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Direct and Online Marketing – the New Marketing Model Essay

I. INTRODUCTION

With the growth of the Internet community and the limitless possibilities the Internet gives to the single user, it didn’t take long before someone realized that the World Wide Web is a really good place for the commercial entrepreneur. So, very quickly the online market was born, offering almost all kinds of goods to be purchased and delivered to your door. This new online sensation was called electronic commerce, or ecommerce.

E-commerce is a complex term referring to the process of selling and buying products and services over the Internet or other electronic systems. Considered as the sales aspect of the e-business, the electronic commerce has revolutionized trade as a routine activity for the contemporary man by bringing the marketplace to your home or the office, thus saving you time and efforts.

The development of e-commerce has given birth to new terms such as electronic funds transfer, online transaction processing, electronic data interchange (EDI), Internet marketing, automated data collection systems, etc. They all designate certain key components of the sophisticated e-commerce system.

The majority of processes running within the e-commerce system are carried out on the World Wide Web. It is on the web where goods and services are presented through variously designed e-commerce websites to match the taste of a particular target audience. From there customers can order the desired items and pay for them in a variety of supported e-payment options such as credit cards, PayPal, etc. Certain e-commerce operations are executed via email as well. These may include sending order placement confirmations or electronic invoice notifications to the buyer’s personal mailbox after a particular purchase.

Depending on the nature of the offered products and services, ecommerce operations may involve virtual and physical items. Due to the increasing use of the Internet in our daily lives, the percentage of the virtual items distributed through ecommerce is rapidly growing. These include services like buying admission to limited access websites or electronic versions of newspapers and magazines, online gaming, etc. Nevertheless, the majority of e-commerce transactions are still related to the purchase and transportation of physical items.

As far as the parties involved in the online transaction process are concerned, ecommerce can be thought of as being business-to-consumer, more popular as B2C, and business-to-business, also known as B2B. The B2C ecommerce, conducted between business entities and consumers, includes all online stores (e-shops) offering retail products and services to end customers such as flower stores, shoe stores, furniture stores, etc. The B2B commerce, on the other hand, takes place between business entities only, such as wholesalers and retailers, on not that widely popular web stores.

The rapid expansion of ecommerce has made it possible for almost all big retail companies to set up their own online stores with regularly updated content. Thus, it is now easier than ever to obtain an item from the latest collection of your favorite clothes brand, or be among the first to take advantage of a starting clearance campaign. Moreover, the ecommerce fashion is gradually ‘infecting’ smaller retail companies, which find it as a good chance to expand their reach to potential customers and increase the selling volumes. This trend is stimulated by the attractive low-cost ecommerce hosting services offered by different hosts on the web.

II. ONLINE MARKETING

Online marketing, also known as online advertisement, internet marketing, online marketing or e-marketing, is the marketing and promotion of products or services over the Internet. Online advertising is a form of promotion that uses the Internet and World Wide Web to deliver marketing messages to attract customers.

TYPES OF ONLINE MARKETING

* Search Engine Optimization (SEO) is the process of affecting the visibility of a website or a web page in a search engine’s “natural” or un-paid (“organic”) search results. In general, the earlier (or higher ranked on the search results page), and more frequently a site appears in the search results list, the more visitors it will receive from the search engine’s users. SEO may target different kinds of search, including image search, local search, video search, academic search, news search and industry-specific vertical search engines.

As an Internet marketing strategy, SEO considers how search engines work, what people search for, the actual search terms or keywords typed into search engines and which search engines are preferred by their targeted audience. Optimizing a website may involve editing its content, HTML and associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines. Promoting a site to increase the number of backlinks, or inbound links, is another SEO tactic. The plural of the abbreviation SEO can refer to “search engine optimizers,” those who provide SEO service.

* Pay-Per-Click Advertising (also called cost per click) is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher (typically a website owner) when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. PPC “display” advertisements, also known as “banner” ads, are shown on web sites or search engine results with related content that have agreed to show ads. In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, PPC implements the so-called affiliate model that provides purchase opportunities wherever people may be surfing.

It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point click-through to the merchant. It is a pay-for-performance model: If an affiliate does not generate sales, it represents no cost to the merchant. Variations include banner exchange, pay-per-click, and revenue sharing programs. Websites that utilize PPC ads will display an advertisement when a keyword query matches an advertiser’s keyword list, or when a content site displays relevant content.

