The Internet has brought media to a global audience. The interactive nature of
Internet marketing in terms of providing instant response and eliciting
responses, is a unique quality of the medium. Internet marketing is sometimes
considered to have a broader scope because it not only refers to the Internet,
e-mail, and wireless media, but it includes management of digital customer data
and electronic customer relationship management (ECRM) systems.
Internet marketing ties together creative and technical aspects of the Internet,
including: design, development, advertising, and sales.
Internet marketing also refers to the placement of media along different stages
of the customer engagement cycle through
search engine marketing (SEM),
search engine optimization (SEO),
banner ads
on specific websites, e-mail marketing, and
Web 2.0
strategies. In 2008
The New York Times, working with
comScore,
published an initial estimate to quantify the user data collected by large
Internet-based companies. Counting four types of interactions with company
websites in addition to the
hits from advertisements served from
advertising networks, the authors found the potential for collecting data upward
of 2,500 times on average per user per month.[1]
Internet marketing, also referred to as i-marketing,
web-marketing, online-marketing, or e-Marketing, is the
marketing
of products or services over the Internet.
The Internet has brought media to a global audience. The interactive nature of
Internet marketing in terms of providing instant response and eliciting
responses, is a unique quality of the medium. Internet marketing is sometimes
considered to have a broader scope because it not only refers to the Internet,
e-mail, and wireless media, but it includes management of digital customer data
and electronic customer relationship management (ECRM) systems.
Internet marketing ties together creative and technical aspects of the Internet,
including: design, development, advertising, and sales.
Internet marketing also refers to the placement of media along different stages
of the customer engagement cycle through
search engine marketing (SEM),
search engine optimization (SEO),
banner ads
on specific websites, e-mail marketing, and
Web 2.0
strategies. In 2008
The New York Times, working with
comScore,
published an initial estimate to quantify the user data collected by large
Internet-based companies. Counting four types of interactions with company
websites in addition to the
hits from advertisements served from
advertising networks, the authors found the potential for collecting data upward
of 2,500 times on average per user per month.[1]
[edit]
Business models
Internet marketing is associated with several
business models:
- e-commerce — this is where goods are sold directly to
consumers (B2C) or businesses (B2B)
- Publishing — this is the sale of
advertising
- lead-based
websites — this is an organization that generates value by acquiring sales leads
from its website
- affiliate marketing — this is process in
which a product or service developed by one person is sold by other active
seller for a share of profits. The owner of the product normally provide some
marketing material (sales letter, affiliate link, tracking facility).
- local internet
marketing - this is the process of a locally based company traditionally
selling belly to belly and utilizing the Internet to find and nurture
relationships, later to take those relationships offline.
- blackhat marketing -
this is a form of internet marketing which employs deceptive, less than truthful
methods to drive web traffic to a website or affiliate marketing offer. This
method sometimes includes spam, cloaking within search engine result pages, or
routing users to pages they didn't initially request.
There are many other business models based on the specific needs of each person
or the business that launches an Internet marketing campaign.
[edit]
One-to-one approach
The targeted user is typically browsing the Internet alone therefore the
marketing messages can reach them personally. This approach is used in search
marketing, where the advertisements are based on
search engine
keywords entered by the user.
And now with the advent of Web 2.0 tools, many users can interconnect as
"peers."
[edit]
Appeal to specific
interests
Internet marketing and geo marketing places an emphasis on marketing
that appeals to a specific behaviour or interest, rather than reaching out to a
broadly-defined demographic. "On- and Off-line" marketers typically segment
their markets according to age group, gender, geography, and other general
factors. Marketers have the luxury of targeting by activity and
geolocation. For example, a kayak company can post advertisements on
kayaking and canoeing websites with the full knowledge that the audience has a
related interest.
Internet marketing differs from magazine advertisements, where the goal is to
appeal to the projected demographic of the periodical, but rather the advertiser
has knowledge of the target audience—people who engage in certain activities
(e.g., uploading pictures, contributing to
blogs)— so the company does not rely on the expectation that a certain group
of people will be interested in its new product or service.
[edit]
Geo targeting
Geo
targeting (in internet marketing) and
geo marketing are the methods of determining the
geolocation (the physical location) of a website visitor with
geolocation software, and delivering
different
content to that visitor based on his or her location, such as country,
region/state, city, metro code/zip code, organization,
Internet Protocol (IP) address,
ISP or other criteria.
[edit]
Different content by
choice
A typical example for different content by choice in geo targeting is the FedEx
website at FedEx.com where users have the choice to select their country
location first and are then presented with a different site or article content
depending on their selection.
[edit]
Automated different
content
With automated different content in Internet marketing and
geomarketing, the delivery of different content based on the geographical
geolocation and other personal information is automated.
[edit] Advantages
Internet marketing is relatively inexpensive when compared to the ratio of cost
against the reach of the target audience. Companies can reach a wide audience
for a small fraction of traditional advertising budgets. The nature of the
medium allows consumers to research and purchase products and services at their
own convenience. Therefore, businesses have the advantage of appealing to
consumers in a medium that can bring results quickly. The strategy and overall
effectiveness of marketing campaigns depend on business goals and
cost-volume-profit (CVP) analysis.
