Internet Marketing 18475 Essay Example

banking transaction online costs about 1 cent compared to over one dollar when done through a teller at a physical bank (www.ecommerce.gov). Furthermore, both large and small businesses have the ability to establish a global presence by creating a webpage that provides product information and allows for online purchases. Various estimates exist for the "Internet Universe," which refers to the number of individuals who can access the Internet.According to different sources, the current estimations for the global population with online capabilities range from approximately 119 million (NetResults, 1/00) to 304.36 million people (Nua Internet Survey).

The website www.nua.ie/surveys is commonly referred to as NUA Surveys.

According to the NABE Survey, it is unsurprising to find that 60% of American companies, or 3 out of 5, currently utilize e-commerce in different ways. Additionally, 4 out of 5 businesses express their plans to integrate e-commerce in the future due to its ability to attract a significant number of consumers.

The future of business will be greatly influenced by Internet commerce.

On the internet, there are three primary sectors of e-commerce.

There are three sectors of e-commerce on the Internet: Business-to-Consumer (B2C), Business-to-Business (B2B), and Consumer-to-Consumer (C2C). It is important to recognize these different sectors, even though many Internet users are only familiar with consumer-focused e-commerce.

Predictions indicate that the Business to Business sector is poised for substantial growth in the upcoming three years, with the possibility of growth in other industries as well. This assertion is backed by a recent survey revealing that a larger number of companies intend to utilize e-commerce for purchasing rather than selling purposes, leading to an anticipated surge in online sales figures within the business to business domain.

The

website www.nua.ie/surveys.

Online Advertising

Internet based advertising is considered the first new advertising platform in fifty years, according to News Bytes News (4/00). Internet companies advertise on the Internet for various reasons, such as creating awareness for new products, informing consumers about product features and benefits, and building brand loyalty (MK380 Course Note book). The presentation of a company's product or service in a memorable message is an important aspect of effective advertising. The choice of advertising medium plays a significant role in how consumers perceive and retain information. Therefore, it is crucial for businesses to carefully select the medium. Ultimately, the success of an advertising strategy often depends on choosing the right medium that maximizes exposure to the target market while also ensuring the message is memorable.

According to Robin Webster, a VP at the Association of National Advertisers, the internet is a unique medium that encompasses all aspects of a marketer's job. It includes functions such as raising awareness, providing information, facilitating transactions, and offering customer service. This transformative medium turns passive viewers into engaged individuals. For instance, if a customer clicks on a CDNow banner displayed on a website, they will be redirected to CDNow.com. There, they can explore CD reviews, listen to music samples, make purchases, and even communicate with customer service representatives.

The design of ads can limit interaction based on their use. One factor that affects design capabilities is the speed of the user's connection to a website. Ads with rich multimedia content often have interactive features for users, but these capabilities are currently restricted by slower modem speeds. Most users have phone connections and modems that allow maximum speeds of 56K bits

per second, while high-speed access can reach speeds of 128K bits per second. Because of the slower connection speeds, ads with multimedia content take longer to load, causing users to leave sites before loading is complete. However, advancements in technology have made higher bandwidth connections more accessible beyond just college students and corporate offices. Cable providers like Time Warner and Comcast have been expanding high-speed access across the country since December 1999, including Indianapolis. These services are available for as low as $50 per month with unlimited access, and prices are expected to decrease due to competition and technological advancements.

As high-speed access becomes more common, advertisers will likely use designs with extensive multimedia content. This trend will result in increased interaction with customers and the development of innovative techniques for reaching them.

In 1999, online advertising revenues reached $4.6 billion, growing by 141% compared to the previous year's $1.92 billion, as stated by Rich LeFurgy, Chairman of the Internet Advertising Bureau. This surprising increase exceeded expectations and indicates that there will be substantial growth in 2000, with a projected rate of at least 100%. Businesses are increasingly favoring internet advertising and it is slowly gaining on television ad spending. In fact, it made up almost half of cable TV ad revenues in 1999, totaling $9.8 billion.

