Internet Marketing

From Isopedia

1 Definition and Overview
2 History of Internet Marketing
3 Customer Profile
4 Reasons For Using It
5 Benefits of Using It
6 Not For Everyone
7 Setbacks and Security Concerns
8 Technology
9 The Future of E-Marketing
10 Top Users of Internet Marketing
11 References
12 Team Members

Definition and Overview

Online marketing is one of the fasted growing advertising outlets. Businessweek highlighted this phenomenon and quoted an estimated $ 16.4 billion online expenditure for 2006. Internet marketing offers an opportunity for virtually any organization interested in growing or promoting itself via an online media. The chief priority is for the internet advertisement to fit with the business goals of the company. But what is it exactly?

According to Principles of Marketing, Internet Marketing, also known as online marketing, can be defined as advertising that appears while consumers are surfing the web. Such advertising includes banner and ticker ads, e-mail marketing, affiliate marketing, interactive advertising, viral marketing, blog marketing, article marketing, and blogging. Even though Internet marketing is very similar to offline marketing, also known as Traditional marketing, there are still a few particular purposes in which internet marketing has an advantage over offline marketing. Internet marketing is best suited for marketing products and services in which it is necessary to include a lot of detailed information for consumers, such as tourism destinations and books. It is also perfect for marketing products and services that people feel strongly about, such as music and films. The main difference between the two types of marketing is that while offline marketing is used to raise consumer awareness and arouse interest, internet marketing educates consumers and allows them to get answers to questions by having access to wide-ranging information.

Marketing on the internet has increased in popularity over the past several years as technology has advanced. Many marketers are finding the internet increasingly useful in targeting products that are just right for the consumer. This is commonly seen on Amazon.com, where internet marketing has allowed Amazon to reach niche markets and target consumers with products that share similarities with products previously purchased by the consumer.

History of Internet Marketing

While one could think that internet marketing developed during the same time the internet developed (during the late 1980’s), in reality, internet marketing did not appear on the World Wide Web until the early 1990’s. Early examples of internet marketing simply featured plain text on websites, and text-based websites that offered typical straightforward product information. At the time, these sites were very basic with no pictures or graphics. It is plausible to conclude that the internet capacity and bandwidth played a part in the simple examples of internet marketing during the early and mid 1990’s. While the internet was still a relatively new phenomenon in the early 1990’s, as the millennium approached, the technology surrounding the internet began to transform. Faster internet connections began to hit homes and businesses across the globe. As this increase in speed took hold, marketers began to incorporate graphics and pictures on websites in order to sell their product or service to consumers through offline channels. Soon, the technology existed that enabled companies to sell their products and services directly from their website, which began the phenomenon known as e-commerce. Consumers could now order products right from the comfort of their own home.

The evolution of internet marketing can easily be seen by just taking a look at what companies sell on the internet, and how they attract customers to their websites. During the early stages of internet marketing most marketing strategies focused on simply selling information on products and services. However, as internet marketing evolved, individuals and companies are now selling advertising space, business models, and software programs through the internet. It is also important to note that internet companies, like Google and Yahoo, have been founded, emerged, and evolved over the course of the past decade. These internet companies have evolved into providing advertising on any part of their websites, which contributes to their quarterly revenue. Even many smaller firms, including internet startups, turned to highly trafficked sites like internet portal Yahoo, and paid for advertisements including banner bars and ticker ads. Other firms have created pioneering advertising programs, sometimes referred to as viral marketing. This marketing technique seeks to create a buzz about a product through word-of-mouth. Lately, such buzz is commonly seen in blogs, and customer product reviews. It is true that as the internet evolved, so has internet marketing. In today’s world, many individuals spend most of their time on the internet, and that has led to new techniques in order to reach consumers.

