MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

MGT 417
INFORMATION TECHNOLOGY IN BUSSINESS

ASSIGNMENT 2

QUESTION:

1. Discuss the various methods of online advertising.
o Compare the traditional advertising and online advertising
o Methods such as banners, pop-ups, email and social networks
(discusses detail each method)
o Advantages online advertising compare to traditional methods.

2. Discuss the electronic commerce business models for Business-to-Business
(B2B). Give examples of each type.
o B2B business model such as Sell-Side marketplaces, buy-side
marketplaces and electronic exchanges. Discusses details








NAME : MUHAMAT BIN IDRIS
STUDENT NO : 2013141007
CLASS : NBMHF1A
SUBMIT DATE: 20 APRIL 2014

MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

QUESTION 1
Advertising is the promotion of a company's products and services, carried out primarily
to drive up its sales. It is also done to build a brand identity, communicate changes in old
products, or introduce new product/services to the customers. Advertising has become an
essential element of the corporate world, and hence, companies allot a considerable amount of
resources towards their advertising budget. There is two types of advertising : Online advertising
and traditional advertising.
Online advertising
Online advertising, also called Internet advertising, uses the Internet to
deliver promotional marketing messages to consumers. It includes email marketing, search
engine marketing, social media marketing, many types of display advertising (including web
banner advertising), and mobile advertising.
Traditional advertising
Traditional advertising is refers to any paid form of non-personal communication or
marketing about an organization or product. It utilizes media such as radio, newspapers,
magazines and printed ads to sell a product.
Method of Online Advertising
With the advent of the Internet came the end of advertising as it had been done for
decades. Measurement and targeting possibilities continue to evolve, helping to optimize
marketing budgets and build sales. However, in this new era, advertisers have so many more
options that it can be overwhelming. Following are the major types of Internet advertising
available, along with advantages and challenges of each.
1. Banner Ads
Banner ads were one of the earliest types of Internet advertising available. Basically, it
consists of an image file that is connected to a website that offers more information or a way to
buy what was advertised. So that traffic to the site from the banner ad can be tracked, often a
special landing page is set up.
For example, the following banner ad is for a stationery shop site:

MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

Banner ads can, technically, be any size. However, there are some common sizes that fit
in most website layout schemes.Banner ads can be purchased and placed in a variety of ways:
House Ads. The website owner can place ads for the company's own products and services
which link to other areas on the main or other web properties.
Paid or Sponsored Ads. Advertisers or sponsors can pay to have a static placement on a website
for a specified period of time. Sometimes this is sold as a sponsorship to support the costs of
maintaining the website, e.g. a blog may be sponsored by a manufacturer.
Banner ads have lost some appeal since as the Internet continues to mature, more
effective advertising methods have taken their place.
2. Pop-Up and Pop-Under
A pop-up ad is an ad that "pops up" in its own window when you go to a page. It
obscures the Web page that you are trying to read, so you have to close the window or move it
out of the way. Pop-under ads are similar, but place themselves under the content you are trying
to read and are therefore less intrusive.
Pop-up and pop-under ads annoy many users
because they clutter up the desktop and take time to close.
However, they are much more effective than banner ads.
Whereas a banner ad might get two to five clicks per 1,000
impressions, a pop-up ad might average 30 clicks.
Therefore, advertisers are willing to pay more for pop-up
and pop-under ads. Typically, a pop-up ad will pay the Web
site four to 10 times more than a banner ads. That is why
you see so many pop-up ads on the Web today.
3. Email Advertising
Email marketing is another way using the Internet to market products at a low cost, but
also in an effective way. Make a list of potential customers who would be interested in buying or
subscribing to your products. Create an attractive mailer that can be sent out to these people, so
that they can be informed about the products that are on sale. Try and include a few discounts
and attractive offers to make the most of this advertising move. This way, one can communicate
with customers on a regular basis. Email marketing has been stigmatized as spam. While much
of the email marketing you receive is indeed spam, your campaign doesnt have to be. The
difference between a legitimate marketing campaign and spam is that people will actually
request emails that are legitimate. So how can you make your email marketing campaign legit?
All you need to do is create a massive email list of interested parties to send weekly emails to.
Creating that list is a little more difficult. You will to give something away for free in order to
MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

entice people to provide their email addresses to you. This can be something as simple as a small
report or document that is related to your business. After you have created your list, you can
begin email marketing without the stigma of a spammer. It is important to allow your recipients
to remove themselves from your list if they want to.
4. Social Media Platforms
Nothing beats the power of social media platforms such as Facebook, Twitter and
MySpace. Not only do these give identities to people the world over, but also bring them closer
for a wide range of purposes. Search for a person or a company, and you will find only a six
degrees of separation between the result and you. When such power is available so easily, one
needs to use it responsibly to make the most of it. To advertise your product, services or your
company on these platforms, you need to make its account, just as you would do it for yourself.
Fill in the details and keep the page active with events, quizzes, pictures, and other updates.
Suggest the page to more and more friends so that your social circle increases and you get more
attention towards the cause. This modern advertising method is absolutely free and equally
effective.

