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For use with Strategic Electronic Marketing: Managing E-Business

Copyright 2000 South-Western College Publishing

Chapter 3 Slide: 1

Chapter 3: E-Business Communication



Chapter 3 Slide: 2

LEARNING OBJECTIVES (1)

• List the audiences with whom an e-business would need to communicate.

• Compare and contrast a one-to-many and many-to-many communication model.

• Explain how the communication process works.• Describe the role involvement plays in Web site

design.• Relate hypermedia’s role in gaining audience

attention.



Chapter 3 Slide: 3

LEARNING OBJECTIVES (2)

• Outline what should be done with a Web site to gain audience interest.

• Explain how an e-business can develop desire from its target market.

• List what is important in motivating an audience to take action.

• Explain how e-business communication can be used in industrial markets.

• Contrast the strengths and weaknesses of using the Internet as an advertising medium.



Chapter 3 Slide: 4

Vignette: Amazing Amazon.com

• Thinking Strategically – Make a short list of what you know about

Amazon.com. – Decide how much of that information comes from:

• Paid advertising, publicity, and from interacting with the Web site.

– Evaluate the design of the Web site. – Determine what in the Web site design would

encourage you to purchase.



Chapter 3 Slide: 5

The Internet as a Communication Medium

• The Internet is used to communicate to constituencies or audiences both external and internal to the e-business. – External audiences include customers,

stockholders, the general public, and other specifically targeted audiences.

– Internal audiences can include both employees and suppliers.



Chapter 3 Slide: 6

Hypermedia

• Hypermedia allow companies to deliver targeted messages to specific audiences. – Hypermedia environments are distributed

network that allow for hyperlinks and nonlinear search and retrieval processes to collect information.

• Examples: World Wide Web, interactive television, interactive Web based cellular telephones, and other portable devices.



Chapter 3 Slide: 7

Linear Communication

• Traditional media often follow a one-to-many communication model where a single promotion, such as a print ad or television commercial, is sent by one source and seen by many without the opportunity for immediate feedback.

• Linear communication follows a scripted flow.



Chapter 3 Slide: 8

Non-Linear Communication

• Interactivity and hyperlinks allow for a type of two-way communication between the e-business and its audience.

• Non-linear communication allows for a free flow and exchange of information.– Most conversations individuals have with

others are non-linear. Good sales presentations are free flows of communication.



Chapter 3 Slide: 9

What Is Promotion?

• Promotion is a communication process consisting of advertising, publicity, sales promotion, and salesmanship.



Chapter 3 Slide: 10

Figure 3.1: The Communication System

COMMUNICATION SYSTEMCOMMUNICATION SYSTEM

MESSAGEMedia

MESSAGEMedia

SENDER SENDER

FEEDBACK FEEDBACK

NOISENOISE

TARGETED SEGMENT

TARGETED SEGMENTEncode Decode



Chapter 3 Slide: 11

Many-to-Many Model (1)

• The many-to-many model places the hypermedia in the center of the communication process.

• Hypermedia become a meeting place where anyone can communicate with anyone else.

• Both firms and customers can obtain and deliver content.



Chapter 3 Slide: 12

HypermediaHypermedia

Figure 3.2: Many-to-Many Model

ContentContent

ContentContent

Customer

Customer

Firm

Firm

Firm

Firm

Firm

Firm

Customer

Customer

Customer

Customer

Adapted from: Donna L. Hoffman & Thomas P. Novak, "Marketing in Hypermedia Computer-Mediated Environments: Conceptual Foundations," Journal of Marketing, July 1996, Vol. 60, p. 53.



Chapter 3 Slide: 13


• The many-to-many model is also evident in the use of chat or threaded discussion lists at Web sites. – Chatting online involves a number of

individuals who leave messages for others to see.

• This can be placed in a repository or chat rooms for viewing at later times or could be “live” in that individuals write to others in real time.



Chapter 3 Slide: 14


• Threaded discussion lists allow individuals to add to an initial message with successive messages. This allows a newsgroup user to add to a thread, or single conversation, by indicating their response to the prior message. Messages are available for other to read and are indented under topics headings:– Initial Post

• First response– Second response



Chapter 3 Slide: 15

Figure 3.3: Linear Communication Thumbnails

PR IN T A DH E A D L IN ESub-H ead ing

Body CopyBody CopyBody CopyBody Copy

Logo

TV ST O R Y B O A R D

Scene1

Scene2

Scene3

Scene4

Scene5

Scene6

Thumbnail: a quick sketch of a communication concept allowing the creation of a large number of ideas in a short time period.



