Chapter 9Marketing and Advertising

in E-Commerce

Learning Objectives1. Describe factors that influence online consumer

behavior.2. Understand the decision-making process of

online consumer purchasing.3. Discuss the issues of e-loyalty and e-trust in

electronic commerce (EC).4. Understand segmentation and how companies

are building one-to-one relationships with customers.

5. Explain how consumer behavior can be analyzed for creating personalized services.

Learning Objectives6. Understand consumer market research in e-

commerce.7. Describe the objectives of Web advertising and

its characteristics.8. Describe the major advertising methods used on

the Web.9. Learn mobile marketing concepts and

techniques.10.Describe various online advertising strategies

and types of promotions.11.Understand some implementation issues.

Learning About Online Consumer

Behavior • A Model of Consumer Behavior Online

o Influential factorso The attitude-behavior decision process

• The Major Influential Factors o Consumer Characteristics o Merchant and Intermediary-Related Factors o Product/Service Factorso EC Systems o Environmental Factors

EC Model of Online Consumer

Behavior

The Consumer Purchasing Decision

Process• A Generic Purchasing-Decision Model

o Need identificationo Information search

• *Product brokering• *Merchant brokering

o Evaluation of alternativeso Purchase and deliveryo Post-purchase activities

The Consumer Purchasing Decision

Process• Players in the Consumer Decision

Making Processo Initiatoro Influencero Decidero Buyero User

• Shopping Cart Abandonment

Loyalty, Satisfaction, and Trust in E-

Commerce• *Customer Loyalty

o *E-loyalty

• Satisfaction in EC

Loyalty, Satisfaction, and Trust in E-

Commerce• Trust in EC

o *Trusto EC Trust Models

• *Online trust

o How to Increase Trust in EC• Improve Your Website• Objective Third-party Seals• Establish Trustworthiness

o Other Methods For Facilitating Trust• *Reputation-based Systems• Online Word of Mouth

Mass Marketing, Market

Segmentation, and Relationship

Marketing• From Mass Marketing to One-to-One

Marketingo Mass Marketing and Advertising o *Market Segmentation o Relationship (One-to-One) Marketing

• *Relationship marketing• *One-to-one marketing

• How One-to-One Relationships Are Practiced

From Mass Marketing to Segmentation to One-to-One

The One-to-One Marketing Cycle

Sources: Compiled from Greenberg 2 010 and the authors’ experience

Personalization and Behavioral Marketing

• Personalization in E-Commerceo *Personalizationo *User profileo *Cookieo Web Cookies for Data Collectiono Using Personalized Techniques to

Increase Sales

Personalization and Behavioral Marketing

• Behavioral Marketing and Collaborative Filteringo *Behavioral Targeting o *Collaborative Filtering o Other Methods

• Rule-based filtering• Content-based filtering• Activity-based filtering

o Legal and Ethical Issues in Collaborative Filtering o Social Psychology and Morphing in Behavioral

Marketingo Use of Customer Database Marketing

Market Research for E-Commerce

• Objectives and Concepts of Market Research Onlineo What Are Marketers Looking For in EC

Market Research

Market Research for E-Commerce

• Representative Market Research Approacheso Data Collection and Analysis o Online Surveys

• Web-Based Surveys• Online Focus Groups

o Hearing Directly from Customers o Data Collection in Social Networks and Other Web 2.0

Environments o Observing Customers’ Movements Online

• *Transaction Logs• *Clickstream behavior• Cookies and *Web Bugs• *Spyware

o Web Analytics and Miningo Clickstream Analysis

• *Clickstream data• *Web mining

Market Research for E-Commerce

• Limitations of Online Market Research and How to Overcome Themo Privacy Issues in Market Research

• Biometric and Smartphone Marketing Helps Market Researcho *Biometrico *Mobile market research

Web Advertising• Overview of Web Advertising

o *Interactive marketingo The Advertising Cycle

• Basic Internet Advertising Terminologyo *Ad viewso *Buttono *Click (ad click)o *CPM (cost per mille, i.e., thousand impressions)o *Conversion rateo *Click-through rate/ratio (CTR)o *Hito *Landing pageo *Page

