A report on the Study of Online Marketing

Techniques: India

By
Aditya Rao 2005A4PS310

In fulfillment of the Study Oriented Project

under the guidance of

Anil K Bhat

Birla Institute of Technology & Science, Pilani

27th April, 2009
 Acknowledgements
With profound gratitude and respect I express my sincere thanks to Prof. Anil K Bhat for giving
me the opportunity to work under him. His timely guidance and advice always kept me
motivated to do better and on the right path. I would also like to thank him for the helpful
resources suggested by him.

And last, our earnest thanks to Google and the World Wide Web, without which this report
would have no beginning, nor an end.
 Abstract
This report aims to cover all the important online techniques currently being practiced by
industry professionals. It elaborates every technique with relevant case studies, examples etc.
Important online marketing techniques covered in the report are Search Engine Optimisation
Marketing, Viral Marketing, and Display Advertising etc.

The report also takes up Mobile Advertising and its effectiveness in India. Every section is
concluded by some suggestions to improve the current monetization and business models in
every kind of marketing technique.

A final conclusion is drawn as to the state of Online Marketing in India and its place in the
future, which surely looks bright.
 Table of Contents
1. Internet – An Introduction

1.1. Past, Present and the Future

1.2. The Indian Scenario

2. Internet Marketing

2.1. Push or Pull?

2.2 Types of Online Marketing

3. Search Engine Marketing

3.1. Introduction

3.2. Page Rank: An Overview

3.3. Analyze Google Rankings

3.4. Case Study: SEO for small companies

4. Display Advertising

4.1. Introduction

4.2. Banner Copy Testing

4.3. Portal Case Study: Hong Kong web site

5. Viral Marketing

5.1. Introduction

5.2. Evaluating a viral campaign

5.3. Viral campaign backfires: A case study

6. Interactive Marketing
 6.1. Introduction

6.2. Interactivity and advertising

7. Social Media Optimisation

7.1. Introduction

7.2. MySpace or yours?

7.3. Growth of Social Media

7.4. Social Media Backfires: A Case Study

8. Mobile Marketing

8.1. Introduction

8.2. Advertising for Gen M

8.3. Effectiveness of Mobile Advertising: India

9. Integrated Marketing Communications – Online (IMC)

9.1. Introduction

9.2. Overview

10. Conclusions

10.1. Future of Online Marketing

10.2. Future of Online Marketing companies in India

11. References
1. Internet – An Introduction
1.1. Past, Present and the Future
With increased globalization of the world economies, for most enterprises, market
opportunities seem to be endless these days. This in turn, of course, causes heightened
competition among the players in order to achieve better performance. Consequently,
departing from the traditional commercial strategies and tactics, innovative managers are
looking for unique ways to compete more effectively on a local, regional and global basis. The
information superhighway is being shaped by advances in digital telephone networks,
interactive cable television, personal computers, online services and, finally, the Internet.

The Internet, also known as the “International electronic network,” began in 1968 by the
Advanced Research Projects Agency of the Department of Defense. Originally, known as the
ARPAnet, the Internet was started as an experimental network connecting different university
computer centers throughout the country. The combination of ARPAnet and commercially
available backbone services forms what the Internet is today – the world’s largest collection of
decentralized computer networks. There are over 30,000 estimated computer networks
connecting more than 1.5 million computers to one another. Transmission Control
Protocol/Internet Protocol (TCP/IP) is used by all of these networks as the standard
communication protocol through which data communication is accomplished. At least 20
million people (actually estimated at 30 million) in 135 countries send and receive information
through the Internet.

The Net represents a $300 billion market. Over 30 million companies and households around
the world use the Internet as a communications link through e-mail, interactive advertisement,
bulletin boards, research and online discussion groups. At its most basic level, the Internet
serves as a seemingly endless catalog of marketing messages and advertising in an interactive
fashion.

Advantages of the World Wide Web

• Global opportunities
 The Net access delivers a company with an opportunity to implement highly cost-
effective vehicles not only for their own marketing and customer support needs, but
also for positioning themselves globally. More and more businesses are discovering that
they have the ability to reach and communicate with current and potential customers
abroad through the Internet with the same cost and ease as in the USA.

• Accessibility
Companies who use the Internet, not only for advertising, but for e-mail and customer
ordering, increase their hours of business on a global spectrum. Instead of a typical
eight-hour day, businesses have increased their opportunities by providing 24-hour
access for branch offices, business contacts, and shoppers.

• Utility
Providing appropriate form, place and time utility (i.e. giving customers the opportunity
to decide what they want, where and when) may result in a competitive advantage for
the marketers.

• Advertisement effectiveness
Traditionally, advertising has been one of the major forms of communication between a
firm and its clients. But with internet, advertising has moved on to interaction,
customerisation and constant feedback models.

1.2. The Indian Scenario

Though the internet entered the Indian market a bit late, Indi has now fully emerged as an IT
giant in the making and internet is playing a pivotal role in connecting businesses and providing
employment opportunities. Here are some statics on the Internet usage in India:

• 80 million users by 2010

• Some target markets include matrimony sites, social networks, movie review sites etc.
• The market is growing at 11.2%
• 5th largest internet market globally.
If we look at some Online Advertising statistics from US:

• Search marketing spending will grow by 14.9% in 2009

• US Internet ad spending will increase to $25.7 billion in 2009, an 8.9% growth rate.

With online communities growing by the millions, most companies have taken notice of the
power of this huge consumer base, and are trying to reach them from the bottom of the base.
And a new trend is emerging called Behavioral Targeting:

• Uses information collected on an individual's web-browsing behavior, to select which

advertisements to display to that individual.
• Site owners display content more relevant to the interests of the user.
• Used by online publishers and advertisers to increase the effectiveness of campaigns.
2. Internet Marketing
Internet marketing is the marketing of products or services over the Internet. The Internet has
brought many unique benefits to marketing, one of which being lower costs for the distribution
of information and media to a global audience. The interactive nature of Internet marketing,
both in terms of providing instant response and eliciting responses, is a unique quality of the
medium. Some of the major advantages of marketing over the internet that have already been
discussed above include:

• Cheaper and better reach to target audience.

• One to one personal approach.
• Statistics can be tracked easily. This results in better feedback and improvements.

2.1. Push or Pull?

The marketing techniques over the internet have evolved into a truly novel concept, which
combines the push techniques of Television, Print marketing etc. and uses clever placement of
content to define a new concept called ‘Push me, pull you’!

In the world of Web marketing advertisers' `push' of content only works if someone is `pulling'.
Successful marketing on the Web is all about pushing content that has the most `pulling' power
for the Web user. In order to build a thriving content site, you must offer news or truly
customized data. It is not just about creating ``fresh coolness''.'

To create successful marketing on the Web one has to understand the motivation that will drive
pull'. Many of the principles of Internet marketing are the same as for traditional marketing:
understanding the target audience (the `who' and `what' for communication), how to reach it
and how to tell if it has been reached, and communicated successfully with. In the case of
marketing on the Web, however, it is also necessary to think about who in the whole wide Web
world will be looking to `pull' the content, and whether the content will appeal.

There are `wired' audiences that are particularly likely to `pull' content. These tend to be
specialists and opinion formers, such as journalists who rely on the Web as a source of
information. Public relations consultancies are harnessing the Web as a conduit for reaching
journalists with press information on new brand launches. In this way the Web acts as a
powerful `few-to-many' communications channel, whereby the targeted journalists reach out
to their readers, often of traditional print media, with the story. By dint of having the journalist
seem to endorse the launch, the story is more credible, with the further benefit that the Web is
global, and instantaneous in its reach. Once the dynamics for `pulling' the defined target
audience are understood, marketers can start to consider how to `push' content out. `Push'
may entail promoting an online presence through traditional marketing methods or it may
mean `pushing' promotional material to people once they come online. Whatever the online
marketing technique used, many of the rules of offline marketing apply; research is the key to
planning, implementing and measuring the effectiveness of an online campaign.

2.2 Types of Online Marketing

There are many ways to publish and market content and services over the internet, most of
which can be published instantaneously for millions of viewers. Some of the techniques studied
in this report include:

• Search Engine Marketing

• Display Advertising
• Viral Marketing
• Interactive Marketing
• Social Networking
• Mobile Marketing
• IMC (Integrated Marketing Communications) Online

3. Search Engine Marketing

3.1. Introduction
Wikipedia, the online library quotes, ‘Search engine optimization (SEO) is the process of
improving the volume or quality of traffic to a web site from search engines via "natural"
("organic" or "algorithmic") search results. Typically, the earlier a site appears in the search
results list, the more visitors it will receive from the search engine. SEO may target different
kinds of search, including image search, local search, and industry-specific vertical search
engines.’
Marketers all over the world are using various techniques to push their web sites at the top of
the results page. This section will deal with how Google works, how can one optimize rankings
and what can be the best SEO approaches for a small company.

3.2. Page Rank: An Overview

The following sub-sections deal with the calculation, implementation and impact of the
PageRank, which is the prerequisite to recapitulating existing search engine optimization
strategies. A complete understanding of how Search Engine results can be optimized are thus
obtained, which provides a sound base for further reading. Understanding the implementation
and impact of the PageRank (PR) algorithm allows the focused development of Internet-
marketing strategies.

The following primarily introduces the calculation of the PR. Based on the calculation model,
the implementation is illustrated. Additionally, the impact of the PR, different link strategies
and feasible SEO approaches are also elaborated.