Below are a few instances of online advertising:

Various methods of advertising are commonly used on the Internet, such as banners, buttons, sponsorships, interstitials, and other techniques. The goal of these forms is to capture visitors' attention on a website and redirect them either to the advertiser's webpage or a relevant site. According to an article by Computer World (Aug. 31/98), banner

ads comprise 58% of digital advertising spending, while sponsorships make up 37%. The remaining 5% is allocated to interstitials and other online advertising formats.

Banners are the most popular forms of Internet ads. They are boxes placed at various locations on a web page, often at the top or bottom. These banners combine text and graphics, sometimes animated, to catch the viewer's attention. The advertiser's goal is to entice the viewer to click on the banner with their mouse. Clicking on the banner directs the viewer to an Internet site promoting or providing more information about the advertiser. Many banners feature creatively designed graphics that stand out from the surrounding page. Some designs also incorporate drop down lists that allow viewers to request specific information.

Here is an example of a common banner design with a dropdown list, which lets viewers customize the product according to their preferences.

Button advertisements are smaller and less graphic or animated compared to banners. They often display symbols, logos, or plain text and provide less informational content. When clicked, buttons redirect users to the advertiser's website. Here are some examples of button advertisements.

Online sponsorships are becoming increasingly popular in the realm of online advertising. These sponsorships resemble those found in television, radio, or print media. They entail associating an advertiser's name with a specific webpage. For example, ESPN.com boosts its brand through sponsoring the online game Sports Jeopardy Online. By incorporating the ESPN.com logo on the game's website, players see the ESPN logo whenever they interact with the game. This strategy helps generate traffic for ESPN and bolster its online sports presence. The image below displays an instance of online

sponsorship featuring a Sports Jeopardy Online logo.

Interstitials are a type of internet advertising that surpasses buttons or banners. They are ads that appear in a separate window while waiting for a website to load. These ads are often much larger than banners, occupying a significant portion of the screen. Advertisers favor interstitials because their size allows for attention-grabbing graphics and more information than banners or buttons can offer. However, one drawback is that the destination page may take longer to load due to the graphic and information content of the pop-up page.
A current example of an interstitial is an auto pop-up page on ESPN.com, featuring a new interactive game and sponsored by AT. It loads before or simultaneously with the ESPN home page and demands the viewer's attention by overlaying everything else on the screen.
In addition to on-site advertisements, search engine promotion is another popular form of online advertising. Search engines provide preferred listings among search results, giving advertisers a prominent position at the top of the list with larger fonts or contrasting colors to stand out.This website can often be seen as being the most relevant to the researchers' subject, which can result in more people visiting the site for the advertiser. These special listings are determined by the keywords used in the search. Another feature of many search websites is that they display advertisements that match the keywords searched for on the search-results page. For instance, if someone searches for "Butler baseball," they may see a banner promoting ButlerSports.com in the search results.

Impressions

Impression is a highly popular term in online advertising, referring to each instance an advertisement appears on a viewed web page.

For instance, if Yahoo.com's site loaded with 2 ads displayed, it would count as 2 impressions. Ad exposure is measured by the number of impressions, indicating how many times an ad appeared on a webpage. Site server tracks these statistics. Impressions commonly determine the cost of an ad, often sold on a cost per thousand basis. The higher the payment from advertisers, the more impressions the ad garners, leading to increased exposure and a larger audience reach.

Segmentation Opportunities

The Internet presents advertisers with the chance to segment their markets into smaller customer groups, catering to each group's distinct needs, desires, and purchasing behaviors. This capability allows companies to offer tailored products or services that are most likely to resonate with each individual group. The Internet's ability to accomplish this is unparalleled for various reasons.

Web sites cater to specific audiences, unlike other media forms, with popular sites available for various interests such as sports, hobbies, careers, and more. If you have an interest in a particular topic and there is a website published about it, information can be easily accessed. Advertisers can benefit from these sites by placing ads on the specific sites visited by their target audiences.

The Internet facilitates effortless data collection, enabling more precise segmentation. Applications with user privileges can gather precise information about visitors to websites. Unlike other media formats that depend on ratings surveys or investigative services, internet sites have numerous tools for understanding their customers. Leading online companies such as America Online and Ebay necessitate customers to create free login IDs in order to access most services. As part of the registration procedure, users are required to complete a survey containing demographic

inquiries regarding age, marital status, occupation, and purchasing habits. The gathered data is subsequently shared with potential advertisers.

