Marketing and the Internet

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Marketing and the Internet

• Wave of the Future - or Over-hyped Fad?

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• The first problem of our business is to win an
  audience, hold an audience and interest an
  audience. William Paley, Radios as a Cultural
  Force, 1934
• Has the business of media acceptance really
  changed?

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Commercial Beginnings of the WEB

• Fewer than twenty years ago, the commercial use
  of the WEB was considered improper
• Restricted to the likes of the military and
  academia
• The big bang occurred in 1994 when the new
  Internet backbone was created allowing the
  commercial uses to become operational
• NSF Funding and acceptable uses policy removed
• Global marketing at the most acceptable costs
  ever!

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Background

• Rapid growth resembles the early diffusion of TV
  in the 1950s
• Currently in the middle of the story - outcome
  unpredictable
• Many cybercritics feel it is a fad partially
  playing out already

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Business Applications

• Effective way to communicate with other
  businesses (suppliers, distributors) via email
• Fabulous way to reach customers
• Interaction of video, picture, sound
• Motivated consumers
• Very low cost for global reach

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Current Trends

• Widespread belief that the Internet will emerge
  as an extremely useful tool for business planning
  and become a part of the marketing mix
• Useful as an electronic store front, source of
  marketing research, and marketing communication
• eBay

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Basics

• What is the Internet?
• Is a network of computers reaching every country
  in the world
• Social space for communication
• no governing body - shaped by users

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Background

• Internet emerged in the 1960s
• Developed by the Defense Department as a fail
  safe way of communicating messages in the event
  of a nuclear attack

• Until the 1990s was used almost exclusively by
  the Defense Department and academia
• Almost unheard of by the mainstream until the mid
  1990s

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Internet Options

• E-Mail
• communication without paper or delay
• ListServ
• discussions of specific products
• Usenet
• 17,000 discussion groups
• unobtrusive source of primary data
• WWW
• universal database

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Recent Developments

• Consumer to Consumer Commerce
• Consumer Auctions
• Market Monitor honesty and reliability profiles
• Business vs. Pleasure
• Overlapping eBay average 27 minutes per visit
• Surfing replacing other media options

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Dramatic Growth

• Growth Patterns
• computers connected to the Net (Internet
  hosts) 2.2 million to 100 million January 1994 to
  January 2006

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How is the Internet Organized?

• Major Internet Classifications
• .com commercial
• .edu educational
• .gov government
• .net Internet service provider
• .org non-profit organization
• New suffixes currently necessary to accommodate
  growth

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Who is out there?

• Content Providers
• businesses, universities, governments that allow
  others to peak into their computers
• Advertisers
• Audience

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The Audience

• No one knows exact numbers
• Conservative approximation 167 million
  worldwide (75 active)
• s growing quickly 90 growth in last 5 years
• Less than 4 worlds population
• 50 of users feel it is a necessity

• Profile
• 37 professionals, 12 technical fields, 14
  managers, 2/3 males
• Women would rather NOT shop on-line
• security concern

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Nielsen Ratings

• Nielsen Ratings available at www.nielsen-netrating
  s.com
• Interesting Stats
• 35 million households online at any moment
• 550,000 new households online every month
• 760 new households online each hour
• 158.3 M United States
• 37.7 M Japan
• 21.0 M United Kingdom
• 14.6 M Canada
• 8.5 M Australia
• 1.9 M Singapore
• Home Internet Access

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Weekly Top 10 Banner AdsMarch 11, 2001

• Banner Image
• 1. Bonzi Software
• 
  
• 2. ClassMates
• 
  
• 3. Amazon
• 
  
• 4. Match.com
• 
  
• 5. JP Morgan Chase
• 
  
• .

