Marketing on the Web – Part 2 MGMT 230 WEEK 9. This class will cover… Permission marketing, ethics, and privacy The internet marketing toolbox – Web display.

Marketing on the Web – Part 2

MGMT 230WEEK 9

This class will cover…

• Permission marketing, ethics, and privacy

• The internet marketing toolbox– Web display advertising– eMail marketing

Legal requirements and professional standards around “permission marketing”

Legal Protection of Internet Privacy

• A major concern of Internet users is that their personal data is used only for the purpose it was provided

• Legislation in Canada – PIPEDA (

Personal Information Protection and Electronic Documents Act)

– All businesses and other organizations had to comply by Jan 1, 2004

Privacy requirements

• Information about an identifiable individual– Name, address, gender, age, ID numbers– Sensitive information (religion, union affiliations, sexual

orientation, medical records etc)• Identify purpose for which info is being collected• Knowledge and consent of individual is required• Use only for the purpose for which it was collected• Keep it secure• Make public your policies and practices about how

private information is deal with

Privacy Policies

• Organizations carry out this legal requirement by providing information in privacy policies

• Policy must address information collected automatically from log files and cookies, as well as personal information actively provided by the user– Example: FutureShop– Example: Microsoft Canada

• Trust can also be increased by the use of “trustmarks” from 3rd party providers such as Truste

Privacy and cookies• Cookies are a boon to marketers – just a few of the uses (

video explanation from Google):– Personalization– Advertising and ad networks– Shopping carts– Recognizing returning visitors– Tracking click-through from advertising to purchase

• They also offer big advantages to web site users• However – they are also the cause of many privacy

concerns

Types of cookies• There are several types of cookie

– Persistent cookies– Single session cookies– First-party cookies– Third-party cookies – these are the ones that cause concern

• No one-to-one correspondence between computer (cookie) and user

• Issue for marketers– Must disclose how cookies are used in Privacy Policy– Creeping out the customers by “going too far”

• Behavioural re-targeting (based on previous actions, not demographics) is being called “stalking”

New legal framework for Canada: CASL

• “In order to build consumer trust and confidence in conducting e-business in Canada the Government of Canada is committed to establishing clear rules to protect the privacy of personal information in the new 'virtual' marketplace. This is being done through the implementation of Federal privacy legislation, and implementation of the new anti-spam legislation.”

Industry Canada

• Summary of the new anti-spam legislation (Bill C28)

– Very strict consent framework is one of the most notable points– Applied to all “electronic communication” not just email– We will look at this legislation in more detail later in the class

We can also build trust and confidence by using “permission marketing” techniques

Permission marketing

• Term coined by Seth Godin (1999)• Underpins the notion of relationship

marketing• The antithesis of “interruption marketing” and

the answer to the problem of clutter– Permission marketing is…..

anticipated, relevant and personal• Often begins with some sort of incentive that

customers “opt-in” to

Permission as a basic principle on the web

• Don’t ask for personal information too early in a process

• Don’t ask for it until it is needed

• Remember, once you have customer information, all contact should be “anticipated, relevant, and personal” (and used only for the purpose(s) that they explicitly gave consent for)

EMAIL MARKETING

E-mail - direct marketing

• Marketing-related e-mail is a very high proportion of a typical Internet user’s in-box

• Advantages– Cheap (no printing or delivery costs)– Direct (include hyperlink to website for click-through)– Fast to execute– Fast response rate (or not at all)

• Disadvantages– Bad reputation because of spam – delivery problems– Very difficult to get people to open emails– Email addresses keep changing

SPAM• Marketers have abused and misused email

• The Spamhaus Project estimates that 90% of incoming email traffic is spam in North America, Europe or Australasia. By June 2008 96.5% of e-mail received by businesses was spam.

• Why does SPAM continue?– Cost to sender is minimal – Very low response rate required to make SPAM profitable.

Spammers are turning a profit despite only getting one response for every 12.5m e-mails they send.

SPAM defined• Traditional definition of SPAM

– Unsolicited commercial email sent in bulk(UCE)• New Canadian Anti-Spam legislation (CASL)

broadens the definition to:– Spamming: “the sending of unsolicited

commercial electronic messages (“CEMs”) whether in the form of e-mail, text messages, social media or other means of telecommunication”

– Email does not have to be sent in bulk to fall under this legislation

So what does the law say?• CASL (Canada’s Anti-Spam Legislation)

– Passed December 2010 (after many years in development)– Sections covering “commercial electronic messages” came

into force July 1, 2014– January 15, 2015, sections of the Act related to the

unsolicited installation of computer programs or software come into force.

