Internet Marketing and Monetization. Alvin All and Craig Wortmann University of Chicago February 6, 2010

Transcription

1 Internet Marketing and Monetization Alvin All and Craig Wortmann University of Chicago February 6, 2010

2 Internet Marketing and Monetization I. Marketing A. Defining the business model B. The Web site as sales call C. Define Internet distribution points D. Variable Paid vs. Fixed Paid Marketing II. Monetization A. Advertising Model B. Ecommerce Model

3 Defining the Internet Business Model Who is paying us? Consumer $ $ Web Site Advertiser

4 Defining the Internet Business Model Consumer buys a product or service What are they getting? Consumer $ $ Web Site Client Advertisers get access, leads and customers

5 Defining the Internet Business Model Consumer pays Web site directly for product/service Client pays to reach our audience Ecommerce (Transaction) Business Model Advertising (Relationship) Web site assumes each visitor is ready to buy - so place emphasis on price, product features and urgency to buy now. Business Model Description Web site offers content, tools and resources for free and seeks long-term relationship.

6 Internet Business Model - Types of Web Sites Ecommerce Advertising Ecommerce store selling products or intellectual property Subscription to information or tools Photo sharing site Search engine Web Site Type Information/Content Search engine Community Social networking File sharing Blog

7 Ecommerce - Selling Products/Intellectual Property Amazon Network Solutions itunes

8 Ecommerce - Information Content Wall Street Journal The New York Times

9 Ecommerce - Tool Trails.com Survey Monkey

10 Ecommerce - Photo Sharing and Storage Snapfish Shutterfly

11 Ecommerce - Search Engine Google Yahoo

12 Advertising - Search Engine Google Yahoo

13 Advertising - Blogging Lickmyspoon Art Architecture

14 Advertising - Information Content CNN ç ç iparenting

15 Advertising - Social Media Facebook ç ç MySpace

16 The Website as Sales Call Think of a website visit as a prospect sales call, and think of how you would interact with that prospect if you were sitting in front of him. For starters, was the visitor able to find your site by performing a search engine query? Let s assume he did. Now that he s on your site, consider the following: Is your content engaging? Can the user find what he needs easily? Thinking about and structuring your site as if it were a living, breathing sales person is one of the most valuable exercises you can undertake. According to Phil Mui from Google, the overall average conversion rate of all websites using Google Analytics is 2%. TWO percent! So what is happening to the other 98%? Many users simply can t find what they need or aren t willing go deep enough to look for it.

17 The website as sales call

24 Defining the Internet Marketing Distribution Points Domain name misspellings Intuitive domain names Voting/Review Sites Affiliate Marketing Other Web sites Video Search Engine Web Site Podcasts Blogs Press Release Social Media Associations Tradeshow Listing Content Syndication

25 Variable vs. Fixed Payment Distribution Points Variable Pay Fixed Pay Domain name misspellings Intuitive domain names Voting/Review Sites Affiliate Marketing Other Web sites Video Search Engine Web Site Podcasts Blogs Press Release Social Media Associations Tradeshow Listing Content Syndication

26 Variable vs. Fixed Payment Distribution Points Variable Pay Search Engine - Keywords Affiliate marketing Domain name misspellings Intuitive domain names Advertising Other Web sites Web Site Fixed Pay Search Engine - SEO Domain name misspellings Intuitive domain names Press release Social media Podcasts Video Blog Content syndication Tradeshow listing Associations Voting/review sites

27 World Internet Statistics Source: Internet World Stats

28 Search Engine Statistics Source: Experian Hitwise

29 Search Engine - Paid Keywords Google Tools

30 Search Engine - Paid Keywords Google Tools

31 Search Engine - Paid Keywords Adgooroo

32 Affiliate Marketing Commission Junction

33 Advertising Monetization How advertising is sold and purchased Pricing structure Ad unit types Ad kit Insertion order Ad serving delivery and tracking tool Remnant inventory

34 Advertising Sold and Purchased Publisher 1. Direct Sale 2. Client Agency Client 3. Publisher Agency Publisher Agency(AOR) Client Agency(AOR)

35 Advertising Pricing Structure CPM - Cost Per Thousand: Advertisers pay for exposure of their message to the publisher s audience. CPC - Cost Per Click: Advertisers pay each time a user clicks on their ad on the publisher s Web site and is redirected to the advertiser s Web site. CPA - Cost Per Action: Advertisers pay based on users clicking on their ad on the publisher s Web site and completing an action at the advertiser s Web site. This action could be an ecommerce transaction or registering/signing-up for something with the advertiser.

