Web Site Advertising and Retailing

1. Web Site Advertising and Retailing • Discuss the advantages of net advertising • Discuss the multifaceted approaches of advertising • Discuss net advertising dos and don’ts • Discuss the use of log files, DoubleClick and tags as methods for gathering advertising statistics • Discuss the use of web banners • Discuss the use of the web for retailing • Discuss changes in internet-based retailing approaches • Discuss affiliation programs

2. Security Objectives • Discuss the roles encryption and certificates play • Contrast symmetric and asymmetric encryption • Discuss key activities in certification management • Define: Cryptography, digital ID, key, digital signature, hash coding, hash algorithm, message digest, private key, public key, CERT • Discuss protecting intranets with firewalls and corporate servers against being attacked through the Internet • Discuss the role Secure Socket Layer, Secure HTTP, and Secure Electronic Transaction protocols play in protecting e-commerce

3. The Net as an Advertising Resource • It’s fast • Print ads: 4-6 weeks to create, 2-6 weeks to publication • Web ads: matter of days • Changes can be made quickly • Inexpensive • Direct mail: $.50-$.75/piece vs. email:$.10/piece (no limit on length) • Allows pictures and testimonials • Multifaceted

4. Nature of Communication: Two Methods • Personal contact model (one-to-one) • Also called prospecting • Firm’s employees individually search for, qualify, and contact potential customers • Mass media model (many-to-one) • Firm delivers message and broadcasts it through billboards, newspaper, television, etc. • Addressable media is sometimes distinguished from mass media • Addressable media is directed to known addresses, and includes direct mail, telephone calls, and e-mail

5. Multifaceted Advertising Approaches • Usenet new groups • Free email services (17.8% WSJ 3/21/99): FreeMark Communications,Juno Online Services • Games: BayBank, www.riddler.com • Interactive screen savers(freeloader) • Framing: http://totalnews.com (formerly) • Advertorial • Ad Robot (push technology) • “persistence:” ICQ

6. Web Terms Used in Advertising • CPM is a dollar amount for each thousand people in the estimated audience • A visit occurs when a visitor requests a page from a web • Further page loads counted as part of the visit for a time period chosen by the site administrator • Trial visit -First time a visitor loads a web site; A subsequent visit is a repeat visit • Page view • Each time a visitor loads a page- if the page has an ad, this is called an ad view

7. Web Terms Used in Advertising • Impression -- each time a banner ad loads • If a visitor clicks the ad to open it, it is called a click or click-through • Advertisers use market segmentation • Divides the pool of potential customers into common demographic characteristics, such as age, gender, income level, etc. called segments • Targets specific messages to these groups • Micromarketing- targeting very small market segments

8. What about Web Banners? • Unique to Net • Usually limited text with hot link • Different sizes sell for different prices • Site may rotate banner (e.g., Yahoo and C-Net) • Lots of competition • Hard to assess impact

9. Web Banner Statistics WSJ 2/24/99 • Average price per 1000 online impressions dropped 5.6% to $35.12 from $37.21 a year earlier • Web surfers click on .5% of banners, down 1% from last year and 2.5% two years ago • Lycos business, career, or computer sections: $35/1000 • Lycos mortgage-rate page: $150/1000

10. Running Time cyberatlas 8/28/2000 • Over 7,000 new banner ads appear each week, but they only run an average of less than three weeks (based on year study of top 500 websites) • Staying power depends on industry • automotive banners: 7.8 weeks (avg) • hardware/electronics banners: 4.1 weeks (avg) • Most ad campaigns garner less than 44,000 impressions

11. Choosing the Best Place to Advertise • Popular sites (C&S): • AOL • Yahoo • Microsoft’s Network • Lycos Inc • Post in all categories that fit and on industry-appropriate forums • Give robots your URL • www.submit-it.com • Put URL at bottom of your e-mail

12. Definition of Branding • Elements of branding • Differentiation • Relevance • Degree the product offers utility to the customer • Perceived value

13. Creating and Maintaining Brands on the Web • What is the role of brand names? • Top 100 e-commerce sites spent an average of $8 million to create and build their online brands in 1998 • In 1999, dot-coms spent $3.1 billion in traditional advertising including TV, radio and print (WSJ 4/3/2000) • Dot-com advertising spending 2% of total $87.5 of US advertising spending (WSJ 4/3/2000)

14. Emotional vs. Rational Branding • Emotional appeals work well in mass media because ad targets are passive • Do not work well on Web, however, because Web is active medium • Rational branding • Gives people valuable service in exchange for viewing ads • Examples include free e-mail and secure shopping services • Navigators can play a role here