Customer Profile

In selecting this channel, a company interested in internet marketing would indicate a preference for inexpensive promotion. Any business in the growth stage of their product lifecycle would capitalize on this cheaper way to bring awareness to their products. In addition, any company’s product in the maturity or decline phases could also benefit from internet marketing either by edging out the competition or by serving as a reminder. Internet marketing can be useful during several stages of a company’s success.

Internet marketing users are presented with multiple presentation options, giving flexibility to the customer company. The business subscribers can choose a number of options to advertise with, such as CPM (cost per image) or CPC (cost per click.) Customers with a set marketing budget can cap their internet marketing to avoid overspending. Internet marketing allows customers to select a target audience to segment their good or service toward. This personalizes the intended consumers. Instead of relying on demographics of mass-marketing, internet marketing can constrict the segment by habits. For example, only bloggers who visited a camp site will be shown a display for Wal-Mart’s retractable tents. Internet marketing is thus more efficient by limiting resources to likely consumer candidates. Online activity is also more tractable, and therefore, more marketable. This is an advantage for customers seeking a specialized audience.

Internet Marketing can be monitored and measured more easily than offline channels. Customers interested in pursuing internet marketing would use this advantage to better profile the consumers. Companies who rely on elderly consumers may not consider internet marketing. Older people tend to be less technologically savvy and will not be as exposed to the internet as younger generations. In addition, those with consumers more hesitant to trust online billing will not benefit as greatly.

Internet marketing is primarily for organizations wishing to promote their goods or services to a younger segmented audience in a cheap, measurable channel.

Reasons For Using It

Introducing a New Product or Company

This will promote awareness by getting the brand name out on the web to encourage familiarity without losing the consumer in cluttered “junk.”

Operating On a Small Budget

Internet marketing is relatively cheap in comparison to high printing and material costs associated with other advertising methods. The internet also affords a cap option, to prevent ads from running if they have already received their maximum images displayed or clicks for that time period.

Benefits of Using It

Specialized Segment Target

Instead of hoping that the typical consumer receives a company’s promotion from a general audience display, internet marketing can target only a specialized segment. Online sites can be designed to advertise the user’s lifestyle. For example, Johnson & Johnson will not market themselves on ESPN.com. Organizations with a concentrated consumer population can utilize internet marketing to run their promotions more efficiently.

Track Marketing Strategy

If a company wishes to monitor its success, or gather data on its consumers, internet marketing is easy to track. For example, through a simple click of the mouse a company can evaluate their entire campaign strategy. By clicking on an advertisement, consumers register themselves as having viewed the ad, the amount of time spent looking at the ad, the number of times he returned to the site, and the number of people he then forwarded the site to.

Internet Savy/Trusting

The internet is friendlier toward the younger generations and those technologically adaptable. Companies with a 20-30 year old average consumer basis, Jeep for example, would be better served with internet marketing than a company whose has a majority elderly consumer.

Communicability

Allows customers to communicate more efficiently, with personal communication to their consumers.

Not For Everyone

Standard Preferred Media Outlet

Certain industries perform better with a given channel. An automobile should be demonstrated rather than merely depicted, thus TV commercials are better.

Descriptive Product/Service

Lengthy or complicated advertisements requiring reading could be better optimized through a newspaper, instead of internet marketing.

Clashing Culture

Certain countries have strict internet laws, forbidding marketers to use certain words, or target children. For example, Absolut Vodka would not benefit from internet marketing in any Muslim country, where it is forbidden to advertise or sell alcoholic products. Other countries are not technologically advanced enough to mass navigate the internet and be exposed to internet marketing.

Setbacks and Security Concerns

Tracking Customer Information

Many companies have been unlawful to customers and have been sharing their information, thus creating insecurity and fret with consumers. Some companies have the option to consumers of “opting-out” their information from the website database, therefore erasing all records of it. Unfortunately, not all sites are this trustful and distribute or sell customer information without the customer being aware of it.