Calculation

The Page Rank represents a web site’s importance within a set of pages (e.g. Internet) and has a
major impact on the positioning of web sites within the search engine result pages (SERP). The
following Equation describes the rather simple calculation of the PR:

Within this formula q is the residual probability (usually 0.15) derived from the “random
walk“principle (used to avoid rank sink), N the total number of pages, M(pi) the set of pages
linking to pi and L(pj) the number of outgoing hyperlinks of the page pj . Limiting the number of
iterations required to efficiently calculate the precise PR is a major determinant to optimizing
the speed of the crawling/indexation process. The overall ranking of a page within the SERP is
deducted from the PR and the relevance-score (RS). As described in the next equation, those
two factors are weighted by a set of controls and a factor-base, which is defined as:
Within this formula, RS is the relevance-score (determined by onsite-factors like title-tag), PR
the PageRank, as explained above, a, b, are weight controls and fb a factor-base to integrate
the logarithmic core PR. While the PR is linear, the rank shown on the Google toolbar
(http://toolbar.google.com) or alternative tools is mapped on a logarithmic scale with an
approximate basis of 5-8.

How does Google work?

Google is fetching URLs coordinated by a URL-server. The fetched sites are compressed and
sent to a store-server indicated with a doc-id. An indexer distributes the parsed and analyzed
web page as hit lists (set of words) in a partially sorted forward index barrel. Additionally, the
indexer stores information about hyperlinks on the document in an anchor file. Those
hyperlinks, converted by a URL-resolver, are again associated with doc-ids. A database with
pairs of such resolved doc-ids is used to compute the PR as stated above. Finally, the sorter
creates an inverted index from the barrels sorted by word-ids which is then used by the
searcher. Performing a single word search, Google converts the word into the word-id to search
in the short barrel, analyzing the hit lists of the indexed documents. The hit type is combined
with a type weight (the dot product of the vector of count-weights with the vector of type-
weights) to the RS. For a specific query, Google uses onsite-factors to select a first subset of
relevant matches (RM; example 10,000 pages) from the total number of matches (M; example
100,000 pages) from the large repository (approximately 27 billion pages). This subset RM is
determined by approximately two simple indicators (presumably title-tag and keyword density
(ratio of the number of occurrences of a particular keyword or phrase to the total number of
words in a page As explained, the onsite-factors are highly important for Web pages in such an
algorithm; a high PR is totally insignificant in case the Web page does not fulfill the
requirements for being included in RM. This non-PR threshold determines a set of different SEO
strategies. The significance of PR for the overall ranking has stressed the necessity of
distributing inbound hyperlinks within the Internet.

Impact on SEO strategies

The establishment of more inbound hyperlinks has been approached by: link-exchange and link
spamming. While link-exchange was still a rather natural process (“I link to you, so you link to
me”), link spamming was implemented in many different forms. Link-farms for example
enabled the distribution of a large amount of static hyperlinks utilizing rather simple algorithms.
More sophisticated technical approaches were the active utilization of the web site’s structure
to highlight specific web pages. The structures of the web pages have an important impact on
the PR distribution.

3.3. Analyze Google Rankings

The purpose of this sub-section is to identify the most popular techniques used to rank a web
page highly in Google. The paper presents the results of a study into 50 highly optimized web
pages that were created as part of a Search Engine Optimization competition. The study focuses
on the most popular techniques that were used to rank highest in this competition, and
includes an analysis on the use of PageRank, number of pages, number of in-links, domain age
and the use of third party sites such as directories and social bookmarking sites. A separate
study was made into 50 non-optimized web pages for comparison. Understanding which factors
can influence a page’s ranking in a search engine is therefore crucial for any web site that
wishes to attract large numbers of users (in particular, e-commerce sites). This section
therefore sets out to identify the most effective techniques that can be used.

In order to do this, the section presents the results from an analysis of the most successful
pages that were created as part of a Search Engine Optimization (SEO) competition (SEO is the
process of trying to rank highly a given web page or domain for specific keywords). Because all
of these pages are highly optimized, the resultant set of data represents an aggregation of the
most popular (and thus implicitly, the most effective) techniques used by the most successful
Search Engine Optimizers in operation today.

Issues with inferring search engine-ranking factors

The web factors that could potentially influence a search engine’s ranking of a web site can be
classified according to two distinct categories:

Query-Factors (On-Page factors), which rely on the content of a web page, such as the
existence and frequency of keywords; and Query-Independent Factors (Off-Page factors), which
rely on information from external web pages that link to a web page under consideration.

However, both types of factor are notoriously difficult to enumerate as the search engines do
not reveal which particular ones they use when determining a web site’s ranking. Although
identifying the ranking factors is extremely difficult to infer, and the claims made by individual
SEO companies difficult to verify, an understanding of the most effective techniques can be
achieved by analyzing a set of highly optimized web pages created by a host of the leading SEO
companies and individuals. These web pages can easily be found by entering a specially
constructed query into any search engine. This query contains the keywords V7ndotcom
Elursrebmem, which was defined by the industry-leading SEO web site: www.v7n.com in a SEO
competition it ran between January 15 2006 and May 15 2006. The keywords in the query were
constructed in such a way as to ensure there were no existing pages that would rank for this
query before the competition began, and the only pages that would ever rank for it would be
those that would be competing in the competition. The participants were leading SEO
companies and individuals.

Experimental design and methodology

Defining the factors to analyze

Of the 200 or so factors that Google claim they use when determining a page’s rank, the
following have been chosen as representing the factors that most likely exert the greatest
influence on a page’s rank:

• Number of web pages in a site indexed by search engine.

Some web sites are bigger than others by several orders of magnitude. Bigger may be
better as far as rankings are concerned.
• PageRank of a web site.
Google’s PageRank algorithm helps rank web sites according to the number of in-links,
and the calculated authority of each site providing the in-link. Generally, the higher a
site’s PageRank, the higher it’s ranking (and the more authority it can confer to other
sites it links to).
• Number of in-links to a web site.
PageRank can be substituted by in-links as a good approximation of rank.
• Age of the web site’s domain name.
The SEO community currently speculates that older domain names will rank more highly
than newer domain names for the same content.
• Listing in Yahoo and DMoz directories.
Both Yahoo and DMoz.org (the Open Directory) are human-edited directories whose
results feed into directories from other search engine companies such as Yahoo and
Google, respectively. Because of the high quality control of these directories, the sites
they list are deemed to be of high authority, which the search engines may use as one of
their ranking factors.
 • Number of pages listed in Del.icio.us.
Del.icio.us is a social bookmarking site that enables anyone to bookmark a page.
Because of its popularity and the fact that a bookmark can be interpreted as an implicit
recommendation of a page, the number of different people who have bookmarked a
specific page may add to that page’s ranking.

Results and analysis

Analysis of the top ten results for the query V7ndotcom Elursrebmem

At first glance, the results presented in Table I, show a wide variance for each individual factor.
However, the techniques used by each SEO competitor become clearer, as the following
analysis shows.

Number of pages indexed

For the top ten results, the number of pages of individual sites indexed by Google range from
two to 21,600. Widening the result set to the top 50, this range increases from two to 334,000,
with some SEO competitors clearly attempting to influence the rankings through sheer volume.
However, with the second placed competitor having only eight pages indexed, a high volume of
pages is clearly not needed to rank highly – quality seemingly counts over quality.

That said, an analysis of the top 50 shows that creating a large number of pages is a technique
used by many SEOs, with some success. Figure 1 shows the number of pages indexed for the
top 50 (number of pages shown on a logarithmic scale). The majority of pages ranked in the top
27 clearly have more pages indexed than those that rank between 28 and 50.

PageRank of a web site

The PageRank of the top ten from the v7n set ranged from PageRank 4 (PR4) through to PR7.
Figure 2 shows the frequency distribution of PageRank, which clearly shows how important
PageRank is to a page’s ranking. For example, no page with a PageRank less than 4 ranked at all
within the top 40. However, despite the obvious importance of PageRank, it is impossible to
state that a specific page with a certain PageRank will rank higher than other pages with a lower
PageRank; only that high PageRank pages tend to rank higher than lower PageRank pages.

Comparing the PageRank distribution for the v7n set (Figure 2) with the mobile phones set
reveals a broader distribution of the PageRank values for the mobile phones set. This is due to
different types of web site all ranking highly for the query mobile phones, each with its own
individual properties that will impact upon a search engine’s ranking algorithm.
Number of in-links

Figure 4 shows the number of page in-links for the v7n set. Note that these figures reflect the
number of in-links to a specific page, rather than to the whole web site. The trend clearly shows
a decline in the number of in-links as the rankings fall.

Domain age

Domain age (i.e. the date at which each domain was registered) has been posited as an
important factor in the ranking of a site, as older domain names are said to be inferred by
Google’s ranking algorithm as conveying more trust, and therefore should rank higher than
newer domains.
DMoz directory submissions

Figure 6 shows the number of sites listed in The Open Directory for the v7n set and the mobile
phones set. The mobile phones set is consistently high, with 80 percent of sites included in the
directory. In contrast, the v7n set shows a marked difference between the top 10 sites and the
remaining sites, and only 22 percent of sites in the whole set being included. Being listed in
DMoz is notoriously difficult, however, with lead times of six months to a year before an entry
submission is actually included, due to the fact that human volunteers must judge each and
every entry.

