© 2008 Thomson, a part of the Thomson Corporation. Thomson, the Star logo, and Atomic Dog are trademarks used herein under license.  All rights reserved.

© 2008 Thomson, a part of the Thomson Corporation. Thomson, the Star logo, and Atomic Dog are trademarks used herein under license.  All rights reserved.

INTERNET MARKETING:INTEGRATING ONLINE AND OFFLINE STRATEGIES

Chapter 1

Internet Marketing Enters the Mainstream !Is

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

THE INTERNET IS CHANGING THE WAYWE LIVE AND WORK

In What Ways?

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

INTERNET PERVASIVE

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

INTERNET PERVASIVE, NOT PREDICTIBLE

http://www.pewinternet.org/Infographics/Generational-differences-in-online-activities.aspx

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

HUGE CHANGES

http://www.online-publishers.org/

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

VARIETY OF CONTENT– B2B as well as B2C

http://www-01.ibm.com/software/info/television/index.jsp

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

NON-PROFITS, GOVT. OFTEN LAG

http://www.nature.org/activities/features/

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

MEDIA USE CHANGING

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

Newspaper Readership Declining Since 1990sTV Still Dominant News Source (Pew)

http://www.marketingcharts.com/television/internet-plays-larger-news-role-but-tv-still-dominates-5744/

Usage PatternsDiffer by Age—Why?

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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

• 1991: Gopher and HTML

• 1993: Mosiac

• 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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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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• New Segments Emerging

eg. , Age, BEHAVIORAL

• Marketing As Conversation

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

SOCIAL MEDIA STRATEGY

Recent Model – Sloan Center for IR, UCal RiversideLISTEN > EXPERIMENT > APPLY > DEVELOPImportance of Integrated Marketing

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

SOCIAL MEDIA – THE FUTURE

http://www.destinationcrm.com/Articles/CRM-News/Daily-News/Social-Media-The-Five-Year-Forecast-53635.aspx

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HOW ONCE-MIGHTY HAVE FALLEN

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

Consumers Use The Internet

For Many Reasons.

The Primary Ones Are

Communication

Information

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HOW ARE TRADITIONAL BUSINESSES USING THE INTERNET?

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

MARKETERS TRY TO FOLLOW AUDIENCES

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

http://www.marketingcharts.com/interactive/marketers-top-10-wish-list-for-agencies-of-the-future-5904/sapient-marketers-digital-channel-use-now-futurejpg/

AND USE MOST EFFICIENT MEDIA IN ECONOMIC DOWNTURN

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

INTERACTIVE, SOCIAL LEADING WAY

http://ana.blogs.com/liodice/

The 66% who used social media this year represents an increase over 2007 survey results, which revealed that only 20% of marketers were using social media and 25% were employing viral videos two years ago.

Despite the interest in blogs, mobile and social media, however, the newer media platforms that will get the most spending in 2009 are still the ones that are more established:•Own website (26%)•Search engine marketing (19%)•Online ads, including banners, etc. (17%)

http://www.marketingcharts.com/interactive/new-media-hits-mainstream-tried-and-true-still-works-best-10087/

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

Internet Marketing Is Only One Part Of The Marketing Communications Mix.

It Rarely Works Well In Isolation From Other Communications Channels.

The Question Is

WHAT ROLE SHOULD THE INTERNET PLAY IN THE MARCOM STRATEGY?

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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• Location Is Becoming Irrelevant

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

EFFECT ON BUSINESS PROCESSES

• Cost

• Quality

• Customer Access/Community

• Choice

• Collaboration

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

TRANSFORMATIONAL CHANGE

The Overall Effect of the Unique

Characteristics of the Internet

is an

Important Shift of Power/Control

TO THE CUSTOMER.

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

THE INTERNET MARKETING PARADIGM

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

THE GENERIC OBJECTIVES

• Customer Acquisition

• Customer Conversion

• Customer Retention

• Customer Value Growth

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

THE MARKETING INPUTS

• Internet Business Models

• Interactive Channels Websites, Email, Wireless, Misc.

• Offline Channels Mass Media, Events, Sponsorships, PR

• Social and Regulatory Issues

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

THE MARKETING ACTIONS

• Advertising and Promotion Direct Response Brand Development

• E-Commerce

• Customer Service and Support

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

INTERNET INFRASTRUCTURE STACK

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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. Information Economy Characterized by Choice, Abundance

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Internet Marketing: Integrating Online and Offline Strategies © 2007 Thomson, a part of the Thomson Corporation.

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