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Online marketing

Online marketing. Dr Tim King 6 th May 2010. Free Business Models. For the fun of it Donation funded (wikipedia) Land grab to gain early users Funded by adverts That you can pay to turn off (Spotify) That you can pay for a premium service (downloads)

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Online marketing

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  1. Online marketing Dr Tim King 6th May 2010

  2. Free Business Models • For the fun of it • Donation funded (wikipedia) • Land grab to gain early users • Funded by adverts • That you can pay to turn off (Spotify) • That you can pay for a premium service (downloads) • Funded by selling information about users • Funded by sellers (eBay) • Part of a wider service (BBC, cars) • Free software, pay if you like it (guiltware) • Free software, pay for maintenance (Linux, AVG)

  3. Paid-for Business Models • Try before you buy • Poor quality short clips • Free trial – but licence key cracks are common • Pay per use • Software as a service • Genealogy sites • Betting • Licence / subscription • Digital Rights Management (everlasting vs annual) • Per item • Amazon, eBuyer

  4. Users add value • Network externality • The effect a user has on the value of a site to other users • A site/service is more attractive if your mates use it • MySpace / Facebook; Yahoo / Google / Bing • Google Talk / AOL / MSN • Produce content targeted at your users • You produce it (Newspapers, slate) • Let them produce it (Facebook, YouTube) • Chicken and egg problem • How to get the site started? • Twitter used two large monitors at a festival • Provide superset of competitor

  5. Personalisation (1) • Know your customer • Where do visitors come from and why • Google Analytics • Profile typical users when they visit a web site • Time and path to make purchase decision • Read ad, click ad, browse site, choose item, checkout, pay • Purchase history • Amount of research done • Profile users through loyalty cards • Nectar • They know everything you have ever bought • Use multiple landing sites

  6. Personalisation (2) • Keep in touch with your customers • Cookies • Welcome back Tim • Collect email addresses • Email newsletters • Lastminute • Loyalty discounts (Maplin)

  7. Personalisation (3) • Know your customer type • User database • Address/postcode -> socio economic indicator • Gender • Age -> Register with Data Protection Registrar • 60 “bins” 5 classes x 2 genders x 6 age groups • (kids, teens, dinky, married with kids, empty nesters, retired) • Disposable income • Disposable leisure time • Recommendation • People who bought this also bought that • Data from your own site • Amazon really can recommend music or books you might like • Data mining • People who buy this on cold winter Fridays in Slough also buy that

  8. Customer support • Identify meaning of email • Auto-respond with the answer • Classify once human response given • So next time it will auto-respond • Expose database as FAQ • So they don’t send the email at all • Always give the option of human interaction

  9. Brand awareness • Single most important piece of data • Hard to gain and easy to lose • People buy from a known name • Sense of trust • Marks and Spencer • Perceived value • Cheap reliable airline => Cheap reliable mobile • Peer pressure • Nike, Rolex, Dolce and Gabanna, Ferrari • Brands can expand • Virgin • Active, Atlantic, Books, Brides, Broadband, Cosmetics, Credit card, Drinks, Galactic(!), Games, Holidays, Limobike, Megastore, Mobile, Trains, Wines • Apple • From computers to iPods to iPhones

  10. Advertising • Google • Buy your brand name • Coke • Careers • Corporate Responsibility • The Coca-Cola company • Press Centre • Buy your supplier’s brand name • Nike • JDSports • Buy your competitors’ brand name • Ford • Adverts for Seat dealer • Buy your target • Nike (Boycott Nike), Coke (KillerCoke)

  11. Successful business models • Google • Acquiring DoubleClick gives it over 80% of web advertising • Acquiring YouTube gives it millions more viewers • Providing a simple way to advertise gets it plenty of customers • Has Microsoft Office firmly in its sights • Mobile and android and voice • PlentyOfFish • Run by a single guy from his apartment • Free dating site • In the global top 40 web sites • Runs Google AdSense adverts • Gets paid over $5m per year by Google

  12. Conclusion • Continuous evolution --- update • 28K/s -> 50M/s • Still pictures -> movies • 2D -> 3D • Newsgroups -> online communities -> Twitter • Games -> Second Life • Evolving economics • Many people make a living online • Buying and selling on ebay • Property developer in Second Life • What’s next?

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