Yahoo directory submission

The results of the Yahoo directory submission analysis were less conclusive, as so few of the
v7n set had a Yahoo directory entry. Only 14 percent of sites were listed, 33compared with 90
percent of the mobile phones set. The reason for this is presumably the fact that entry into the
Yahoo directory costs $300 and again may take several months for a site to be listed.
Consequently, with a high initial outlay and no guarantee that an entry will even appear in the
Yahoo directory in time for the contest’s closure date, it appears that very few SEOs attempted
this option.
Del.icio.us bookmarks

The number of pages bookmarked in Del.icio.us for both the v7n set and the mobile phone set
also shows a notable disparity. Del.icio.us links will only appear if people choose to bookmark
them. Although this appears to be a fail-safe way of determining a page’s popularity, a
bookmark does not, of course, give any indication of the intention of the bookmarker. As such,
a page can appear popular simply by the page’s author encouraging as many people as possible
to bookmark it for reasons other than popularity.

Conclusion: 92 percent of the top 50 pages in the mobile phones set have del.icio.us links, while
only 54 percent of the v7n set do. However, of the v7n set, there is a clear trend showing more
del.icio.us bookmarks the higher the ranking. As such, attracting del.icio.us bookmarks would
appear to be a technique used by the more successful SEOs, but it cannot be said that
del.icio.us bookmarks confer high ranking

Conclusion

This section has presented the results of a study into the techniques used by top SEOs to rank
their web pages no. 1 in a SEO competition. After describing the experimental design and
methodology used, the results of the study were as follows:
 • Many SEOs generated many pages to influence rankings, which proved a partial success.
• High PageRank in Google clearly plays a major part in a page’s rankings, and attaining a
high PageRank was a goal of most of the SEOs. However a PR of a particular rank will not
necessarily rank higher than a PR of a lower rank.
• The more successful SEOs attracted many in-links to their page, with a clear trend
showing declining in-links for lower rankings. Accordingly, attracting many in-links is
another technique used by SEOs that would appear to have a good deal of success.
• A listing in DMoz is a technique favoured by the more successful SEOs.
• Many SEOs use older domains for higher rankings, and there may be truth that this is a
successful technique.
• The more successful pages had more del.icio.us bookmarks

3.4. Case Study: SEO for small companies

Smaller companies must continually review the pay-per-click (PPC) option or an organic listing
on search engines. The purpose of the following section is to present a case study of a small
manufacturing firm that is beginning to evaluate which search engine, Yahoo or Google, is more
cost effective. Ultimately, management identified different variables and analytically reached to
a conclusion whether PPC advertising is worth the cost to the company. For the purpose of
study, one month’s section of data from Yahoo and Google was examined. Patterns or
indications as to which key word landed a better bid position in the PPC campaign were
determined. And thus, seven consecutive campaigns for click-through rates (CTRs), average cost
per click (CPC) and average position of keywords between the search engines Yahoo and Google
were observed.

As has already been discussed in the previous sections regarding SEO techniques and, the
search engine generates a ranked listing of sites relevant to the keyword used by the customer.
The sites listed first are those deemed most relevant by the search engine based on factors like
site content, links and current updates. Typically, the organic listings are the bulk of the copy on
the screen, and each search engine has their own algorithm for ranking the list of sites.

Pay-per-click advertisements are listed on the side at a prominent place, usually shaded or
noted as ‘‘sponsored’’ links so that a customer will understand that the link was purchased by
the web site business. The price paid per click is determined on an auction basis. For example, if
a business wants the top spot for the term ‘‘gold ring’’, it will bid up to a certain amount ‘‘per
click’’. Whenever the search engine displays an advertisement for a business web listing and a
customer clicks on it, that action leads the customer to the business web site, and the company
is charged an amount of money by the search engine company. Since this charge occurs each
time a customer clicks through to a business web site and since this cost is changed regularly on
an auction basis, it is obvious that this can be an expensive process, especially to a small
company. The question arises, is this cost necessary to the business, or is the organic listing just
as productive to the small business.

A case study: data from Kennedy Incorporated

Smaller companies are always concerned with cost-benefit analysis. At first glance, it appears
that the PPC option would be very productive for small businesses. Although it can be costly,
sometimes it is the only way a company’s web site will be seen by customers. Also it is difficult
for small companies to compete with the giants in the organic click venue, because in the
organic stream, the larger companies will generally land on top of the list. Therefore,
companies must regularly examine the cost of the PPC, and the position they have purchased,
but they must also review their web site design to ensure that the organic listing is frequently
landing the company one of the top spots of the list. For example, good web page design
should include creating specific landing pages for popular key words. And the company’s
management wanted to balance using the organic venue and the PPC one for the profitability
of their company. Kennedy decided to use the PPC method utilizing the two largest search
engines, Google and Yahoo. The question for the company is how to best deploy its limited
marketing budget.

The following two tables show different data obtained from Yahoo! and Google, respectively.
Within the PPC method, management first wanted to know what keyword phrases to pick and
what would be the CPC to insure them a position at the top of the sponsored list. Management
agreed that being in one of the top three positions was acceptable. For example, the ‘‘key chain
promotional product’’ had a click cost of $2.73 for first place on the sponsored list, but dropped
dramatically to a cost of $0.15 for the second position bid. That is a huge cost differential for
simply being listed second on the sponsored list. Also that keyword only received 126 search
requests, so being second or third was quite acceptable to the company. They noticed that all
the keywords that received search requests numbering in the thousands had fairly small
differentials from first to second bid and often even to third bid. In those cases, it would be
good strategy to have the highest bid, because in spending a few pennies more the company
could get the top bid.

Once the company decides on keyword phrases to use, then they would like to compare the
cost of search engines. Since Kennedy Incorporated set a budget with Google and Yahoo to stay
below a certain dollar limit, the total costs were almost the same. However, the average CPC
was higher with Google. That would make the difference in the average CPC rather significant.

Also notice that the click through rate (CTR) for Yahoo was 3.83 per cent and for Google it is
only 0.64 per cent. That number is simply the number of clicks divided by the number of
impressions. The CTR is very important, because it is the first step a consumer takes to make a
conversion to a sale. The bottom line is that for the same dollar amount of advertising spent,
Kennedy Incorporated obtained a better CTR on Yahoo than on Google. In this regard, Yahoo
outperformed Google in this Sample. Typically, a higher average position was achieved with
Yahoo as well. t is clear from the data, that Yahoo provided more traffic (e.g. more clicks) to the
web site of this small company with its limited marketing budget. Since clicks through to the
web site are the first step in the sales process, the data suggests that Yahoo provided more
value for the investment than did Google
4. Display Advertising
4.1. Introduction
Display advertising is a type of advertising that typically contains text (i.e., copy), logos,
photographs or other images, location maps, and similar items. Display advertisements are not
required to contain images, audio, or video: Textual advertisements are also used where text
may be more appropriate or more effective. One common form of display advertising involves
billboards.

Display advertising also appears on the Internet, as a form of internet marketing. Display
advertising appears on web pages in many forms, including web banners. These banners can
consist of static or animated images, as well as interactive media that may include audio and
video elements. Adobe Systems Flash or .gif is the preferred presentation formats for such
interactive advertisements. The Internet Advertising Bureau, an industry trade group, sets some
standards for online display advertisement sizes and shapes.

4.2. Banner Copy Testing

Corporate Web sites serve a variety of purposes such as direct selling, projecting corporate
image, providing product information, generating qualified leads, dispensing electronic
coupons, and handling a variety of post- purchase tasks. Companies generate Web site traffic
off line through active promotion of the address uniform resource locator (URL) in collateral
advertising material and online through registration with search engines, hypertextual links
with other Websites and in some cases paid banner advertisements on other Web sites. It is
this latter method of generating traffic that concerns this section, and various testing methods
to improve the efficiency of display advertising.

Advertising banners

Advertising banners are usually small (120-500 pixels wide × 45-120 pixels high), rectangular
displays on a Web page. As banner advertisements increase in popularity, so do calls for
advertisement banner research. Web advertisers question traditional media’s cost per
thousand (CPM) pricing model based on impressions, often insisting on paying for results, click-
throughs, as well as, or instead of, impressions. Advertisers want to understand who is clicking
on the banner, and which factors lead to higher click-through rates.

Click-through rates

Measuring and increasing advertisement banner click-through rates are important both for the
advertiser and the Web site sponsoring the advertising. As banner pricing moves away from
CPM and towards click-through rates, both parties will work towards increasing click-through
rates. For the advertiser or advertising agency shopping rate cards, click-through rates will help
determine which Web site offers the better buy. Targeting banner advertisements based on the
content of a Web site should tend to increase response rates.

Copy testing

Traditional copy testing or communication-effect research, often uses a paper and pencil test
after exposure to an advertisement, measuring the reported change in recall, recognition or
attitude towards a product. Web banner copy testing via click-through rates has at least one
major difference when compared to most copy testing in other media; that actual behavior can
be recorded and analysed. Some of the variables identified in such tests are described below.

Specific language communications effects

The experiment focused on mechanical aspects of wording choice, rather than message
variables readership was negatively affected by an imperative in the headline, and positively by
a determiner such as “a” or “the”. Some factors having no effect on readership included the
number of adjectives, nouns, verbs or total words in the headline, presence of personal
references, and use of an interrogative form. In some cases these factors affected either
recognition of the advertisement or the ability of the respondent to associate the brand with
the advertisement. For example, use of personal references (you, your) in the advertisement
had an effect on both advertisement recognition and brand association.