Chapter 3 Slide: 16

Home Page

Figure #4: Hypermedia Connections to Multiple Pages



Chapter 3 Slide: 17

Hypermedia Communication Goals

• A Web site can provide a little or a great depth of information for a site visitor.

• A single site can be designed for goal-directed buyers as well as for those who are net surfing and are looking only to experience the site. – The Web site can be designed to allow links to

other individuals who share the same interests.



Chapter 3 Slide: 18

High Involvement (1)

• Individuals with high involvement for a product or product category are:– likely to see a topic as interesting or important – attend to information more – are more likely to comprehend complex messages– may be willing to spend more time with a Web site.

• Involvement levels of individuals can be high when they are goal directed, such as attempting to gather information to make a purchase.



Chapter 3 Slide: 19

High Involvement (2)

• Individuals can also have high enduring involvement with products or product categories, and engage in net surfing to obtain high levels of interactivity with sites.– Enduring involvement exists when an

individual has a high level interest in a topic over and extended time period.



Chapter 3 Slide: 20

From Public Relations to Supporting Relationships

• Brochure sites are designed as an advertising or public relations tool. – May contain the same information as a business’ print

material.

– These sites are designed to make visitors aware of and informed about a business's image or products.

– This can be seen as a simple extension of traditional media campaigns.

– Brochure sites should be designed to enhance the overall promotional campaign.



Chapter 3 Slide: 21

The Public Face of a Business

• For non-brick and mortar pure-play Internet businesses, the Web page may be the only chance a customer has to interact with the business.

• The Web page must project and protect the image of the company.

• Protecting a company's image is a concern on the Internet.



Chapter 3 Slide: 22

Web Sites and Company ImageSome companies that have registered domain names

to prevent attack include:Charles Schwab: !#%*schwab.com and schwab!#

%*.com. BellAtlantic: Bigyellow!#%*.comChase Manhattan Bank: Chase!#%*.comCox Communications Inc.: Cox!#%*.comVail Resorts: vailresorts!#%*.comVolvo Cars of North America: volvo!#%*.comPlayboy Enterprises: Playboy!#%*.com

!#%* represents a deleted offending word



Chapter 3 Slide: 23

Relationship Sites

• Relationship sites target individuals who may have higher levels of information involvement. – Sites can designed for individuals with high

levels of enduring involvement. – They often contain games, chat groups, or other

interactive components to maintain relationships with customers.



Chapter 3 Slide: 24

Online Transactions Sites• Customers can be taken from a stage with

little information to the process of engaging in online transactions.– Experienced salespeople can be key in

developing a relationship site. – Salespeople identify the needs of their prospects

and then tailor, or encode, the communication to meet the prospect's needs and answer any questions the prospect may have.



Chapter 3 Slide: 25

Case 3.1: In The Web Driving Seat

• Thinking Strategically– Visit the BMW Web site (www.bmwusa.com).

– Determine if the site is only designed for current BMW owners or if they are targeting potential owners as well.

– Decide if this site appeals to individuals with high or low levels of automotive involvement.

– Visit another Web site for a single automobile or manufacturer.

– Determine if those sites are designed to appeal to high or low automotive involvement levels.

http://www.bmwusa.com/



Chapter 3 Slide: 26

Communication GoalsATTITUDE MODEL

AIDAPROCESS

E-BUSINESS COMMUNICATION STRATEGY

Awareness Use offline media to make the audience aware of the Website. Use search engines to allow a Web site to be found insearches. Use other Web sites as a media for advertising aWeb site.

Cognition(thinking)

Interest Use customization and personalization techniques to meetthe individual’s needs. Use targeted e-mail and permissionmarketing. Use push to send information to the audience.

Affect(feeling)

Desire Develop content and a design that appeals to the targetaudience. Include relationship development componentsthat will keep the audience at the site.

Conation(behavior)

Action Use promotions to entice actions.



Chapter 3 Slide: 27

Media and Effects

PROMOTIONAL STRATEGY MATRIX ATTENTION INTEREST DESIRE ACTION

PUBLIC RELATIONSADVERTISINGPERSONAL SALES SALES PROMOTIONWEB PAGE

A promotional mix includes the use of public relations and publicity, advertising, personal selling, sales promotions, and hypermedia such as Web sites.



