1 DBM presentation 88731348 890731408 WEB Business Model

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DBM presentation 薛俊平施孟秀 88731348 890731408 WEB Business Model 張子揚王者師 88731312 88731326 莊介博 88731347 2

5 Chapter Five WEB Business Models 3

competitors, readers, suppliers Partners………. . 4

Do You Yahoo? n n For 50% of US Web users: YES!!! A phenomenal Silicon Valley success story Yahoo! brand extensions provide value add for users u Games clubs chat auctions Stores Yahoo! leverages its brand ability to draw traffic to generate multiple revenue streams 5

Media Metrix, Inc. Top 50 Digital Media/Web Properties At Home & At Work Combined in the United States August 2000 Measurement Period (08/01/00 through 08/31/00) Rank Top Web & Digital Media Properties Unique Visitors (000) Total Digital Media Universe 79, 638 1 AOL Network* - Proprietary & WWW 62, 659 2 Yahoo!* 52, 012 3 Microsoft Sites* 51, 963 4 Lycos* 32, 907 5 Excite Network* 28, 167 6 Go Network* 23, 126 7 About The Human Internet* 19, 783 8 Alta. Vista Network* 17, 795 9 Time Warner Online* 15, 825 10 Amazon* 15, 688 6

Major TOPICS v. WEB benefits to firms v. Closed loop marketing 8

End of Chapter http: //www. swcollege. com/marketing/hanson. html 9 回目錄頁

WEB benefits to firms A. Improvement-based benefits Ø ( Product or Service) B. Revenue-based Business Models Provider Pays Ø User Pays (User-based revenue Models) Ø 10 回目錄頁

Improvement-based benefits Ø Enhancement Ø Ø Efficiency Ø Ø Ø Online Brand Building(線上品牌建立) Category Building(領域品牌建立) Online Quality Enhancement(品質提昇) Cost Reduction(成本節省) Low Cost Samples Effectiveness 11 回目錄頁

Revenue-Based Biz Models Provider Pays (提出者付費模式) Sponsorship n Alliances n Banner advertising n Prospect fees n Sales commissions n Customer Pays (消費者付費模式) n Product sales n Pay-per-use n Subscriptions n Bundle sales 12 回目錄頁

Provider-Based revenue Models Ø Ø Ø Content Sponsorship(內容提供) Retail Alliances Banner Advertising(橫幅廣告) Prospect Fees(點選) Sales Commissions Choosing a payment structure 13 回目錄頁

User-based revenue Models Ø Business vs. consumer sales Ø Online sales & accountability 14 回目錄頁

Closed loop marketing Ø Marketing actions and responses Ø WEB chains Ø Evaluate WEB chains 15

Marketing & Web Chain 1. Marketing actions and responses Ø Ø 2. AIDA: attention / interesting / desire / action Awareness, preference, loyalty WEB chains Ø Not aware and ad impression Ø Prospects that don’t buy online Ø Online buyers and offline buyers 16

Marketing actions & responses Ø The market’s response probability is not fixed Ø Produce the desired response by creating and offering values to the market 17

Marketing actions and responses Ø Ø Both choice and learning are important Closed loop marketing leads to rapid learning Marketers can experiment with prices, ad copy, and product features on selected samples of consumers 18

Web Chains 1). A Web chain is a click sequence Ø Can be as short as a single click Ø Can be as long as all possible choices on a Web site Decision points = event nodes ü Ending point = result node 2). Common Web chain starting points Ø Company homepage Ø Search engine or portal Ø Banner ads ü 19

WEB chains to Closed loop marketing 1. The chain extends from the marketing offer to desired marketing response 2. Each step in the chain is Increase effective & efficiency trackable 20

Evaluate WEB chains 1. Goals of the Evaluation: Ad impact or purchase? 2. WEB chain benefits and probabilities 3. Calculating values Ø Online buyers New customer: ad impact + brand impact + online profit + lifetime value = ? Ø Cost of new customer acquisition 21

Evaluating Web Chains Ø Enables marketers to evaluate a wide range of Web strategies and tactics Ø Calculate ü expected value of an impression ü expected value of a prospect ü expected value of a new customer ü expected value of a repeat buyer 22

