8 Interactive marketing communications 348

Learning objectives /Questions for marketers /

Links to other chapters 348

Introduction 349 The characteristics of interactive marketing communications 350

Differences in advertising between traditional and digital media 354

Integrated Internet marketing communications 357

Integration through time 360

Campaign response mechanics 362

Objectives and measurement for interactive marketing communications 363

Conversion marketing objectives 365

Timescales for objective setting 366

Campaign cost objectives 367

Offline promotion techniques 370 Advantages and disadvantages of using offline communications to support e-commerce 371 Incidental and specific advertising of the online presence 371

Public relations 372

Direct marketing 372

Other physical reminders 372

Word of mouth 373

Online promotion techniques 373

1 Search engine marketing 373

(a) Search engine optimisation (SEO) 376

(b) Pay-per-click (PPC) search marketing 381

(c) Trusted feed 383

2 Online PR 384 What is PR? 384 What is online PR? 385 Differences between online PR and traditional PR 385 Online PR activities 386

3 Online partnerships 388

(a) Affiliate marketing 388

(b) Online sponsorship 390

4 Interactive advertising 391

Fundamentals of online advertising 391

The purpose of interactive advertising 392

Measurement of interactive ad effectiveness 393

Interactive ad targeting options 393

Interactive ad formats 394

Making banner advertising work 395

Buying advertising 395

5 E-mail marketing 397

Opt-in e-mail options for customer acquisition 398 Opt-in e-mail options for prospect conversion and customer retention (house list) 398

E-mail marketing success factors 399

Managing inbound e-mail communications 400

6 Viral marketing 400 On-site promotional techniques 402 Selecting the optimal communications mix 403 Case Study 8 Making FMCG brands sizzle online 407 Summary 409

Exercises 410

Self-assessment exercises 410

Essay and discussion questions 411

Examination questions 411

References 411

Further reading 413

Web links 413

9 Maintaining and monitoring the online presence 415

Learning objectives / Questions for marketers /

Links to other chapters 415

Introduction 416

Performance management for Internet marketing 417

Stage 1: Creating a performance management system 418 Stage 2: Defining the performance metrics framework 420 Stage 3: Tools and techniques for collecting metrics and summarising results 424

The maintenance process 433

How often should material be updated? 434

Responsibilities in web site maintenance 435

Who owns the process? 435

Who owns the content? 438

Who owns the format? 438

Who owns the technology? 438

Content management 440

Case Study 9 Learning from Amazon's culture of metrics 441

Summary 446

Exercises 447

Self-assessment exercises 447

Essay and discussion questions 448

Examination questions 448

References 448

Further reading 449

Web links 449

10 Business-to-consumer Internet marketing 451

Learning objectives / Questions for marketers /

Links to other chapters 451

Introduction 452

Key themes and concepts 452

Online customers 453

Who are the online customers? 453 Online customers' expectations and motivations 457

E-retailing 462

Development of e-retailing 462

E-retailing: the virtual channel 467

E-retail activities 467

Information functions 467

Interactive functions 468

Who are the e-retailers and what are they selling? 469

Implications for e-retail marketing strategy 472 Case Study 10 establishing and maintaining a competitive position 478

Summary 480

Exercises 481

Self-assessment exercises 481

Essay and discussion questions 481

Examination questions 481

References 481

Further reading 483

Web links 483

11 Business-to-business Internet marketing 484

Learning objectives / Questions for marketers /

Links to other chapters 484

Introduction 485

Key themes and concepts 485

B2B e-context 486

Online environment analysis 486

Commercial exchanges in B2B markets 493

The electronic marketplace 493 How organisations are using Internet technologies 495

Trading relationships in B2B markets 501

The exchange process 502

The buying function 502

Trading partnerships 503

Digital marketing strategies 504

Case Study 11 Growth, volume and dispersion of electronic markets 506

Summary 510

Exercises 511

Self-assessment exercises 511

Essay and discussion question 511

Examination question 511

References 511

Further reading 513

Web links 513

Glossary 514

Index 534

Supporting resources

Visit to find valuable online resources. Companion Website for students

• Web links to case study materials, academic articles and examples of best practice

• Guidance on tools and techniques for effective web sites

• A comprehensive online glossary

For instructors

• Complete, downloadable Instructor's Manual

• PowerPoint slides that can be downloaded and used as OHTs

For more information please contact your local Pearson Education sales representative or visit

OneKey: All you and your students need to succeed

OneKey is an exclusive new resource for instructors and students, giving you access to the best online teaching and learning tools 24 hours a day, 7 days a week.

OneKey means all your resources are in one place for aii^uneed maximum convenience, simplicity and success. Convenience. Simplicity. Success.

A OneKey product is available for Internet Marketing, third edition for use with Blackboard™, WebCT and CourseCompass. It contains:

• Interactive Study Guide

• Assessment questions to test your understanding

• Flashcards to aid revision

• Video cases to give you real world application

For more information about the OneKey product please contact your local Pearson Education sales representative or visit

Preface introduction

The internet - opportunity and threat

The Internet represents a tremendous opportunity. For customers, it gives a much wider choice of products, services and prices from different suppliers and the means to select and purchase items more readily. For organisations marketing these products and services it gives the opportunity to expand into new markets, offer new services and compete on a more equal footing with larger businesses. For those working within these organisations it gives the opportunity to develop new skills and to use the Internet to improve the competitiveness of the company.

At the same time, the Internet gives rise to many threats to organisations. For example, start-up companies such as Amazon (books) ( Expedia (travel) ( AutoByTel (cars) ( and CDWOW (CDs) ( have captured a significant part of their market and struck fear into the existing players. Indeed the phrase 'amazoning a market sector' has become an often-used expression among marketers.

