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Final Presentation E-Business - HEC 2009 A. Osterwalder 15th December 2009 Ana Ron Elizade Irene Sáenz de Santa María Valín Eduardo Sáinz de los Terreros Sastre Fernando de Santiago Martín Gonzalo de Pablo Mariscal 05/13/22 E-BUSINESS

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Final PresentationE-Business - HEC 2009

A. Osterwalder

15th December 2009

Ana Ron ElizadeIrene Sáenz de Santa María Valín

Eduardo Sáinz de los Terreros SastreFernando de Santiago Martín

Gonzalo de Pablo Mariscal04/08/23E-BUSINESS

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Industry Structure

How is the Web transforming the industry?

What can we see and sense?

Ways of working

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Definitions:◦ Branding: It is the application of marketing techniques to a specific product,

product lin, or brand.◦ Advertising: It is the description or presentation of a product, idea, or

organization, in order to induce individuals to buy, support, or approve it. Insight:

◦ Brand: Distinguishing name and/or symbol intended to identify a product or producer

◦ Description: Detailed account of the certain or salient aspects, characteristics, or features of a subject matter or something seen, heard, or otherwise experienced or known.

◦ Presentation: Formal submission or delivery of a document or negotiable instrument for the appropriate notice or action (acceptance, negotiation, payment, etc.) of the named entity.

◦ Product: The end result of the manufacturing process, to be offered to the marketplace to satisfy a need or want.

◦ Organization: A company, business, firm, or association.◦ Individuals: Single person.

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Ancient Rome and Arabic: Out-of-Home advertising and Billboards are the oldest forms of advertising

19th Century: Growth of mail-order advertising 1836: First paid advertising in newspapers 1840: First advertising agency 1920s: Advertising come to radio 1940s: Advertising come to TV 1950s: Modern of selling advertising space to multiple

sponsors Late 1980s-Early 1990s: Cable TV. Thematic channels 21st Century: Advertising through Internet

Increasing trend of interactive and "embedded" ads, such as via product placement, having consumers vote through text messages, and various innovations utilizing social network services

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Brand: It is a distinguishing name and/or symbol intended to identify a product or producer.

Intellectual Property: It is a number of distinct types of legal monopolies over creations of the mind, both artistic and commercial.

Human Capital: It refers to the stock of skills and knowledge embodied in the ability to perform labor so as to produce economic value.

Broadcasting network: It consists of links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes.

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Organization: Refers to companies which have brands and use advertising to improve its performance.

Ad Agency: It is a service business dedicated to creating, planning and handling advertising for its clients.

Broadcaster: It is the agent responsible for the distribution of audio and/or video signals which transmit programs to an audience.

Client: It is usually used to refer to a current or potential buyer or user of the products of an individual or organization.

Salesperson: It is the agent whose activity is mainly involved in selling products or services in return for money or other compensation.

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Web Technologies Influencing the Industry

New problems being solved

Advantages for customers

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Traditional Mass Media Advertising

New communications environment: evolving network of new media


High capacity Interactive Multimedia

The fundamental differences between online and traditional advertising result from a combination of internet technologies and the nature of the web.

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WEB TECHNOLOGIES: -Search engines: A tool designed to search for information on the World Wide Web -Banner ads: A form of advertising on the World Wide Web that is intended to attract traffic to a website by

linking to the website of the advertiser -Buying online ad space: Advertising networks sell space to advertisers

- Addopting the cost-per-click approach to pricing- Addopting the use of auctions to allocate the advertising spots on the page showing results of the


-Web-based vehicles: Web versions of business directories similar to the yellow pages ; web versions of newspaper

classified ads ; web versions of direct mail and telephone marketing -IndividualIP (Internet protocol): Address which typically identifies the location of the individual -Data bases: It is possible for online entities to gather data on what people have done online

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-New opportunities for touching customers

-Enriching products and services with information

-Squeezing out costs through process automation: Companies can reach a wide audience for a small fraction of traditional advertising budgets

-Redesigning internal business process through enhanced communication and knowledge sharing

-Reduces Time and money spent

- Global product promotion; reach new markets world wide

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Vital Web presence

-Gives a competitive advantages

-Removes Location and availability restrictions

-Heightens customer service

-Streamlining the ordering process by taking orders online

-Companies can reach a wide audience for a small fraction of traditional advertising budgets. Companies can reach a wide audience for a small fraction of traditional advertising budget. Various methods: pay per impression, pay per click, pay per play or pay per action

