Final PresentationE-Business - HEC 2009

A. Osterwalder

15th December 2009

Ana Ron ElizadeIrene Sáenz de Santa María Valín

Eduardo Sáinz de los Terreros SastreFernando de Santiago Martín

Gonzalo de Pablo Mariscal04/08/23E-BUSINESS

Industry Structure

How is the Web transforming the industry?

What can we see and sense?

Ways of working

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Definitions:◦ Branding: It is the application of marketing techniques to a specific product,

product lin, or brand.◦ Advertising: It is the description or presentation of a product, idea, or

organization, in order to induce individuals to buy, support, or approve it. Insight:

◦ Brand: Distinguishing name and/or symbol intended to identify a product or producer

◦ Description: Detailed account of the certain or salient aspects, characteristics, or features of a subject matter or something seen, heard, or otherwise experienced or known.

◦ Presentation: Formal submission or delivery of a document or negotiable instrument for the appropriate notice or action (acceptance, negotiation, payment, etc.) of the named entity.

◦ Product: The end result of the manufacturing process, to be offered to the marketplace to satisfy a need or want.

◦ Organization: A company, business, firm, or association.◦ Individuals: Single person.

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Ancient Rome and Arabic: Out-of-Home advertising and Billboards are the oldest forms of advertising

19th Century: Growth of mail-order advertising 1836: First paid advertising in newspapers 1840: First advertising agency 1920s: Advertising come to radio 1940s: Advertising come to TV 1950s: Modern of selling advertising space to multiple

sponsors Late 1980s-Early 1990s: Cable TV. Thematic channels 21st Century: Advertising through Internet

Increasing trend of interactive and "embedded" ads, such as via product placement, having consumers vote through text messages, and various innovations utilizing social network services

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Brand: It is a distinguishing name and/or symbol intended to identify a product or producer.

Intellectual Property: It is a number of distinct types of legal monopolies over creations of the mind, both artistic and commercial.

Human Capital: It refers to the stock of skills and knowledge embodied in the ability to perform labor so as to produce economic value.

Broadcasting network: It consists of links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes.

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Organization: Refers to companies which have brands and use advertising to improve its performance.

Ad Agency: It is a service business dedicated to creating, planning and handling advertising for its clients.

Broadcaster: It is the agent responsible for the distribution of audio and/or video signals which transmit programs to an audience.

Client: It is usually used to refer to a current or potential buyer or user of the products of an individual or organization.

Salesperson: It is the agent whose activity is mainly involved in selling products or services in return for money or other compensation.

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HOW IS THE WEB TRANSFORMING THE INDUSTRY

Web Technologies Influencing the Industry

New problems being solved

Advantages for customers

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Traditional Mass Media Advertising

New communications environment: evolving network of new media

EVOLUTION

High capacity Interactive Multimedia

The fundamental differences between online and traditional advertising result from a combination of internet technologies and the nature of the web.

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WEB TECHNOLOGIES: -Search engines: A tool designed to search for information on the World Wide Web -Banner ads: A form of advertising on the World Wide Web that is intended to attract traffic to a website by

linking to the website of the advertiser -Buying online ad space: Advertising networks sell space to advertisers

- Addopting the cost-per-click approach to pricing- Addopting the use of auctions to allocate the advertising spots on the page showing results of the

search.

-Web-based vehicles: Web versions of business directories similar to the yellow pages ; web versions of newspaper

classified ads ; web versions of direct mail and telephone marketing -IndividualIP (Internet protocol): Address which typically identifies the location of the individual -Data bases: It is possible for online entities to gather data on what people have done online

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-New opportunities for touching customers

-Enriching products and services with information

-Squeezing out costs through process automation: Companies can reach a wide audience for a small fraction of traditional advertising budgets

-Redesigning internal business process through enhanced communication and knowledge sharing

-Reduces Time and money spent

- Global product promotion; reach new markets world wide

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Vital Web presence

-Gives a competitive advantages

-Removes Location and availability restrictions

-Heightens customer service

-Streamlining the ordering process by taking orders online

-Companies can reach a wide audience for a small fraction of traditional advertising budgets. Companies can reach a wide audience for a small fraction of traditional advertising budget. Various methods: pay per impression, pay per click, pay per play or pay per action

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CREATIVITY, EXPOSURE, SPEED AND INFORMATION ACCESS

-The nature of the medium allows consumers to research and purchase products and services at their own convenience

-Every step on the process is faster : the Internet is faster than traditional selling methods

-More information about products and the selling of products: customers can access to information by him/herself

