internet • Marketing communication as a noun • A noun is a thing • E.g., a message and its form • A “Download Netscape 128.0 Now!!!! Button • Marketing communication as a verb • A verb is an act • E.g., the process of sharing information • Interactivity between source and receiver • Interactivity between receiver and content

5. Source and Receiver Interactivity • Size of the targeted audience • Broadcast • One-to-many • E.g., TV and radio • Narrowcast • One-to-some (focused) • E.g., Cable channels, protected servers • Pointcast • One-to-one • E.g., Direct mail, e-mail

6. Source and Content Interactivity • Role of user control over message • User preferences • Computing constraints • User as active participant • Pull (selectivity) vs. push of traditional media • All forms (broad, narrow, point) can be pushed with the Internet • Internet enables pull, too

7. Effects of Interactivity on Content • Use communication to match product to needs • Individualized offering = personalization • Differently driven by push and pull • Pull is user-initiated • Push is marketer-initiated • The difference may affect the quality of personalization

8. Marketing Mix Implications • Communication and Product Strategy • Mass customization with communication • Two requirements • Receiver-content interactivity • Modularization • Customization characteristics • A continuum (mass production to personalization) • Processes of customization • Forms of customization • Relation to personalization

9. Communication and Price Strategy • From static to dynamic pricing • Limits to fixed price models • Better for low differentiation, low elasticity • Internet ==> price trans.==> price sensitivity • The Internet and alternative models • Real-time pricing: fun w/supply & demand • Role of infomediaries • Auctions • Companies as price-setting middlemen (Priceline)

10. Communication and Distribution • Internet as point-of-sale • Decision making for online channel • Central role of exchanging information • Possible scenarios • Destination sites • Fully-fledged channel (all aspects managed via online communication) • Micro-sites • In-depth brand information, externally hosted • Other uses of marketing communications

11. Communication and Promotion • Advertising is a big deal ($4.62B, 1999) • Two forms: text-based, multimedia • Email = text-based • Multimedia = web-based • Banners • Buttons • Interstitials • Banners rule

12. Ad Type Popularity

13. All About Ads… • Pricing models for online ads • CPM • Click-through • Flat-fee • What’s it worth: ROAI • # of impressions purchased * avg. click-through rate * avg. customer turnover (visitors to customers) * avg. net profit/sale = expected return.

14. Other Forms of Promotion • Sales promotions • Short-term incentives • Coupons, contests • Public relations • Corporate and brand image • All unpaid-for exposure • Site content • Events (e.g., Rosie’s kids on eBay) • Personal selling

15. Issues for Perspectives • For marketers • How to track effect of communications? • Site-centric • Consumer-centric • For consumers • Medium effects on search, choice, memory • For Policy Makers • User control and spam • Local legislation and global reach • For Technologists • Remembering preferences, adaptive customization