The internet - management issues

With the success stories of companies capturing market share together with the rapidly increasing adoption of the Internet by consumers and business buyers has come a fast-growing realisation that all organisations must have an effective Internet presence to prosper, or possibly even survive! Michael Porter has said:

The key question is not whether to deploy Internet technology - companies have no choice if they want to stay competitive - but how to deploy it.

What are these challenges of deploying Internet and digital technology? Figure 1 gives an indication of the marketing activities that need to be managed effectively which are covered in this book.

The figure shows the range of different marketing activities or operating processes needed to support acquiring new customers through communicating with them on third-party web sites, attracting them to a company web site, converting them to sale and then using online media to encourage further sales. Applying the Internet as part of multi-channel marketing to support customer journeys through different media is also a major theme throughout this text. Management processes related to Internet marketing include planning how Internet marketing can be best resourced to contribute to the organisation and integrate with other marketing activities. The increased adoption of Internet marketing also implies a significant programme of change that needs to be managed. New forms of objectives need to be set, new communications strategies developed and staff developed through new responsibilities and skills.


Search engine optimisation

Pay Per Click search


Online ads/sponsorship

E-mail marketing

Online PR

Offline campaigns

Conversion/proposition development

Proposition development

Content creation

Content management


Site usability and accessibility

Design and development

Customer service

Retention and growth

Proposition development

Outbound communications

E-mail marketing

Customer management

Touch strategy definition

Loyalty programmes


Supporting processes

Performance improvement including management information, web analytics and customer analysis

Design guidelines and operating procedures

Technical infrastructure including service level management

Strategy and planning

Creating the vision Assessing technological innovation

Market analysis and competitor benchmarking

Financial analysis and modelling

Defining the multichannel customer experience Managing customer information

Annual planning and budgeting

IT project and campaign planning and management

Managing relationships

Interfacing with senior management

Interfacing with marketing and corporate communications

Interfacing with IT

Staff development, education and retention

Managing external relationships Vendor selection and management

Managing improvement and change

Figure 1 Key organisational processes for Internet marketing

Source: E-consultancy (2005), author Dave Chaffey

The Internet - new skills required?

The aim of this text is to provide you with a comprehensive guide to the concepts, techniques and best practice to support all the digital marketing processes shown in Figure 1. This book is based on emerging academic models together with best practice from leading adopters of digital media. The practical knowledge developed through reviewing these concepts and best practice is intended to enable graduates entering employment and marketing professionals to exploit the opportunities of marketing using the Internet while minimising the risks.

Specifically, this book addresses the following needs:

• There is a need to know to what extent the Internet changes existing marketing models and whether new models and strategies can be applied to exploit the medium effectively.

• Marketing practitioners need practical Internet marketing skills to market their products effectively. Knowledge of the new jargon - terms such as 'portal', 'clickthrough', 'cookie', 'hits', 'page impressions', 'digital certificate' - and of effective methods of site design and promotion such as search engine marketing will be necessary, either for direct 'hands-on' development of a site or to enable communication with other staff or agencies that are implementing and maintaining the site.

• Given the rapidly changing market characteristics and best practices of Internet marketing, web-based information sources are needed to update knowledge regularly. This text and the supporting companion web site contain extensive links to web sites to achieve this.

The content of this book assumes some existing knowledge of marketing in the reader, perhaps developed through experience or by students studying introductory modules in marketing fundamentals, marketing communications or buyer behaviour. However, the text outlines basic concepts of marketing, communications theory, buyer behaviour and the marketing mix.

Changes for the third edition of Internet Marketing

The acclaimed structure of the second edition has been retained since this provides a clear sequence to the stages of strategy development and implementation which are required to plan successfully for Internet marketing in existing and start-up companies. The third edition is a significant update with many revisions, new subsections and nearly 100 new figures to better explain Internet marketing concepts. The main changes are:

• In-depth cases written specifically for this book, illustrating best practices and the challenges of online marketing from well-known global e-businesses such as Amazon and eBay to European and Asian examples such as, and start-ups such as A full listing of cases is given in Table 1. Mini case studies and examples within each chapter have also been updated to include the full range of Internet marketing applications from transactional sites, lead-generation relationship-building sites, brand sites and media-owned sites;

• Updated to reference the full range of digital media that support Internet marketing including blogging, Really Simple Syndication (RSS), instant messaging, podcasting, digital TV and mobile marketing;

• More detail on understanding online buyer behaviour and the need to deliver effective online customer experiences consistent with this (Chapter 2);

• Updates on the legal constraints from data protection and privacy laws and accessibility legislation (Chapter 3);

• Additional coverage on the opportunities provided by technological developments in wireless and mobile media and broadband adoption (Chapter 3);

• Content on strategy updated to reflect the latest thinking on customer-centric online marketing using customer personas and journeys as part of multi-channel marketing (Chapters 4 and 5);

• Chapter 6 on relationship marketing now has an approach oriented to electronic customer relationship management (e-CRM) and includes more detail on techniques used by e-retailers and e-mail marketers such as lifetime value and recency-frequency-monetary (RFM) value analysis;

• Greater depth on online marketing communications techniques including affiliate marketing, search engine marketing, online PR and viral marketing (Chapter 8);

• Coverage on the latest approaches to using web analytics to measure and improve Internet marketing (Chapter 9).

• Chapter 10 provides more detailed insight into online consumers and their behaviour and examines how retailers are responding to the challenges created by raised customer expectations.

• Expanded discussion of B2B trading, trading partnerships and digital marketing strategies. Table 1 In-depth case studies in Internet Marketing, 3rd edition

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