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Questions and Answers

What is rational branding, and how does it differ from emotional branding?

Rational branding focuses on cognitive appeals by offering specific help to users in exchange for viewing ads, while emotional branding aims to connect with consumers on a personal level through feelings.

Explain the role of affiliate marketing in reducing costs for sellers.

Affiliate marketing reduces costs for sellers as affiliate sites handle advertising, product promotion, and transaction processing, without the need for inventory management.

What are the two common types of affiliate commissions mentioned?

The two common types of affiliate commissions are pay-per-click, which pays each time a link is clicked, and pay-per-conversion, which pays when a visitor becomes a customer.

How does viral marketing utilize existing customers to promote products?

Viral marketing relies on existing customers to share products or services with potential customers, often through word-of-mouth or social media. Signup and view all the answers

Identify the main factors influencing search engine ranking.

Search engine ranking is influenced by factors such as relevance of content, quality of backlinks, and keywords used on the site. Signup and view all the answers

What is the purpose of search engine optimization (SEO)?

Search engine optimization (SEO) aims to enhance a website's visibility so that it ranks higher in search engine results for targeted keywords. Signup and view all the answers

Describe how contextual advertising works.

Contextual advertising places ads adjacent to related content on a website, increasing the likelihood that users will find the ads relevant to their interests. Signup and view all the answers

What is the relationship between customer acquisition cost and retention marketing techniques?

Customer acquisition cost refers to the expenses incurred to gain a new customer, while retention marketing techniques focus on keeping existing customers to reduce the overall cost of acquiring customers. Signup and view all the answers

How do social media platforms facilitate indirect marketing approaches?

Social media platforms facilitate indirect marketing by encouraging customer engagement and discussions about products rather than overt selling. Signup and view all the answers

What is the function of paid search engine inclusion?

Paid search engine inclusion allows advertisers to purchase top listings for specific search terms, increasing their visibility in search results. Signup and view all the answers

What is the primary goal of the customer loyalty model?

The primary goal is to move customers into the commitment stage as quickly as possible and maintain their loyalty. Signup and view all the answers

How does the funnel model of acquisition differ from the customer life-cycle model?

The funnel model is a more structured tool that helps evaluate specific strategy elements rather than being purely abstract. Signup and view all the answers

What does 'acquisition cost' refer to in the context of customer acquisition?

Acquisition cost refers to the amount of money spent to bring one visitor to the site. Signup and view all the answers

List two strategies companies can employ for effective banner advertising.

Companies can use animated GIFs and rich media effects to capture attention. Signup and view all the answers

What are the potential disadvantages of pop-up ads?

Pop-up ads can annoy users and create lasting negative impressions of the brand. Signup and view all the answers

Explain the concept of 'retention cost' in marketing.

Retention cost is the expense incurred to encourage customers to return to a website and make repeat purchases. Signup and view all the answers

What are some ways to measure the effectiveness of online advertising?

Effectiveness can be measured through metrics like click-through rates and conversion rates. Signup and view all the answers

Define the term 'impression' in the context of online advertising.

An impression occurs each time a banner ad loads on a webpage. Signup and view all the answers

In what way does usage-based segmentation benefit online marketing?

Usage-based segmentation customizes visitor experiences to match their behavior on the site. Signup and view all the answers

What is the significance of the commitment stage in the customer loyalty model?

In the commitment stage, customers experience high satisfaction and develop fierce loyalty. Signup and view all the answers

How do banner ad networks function in advertising?

Banner ad networks manage the exchange of ad placements between advertisers and websites. Signup and view all the answers

What role does customer feedback play in retention marketing techniques?

Customer feedback provides insights that help improve products and services, thus enhancing retention. Signup and view all the answers

What is the relationship between customer acquisition and conversion costs?

Customer acquisition costs relate to bringing visitors to the site, while conversion costs refer to persuading them to make a purchase. Signup and view all the answers

Why is it important for online advertisers to target their ads effectively?

Effective targeting increases the chances of engagement and conversion, maximizing advertising ROI. Signup and view all the answers

What is 'cost per click' (CPC) in online advertising?

Cost per click (CPC) is the fee charged for each time a visitor clicks on an advertisement. Signup and view all the answers

