INTERNET MARKETING:INTEGRATING ONLINE AND OFFLINE STRATEGIES

Chapter 1

Internet Marketing Enters the Mainstream

2

THE INTERNET IS CHANGING THE WAYWE LIVE AND WORK

In What Ways?

3

EVOLUTION OF THE INTERNETSlow Growth from 1957 Through 1990

• 1950s: The Cold War spawns the ARPAnet

• 1960s and 70s: Slow growth—limited to scientists and researchers around the world

• 1980s: TCP/IP; National Science Foundation operated the backbone, banned commercial traffic

4

EVOLUTION OF THE INTERNET1990s Through Present: Boom to Bust to Stable Growth

• 1991: Gopher and HTML

• 1993: Mosaic

• 1995: Yahoo!

• Throughout the 1990s: Venture Capital Dollars Chasing Untried Business Models

• 2000 and 2001: Business Failures and Disappearance of Market and Venture Capital

• 2004 On: Rapid Growth in Users, Content, and Sales (B2C and B2B); Emergence of New Players Like Google

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CONTINUED EVOLUTION – WEB 2.0

• The Web As Common Platform

• Collaborative Knowledge Creation, Sharing Links, Mashups, Blogs, Podcasts, Social

Networks And Many Others

• Rich User Experiences

6

SABRE

From An Efficient Internal SystemTo A Successful Information Product

• 1950s and 60s - Used to Support American Airlines Operations

• 1970s - Deployed Into Travel Agencies• 1980s - Customers Allowed Network

Access• 1990s - Travelocity and GetThere• 2000 - Spun Off As Independent

Company

7

INTERNET PLAYS A ROLE IN THE LIVES OF A MAJORITY OFAMERICANS

8

Consumers Use The Internet

For Many Reasons.

The Primary Ones Are

Communication

Information

9

HOW ARE TRADITIONAL BUSINESSES USING THE INTERNET?

10

NET PLAYS INCREASINGLY LARGE, STRATEGIC ROLE IN MARKETING

11

Internet Marketing Is Increasing Because

It Can Be Precisely Targeted

Cost is Low Relative To Other Channels

It Is Measurable And Can Be Held Accountable For ROPI

12

UNIQUE CHARACTERISTICS/BENEFITS

• Common Platform• Perfect Information• Global• Interactive• Distance Is No Longer Relevant

Size Is Relevant To Brand Strength and Resources

• Always On• Many-to-Many

13

EFFECT ON BUSINESS PROCESSES

• Cost

• Quality

• Customer Access

• Choice

14

TRANSFORMATIONAL CHANGE

The Overall Effect of the Unique

Characteristics of the Internet

is an

Important Shift of Power/Control

TO THE CUSTOMER.

15

THE INTERNET MARKETING PARADIGM

16

THE GENERIC OBJECTIVES

• Customer Acquisition

• Customer Conversion

• Customer Retention

• Customer Value Growth

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THE MARKETING INPUTS

• Internet Business Models

• Interactive Channels Websites, Email, Wireless, Misc.

• Offline Channels Mass Media, Events, Sponsorships, PR

• Social and Regulatory Issues

18

THE MARKETING ACTIONS

• Advertising and Promotion Direct Response Brand Development

• E-Commerce

• Customer Service and Support

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INTERNET INFRASTRUCTURE STACK

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INCREASED PRODUCTIVITY

Moore’s Law

Metcalfe’s Law

Computing Power Doubles; Cost is Cut in Half

Power of the Network Increases Geometrically

With Each New Connection

21

STRATEGIC DRIVERS OF THE INTERNET ECONOMY

1. Information Gives Greatest Value Added

2. Distance No Longer Matters

3. Speed Is Of The Essence

4. People Are The Key Assets

5. Growth Is Accelerated By The Network

6. Marketers Can Deal with Customers 1 to 1

7. Demand Can Be Predicted More Accurately

8. Transaction & Coordination Costs Decrease

9. Customers Have Power

10.Economy Characterized by Choice, Abundance

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SUMMARY• Growth and Innovation Continue• Businesses are Taking Advantage of the Unique

Characteristics of the Internet• Key Marketing Objectives

Customer Acquisition, Conversion Retention, Value Growth

• Complex Technological Infrastructure• Strategic Drivers Of The New Information-Driven

Economy• Internet Has Re-Written Many Economic Rules-BUT

Good Business Processes Essential Profitability/ROI Required

• Integral Part of Marketing Activities Traditional/New Economy Large/Small Global/National/and increasingly Local