The experiment

The current pilot experiment involved four different banners randomly assigned to visitors
arriving at a shopping-oriented Web page
Experimental design

There were four treatment conditions, or banners, which were identical except for one line of
copy. The four separate examples read: “Specializing in finding your soul mate”, “Find your soul
mate”, “Click here to find your soul mate” or just “Click here”. The language used to create
Web pages is called the hypertext markup language (HTML). The home page for the banner
contained the following HTML:

<IMG SRC=”/cgi-bin/image.cgi” >

Most often, the SRC parameter in an IMG markup points to an image file. In the case of our
experiment, however, the SRC parameter pointed to a computer program. This program
generated a random number and then used that number to pick one of the four experimental
banners.

Working hypotheses

For practical considerations, we the first banner was used as a starting point. And a second
banner was developed in a simple attempt to demonstrate that Web copy testing could
improve the efficacy of a banner. The second banner contained cleaner copy: “Find your soul
mate”. Also, the second phrase is a sentence in the active voice, a linguistic condition
associated with high-readership performance. For that and for intuitive reasons, it was
reasoned that the second banner would outperform the original.

A second goal was to evaluate the common Web advertising practice of using the phrase “Click
here” on banner advertisements. Evidence suggests that “Click here” does add to banner
advertisement effectiveness. For the third advertisement the phrase “Click here” was added to
create the copy, “Click here to find your soul mate” and it was hypothesized that this banner
would outperform the simpler version without the phrase “Click here”. Finally, as a control
condition, we the “Find your soul mate” element and an advertisement with the simple phrase
“Click here” was included. To summarize, it was expected was that the click-through rates
would increase as we went from:

• specializing in find your soul mate;

• find your soul mate; and

• click here to find your soul mate

With “Click here” performing somewhat worse than “Click here to find your soul mate”. In
addition, we wanted to look at the possibility that some visitor segments had a higher click-
through rate than others

Results

The 18-day experiment yielded 2,272 usable visitors. Click-through rates for the four conditions

appear in Table I. As shown, the most effective wording was simply “Click here”, followed by
“Click here to find your soul mate”, “Find your soul mate” and last was “Specializing in finding
your soul mate”

Conclusions

Copy testing can improve banner advertisement effectiveness, but the quirks and unique
features of online media will require new theories and new studies. Our most surprising result
was that the basic imperative phrase “Click here” outperformed all of the other conditions, the
fact being attributed to the curiosity variable which is added to the copy banner.

4.3. Portal Case Study: Hong Kong web site

The following section deals with identifying some key success factors related to internet
advertising, in the specific case of a portal directed at a teenage audience in Hong Kong. It also
tries to derive a generally applicable formula for measuring the effectiveness of internet
advertising. It proposes a framework for advertising effectiveness that includes traditional
objective measures (click-through rates), subjective measures applied by advertisers, and
seasonality corrections. It successfully derives a mathematical formula for measurement of
effectiveness. Extracts components from ten banner advertising campaigns at one web site
between January 2001 and May 2002, and analyses them by means of proprietary data-mining
rule-induction software. Selects two rules form the several generated, on the basis of
confidence levels. The section concludes with the findings that, in the case example studied:
small interactive games and free gifts deliver the highest brand impression after normalization
of the banner click-through rate; revenue is significantly affected by local cultural and seasonal
factors; “media-rich” design is an important factor in attracting the target audience to click on a
banner. Notes the importance of countering the natural variability of click-through rates, and
proposes a variety of design add-ons to stabilise them.

The ability of the internet to deliver and obtain information in a flexible, effective manner at
relatively low costs is very attractive. It provides a new medium for breaking down the
traditional boundaries of media advertising. The research reported here focuses on “banner
ads” in particular. Two of the key features that distinguish those from traditional forms of
media advertising are control and interaction. The results showed that respondents wanted to
use banner ads for “maintaining social relationships” “curiosity” “practical reasons” and “two-
way communication” and to “rest and pass time”. They also demonstrated that image was
significantly more effective than text in banner advertising.

Web advertising for teenagers in Hong Kong

Young people make active choices about their media they use according to their personalities,
socialization needs, and personal identification. The interactivity of the internet provides
teenagers with an opportunity to communicate directly with advertisers. The web site in study
is publisher of the popular teenager magazine YES! At yes.com.hk

Pricing and effectiveness measurement

Three pricing and measurement models are commonly used for buying and selling banner
advertising: exposure-based cost-per-thousand; interaction-based click-through rate; an
outcome-based pricing model, in which advertisers pay for deliverables such as enquires and
purchases. The price of banners at the yes.com.hk site is mainly a fixed fee for a given period of
time, negotiated on the basis of cost per thousand exposures. Because of strong competition,
the company is investigating other models that are more directly related to performance

Advertising agencies favoured interaction and performance metrics, some 86 per cent reporting
that they used click-through rates for measuring advertising effectiveness, and only half
claiming to use such exposure-based criteria as cost-per-thousand. However, by default, click-
through rate is used in this section as the basis for evaluating the performance of an advertising
campaign.

Research methodology

The research goal is to study the factors that contribute to the success of advertising
campaigns. The adoption of successful advertising planning will very likely help a company to
achieve profitability. At the operational level, a sound strategic plan should lead to one of the
following:

• Increase in the value of the advertising service, as a basis for increase revenue from the
advertising rate.
• Reduction of the seasonal factors affecting advertising revenues.
• Increase in page traffic, making the site more appealing to potential advertisers.

The case study reported here, therefore, aims to identify success factors in advertising
campaigns for client advertisers. Promotion of those to potential advertisers has the potential
to increase the probability of success of a campaign. Clients who spend more on internet
advertising are those who feel competent at judging their agencies’ cost effectiveness and
measure internet advertising activities effectively. To address these issues, this study develops
a framework to account for advertising effectiveness that takes into account both click-through
rates and advertising effectiveness assessed by the client. It collects the top ten banner ad
campaigns at yes.com.hk from January 2001 to May 2002 (Figure 1) and extracts the
components of each promotion for analysis.

The value of Vo is obtained from the following formula expressing the success of a campaign:

Where Cn denotes the normalized banner click-through rate and is calculated by:
Where Ct denotes the average click-through rate of day t, t the ad exposure duration in days, Cy
the general average click through rate of the year and St the seasonal compensation factor.
Both the values Vs, Vo are normalized within a scale of 0-10. The success degree V is then
computed as follows:

Average CTRs of top 10 banners

In this study, a weight of 0.6 is assigned for Vs to derive the overall effective measurement V. In
calculating Vo, it is important to consider the seasonal fluctuations, because the time that
teenagers spend on the internet depends very much on special events and study breaks.
Data analysis

A banner click represents an active and positive acknowledgment of having viewed an ad and at
least a momentary desire to further investigate the marketing message, which is one step
beyond simple “eyeball” measurements and can be easily traced. Therefore, click-through is
used in this study as an objective measurement of banner advertisement effectiveness. The
measurement of success by direct comparison of the click-through rates in different periods
would be unfair, and a seasonal compensation factor is introduced to make the comparisons
more meaningful. By analysing the click-through rates for yes.com.hk, it is possible to derive the
measurements for seasonal fluctuations in traffic due to examination periods and summer
vacation. The proposed model provides an effective means of calculating the success factor
values. By considering the success factor values, it is possible to determine whether an
advertising campaign is effective or not.

The results shown in Table III imply that good banner designs contribute significantly to the
success of a campaign. And, the size of the banner, its layout, and short and concise messages
are factors that contribute to effectiveness. The results also suggest that the presence of a
small online game is important to the success of the advertising campaign. In other words,
interactivity of a banner advertisement is an important factor. Previous studies have found that
many internet users spend their time playing video games online, which has led marketers to
launch a new marketing format, “advergames” that merges games with advertisements. Games
engage users for long periods of time, immersing them in an environment where they can
develop an affinity for the brand. Rather than merely watching the action, “advergame”
consumers actually become part of the action: a powerful combination of interactivity for the
user and control for the advertiser. Related forms of online branded entertainment have been
increasing in recent years, and studies have shown that spending on them is continuing to
grow. “Advergames” can also be used to gather valuable consumer information, players being
required to submit e-mail addresses in order to register for prizes. Offering free gifts is the next
important factor. However, to be effective, these must be of some value to users. Although a
local advertiser offered a 10 per cent discount and free make-up products, the overall end
result was not satisfactory, because most customers enjoyed a 20 per cent discount with their
personal cards and the free products were not up to the current fashion trend. In other words,
vertical integration is necessary in such marketing campaigns. Banner design is also an essential
factor in attracting visitors to click on a web site. Even when a user does not click on a banner,
anything that can capture attention contributes to brand awareness.

Addressing the needs of teenagers

It is also important that advertising campaigns directed at teenagers address their needs.
Teenagers use the internet to fulfill such needs as these, in decreasing order of importance:

• Fun and games;

• Academic materials and homework;
• Music;
• Socialization (travel, making friends);
• Health; and
• Shopping.
Discussion of results

The study reported here has identified the most effective internet banner-advertising strategy
suggested by a case study of yes.com.hk. An effective strategy can proceed from different
perspectives. It may:

• Focus on users’ needs, diversifying the content to improve the loyalty of users;
• focus on advertisers’ needs, providing more flexibility and variety in advertising packages
and introducing new pricing schemes;
• minimise revenue fluctuations, by varying strategy between peak and non-peak periods;
• thereby increase the success rate of advertising campaigns.

By referring to the evaluations of successful advertising campaigns, yes.com.hk and any other
intending user of internet advertising in the Hong Kong market (and perhaps beyond) can
develop advertising strategies targeted to the needs of teenagers.

