Marketing on the Web – Part 2

1. Marketing on the Web – Part 2 MGMT 230 WEEK 9

2. The internet marketing toolbox

3. Promotional tools we will look at • Search engine advertising (pay-per-click) • Web display advertising • eMail marketing

4. Search engine advertising

5. Search engine marketing • OBJECTIVE IS TO BE IN THE TOP FEW SEARCH RESULTS • 2 major methods within search engine marketing • Search engine optimization (SEO) - built into the design of web pages (organic positioning) – we looked at this in Week 5 • Search engine advertising and paid placement

6. Paid listings Organic listings

7. Both types of search engine marketing depend on keywords / key phrases • Keywords are the search terms people type into search engines • In order for the page to appear in the organic search engine results these terms must appear in the page itself. We optimize for this via search engine optimization – in search engine advertising the keywords / key phrases are the terms that “trigger” the advertising when someone types them into the search box (the terms do not have to appear on the page itself, although the page must be relevant to the keyword or Google will regard it as deceptive advertising) • The concept of the “landing page”

8. Search engine advertising • Search engines allow marketers to buy specific key word positions - ie. buy their way to the top • Less consumer resistance that other forms of advertising (but remember that CTR still quite low) • Print directory versus search advertising for SME? • Effectiveness can be directly measured • Speed of execution and “tweaking” of advertising copy • Speed of consumer response • Usually more cost-effective • Continuing strong growth in terms of advertising dollars spent (IAB Internet Advertising Revenue Report June 2013)

9. Internet advertising formats (IAB report October 2013)

10. Search engine advertising • Web site design has no impact on position • Position is purchased via a bid system as part of an advertising campaign - guarantees instant visibility • Pay for performance model – cost on a per-click basis (no clicks = free advertising) • You have control over: • Position in search results • Keyword choice • Ad listing copy • Landing page • Targeting • Search Engine advertising objective • purchase the keywords at the lowest cost • Remember with search advertising, a firm can use as many keywords as it can afford

11. Paid search versus SEO Paid search SEO Results are gradual – can take months But the results can persist – maintaining position over time Searchers find it more acceptable than advertising Can be complex and may require external expertise One process – many results (tends to bring results across many search engines, not just one) • Results can be seen immediately through increased traffic. • But : no spending = no results • Greater control over which keywords are most associated with their company, brands, products or services. • Additional metrics are available, which means more detailed Web analytics that yield sophisticated knowledge from the data. http://www.iab.net/insights_research/947883/1675/708987 DO BOTH!

12. Buying keywords: how search engine advertising works • Sponsored links - Contextual advertisements - Google Adwords in action and information about Adwords • Keyword bid advertising usually works on a cost per click (CPC) basis • Advertisers pay only when consumers click on their link. • In simple terms, the company bidding higher on the keyword is ranked higher in keyword search results. • Google uses a combination of the bid price or cost per click (CPC) and the ad relevancy or click-through rate (CTR) • CPC x CTR = Google AdRankUnderstanding Ad Rank • Geo-targeting(language and location) • Setting a daily budget

13. Not just search results pages • PPC advertisements purchased from search engines also appear across their advertising networks • These ads are triggered in a different way • Google Adsenseis for publishers

14. One of the problems with PPC advertising? Click fraud • Two main types of click fraud: • Search engine click fraud: artificially raising a competitor’s marketing costs or exhausting their budget to remove them from their position in the listings (usually on very high cost or competitive key terms) • Publisher click fraud: artificially raising a publisher’s income from AdSense • Estimated 10% to 15% of ad clicks are fake, representing roughly $1 billion in annual billings (Business Week, 2006). • Search firms have put tools in place to detect and prevent click fraud (but have still been sued by advertisers) • Where are we now with click fraud? Stats for 2012 • Mobile clicks in error are now an increasing problem

15. Interactive display advertising on the web

16. Internet advertising formats (IAB report October 2013)

17. Web site advertising formats • Began as static banners in the mid 1990s, added animation, then moved to the use of “rich media” where people can interact with the advertising • Interactive formats, including: • Banners • Buttons • Skyscrapers • Pop-ups, pop-unders, interstitials • Pre-rolls (video) • Video ads • For examples of web advertising formats, go to • DoubleClick Media Gallery

