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MD253 - E-Commerce

MD253 - E-Commerce. Module 6: Advertising & E-Commerce Spring 2003. Topics Covered. Profiling - how does it work? Advertising Networks Comparing Media Models Improving Results Rich Media & Other Examples Problems & Challenges. Cookies. stored in a text file on your hard drive usage

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MD253 - E-Commerce

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  1. MD253 - E-Commerce Module 6: Advertising & E-Commerce Spring 2003

  2. Topics Covered • Profiling - how does it work? • Advertising Networks • Comparing Media Models • Improving Results • Rich Media & Other Examples • Problems & Challenges

  3. Cookies • stored in a text file on your hard drive • usage • track users (unique ID) • save passwords / prefs. • temporary storage (shopping basket) • each cookie can only be accessed by the domain that placed it (ads have own domain) • may be disabled (prefs) • a cookie  single user

  4. Targeting Targeting Options • site categorization • visitor frequency • geography • domain name • service provider • SIC codes • company size (emp, $) • browser type • operating system • click stream

  5. Comparing Media • Effectiveness • Internet banner ad click through (‘98 2.11%; ‘99 1%; ‘02 .3%) • Direct mail response = 1-2% • Print ads response = .5-.75% • CPM (cost per 1000 impressions) • Niche magazines - $75-150 • Consumer magazines - $30-40 • Web sites: (‘98 $20-30; ‘99 $17; ‘02 $2-$34) • Network TV $6-15 • National radio: $4-$8 sources: Morgan Stanley, Inter@ctive eCompany Now

  6. Media Buy Models • CPM • cost per thousand impressions • Click-Thru (Cost Per Click) • advertisers pay only when users click an ad • Affiliate (Cost Per Sale / Lead) • advertisers pay per sale or lead/inquiry • Exclusives & Sponsorships • Barter • trading space with another site

  7. Internet Ad Response Rates • Improving click-through rates • audio (+300%) • placement (lower rt. +228%; 1/3 down +77%) • interstitials (+44%) • animation (+25%) • cryptic messages (+18%) • posing a question (+16%) • calls to action (+15%) e.g. “see us now” • matching/targeting (+400-600% or more) sources: Grey Interactive, DoubleClick, webreference.com, Internet Profiles, AudioNet, BusinessWeek

  8. Challenges for Net Advertising • Excess Inventory • roughly 80% unsold, punished for efficiency, caching • Decreasing Effectiveness • Click- throughs plummeting • “Deboning” • ad blocking, third-party cookie blocking • The Agency’s Goal / Result Conflict

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