Digital communications 2011 student version

Digital Communications

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Overview• Trends in online; online consumer behaviour;

• search engine optimisation;

• affiliates; email marketing;

• advertising,

• mobile marketing

• Blogging & social media; IPTV and in-game; comparison & voucher sites; PR & reputation management

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The Internet – a definition resolvedFederal Networking Council (1995)"Internet" refers to the global information system that -- (i) is logically linked together by a globally unique address space based on the Internet Protocol (IP) or its subsequent extensions/follow-ons;(ii) is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and (iii) provides, uses or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein."

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Who Governs the Internet?• A number of different organisations that influence

the Internet and monitor its operations including:

• Internet Architecture Board (IAB)

• Internet Corporation for Assigned Names and Numbers (ICANN)

• Internet Engineering Steering Group (IESG)

• Internet Engineering Task Force (IETF)

• Internet Society (ISOC)

• World Wide Web Consortium (W3C)

Technologies

• Mashups

• Blogging

• Podcasting

• RSS

• Wikipedia

• Flickr

• Bittorrent

• AJAX

• Social Media Networks

• Google

• MMORPG

• Wii / PS3 / Xbox

• Smartphones

• Tablets

• WiFi

• EDI

• Cloud Computing

• The Grid

Key Technology Drivers

• Mobile Devices

• Control Mechanisms

• Lifestyle Integration

• Connection Speed

• Power Consumption / Regeneration

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Different Roles of Digital Media (Pelkonen, 2003)

Impact of Internet Marketing• Market expansion

– increased value-added, reduced costs

• Abolition of geographical constraints

– potentially limitless reach, without loss of richness

• Huge potential transaction cost savings

– revolutionary, rather than incremental

• Impacts up and down the value chain

– cumulative impact for end users

• Potential for interactivity with customers

– mass customisation, one-to-one relationships

How is the Internet Different?• Overcomes physical boundaries and distance

– Larger market

– Greater efficiencies

• Greater targeting

– Lower cost of acquiring information about a segment

• Interactive two way communication

• Internet goes beyond segmentation to fragmentation allowing tailoring to individuals

• Greater information, quality information, detailed information

• Allows for anticipatory marketing

• Improved transaction efficiency

How is it the same?• Virtual activities do not eliminate the need for

physical activities

• Internet does not necessarily offer lower prices to customers (why should it?)

• Many products and services are the same on or off line.

• Internet may offer convenience and richness of information but there is the possibility of information overload, risk, trust and privacy loss

Interactive potential• Arnott and Bridgewater (2002)

– Many companies slow to realise interactive potential (info provision only)

• Maybe a transitional stage for existing firms

– Larger firms more sophisticated in use made of Internet

• Could help smaller firms to even the odds?

– No evident difference between product and service firms’ use of Internet

– No clear geographical picture

– Greater international involvement linked to more sophisticated use of Internet interactivity (for all sizes of firm)

– How ready are customers to respond?

Top 10 Internet markets, 2010Internet: Average hours spent in the last 30 days

Germany 20.30Great Britain 18.90France 18.50Portugal 18.30Turkey 17.70Republic of Ireland 16.30Northern Ireland 16.00Spain 15.50South Africa 15.20Saudi Arabia 14.80

© TGI2011 Tom Chapman 12

Online Consumer Behaviour

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Global Mobile Network Consumer Internet Video TrafficPB/Month, 2010-2015

Media forecasts

Compound Annual Growth Rate, 2010-2015: 108%

Source: Cisco Visual Networking Index, 2011Extracted from: Cisco Visual Networking Index: Forecast & Methodology, 2010-2015

To click through to article, use Slide Show view

Global Consumer Mobile Internet Gaming TrafficPB/Month, 2010-2015

Media forecasts

Compound Annual Growth Rate, 2010-2015: 110%

Source: Cisco Visual Networking Index, 2011Extracted from: Cisco Visual Networking Index: Forecast & Methodology, 2010-2015

To click through to article, use Slide Show view

Online Shopping Behaviour Clark & Wright (2007).

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Advertising

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Truong & Simmons (2010, p.240)“Harker (2008, p. 296) defines online or Internet advertising as, ‘any form of commercial content available on the internet, delivered by any channel, in any form, designed to inform customers about a product or service at any degree of depth’.