A WEB chains of Events No No Notice rate (NNR) E 1: Views page with paid link R 1: doesn’t notice Ad=$0 benefit Click-through rate(CTR) (1 -CTR-NNR) R 2: notices Ad but doesn’t click= Ad brand impact E 2: clicks through to company Web site = prospects (1 -PCR) Offline Induced Buyer (OIB) Proposed conversion rate(PCR) E 3: views Web site but doesn’t buy (1 -OIB) R 3: offline purchase = (Ad brand+Web site brand+ offline profit) R 4: No immediate purchase= (Ad brand+ Web site brand impact) New customer (1 -RR) E 4: Visit Web site and buys Repeat Buyer Rate (RR) R 5: new customer = (Ad brand + Web site brand + online profit + future lifetime value) E 5: Loyal customer Offline buy rate (OBR) R 6: would have bought offline anyway = (Ad brand + Web site brand + Online profit – offline profit) Online only (1 -OBR) R 7: would only buy online= ( Ad brand + Web site brand + online profit ) 23

Evaluation Ø Ø Ad Impact: do consumer aware the ad? Brand impact: 3 times of ad exposure? & brand preference Action: online profit, offline profit or others? Evaluation：曝光數 (Impression)× 點選率(CTR) 10, 440, 000 *0. 5% ＝ 52, 200點選數 × 30%填問卷率＝ 15, 660 26

Example Activity B Ø Objective Ø Target consumer: Mail to reach 150, 000 target consumers Ø Scheme Ø Creativity Ø Timing concern Ø Budget concern 29

Evaluation - benefit How many people feedback? 150, 000× 6% feedback ratio ＝ 9, 000 u People not interest? 9, 000 * 50% = 4, 500 u People purchase 4, 500 * 80%=3, 600 Profit 3, 600*200 = 720, 000 u People not buy on line but take actions off line 4, 500 * 20% = 900 Profit 900 * 200 = 180, 000 u Life time value 4, 500 * 400 = 1, 800, 000 Sub total: 2, 700, 000 u n 30

Profit Analysis Ø Sales Incremental Net sales Ø Cost ü COGS ü A&P expense Ø Incremental OP ü 31 回目錄頁

Business vs. consumer sales 1). B to B online sales 2). better access to computers, faster connection speeds, a support staff that make sure the network and software functioning 32 回目錄頁

Online sales & accountability 1). Initial contract complete sale Track efforts evaluated for effectiveness and profitability Effective approaches can be expanded and unprofitable efforts spotted and eliminated. 2). reliable return on investment can be calculated: sponsorships, banner ads, prospect fees. 回目錄頁 33

WEB chains = Closed loop marketing Ø Ø Ø The chain extends from the marketing offer to desired marketing response Each step in the chain is trackable The Internet can be used to close the loop on traditional media advertising if unique identifiers are included with the ad v Dell newspaper ads contain a unique code 34 回目錄頁

Enhancement Online Brand Building v. Disney v. Amazon ve. Bay v. AOL 35 回目錄頁

Enhancement Category Building v. Intel v. Yahoo 36 回目錄頁

Enhancement Online Quality Enhancement v. NPR v. Moore’s Law 37 回目錄頁

Efficiency Cost reduction v. Cisco v. Microsoft v. Banking online service (ATM) 38 回目錄頁

Efficiency Free Trial v. Introducing many online services and software packages. 39 回目錄頁

Effectiveness Support dealers Ø Support suppliers Ø Collect information Ø v. GE v. GM v. Double Click(dart) v台塑 40 回目錄頁

Provider-Based revenue Models 1. Content Sponsorship 1). Publishing Sites--Ø Expand offerings Ø Reduce Risk 2). Sponsor --Ø Attract target customers Ø Prevent competitors 41 回目錄頁

Provider-Based revenue Models 2. Retail Alliances 1). Desirable location in the physical world ßà Prominent link on Web page 2). Two incentive shape these prominent deals between main portal sites and online retailers Ø Volume of traffic Ø Competitive exclusion 42 回目錄頁

Provider-Based revenue Models 3. Banner Advertising 1). Most visible of provider-based models 2). Inherent measurability ßà Closed Loop Marketing 43 回目錄頁

Provider-Based revenue Models 4. Prospect Fees 1). Click-through 2). Complete some action Ø Customer leads Ø Visits to a WEB sites Ø Download software 44 回目錄頁

Provider-Based revenue Models 5. Sales Commissions 1). Affiliates program Ø Ø Involve logos on Web sites Base payment on actual revenue from sales 2). Quick and low cost 45 回目錄頁

Provider-Based revenue Models 6. Choosing a payment structure 1). Multiple Revenue Model v USA Today Online 2). Bargaining power 46

Payment Mechanisms Which Company Bears the Risk? Sponsorship Fixed Payment Ø fixed payment Ø Banner Ads Impressions impressions Prospect Fees Click Through Ø Sales Commissions Purchase success of site & advertiser Risk Increases for the Web Site Being Paid 47