Internet Marketing Plans

Internet Marketing

The Internet Marketing Plans

Topics

Online demographicsOnline commerce statisticsOnline marketing costsInternet marketing plan checklist

Online Demographics

Key usage drivers are income, education, computer ownership, residence, and age.

Most of the world is still not online!

– Internet usage rises sharply with household income

– The more educated someone is, the more likely they are to be online

– Internet usage varies dramatically by the region of the country and region of the world

– Middle-age heads of households are most likely to be online, followed by younger households and trailed by seniors

Online Demographics

Income is a strong positive driver of Net access in all regions of the country High income groups have influenced the success of

infant industries such as online trading There is a concern of a "digital divide" between

rich and poor Lower income individuals have a much lower rate of

online use They are unable to reap the benefits of the Internet

Income

Online DemographicsEducation

Quotable Quote:

Early adopters of the Net are the most educated members of society. As the Net diffuses to a wider audience, ease of use and simplicity become even more important. The Net needs to be more "appliance-like".

0%

10%

20%

30%

40%

50%

Elementary Some H.S. H.S. Diploma

or GED

Some

College

B.A. or more

U.S. Rural Urban Central City

Internet Usage Based on Education and Region

Online Demographics

Internet use varies greatly by region of the country

Alaska has the highest usage; the South has the lowest

Long, dark winters may lead to more usage – Finland is the most wired country in the world

Region

Online DemographicsGender

The gender gap that

characterized the early years

of the Net is rapidly closing

0%

10%

20%

30%

40%

50%

Male Female

At Home Outside Home Any Location

Internet usage based on gender and place of connection

Online DemographicsUsage Continues to Grow

Percentage of

Americans who… 1995 1998

Own a computer 36 43

Use the I nternet 14 41

Go online every day 3 12

Use e-mail 10 35

Bought online 1 13

Online DemographicsInternational Access Lags Behind

the US37% 36%

33%31%

15%

10% 10%8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

U.S. Canada NordicsAustralia U.K. Germany J apan France

Percent of population with Internet access at home or at work (1998)

1479 2126

4109 3433 3146 3628 3841

1479

3605

7714

11147

14293

17921

21762

1998 1999 2000 2001 2002 2003 2004

Baru Total

Perkembangan Jumlah Domain Baru

134 256 400 581 667 865 1087 1500512 1000

1900

4200 4500

8080

11226

16000

1998 1999 2000 2001 2002 2003 2004 2005

Pelanggan Pengguna

Jumlah Pelanggan dan Pengguna Internet di Indonesia (dalam 000)

Sumber : AC Nielsen, dikutip dari Marketing, Agustus 2005

Indonesian Online Statistic

14,8 16,427,9 28,5 26,7 31,6

4515 16,3

19,6 19,1 20,120,5

19,5

27,2 26,6

26,7 26,4 26,627,8

22,7

19,5 17,7

12,6 12,6 13,510,6

7,416,8 17,1

10,1 11 9,9 7,5 4,36,7 5,9 3,2 2,5 3,2 2,1 1

TV Radio Newspaper Magazine Tabloid Cinema Intenet

E

D

C2

C1

B

A

49,1

17

8

6

4,9

7,6

2,9

2,2

2,2

0 10 20 30 40 50 60

Jabotabek

Surabaya

Bandung

Medan

Semarang

Yogyakarta

Makasar

Denpasar

Palembang

Internet Users by Cities

Internet is an upper class domain


45,9

37

28,9

22,4

22,5

21,7

20,7

17,1

15,7

13,1

10,6

5,3

49

21,2

25,7

26

23

16,9

17,7

15

13

13

12,9

3,5

Electronic Mail

Play Games

General Surving

Chating

Listen to Music

Access Local News

Product Info

Access Int'News

Read electro Npp

Read electro Mag

Job Hunting

Clasify Ads

Male

Female

E-mail is the most common feature used


GENDER

AGE

EDUCATION

40,4

59,6

Male

Female

6,5

16,2

16,3

27,7

23,3

10 40 + yr

30-39 yr

25-29 yr

20-24 yr

15-19 yr

10-14 yr

1,219,3

10,9

40,3

17,2

8,9

2,1

Post Graduate

University

Academy

SLA

SLP

SD

SD not finished


Online Commerce StatisticsTop 20 E-Tailers of June 1999

Rank Site

Projected No.