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-The nature of the medium allows consumers to research and purchase products and services at their own convenience

-Every step on the process is faster : the Internet is faster than traditional selling methods

-More information about products and the selling of products: customers can access to information by him/herself

-Disponibility: Products can be sold or ordered 24 hours a day, seven days a week, 365 days a year without the need for support staff

-Online ordering helps to eliminate errors and make order processing more efficient

-The Web eliminates many of the extra costs that are associated with ordering: Ordering by phone can cost long distance fees and errors can occur with product codes

-It is simple to quickly re-order the same products from a previous date with one click of the mouse: Once logged on, a customer is able to lookup their order history to quickly see what they have ordered in the past

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Business Model: The method of doing business by which a company can sustain itself -- generate revenue

Main advertising models: Banner: A web site provides content mixed with advertising messages Portal: Search engine that may include varied content or services Classifieds: List items for sale or wanted for purchase. User Registration: Content-based sites that are free to access but require users

to register and provide demographic data Query-based Paid Placement: Sells favorable link positioning or advertising

keyed to particular search terms in a user query. Contextual Advertising/Behavioral Marketing: Freeware developers who

bundle adware with their product Content-Targeted Advertising: It extends the precision of search advertising to

the rest of the web Intromercials: Animated full-screen ads placed at the entry of a site Ultramercials: Interactive online ads that require the user to respond.

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INTERNET provides new advertising opportunities Popup, banners, e-mail advertisements,...

Since the rise of "entertaining" advertising people may like an advertisement enough to wish to watch it later or show a friend have FUN with company’s advertisements

Growing importance of the niche market using niche or targeted ads advertisements are targeted to a specific group and can be viewed by anyone wishing to find out more about a particular business.

Industry DIVERSIFICATION Ad Agencies Freelance advertising public competitions to create ads for

company’s products. Advertising EDUCATION importance of advertisement in

cultural and technological changes

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Today’s Advertisements try to influence people CONSUMERISM

Advertising campaigns poor in ethical values sex and race discrimination

Solution new tax over advertising companies which advertisements break established rules

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Psychological factors → thinking, feeling, sensation, and intuition → completely enthralling experience, not one with negative connotations

Companies should aim to strengthen customer interactions with advertisements on the Web

Unfortunately, most companies provide a generic experience to all customers instead of delivering a personalized experience.

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Commercial advertisers often seek to generate increased consumption of their products or services through branding

ETHICS → large numbers of advertisements (i.e.flashing banners), misleading images looking like error messages from the operating system, websites unethically using online advertising for revenue, without monitoring the links

MALWARE → advertising methods unethical and even illegal (external applications which alter system settings, spawn pop-ups, and insert advertisements into non-affiliated WebPages) → labelled as SPYWARE/ADWARE.

PRIVACY AND ANONYMITY → tracking the browsing of users across websites

ENVIRONMENT → 77% of consumers describe themselves as “green” and “actively living their lives conscious of their health and environment”

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Results-based and measurable Rich, varied and interactive Targeted effectively at desired consumer

segments Attuned to consumer desires to control

media experiences Direct response focus

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94% of all email messages are


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"Consumers are getting harder to influence as commercial clutter invades their lives." More: "People are tiring of ads in all their forms... [a recent] study found 65% of people now feel 'constantly bombarded' by ad messages." (The Economist, 2004)

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WAYS OF WORKING Activities we have Performed

-Looking for information about the history, the evolution, the structure and the operations of the industry in:

The Online Advertising Industry: Economics, Evolution, and Privacy

History of advertising of internet advertising”

Business models on the web




Vator Reports: The Rapidly Changing Online Marketing and Advertising Industry

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CONCLUSIONS IWhat have we learned

-Advertising is the description or presentation of a product, idea, or organization, in order to induce individuals to buy, support, or approve it.

-How the industry in structured

-How new technologies are influencing and changing the advertising industry.

-What are search engines, banner ads, buying online ad space.

-Consumer concerns in this industry

-What these concepts mean in the advertising industry






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CONCLUSIONS IIIWay of Thinking Changes


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