Internet Marketing

1. Internet Marketing Internet Marketing Plans A Dynamic Virtual Chapter http://www.swcollege.com/marketing/hanson/hanson.html

2. Topics • Online demographics • Online commerce statistics • Online marketing costs • Internet marketing plan checklist

3. Online Demographics Most of the world is still not online! • Key usage drivers are income, education, computer ownership, residence, and age. • Internet usage rises sharply with household income • The more educated someone is, the more likely they are to be online • Internet usage varies dramatically by the region of the country and region of the world • Middle-age heads of households are most likely to be online, followed by younger households and trailed by seniors

4. Online Demographics Income • Income is a strong positive driver of Net access in all regions of the country • High income groups have influenced the success of infant industries such as online trading • There is a concern of a "digital divide" between rich and poor • Lower income individuals have a much lower rate of online use • They are unable to reap the benefits of the Internet

5. Internet Usage Based on Education and Region Online Demographics Education Quotable Quote: Early adopters of the Net are the most educated members of society. As the Net diffuses to a wider audience, ease of use and simplicity become even more important. The Net needs to be more "appliance-like".

6. Online Demographics Region • Internet use varies greatly by region of the country • Alaska has the highest usage; the South has the lowest • Long, dark winters may lead to more usage – Finland is the most wired country in the world

7. Internet usage based on gender and place of connection Online Demographics Gender The gender gap that characterized the early years of the Net is rapidly closing

8. Online Demographics Usage Continues to Grow

9. Online Demographics International Access Lags Behind the US Percent of population with Internet access at home or at work (1998)

10. Online Commerce Statistics Top 20 E-Tailers of June 1999 Source: PC Data Online

11. Top 10 Affiliate Programs, April 1999 • AutoFusion’s Car Prices.com • Strange News Ticker • Music Boulevard • Amazon.com • One & Only Internet Personals • Lending Tree • Reel.com • All-Hotels.com • Info-Links Network • iSyndicate Source: refer-it Online Commerce Statistics • Affiliate programs, such as Amazon Associates, combine the business model and network phenomena. • They have a direct tie to e-commerce because you don't get a fee unless a sale is made.

12. Online Commerce Statistics Consumers told Greenfield Online the best features of online shopping are the abilities to quickly and easily compare prices and shop at any time.

13. Online Commerce Statistics • By the end of 2002, $2.8 billion will have been spent worldwide on e-commerce software. • 78 percent of this total will derive from from investment in distribution channel management, online procurement, and supply chain management (business-to-business e-commerce solutions). • Business-to-consumer e-commerce, which in 1997 made up 41 percent of e-commerce software revenues, will in 2002 account for just 22 percent.

14. Online Commerce Statistics • Business-to-business e-commerce focuses not so much on revenue generating as increasing efficiency of business processes. Now, smaller and medium-sized enterprises can benefit through increased efficiency and disintermediation of the supply chain. • The true value of business-to-business e-commerce comes when other businesses adopt such solutions. When suppliers and buyers using e-commerce form relationships, both can reduce their costs. • Relationships with business partners will be vital. Companies will only invest if there are enough other enterprises investing, otherwise the technology will be of no use.

15. Online Commerce Statistics Source: Data Monitor

16. Online Commerce Statistics More Travelers Booking Online • Nearly one-third of Internet users who visit travel-related Web sites have made online reservations at those sites, according to a study by NPD Online Research. • BUT. . . • A majority of Internet travelers still divert the confirmation of their travel reservations to traditional travel agents.

17. Online Commerce Statistics Source: NPD Online Research

18. Online Marketing Cots

19. Online Marketing Costs • As software tools become powerful and more available, simple web tasks are easy and cheap to perform • BUT. . . • Increasing customer expectations lead to increasing costs • AND. . . • The cost of web design talent is also increasing

20. Online Marketing Costs A Host For Your Site • A web host has its own collection of servers, services, support staff and infrastructure for your company to use on a subscription basis. • For a set up fee of $50-$100 and monthly charge of $20+, you receive your own domain name (www.mycompany.com) and your own IP address (123.456.78.90).

21. Online Marketing Costs A Host For Your Site Hosting services include: • File storage • Data transfer • Tech support • POP mailboxes • Access to CGI and Java scripts • Microsoft FrontPage extensions • E-commerce tools such as shopping cart software and secure credit card transfers • Support for multimedia add-ons

22. Online Marketing Costs A Host For Your Site Benefits of Web Hosting • Reliability for mission-critical Web activities • Faster, better Web access • Reduced costs • Added functionality • Extensive tech support and assistance • Domain-name identity

23. Online Marketing Costs Development Costs Are On the Rise Source: NetMarketing

24. Distribution of Costs Online Marketing Costs • The development of a serious e-commerce site costs an average of $1 million according to The Gartner Group. • Labor is the most important cost driver, and time to market can be considerable.

25. Internet Marketing Plan Overview • An Internet marketing plan • Is a specific implementation of the opportunities, tradeoffs, and strategies presented in the text • Outlines a set of goals • Two options: • Embedded plans include web-related decisions and impacts and are a part of a general marketing plan • Best for long-term analysis or when online activities are part of an integrated marketing approach • Stand-alone plans analyze and discuss Net activities separately from the full range of marketing department activities • Best for analyzing specific campaigns, Web enhancements or “Dot coms”

26. Traffic Building • Traffic is an asset • Traffic is getting more expensive and difficult to generate as online competition increases • Retaining traffic is very valuable • Stickiness, duration of visits & repeat visits are all important • Traffic building strategies should reinforce basic branding positions • Traffic building uses a wide variety of tools that should be synchronized

27. Traffic Building Traffic-Driving Tools • Banners are popular but effectiveness is questionable • Big winners: • Affiliate programs • E-mail • PR • The winners all take advantage of network effects (Metcalfe’s Law)

28. Traffic Building Advertising Media Selection • Brand building works best on TV and radio • The total amount spent promoting sites is growing and shifting toward off-line advertising and e-mail • More mainstream Net use means more mainstream promotion methods can be used • E-mail is showing higher conversion rates than online banners • Bandwidth still prevents “TV-like” ads online

29. Traffic Building Top Sites • Looking at the most popular online sites shed light on the range of traffic-driving results • The top sites are portals, but there are some unusual top-ranked sites that aren’t general purpose Web locations • Take a look at • Media Metrix’s Top Sites • Nielsen’s Top Sites

30. Full Banner 468x60 pixels Full Banner with Vertical Navigation Bar 392x72 pixels Half Banner 234x60 pixels Traffic Building Nuts and Bolts: Banner Formats The Internet Advertising Bureau/CASIE helps standardize the main banner templates

31. Button 1 120x90 pixels Square Button 125x125 pixels Half Banner 234x60 pixels Button 2 120x60 pixels Micro Button 88x31 pixels Traffic Building Nuts and Bolts: Banner Formats The Internet Advertising Bureau/CASIE helps standardize the main banner templates

32. Traffic Building Search Engines • Search engines provide free traffic without the need for ads, alliances, and sponsorships • Yet they’re a source of frustration and mystery • How do they work? • Is it really possible to buy your way up the list? • What makes them tick? • Resources that can help: • Search Engine Watch • Northern Webs tutorial

33. Net Marketing Tutorials Provide Hands On Experience • Check out the tutorials at http://www.swcollege.com/marketing/hanson/hanson.html