Chapter 11: Marketing Communication Tools

for High-Tech Markets

©2010 Pearson Education, Inc. publishing as Prentice Hall

What are the two pricing models used for online advertising?

How are traditional media dealing with the disruption caused by new media?

What problems and limitations are associated with online advertising?

What considerations are crucial to implementing an effective Web site?

©2010 Pearson Education, Inc. publishing as Prentice Hall

Advertising and Promotion Mix: ◦Traditional advertising, trade shows, sales

promotions, PR, publicity, direct marketing, personal selling

New Media ◦Internet based and Web 2.0 techniques,

mobile marketing

Website Design and Management

©2010 Pearson Education, Inc. publishing as Prentice Hall

Narrow Broad

Coverage of Target Audience (Reach)

Cos

t p

er

Con

tact

HIGH

LOW

Salesperson

6. Tele- marketing

5. Catalog Lit. & Manuals

4. Trade Show Seminars, Training

3. Direct Mail

2. Public Relations/ Publicity

1. Media Advertising

©2010 Pearson Education, Inc. publishing as Prentice Hall

Using tools from all levels of the pyramid in an orchestrated campaign to deliver a consistent message to the target audience.

The use of high level tools in the pyramid is based on the effectiveness of low level tools

◦ Match tools to the task at hand

©2010 Pearson Education, Inc. publishing as Prentice Hall

Paid, nonpersonal Mass-media channels

◦ Print, radio, television, billboards, targeted trade journals

Critical issues:◦ Reach- overlap with target market ◦ Cost efficiency (CPM)◦ Fit of the editorial climate with brand message◦ Size/Frequency of the ads◦ Ad agency or not?◦ Message strategy: gain attention/ reinforce brand

message

©2010 Pearson Education, Inc. publishing as Prentice Hall

Positive image, good media relations are vital.

PR: activities to develop goodwill with its customers, community, and stakeholders ◦ Event sponsorship, charitable events/cause marketing,

corporate advertising

Publicity: any coverage received in the news media regarding the firm’s products or activities◦ Press conferences, press releases, staged events, “new

media” tools

©2010 Pearson Education, Inc. publishing as Prentice Hall

Precisely targeted Effectiveness is a function of:

◦List quality◦Appropriate mailing volume/frequency◦Message

Obtain lists from brokers or other sources Equivalent to online newsletter and

targeted email communications

©2010 Pearson Education, Inc. publishing as Prentice Hall

To launch new products, reach sales prospects, compare competitors’ products

Accelerates the progression of business buyers through the selling cycle

◦ Investment vs. return

◦Attract traffic to booth

◦Follow-up on leads

©2010 Pearson Education, Inc. publishing as Prentice Hall

Additional information

Build on earlier communications

Showcase key benefits in terms of:◦Relative advantage◦Compatibility◦Scalability◦Service/warranty◦Total cost of ownership

©2010 Pearson Education, Inc. publishing as Prentice Hall

Outbound basis: company’s personnel cold-call existing customers

Inbound basis: customers or prospects call into the company’s call center

Provide support to field salespeople

National “Do Not Call” list- reduced effectiveness of cold call communication channel

©2010 Pearson Education, Inc. publishing as Prentice Hall

Focus on one customer at a time

Effectiveness of this most expensive tool is a function of the foundation established by lower-level tools in the pyramid

©2010 Pearson Education, Inc. publishing as Prentice Hall

Most Usedin decreasing order

Perceived Efficiencyin decreasing order

Email ads Search ads

Display (banner) ads Email ads

Search ads Branded sponsorship

Branded sponsorshipReferrals from other web sites

Referrals from other web sites Video ads

Video ads Podcasts

Podcasts Display ads

Online Advertising Tools

©2010 Pearson Education, Inc. publishing as Prentice Hall

New Media: technology-enabled advertising/ promotion tools

Can be used in a complementary fashion at all levels of the pyramid

Permission-Based vs. “Interruption” Marketing◦Best practices: opt-in ◦Follow-up with relationship marketing strategies

©2010 Pearson Education, Inc. publishing as Prentice Hall

Display Ads/Banner Ads Click-through rates on display ads have

been decreasing over time

Better for long-term brand building ◦ Increase advertisement awareness, brand

awareness, and purchase intent◦ Reminder to current customers to buy again

Behavioral Targeting◦ “supersmart, supertargeted display ads” based on

previous online behavior

©2010 Pearson Education, Inc. publishing as Prentice Hall

Branded Sponsorship Use ads to associate brand with popular

web pages

Classified Similar to classified ads in print

newspapers (Craigslist.org)

©2010 Pearson Education, Inc. publishing as Prentice Hall

Search Ads

◦Paid searches◦Pay-per-click◦Contextual ads

Search engine optimization◦Keyword Relevance

Use of “tags” in html code (title, keywords, descriptions, links)

◦Link Popularity

©2010 Pearson Education, Inc. publishing as Prentice Hall

Search Ads (cont.)