-Disponibility: Products can be sold or ordered 24 hours a day, seven days a week, 365 days a year without the need for support staff

-Online ordering helps to eliminate errors and make order processing more efficient

-The Web eliminates many of the extra costs that are associated with ordering: Ordering by phone can cost long distance fees and errors can occur with product codes

-It is simple to quickly re-order the same products from a previous date with one click of the mouse: Once logged on, a customer is able to lookup their order history to quickly see what they have ordered in the past

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Business Model: The method of doing business by which a company can sustain itself -- generate revenue

Main advertising models: Banner: A web site provides content mixed with advertising messages Portal: Search engine that may include varied content or services Classifieds: List items for sale or wanted for purchase. User Registration: Content-based sites that are free to access but require users

to register and provide demographic data Query-based Paid Placement: Sells favorable link positioning or advertising

keyed to particular search terms in a user query. Contextual Advertising/Behavioral Marketing: Freeware developers who

bundle adware with their product Content-Targeted Advertising: It extends the precision of search advertising to

the rest of the web Intromercials: Animated full-screen ads placed at the entry of a site Ultramercials: Interactive online ads that require the user to respond.

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INTERNET provides new advertising opportunities Popup, banners, e-mail advertisements,...

Since the rise of "entertaining" advertising people may like an advertisement enough to wish to watch it later or show a friend have FUN with company’s advertisements

Growing importance of the niche market using niche or targeted ads advertisements are targeted to a specific group and can be viewed by anyone wishing to find out more about a particular business.

Industry DIVERSIFICATION Ad Agencies Freelance advertising public competitions to create ads for

company’s products. Advertising EDUCATION importance of advertisement in

cultural and technological changes

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Today’s Advertisements try to influence people CONSUMERISM

Advertising campaigns poor in ethical values sex and race discrimination

Solution new tax over advertising companies which advertisements break established rules

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Psychological factors → thinking, feeling, sensation, and intuition → completely enthralling experience, not one with negative connotations

Companies should aim to strengthen customer interactions with advertisements on the Web

Unfortunately, most companies provide a generic experience to all customers instead of delivering a personalized experience.

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Commercial advertisers often seek to generate increased consumption of their products or services through branding

ETHICS → large numbers of advertisements (i.e.flashing banners), misleading images looking like error messages from the operating system, websites unethically using online advertising for revenue, without monitoring the links

MALWARE → advertising methods unethical and even illegal (external applications which alter system settings, spawn pop-ups, and insert advertisements into non-affiliated WebPages) → labelled as SPYWARE/ADWARE.

PRIVACY AND ANONYMITY → tracking the browsing of users across websites

ENVIRONMENT → 77% of consumers describe themselves as “green” and “actively living their lives conscious of their health and environment”

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Results-based and measurable Rich, varied and interactive Targeted effectively at desired consumer

segments Attuned to consumer desires to control

media experiences Direct response focus

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94% of all email messages are

spam

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"Consumers are getting harder to influence as commercial clutter invades their lives." More: "People are tiring of ads in all their forms... [a recent] study found 65% of people now feel 'constantly bombarded' by ad messages." (The Economist, 2004)

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WAYS OF WORKING Activities we have Performed

-Looking for information about the history, the evolution, the structure and the operations of the industry in:

The Online Advertising Industry: Economics, Evolution, and Privacyhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1376607

History of advertising www.mediaknowall.com/Advertising/history.htmlHistory of internet advertising” www.historyoftheinternet.net

Business models on the web digitalenterprise.org/models/models.html#Advertisinghttp://digitalenterprise.org/models/models.htmlhttp://www.monitor.com/Portals/0/MonitorContent/documents/Monitor_Truth_About_Internet_Business_Models.pdf

SEVERAL ARTICLES

WEB SITES Pzrservices.typepad.com/advertisimgisgoodforyou

VIDEOS

Vator Reports: The Rapidly Changing Online Marketing and Advertising Industryhttp://www.youtube.com/watch?v=WKn-lLzCLik

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CONCLUSIONS IWhat have we learned

-Advertising is the description or presentation of a product, idea, or organization, in order to induce individuals to buy, support, or approve it.

-How the industry in structured

-How new technologies are influencing and changing the advertising industry.

-What are search engines, banner ads, buying online ad space.

-Consumer concerns in this industry

-What these concepts mean in the advertising industry

ETHICS

MALWARE

PRIVACY AND

ANNONYMITY

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REALLY HIGH INFLUENCING THE

DECISSION MAKING PROCESS OF THE

ADVERTISING COMPANIES

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CONCLUSIONS IIIWay of Thinking Changes

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