5. Viral Marketing
5.1. Introduction
The buzzwords viral marketing and viral advertising refer to marketing techniques that use pre-
existing social networks to produce increases in brand awareness or to achieve other marketing
objectives (such as product sales) through self-replicating viral processes, analogous to the
spread of pathological and computer viruses. It can be word-of-mouth delivered or enhanced
by the network effects of the Internet.[1] Viral promotions may take the form of video clips,
interactive Flash games, advergames, ebooks, brand able software, images, or even text
messages. The basic form of viral marketing is not infinitely sustainable.

Viral marketing is the new trend that is sweeping the nations, and although no one is
completely sure if it boosts sales, it boosts awareness and encourages traffic – and that counts
for a lot! The intended result of viral marketing is word-of-mouth (WOM) marketing, which is
when people tell other people about the great new video on YouTube, or application on
Facebook. People are pleased and proud to be able to send their friends something funny, or
tell them about a new product only they know about. But they are just as quick to send bad
news – so getting the message and the delivery right is very important.
Tips for employing viral campaigns

1. Use tactics to build awareness and trial

It is a great, cheap way to get customer feedback, and you gain the contact details of
hundreds of your desired consumers, which enables you to do some serious targeted
marketing.
2. No acquisition without identification
To analyze and research the feedback, number of hits etc. is really important as If you
do not put the tools in place to record these customers’ details, you will never know if it
had an effect on sales.
3. Connect your advocates to product development.
A lot of companies are adopting this already – and even if you get no good suggestions,
you have people feeling like they are involved, and therefore, they are brand advocates.

5.2. Evaluating a viral campaign

There has been little evidence of any work undertaken to measure the effectiveness of viral
marketing campaigns. This sections aims to report on research undertaken to determine the
key criteria that viral marketing practitioners believe should be used to measure the success of
viral marketing campaigns.

Methodology

Semi-structured interviews were undertaken with some of the premier web masters, those
leading the development of much of the UK’s viral marketing activities. WoM is the highest
ranked technique used by consumers to not only gather information but also to make
purchasing decisions. Experts view VMC as a “Digital Sneeze”, characterized by the release of
“millions of tiny particles that can infect others who come into contact with them”.

Several academics have put forward different ideas concerning the measurement and
evaluation of VMC as the current practice of measuring the number of “hits” or “impressions”
does little more than define the level of activity, and is not a suitable measure of the success of
a viral campaign. A three-step research approach to identify the key criteria used to evaluate
viral marketing was adopted:
 1. Required the development of a draft Interview Guide which covered the major areas of
interest identified in the literature and was designed with a practitioner orientation.
2. Involved a pilot test, using four face-to-face, depth, semi-structured interviews.
3. Respondents were selected, and the data collection process was completed.

The main body section of the Interview Guide was subdivided into four main themes. This
sequence was designed to funnel the scope of the questioning as the interview unfolded,
commencing with broad questions and then progressing to more in-depth focused discussions.
The themes were divided as follows:

• Theme 1. Exploring nature and characteristics of VMC.

• Theme 2. Exploring VMC advertising campaigns.
• Theme 3. Exploring the evaluation of VMC.
• Theme 4. Exploring VMC evaluation criteria.

Findings and discussion

Theme 1: exploring nature and characteristics of VMC

Interestingly, the majority of respondents classify VMC as being simply WoM online, and they
suggest that the online medium itself could be broken down further into distinct areas. The
following table illustrates the respondents’ collective views on a classification of VMC media
and sub-category tools. This is an important distinction as there are fundamental differences
and communication richness characteristics between different media.

Theme 2: exploring VMC advertising campaigns

Four of the respondents highlighted the difficulty associated with targeting and reaching
specific niche audiences within online communities. Some believe that a successful VMC
campaign involves reaching the largest number of people in the least amount of time. Others in
the group believe that the outcome should be measured in terms of what proportion of the
target audience has been reached.

Theme 3: exploring evaluation of VMC

Important variables to gauge the effectiveness of a VMC were classified as shown.

Theme 4: exploring VMC evaluation criteria

Indeed, whilst this research found hits/downloads and reasons for transmission to be
significant, it confirms the view that measures of awareness and reach are thought to be the
most important factors in gauging the effectiveness of a VMC creative.

Conclusions

We conclude therefore, that the evaluation process should be shaped by the VMC campaign
objectives, a view supported by the academic literature and viral marketing practitioners. These
objectives will influence the choice of target audience, message, media and the tools used for
its deployment.

Two forms of viral marketing were identified, “random” and “placed” virals, and within these
goals the success of VMCs should be considered in terms of the evaluative criteria most
appropriate to the campaign goals, but practitioners believe these will normally involve reach,
awareness, the number of hits, the rate of viral transfer and some measure of financial return.

Research limitations

The small size of the sample prevents generalization but the findings suggest that further
research is necessary to confirm these findings and to explore the topic in greater detail.

5.3. Viral campaign backfires: A case study

As explained above, a viral campaign spreads like a virus or a forest fire. And you can’t really
control either of those, can you? While every viral campaign has the power to reach the
expected amount of unique visitors, the power to control the visitor’s perceptions and how it
propagates in the medium is beyond control. There have been some recent backfires of famous
Viral Campaigns, and the Chevrolet Tahoe incident is analysed in this section.

The Chevrolet Tahoe viral campaign

At first glance, the video looks like a typical 30-second car commercial: a shiny sport utility
vehicle careers down a country road lined with sunflower fields, jaunty music playing in the
background.

Then, white lettering appears on the screen: "$70 to fill up the tank, which will last less than
400 miles. Chevy Tahoe"

The commercial was the product of one of the advertising industry's latest trends: user-
generated advertising. Chevrolet, as a part of the campaign introduced a Web site allowing
visitors to take existing video clips and music, insert their own words and create a customized
30-second commercial for the 2007 Chevrolet Tahoe.

In theory, the company was hoping that visitors to its Web site would e-mail their own videos
around the Web, generating interest for the Tahoe through what is known as viral marketing.
By the measure of Chevrolet Tahoe videos circulating the blogosphere and the video-hosting
Web sites like YouTube, that goal was achieved. But the videos that were circulated most
widely like the commercial that attacked the S.U.V. for its gas mileage, may not be what
Chevrolet had in mind.
Nor was the ad using a sweeping view of the Tahoe driving through a desert. "Our planet's oil is
almost gone," it said. "You don't need G.P.S. to see where this road leads."

Another commercial asked: "Like this snowy wilderness? Better get your fill of it now. Then say
hello to global warming."

A spokeswoman for Chevrolet, Melisa Tezanos, said the company did not plan to shut down the
anti-S.U.V. ads.

"We anticipated that there would be critical submissions," Ms. Tezanos said. "You do turn over
your brand to the public, and we knew that we were going to get some bad with the good. But
it's part of playing in this space."

Experts said that companies had such a strong desire for user-generated advertising that they
were willing to accept the risks. "There's this gold rush fever about consumer-generated
content," he said. "Everybody wants to have consumer-generated content, and Chevy Tahoe
doesn't want to be left behind."

The Web site where consumers are invited to make their own commercial,
chevyapprentice.com, was introduced as a promotional tie to an episode of "The Apprentice"
on NBC that featured the Tahoe in a contestant challenge. Through Monday, visitors to the
Web site can submit a video to win a free trip or free tickets to a concert or sporting event.

To create a video, users could choose from video clips depicting the Tahoe in natural settings,
like driving through snowy mountain ranges or perched at the edge of a rushing waterfall, pick
one of eight soundtracks and add text to narrate the commercial. The site even offered
"Director's Tips," including "Inform: Deliver the key messaging in a straightforward, concise
manner."

Whatever, might have been the outcome of the campaign, the brand surely got its share of
market buzz.

6. Interactive Marketing
6.1. Introduction
It can be defined as the "paid and unpaid presentation and promotion of products, services and
ideas by an identified sponsor through mediated means involving mutual action between
consumers and producers." This is most commonly performed through the Internet as a
medium. Interactive Advertising uses online or offline interactive media to communicate with
consumers and to promote products, brands, services, and public service announcements,
corporate or political groups.

6.2. Interactivity and advertising

Mass communication has seen many revolutions since the beginning of advertising, but all of
them were impersonal forms of communication which left nothing for the receiver to do. But
now, the interactivity of internet makes it a viable tool for seeking immediate action from the
modern online communities and the huge user base. This section explains the concept of
interactivity, and the variables that define its success. These variables such as number of inputs,
number of characteristics, speed of interactions, etc., are very important for the success of any
interactive communication with audience.

In response to the challenge of aggressive competition, advertising has become more colourful,
more vibrant, faster and louder. A more promising approach takes advantage of new
technological advances to provide a new kind of advertising experience, customized and
personalized one.

The changing nature of advertising

Interactive advertising gives consumers more control by giving them a range of choices in their
experience with product information. And it produces a sense that the communication is more
personal than traditional ads because it creates or simulates a one-on-one interaction.
Advertisers can use information obtained from consumers to customize their messages,
segment audiences, to facilitate consumer search for selected types of information and
products etc.

