Part Two: Chapter Eight Traffic Building

1. Internet Marketing & e-CommerceWard HansonKirthi KalyanamRequests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENTTHOMSON BUSINESS and ECONOMICS5109 Natorp BoulevardMason, OH 45040Phone: (800) 423-0563

2. Part Two: Chapter EightTraffic Building “A wealth of information creates a poverty of attention.” Herbert Simon, Designing Organizations for an Information-rich World

3. Value and Scarcity Online • Volume of online content is growing far faster than the number of Web users

4. Value and Scarcity Online • Volume of online content is growing far faster than the number of Web users • Every site faces unique challenges to attract new visitors

5. Value and Scarcity Online • Volume of online content is growing far faster than the number of Web users • Every site faces unique challenges to attract new visitors • As Web users grow more experienced, they are less likely to explore new sites

6. Value and Scarcity Online • Volume of online content is growing far faster than the number of Web users • Every site faces unique challenges to attract new visitors • As Web users grow more experienced, they are less likely to explore new sites • The true scarcity online: user attention

7. Value and Scarcity Online

8. Planning for Maximum Traffic • Drawing more visitors to a site requires a thoughtful web traffic plan • Web traffic plans should consider each of the five main traffic categories:

9. Planning for Maximum Traffic • Drawing more visitors to a site requires a thoughtful web traffic plan • Web traffic plans should consider each of the five main traffic categories: • Branding decisions (e.g. domain name) • Search engine marketing • Affiliate networks • Online banner advertising • Publicity and word of mouth

10. Planning for Valuable Traffic • Effective traffic plans assess the volume and quality of traffic generated • Spotting broad use patterns through visualization tools helps calculate the cost and productivity of new visits • Key tool for traffic-building analysis is cost-per-action: the number of visits that end in a particular action divided by the cost of the campaign

11. Planning for Valuable Traffic At each stage, visitors decline and costs rise

12. Traffic-Building Goals • Basic goal: best traffic at lowest cost • But how to define best traffic?

13. Traffic-Building Goals • Basic goal: best traffic at lowest cost • But how to define best traffic? Maximum Profit Minimum Cost-per-Action Best Traffic with Least Cost Maximize Actions

14. Traffic-Building Goals • Profit guidelines that include web site branding; ignore ad branding impact: • Spend on traffic sources that maximize difference between unified visit value and cost per visit • Acquire traffic as long as the cost per visit is less than the unified visit value

15. Traffic-Building Goals • Profit guidelines that ignore branding and all other impacts: • Spend on traffic sources that maximize difference between customer lifetime value and web customer acquisition cost • Acquire traffic as long as online customer value exceeds acquisition cost

16. Traffic-Building Goals SOURCE: Gupta, Lehmann, Stuart: “Valuing Customers,” Journal of Marketing Research 41, no. 1 (Feb. 2004)

17. Search Engine Optimization • The power of landing “Above the Fold” SOURCE: FPG/Getty Images

18. Search Engine Optimization • Top placement in search returns is key to generating organic Web traffic

19. Search Engine Optimization • Top placement in search returns is key to generating organic Web traffic • User’s willingness to investigate falls sharply as items drop on the return list

20. Search Engine Optimization • Top placement in search returns is key to generating organic Web traffic • User’s willingness to investigate falls sharply as items drop on the return list • Higher click rate on top-rated items • Few users go beyond first page or two

21. Search Engine Optimization • Improving search engine placement • Get indexed on main search engines • Use meta-tags and develop content with appropriate keywords that trigger higher search engine rankings • Structure site content and navigation to reinforce search engine algorithms • Cultivate links from appropriate sites

22. Keyword Advertising • Clickable, text-based ads bring in billions of dollars of ad revenue • Ads steer traffic to an organization web site; fee charged only if click occurs • Competitive bidding process determines a keyword’s value

23. Keyword Advertising • Evaluating keyword portfolios • Identify a site’s most relevant keywords • Test and expand list, based on conversion and click-through rates

24. Keyword Advertising • Evaluating keyword portfolios • Identify a site’s most relevant keywords • Test and expand list, based on conversion and click-through rates • Bidding and tracking • Higher bids increase chance at higher keyword position • No click costs more than maximum bid • Price charged depends on intensity of competition

25. Keyword Advertising

26. Traffic by Association • In traditional advertising, marketers put a company’s message where consumers work, live, play

27. Traffic by Association • In traditional advertising, marketers put a company’s message where consumers work, live, play • Same concept holds true online

28. Traffic by Association • In traditional advertising, marketers put a company’s message where consumers work, live, play • Same concept holds true online • Banner advertising • URL placement on shopping bags, billboards, monthly statements • Sponsorship and co-branding