Marketing and the Internet

Wave of the Future - or Over-hyped Fad?

“The first problem of our business is to win an audience, hold an audience and interest an audience.” William Paley, Radios as a Cultural Force, 1934

Has the business of media acceptance really changed?

Commercial Beginnings of the WEB

Fewer than twenty years ago, the commercial use of the WEB was considered improper Restricted to the likes of the military and academia

The “big bang” occurred in 1994 when the new Internet backbone was created allowing the commercial uses to become operational NSF Funding and acceptable uses policy removed Global marketing at the most acceptable costs ever!

Background

Rapid growth resembles the early diffusion of TV in the 1950’s

Currently in the middle of the story - outcome unpredictable

Many cybercritics feel it is a fad –partially playing out already

Business Applications

Effective way to communicate with other businesses (suppliers, distributors) via email

Fabulous way to reach customers Interaction of video, picture, sound Motivated consumers Very low cost for global reach

Current Trends

Widespread belief that the Internet will emerge as an extremely useful tool for business planning and become a part of the marketing mix

Useful as an electronic store front, source of marketing research, and marketing communication

eBay

Basics

What is the Internet? Is a network of

computers reaching every country in the world

Social space for communication

no governing body - shaped by users

Background Internet emerged in

the 1960’s Developed by the

Defense Department as a fail safe way of communicating messages in the event of a nuclear attack

Until the 1990’s was used almost exclusively by the Defense Department and academia

Almost unheard of by the mainstream until the mid 1990s

Internet Options

E-Mail communication without paper or delay

ListServ discussions of specific products

Usenet 17,000+ discussion groups unobtrusive source of primary data

WWW universal database

Recent Developments Consumer to

Consumer Commerce Consumer Auctions Market Monitor –

honesty and reliability profiles

Business vs. Pleasure Overlapping – eBay

average 27 minutes per visit

Surfing replacing other media options

Dramatic Growth

Growth Patterns # computers

connected to the ‘Net (Internet hosts) 2.2 million to 100 million January 1994 to January 2006

How is the Internet Organized?

Major Internet Classifications .com commercial .edu educational .gov government .net Internet service provider .org non-profit organization

New suffixes currently necessary to accommodate growth

Who is out there?

Content Providers businesses,

universities, governments that allow others to peak into their computers

Advertisers Audience

The Audience

No one knows exact numbers

Conservative approximation – 167 million worldwide (75 active)

#’s growing quickly – 90% growth in last 5 years

Less than 4% world’s population

50% of users feel it is a necessity

Profile 37% professionals,

12% technical fields, 14% managers, 2/3 males

Women would rather NOT shop on-line security concern

Nielsen Ratings

Nielsen Ratings available at www.nielsen-netratings.com

Interesting Stats 35 million households online at any moment 550,000 new households online every month 760 new households online each hour

158.3 M United States 37.7 M Japan 21.0 M United Kingdom 14.6 M Canada 8.5 M Australia 1.9 M Singapore *Home Internet Access

Weekly Top 10 Banner AdsMarch 11, 2001

Banner Image 1. Bonzi Software 2. ClassMates 3. Amazon 4. Match.com 5. JP Morgan Chase

.

6. ClassMates

7. CDNOW

8. JP Morgan Chase

9. Colonize

10. JP Morgan Chase

*Banners ranked by impressions

Lead Industry Advertisers

LEADING CPG ADVERTISERS | ranked by impression | Mar 28-Apr 3, 2005

PepsiCo, Inc. 157,196,000 IncreaseYourHealth.com 83,428,000 Rodan & Fields 24,961,000 General Mills, Inc. 22,770,000 The Procter & Gamble Company 17,983,000 The Coca-Cola Company 12,567,000 Nestle USA, Inc. 10,782,000 Johnson & Johnson 10,580,000 Groupe Danone 6,927,000 The Estee Lauder Companies Inc 6,309,000 Other 90,493,000 Total 443,996,000

Top Ten Hot PropertiesMarch 11, 2001

AOL/Time Warner Websites

39. 4M page hits Yahoo!

30.7M page hits MSN

26.2M page hits Microsoft

10M page hits Excite Network

9.2M page hits

Lycos 9.1M page hits

Disney Internet 6.8M page hits

eBay 6.8M page hits

eUniverse Network 6.1 page hits

About the Human Internet

5.8M page hits

Top Ten Parent Companies Week Ending March 28, 2005 (Home)

United States: Top 10 Parent CompaniesWeek ending March 28, 2005Home Panel Parent Name Unique

Audience(000)Reach

%TimePerPerson

Microsoft 55,711 51.48 00:35:35TimeWarner 52,356 48.38 01:34:25Yahoo! 48,509 44.82 00:49:58Google 31,802 29.38 00:09:39eBay 18,436 17.03 00:51:27US Govt 12,922 11.94 00:12:27Ask Jeeves9,943 9.19 00:10:53United Online9,894 9.14 00:27:51RealNetworks9,770 9.03 00:22:12Amazon 9,282 8.58 00:10:09  

Internet Usage Stats (March 28, 2005)

Number of Session per week

Time Spent per site PC Time per week Page Views per week Active Digital Media

Universe Current Digital Media

Universe

10 00:00:49 08:38:22 23 108,226,441 201,566,843

How do Marketers Use the Internet?

Net as a planning tool Secondary Research Source

gather market information/library cheap, easy access to government releases data more current than paper publications

Primary Research Sourcesurvey customers/prospectscollect customer service inquiries/product use

ideas

How do Marketers Use the Internet?

Net as a Distribution Channel (I.e., direct catalog) cost savings push vs. pull payment concerns distribution of electronic products I.e.,

software, electronic magazines, music, video clips

How do Marketers Use the Internet?

Communication Medium keep in touch with the

TM functions similarly to

TV or magazines - except is a two-way interactive medium

Communication Approaches Maintain a WEB site with information

about products and services purchase advertising space on other

WEB sites Build an e-mail data base of consumers Hold PR events on-line Offer coupons, sweepstakes, SP

approaches

Advertising and Marketing on the Net

Product vs. Content Advertising corporate home pages banner ads

Increasing Role of the Internet in Entertainment Product distribution and promotion

Corporate Home Pages

Product-oriented sites request brochures scheduling questions/help

Source of Advertising and PR Information

Banner Advertisements

Paid placements on other sites that contain editorial material

Click hyperlinks you to ad site’s home page

Example from USA Today Homepage

Banner Ads

Placement crucial to gaining exposure to the TM

Related and similarly profiled pages optimum

Top Ten http://

www.nielsennetratings.com/hot_off.htm

Other Types of CyberMarketing

Virtual Malls gateway to a group of

Internet storefronts example - http://

www.internet-mall.com/

advantages - attracts browsers to site

Other Types of CyberMarketing

Coupons packaged for goods,

fast-food and travel companies

charges from $3 - $15 per thousand coupons distributed

free-standing inserts $7/1000

Event Marketing Avenue for ties to

event and sports happenings

Superbowl and Oscars have sites

Sponsorships cost $100k-$225k

logos and links