The Advertising Cycle

Web Advertising• Why Internet Advertising?

o Advertising Online and Its Advantages • Cost• Media richness• Easy updating• Personalization• Location-based• Linking to shopping

o Traditional Versus Online Advertisement

Online Advertising Methods: From E-Mail to SEO and

Video Ads• Major Categories of Ads

o Classified Adso Display Adso Interactive Ads

• *Bannerso *Random bannerso *Static bannerso *Pop-up bannerso *Personalized bannerso *Live bannerso Benefits and Limitations of Banner Ads o *Banner swappingo *Banner exchanges

Online Advertising Methods: From E-Mail to SEO and

Video Ads• Pop-Up and Similar Type Ads

o *Pop-up ado Pop-up Videos

• *E-Mail Advertisingo *E-mail Marketingo Major Advantages and Limitations of E-Mail

Advertisingo Implementing E-Mail Advertising

• E-Mail Hoaxes• Fraud

Online Advertising Methods: From E-Mail to SEO and

Video Ads• Search Engine Advertisement and

Optimizationo *Search Advertisingo Keyword Advertising o URL Listing o *Search engine optimization (SEO)

• Sponsored Ads (Paid Inclusion)

• Google: The Online Advertising Kingo Google’s Major Advertisement Methods: AdWords

and AdSense

The Process of Search Engine Optimization

Online Advertising Methods: From E-Mail to SEO and

Video Ads• *Viral marketing (viral advertising)• Video Advertising

o *Viral videoo Consumer-Generated Videoso *Interactive Videos

• Video Click-Throughs• Live Interactive Videos

o *Advergaming (in-game advertising)

• Augmented Reality Advertisement• Advertising in Chat Rooms and Forums

IAB Model of Video Advertising

Source: Interactive Advertising Bureau. “A Digital Video AdvertisingOverview.” January 2008. iab.net/media/fi le/dv-report-v3.pdf (accessed July 2014). Used with permission.

Mobile Marketing and

Advertising• Mobile Marketing and Mobile Commerce

o *Mobile marketingo *Mobile advertising (m-advertising)o Mobile Interactive Advertisingo Types of Mobile Ads

• Short Message Ads• Location-Based Ads• Viral Mobile Marketing

o Mobile Marketing and Advertising Campaigns

Process of Mobile Advertising

Mobile Marketing and

Advertising• Mobile Marketing Implementation

Guidelines• Tools to Support Mobile

Advertisement• Mobile Ad Trends

Advertising Strategies and

Promotions• *Permission Advertising• Other Advertising Strategies

o Affiliate Marketing and Advertising• *Affiliate marketing• *Affiliate network

o Paying People to Watch Adso Selling Space by Pixelso Personalized Adso Advertising as a Revenue Model

• *Pay per click (PPC)o Choose-Your-Own-Ad Format

Advertising Strategies and

Promotions• Online Events, Promotions, and Attractions

o Live Web Events for Advertising

• Localization in Advertisingo *Localization

• Developing an Online Advertising Plan1. Set up advertising goals2. Identify target customer3. Choose media and advertising tools4. Develop action and implementation plans5. Develop performance measurement and

monitoring plans6. Execute plans and evaluate performance

• Advertising on Facebook

Life Cycle of Advertising Plans

Managerial Issues1. Do we focus on value-creating customers?2. Which Internet marketing/advertising channel(s)

do we use?3. What metrics do we use to guide advertisers? 4. What is our commitment to Web advertising? 5. Should we integrate our Internet and non-

Internet marketing campaigns? 6. Who will conduct the market research? 7. Should we use mobile coupons? 8. What ethical issues should we consider in online

marketing?

Summary1. Factors influencing online consumer

behavior. 2. The online consumer decision-making

process. 3. Increasing loyalty and trust. 4. Market segmentation and building

one-to-one relationships with customers.

5. Online personalization.

Summary6. EC consumer market research. 7. Objectives and characteristics of

Web advertising. 8. Major online advertising methods. 9. Mobile marketing. 10.Various advertising strategies and

types of promotions.11.Implementation topics.