Chapter 3 Slide: 28

Gaining Attention (1)

• Traditional media gain attention by designing messages with enough impact to gain and hold the audience or the message can be repeated numerous times.

• A Web site differs from traditional media in that the receiver must actually use the Internet to link to Web page content.

• An individual will not be exposed to the message unless they participate in some active measure to view a Web site.



Chapter 3 Slide: 29

• Steps to gain the audience's attention:– Include a site's URL or address in other media.

• The Web address should be included in advertising copy and layouts, business cards, banner ads located in other Web sites, direct email and other directed media.

• The use of URLs in print ads have increased from around 10 percent of ads in 1995 to over 90 percent by 1998

Gaining Attention (2)



Chapter 3 Slide: 30

• Search engines should also be used so the business and its Web address will appear when the Web user searches for topics related to that business.

• Search engines are a cost-effective means of making people aware of a site, but they do not guarantee that a viewer will choose or remember the site.

Search Engines (1)



Chapter 3 Slide: 31

Search Engines (2)

• Three types: – Search directories require that Web site be submitted

for cataloging.

– Search engines use Web spiders or web bots to collect information from sites.

• Web spiders are bots, or software robots, that “crawl” through the Internet looking at Web sites.

– Metacrawlers use the databases of multiple major search engines. These are good for power searches, but combining multiple results can lead to repetitive hits.



Chapter 3 Slide: 32

Hypermedia Hyperlinks (1)

• Gaining attention through Web sites:– Banner ads

• Banner ads have not been highly effective in achieving click-through, or having an individual click on a linked banner to link to other sites.

– Sponsorship (or co-branded ads)• Integrate a company's brand to the editorial content

of the Web site. For example, a firm may sponsor a news site or community bulletin board



Chapter 3 Slide: 33

– Interstitials• Automatically load and display content as Web

site content is brought up. This includes the use of daughter windows that pop and freely float to display ad content.

Hypermedia Hyperlinks (2)



Chapter 3 Slide: 34

Online Advertising

Sponsorships

Interstitial(daughter window)

Banners and Buttons



Chapter 3 Slide: 35

Interest

• The home page or the first page that a visitor sees at a site.– If a visitor has specifically tried to find the web site, or

they have high involvement with the company or product, they may wait for the page to load and spend time watching and interacting with the site.

– If the visitor is only browsing, they may zap the site and move on if it takes too long to download or is not interesting.



Chapter 3 Slide: 36

Case 3.: Ride the Wild Mouse• Thinking Strategically

– Consider what types of design elements would be of interest to Six Flags’ customers.

– Visit the Six Flags’ Web site (www.sixflags.com).

– Determine the types of plug-ins that are required to use the site.

– Decide how important having high bandwidth is for users of this site.

– Evaluate the design elements.

– Determine what this site has that will get its target audience to visit more than once.

http://www.sixflags.com/



Chapter 3 Slide: 37

Web Site Goals

• Brochure or public relations sites– The compelling reasons for the visitor to

remember and return to the site should be communicated.

• Action oriented sites– The communication should be focused around

the unique selling proposition of the firm or the competitive advantage of the product over competitive products



Chapter 3 Slide: 38

Developing Effective Web Pages

Site Address CommentsCommunicationArts

Www.comma rts.com/index .html

Site for identifying design trends andlearning what works and what doesn'ton the Internet.

Web Pages thatSuck

Www.webpa gesthatsuck.c om

Gives examples of good and poorWeb page design.

NewMediaInvision Awards

www.invision awards.com

Good examples of Web andmultimedia design. Shows pastawards winners.



Chapter 3 Slide: 39

Desire

• The cost of obtaining a new Web customer can average $34. – Once this customer is found an e-business has

an incentive to keep that customer’s interest and desire to come back to a site.

– This can be accomplished by effect message design and communication strategies.

– Knowledge held by the sales force can be tapped to outline the site’s information flow.



Chapter 3 Slide: 40

Targeted E-Mail

• Targeted e-mail allows firms to directly contact individuals. – Targeted e-mail works best with individuals

who have already given their permission to receive messages.

• Permission marketing is where the customer ops-in, or signs in at a Web site and agrees to receive email based direct marketing.



Chapter 3 Slide: 41

Push and Personalization

• Hypermedia based promotion allows for personalized messages and sending messages to the individual using push technology. – Webcasting allows the user to have

information delivered to their "doorway" or browser without requesting or searching for information.