Understanding interactivity

A person can interact on the web in two general ways: get or give information from/to the web
or communicate to another person through the medium. Some salient features of interactivity
are:

• Information is always sought, not merely sent

• Activity is a user trait as well as a medium trait
• Person-machine interactions are a special form communication
• Media systems may facilitate mass or interpersonal communication, or both
The two dimensions of interactivity in terms of message or control dimensions. So, interactivity
is divided into total four dimensions:

1. Customer controlled and content oriented

2. Customer controlled and form oriented
3. Marketer controlled and content oriented
4. Marketer controlled and form oriented

So, it can be concluded that interactivity has various degrees, and is not dichotomous in nature.
The degree to which a medium, can be said to be, interactive depends on five variables:

• Number of inputs
From the user that the medium accepts and to which it responds such as voice/audio
input, mouse recognition etc.
• Number and type of characteristics
Of the mediated experience that can be modified by the user also help determine the
degree to which a medium can be called interactive. This variable is directly
proportional to perceptions of interactivity.
• Amount of change
Possible in each characteristic of the mediated presentation. Interactivity is obviously
enhanced by expanding the degree to which users can control each attribute of the
experience.
• Speed
With which the medium can respond to user inputs. The ideal interactive medium
responds in real time to user input, and the lag time is not noticeable
• Degree of correspondence
Between the type of user input and the type of medium response. These two things
contribute favourable to the perception of interactivity.

Defining the objectives

It can now be defined as the “extent to which users can participate in modifying the form and
content of a mediated environment in real time”. For a truly interactive medium, the consumer
needs to be truly and deeply involved in a two way communication.
Such advertising has the potential to lessen the ‘process losses’ associated with uncoordinated
advertising, and to reduce the difficulties commonly encountered in clearly communicating an
advertising message. It has the potential to fundamentally change the nature of advertising in
much the same way that electronic infrastructure has changed the nature of group interaction.

7. Social Media Optimisation

7.1. Introduction
Social media optimization (SMO) is a set of methods for generating publicity through social
media, online communities and community websites. Methods of SMO include adding RSS
feeds, social news buttons, blogging, and incorporating third-party community functionalities
like images and videos. Social media optimization is related to search engine marketing, but
differs in several ways, primarily the focus on driving traffic from sources other than search
engines, though improved search ranking is also a benefit of successful SMO.

Social media optimization is in many ways connected as a technique to viral marketing where
word of mouth is created not through friends or family but through the use of networking in
social bookmarking, video and photo sharing websites. In a similar way the engagement with
blogs achieves the same by sharing content through the use of RSS in the blogosphere and
special blog search engines.

7.2. Myspace or yours?

Over the last few years social networking has established itself as the latest in a line of internet
trends. Given the extraordinary growth in popularity of such networks, it was only a matter of
time before people woke up to the commercial possibilities offered.

One such strategy is the three-dimensional Facebook advertisements that consist of:

• Branded profile pages

Marketers and brand owners are able to create specific pages where network users can
sign up to show their allegiance to the brand.
 • Social advertisements
This step extends user involvement by allowing them to take actions such as evaluating
the brand and relaying messages to their friends. The advertiser pays users for such
actions.

• Beacon
Through this mechanism, Facebook tracks member purchase behavior elsewhere and
utilizes the information to provide relevant advertisements to them during future site
visits.

One concern which has always impeded such models is the privacy concerns of the visiting
users. In an age where hypersensitivity towards data protection issues is invariably the norm, it
hardly seems wise to invite accusations of infringing the privacy of users who often feel that
networking sites should be ad-free in the first place.

The groundswell is constantly rising to the forefront of online marketing and has replaced old
terms and concepts with revolutionary ideas.
Disadvantages

To some, of course, the whole concept of social networking is controversial. Some companies
understandably remain wary of the danger that their brand will become tarnished because of
some perceived association with this aspect of the internet’s seedier side.

Solution

Perhaps MySpace has got it right with its decision to include a greater percentage of
professionally produced content and the move already looks like proving a winner. Network
leader Christopher DeWolfe has identified the need for a more innovative approach and has set
up partnerships with the likes of Sony, Fox and NBC to turn out original dramas etc. Rivals like
YouTube and Facebook see the original content route as inherently risky and prefer to let users
remain in charge of the camera. Previous failures when Internet companies have attempted to
wear the producer’s hat only serve to strengthen this perception.

What does the future hold?

Relevance is the key to effectiveness of any advertising. Advertisement content must enhance
the site offering with promoted brands closely relating to user motivation for visiting the
network in the first place. The need for originality extends to the type of advertising used.
Banner advertisements are considered old hat and some media analysts claim that click-
through rates are low.

But the development of alternative methods remains a priority in the quest to customize and
enhance user experience. Some providers favor the use of widgets that enable advertising to be
embedded within web pages. Successful deployment of these widgets to build up the user base
of other networks has also ignited a belief in the value of collaboration.

7.3. Growth of Social Media

Facebook: Progress and Demographics

• Fastest growing Social Network.

• 140 million active users.
• Average user is connected to 101friends
 • More than 15 million pieces of content (web links, blog posts, notes, photos, etc.) shared
each month.

Social Networking: India

• 17 million people in India estimated to visit social networks regularly.

• Orkut is the highest used social network followed by Bigadda and Facebook.
• Social Networking in India Rises by 51%

Future of Social Networking in India

• 50% of traffic in India is related to Social networking. Orkut has taken internet to the
masses.
 • It’s difficult to monetize social networks.
• Users aren’t looking for information about products.
• Previous advertising models have failed.

7.4. Social Media Backfires: A Case Study

The #amazonfail Story

Amazon recently deleted the sales rankings of hundreds of gay- and lesbian-themed books.
Writer Mark Probst blogged about the de-ranking and was told by an Amazon representative
that the company will no longer include sales ranks for "adult" material on the site.

Reaction was swift: anger over lumping gay-themed books with pornography accompanied by
cries of censorship. Probst's blog post was dated Sunday, April 12 at 2:08 am. In 24 hours,
here's a quick look at how things developed:

• Twitter: Users begin using the hastag #AmazonFAIL. It was the number-one trending
topic on Twitter search all day.
• Blogs. Over 5,000 blog posts about the news happened that day.
• Facebook. The AmazonFail Group launched this group on the popular social networking
circle, quickly gathering 1,200 members out of the gate.
 • Online petitions. Online petitions sprang up protesting the "adult" policy. One gathered
more than 9,000 signatures in a few hours' time.
• Google bomb. A blogger launched a campaign to redefine "Amazon rank" on Google. It's
working. This page is #2 in the search rankings.

How has Amazon responded to the building PR crisis besides the "glitch" comment?

Nothing so far on the Amazon.com front page, the company's Twitter account, or the CTO's
Twitter account. The anger of injustice spreads quickly and can take on a life of its own. For a
company that helped pioneer using customer comments to sell books in a flattened,
democratized context, this sure seemed like a fail moment for Amazon.

8. Mobile Marketing
8.1. Introduction
Mobile advertising is a form of advertising via mobile (wireless) phones or other mobile devices.
It is a subset of mobile marketing. Some see mobile advertising as closely related to online or
internet advertising, though its reach is far greater - currently, most mobile advertising is
targeted at mobile phones, that came estimably to a global total of 3 billion as of 2007, and will
reach 4 billion in 2008.

8.2. Advertising for Gen M

Young consumers have been notoriously difficult for advertisers to reach. Mobile marketing
might provide the answer, but only if companies understand some basic principles. In reality,
the success of mobile marketing campaigns has been mixed, in part because many companies
don’t understand what truly influences whether young consumers will accept having branding
and marketing communications sent to them on their mobile devices. Will they, for instance, be
enticed by receiving electronic coupons on their cell phones, or will they be annoyed? In this
section number of important variables like consumers’ personal attachment to their cell
phones, their concerns for privacy and their willingness to “opt in” and accept permission-
based marketing are discussed in detail.

Many global companies, including Burger King, MTV, Procter & Gamble and Ford, already have
initiated programs that enable consumers search for the nearest restaurant location using their
cell phones, in real time. Such campaigns have generated click-through up to 10 times those of
traditional Internet banner ads.

What Really Influences Mobile Marketing Acceptance?

The research specifically looked at two different markets with varying degrees of economic
development, commercial and marketing communications infrastructure and mobile
penetration. Mobile-phone penetration has grown to approximately 30% in Pakistan, and it is
becoming increasingly common to see all types of people — ranging from businessmen to
street vendors — using cell phones for personal and business communications. Particularly for
young Pakistani consumers, the increased availability and affordability of mobile phones open
up lines of communication and commerce that previously were unavailable.

To study such differences, the section looks at some specific factors (identified from a mobile
review of relevant research) that might influence a consumer’s intentions to engage in mobile
activities:

1. Usage Characteristics
People tend to consume media both for its utility and content as well as for the
enjoyment and experience of the process itself (for example, browsing, chatting, and
accessing entertaining content and developing or maintaining social networks).
2. Personal Attachment
To many people, a cell phone is more than just a communications device and has
become an integral part of a person’s self concept and identity.
3. Consumer Innovativeness
Past research has shown that people’s innovativeness — the degree to which they are
open to new experiences, information and technology — indirectly influences their
attitudes toward mobile marketing practices.
4. Social Influence
Teenagers often display their mobile phones as overt signs of social standing, and the
appearance and functionality of the devices can be status symbols.
5. Permission-Based Marketing
To reduce privacy concerns, companies could offer consumers greater control over the
acquisition and use of their personal information, in effect forging trust in the marketer.
 6. Attitudes Toward Mobile Communications
Consumers’ attitudes toward products, brands and advertising have been linked in the
past to behavioral intent, and recent studies have shown that people with positive
attitudes toward mobile services have greater to use them.