of Purchasers

(000) Reach (%)

Unique

Users

(000)

Purchase

Rate (%)

1 amazon.com 562 14.70 6,463 8.70

2 ticketmaster.com 280 2.90 1,258 22.30

3 buy.com 273 3.30 1,441 18.90

4 sony.com 226 5.60 2,473 9.20

5 mothernature.com 196 2.60 1,162 16.90

6 iprint.com 174 1.90 826 21.10

7 drugstore.com 154 1.90 814 18.90

8 hallmark.com 153 1.10 486 21.40

9 netmarket.com 138 1.50 672 20.50

10 cdnow.com 116 7.50 3,288 3.50

11 computers4sure.com 104 1.20 526 19.80

12 barnesandnoble.com 101 5.30 2,307 4.40

13 apple.com 99 4.50 1,983 5.00

14 etoys.com 83 3.40 1,485 5.60

15 enews.com 70 2.50 1,109 6.30

16 compaq.com 64 1.90 824 7.80

17 smarterkids.com 58 2.00 857 6.80

18 gateway.com 56 2.80 1,227 4.60

19 spree.com 56 3.10 1,364 4.10

20 egghead.com 41 2.90 1,269 3.30

Source: PC Data Online

Online Commerce Statistics

• Affiliate programs, such as Amazon Associates, combine the business model and network phenomena.

• They have a direct tie to e-commerce because you don't get a fee unless a sale is made.

Top 10 Affiliate Programs, April 1999

Source: refer-it

10. iSyndicate

9. Info-Links Network

8. All-Hotels.com

7. Reel.com

6. Lending Tree

5. One & Only Internet Personals

4. Amazon.com

3. Music Boulevard

2. Strange News Ticker

1. AutoFusion’s Car Prices.com


Consumers told Greenfield Online the best features of online shopping are the abilities

to quickly and easily compare prices and shop at any time.

Product Online Catalog Local Store Mall

Sof tware 49% 22% 63% 41%

Books 49% 23% 68% 52%

Clothing 18% 22% 66% 68%

Outlet Customers are Most Likely to Use When Ready to Buy


By the end of 2002, $2.8 billion will have been spent worldwide on e-commerce software.

78 percent of this total will derive from from investment in distribution channel management, online procurement, and supply chain management (business-to-business e-commerce solutions).

Business-to-consumer e-commerce, which in 1997 made up 41 percent of e-commerce software revenues, will in 2002 account for just 22 percent.

Online Commerce Statistics• Business-to-business e-commerce focuses not so

much on revenue generating as increasing efficiency of business processes. Now, smaller and medium-sized enterprises can benefit through increased efficiency and disintermediation of the supply chain.

• The true value of business-to-business e-commerce comes when other businesses adopt such solutions. When suppliers and buyers using e-commerce form relationships, both can reduce their costs.

• Relationships with business partners will be vital. Companies will only invest if there are enough other enterprises investing, otherwise the technology will be of no use.


Source: Data Monitor

1997 2002

Global $168 million $2800 million

Europe 23% 34%

Supply 12% 30%

Distribution 36% 30%

Procurement 11% 18%

Business to Consumer 41% 22%

E- Commerce Software Market

Applications


• Nearly one-third of Internet users who visit travel-related Web sites have made online reservations at those sites, according to a study by NPD Online Research.

BUT. . .

• A majority of Internet travelers still divert the confirmation of their travel reservations to traditional travel agents.

More Travelers Booking Online


Total

Respondents Newbies I ntermediates Net Vets

Lowest Price 31% 28% 28% 33%

Credit Card Security 18% 33% 25% 13%

Human Contact 16% 8% 16% 16%

Accurate Reservations 14% 9% 13% 14%

Other 21% 22% 18% 24%

Why I nternet Users Book Travel Offl ine

Source: NPD Online Research

Online Marketing Cots

W eb S ite Costs

H ost ing I mproving M anaging

W eb S ite Costs

Online Marketing Costs• As software tools become powerful

and more available, simple web tasks are easy and cheap to perform

BUT. . .

• Increasing customer expectations lead to increasing costs

AND. . .