• 6. ClassMates
• 
  7. CDNOW
  
• 
  
• 8. JP Morgan Chase
• 
  
• 9. Colonize
• 
  
• 10. JP Morgan Chase
• Banners ranked by impressions

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Lead Industry Advertisers

• LEADING CPG ADVERTISERS  ranked by impression 
  Mar 28-Apr 3, 2005
• PepsiCo, Inc. 157,196,000
• IncreaseYourHealth.com 83,428,000
• Rodan Fields 24,961,000
• General Mills, Inc. 22,770,000
• The Procter Gamble Company 17,983,000
  
• The Coca-Cola Company 12,567,000
• Nestle USA, Inc. 10,782,000
• Johnson Johnson 10,580,000
• Groupe Danone 6,927,000
• The Estee Lauder Companies Inc 6,309,000
  
• Other 90,493,000
• Total 443,996,000

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Top Ten Hot PropertiesMarch 11, 2001

• Lycos
• 9.1M page hits
• Disney Internet
• 6.8M page hits
• eBay
• 6.8M page hits
• eUniverse Network
• 6.1 page hits
• About the Human Internet
• 5.8M page hits

• AOL/Time Warner Websites
• 39. 4M page hits
• Yahoo!
• 30.7M page hits
• MSN
• 26.2M page hits
• Microsoft
• 10M page hits
• Excite Network
• 9.2M page hits

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Top Ten Parent Companies Week Ending March 28,
2005 (Home)

• United States Top 10 Parent CompaniesWeek
  ending March 28, 2005Home Panel Parent Name
  Unique
• Audience (000)
• Reach Time Per Person
• Microsoft 55,711 51.48 003535
• TimeWarner 52,356 48.38 013425
• Yahoo! 48,509 44.82 004958
• Google 31,802 29.38 000939
• eBay 18,436 17.03 005127
• US Govt 12,922 11.94 001227
• Ask Jeeves9,943 9.19 001053
• United Online9,894 9.14 002751
• RealNetworks9,770 9.03 002212
• Amazon 9,282 8.58 001009  

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Internet Usage Stats (March 28, 2005)

• Number of Session per week
• Time Spent per site
• PC Time per week
• Page Views per week
• Active Digital Media Universe
• Current Digital Media Universe

• 10
• 000049
• 083822
• 23
• 108,226,441
• 201,566,843

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How do Marketers Use the Internet?

• Net as a planning tool
• Secondary Research Source
• gather market information/library
• cheap, easy
• access to government releases
• data more current than paper publications
• Primary Research Source
• survey customers/prospects
• collect customer service inquiries/product use
  ideas

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How do Marketers Use the Internet?

• Net as a Distribution Channel (I.e., direct
  catalog)
• cost savings
• push vs. pull
• payment concerns
• distribution of electronic products I.e.,
  software, electronic magazines, music, video clips

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How do Marketers Use the Internet?

• Communication Medium
• keep in touch with the TM
• functions similarly to TV or magazines - except
  is a two-way interactive medium

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Communication Approaches

• Maintain a WEB site with information about
  products and services
• purchase advertising space on other WEB sites
• Build an e-mail data base of consumers
• Hold PR events on-line
• Offer coupons, sweepstakes, SP approaches

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Advertising and Marketing on the Net

• Product vs. Content Advertising
• corporate home pages
• banner ads
• Increasing Role of the Internet in Entertainment
  Product distribution and promotion

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Corporate Home Pages

• Product-oriented sites
• request brochures
• scheduling
• questions/help
• Source of Advertising and PR Information

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Banner Advertisements

• Paid placements on other sites that contain
  editorial material
• Click hyperlinks you to ad sites home page
• Example from USA Today Homepage

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Banner Ads

• Placement crucial to gaining exposure to the TM
• Related and similarly profiled pages optimum
• Top Ten
• http//www.nielsennetratings.com/hot_off.htm

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Other Types of CyberMarketing

• Virtual Malls
• gateway to a group of Internet storefronts
• example - http// www.internet-mall.com/
• advantages - attracts browsers to site

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Other Types of CyberMarketing

• Coupons
• packaged for goods, fast-food and travel
  companies
• charges from 3 - 15 per thousand coupons
  distributed
• free-standing inserts 7/1000

• Event Marketing
• Avenue for ties to event and sports happenings
• Superbowl and Oscars have sites
• Sponsorships cost 100k-225k
• logos and links