• Individuals can customize the homepages.



Chapter 3 Slide: 42

Using Webcasting Technology

Profile code:132896 Push

USER COOKIE DATABASE TARGETED WEB PAGE



Chapter 3 Slide: 43

Action

• E-business Action Goals:– Have individuals visit a Web site

– Provide information for databases

– Obtain information for future purchases

– Make online purchases.



Chapter 3 Slide: 44

Key Attributes of Successful Web Sites

Table 3.8: Reasons For Using Favorite Sites1

1) Easy of use: 66%2) Quick download: 58%3) Frequently updated: 54%

4) Coupons and incentives: 14%5) Favorite brands: 13%6) Cutting-edge technology: 12%7) Games: 12%8) Purchasing capabilities: 11%9) Customizable: 10%10) Offers chat: 10%

1 NUA Internet Surveys, “Forrester Research: Strong Content Means A Loyal Audience,”

<http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905354655&rel=true>, January 27, 1999.



Chapter 3 Slide: 45

Case 3.: Which Media Helped the Witch? (1)

• Thinking Strategically– Decide who the target market was for The Blair Witch

Project.

– Determine what this target market would be most interested in seeing at a Web site.

– Visit the Web site (www.blairwitch.com).

– Evaluate the content developed for the site.

– Determine what is the most compelling for individuals interested in this movie.

http://www.blairwitch.com/



Chapter 3 Slide: 46

Case 3.: Which Media Helped the Witch? (2)

• Thinking Strategically– Consider what would need to be changed to keep

individuals returning to the site.

– Visit other movie Web sites.

– Determine their target markets and how they develop relationships with their audiences.



Chapter 3 Slide: 47

Industrial MarketsIndustrial markets have traditionally relied more on personal sales for communication while consumer markets have been centered on advertising.

Table 3.5: Consumer vs. Industrial Markets CONSUMER INDUSTRIAL

ADVERTISINGPERSONAL SALES WEB PAGE



Chapter 3 Slide: 48

Communicating Through Extranets and Internets

• Extranets and Intranets use the common IP interface and have the same communication considerations as Internet based Web communication.

• Intranets use browsers, servers, and Internet protocols, but are not open to unauthorized users.– Bandwidth inside organizations is often higher than

home users allowing for the potential for applications such as voice, video, and conferencing online.



Chapter 3 Slide: 49

Sales Force Automation

• Sales force automation (SFA) uses the information power of interactive media to enhance selling efforts. – The basis for sales force automation is centered on

using Web based technology to aid in the sales process.

• SFA empowers the sales person by allowing them to link to vital information from the companies Web site. – Provide inventory data, price information, and aiding in

sales presentations.



Chapter 3 Slide: 50

Advertising (1)

• The Web allows for: – Direct communication and interaction

with customers.

– Tracking a customer's media use.

– The development of customized ads and placement.

– Facilitates actions such as purchasing.



Chapter 3 Slide: 51

Advertising (2)

• The Internet is the fasting growing media.– Taking only 5 years to reach 50 million users compared

to radio’s 38 years, television’s 13 years, and cable’s 10 years.

– Web surfers have shifted media habits away from television watching.

• Problems with the Web media include:– Narrow target markets, privacy concerns, limited

bandwidth, no effective measures of success, and hard to prove returns on investments.



Chapter 3 Slide: 52

Agencies

• Advertising agencies act as intermediaries by providing the talent to help set promotional objectives, create the content, place the promotion in the media, and provide feedback on the results of the campaign to the client.

• Agencies:– DoubleClick (www.doubleclick.com)

– USWeb (www.usweb.com)

– Razorfish (www.razorfish.com)

http://www.doubleclick.com/

http://www.usweb.com/

http://www.razorfish.com/



Chapter 3 Slide: 53

Timing

• Traditional promotional campaigns use a mix of media to reach all of the AIDA goals. – Using a combination of broadcast and print over

differing time periods.

• The Web allows advertisers to develop sites where the target audience can visit whenever they want and as often as they like. – It is important that Web sites be refreshed to

encourage the users to return.



Chapter 3 Slide: 54

Measuring Effectiveness• Internet advertising has the potential for allowing

the advertiser to capture information such as who sees which ad and for how long. – Web servers are able to track every time an individual

moves from one linked page to another.

– Dead pages, or pages no one visits, can be updated or deleted.

