Internet Marketing

1. Internet Marketing Networks

2. Topics • The global matrix • Marketing with networks • Why the Net works • When the Net stumbles • Networks inside companies

3. The Global Matrix • The Web is truly worldwide • Firms and governments around the globe are devoting huge sums of money to make the promise of the Web come true • Malaysia, for example

4. Marketing With Networks • Networks are a social technology • A network of users and resources creates new activities and powerful capabilities for marketers • For Internet marketers, networks imply • ubiquity • expectations • sharing • specialization • virtual value activities

5. Ubiquity Metcalfe’s Law The value of a network starts to grow at a rate that is the square of the size of the network

6. To Understand How Metcalfe’s Law Plays Out, Let’s Take A Look At Some Recent Headlines

7. Headline Name of Publication - Date Insert excerpts from a current article out of the business press (e.g. Wall Street Journal, Wired News, Business 2.0, or Fast Company) that talks about the increasing number of people online. I usually take excerpts out of the lead paragraph, and highlight keywords. I’ve found articles on the surging Net population in China, for example, that nicely illustrate Metcalfe’s law.

8. Ubiquity Metcalfe’s Law The more people on line, the bigger the e-commerce opportunity

9. Ubiquity Opt-In, Opt-Out, Spam • Spam is a drawback to ubiquity • Net marketers must choose what terms they offer users • No restrictions: the company has unrestricted use of the information it gathers on visitors to its site • Opt-out: users can choose not to receive any solicitation • Opt-in: users can give permission to receive relevant solicitations • No sharing: the company cannot use or sell user information

10. Expectations • Publicity and Celebrity • Hype plays a large part of any Net marketing campaign • Kim Polese, Marimba • Jeff Bezos, Amazon • The economic logic of hype • Celebrity endorsements, media stories, and general “buzz” create an aura of success

11. Sharing • Low connection costs lead to sharing • Shared resources enable companies to launch a Net presence more easily and cost-effectively

12. Specialization • The Internet makes it easier to bring resources together from a wide range of alliance partners • Each alliance partner specializes in providing particular content • Visit any portal or search engine • Yahoo! • Excite • Alta Vista • Lycos • AOL

13. Virtual Value Activities • A VVA takes information as input and outputs new kinds of info that helps customers • solve problems • make better decisions • entertain themselves

14. The Five Virtual Value Activities • Gathering • Organizing • Selecting & synthesizing • Distributing

15. The Five Virtual Value Activities • Gathering: assembles info & links, so the user only has to go to one site instead of many • Organizing: places info into categories and presents a structure that enables the user to find what he/she is looking for • Distributing: using the Web to publish info and make it widely available

16. The Five Virtual Value Activities • Selecting • Synthesizing • Enabled by AI technologies that build up profiles of users (implicit) and allow a user to input preferences (explicit) • Selects the most relevant info (to a given user) and makes it the most obvious • My Yahoo! • Preferred customer pages

17. Why The Net Works • It’s reliable and efficient • Multiple connections • There are a number of ways to connect to each node on the network • Even if multiple links aren’t working, a message can still get through • Packet switching • Messages are broken up into pieces called packets • This allows many users to simultaneously share network resources

18. Why The Net Works • Open technology standards enable the Internet to grow (scale) • Open standards • software protocols and operations are readily available • they are documented widely • they aren’t controlled by any one firm • Scalability refers to the ability to add locations, paths, capabilities, and resources to the Net without having to reengineer the whole thing

19. When The Net Stumbles • Outages on the Net are quite rare • Congestion and delay is more common • Access lags are caused by limited transmission capacity from the user to the Internet • Faster connections will enable marketers to utilize and send richer content • Transmission lags are caused by limited transmission capacity from the user’s ISP to the server’s ISP • Server lags refer to the time that a server takes to recognize and fulfill a user’s request

20. Networks Inside Companies • Internet marketing uses Net technologies to reach out to customers • Many companies divide their Net activities into three categories • the public Internet, managed by the marketing department • the extranet, connects the company with it’s major suppliers • the intranet, available only to the company’s employees

21. Visible to the public • Managed by marketing • Visible to suppliers and B-to-B customers • Supply chain management • Managed by marketing and logistics • Internal to a company • Available only to employees • Often managed by HR How Companies Organize Net Activities Figure 3.9

22. Wide Range of Internet Content Figure 3.10

23. Contrasting Internal and External Network Roles Table 3.4