Study Notes

Marketing on the Web

The four Ps of marketing contribute to marketing strategy.
- Product (physical item or service sold)
- Price (amount customer pays)
- Promotion (any means to spread word)
- Place (distribution)
Product-based marketing strategies are often used by managers, focusing on products and services sold.
- This works well when customers need specific products.
- This works poorly when customers have a specific need to fulfill.
Customer-based marketing strategies are designed to meet various types of customers’ specific needs.
- Companies need to take a view beyond internal perspective.
Web communication offers advantages of personal contact selling, but with mass media cost savings.
- Mass media advertising offers the lowest trust level.
- Product complexity is a factor in media choice.
- Blogs and social media allow for two-way communication.
Market segmentation divides potential customer pools into segments defined by customer characteristics.
- Micromarketing targets very small market segments.
- Geographic segmentation (location)
- Demographic segmentation (age, gender, income, etc.)
- Psychographic segmentation (social class, personality)
The Web presents an opportunity for different store environments online.
- Retail stores have limited floor and display space.
- Web stores can provide separate virtual spaces for different market segments.
One-to-one marketing offers products and services matched to the needs of a particular customer.
- Dell offers several different ways to a business, using Dell Premier accounts, for high-level customer-based market segmentation.
Behavioral segmentation creates separate customer experiences based on behavior.
- Occasion segmentation considers things happening at a specific time or occasion.
- Usage-based market segmentation customizes visitor experiences to match site usage or visitor type.
Visitors behave in different ways on the web.
- Browsers are visitors who are just surfing the sites.
- Buyers are visitors intent on making a purchase.
- Shoppers are visitors motivated to buy but need more information.
McKinsey & Company identified six behavioral-based categories for visitors:
- Simplifiers (convenience)
- Surfers (find information)
- Bargainers (good deals)
- Connectors (stay in touch)
- Routiners (return to the same sites)
- Sportsters (sports/entertainment sites)
The five-stage model of customer loyalty shows increasing relationship intensity:
- Awareness
- Exploration
- Familiarity
- Commitment
- Separation
The goal is to move customers into the commitment stage and keep them there as long as possible.
- Only want to see customers move into the separation stage if they are costing more to serve than they are worth.
Customer acquisition is the process of attracting new customers to your site and can be conceptualized by the funnel method.
- The total cost of acquiring a customer includes the acquisition cost and conversion cost..
Banner ads use stationary or moving graphics and include hyperlinks.
Interactive marketing unit (IMU) ad formats provide a standard for ad sizes.
Banner ad placement is managed by an ad exchange network, advertising agencies, or a banner advertising network.
Click through rates measure the effectiveness of banner ads, with some banner ads using rich media effects (video clips) and animated GIFs to optimize their effectiveness.
Text ads are short promotional messages with no graphic elements.
Intrusive ad formats, such as pop-up ads and interstitial ads, are often considered annoying by users.
Rich media and video ads generate graphical activity that floats over the Web page itself.
- Pre-roll video ads require a visitor to view all or part of an ad before the content selected plays.
Mobile device advertising utilizes messages displayed from advertisers.
Site sponsorships allow advertisers to sponsor all or parts of a site, which is a more subtle way of promoting the product.
- Ethical concerns arise if the sponsor is allowed to create content or weave advertising into the site’s content.
Online advertising cost and effectiveness can be measured by cost per thousand (CPM) or cost per click (CPC).
- CPM rates are used for mass media advertising.
E-mail marketing can be used to announce new products or features, but avoiding unsolicited commercial email (UCE, spam) is important.
- Obtain customer approval prior to sending.
Permission marketing is the strategy of sending e-mail messages to people who request information.
- Opt-in e-mail is an essential part of permission marketing.
Combining content and advertising increases acceptance of e-mail.
- Advertisers use hyperlinks in e-mail messages to take customers to advertiser’s Web site content.
Outsourcing e-mail processing manages an e-mail campaign by e-mail processing service providers.
Branded products are easier to advertise and promote due to their established reputation.
- The value of a branded product far exceeds the cost of creating it.
- The three key brand elements are product differentiation, relevance, and perceived value.

Rational Branding

Involves offering something of value to web users in exchange for viewing an ad
Relies on the cognitive appeal of the specific benefit offered
Web is an active medium controlled by the customer, making it difficult to use emotional appeals
Emotional appeals are effective in passive media like television, radio, billboards, and print

Affiliate Marketing

Uses an affiliate website to promote products or services
Affiliate site receives a commission for each visitor who follows a link to the seller’s site
Affiliate saves expenses related to inventory, advertising, promoting, and transaction processing
Amazon.com was a pioneer in affiliate marketing

Affiliate Commissions / Cause Marketing

Pay-per-click: commission is paid for each click on a link
Pay-per-conversion: commission is paid when a visitor becomes a qualified prospect or customer
Affiliate programs are often managed by a clearinghouse that connects affiliate sites with sellers

Relies on existing customers to spread the word about products or services
BlueMountain Arts is an example of viral marketing with electronic greeting cards that include links to their site
Social media marketing is best done indirectly, encouraging community discussions about a product or service
"Fans" are website followers who engage in discussion activities

Search Engine Positioning and Domain Names

How potential customers find websites: referrals, affiliate links, website URLs in advertising, unintentional visits, search engines
Search engines and directories are websites that help people discover online content

Search Engines and Web Directories

Web directories use spider programs to automatically search for interesting web pages
Spiders index and store information in a database
Search utility matches user search terms with relevant web pages
Search engine ranking considers several factors to determine which URLs appear first in search results
Search engine positioning is the process of optimizing website content to rank high in search results

Paid Search Engine Inclusion and Placement

Search term sponsorship offers the option of purchasing a top listing on results pages for a particular term
Paid display ad space can be purchased at the top of search results pages
Search engine positioning is complex, involving brokers, Google AdWords, contextual advertising, and localized advertising