EM ARKETING6 E C HAPTER 12 EMarketing Communication

E-M ARKETING/6 E C HAPTER 12 E-Marketing Communication Tools

C HAPTER 12 O BJECTIVES 13 -2 After reading Chapter 12, you will be able to: Define integrated marketing communication (IMC) and explain the importance of hierarchy of effects models. Discuss how marketers use the internet for advertising, marketing public relations, sales promotions, direct marketing, and personal selling. Identify several emerging IMC tools. Describe the most effective online IMC tactics. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

W ILL IT B LEND? 13 -3 Blendtec supplies commercial blenders to Starbucks and others. Blendtec produced a video in which the CEO blended unusual products such as a garden rake, a golf club, and light bulbs. The video, uploaded to You. Tube, received 3. 9 million views in an 8 -month period. The Will It Blend? Campaign illustrates the potential value of connecting with consumers online versus traditional advertising. Do you think that this type of campaign can build awareness for new products? Can you think of other examples? © 2009 Pearson Education, Inc. Publishing as Prentice Hall

I NTEGRATED M ARKETING C OMMUNICATION (IMC) 13 -4 IMC is a cross-functional process for planning, executing, and monitoring brand communications. The goal is to profitably acquire, retain, and grow customers. IMC strategy requires a thorough understanding of target markets, the brand, its competition, and other factors. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

M ARKETING C OMMUNICATION T OOLS 13 -5 Mar. Com consists of both planned and unplanned messages between firms and customers and among customers. E-marketers can enhance Mar. Com by using innovative technologies, such as text and multimedia messages, databases, blogs, digital receiving devices, etc. Internet Mar. Com may include advertising, sales promotion, marketing public relations (MPR), direct marketing, and personal selling. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

IMC G OALS AND S TRATEGIES 13 -6 The AIDA and “think, feel, do” (hierarchy of effects) models help guide selection of online and offline Mar. Com tools. The models recognize that consumers first become aware of a product before they develop feelings and purchase it. Application depends on whether the product purchasing decision is high- or low- involvement. The models can help marketers select appropriate communication objectives and strategies, such as: Build brand equity – tv still the best Elicit a direct response – the internet most effective © 2009 Pearson Education, Inc. Publishing as Prentice Hall

E-M ARKETING T ACTICSFOR H IERARCHYOF E FFECTS G OALS 13 -7 Ex. 13. 2 © 2009 Pearson Education, Inc. Publishing as Prentice Hall

I NTERNET A DVERTISING 13 -8 Advertising is nonpersonal, usually persuasive, communication about products or ideas paid for by an identified sponsor. All paid space on a Web site or in an email is considered advertising. Online advertising reached $21. 1 billion in 2007. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

U. S. I NTERNET A DVERTISING E XPENDITURES 1996 -2007 13 -9 Ex. 13. 4 © 2009 Pearson Education, Inc. Publishing as Prentice Hall

T RENDS IN I NTERNET A DVERTISING 12 -10 Online advertising reached $23. 5 billion in 2008, $22. 7 billion in 2009. In 2009, 14. 3% of ad dollars were spent online. Most spending came from: Retail Telecom Financial services Automotive Computing Use of user-generated advertising © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

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I think the only surprise here is that it took so long for this to happen. Consumers have been spending far more time online gathering news and information about the world and doing research for products and retail outlets for years. It’s about time the advertising dollars have finally shifted to reflect time spent by consumers. There are several reasons that this has taken so long. The first has to be that online advertising is a moving target. What worked yesterday may still work today but be trumped by the newest thing. Search engine marketing maybe the best example as early on search engines didn’t even exist and now a retailer can use the Google ad network to buy a “local” ad on the New York Times site that will only be seen by consumers in his market. Buying a local ad on a national site is still beyond the comprehension of most local retailers. Another reason the spending for online took so long to pass print spending is that so much can be done on the Internet for so little money. The local ad on a national site program from Google costs a fraction of what a 3 col. x 10″ ad costs in a local paper. A mere fraction. Social sites are effective marketing tools for local advertisers and there is no publication costs at reason tall. The third his has taken so long relates to the second, it’s cheap. Because it’s so inexpensive it’s hard for traditional agencies both large and small to make money on such low cost efforts. So we don’t have anyone, especially in local markets representing the value of the Internet to local retailers. The Internet is a self-serve business model and local retailers just don’t have the time to keep up with all that is happening. The lesson for national brand managers in charge of local advertising is to provide local retailers with the insights, assets and capability to promote themselves online. Thank goodness there are marketing platforms that can help with print and the Internet making life much easier for retailers and deliver better ROIs for brand managers. © 12

