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Marketing and the Internet

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Title: Marketing and the Internet


1
Marketing and the Internet
  • Wave of the Future - or Over-hyped Fad?

2
  • The first problem of our business is to win an
    audience, hold an audience and interest an
    audience. William Paley, Radios as a Cultural
    Force, 1934
  • Has the business of media acceptance really
    changed?

3
Commercial Beginnings of the WEB
  • Fewer than twenty years ago, the commercial use
    of the WEB was considered improper
  • Restricted to the likes of the military and
    academia
  • The big bang occurred in 1994 when the new
    Internet backbone was created allowing the
    commercial uses to become operational
  • NSF Funding and acceptable uses policy removed
  • Global marketing at the most acceptable costs
    ever!

4
Background
  • Rapid growth resembles the early diffusion of TV
    in the 1950s
  • Currently in the middle of the story - outcome
    unpredictable
  • Many cybercritics feel it is a fad partially
    playing out already

5
Business Applications
  • Effective way to communicate with other
    businesses (suppliers, distributors) via email
  • Fabulous way to reach customers
  • Interaction of video, picture, sound
  • Motivated consumers
  • Very low cost for global reach

6
Current Trends
  • Widespread belief that the Internet will emerge
    as an extremely useful tool for business planning
    and become a part of the marketing mix
  • Useful as an electronic store front, source of
    marketing research, and marketing communication
  • eBay

7
Basics
  • What is the Internet?
  • Is a network of computers reaching every country
    in the world
  • Social space for communication
  • no governing body - shaped by users

8
Background
  • Internet emerged in the 1960s
  • Developed by the Defense Department as a fail
    safe way of communicating messages in the event
    of a nuclear attack
  • Until the 1990s was used almost exclusively by
    the Defense Department and academia
  • Almost unheard of by the mainstream until the mid
    1990s

9
Internet Options
  • E-Mail
  • communication without paper or delay
  • ListServ
  • discussions of specific products
  • Usenet
  • 17,000 discussion groups
  • unobtrusive source of primary data
  • WWW
  • universal database

10
Recent Developments
  • Consumer to Consumer Commerce
  • Consumer Auctions
  • Market Monitor honesty and reliability profiles
  • Business vs. Pleasure
  • Overlapping eBay average 27 minutes per visit
  • Surfing replacing other media options

11
Dramatic Growth
  • Growth Patterns
  • computers connected to the Net (Internet
    hosts) 2.2 million to 100 million January 1994 to
    January 2006

12
How is the Internet Organized?
  • Major Internet Classifications
  • .com commercial
  • .edu educational
  • .gov government
  • .net Internet service provider
  • .org non-profit organization
  • New suffixes currently necessary to accommodate
    growth

13
Who is out there?
  • Content Providers
  • businesses, universities, governments that allow
    others to peak into their computers
  • Advertisers
  • Audience

14
The Audience
  • No one knows exact numbers
  • Conservative approximation 167 million
    worldwide (75 active)
  • s growing quickly 90 growth in last 5 years
  • Less than 4 worlds population
  • 50 of users feel it is a necessity
  • Profile
  • 37 professionals, 12 technical fields, 14
    managers, 2/3 males
  • Women would rather NOT shop on-line
  • security concern

15
Nielsen Ratings
  • Nielsen Ratings available at www.nielsen-netrating
    s.com
  • Interesting Stats
  • 35 million households online at any moment
  • 550,000 new households online every month
  • 760 new households online each hour
  • 158.3 M United States
  • 37.7 M Japan
  • 21.0 M United Kingdom
  • 14.6 M Canada
  • 8.5 M Australia
  • 1.9 M Singapore
  • Home Internet Access

16
Weekly Top 10 Banner AdsMarch 11, 2001
  • Banner Image
  • 1. Bonzi Software

  • 2. ClassMates

  • 3. Amazon

  • 4. Match.com

  • 5. JP Morgan Chase

  • .
  • 6. ClassMates

  • 7. CDNOW

  • 8. JP Morgan Chase

  • 9. Colonize

  • 10. JP Morgan Chase
  • Banners ranked by impressions

17
Lead Industry Advertisers
  • LEADING CPG ADVERTISERS  ranked by impression 
    Mar 28-Apr 3, 2005
  • PepsiCo, Inc. 157,196,000
  • IncreaseYourHealth.com 83,428,000
  • Rodan Fields 24,961,000
  • General Mills, Inc. 22,770,000
  • The Procter Gamble Company 17,983,000
  • The Coca-Cola Company 12,567,000
  • Nestle USA, Inc. 10,782,000
  • Johnson Johnson 10,580,000
  • Groupe Danone 6,927,000
  • The Estee Lauder Companies Inc 6,309,000
  • Other 90,493,000
  • Total 443,996,000