Webopedia.com defines "cookies" as small files placed on users' computers by Internet sites to gather additional information about customers. These files contain user information and are sent to the site upon entering or leaving. Cookies are often used to personalize web pages for users, like automatically loading their email when visiting Hotmail.com without needing to log in.

Personalized web sites are considered important by many online users, with a study finding that 71 percent of respondents have one, and two-thirds of them believing it is important or very important.

Cookies also allow tracking of visitors' movements within a site, including total time spent, path taken, and time spent on each page.

These examples represent just two of the prevalent methods currently employed for Internet information gathering. The progress in Website data collection will be in tune with technological advancements. Such advancements will only enhance the capabilities of online advertisers in catering to their segmented markets.

The subject of concern here is online privacy issues.

Online privacy is a crucial concern for Internet marketers to address, given the abundance of easily collected and distributed information.

Tax Issues

The issue of taxation on sales through the Internet is being carefully considered due to its broad reach across the states and nations. Currently, there are no taxes applied to sales made through the Internet, which has contributed to lower prices compared to traditional stores. In 1998, the Internet Tax Freedom Act was passed, temporarily preventing the legislation of taxes on Internet sales for 3 years (Rankin, 9/99). However, this act is set to expire in 2001, which may

lead to discussions about implementing a taxation system for Internet commerce in the U.S.

According to a recently formed advisory commission established by Congress, there has been a comprehensive examination of the tax matter since the implementation of the act. The commission's conclusion is that the imposition of a tax on Internet Sales is necessary in order to safeguard traditional retailers from unfair competition (Rankin). Although no taxation will be implemented until the act is reversed, a Senator has suggested the implementation of a 5% nationwide sales tax on all Internet sales (Rankin).

Government Interaction

According to a report released by the United States Government, the Internet must adhere to a set of principles in order to ensure its continued growth and development in the right direction.

The U.S. Government believes that the private sector should be in control of the Internet's evolution. According to "A Framework for Global Electronic Commerce," a market-driven arena is necessary to ensure innovation, expanded web services, broad participation from businesses and consumers, and low prices. The government emphasizes the importance of private entities taking the lead in organizing collective agreements or standards, even when they are necessary. This hands-off approach allows the Internet to meet the needs of its users without being bogged down by regulation and restrictions. The rapidly changing nature of technology enables new services and procedures on the Internet that were previously unimaginable.

The Government's report emphasized the need to recognize the unique qualities of the Internet. This recognition has stemmed from the distinct differences between the Internet and other media platforms. Unlike radio, television, and other forms of media, the Internet offers possibilities that are unmatched. Therefore, it is unfair

to subject the Internet to the same regulations and rules as traditional media forms. The Government's objective is to review and revise or eliminate existing laws and regulations that obstruct electronic commerce in order to accommodate the demands of the digital era.

By implementing these measures, the Government is assuming a responsible role in nurturing the development of technology in a way that benefits all users. The extraordinary possibilities of today were unimaginable a decade ago, and the future remains uncertain. The Government encourages a deregulated environment that enables these advancements to occur for the greater good of the population.

Demographics of Online Users

Data from a 1999 Forrester Research Study

Works Cited

Davidson, Jeff. "Marketing Online." American Business Perspectives, May/Jun2000, Vol. 221, p5, 4p

Machlis, Sharon. "New Ads." Computerworld, 8/31/98, Vol. 32 Issue 35, p39.

Visit www.webopedia.com to learn more about "cookie".

Rankin, Ken. "States Stirring up Net Tax Interest." Discount Store News, 9/06/99, Vol. 38 Issue 17. P12.

+ Komenar, Margo. Electronic Marketing. Wiley Computer Publishing, New York. 1997.

www.slis.indiana.edu

+ Zwass, Vladimir. Structure and Macro-Level impacts of E-Commerce.

NetResults. Advertising Age, 1/17/20000, Vol 71. Issue 3, p43

Visit the website www.nua.ie/surveys

NABE Panel highlights the extensive adoption of e-commerce through a special survey.