• The cost of web design talent is also increasing

Online Marketing Costs

• A web host has its own collection of servers, services, support staff and infrastructure for your company to use on a subscription basis.

• For a set up fee of $50-$100 and monthly charge of $20+, you receive your own domain name (www.mycompany.com) and your own IP address (123.456.78.90).

A Host For Your Site

http://www.mycompany.com/


Hosting services include: File storage Data transfer Tech support POP mailboxes Access to CGI and Java scripts Microsoft FrontPage extensions E-commerce tools such as shopping cart software

and secure credit card transfers Support for multimedia add-ons



Benefits of Web Hosting Reliability for mission-critical Web activities Faster, better Web access Reduced costs Added functionality Extensive tech support and assistance Domain-name identity


Online Marketing CostsDevelopment Costs Are On the

Rise

Source: NetMarketing

Simple Site Med Site Large Site

Feb- 99 $78,000 $150,000 $440,000

J un- 98 $44,500 $99,750 $302,975

Oct- 97 $25,000 $83,000 $275,000

Apr- 97 $18,750 $67,500 $330,000

Sep- 96 $26,100 $102,025 $596,073

Change from

J un- 98 75% 50% 45%

National High $167,500 $311,570 $1,066,870

National Low $750 $4,500 $1,000

Online Marketing Costs• The development of a serious e-commerce site

costs an average of $1 million according to The Gartner Group.

• Labor is the most important cost driver, and time to market can be considerable.

Respondents "On Budget"

5 months

1 year

2 or more on average

None

Average

High End

Number of External Firms Used

Cost to Develop an E- Commerce Site from Scratch

Cost to Develop

Time to Complete

Average $1 million

Less than $350,000

More than $2,000,000

Low End

High End

Distribution of Costs

Laobr

79%

Hardware

11%

Sof tware

10%

Internet Marketing Plan Overview

An Internet marketing plan Is a specific implementation of the opportunities, tradeoffs,

and strategies presented in the text Outlines a set of goals

Two options: Embedded plans include web-related decisions and

impacts and are a part of a general marketing plan Best for long-term analysis or when online activities are part of

an integrated marketing approach Stand-alone plans analyze and discuss Net activities

separately from the full range of marketing department activities

Best for analyzing specific campaigns, Web enhancements or “Dot coms”

Traffic Building

Traffic is an asset Traffic is getting more expensive and difficult to

generate as online competition increases Retaining traffic is very valuable

Stickiness, duration of visits & repeat visits are all important

Traffic building strategies should reinforce basic branding positions

Traffic building uses a wide variety of tools that should be synchronized

Traffic Building

• Banners are popular but effectiveness is questionable

• Big winners:– Affiliate

programs– E-mail– PR

• The winners all take advantage of network effects (Metcalfe’s Law)

Traffic-Driving Tools

Traffic Building

Brand building works best on TV and radio The total amount spent promoting sites is growing

and shifting toward off-line advertising and e-mail More mainstream Net use means more

mainstream promotion methods can be used E-mail is showing higher conversion rates than

online banners Bandwidth still prevents “TV-like” ads online

Advertising Media Selection

Traffic Building

Looking at the most popular online sites shed light on the range of traffic-driving results

The top sites are portals, but there are some unusual top-ranked sites that aren’t general purpose Web locations

Take a look at Media Metrix’s Top SitesNielsen’s Top Sites

Top Sites

Traffic BuildingNuts and Bolts: Banner Formats

The Internet Advertising Bureau/CASIE helps standardize the main banner

templates

Full Banner468x60 pixels

Full Banner with Vertical Navigation Bar392x72 pixels

Half Banner234x60 pixels

Traffic BuildingNuts and Bolts: Banner Formats

The Internet Advertising Bureau/CASIE helps standardize the main banner

templates

Half Banner234x60 pixels

Button 1120x90 pixels

Button 2120x60 pixels

Square Button125x125 pixels

Micro Button88x31 pixels

Traffic Building

Search engines provide free traffic without the need for ads, alliances, and sponsorships

Yet they’re a source of frustration and mystery How do they work? Is it really possible to buy your way up the list? What makes them tick?

Resources that can help: Search Engine Watch Northern Webs tutorial

Search Engines

Internet Marketing Plans

Education

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