18
Top Ten Hot PropertiesMarch 11, 2001
  • Lycos
  • 9.1M page hits
  • Disney Internet
  • 6.8M page hits
  • eBay
  • 6.8M page hits
  • eUniverse Network
  • 6.1 page hits
  • About the Human Internet
  • 5.8M page hits
  • AOL/Time Warner Websites
  • 39. 4M page hits
  • Yahoo!
  • 30.7M page hits
  • MSN
  • 26.2M page hits
  • Microsoft
  • 10M page hits
  • Excite Network
  • 9.2M page hits

19
Top Ten Parent Companies Week Ending March 28,
2005 (Home)
  • United States Top 10 Parent CompaniesWeek
    ending March 28, 2005Home Panel Parent Name
    Unique
  • Audience (000)
  • Reach Time Per Person
  • Microsoft 55,711 51.48 003535
  • TimeWarner 52,356 48.38 013425
  • Yahoo! 48,509 44.82 004958
  • Google 31,802 29.38 000939
  • eBay 18,436 17.03 005127
  • US Govt 12,922 11.94 001227
  • Ask Jeeves9,943 9.19 001053
  • United Online9,894 9.14 002751
  • RealNetworks9,770 9.03 002212
  • Amazon 9,282 8.58 001009  

20
Internet Usage Stats (March 28, 2005)
  • Number of Session per week
  • Time Spent per site
  • PC Time per week
  • Page Views per week
  • Active Digital Media Universe
  • Current Digital Media Universe
  • 10
  • 000049
  • 083822
  • 23
  • 108,226,441
  • 201,566,843

21
How do Marketers Use the Internet?
  • Net as a planning tool
  • Secondary Research Source
  • gather market information/library
  • cheap, easy
  • access to government releases
  • data more current than paper publications
  • Primary Research Source
  • survey customers/prospects
  • collect customer service inquiries/product use
    ideas

22
How do Marketers Use the Internet?
  • Net as a Distribution Channel (I.e., direct
    catalog)
  • cost savings
  • push vs. pull
  • payment concerns
  • distribution of electronic products I.e.,
    software, electronic magazines, music, video clips

23
How do Marketers Use the Internet?
  • Communication Medium
  • keep in touch with the TM
  • functions similarly to TV or magazines - except
    is a two-way interactive medium

24
Communication Approaches
  • Maintain a WEB site with information about
    products and services
  • purchase advertising space on other WEB sites
  • Build an e-mail data base of consumers
  • Hold PR events on-line
  • Offer coupons, sweepstakes, SP approaches

25
Advertising and Marketing on the Net
  • Product vs. Content Advertising
  • corporate home pages
  • banner ads
  • Increasing Role of the Internet in Entertainment
    Product distribution and promotion

26
Corporate Home Pages
  • Product-oriented sites
  • request brochures
  • scheduling
  • questions/help
  • Source of Advertising and PR Information

27
Banner Advertisements
  • Paid placements on other sites that contain
    editorial material
  • Click hyperlinks you to ad sites home page
  • Example from USA Today Homepage

28
Banner Ads
  • Placement crucial to gaining exposure to the TM
  • Related and similarly profiled pages optimum
  • Top Ten
  • http//www.nielsennetratings.com/hot_off.htm

29
Other Types of CyberMarketing
  • Virtual Malls
  • gateway to a group of Internet storefronts
  • example - http// www.internet-mall.com/
  • advantages - attracts browsers to site

30
Other Types of CyberMarketing
  • Coupons
  • packaged for goods, fast-food and travel
    companies
  • charges from 3 - 15 per thousand coupons
    distributed
  • free-standing inserts 7/1000
  • Event Marketing
  • Avenue for ties to event and sports happenings
  • Superbowl and Oscars have sites
  • Sponsorships cost 100k-225k
  • logos and links
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