15. Advertising Considerations • Mix traditional with net advertising • place e-mail address and URL on advertising, catalogs, letterhead, business cards (resumes) • pick a memorable URL • Play media off one another- Victoria’s Secret • Use promotions: • First on-line purchase • Coupons • Identify target markets

16. Advertising Do’s • View the competition • get ideas for your site • check out other’s HTML • Spend time as a user • Stay abreast of trends • Include complementary links (“Welcome to my site, please leave!”) • Check your links periodically • Post press releases to mailing lists • Relationship Marketing

17. Relationship Marketing (1:1 Marketing) • Market via more personal touch • Get personal testimonials of people in the trenches who have used product • Personalized web pages • Contribute to discussion groups • Company exec may answer e-mail • Focus on maintaining and enhancing relationships • costs 5 times as much to acquire new customer than to retain current one • Use in addition to other advertising

18. Net agents • “intelligent agents”, “software agents” • Software, often applying artificial intelligence, to support buyers • locating information or products • receiving personalized information on the basis of a predetermined profile • return comparative information based on user • Can make decisions or initiate requests • “Cholesterol” of Internet

19. Getting Statistics about Advertising Impact • DoubleClick, MatchLogic, RealMedia, Inc. • buy ad space on Web and keep their own tally of ads on a page • some customers ban these advertisers from using any data from their web site • P&G, GM and MatchLogic • IBM bars websites where it advertises (>800 web sites) from collect its ad-campaign data • HTTPD logs • Tags • Cookies

20. DoubleClick, Inc • Sells advertising space on network of 1400 websites • Information to better customize ads • Predicts what you will buy on Web based on what you have purchased online and offline • Pay $1 billion to buy Abacus Direct • may need to revise privacy statement • Plan requires help of online retailer

21. Getting Statistics about Advertising Impact • Use HTTPD log files • Log counts every access • includes access to each image • may be hard to determine unique independent entries • Logs contain domain names, not user names, of visitors • Logs also include time, date and accessed URL • Get logs from ISP • Logs themselves may be large

22. Use of Log Files • To count visitors • count users accessing home page • but, users may skip home page by accessing inside page directly • To improve pages • access patterns by time (may help determine best time for updates) • pages being accessed • audio, movies or popup images that may be omitted • Software available (Refer-it’s Analog)

23. New Standard to Count Visits: Tags • Fast Steering Committee • Programmer adds simple software codes to Web ad • no one owns codes • can be freely inserted • Advertisers don’t trust numbers • Cache ads aren’t counted

24. Meeting Key Customer Needs • Efficient information access • intelligent agents • interactive personalized “smart catalogs” • Seller-driven/ Web-centric Buyer-driven/ Customer-centric • Casting technologies

25. Reasons for Going Online (PcData 2/23/99) • 63% of respondents listed convenience as the most important reason why they shopped on-line. • 25 % mentioned pricing For all the fuss about the • Only 10% of the respondents listed selection as the primary motivator to go on line.

26. Internet Retailing (e-tailing) (WSJ 4/5/2000) • Last year doubled to $15 billion • Expected to rise 53% to 23 billion in 2000 • Costs rising faster than sales • advertising • warehouses • online assistance (Land’s End, eToys) • Building a high quality e-tailing website costs $30 million • Building a brand costs$100 million

27. Internet Retail Establishments • Brochure • tells company’s story in text and pictures • Company mailbox • automated mail response to e-mail requests • Specialty store • storefronts with product catalogs • http://www.virtualvin.com/;http://www.fridgedoor.com/ • Cybermall • Subscription

28. Storefronts and Cityscapes • There are “no bad parts of town” • Don’t pay premium for name alone. • Reasonably priced storefronts offer some advantages. • Belong to multiple communities • put host page in one location • place links to your pages in other malls • Push products (insurance)may do better face-to-face

29. Cybermalls • Retail complex that houses dozens of specialty stores • http://malls.com/awesome • $25 mo/ 5 pages - $850 mo/maintained • CUC NetMarket: www.netmarket.com • ZD Net’s Computershopper: www.zdnet.com/computershopper • Malls with traffic and big business tenants (i.e., IBM) cost more

30. Subscription/Fee-Based Marketing • Marketing-subscription mixed model • Revenue derived from fee and it also accepts some level of advertising • Used by newspapers and magazines • Successful web models include New York Times, the Wall Street Journal, ESPN, Reuters, and Northern Light • Fee for transaction Model • Online travel agents and car-buying services can remove an intermediary from a value chain

