Page 286 - Introduction to Electronic Commerce and Social Commerce

272 9 Marketing and Advertising in E-Commerce

• Click-through rate/ratio (CTR): The percentage of visi- Traditional Versus Online Advertising
tors who are exposed to a banner ad and click on it.
• Hit: A request for data from a Web page or file. Each advertising medium, including the Internet, has its advan-
• Landing page: The page a viewer is directed to after hav- tages and limitations. Pfeiffer and Zinnbauer (2010) compared
ing clicked on a link. In online marketing, this page is traditional advertising against Internet advertising (including
used to convert the person from a viewer to a buyer. social networks). These results have been replicated recently in
• Page: An HTML (Hypertext Markup Language) docu- many studies including Bilos et al. in 2014. They concluded
ment that may contain text, images, and other online ele- that, not only is Internet advertising more cost efficient, the
ments, such as Java applets and multimedia files; may be business impact of Internet ads is larger than traditional ads.
generated statically or dynamically. The synergy between TV and online advertising can help
attract more attention than either medium on its own. It has
been found that a TV campaign increases brand awareness by
Why Internet Advertising? 27%, whereas a combined TV and online campaign increases
it by 45%. A TV campaign increases intent to purchase by
The major traditional advertising media are television, news- 2%, whereas a combined TV and online campaign increases
papers, magazines, and radio. However, the market is chang- it by 12%.
ing, as many consumers are spending more time on the The impact of Internet ads on newspaper viability is dev-
Internet (about a 25% annual growth) and using mobile astating. Many newspapers are disappearing, merging, or
devices. Internet advertising is getting more attention. The losing money. One solution is to increase their digital ads, as
advertising revenue of Internet advertising exceeded that of the New York Times is doing.
broadcast TV, cable TV, and newspapers in 2013, and we can Internet ads are subject to limitations such as screen size,
foresee this trend continuing. Hence, online advertising is a space, and policies.
clear choice for the future.

Advertising Online and Its Advantages SECTION 9.4 REVIEW QUESTIONS

The major advantages of Internet ads over traditional media 1. Define Web advertising and the major terms associated
advertising are the ability to interact one-to-one with cus- with it.
tomers and the ability to use rich media (e.g., videos) to grab 2. Describe the reasons for the growth in Web advertising.
attention. In addition, ads can be changed easily and cam- 3. Describe emerging Internet advertising approaches.
paigns are usually less costly. In comparison with traditional 4. List the major benefits of Web advertising.
media, the Internet is the fastest growing communication 5. Draw and explain the advertising cycle.
medium by far. Worldwide, as of April 2016, the number of 6. What is the impact of online advertising on the viability
Internet users was getting close to 3.17 billion (see statista. of newspapers and TV?
com/topics/1145/internet-usage-worldwide). Of course,
advertisers are interested in such a fast growing community.
Other reasons why Web advertising is growing rapidly 9.5 ONLINE ADVERTISING METHODS:
include: FROM E-MAIL TO SEO AND VIDEO ADS

• Cost. Online ads usually are cheaper than ads in tra- A large number of online advertising methods exist. For a list
ditional media. and description, please see en.wikipedia.org/wiki/Online_
• Media richness. Web ads can include rich and diver- advertising. Next, we discuss the three major categories of ads.
sified media (e.g., videos, animation). In addition,
ads can be combined with games and entertainment.
• Easy updating. Updating can be done quickly and Major Categories of Ads
inexpensively.
• Personalization. Web ads can be either one-to-one Ads can be classified into three major categories: classified,
or addressed to population segments. display, and interactive.
• Location-based. Using wireless technology and
GPS, Web advertising can be location based. Classified Ads
• Linking to shopping. It is easy to link from an
online ad to a vendor’s webstore. Usually, it can be These ads usually use text, but lately may include photos.
done in one click. The ads are grouped according to classification (e.g., cars,
rentals). They are the least expensive.