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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