Two global markets

First, our findings indicate relatively high levels of privacy concerns among U.S. respondents
with respect to mobile marketing efforts. In comparison, respondents in Pakistan exhibited
fewer privacy concerns and were more likely to give their permission for marketers to interact
with them in the mobile space. U.S. respondents also exhibited greater levels of consumer
innovativeness, and their attitudes toward mobile communications were a significant predictor
of mobile marketing acceptance.

Second, for the U.S. data, the significant predictors of mobile marketing acceptance were usage
characteristics, privacy concerns, consumer innovativeness, attitudes toward communications
and the need for permission-based communications in the mobile space. Of those factors, the
only two that were shared by the Pakistani data were usage characteristics permission-based
involvement (although the U.S. respondents were generally less willing to grant permission to
companies to communicate with them in the mobile space). Interestingly, social influence and
personal attachment were not found to be significant drivers of mobile marketing acceptance
in either the United States or Pakistan.

Companies thus might consider tapping into those two areas by deploying mobile marketing
campaigns with, for example, elements of social networking and content that enables
individuals to personalize their phones as well as the communications offers they receive.

Third, gender differences were significant in two areas. Females in both markets had greater
personal attachment to their cell phones than did males.

Recommendations

Based on the study findings, how should a mobile campaign for an established market such as
the United States differ from in a developing market such as Pakistan? The central message is
that the United States represents a relatively more complex market in which to execute such
campaigns because companies must overcome bigger barriers to acceptance, including privacy
concerns and a great reluctance of consumers to allow companies to engage them in mobile
marketing activities.

First, a company might consider conducting a beta or “soft launch of a mobile campaign in a
developing market such as Pakistan. Using the results from that effort, the company then could
adjust and launch the campaign in a more mature market as the United States. There are two
reasons for his two pronged approach: (1) an emerging market often represents less sales
volume as a percentage of total sales than a developed market, and (2) consumers in an
emerging market might be more willing to engage in mobile marketing and promotions.

Second, the role of permission is different depending on the market. American respondents
indicated that, in order to accept mobile marketing communications, they wanted to be in
control — to grant permission for a company to communicate with them.

Third, the U.S. campaign also might stress the innovative nature of the mobile platform itself
and leverage consumers’ favorable attitudes toward cell phones as devices for keeping in touch
with others and for connecting across a mobile social network.

Fourth, even though social influence and personal attachment do not appear to be direct
influencers of mobile marketing acceptance in either the United States or Pakistan, those two
are still important to young consumers, who depend on their cell phones for social connection
and interaction. Therefore, particularly in more mature markets such as the United States,
companies might want to leverage cell phones as a platform for social connectivity by providing
viral, value-base mobile content.

8.3. Effectiveness of Mobile Advertising: India

In the current scenario, the services provided by mobile internet applications include Web
information search, SMS (short message service), MMS (multimedia message service), banking,
payment, gaming, e-mailing, chat, weather forecast, GPS (global positioning service), and so
forth. Collectively, this is known as “m-commerce”.

Mobile advertising in India today is very generic in its approach, as substantiated by factor
analysis performed on the data — marketing communication through mobiles primarily lacked
in contextualization and perceived usefulness (for the target customers), and were disruptive
in nature.
Interactive media’s share of worldwide advertising expenditure is expected to hit 15 per cent in
2009, almost double in four years. In India, though m-commerce explorations of m-commerce
have seen only modest growth, because of the considerable uncertainties involved in mobile
research. This article shows analytically that the need of the hour is reaching customers by
allowing personalization of content and context of the message.

Classification of Mobile Internet Services

Goal-oriented Experiential
Person-interactive Information Messaging
Machine-interactive Payment Gaming

“Person interactivity” occurs between people through a medium, while “machine interactivity”
refers to the interaction between people and the medium. In the latter, users can freely
modify the content and form of a mediated environment. A goal-oriented process is defined
by utilitarian benefits, while an experiential process provides hedonic benefits.

This study majorly attempts to critically analyze “person interactive” (goal-oriented)

information and “person interactive” (experiential) messaging targeting both utilitarian and
hedonic benefits from the consumers’ perspective.

In comparison with traditional advertising, the main advantage of mobile advertising is that it
can reach the target customers anywhere anytime

Combining with the customers’ user profile and context situation, advertising companies can
provide the target customers exactly the advertisement information they desire, not just
“spam” them with advertisements they are not interested in.

Because of the high diffusion rate of SMS and other facilities, ate responses that are as high as
40 per cent, compared to a 3 per cent response rate through direct mail and 1 per cent through
internet banner ads

Objectives of study

‘Effectiveness’ for the purpose of this study has been concretized in terms of impact of mobile
advertising on the purchase decision of the consumer. Further, an attempt has been made to
analyze variations in consumer responsiveness towards mobile advertising using Analytic
Hierarchy Process (AHP)

Theoretical framework

In a new edition of the model, the Advertising Research Foundation (ARF) includes new digital
media and creates eight hierarchical levels of media performance: vehicle distribution, vehicle
exposure, advertising exposure, advertising attentiveness, advertising communication,
advertising persuasion, advertising response, and sales response.

The first two levels indicate measures of potential spread of the media among consumers and
have been the most used factors in the marketing communication industry. Advertising
exposure refers to the number of consumers exposed not to the media as such but to the
particular commercial or advertisement. Similarly, advertising attentiveness is considered to be
a measure of the degree to which those exposed to the advertising are focused on it.
Advertising communication refers to information retained by the consumer after exposure to
the message. Advertising persuasion measures shift in attitudes and/or intentions produced by
the communication and advertising response is other consumer response than purchasing.

In the current study, ‘advertising effectiveness’ (through mobile communication devices), is

analysed in terms of impact on the purchase decision of the consumer.

Methodology

Quota sampling was employed with the questionnaires being sent to approximately 2,000
respondents out of which 1,540 questionnaires were found complete in all respects. The
response rate was thus 77 per cent.

Findings and discussions

Consumer Perception about Mobile Advertising

In order to gain an insight into consumer perception towards mobile advertising, we first ran
factor analysis. These factors were based on the selection of the most indicative attributes
interpreted from focus group discussions and in-depth interviews with mobile users. In
addition, secondary information material (prior consumer researches related to mobile
advertising) was studied.
The analysis reveals The Rotated Component Matrix reveals three factors (which represent the
three broad perceptual dimensions about mobile advertising) derived from 13 variables (which
represent the perception of mobile users towards mobile advertising).

Factor 1: incorporates the variables—mobile ads are less informative (in the current format); do
not satisfy personal needs, inappropriate timing, and clutter. Since all these variables are
related to lack of contextualization and personalization, this factor can be labeled as ‘lack of
contextualization.’

Factor2: can be labeled as ‘perceived usefulness’ of mobile ads.

Factor 3: is called as ‘disruptive nature’ of mobile ads.

Thereafter, to gain further insight into the perception of mobile users (towards mobile
advertising), a qualitative analysis tool—Analytic Hierarchy Process was performed. AHP is a
multi-criteria decision the decision maker provides weighted preferences for the criteria,
which are used to determine the preferences for the decision alternatives.
It was concluded that mobile advertising in its current format is unacceptable to customers
and requires inclusion of certain attributes so that the relevance and utility value of such
marketing messages, increases their overall acceptance by consumers.

The results indicate that mobile advertising in its current format does not have a significant
impact on the purchase decision of a consumer.

Analysis of Desired Attributes

It can hence be inferred that incorporating attributes like contextualization and relevant utility
value (with reference to the target customers), would increase the overall acceptance of
mobile advertising. Hence, customization on an individual basis seems to be the need of the
hour, as far as increasing acceptance of mobile advertising is concerned.

Proposed strategies

The study further indicates that the crux of the problem lies not in relaying mobile advertising
messages to mobile users, but in the mass marketing approach being adopted by the
companies.

Customers are looking for customization of mobile marketing messages as per their individual
requirements, tastes, and preferences. Hence the need of the hour appears to be
Customerization.

Intelligent Software Agents represent one of the most interesting and innovative technologies
under economical criteria. Software Agents are programmes, which fulfill a task independently
on behalf of the user. This definition encompasses the term, ‘agent’ as a person or thing, who
is able and authorized to act on behalf of a third party, and the term, ‘software.’ The software
can be adapted to the individual preferences and parameter of its instructor and operates
without intervention of the user at a specific problem definition.

Agents can be used by both customers (Demanders software agents attempting to access
some information) as well as mobile marketing firms (Suppliers). Mobile marketing firms can
deploy these agents to customize products as well as advertisements. Today, suppliers use
software agents to personalize products and advertisements.

9. Integrated Marketing Communications –

Online (IMC)
9.1. Introduction
The purpose of this section is to investigate the particularities of integrated marketing
communication (IMC) in the online environment. Both secondary and primary data (face-to-
face interviews with 29 marketing or communication managers of UK online consumer retail
firms) are analysed in order to identify the various meanings of the integrated online marketing
communication, the opportunities and challenges raised by online communication, and the
structure of an efficient integrated online marketing communication system.

It is analysed that the transparency, interactivity and memory of the internet force the
organisation to adopt a proactive-reactive attitude in online communication, and to combine
consistency and continuity with flexibility and customization.

9.2. Overview
The emergence and the development of integrated marketing communication (IMC) has been
determined by a number of evolutionary trends in various areas of marketing – the increased
fragmentation and segmentation of markets, relationship marketing and direct marketing etc.