12 -13 U. S. INTERNET ADVERTISING EXPENDITURES © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

© 14 I NTERNET A DVERTISINGVS B ROADCASTAND C ABLE TV

I NTERNET A DVERTISING F ORMATS 13 -15 Keyword search is the fastest growing and most important technique. Display ads are the second largest. Display ads include traditional banners and many additional sizes. Formats include rectangles, pop-ups, banners, buttons, and skyscraper display ads. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

I NTERNET A D R EVENUE BY MAJOR F ORMAT 2004 -2008 Tremendous growth of search ads

12 -17 A DVERTISING D OLLARS BY F ORMAT © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

R ICH M EDIA A DS 13 -18 Rich media ads are interactive, at least offering clickthrough. Rich media ads often use Flash animation to attract attention. Many formats can be rich media: Banner ads Interstitial ads Floating ads Expanding ads Pearson Education, Inc. Publishing as Prentice Hall © 2009 Polite ads

T RANSITIONAND F LOATER A DS 13 -19 Transition ads appear while other content is loading. Interstitials are Java-based ads that appear while content is loading. Represent 2% of all Web advertising expenditures. Superstitials are video-like ads that appear when a user moves their mouse. Shoshkeles are 5 -8 second Flash animations that run through a Web page. Capture user attention and can be entertaining. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

C ONTEXTUAL A DS 12 -20 Ad servers serve ads into web sites as appropriate users view pages. Facebook also offers specific ad targeting based on user profiles. This process is also the basis for Google’s Ad. Sense program. Contextual ads (keyword search) are the largest category of online advertising. © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

E-M AIL A DVERTISING 13 -21 E-mail advertising is the least expensive type of online advertising. Advertisers can purchase space in another firm’s e-mail content such as newsletters. Note that email messages sent from a firm directly to internet users are direct marketing, not advertising. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

S PONSORSHIPS 13 -22 Sponsorships integrate editorial content and advertising. Many firms want to build partnerships that provide useful content. Sponsorships allow great interactivity and help firms build synergistic partnerships that provide useful content. Sponsor disclosure is an important issue for e-marketers. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

M OBILE A DVERTISING 12 -23 Mobile Internet usage grew about 25% annually from 2007 -2010. Techniques for mobile devices include: Display ads Messaging Location-based ads Paid search Video Advertising on mobile devices is likely to increase. © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

12 -24 M OBILE A DVERTISING V ENUES BY G OAL © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

M OBILE A DVERTISING I SSUES 12 -25 Small bandwith – ads can cause page downloads to slow significantlt Small screen – limits the ad size Techniques of tracking ad effectiveness not fully developed Phone users made to pay for the time it takes the ada to download © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

M ARKETING P UBLIC R ELATIONS (MPR) 13 -26 Public relations includes activities that influence public opinion and create goodwill. MPR includes brand-related activities, such as online events, and nonpaid, third-party media coverage. A Web site can serve as an electronic brochure. Online events can draw traffic to a site. Users can download video podcasts on many types of receiving appliances. Viral marketing and other techniques can help companies create buzz online. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

S ALES P ROMOTION O FFERS 13 -27 Sales promotions are short-term incentives that facilitate the movement of products to the end user. Coupons Rebates Samples – free versions; free trys Contests, sweepstakes, and game 2010 usage estimates are 6% - 75% of internet users Sales promotions do not help build customer relationship for the long term. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