18. Paying for, and measuring usage Online media have varied payment schemes – unlike traditional media which is usually priced on a pay for placement basis (based on ratings) Ad Clicks • Aggregate number of user clicks on a banner ad • Number of times a banner ad is downloaded to a user’s browser and presumably looked at Ad Views (Impressions) Click-Through • Percentage of ad views that are clicked upon; also “Click Through Rate (CTR)” • Formula used to calculate what an advertiser will pay to an Internet publisher based on number of click-throughs a banner generates CPC(Cost-per-Click) • Cost per thousand impressions of a banner ad; a publisher that charges $10,000 per banner and guarantees 500,000 impressions has a CPM of $20 ($10,000 divided by 500) CPM • Going beyond click-through rates: • Clickstream data gives you the whole picture of a consumers movements before, during and after viewing an advert and means that marketers can use behaviouraltargeting and retargeting Strauss et al. eMarketing 2006

19. How successful is web display advertising? • Banner ad click-through rates are very low • Approx 1 in every 1000 impressions results in a click on a banner ad • Banner “blindness” • Web advertising effectiveness • Interruption marketing versus Permission marketing • What people hate about web advertising (Jacob Nielsen) • Text advertisements on search engines seem to be more successful – contextual and sometimes useful • Marketers are attempting to make advertising more relevant and personal – with the extensive use of cookies for targeting and by using behavioural targeting

20. Privacy, cookies, and third-party advertising networks • Cookies are a boon to marketers, and they also offer big advantages to web site users • However – they are also the cause of many privacy concerns, particularly in the case of advertising networks such as Doubleclick • This tracking is achieved at the browser level by the use of cookies Chaffey et al (2006) Internet Marketing

21. DoubleClick and Travelocity – a simple example of the functioning of an ad network From: E-Marketing. Strauss, El-Ansary, Frost. Prentice Hall. 2003. Pg. 103. Two cookies are placed on the user’s computer

22. So what’s the problem for marketers? • Third Party Ad-Serving Basics (from Google) • Many users are now regularly deleting or blocking cookies (capability built into browsers now) • This interferes with many of the marketing benefits • Creeping out the customers by “going too far” • Increasingly behaviour, rather than just demographics is targeted • Re-targeted ads that follow users around Chaffey et al (2006) Internet Marketing

24. EMAIL MARKETING

25. E-mail - direct marketing • Marketing-related e-mail is a very high proportion of a typical Internet user’s in-box • Advantages • Cheap (no printing or delivery costs) • Direct (include hyperlink to website for click-through) • Fast to execute • Fast response rate (or not at all) • Disadvantages • Bad reputation because of spam – delivery problems • Very difficult to get people to open emails • Email addresses keep changing

26. SPAM • Definition of SPAM • Unsolicited commercial email sent in bulk(UCE) • Marketers have abused and misused email • The Spamhaus Project estimates that 90% of incoming email traffic is spam in North America, Europe or Australasia. By June 2008 96.5% of e-mail received by businesses was spam.

27. Why does SPAM continue? • Cost to sender is minimal • Very low response rate required to make SPAM profitable. Spammers are turning a profit despite only getting one response for every 12.5m e-mails they send. • Nature of the worldwide global network enables SPAM • Spamhaus project (spamhaus.org) • Legal penalties difficult to enforce • Canada has recently (2010) passed Anti-Spam legislation • US law – the “Can Spam” Act – came into force on Jan 1, 2004 • Requirements for commercial emailers • Recent large fine for Facebook Spam

28. eMail marketing challenges • Even with permission-based opt-in, there are considerable challenges in • Getting your email to the recipient (spam filters etc) • Getting them to open it when they get it

29. Some tactics to help get your email delivered and opened • Use double opt-in subscription process • No pre-checked boxes • Have a visible “update email preferences” link • A recognized, expected, consistent sender name • Make it expected • Select appropriate send time • Be aware of how content (spam) filtering works (test your messages) • Based on How Nongeeks Can Increase eMail Delivery