Learning Objectives. Interactive Media. Learning Objectives (cont.) Interactive Media. Traditional Advertising Versus Interactive Communications

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1 CHAPTER 12 Interactive Media Learning Objectives Describe the various elements of internet communications Identify the key organization members that constitute the online advertising industry Evaluate the various advertising models available to marketing organizations Continued 12-1 Copyright 2009 Pearson Education Canada 12-2 Copyright 2009 Pearson Education Canada Learning Objectives (cont.) Identify key aspects of online audience measurement systems Assess the potential of the internet as an advertising medium Describe and apply various models of pricing and buying online advertising Interactive Media Wireless technology, internet, cell phones, portable music players, and PDAs represent a new advertising environment challenging marketers. Technology is rapidly advancing, but marketers have been slow to respond. Why? generation gap between aging marketing decision-makers and the younger, tech savvy target markets Copyright 2009 Pearson Education Canada 12-4 Copyright 2009 Pearson Education Canada Traditional Advertising Versus Traditional advertising Organizations target customers Interactive communications Customers target information that is of interest to them Control has shifted from the advertiser to the customer. Interactive Advertising The digital revolution is being led by Canadians we are the world leaders in internet usage per capita and we now consumer 20% of our media online. In 2006, online advertising revenues reached $1.01 billion, an 80% increase over Heaviest users: higher income households those with post-secondary education 18 to 44 years old 12-5 Copyright 2009 Pearson Education Canada 12-6 Copyright 2009 Pearson Education Canada 1

2 The Internet and Internet Usage Internet A network of computer networks linked together to act as one World Wide Web The collection of websites on the internet For websites, unlike any type of medium, the consumer controls whether he or she will see the information Websites also provide a means of collecting information about visitors (through contests and surveys) 12-7 Copyright 2009 Pearson Education Canada Internet Culture and Behaviour 12-8 Copyright 2009 Pearson Education Canada Sellers Buyers Ad Agency/ Web Design Measurement companies The Industry Publishers, ad networks sell space. Advertisers, agencies buy space. Traditional ad agencies have acquired digital-media agencies or integrated them into organization. Boutique shops pioneered online advertising. Service companies facilitate effective use of online advertising. Strategy Establish objectives and then choose interactive media options from: Internet Mobile communication device Video games Social media networks 12-9 Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada Strategy Behavioural targeting Delivery of ads based on consumer's previous surfing behaviour tracked by cookies. A cookie is an electronic identification tag sent from a Web server to a browser to track a person s browsing patterns. Users agree to accept cookies while giving up private information about how they use the Internet Copyright 2009 Pearson Education Canada Audience Measurement To attract advertisers accurate measurement is essential. Web publishers compile data in web server logs including: Page views Numbers of unique visitors Number and length of visits Independent third parties, such as Nielsen/Net Ratings and Media Metrix provide audited information about Web usage. Visit the press room at Nielsen/Net Ratings for more data Copyright 2009 Pearson Education Canada 2

3 Effectiveness Internet ads are measured for effectiveness based on: Impressions Clicks (clickthroughs) Clickthrough Rate Visitor Visits Stickiness website that has the average visitor return to the site several times each month and view several pages on that site Copyright 2009 Pearson Education Canada The goal of advertising is to motivate a purchase. Online advertising may: 1. Create brand awareness 2. Stimulate interest and preference 3. Distributing incentives and contest information 4. Provide a means to make a purchase 5. Provide a means to contact an advertiser 6. Acquire data about real/potential customers Copyright 2009 Pearson Education Canada 1. Display Advertising 2. Online Video Banner Advertising Leaderboard 3. Search Advertising 4. Sponsorships 5. Advertising (Permission-based) 6. Webcasting (webisodes) Rectangle Banner Skyscraper Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada The quality of online advertising is improving as video graphics are added. Banners Rectangle Big box Leaderboard Skyscraper Animated Banners and Interactive/Rich Media Expandable Banner Videostrip Push down banner Floating ad Window ad Wallpaper ad Banner Advertising Copyright 2009 Pearson Education Canada Sponsorships An advertiser commits to an extended relationship with another website. Sponsorships allow for a successful campaign without having to drive traffic to a brand s website. Consumers trust brands they visit repeatedly, therefore, a second brand (a sponsor) may be perceived positively by the association Copyright 2009 Pearson Education Canada 3

4 There are two types of advertising: 1. Permission-based 2. Sponsored Advertising Similar to direct mail, advertisers use house lists and rented lists that include opt-in names and addresses. Advantages & Disadvantages of Targeting Capability Tracking & Accountability Timing Advantages Interactivity and Action Disadvantages Acceptance of Online Advertising Consumer Frustration Privacy Concerns Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada Internet Advertising Rates and Buying Space CPM is the price charged for displaying an ad 1,000 times. Options include: Run of Site Run of Category Keyword Targeting As degree of targeting increases, the CPM increases. Pay-for-Performance Model Since clicking is the desired action, advertisers feel they should only pay when the banner ad is clicked on, on a cost-per-click basis. This system tends to devalue advertising and punish the website financially if the ad does not attract an audience. In the offline advertising world, the media are not responsible for an action being taken. That is left to the message! The job of the media is to offer access to an audience, not to share in the responsibility for the quality of the advertising itself Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada Flat-Fee Model A Web site charges a set amount for the length of time the ad appears on the site (week, month, quarter). Other Forms of Online Marketing Communications Podcasting Blogging Company and Brand Websites Sponsorships are commonly sold on this basis as is some banner advertising Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada 4

5 Company and Brand Websites Traditional media can drive traffic to corporate websites for opportunities to tell the whole story. Websites can provide product knowledge and other information to move customers to purchase decisions. Media combinations that include television, print, and websites generate higher awareness and preference scores than just television and print. Mobile Communications Opportunities for advertisers to communicate with consumers exist through: Text messaging Video messaging Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada Video Game Advertising (Advergaming) The integration of brands into video games, both games played online and games purchased directly by consumers. Social Network Media A social network connects people with different types of interests at one website. Different types of networks are: Broad-reach sites (MySpace, YouTube, Facebook) Demographically focused sites (issue-based interests, Specific topic sites (Dogster a dog lover s site) Consumer-generated content delivered on social networks often carry more weight with consumers than marketer-generated content Copyright 2009 Pearson Education Canada Copyright 2009 Pearson Education Canada 5