36 Advertising Pricing Example CPM: 1,000,000 impressions served / 1,000 x $15 CPM = $15,000 in sales CPC: 1,000,000 impressions x 1.5% click on ad = 15,000 clicks x $ 1 CPC = $15,000 in sales CPA: 1,000,000 impressions x 1.5% click on ad = 15,000 clicks x 2% conversion to action = 300 conversions x $50 CPA = $15,000 in sales

37 Advertising Ad Unit Tips Try to get all ad units above the fold. Use standard ad unit sizes. Offer enewsletters and registration. Require name, address, zipcode, HHI registration. Ask for other data points that are pertinent to your Web site. Offer rich media - they get higher prices and better performance results. Offer direct s to advertisers. Offer enewsletter sponsorships. Offer co-registration only to pertinent clients.

38 Ad Unit Type Web Site Examples 728x90 Banner 300x250 Box 160x600 Skyscraper Width x Height (In Pixels)

39 Ad Unit Type Examples

40 Ad Kit Your ad kit should contain information about your Web site, such as unique user, page view and impression count, demographic information, ad units offered with rate card pricing, tech specs for ad units, minimum buys and more. This is the main brochure for an advertiser to become familiar with your Web site and your advertising options. You will the ad kit to potential advertisers.

41 Ad Unit Delivery and Tracking There are many ad unit serving and tracking tools. Ad units are fed into the ad serving tool and unique code is attached to the ad unit to track the impressions and clicks. The advertiser and the publisher need to have ad serving and tracking on the same ad and even when it is the same technology you both will have different counts!

42 Remnant Inventory Remnant inventory is advertising inventory that the company was unable to sell. It is sold at a deeper discount than otherwise. Just like an airline you have some many seats to fill every day and sometimes you can t with your sales force or an agency you use. At this point you let remnant inventory run on your Web site.

43 Internet Advertising Bureau (IAB) Standards

44 Ecommerce - Tips for Success Great search and navigation Customer service number displayed on top Show related products and cross sell Allow shoppers to add to cart without immediate registration Keep the wish list separate from buy item button Customers should be able to easily access their cart Show security badges and trust certificates Offer payment and shipment options Include order details on the confirmation page Reduce shopping cart abandonment Include product reviews

45 Ecommerce - Shopping Cart Abandonment A study by PayPal and comscore found 45% of US online shoppers had abandoned shopping carts multiple times in just three weeks. Most importantly from the merchants point of view, the average cost of abandoned goods in those shopping carts was $109. In the same study, 46% of online shoppers said high shipping charges were a very important reason for emptying carts. Other reasons for abandonment included: Wanted to comparison shop: 37% Lack of money: 36% Wanted to look for a coupon: 27% Wanted to shop offline: 26% Couldn t find preferred pay option: 24% Item unavailable at checkout: 23% Couldn t find customer support: 22% Security concerns: 21%

46 Ecommerce - Payment Structural Set-up Shopping Cart SSL Payment Gateway Internet Merchant Bank Your Company Checking Account

47 Ecommerce - Payment Flow Shopping Cart SSL Authorize.net PayPal, 2Checkout or Clickbank InstaMerchant

48 Ecommerce - Shopping Cart Decision Two types of shopping carts - Hosted/Rented/Managed vs. Software. Hosted/Rented/Managed - Requires monthly rental fees to the hosting provider plus potentially transaction fees. The advantage is a quick setup, little to no technical skill by the operator, short-term contracts, web hosting included and server backups. The disadvantage is monthly fees and transaction fees and low to no ability to customize for a specific need that the operator might have. Software - One time cost for the software. The advantage is with higher volume sales the software will financially be a lower cost than monthly fees and more customisable and flexible to specific needs. The disadvantage is higher upfront costs, more technical skill needed to get started and a cost for monthly web hosting fees.

49 Ecommerce - Shopping Cart Types 3dCart AbleCommerce Captures CardinalCommerce Cart2Buy Cart32 CartManager ChannelAdvisor CoreCommerce DesignCart E-junkie Easy Store Creator ecartsoft ecrater FatFreeCart Flying Cart FORTUNE3 GoECart ibuilder Hosted/Rented Infopia Kyozou LC E-Commerce Solutions Magento Commerce Make-a-Store Marketworks Mercantec NetSuite Network Solutions PayLoadz Pinnacle Cart Shopify ShopVisible SmartCart.com SpotMerchant Vendio Volusion Yahoo Store Zoovy Software 1Shoppingcart AbleCommerce AFCommerce AspDotNetStorefront CardinalCommerce Cart32 CS-Cart digishop FORTUNE3 LiteCommerce Magento Commerce Make-a-Store Miva Pinnacle Cart ProductCart ShopSite UberCart WordPress e-commerce Plugin X-Cart

50 Ecommerce - Payment Gateway Defined A payment gateway is an e-commerce application service provider that authorizes payments for e-businesses, on-line retailers, bricks and clicks, or traditional brick and mortar. It is the equivalent of a physical point of sale terminal located in most retail outlets. A payment gateway protects credit cards details encrypting sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant and also between merchant and payment processor. A payment gateway facilitates the transfer of information between a payment portal and the Front End Processor or acquiring bank.

51 Ecommerce - Payment Gateways

52 Thank you for your time. If you want to reach us after the conference use our addresses below. Alvin All Craig Wortmann