1Media Planning:Advertising and IBP onthe InternetChapter 16© 2006 Thomson/South-WesternChapter 16: Internet 2Introductory Scenario: NoWires Means No RulesNew technology will change Internet advertisingopportunities• WiFi became popular in 2004 because it provided wirelessInternet access connections reaching out about 300 feet.• WiMax is similar to WiFi in that both create wireless “hotspots” but iMax has a range of 25-30 miles!• Mobile-Fi is similar to WiMax but adds the capability ofaccessing the Net while the user is moving in a car or a train.• Ultrabroadband is a technology that will allow people tomove extremely large files quickly over short distances© 2006 Thomson/South-WesternChapter 16: Internet 3Role of the Internet in theAdvertising Process• Internet will not replace traditional media• Advertisers will discover ways to use theInternet as a key component of integratedbrand promotions© 2006 Thomson/South-Western2Chapter 16: Internet 4The (R)evolution of theInternet• Connected consumer experiencescommunity, empowerment, liberation• In 1994 advertisers began venturingon the Internet, retreated in 2000and returned in 2004• At present:– 1 billion users– Ad revenues of $14 billion in 2007© 2006 Thomson/South-WesternChapter 16: Internet 5An Overview of Cyberspace• The Internet is a global collection ofcomputer networks linking both publicand private computer systems.• It was originally designed by the U.S.military to be a decentralized, highlyredundant, and thus reliablecommunications system in the event of anational emergency.© 2006 Thomson/South-WesternChapter 16: Internet 6Basic Components of theInternet• Electronic mail (e-mail)– In 2000 more than 1.5 trillion e-mails sent from U.S.• Internet relay chat (IRC)• Usenet• World Wide Web (WWW)© 2006 Thomson/South-Western3Chapter 16: Internet 7Internet Media• E-Mail• Opt-in E-mail• Electronic mailing lists• Usenet• World Wide Web– Greatest opportunity for advertisers– Supports detail and graphics© 2006 Thomson/South-WesternChapter 16: Internet 8Search Engines: Surfing theWorld Wide WebFour distinct styles of search engine:– Hierarchical Search Engines• All sites fit into categories– Collection Search Engines• Use “spiders,” automated programs that collectinformation– Concept Search Engines• Search using concept rather than word– Robot Search Engines• “Bots” comb the web searching for information© 2006 Thomson/South-WesternChapter 14: Media Planning 9The “Portal”1. A starting point for Web access and search andchanneling surfers to particular sites2. Portals can be vertical—serving specializedmarkets.3. Portals can be horizontal—providing linksacross many industries.4. Portals also can be ethnic or community based.© 2006 Thomson/South-Western4Chapter 16: Internet 10Advertising on theInternet• Advertising Expenditures– 1995=$54.7 billion– 2004=about $10 billion– 2007=estimated at $14 billion• Advantages:– Target market selectivity– Tracking– Deliverability and flexibility– Interactivity– Cost– Integration© 2006 Thomson/South-WesternChapter 16: Internet 11Advantages of Advertisingon the Internet• Target Market Selectivity.• Tracking.• Deliverability and Flexibility.• Interactivity.– click-through• Cost.• Integration.© 2006 Thomson/South-WesternChapter 16: Internet 12Who advertises on theInternet?Top 10 Internet Advertisers– Time Warner– Microsoft– Qwest– Bank One Corp.– Netstock Investment– AmeriTrade Holdings– eDiets.com– Yahoo– Bartlesmann– USA InternactiveTop 10OthersTop Advertisers on the Webranked by impressions© 2006 Thomson/South-Western5Chapter 16: Internet 13Types of Advertising on theInternet• Banner ads• Sponsorship• Pop-under (new and annoying)• E-mail communication– Permission marketing– Viral marketing• Streaming video and audio• Corporate home pages• Virtual malls© 2006 Thomson/South-WesternChapter 16: Internet 14Issues in Establishing aWeb Site• Costs can be high– $1 million to develop– $4.9 million to launch– $1 million to maintain• Make the site “sticky” through “rationalbranding”• Purchase keywords and a domain name• Promoting the site to attract visitors© 2006 Thomson/South-WesternChapter 16: Internet 15Making the Site “Sticky”• Incorporate engaging, interactivefeatures– Weather, late breaking news, stock reports– Online games or videos• Practice rational branding– Give visitors unique informational resourcesthat justify visiting the site© 2006 Thomson/South-Western6Chapter 16: Internet 16Security and Privacy Issues• Web users can download text, images,and graphics from the Web• No viable policing of this practice ispossible yet• Consumers are worried companies willuse personal information• DoubleClick.com– Allows clients to track buying habits andtraffic patterns of web visitors© 2006 Thomson/South-WesternChapter 16: Internet 17Measuring InternetAdvertising EffectivenessAllows for tracking of web site usageLogAnalysisSoftwareNumber of different people visiting a siteUsersOccasions user “x” interacted with site “y”after “z” time has elapsedVisitsNumber of pages sent to the requesting sitePagesNumber of elements requested from a pageHitsDefinitionTerm© 2006 Thomson/South-WesternChapter 16: Internet 18Measuring InternetAdvertising Effectiveness• Technical aspects of the Internetmeasurement problem• The caching complication• Internet measurement andpayment© 2006 Thomson/South-Western7Chapter 16: Internet 19Managing the Brandin an E-Community• Consumers have new ways ofcommunicating with each other• Some users form online communities• Dealing with brand communities is achallenge© 2006 Thomson/South-Western• Introduction of new technologies suchas wireless communication andstreaming video—Broadcast Web• Mergers and partnerships• Merging traditional and new media• Developing a new advertisingrevenue modelChapter 16: Internet 20Future of Advertising andthe Internet© 2006