Download Chapter12 - courses.psu.edu

The Internet as Communication
The importance of interactivity
Implications for mix elements
Issues for perspectives
A Resource for Communication


A unique medium
A context for content
– Distinction between information and
vehicle that conveys it
– Distinction between context/vehicle and
infrastructure that conveys it

A context with multiple vehicles
– Forms of marketing communications
Characterizing Communication

Components
– Source
– Message
– Receiver

Processes
– Encoding (by source)
– Decoding (by receiver)

Component x process interactions
Parsing the Internet

Marketing communication as a noun
– A noun is a thing
• E.g., a message and its form
• A “Download Netscape 128.0 Now!!!! Button

Marketing communication as a verb
– A verb is an act
• E.g., the process of sharing information
• Interactivity between source and receiver
• Interactivity between receiver and content
Source and Receiver Interactivity

Size of the targeted audience
– Broadcast
• One-to-many
• E.g., TV and radio
– Narrowcast
• One-to-some (focused)
• E.g., Cable channels, protected servers
– Pointcast
• One-to-one
• E.g., Direct mail, e-mail
Source and Content Interactivity

Role of user control over message
– User preferences
– Computing constraints

User as active participant
– Pull (selectivity) vs. push of traditional
media
• All forms (broad, narrow, point) can be pushed
with the Internet
• Internet enables pull, too
Effects of Interactivity on
Content

Use communication to match product to
needs
– Individualized offering = personalization
– Differently driven by push and pull
• Pull is user-initiated
• Push is marketer-initiated
– The difference may affect the quality of
personalization
Marketing Mix Implications

Communication and Product Strategy
– Mass customization with communication
– Two requirements
• Receiver-content interactivity
• Modularization
– Customization characteristics
•
•
•
•
A continuum (mass production to personalization)
Processes of customization
Forms of customization
Relation to personalization
Communication and Price
Strategy

From static to dynamic pricing
– Limits to fixed price models
• Better for low differentiation, low elasticity
• Internet ==> price trans.==> price sensitivity

The Internet and alternative models
– Real-time pricing: fun w/supply & demand
– Role of infomediaries
• Auctions
• Companies as price-setting middlemen (Priceline)
Communication and Distribution


Internet as point-of-sale
Decision making for online channel
– Central role of exchanging information
– Possible scenarios
• Destination sites
– Fully-fledged channel (all aspects managed via
online communication)
• Micro-sites
– In-depth brand information, externally hosted
• Other uses of marketing communications
Communication and Promotion


Advertising is a big deal ($4.62B, 1999)
Two forms: text-based, multimedia
– Email = text-based
– Multimedia = web-based
•
•
•
•
Banners
Buttons
Interstitials
Banners rule
Ad Type Popularity
11%
2%
4%
Banners
Sponsorships
Interstitial
56%
27%
Email
Other
All About Ads…

Pricing models for online ads
– CPM
– Click-through
– Flat-fee

What’s it worth: ROAI
• # of impressions purchased * avg. click-through
rate * avg. customer turnover (visitors to
customers) * avg. net profit/sale = expected
return.
Other Forms of Promotion

Sales promotions
– Short-term incentives
– Coupons, contests

Public relations
– Corporate and brand image
– All unpaid-for exposure
• Site content
• Events (e.g., Rosie’s kids on eBay)

Personal selling
Issues for Perspectives

For marketers
– How to track effect of communications?
• Site-centric
• Consumer-centric

For consumers
– Medium effects on search, choice, memory

For Policy Makers
– User control and spam
– Local legislation and global reach

For Technologists
– Remembering preferences, adaptive customization