– This data can be collected from both the sending server and the user's PC.

– Data from cookies may even provide an indication of the profile of the user.



Chapter 3 Slide: 55

Table 3.3: Measurement of Hypermedia Advertising (1)

• Hit Counts: Early measure that looks at server data for number of times a page is requested, but not necessarily seen or displayed at the user’s browser.– Could include multiple hits counted for every click of

the mouse or page refresh.

– Records activity regardless of the viewer’s location such as from workplaces, homes, schools, or from other countries.

– Provides no information on users.



Chapter 3 Slide: 56


• Page Views: Tracks the number of individual pages sent to Web viewers.– Gives no indication of how many users receive or view

pages and no profile data on the user.

• Click-Throughs: Tracks the number of times an online ad is clicked on.– Gives no information about the customers.

– Customers who click through may dump a page before it loads.



Chapter 3 Slide: 57

• Unique Visitors : Allows tracking by the IP address of viewer.– Multiple users may use the same IP address to access a

site.

• Reach: Measure of sampled group’s visits (if 25% of sample has visited site has obtained 25% reach).

– Requires the use of surveys or panels may be narrow in scope.

– This can pair information on the individual’s background with individual behavior.




Chapter 3 Slide: 58

• New Measures: These could include linking individuals by demographic data, loyalty, site behavior, and other measures.– These new measures may allow constant

measures of who visits a site and how long they stay at a site.




Chapter 3 Slide: 59

Ad Blocking

• Consumers can filter, or block ads from Web sites. – This shifts power from businesses to the consumers.

• Filters look at the HTML code and checks files and file types against a filter list to block ads, interstitials, or animated banners. – There is a stronger interest in this type of technology

inside of companies where blocking of ads can improve speed and network performance.

• Some companies have retaliated by blocking users who use ad blocking software



Chapter 3 Slide: 60

Table 3.4: Web Site Ratings IndicatorsPAYMENTMETHOD

MEANING COMMENTS

CPM Cost-per-thousand Typical method used tocompare across media.

CPC Cost-per-click Cost of clicking through from ahypermedia page.

Pay-per-actionPay-per-performance

Per sales lead, perdownload, perpurchase, etc.

Cost vary by company.

• In the first quarter of 1999:– 43% of campaigns used cost per thousand, 6% used

performance based measures, and 51% used a combination of measures.



Chapter 3 Slide: 61

ALE 3.1: Evaluate Web Sites

AIDAPROCESS

E-BUSINESS COMMUNICATION STRATEGY

Awareness Describe how offline media to make the audience aware of the Web site.Use a search engine to see what search terms allow the Web site to be found.How far from the top of the list does this business end up?Determine if other Web sites as a media for advertising this Web site.

Desire Describe how content is designed to appeals to the target audience.How does this site attempt to develop relationship development with itsaudience.

Interest Evaluate if this site uses customization and/or personalization techniques tomeet individual’s needs.Determine if the site uses targeted e-mail and permission marketing.Investigate if the site use push to send information to the audience.

Action Decide what types of actions the site attempts to achieve.Determine if the site uses promotions to entice actions.



Chapter 3 Slide: 62

ALE 3.2: Determining Advertising Rates

• Find pricing information on advertising rates from media kit at Web sites. – DoubleClick’s Business Rate Card:

www.doubleclick.com/advertisers/business/rate_card.htm

– Evaluate how DoubleClick assigns its charges.

– Visit another site and find its advertising rates.

– How do these compare to DoubleClick’s.

– Compare the target markets of the two Web sites.

– Determine which Web site is the better value.

http://www.doubleclick.com/advertisers/business/rate_card.htm



Chapter 3 Slide: 63

ALE 3.3: Charting A Thumbnail

• Create a thumbnail of a TV ad by charting out the flow of the major scenes.

• Find a Web site for that product or a similar product.

• Contrast the differences in information flow. • Consider which approach works best in moving

the audience through the AIDA process. • Determine how each medium could support the

other in reaching communication goals.



Chapter 3 Slide: 64

Active Learning Exercise #3.1: Soft Drink Design

• Design a Web site for a new soft drink: – Who is the target market?

– What is the main selling point?

– How will the market will decode the message?

– What other media will tie in with this site as part of a campaign?

– How will the message encoded?

– How will the site be designed?

• How does this Web design compare to existing sites?

• How do these companies develop relationships with their target audiences?

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