Jensen (2008) states that internet advertising consists of three primary constituents: display advertising – which includes banners, pop-ups and interstitials; search engine optimization (SEO) and search engine marketing (SEM) – including paid and unpaid SEO and SEM (e.g. Google Adwords); and, affiliate programs, where a marketer’s link (e.g. Amazon) is provided on a host’s website. A further constituent is email, paid for advertising in that most firms utilize email marketing hardware/software, and customer lists that are bought in (Merisavo & Raulas, 2004).”

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UK Digital Media Mix (IAB)

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Advertising UK (IAB)

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Adspend by country forecast at current prices, 2011

Media forecasts

Notes: Local currency, current prices Source: Warc

Extracted from International Ad Forecast 2011/12 (July).To click through to article, use Slide Show view

year-on-year % change

Adspend Forecast by Main Media: 2010 vs 2009

Media forecastsExtracted from Adstats: Adspend in 2010.To click through to article, use Slide Show view

Source: Warc

Year-on-year change (%), top 5 markets

Consensus Forecast: Internet Advertising Expenditure

Media forecastsExtracted from Consensus Adspend Forecast – May 2010.To click through to article, use Slide Show view

Source: Warc

Current prices, y/y % change

2010 2011

Australia 13.3 12.0

Brazil 23.4 20.2

Canada 18.3 17.7

China 28.6 39.9

France 9.7 9.9

Germany 9.3 10.0

India 28.6 18.1

Italy 12.7 15.9

Japan 6.5 8.1

Russia 22.1 23.4

Spain 11.5 13.4

UK 6.6 5.6

US 10.2 13.5

Predicted US online ad spend by format, 2015

Media forecastsSource: eMarketer, April 2011

Extracted from Adstats: Online video.To click through to article, use Slide Show view

% share

Search Engines Grehan & Pettijohn (2009)• Content

• Quality Backlinks

• Page Rank

• Domain Age

• Description

• URL / Domain Name

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Paid Search• Relevance

• Traffic

• Competition

• Commerciality

“The executives of companies conducting business over the Internet have, conveniently, downplayed traditional measures of profitability and economic value. Instead, they have emphasized expansive definitions of revenue, numbers of customers, or, even more suspect, measures that might someday correlate with revenue, such as numbers of unique users (“reach”), numbers of site visitors, or click-through rates.” Porter, M. E. (2001, p.4)

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Word of MouthViral Marketing

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Definition Cruz & Fill (2008, p. 745)• The term “viral marketing” was developed by Juvertson and Draper

(1997). It was used to describe the free email service which Hotmail was providing. According to Juvertson (2000, pp. 1-2), they defined the term simply as “network-enhanced word-of-mouth”.

• However, the literature contains a variety of terminology used to explain what viral marketing is.

• Vilpponen et al. (2006, p. 72) “Interactive Marketing”

• Blattberg and Deighton (1991) “Internet word-of-mouth”

• Goldenberg et al., (2001) “word-of-mouse”

• Kaikati and Kaikati (2004) “stealth marketing”

• De Bruyn and Lilien (2004) “referral marketing”

• Thomas (2004) tries to unify these ideas in the term “buzz marketing”

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Performance MeasurementCruz & Fill (2008, p. 753)

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Performance MeasurementCruz & Fill (2008, p. 754)

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Social Media Overview

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Social Media

Overview

“Social networking sites are the hottest attraction on the Internet, dethroning pornography and highlighting a major change in how people communicate ... ... ” Reuters (2008)

“Social Media represent a revolutionary new trend that should be of interest to companies operating in online space or any space, for that matter.” (Kaplan and Haenlein, 2010 pg 59)

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Social Media Defined“social media is a hybrid element of the promotion mix because in a traditional sense it enables companies to talk to their customers, while in a nontraditional sense it enables customers to talk directly to one another.’’ (Blackshaw & Nazzaro, 2004, p. 2).”(Mangold and Faulds, 2009, 357)

"an internet-facilitated and consumer-driven movement of networks, content and knowledge built on web-based media tools that enable individuals to connect online.” (Angel and Sexsmith, 2009)

“Social Media is a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content.” (Kaplan and Haenlein, 2010 pg 61)

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A Classification of Social MediaKaplan & Haenlein (2010, 62)