Such advertisements are called sponsored links or sponsored ads, and appear adjacent to, above, or beneath organic results on search engine results pages, or anywhere a web developer chooses on a content site. Among PPC providers, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter used to be the three largest network operators, and all three operate under a bid-based model.

In 2010, Yahoo and Microsoft launched their combined effort against Google and Microsoft’s Bing began to be the search engine that Yahoo used to provide its search results. Since they joined forces, their PPC platform was renamed AdCenter. Their combined network of third party sites that allow AdCenter ads to populate banner and text ads on their site is called BingAds. The PPC advertising model is open to abuse through click fraud, although Google and others have implemented automated systems to guard against abusive clicks by competitors or corrupt web developers.

* Email Marketing is directly marketing a commercial message to a group of people using email. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. It usually involves using email to send ads, request business, or solicit sales or donations, and is meant to build loyalty, trust, or brand awareness. Email marketing can be done to either cold lists or current customer database.

Broadly, the term is usually used to refer to: * Sending email messages with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business, * Sending email messages with the purpose of acquiring new customers or convincing current customers to purchase something immediately, * Adding advertisements to email messages sent by other companies to their customers Researchers estimate that United States firms alone spent US $1.51 billion on email marketing in 2011 and will grow to $2.468 billion by 2016.

* Affiliate Marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought
about by the affiliate’s own marketing efforts. The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors. Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC – Pay Per Click), e-mail marketing, and in some sense display advertising.

On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner. Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales. Affiliate marketing is frequently overlooked by advertisers. While search engines, e-mail, and website syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers’ marketing strategies.

* Display Advertising is a type of advertising that typically contains text (i.e., copy), logos, photographs or other images, location maps, and similar items. In periodicals, display advertising can appear on the same page as, or on the page adjacent to, general editorial content. In contrast, classified advertising generally appears in a distinct section, was traditionally text-only, and was available in a limited selection of typefaces. 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. An example of textual advertisements is commercial messages sent to mobile device users, or email. One common form of display advertising involves billboards. Posters, fliers, transit cards, tents, scale models are examples of display advertising.. Display advertising appears on web pages in many forms, including web banners. Banner ad standards continue to evolve.

* Blogging. A weblog, also called a blog, is a journal that is maintained by a blogger and contains information that is instantly published to their blog website. Blogging is a very popular activity. The number of online users creating and maintaining blogs has increased dramatically over the past year. The number Internet users who read these blogs has also shot up, with some blogs boasting thousands, even millions of daily dedicated readers. Blog marketing is any process that publicizes or advertises a website, business, brand or service via the medium of blogs. This includes, but is not limited to marketing via ads placed on blogs, recommendations and reviews by the blogger, promotion via entries on third party blogs and cross-syndication of information across multiple blogs.

* Community Building. An online community is a virtual community that exists online and whose members enable its existence through taking part in membership ritual. An online community can take the form of an information system where anyone can post content, such as a Bulletin board system or one where only a restricted number of people can initiate posts, such as Weblogs. Online communities have also become a supplemental form of communication between people who know each other primarily in real life. Many means are used in social separately or in combination, including text-based chat rooms and forums that use voice, video text or avatars. Significant socio-technical change may have resulted from the proliferation of such Internet-based social networks.

* Social Media Marketing refers to the process of gaining website traffic or attention through social media sites. Social media marketing programs usually center on efforts to create content that attracts attention and encourages readers to share it with their social networks. A corporate message spreads from user to user and presumably resonates because it appears to come from a trusted, third-party source, as opposed to the brand or company itself. Hence, this form of marketing is driven by word-of-mouth, meaning it results in earned media rather than paid media. Social media has become a platform that is easily accessible to anyone with internet access. Increased communication for organizations fosters brand awareness and often, improved customer service.

Additionally, social media serves as a relatively inexpensive platform for organizations to implement marketing campaigns. Social media marketing involves the use of social networks, COBRAs and eWOM to successfully advertise online. Social networks such as Facebook and Twitter provide advertisers with information about the likes and dislikes of their consumers. This technique is crucial, as it provides the businesses with a “target audience”. With social networks, information relevant to the user’s likes is available to businesses; who then advertise accordingly. Consumer’s online brand related activities (COBRAs) is another method used by advertisers to promote their products.

