ACS 3907 E-Commerce...Online Advertising 11 •Global ad spend in 2013 will see steady growth of...

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©Bowen Hui, Beyond the Cube Consulting Services Ltd.

ACS 3907E-Commerce

Lecture 6-2

Instructor: Kerry Augustine


E-Commerce Marketing - Part 2

• Closed Loop Marketing

• Online ads

• Web metrics

• Google analytics

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©Bowen Hui, Beyond the Cube Consulting Services Ltd.3

Closed Loop Marketing

• Closed loop marketing (CLM) is the process by which customer data

can feed marketing campaigns and drive up sales performance.

• The key to effective closed loop marketing is information that

generates qualified leads and passes them on to the sales team in the

knowledge that a customer has been created.

• Today’s Internet-based way of doing business is the driving factor

behind this new generation of intelligence marketing. Online tools,

such as those available by HubSpot allow businesses to accurately

track online campaigns, which in turn allows marketers to manage

budgets more effectively and focus on campaigns that produce results.

• CLM closes the loop between customer behaviour, marketing activity

and sales successes. The first stage to implementing an effective

closed loop marketing campaign is to perfect the company’s marketing

strategies.

http://www.hubspot.com/what-is-hubspot

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https://www.youtube.com/watch?v=EgWxYkZks8c

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Online Advertising

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• Global ad spend in 2013 will see steady growth of 3.5% to reach $503 billion by the end

of the year.

• Mobile advertising was worth $8.3bn in 2012, or 9.5% of internet expenditure / 1.7% of

advertising across all media. “By 2015 we forecast this total to rise to $33.1 billion,

which will be 25.2% of internet expenditure and 6.0% of all global ad spend”.

Source: ZenithOptimedia


Forms of Online Advertisements

• Display ads

• Rich media

• Video ads

• Search engine advertising

• Mobile and local advertising

• Social network advertising: social networks, blogs, and games

• Sponsorships

• Referrals

• E-mail marketing

• Online catalogs

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Online Ad Formats

• Pop-up ad = ad that pops up in its own window, on top of other screens

• Pop-behind ad = ad that pops behind user’s current screen– Basically a pop-up ad with a command to the browser to return to the

user’s original focus

• Interstitial ad = ad that opens when a link is clicked on, instead of opening the intended page of that link

• Rich media ad = generate graphical activity that “floats” over the web page itself instead of opening in a separate window

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An Online Consumer Purchasing Model

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Basic Terminology

• Hits = number of HTTP requests received by company’s server– Hit ≠ page

– Request can be for images or videos on the same page

– Not accurate depicture of site traffic or site activity

• Page views = number of pages requested by visitors– Each frame is considered a separate page

• CTR = click through rate = No. Clicks/ No. Impressions X 100– Number of people exposed to ad and actually click on it immediately

• Landing page = page that appears when a potential customer clicks on an ad

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Example CTR

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Modeling General Trends

• Stickiness = average length of time visitors remain on a site– A.k.a. duration

– Longer duration increases likelihood of buying something

• Unique visitors = number of distinct visitors to a site

• Reach = percentage of total number of consumers in a market who will visit a site

• Recency = average number of days elapsed between visits

• Loyalty = percentage of purchases who return within a year

• Retention rate = percentage of existing customers who continue to buy on a regular basis

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Conversion Rate

• Percentage of visitors who take a desired action

• Desired action can be:

– Purchase

– New membership registration (*acquisition rate in text)

– Newsletter subscription

– Software download

– Page view

• Other terms: sales/transaction conversion rate, registration conversion rate

• High conversion rate depends on main factors:

– Visitor’s interest level

– Attractiveness of offer

– Ease of process

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Conversion Rate (cont.)

• Simple Formula:

• Conversion Rate = Total Conversions X 100

Total Views

• Sales/Transaction Conversion Rate:

• Conversion Rate = Number of Sales X 100

Number of Visitors

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Metrics for Online Purchase Behaviour

• Browse-to-buy ratio = # product views : # items purchased

• View-to-cart ratio = # product views : # items added to cart

• Cart conversion ratio = # actual orders : # add to cart actions

• Checkout conversion ratio = # actual orders : # checkouts

• What do these ratios say about your customers/website?– High views, low buys

– Low orders, high add-to-carts

– Low views, low buys

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Abandonment Rate

• Abandonment rate = percentage of shoppers who begin a shopping cart but fail to complete the order

• Possible causes of high abandonment rate:– Bad site design or checkout process

– Lack of consumer trust

– Security concerns

– Couldn’t find customer support

– Couldn’t find preferred payment option

– Item being unavailable at checkout

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Website Activity Analysis

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Email Metrics

• Open rate = % of customers who open the email and are exposed to the message content– Although opening the email may not be intentional because some

email programs do it automatically

• Delivery rate = % of email recipients who received the email

• Bounce back rate = % of emails that could not be delivered

• Click through rate = % of email recipients who received the email and clicked through the offer

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Percentage of E-mail That Is Spam

SOURCE: Based on data from Symantec, 2012.