• This is very comprehensive and stringent legislation• Penalties: up to $1,000,000 per violation for

individuals and up to $10,000,000 for corporations• Private rights of action after 1 July 2017 – ie. recipients

can suehttp://fightspam.gc.ca/eic/site/030.nsf/eng/h_00039.html

Consent is really important• CASL prohibits the sending of commercial electronic

messages without the recipient's consent (permission), including messages to email addresses and social networking accounts, and text messages sent to a cell phone

• You can legally send CEMs only with the full CONSENT of the recipient– Express consent: Direct, positive opt-in (absolutely no pre-

checked boxes) - remains in force until the customer opts out

– Implied consent – exists where there is a previous business relationship – BUT expires after 2 years – then Express consent is needed to continue sending messages

• 3 things to think about when sending electronic messages (Infographic from Gov’t of Canada)

http://fightspam.gc.ca/eic/site/030.nsf/eng/h_00039.html

eMail marketing challenges

• Even with permission-based opt-in and full consent, there are considerable challenges in

– Getting your email to the recipient (spam filters etc)

– Getting them to open it when they get it

Some tactics to help get your email delivered and opened

Comply with the law:– Use double opt-in subscription process– No pre-checked boxes– Have a visible “update email preferences” or

unsubscribe link– Include a physical business address

• A recognized, expected, consistent sender name• Make it expected• Select appropriate send time• Be aware of how content (spam) filtering works

(test your messages)

• Based on How Nongeeks Can Increase eMail Delivery

DISPLAY ADVERTISING ON THE WEB

Internet advertising formats (IAB report for 2014)

Web site advertising formats• Began as static banners in the mid 1990s, added

animation, then moved to the use of “rich media” where people can interact with the advertising

• Interactive formats, including:– Banners– Buttons– Skyscrapers– Pop-ups, pop-unders, interstitials– Pre-rolls (video)– Video ads

• Where to obtain display advertising services?– Google – Adwords for Display– Facebook – Advertising on Facebook– Programmatic / automated ad buying

Display advertising costing models• Online media have varied payment schemes – unlike

traditional media which is usually priced on a pay for placement basis (based on ratings)

• Most display advertising is still costed using impressions / ad views – the number of times an ad is downloaded to a web page in the user’s browser

• CPM is the formula used to calculate what the advertiser will pay. – Cost per thousand impressions of a banner ad; a publisher that

charges $10,000 per banner and guarantees 500,000 impressions has a CPM of $20 ($10,000 divided by 500)

Privacy, cookies, and third-party advertising networks

• Clickstream data gives marketers the whole picture of a consumer’s movements before, during and after viewing an advert and means that marketers can use behavioural targeting and retargeting in addition to demographic targeting

• However this kind of tracking is also the cause of many privacy concerns, particularly in the case of third party tracking cookies from advertising networks such as Doubleclick

Source: eMarketing eXcellence. 2012. Smith &Chaffey

DoubleClick and Travelocity – a simple example of the functioning of an ad network

DoubleClick

DoubleClick assignsuser a userid AND records the site visited

DoubleClick places ad onWeb page for user

www.travelocity.com 3 875930236.doubleclick.net 485720434 6

1

6

3

4 5

DoubleClick recordsuserid on user's computerin a cookie to identify user in future visits

Computer requestsad from DoubleClickAND identifies sitethat user visited

Userid(485720434 6), Travelocity Home Page 1/25/01

Userid(3875930 236), Raymond Frost

2 Travelocity assignsuser a userid AND records user's nameso as to greet user byname on the next visit

User visits Travelocity

7

Travelocity sends page ANDsilently instructs user's computer to a) Request DoubleClick adb) Tell DoubleClick which section of Travelocity was visitedc) Write Travelocity cookie on user's computer

Exhibit 4 - 1 Tracking Users Site to Site

Two cookies are placed on the user’s computer

From: E-Marketing. Strauss, El-Ansary, Frost. Prentice Hall. 2003. Pg. 103.

So what’s the problem for marketers?

• Third Party Ad-Serving Basics (from Google)• Many users are now regularly deleting or

blocking cookies (capability built into browsers now)– This interferes with many of the marketing

benefits• Creeping out the customers by “going too far”

– Increasingly behaviour, rather than just demographics is targeted

– Re-targeted ads that follow users aroundSource: eMarketing eXcellence. 2012.

Smith &Chaffey

Problems with web advertising• Seen as more intrusive - consumers complain more about

web advertising than about other forms of advertising– What people hate about web advertising (Jacob Nielsen)

• Spyware and tracking cookies• Privacy concerns

– Social networking sites– Behavioural targeting and retargeting – may be subject to regulation– Use of cookies by advertising networks

• Opting out – Network Advertising Initiative• DoubleClick Opt-Out• Do Not Track initiatives

• Pop-up blockers and Ad Blockers• Very low click-through rates…..

http://www.businessinsider.com/its-more-likely-you-will-survive-a-plane-crash-or-win-the-lottery-than-click-a-banner-ad-2011-6?op=1

Ad blockers – the people fight back• A recent report from Adobe and PageFair

projected that the software would lead to nearly $22 billion in lost revenue for advertisers this year.

• Roughly 200 million people globally now use ad-blocking software; global usage increased 41 percent in the last year.

• Apple’s latest OS for mobile iOS 9 will include ad blocking software

http://blog.pagefair.com/2015/ad-blocking-report/

Ad fraud – bots abound

• "An astounding 54% of online display ads...between May of 2012 and February of this year weren't seen by anyone... "A significant number of display-ad "impressions"... are based on fake traffic. Malicious software makes a website think a person is actually on a page and ads are served up to that fake visitor. In other scams, ads show up on several Web pages but they are hidden behind a window on a website that is the size of a pencil point.“

Wall Street Journal, June 2013• The size of the problem was estimated to be around $7.5

billion