Advantages online advertising compare to traditional methods.
Cost implications: The electronic medium is a powerful mile ahead of other means when it
comes to cost. Covering a huge audience is possible with a limited spend online, resulting in
a much better return on investment percentage. And, this is one of the biggest reasons why
SMB's are now considering online marketing to their marketing strategy and who really
can't bear the cost of outdoor banner advertising, trade shows or magazine ads.
Easier targeting means: Due to the nature of the internet, it is possible to taper down the
target audience so that only the segment that does view the ad consists of potentially strong
buyers. In fact, there is a lot of geographical targeting to make the ads relevant to users.
Similarly, users web browsing history can be made a base for zeroing in on preferences and
avoiding useless repetitions.
Measurable: This is one of the most important factors in deciding the impact of online
advertising. On the internet, it is possible to collect accurate data of hits, pages visited,
MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

number of times the ad was viewed by the same user, how the user reached to the ad or the
website, and whether the activity resulted in a sale.
Versatility: Unlike offline media, online advertising can be highly interactive. From
incorporating videos and games to audio messages and sections for query input, there are
many methods to keep the consumer keenly and constantly engaged.
Speed: Once an ad copy is ready, the distance between the advertiser and its consumers can
be rapidly covered. Deployment can be immediate as most of the time the delivery of ad
schedules is not dependent upon the publishers schedule. Even modifications and
replacements in the ad are faster on the internet.

QUESTION 2
In business to business (B2B) applications, the buyer, sellers, and transactions involve
only organizations. Business to-business comprises about 85% of EC volume. Its cover broad
spectrum of application that enables an enterprise to form electronic partnership with its
distributors, resellers, suppliers, customers, and other partners. Organization can use B2B to
restructure their supply chains and their partner relationships.
There are several business models for B2B applications, the major ones are sell-side
marketplaces, buy-side marketplaces, and electronic exchanges.
Sell-Side Marketplaces
In the sell-side marketplace model, organizations attempt to sell their products or service
to other organizations electronically. From their own private e-marketplace and/or from a third-
party website. This model are similar to the B2C model in which the buyer is expected to come
to the sellers site, view catalogs and place an order. In the B2B sell side marketplace however the
buyer is an organization.
The Key mechanisms in the sell-side model are electronic catalogs that can be
customized for each large buyer and forward auctions. Sellers such as Dell Computer
(www.dellauction.com) use auctions extensively. In addition to auction from their own website,
MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

organization can use third party auction sites such as e-bay, to liquidate items. Companies such
as Ariba (www.ariba.com) are helping organization to auction old asset and inventories.
Most of the advantages are for the selling organization that owns the sell side solution.
The seller drives the prices of goods based on level of supply. The solution is seller biased, and
the seller has the most control over the marketplace. Buyers can benefit from low maintenance
costs and through smaller investment costs compared to the seller.
Buy-Side Marketplace
The buy-side marketplace is a model in which organizations attempt to buy needed
products or services from other organizations electronically, usually from their own private e-
marketplace. A major method of buying goods and services in the buy-side model is a reverse
auction. Here, a company that wants to buy items places a request for quotation (RFQ) on its
Web site, or in a third-party bidding marketplace. Once RFQs are posted, sellers (usually
preapproved suppliers) submit bids electronically. Such auctions attract large pools of willing
sellers, who can be either a manufacturer, a distributor, or a retailer. The bids are routed via the
buyers intranet to the engineering and finance departments for evaluation. Clari cations
are made via e-mail, and the winner is noti ed electronically
The buy-side model uses EC technology to streamline the purchasing process in order to reduce
the cost of items purchased, the administrative cost of procurement, and the purchasing cycle
time. General Electric, for example, has calculated that it saves 10 to 15 percent on the cost of
the items placed for bid and up to 85 percent on the administrative cost of procurement; in
addition, cycle time is reduced by about 50 percent. Procurements using a third-party buy-side
marketplace model are especially popular for medium and small organizations
Electronic exchanges
Some electronic exchanges deal in direct materials, and others in indirect materials are
inputs to the manufacturing process, such as safety glass used in automobile wind-shield and
windows. Indirect materials are items, such as office supplies, that are needed for maintenance,
repairs, and operations (MRO). There are three basic types of public exchanges : vertical,
MUHAMAT BIN IDRIS (2013141007) MGT417 ASSIGNTMENT 2

horizontal, and functional. All three types offer diversified support service, ranging from
payment to logistics.
Vertical connect buyers and sellers in a given industry. Examples of vertical exchanges are
www.plasticnet.com in the plastics industry, www.papersite.com in the paper industry,
www.chemconnect.com in the chemical industry,and www.isteelasia.com in the steel industry.
Horizontal exchanges connect buyers and sellers across many industries and are used primarily
for MRO materials. Examples of horizontal exchanges are Worldbid.com (www.worldbil.com),
Global sources (www.globalsources.com), and Alibaba (www.alibaba.com).
In functional exchanges, needed service such a temporary help or extra office space are traded on
an as-needed basis. For example, Employees (www.employease.com) can find temporary labor
by searching employers in its Employ ease Network.
Conclusion
There is a lot of value in being clear about the type of ecommerce business one is talking about.
Among other benefits, it allows us to make like-to-like comparisons across ecommerce
businesses. At the same time, it helps us better understand the business model of different
ecommerce players.

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