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Cost of Online Advertising

• CPM = “cost per thousand impressions” cost model– Pay for number of displays of your ad on someone’s website

• CPC = “cost per click” cost model– Pay for number of times a viewer clicks on your ad on someone’s site

• CPA = “cost per action” cost model– Pay for number of customer actions (e.g., registration, purchase, etc.)

• Other cost models: hybrid, sponsorship

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Customer Acquisition Cost

• Cost associated with process of acquiring a new customer

• Customer Acquisition Cost = Total acquisition expenses

Total new customers

• Different definitions of acquisition expenses used

• E.g., rebates/discounts may count as expense although not actual money, but customers perceive them to have cash value

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Marketing ROI

• ROI % = Net profit from customer X Number of customers X 100

cost of marketing campaign

• Net profit from customer = Lifetime value – Costs

• Lifetime value of a customer: – One customer tends to purchase X times per year

– Customers tend to do business with the company for Y years

– Each transaction tend to be on average $Z

• Article example:

• ROI % = ($27,000 – $13,000) X 4 new customers X 100 = 560

$10,000

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Three (3) Marketing Equations

• Prospects X Conversion Rate = Customers

• Customers X Transactions X Average Sale = Total Revenue

• Total Revenue X Margin = Net Profit

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Comparative Returns on Investment

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Web Analytics and the Online Purchasing Process

• Figure 6.12, Page 397

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Web Analytics Tools

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• Evaluation Criteria:– Company Size

• Small (1 – 50 employees)

• Medium (51 – 1000 employees)

• Large (1000+ employees)

– Set Up/ Ease of Use• Easy to read/ understand

• Intuitive interface

– Metrics • Traffic flows

• Real time updates

• Compare unique visitor counts with relevant dates

– Logical break-up of charts and graphs• Customizable dashboard to suit business needs

– Access to Online Expertise


Google Analytics

• All sorts of tracking and analysis– Cross channel and multimedia

tracking

– Advertising ROI and many web metrics

– Customized reporting and visualized data

– Goal setting

• Beginner’s Guide to Google Analytics

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Facebook Analytics

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https://www.trustradius.com/web-analytics?s=25http://www.google.com/analytics/http://www.flyte.biz/resources/newsletters/08/08-google-analytics.phphttps://analytics.facebook.com/

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MarketingMarketers now need to provide a seamless experience, regardless of channel or device.

Consumers can now engage with a company in a physical store, on an online website or mobile

app, through a catalog, or through social media.


Omni Channel Marketing

35PROS Internet Marketing & Web/Mobile Development Design Solutions


Benefits of Omni Channel Marketing

35GoEasyPos

1) Reaching New ProspectsToday’s businesses have many options including e-mail, SMS, push notification, chatbot, social media & location based services for grabbing the attention of fundamental measure. Omni channel orchestrates all these channel activities for increasing the overall performance of the engagement.

2) Knowing Your Customers Better Omni channel marketing strategy occupies you the customer intelligence you can use for more precise personalization. Since the data is unified across the experiences, brands have more insights on their customer’s behaviors & preferences.

3) Supports Retention ActivitiesCustomer retention is also critical for the sustainable growth. Omni channel helps re-attracting stagnant or lost customers via channel and activity variety.

4) Experience and Service Focused ShoppingOmni channel management focuses retailers to understand that multiple channel service and product offering is essential to provide the highest selection and service.

5) Meet Customers Where They AreA customer-centered viewpoint gives retail enterprises the opportunity to manage customer relationships across all channels.

https://www.internetsearchinc.com/http://blog.goeasypos.com/make-your-local-business-more-progressive-with-omni-channel-management/

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• Omni-Channel Shopping (Shopify)

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Omni Channel Marketing
https://www.shopify.com/enterprise/omni-channel-retailing-commerce-what

ACS 3907 E-Commerce...Online Advertising 11 •Global ad spend in 2013 will see steady growth of...

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