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Social Presence / Media Richness

Low Medium High

Self presentatio

n /Self

disclosure

High BlogsSocial

Networking Sites

Virtual Social Worlds

Low Collaborative projects

Content Communitie

s

Virtual Game

Worlds

Top 20 social networks by registrations, 2010

Media trendsSource: Wikipedia (accessed 31, January 2010)

Extracted from Looking For Eric: In Search of the Hub ConsumersTo click through to article, use Slide Show view

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Pro’s & Cons

• ‘a strategy accelerator’ - connections / relationships both in internal and external

• Information / Data / Marketing Research / Product Development etc not just Marketing Communications

• Security / IP

• Employees

• Image & PR

• Control

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Recommendations Kaplan & Haenlein (2010)

Social • Be Active

• Be Interesting

• Be Humble

• Be Unprofessional ?

• Be Honest

Media• Choose carefully

• Pick the application or make your own

• Ensure Activity Alignment

• Media plan integration

• Access for all

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RecommendationsMangold & Faulds (2009)• “propose that social media be

considered a hybrid component of the promotional mix and therefore be incorporated as an integral part of the organization’s IMC strategy.”

• “managers who are accustomed to exerting a high level of control over company-to-consumer messages must learn to talk with their customers, as opposed to talking at them, therefore influencing the discussions taking place in the social media space.”

• Provide Networking Platforms

• Use blogs and other social media tools to engage customers

• Use both traditional and Internet based promotional tools to engage customers

• Provide information

• Be outrageous

• Provide exclusivity Design products with talking points and consumers’ desired self images in mind

• Support causes that are important to consumers

• Utilize the power of stories

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Food for thought - Marketing

• Back to basics

• An exchange process

• Objectives

• Focus

• Strategy / Direction

• This is not a cheap / short term commitment

• Don’t ‘Give it to the student’

• ROI

• Internal Customers

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Food for thought – Technological & Behavioural • Integration of Social

Media Technologies into corporate and other systems

• Increased use of Social Media Release (SMR) - Steyn et al, (2009)

• Mobile Devices and anytime / location access

• Integration of social media content and more formal / traditional web content

• Use of Social Media demographics (LIKE) in search results and rankings

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Food for thought

It’s not your party

Hold your own party and invite your

advocates2011 Tom Chapman 43

References• Angel, R., & Sexsmith, J. (2009). SOCIAL NETWORKING: THE

VIEW FROM THE C-SUITE. Ivey Business Journal, 73(4), 5.

• Arnott, D. C., & Bridgewater, S. (2002). Internet, interaction and implications for marketing. Marketing Intelligence & Planning, 20(2), 86-95.

• Clark, L., & Wright, P. (2007). Off Their Trolley—Understanding Online Grocery Shopping Behaviour. Home Informatics and Telematics: ICT for The Next Billion, 157-170.

• Cruz, D., & Fill, C. (2008). Evaluating viral marketing: isolating the key criteria. Marketing Intelligence & Planning, 26(7), 743-758.

• Grehan, M., & Pettijohn, J. B. (2009). Search marketing yesterday, today, and tomorrow: Promoting the conversation. Journal of Direct, Data and Digital Marketing Practice, 11(2), 100-113.

• Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1), 59-68.

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References• Mangold, W. G., & Faulds, D. J. (2009). Social media: The new hybrid

element of the promotion mix. Business Horizons, 52(4), 357-365.

• Pelkonen, T. (2003). Value Creation Patterns and Current Trends in Digital Media Service Creation: A Case Study of the Finnish Digital Media Industry. Proceedings from Europrix Scholars Conference paper, November.

• Porter, M. E. (2001). Strategy and the Internet. Harvard Business Review, 79(3), 62-79.

• Reuters (2008) Porn passed over as Web users become social: author. http://www.reuters.com/article/ idUSSP31943720080916

• Steyn, P., Salehi-Sangari, E., Pitt, L., Parent, M., & P. (2009). The Social Media Release as a public relations tool: Intentions to use among B2B bloggers. Public Relations.

• Truong, Y., & Simmons, G. (2010). Perceived intrusiveness in digital advertising: strategic marketing implications. Journal of Strategic Marketing, 18(3), 239-256.2011 Tom Chapman 45