An activity such as uploading a picture of your “new Converse sneakers to Facebook” is an example of a COBRA. Another technique for social media marketing is electronic word of mouth (eWOM). Electronic recommendations and appraisals are a convenient manner to have a product promoted via “consumer-to-consumer interactions”. An example of eWOM would be an online hotel review; the hotel company can have two possible outcomes based on their service. A good service would result in a positive review which gets the hotel free advertisement via social media; however a poor service will result in a negative consumer review which can potentially ruin the company’s reputation.

ADVANTAGE OF ONLINE MARKETING

These are some of the many advantages that online marketing offers over traditional media outlets:

1. Reduced Cost The starting cost of online marketing is only a fraction of the thousands of dollars that Yellow Pages, television and radio ads cost. For example, you can get a free listing on Google Local that will be just as effective as a costly online Yellow Pages ad. In addition, while traditional ads may only run for a short time, a search engine optimization campaign can deliver long-term results. You can also save money with online Pay-Per-Click advertising where it is easy to experiment with small ad volumes until you perfect your strategy and then expand your marketing budget when you are assured of a positive sales return.

2. Everything Is Measurable When you place an ad in the newspaper or a magazine, it can be difficult to assess the direct sales impact for your business. With online marketing, everything can be tracked and illustrated in detailed graphs that illustrate traffic growth, leads and sales conversions from your specific search marketing campaigns. Using a free traffic analysis tool like Google Analytics, it is easy to calculate your return on investment (ROI) so you can appreciate the excellent value generated from your online marketing budget.

3. Brand Engagement In the crowded market, you need to establish and maintain positive brand awareness and client loyalty. Apart from word-of-mouth and leveraging your personal relationships with your established clients, a website is the most important marketing tool a business can have. A regularly updated website with well-written content that maintains people’s interest is essential to showing people exactly how your business is distinctive – and how you offer the best value to your clients.

4. Demographic Targeting The degree to which an online marketing campaign can target and measure the response from specific demographics and regions is often astonishing to business owners who normally use traditional media. New demographic prediction and online advertising platforms allow you to specifically target the specific consumer demographics most likely to buy your products. In particular, if you want to target young people between the ages of 16-30, you’ll need an online marketing strategy to reach them where they spend the bulk of their time: On the Internet and on social media sites.

5. Real-Time Results With online marketing you don’t have to wait weeks to see a significant boost in your business. With a paid search marketing campaign you can experience real-time results that enable you to fine-tune your marketing message to achieve your desired effect. If your marketing strategy isn’t working effectively, real-time monitoring tools allow you to easily pin-point exactly where you are going wrong.

6. Easily Refine Your Strategy Using online marketing analytics and tracking tools you can test conversion rates at a fraction of the cost of a traditional media campaign. Online marketing levels the playing field and allows savvy small businesses to compete in competitive niches that previously would only be open to large corporations and their massive marketing budgets. If your marketing strategy is not bringing in the return on investment (ROI) that you desire, you can work to perfect it without having to launch an expensive new campaign as would be required with most traditional media outlets.

7. Long-Term Exposure The benefit of an organic search marketing campaign that optimizes a website for specific keywords is that you will achieve a long-term return on your investment. Once your website’s visibility is well-established with search engines, it is easy to do regular low-cost maintenance of your strategy. The early adopters of new online marketing platforms like social media marketing will have a significant head start over their competition.

8. Product Information Today’s savvy consumers want to compare reviews and opinions of friends, trusted bloggers and industry experts before they make a decision. If you can provide quality, linkable information that is what people are looking for, then the next step of converting users into paying clients can be very easy. With social media networks like Facebook and Twitter re-enforcing the value of positive word-of-mouth exposure, trust is more important than ever in the marketing field.

9. Less Intrusive Most savvy consumers dislike intrusive traditional marketing methods like direct mailing, print ads and television advertisements. When someone buys a newspaper or magazine, they want to read interesting articles not be bombarded with irrelevant ads. While mediums like television can still be useful for maintaining awareness of large corporate brands, it is not an effective medium for most small and medium-size businesses. With online marketing, you can target consumers precisely when they are searching for products and services that your business can provide.

10. Holds Their Attention When people read the newspaper or a magazine they may scan over the advertisements beside the article but there is no way to engage their attention. With online marketing you can encourage them to take action, visit your website and read about your products and services which results in vastly increased “stickiness” of your marketing message.


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