Integrated marketing communications is the strategic co-ordination of all messages and media
used by an organisation to collectively influence its perceived brand value.
Evolution of concept

The increased fragmentation of media and customers, as well as the revolution introduced in
mass communication by the new communication channels – internet and mobile
communication technologies – has created the need for a new approach to marketing
communication, that can insure centralized management and a consistency of corporate
messages sent towards various audiences The conclusions of these studies were complex: on
one hand, the advertising executives recognized the impact of IMC on increasing the
effectiveness of creative ideas, providing greater communication consistency, and improving
the client return on investment; on the other hand, they outlined the problems related with
measuring the IMC outcomes in terms of time and cost efficiencies.

Experts believe that now IMC involves a cross-functional process. This indicates that all
organizational departments that interact with customers and strategic stakeholders must share
a common understanding and work collectively to develop long-term brand relationships.
Furthermore, the notion of stakeholders implies the shift in the IMC concept from customer
target audiences to the inclusion of key stakeholder groups such as employees, investors,
suppliers, distributors, media and the social community.

Barriers to implementation

• lack of horizontal communication;

• functional specialization;
• decentralization;
• lack of IMC planning and expertise;
• lack of budget;
• lack of database technology;
• corporate culture; and
• fear of change.

Research methodology

In order to analyze the importance and the role of integrated marketing communication for
internet-active organizations, the following research objectives have been formulated:

• To analyze the general impact of internet technology on the marketing communication

process and the behaviour of audiences.
 • To define the meanings of integrated online marketing communication.
• To identify the marketing communication synergies allowed by the internet.
• To identify the challenges raised by the internet for the integrated communication
process.
• To design a synthetic model describing the structure and functioning of an integrated
online marketing communication system.

The impact of the internet technology on marketing communication

The rapid development of the internet in the last ten years has changed the classical
communication procedures because of three specific and co-existent characteristics that
differentiate it from any other communication channel:

• Interactivity.
The internet offers multiple possibilities of interactive communication, acting not only
as an interface, but also as a communication agent (allowing a direct interaction between
individuals and software applications).
• Transparency.
The information published online can be accessed and viewed by any internet user,
unless this information is specifically protected.
• Memory.
The web is a channel not only for transmitting information, but also for storing
information – in other words, the information published on the web remains in the
memory of the network until it is erased

These options are transforming the profile and the behaviour of online audiences. Marketing
communication practitioners should therefore adapt to the new realities of how audiences get
and use information:

• The audience is connected to the organizations.

• The audience is connected to one another
• The audience has access to other information
• Audiences pull information

So, the internet user has more control over the communication process and can be more
proactive.
Internet-based communication synergies

Internet technologies allow online-active organisations to implement three main

communication synergies:

• The integration and coordination of communication modes

The organizations can combine one-to-one (email), one-to-many (list-based email
messages, web pages), and many-to-many (discussion forums) communication in the
online environment. This synergy increases the flexibility of the integrated
communication approach, providing opportunities both for the personalization and
integration of messages.

• The integration and coordination of various types of information

This synergy has a direct effect on the complexity and clarity of the communication,
enhancing the capacity of the organisation to tailor its messages to the specific needs
and requirements of various audiences.
• The capacity to automatically capture and register customer data (demographic or
behavioral) and customer feed-back.

Internet-based communication challenges

The online environment creates not only opportunities, but also challenges for the marketing
communication process. The transparency of the web makes online information available to all
audiences, and reinforces the need for consistency in the planning, design, implementation and
control of online marketing communication.

The specific characteristics of the internet therefore create two conflicting tendencies:

(1) the fragmentation of audiences and communication contexts requires the customization of
online marketing messages; but

(2) the interactivity, transparency and memory of the web necessitates the consistency of
communication and the coherence of the transmitted meaning

A model for implementing integrated online marketing communication

The messages send by the company to its online audiences have to be transformed/adapted in
a three-stage process. First, the message should respect and integrate the core corporate
values of the organisation. Second, the message has to be adapted in relation to the strategic
and tactical objectives pursued through the online communication campaign. Third, the
message should be transformed considering the specific characteristics of the targeted
audience/channel.

The interactive dimension of the internet forces the firm to adopt a more proactive attitude in
searching, registering, and analysing the direct and the indirect feed-back transmitted by the
targeted audiences – or even, in some cases, by all categories of relevant audiences connected
to the internet (considering the transparency and the memory of the internet, even un-
targeted audiences can read and react to some of the online corporate messages).

The use of the feed-back information collected and analysed by the firm should represent a
highly reactive process. The online environment is very dynamic and any delay of an
appropriate reaction to the messages sent by audiences can represent missed opportunities or
aggravated situations. The company should therefore use the conclusions of the feed-back
analysis in order to define and better refine the strategic objectives of its communication
campaigns, and the customization of messages to audience/channel characteristics.

The feed-back analysis is also transmitted to the company management that can decide if
necessary, to modify the corporate core values in order to respond better to market
requirements.

The respondents also emphasized the importance of an efficient information system, that
collects, selects, registers and analyze online input (feed-back), and then acts directly on the
adaptation of corporate communication strategy and tactics.

The customer data/feed-back collected online is used directly to better design and implement
the online integrated marketing communication, which are then targeting selected online
audiences. Correctly implemented, the IMC program is a continuous cycle of gathering data and
implementing response-generating marketing communication which is based on previously
gathered consumer data.

Conclusions

This exploratory study has attempted to identify the major changes determined by the
development of internet technology in the area of marketing communication. The online
environment raises a series of opportunities and challenges for communication practitioners.
The audiences become more fragmented and proactive, but, on the other hand, the company
has the possibility to combine various modes and categories of information in a complex
message. Online applications also permit the enterprise to collect, register, analyze and use
customer data and feed-back for better targeting online audiences and customizing its
messages.

The use of advanced online applications to collect customer data and feed-back information is
paramount for the success of the online communication campaign.
10. Conclusions
10.1. Future of Online Marketing
It may be hard to believe, but the Internet as we know it is just over 15 years old. E-commerce
has grown by leaps and bounds and continues to set new marks every year. As the Internet
continues to grow, there is little doubt that the future of online marketing is bright. As more
people join up with digital revolution, e-commerce continues to grow. Still, one can’t help but
acknowledge Internet users are becoming more sophisticated, particularly as a younger
generation moves into adulthood.

Online marketing is currently a bit of a mess. Remnants of the old, such as banner ads and
email marketing, are clearly one their way out. Banner ads produce horrific click through rates
because people are wary of getting stuck on a site they can’t get away from. Email marketing is
tainted by problems such as spam, phishing scams and identity theft concerns.

The dominant models now are pay-per-click advertising and search engine optimization. Search
engine optimization will be around as long as people use search engines. The promise of free
traffic is simply too glorious to ignore. Since it is fairly difficult to commit fraud in search engine
optimization, it is difficult to see any future legal issues threatening it.

Pay-per-click advertising [“PPC”] has a less clear future. The primary problem is click fraud. Click
fraud occurs when a PPC ad is artificially. The only intention of the clicker is to cost the
advertiser money. Some estimate the percentage of fraudulent clicks on ppc platforms runs as
high as forty percent.

So, what is the future of online marketing in light of the above comments? In my personal view,
search engine optimization will remain the dominant online marketing method. PPC will also
continue, but will be modified into something used to conquer click fraud. I also think
information publishing in the form of free copyright articles will become more and more
dominant.

Combined, these three platforms represent the future of online marketing.

10.2. Future of Online Marketing companies in India
It is just the beginning of internet in India and it has already received so much exposure that the
internet using head count is on an ever rising numbers. The response that it has received is
unbelievable. The number of online marketing companies that have cropped up in the country
is the proof of how well the industry is flourishing.

E commerce is on an all time rising spree and is increasingly growing in size. As internet is
growing so is the trend of online marketing. Most brands now prefer to be a part of the online
business place so that they can make use of the technique to enhance their business. Almost
everything is now moving out of the real world in order to secure a place in the virtual world.
Not only information and knowledge exchange but also interaction and growth are something
that the promising online marketing services are providing to the businesses.

Several online marketing companies have set their face on India now where they see a lot of
potential market. The growing generation here is being called the 'IT generation' which in the
near future shall live in the virtual world for ever. From shopping to education to socializing and
even marriage proposals everything is now online. This significantly states the importance the
online marketing companies established here will receive.

Online marketing companies that are now mushrooming here are aware of the growing trend
and the fast moving lives of the people here, and are accordingly providing a host of services to
the companies that come to them for website production and advertising. Features like search
engine marketing, online advertising, email marketing, website designing, content management
and several other features stand an integral part of their business.

In the coming years, online marketing companies are predicted to growing in leaps and bounds
where it is predicted that amongst other things the search engine marketing shall be most
dominant amongst all other features. Considering the fast growth of technology it would not be
a surprise to see the virtual world live in reality soon.

In Asia, in particular China and India, large, well-educated populations, a lower cost of living
with much-improved standards, and more widely available Internet access may combine in the
near future to create a lot more Internet marketers. Many are well-versed in technical aspects
of the Internet, including programming and site development.
With populations of one billion people and more in those two countries alone, the current
generation is certainly well-attuned to the Internet, and being avid surfers, is no doubt aware of
the commercial opportunities and worldwide reach available only on the net. It's likely only a
matter of time before they begin marketing to western audiences themselves.

The globalization of Internet marketing will continue rapidly, no doubt about it. To stay in the
game, western marketers would be well-advised to begin their strategic planning for this trend
now. New markets and new opportunities are forming - learn to spot them at a distance
through global binoculars!
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