Internet marketers also have the advantage of measuring statistics easily and
inexpensively. Nearly all aspects of an Internet marketing campaign can be
traced, measured, and tested. The advertisers can use a variety of methods:
pay per impression,
pay
per click, pay per play, or
pay per action. Therefore, marketers can
determine which messages or offerings are more appealing to the audience. The
results of campaigns can be measured and tracked immediately because online
marketing initiatives usually require users to click on an advertisement, visit
a website, and perform a targeted action. Such measurement cannot be achieved
through billboard advertising, where an individual will at best be interested,
then decide to obtain more information at a later time..
Because exposure, response, and overall efficiency of Internet media are easier
to track than traditional off-line media—through the use of
web
analytics for instance—Internet marketing can offer a greater sense of
accountability for advertisers. Marketers and their clients are becoming aware
of the need to measure the collaborative effects of marketing (i.e., how the
Internet affects in-store sales) rather than
siloing each advertising medium. The effects of
multichannel marketing can be difficult
to determine, but are an important part of ascertaining the value of media
campaigns.
[edit] Limitations
Internet marketing requires customers to use newer technologies rather than
traditional media. Low-speed Internet connections are another barrier. If
companies build large or overly-complicated websites, individuals connected to
the Internet via dial-up connections or
mobile devices experience significant delays in
content delivery.
From the buyer's perspective, the inability of shoppers to touch, smell, taste
or "try on" tangible goods before making an online purchase can be limiting.
However, there is an industry standard for e-commerce vendors to reassure
customers by having liberal return policies as well as providing in-store
pick-up services.
A survey of 410 marketing executives listed the following
barriers to entry for large companies looking
to market online: insufficient ability to measure impact, lack of internal
capability, and difficulty convincing senior management.[2]
[edit]
Security concerns
Information security is important both to
companies and consumers that participate in online business. Many consumers are
hesitant to purchase items over the Internet because they do not trust that
their personal information will remain private.
Encryption
is the primary method for implementing privacy policies.
Recently some companies that do business online have been caught giving away or
selling information about their customers. Several of these companies provide
guarantees on their websites, claiming that customer information will remain
private. Some companies that purchase customer information offer the option for
individuals to have their information removed from the
database,
also known as
opting out. However, many customers are unaware if and when their
information is being shared, and are unable to stop the transfer of their
information between companies if such activity occurs.
Another major security concern that consumers have with e-commerce merchants is
whether or not they will receive exactly what they purchase. Online merchants
have attempted to address this concern by investing in and building strong
consumer brands (e.g., Amazon.com,
eBay,
Overstock.com), and by leveraging merchant/feedback rating systems and
e-commerce bonding solutions. All of these solutions attempt
to assure consumers that their transactions will be free of problems because the
merchants can be trusted to provide reliable products and services.
Additionally, the major online payment mechanisms (credit cards,
PayPal,
Google Checkout, etc.) have also provided
back-end buyer protection systems to address problems
if they actually do occur.
[edit]
Broadband-induced trends
Online advertising techniques have been dramatically affected by technological
advancements in the telecommunications industry. In fact, many firms are
embracing a new paradigm that is shifting the focus of online advertising from
simple text ads to rich multimedia experiences. As a result, advertisers can
more effectively engage in and manage online branding campaigns, which seek to
shape consumer attitudes and feelings towards specific products. The critical
technological development fueling this paradigm shift is Broadband.
In March 2005, roughly half of all American homes were equipped with broadband
technology. By May 2008, broadband technologies had spread to more than 90% of
all residential Internet connections in the United States. When one considers a
Nielsen’s study conducted in June 2008, which estimated the number of U.S.
Internet users as 220,141,969, one can calculate that there are presently about
199 million people in the United States utilizing broadband technologies to surf
the Web.
As a result, all 199 million members of this burgeoning market have the ability
to view TV-like advertisements with the click of a mouse. And to be sure, online
advertisers are working feverishly to design rich multimedia content that will
engender a “warm-fuzzy” feeling when viewed by their target audience. As
connection speeds continue to increase, so will the frequency of online branding
campaigns.
[edit]
Effects on industries
The number of banks offering the ability to perform banking tasks online has
also increased. Online banking is believed to appeal to customers
because it is more convenient than visiting
bank branches. Currently over 150 million U.S.
adults now bank online, with increasing Internet connection speed being the
primary reason for fast growth in the online banking industry.[citation needed] Of those
individuals who use the Internet, 44 percent now perform banking activities over
the Internet.[citation needed]
Internet auctions have gained popularity.
Unique items that could only previously be found at flea markets are being sold
on eBay. Specialized e-stores sell items ranging from antiques to movie
props.[3][4]
As the premier online reselling platform, eBay is often used as a price-basis
for specialized items. Buyers and sellers often look at prices on the website
before going to flea markets; the price shown on eBay often becomes the item's
selling price. It is increasingly common for flea market vendors to place a
targeted advertisement on the Internet for each item they are selling online,
all while running their business out of their homes.
The effect on the advertising industry itself has been profound. In just a few
years, online advertising has grown to be worth tens
of billions of dollars annually.[5][6][7]
PricewaterhouseCoopers reported that
US$16.9 billion was spent on Internet marketing in the U.S. in 2006.[8]
This has had a growing impact on the
electoral process. In 2008 candidates for
President heavily utilized Internet marketing strategies to reach constituents.
During the 2007 primaries candidates added, on average, over 500 social network
supporters per day to help spread their message.[9]
President Barack Obama raised over US$1 million in a single
day during his extensive Democratic candidacy campaign, largely due to online
donors.[10]