Receiving What You Order

Many times customers do not receive what they had previously ordered. This has been a major concern among merchants and they have fought this by creating strong consumer brands, such as EBay and Amazon, through heavy investing. Also, consumer feedback and ratings have been implementing to track consumers satisfaction with the product.

Slow Servers

Unfortunately, not everybody has up to date modern internet service such as DSL and impeccable reception. Overflowing of web sites and slow servers such as dial-up contribute to ads not working properly. Also, not having the latest software, such as the latest update of Java, might hinder a consumer to viewing the ad properly. Server issues, such as blackouts or when servers go down, hinder the success and profitability of the ad because it is not receiving views from potential customers.

Excessive Pop-ups

Many web sites, in an effort to maximize profitability, implement too many pop-ups and ads. In theory, this might seem as a good idea since customers receive more exposure to different products. But in reality, it ends up pushing customers away because they get disturbed and annoyed. Companies have to find a balance of adequate amounts of pop-ups.

Technology

The basis for the development and advancement of internet marketing is technology. Various innovations have changed the way companies advertise over the World Wide Web. Several technologies include reference links, Google’s AdWords advertising, and viral video marketing.

Many sites, usually popular blogs related to certain products, partner with online stores such as Amazon.com as an associate, placing a reference link to a product through their site. Associates earn a percentage of sales through these reference links. For instance, Amazon.com associates can receive up to 10% in referral fees on Amazon products sold through their referral links.

Another prominent marketing technology is Google’s AdWords. Advertisers create ads, choosing keywords related to their businesses. When people make searches on Google, an ad for a related product or service may show up next to the search results. This is done with the help of Google’s contextual targeting technology. The keywords set by the advertiser determine the target audience. This is Google’s flagship advertising service. Businesses pay Google only if people click their ads. In order to help businesses reach more customers, Google offers its content network which allows these businesses to communicate through various mediums – text, image, and video. Businesses can track results of their clicks and views through Google’s Placement Performance Report.

As of late, one of the most popular forms of viral marketing is through online video services such as YouTube. Even politicians, such as presidential candidates Barrack Obama and Hilary Clinton, have embraced YouTube for uploading videos supporting their campaigns. Obama focuses more on video highlights of his speeches. On the other hand, Clinton utilizes YouTube to showcase videos of her television ads as well as videos of other endorsers and supporters.

The Future of E-Marketing

Internet marketing is growing rapidly with traditional businesses becoming internet marketers. Even though businesses are and will be making the change to internet marketing, Traditional marketing will continue to exist because it has a unique asset that that internet marketing will never be able to capture, face-to-face, hands on marketing. As mentioned before, some products and services need to be touched, smelt, and tasted, before investment. Hence, internet marketing will never be able to take over the whole market field, but it will continue to grow with changes along the way.

Internet marketing will play an important role in the marketing mix for many advertisers. Stephan Spencer said in a seminar, The Future of Internet Marketing, that internet marketing will become an essential part of business, similar to how the FAX and telephone have become today. Becoming an essential part for businesses means that the market will turn from an easy market to a tight market due to regulations and competition.

Privacy will become a topic of the past as websites form databases based on customer profiles. With the issue of privacy and fraud, many people, such as Tim Mack from The Futurist magazine, believe that government will become more involved. Mandating regulations on what personal information is recorded, what exactly is being advertised, to whom the product or service is advertised, etc. will all generate a tight market. Other than the government dealing with the issues of fraud, businesses are going to focus more on customer trust relationships. This can be accomplished through the building of a good brand name both with on and off line channels, with an additional association with other trusted institutions.

The market will become a tight market as competition increases due to the recent ease of starting-up businesses. There will be more cutthroat competition. Humans tend to think short-term, allowing for businesses to use high competitive strategies instead of cooperative ones.

Top Users of Internet Marketing

Amazon – distinguishes itself by a feature that shows new products that are similar to the one’s the customer has previously purchased, and keeps customer profiles updated.