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Advertising Strategies in E-Commerce: Insights from Spring 2003

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This summary explores key topics from the E-Commerce Advertising module of Spring 2003. Key subjects include profiling techniques, the operation of advertising networks, and effective media comparisons. We delve into improving advertising results with rich media and analyze the challenges posed by cookies and user tracking. The course examines various media effectiveness, including CPM and click-through rates, while tackling the issues of ad blocking and diminishing returns in online advertising. Join us for a comprehensive look at revitalizing e-commerce strategies.

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Advertising Strategies in E-Commerce: Insights from Spring 2003

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Presentation Transcript

  1. MD253 - E-Commerce Module 6: Advertising & E-Commerce Spring 2003

  2. Topics Covered • Profiling - how does it work? • Advertising Networks • Comparing Media Models • Improving Results • Rich Media & Other Examples • Problems & Challenges

  3. Cookies • stored in a text file on your hard drive • usage • track users (unique ID) • save passwords / prefs. • temporary storage (shopping basket) • each cookie can only be accessed by the domain that placed it (ads have own domain) • may be disabled (prefs) • a cookie  single user

  4. Targeting Targeting Options • site categorization • visitor frequency • geography • domain name • service provider • SIC codes • company size (emp, $) • browser type • operating system • click stream

  5. Comparing Media • Effectiveness • Internet banner ad click through (‘98 2.11%; ‘99 1%; ‘02 .3%) • Direct mail response = 1-2% • Print ads response = .5-.75% • CPM (cost per 1000 impressions) • Niche magazines - $75-150 • Consumer magazines - $30-40 • Web sites: (‘98 $20-30; ‘99 $17; ‘02 $2-$34) • Network TV $6-15 • National radio: $4-$8 sources: Morgan Stanley, Inter@ctive eCompany Now

  6. Media Buy Models • CPM • cost per thousand impressions • Click-Thru (Cost Per Click) • advertisers pay only when users click an ad • Affiliate (Cost Per Sale / Lead) • advertisers pay per sale or lead/inquiry • Exclusives & Sponsorships • Barter • trading space with another site

  7. Internet Ad Response Rates • Improving click-through rates • audio (+300%) • placement (lower rt. +228%; 1/3 down +77%) • interstitials (+44%) • animation (+25%) • cryptic messages (+18%) • posing a question (+16%) • calls to action (+15%) e.g. “see us now” • matching/targeting (+400-600% or more) sources: Grey Interactive, DoubleClick, webreference.com, Internet Profiles, AudioNet, BusinessWeek

  8. Challenges for Net Advertising • Excess Inventory • roughly 80% unsold, punished for efficiency, caching • Decreasing Effectiveness • Click- throughs plummeting • “Deboning” • ad blocking, third-party cookie blocking • The Agency’s Goal / Result Conflict

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