31. Affiliation Programs • Description of AMAZON.COM’s affiliate program (started in 1996): We pay 15% on individually linked books and 5% on all other items. You build a custom bookstore, music store, and video store on your site or simply put up a link to Amazon.com and get paid on all sales. We do the customer service, shipping and tracking of sales. With our program there are no hidden sales quotas or performance tiers. Put up a link and start earning today. • www.referit.com

32. Security on the Internet • CERT • Encryption • Digital Signatures/Certificate Authorities • Protocols • Firewalls

33. Computer Emergency Response Team (CERT) • Housed at Carnegie Mellon University • Responds to security events and incidents within the U.S. government and private sector • Posts CERT alerts to inform Internet users about recent security events • Posts CERT DNS attack advisory about domain name service attacks

34. Providing Transaction Privacy • Encryption • The coding of information by using a mathematically based program and secret key to produce unintelligible characters • Steganography • Makes text invisible to the naked eye • Cryptography • Converts text to strings that appear to have no meaning • Science that studies encryption

35. Encryption • Mutation of information in any form plain text cipher text plain text • Based on algorithm and key • Key - very large string of zeros and ones: the larger the better! • Algorithm - mathematical function • 40-bit keys are considered minimal,128-bit keys provide much more secure encryption

36. Encryption Functions • Hash Coding • Calculates a number from any length string • Asymmetric (Public-key) Encryption • Encodes by using two mathematically related keys • Symmetric (Secret or Private-key) Encryption • Encodes by using one key, both sender and receiver must know

37. Cryptography • Private (Secret) key cryptography - Symmetric • shared key (both parties agree) • does not scale • nonrepudiation is impossible • Date Encryption Standard (DES);Triple DES • Public key cryptography - Asymmetric • public and private keys • digital signatures • suited for multiple users • slow • RSA

38. Nonrepudiation • verification that a particular transaction actually occurred • prevents parties from denying a transaction’s validity or its existence

39. Digital Signature • Mathematical algorithms for encrypting • A puts private key and document together • A generates unique number called digital signature (fingerprint or message digest) • Fingerprint attached to original message and further encrypted with private key • Message sent to B • B decrypts using A’s public key • Checks for modification with calculations to get matching fingerprint

40. Certificate Authority (CA) • Alternative to secure transmission • Uses trusted third party to authenticate public key • Certificate is digitally signed by CA to verify identity and credentials • Identification requirements vary by CA • Every digital certificate is unique • Digital certificate is sent along with digital message • Have expiration date

41. Certification Management • Digital certificates • issue • register • generate • manage • revoke • To insure • users authorized transaction • transaction hasn’t been tampered • digital receipt and time stamping

42. Hierarchy for CA Root central facility/Policy approval Certification Authorities/Cybernotaries Local Registration Authorities Encryption Entities Digital Signature Entities User Certificates/Digital Signatures End Entities

43. Local Registration Authorities (LRAs)

44. CA Tutorial • http://www.kpmgca.com/download.htm

45. VeriSign OEM • CA software: cross-platform, shrink-wrapped product • PKI and digital certificate solutions • Supports LRA • Query manager (SQL) • Transaction Manager (integrity of certificates) • Signing server • Middleware Framework

46. Secure Sockets Layer (SSL) Protocol • Secures many types of connections between two computers on Internet • Developed by Netscape • Had backing of AppleSoft, DEC, MasterCard International • Provides a security handshake in which the client and server computers exchange the level of security to be used, certificates, among other things

47. Secure Sockets Layer (SSL) Protocol • Provides either 40-bit or 128-bit encryption • Secures data packets at network layer • Secures connections between two computers; checks certificates • Session keys are used to create the cipher text from plain text during the session • Can secure communications in addition to HTTP (i.e., FTP) • Uses public and private key encryption

48. Secure HTTP (S-HTTP) Protocol • Extension to HTTP that provides numerous security features • Client and server authentication • Spontaneous encryption • Request/response nonrepudiation • Provides symmetric and public-key encryption, and message digests (summaries of messages as integers) • Open protocol designed to secure web transactions using special packet headers

49. Secure Electronic Transaction • Backed by MasterCard, Visa, IBM, Netscape and Microsoft • Secures credit card transactions • Uses digital certificate • consumer’s name • few digits of consumer’s credit card • name of bank that issued card • Merchant uses public key cryptography to verify consumer’s identity • Provides confidentiality of payment info • Provides merchant authentication

50. Firewalls • Control damage to your data and computer systems • Protect against spoofing • Implement access controls based on contents of the packets of data transmitted between two parties or devices on a network • Single point of control for security on network