Pricing: ◦CPM

◦Cost per click

Assessment◦Clickstream analysis

◦Click fraud

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web 2.0◦Social media

Social networking sites, blogs, podcasting, video sites, virtual worlds

◦Wiki◦RSS◦AJAX

Host display/search ads Embedded advertising Creativity can compensate a lack of funds

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web 3.0

Emerging technology ◦Semantic Web

Leverages artificial intelligence allowing computers to utilize the web independently of human intervention

◦Increased connection speeds◦Modular web applications◦Advances in computer graphics

©2010 Pearson Education, Inc. publishing as Prentice Hall

Viral Marketing

Compelling marketing offers, voluntarily passed around ◦Harness power of Internet communications and

connectivity ◦Use technology: email, mobile messaging, Web

2.0 tools

Buzz marketing: word-of-mouth communications to generate interest and excitement in a company’s product

©2010 Pearson Education, Inc. publishing as Prentice Hall

Widgets/Gadgets

Free web-based software applications associated with an ad

◦Downloadable, interactive News feeds, stock tickers, clocks, calculators,

◦Uploaded to personal sites Viral element Chat boxes, music players

©2010 Pearson Education, Inc. publishing as Prentice Hall

Affiliates

Web sites that drive traffic/sales to another Web site by carrying their display ad or link

◦Compensation based on number of referrals

◦Higher ranks in natural search listings

©2010 Pearson Education, Inc. publishing as Prentice Hall

Mobile Advertising

The “third screen” Phone platform as advertising tool

◦Text messages directly to individual phone Location-based marketing

◦Uses GPS Use phones to make purchases

◦Used as a credit card Worldwide spending: 2006- $2 Billion

(Expected) 2011- $15 Billion

©2010 Pearson Education, Inc. publishing as Prentice Hall

Virtual Reality Environments

Niche market

To be effective:◦Engage avatars◦Add value to the “community”◦Use smart policies regarding inappropriate

behavior/vandals

©2010 Pearson Education, Inc. publishing as Prentice Hall

New media technologies significantly disrupt traditional media

Response: TV programs are available on the web Legal action for copyright infringement Embedded brand/product plugs Branded entertainment Purchase of DVR viewer data

©2010 Pearson Education, Inc. publishing as Prentice Hall

Steps to Building a Powerful Web Presence Steps to Building a Powerful Web Presence 1. Analyze

Via RSS feeds, blogs, posts, videos, etc.

2. Optimize Keyword analysis, SEO (via content, links,

appropriate navigation techniques) Blog, PRNewswire, white papers, email newsletter

3. Particize Engage, interact Ex.: BattleAgainstBald.com; FreeToCompete.com

©2010 Pearson Education, Inc. publishing as Prentice Hall

Reinforce the company’s value proposition and brand meaning

Factors:◦Design

◦Build Traffic

◦Evaluate Effectiveness

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design

Designed: ◦to achieve online objectives

◦with user’s experience in mind

(See next slide)

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design (cont.)

Essential CharacteristicsEssential Characteristics

Context

Customization Connection

Communication Community Commerce

Content

*All elements have reinforcement (consistency) and fit (meets needs of the target).

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design (cont.)

ContextContext: “Look and feel”; designed with an eye to

the target customers and the value proposition

ContentContent: The digital material presented

(information, products, and services); must be relevant

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design (cont.)

CommunityCommunity: ability of users to interact, build bonds, and share common interests/values

CustomizationCustomization: ability to tailor information suit unique needs; personalized value

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design (cont.)

CommunicationCommunication: means by which interaction occurs between the site and the user; one-way or two-way

ConnectionConnection: links to other useful sites to meet user needs; opportunities to earn revenue from affiliations

©2010 Pearson Education, Inc. publishing as Prentice Hall

Web Design (cont.)

CommerceCommerce: capability to execute commercial transactions; requires a shopping basket, invoicing, secure credit card processing, order acknowledgment

ReinforcingReinforcing: consistency between the previous seven characteristics

©2010 Pearson Education, Inc. publishing as Prentice Hall

Build Site Traffic

““Get Big Fast” conditions: Get Big Fast” conditions:

◦Network effects: exist when adoption by a customer increases the value of that product for other customers already using it

◦Scale economies: : fixed costs can be spread over a growing revenue base

◦Customer retention rates: high in the presence of network effects, solid competitive position, and high customer switching costs

©2010 Pearson Education, Inc. publishing as Prentice Hall

Evaluate Effectiveness

Track visitor numbers and activities

Web analytics ◦Analyze log files (from Web host server)◦Click-stream analysis ◦Search queries (keywords used)◦Referring pages/sites

©2010 Pearson Education, Inc. publishing as Prentice Hall

Evaluate Effectiveness (cont.)

Metrics to measure effectiveness:

◦Cost-per-click: Total online expenditure ÷ number of click-throughs

◦Conversion rate: % of total number of visitors who complete a specific action (purchase, register, etc.)

◦ROI: Ad expense ÷ total revenue generated from the ad expense

◦Bounce rate: Number of users that visit only a single page ÷ number of visits

©2010 Pearson Education, Inc. publishing as Prentice Hall

Technical details

©2010 Pearson Education, Inc. publishing as Prentice Hall

Opening Vignette: Microsoft People Ready Software

Technology Expert: Mario Schulzke

Technology Solution for Global Problems: Rapid Testing for Lymphatic Filariasis

End-of-Book Case: Goomzee Mobile Marketing

©2010 Pearson Education, Inc. publishing as Prentice Hall

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.