D IRECT M ARKETING 13 -28 Direct marketing is direct communication designed to generate a response. Online techniques include: Outgoing e-mail. Targeted online ads that solicit a direct response. Text messages or Short message services (SMS). Multimedia message services (MMS) and instant messages. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

E-M AIL 13 -29 E-mail, used by 89% of internet users, is the internet’s killer application. 75% of marketers invest in e-mail campaigns. E-mail has advantages over postal direct mail marketing. No postage or printing costs. Immediacy and convenience. E-mails can be automatically individualized. E-mail also has disadvantages. Consumer distaste for unsolicited e-mail or spam. Effective lists are hard to obtain and maintain. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

12 -30 M ETRICS FOR E LECTRONIC AND P OSTAL M AIL © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

P ERMISSION M ARKETING: O PT-IN, O PT-OUT 13 -31 When consumers opt-in, they are giving permission to receive commercial e-mail. Opt-in techniques are part of a bigger marketing strategy called permission marketing, “turning strangers into customers. ” Marketers should obtain lists that are guaranteed to be 100% opt-in. Lists with opt-in members get much higher response than other lists. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

V IRAL M ARKETING 13 -32 Viral marketing is the online equivalent of word of mouth marketing. Hotmail is a viral marketing success story. Movies such as Blair Witch Project and American Psycho were promoted using viral marketing techniques. Burger King’s Subservient Chicken campaign drew 14 million visitors in the first year. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

H OTMAIL – VIRAL 12 -33 MARKETINGPIONEER It is generally recognized that Hotmail was the first successful viral marketer. Started in 1996 by two visionaries of Internet marketing, the plan was simply to provide free e-mail addresses to anyone who wanted them. Whenever someone signed up for an account and began sending e-mails there was a message at the bottom of the e-mail inviting the recipient to get a free e -mail address. The more people who used the service the more Hotmail received free advertising and the more people signed up to use the service. It was an overnight phenomenon © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

T EXT M ESSAGING 13 -34 Short message services (SMS) are up to 160 characters of text sent over the internet with a cell phone or smartphone. Instant messages are sent among users who are online at the same time. Marketers can build relationships by sending permission-based information where consumers want to receive it. Flight delays Music and movie schedules SMS use continues to grow in all nations © 2009 Pearson Education, Inc. Publishing as Prentice Hall

L OCATION-BASED M ARKETING 12 -35 Location-based marketing includes promotional offers pushed to mobile devices and based on the user’s physical location. Google is on the leading edge with its local search. © 2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL

D IRECT M ARKETING M ETRICS 13 -36 Response rate and ROI are the most appropriate metrics for direct marketing campaigns. E-mail receives a widely varied and generally low click-through rate but the highest ROI of any direct media. In a study of SMS campaigns, 94% of messages were read by recipients and 23% showed or forwarded messages to a friend. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

S PAM 13 -37 Spam is unsolicited e-mail. Spammers routinely harvest e-mail addresses from newsgroup postings and then spam the members. Many moderated groups filter spam and most email programs can filter spam. The CAN-SPAM Act appears to have little ability to stop spam. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

P ERSONAL S ELLING 13 -38 Personal selling involves real time conversation between a salesperson and customer, face-to-face, by telephone, or by computer. Not much being used currently. Some companies provide real time sales assistance online. Land’s End has a live chat feature. The internet can also generate leads for salespeople. © 2009 Pearson Education, Inc. Publishing as Prentice Hall

IMC M ETRICS 13 -39 Display ads are ineffective. Only 0. 2% of all users click on them. Online ads that were bigger or contained rich media delivered greater impact. There is increasing evidence that online and offline advertising work well together © 2009 Pearson Education, Inc. Publishing as Prentice Hall

B EST AND W ORST P ERFORMING IMC T ACTICS 13 -40 Ex. 13. 23 © 2009 Pearson Education, Inc. Publishing as Prentice Hall