!0 Questions on Internet Marketing

Business Case #7 Internet Marketing The Internet has been the fastest -growing marketing medium in recent years. As Internet technology has developed and broadband penetration has increased, numerous opportunities have arisen which more and more companies are trying to exploit. This note des cribes various aspects of online marketing. Each section of the note is self -contained and addresses a particular theme: The first section, “ The online audience ”, explains how, and how widely, the Internet is used today. A medium is only useful for market ing purposes if it allows sellers to reach potential buyers. This section looks at online shoppers and their willingness to research and carry out purchases online. The second section, “ Particularities of the Internet ”, compares the Internet with other me dia. The Internet is different from other media in certain respects, but there is nothing to be afraid of. The challenge is to exploit its particularities so as get the best possible return on investment. The third section, “ Potential of Internet marketin g”, shows how the Internet can be the vehicle for marketing activities at all stages of the purchase process. Whether the aim is to arouse consumer interest in a sales proposition, explain the proposition or close a sale, the Internet has the tools to do i t. The fourth section, “ Options for Internet marketing ”, describes the most widely used online marketing tools. The fifth section, “ The Internet marketing market ”, presents the players in the market. To find the right service provider, assuming we have d ecided what we expect from our online campaign and how we want to approach it, we need to know the types of companies there are and the services they offer. The last section of the note, “ Examples of Internet use ”, describes some advertising campaigns tha t have included the Internet in their media plan. This section is not intended as an exhaustive sample but presents different ways in which the Internet has been used by companies that advertise online. At the end of the note we attach a list of sources o f up -to-date information about the Internet. Although the ideas and concepts set forth in the note are relatively well established, the statistics are likely to change quite rapidly. Anticipating this eventuality, we indicate public sources from which the latest figures on Internet marketing can be obtained. Business Case #7 The Internet Audience Who is Online? One of the first questions to be considered when organizing a communication campaign is who the intended audience is. The larger the population that use a give n medium as a source of information, the more communication options that medium will offer. The population of Internet users in Spain is around 22.5 million and the population of daily users, around 12 million. T his makes the Internet the sixth most widel y used medium. Figure 1. Penetration of the media in Spain (%) The Internet user population in Spain has grown steadily since 1996. This trend is forecasted to continue, while Internet penetration will continue to increase, albeit at a slowing pace. The process of technology assimilation is still far from over, however. The Internet User Profile The Internet user profile has changed significantly as the population of Internet users in Spain has come to encompass a majority of the country’s population. Nowadays, Internet users comprise men and women in similar proportions. A majority of Internet users are still in the 25 to 44 age bracket, but the gaps are closing. All age groups have a significant presence (more than 5%), and the group that used to lag furthest behind, the over -65s, is now the one that is growing fastest. Table 1 shows the change in the Internet user profile since the Internet started to become widely used in Spain: Business Case #7 Access Points At present, 40% of homes have a broadband connection and the home is the preferred point of access to the Internet, ahead of the workplace. Users who have Internet access in their homes spend an average of more than 10 hours per week online from their home s, in addition to time spent online from elsewhere. Far from slowing, the growth in the reach of the Internet seems about to receive fresh impetus from the rollout of third -generation mobile devices and wireless networks. Soon the Internet will accompany us everywhere we go, via our PDAs, game consoles or cell phones. This expansion will be accompanied by new services and uses to help us get maximum benefit from the new connectivity. Companies Overall, 96.2% of Spanish companies are connected to the Internet, whereas among large companies the figure is 99.9%: Figure 2 Business Case #7 What is the Internet Used for? In the early nineties, the Internet came into civilian use. The first applications to gain popularity were email and discussion groups. Since then, the range of online services has grown steadily and the Internet has become as indispensable for work (supporting internal and external communication) as for leisure. The uses of the Internet today can be classed in five categories:  Content – Websites and ap plications designed mainly to provide information and entertainment. Examples: cnn.com, elMundo.es, Windows Media Player.  Communication – Websites and applications designed to facilitate the exchange of ideas, messages or information between individuals a nd groups. Examples: Yahoo! Mail, MSN Messenger.  Commerce – Websites and applications for online shopping. Examples: Amazon, eBay, Dell.com.  Community – Websites and applications that combine user -generated content with communications to allow users to b uild relationships with one another. Examples: Facebook, MySpace.  Search – Websites and applications that produce ordered lists of online content based on user -specified criteria. Examples: Google, Bing. Using this classification, the time people spend o nline can be broken down as follows: Figure 3 Business Case #7 The Internet and the Purchase Process One of the most popular online activities is shopping. The number of sales to end users via the Internet has grown significantly. In 2007, 7.7 million (34%) of the 22.5 million Internet users in Spain at that time had made a purchase online. Most online purchases are in the tourism and leisure sectors: flight bookings, hotel reservations, tickets for shows, etc. Other sectors, such as real estate or automobiles, may be l ess suitable for online transactions, yet people still use the Internet to gather information and compare prices, features and offers. E-commerce transactions by sector: Table 2 Business Case #7 As or more important from the commercial point of view is the fact that most Internet users use the Internet to research products and explore possible future purchases. The statistics tell us that 82% of buyers and 41% of non -buyers used the Internet to re search a product or service before purchasing it in a physical store. A company’s website is increasingly seen by the general public as the company’s visiting card. A company’s online presence must therefore be an integral part of its marketing strategy. It helps determine the company’s image and provides specific information about the company’s products, thus assisting the process of acquiring new customers and retaining existing ones. Particularities of the Internet Four characteristics of the online m edium are decisive. The first is the scope for segmentation. Website visitors enter the site as individuals, not as groups. This means that the segmentation options are almost infinite. The second is the capacity to provide feedback. Website visitors can communicate with the site owner at any time, explicitly or implicitly. The third is that Internet users are free to do what they like. They do not have to watch until the end of the series or sit through the product placement. They have a remote, their mous e, which they can use to instantly switch to any other of the World Wide Web’s millions of “channels”. The fourth and last is the Internet’s vast coverage. No other medium allows us to publish information instantaneously “everywhere”. Business Case #7 Segmentation Options One of the main advantages of the Internet as a marketing medium is the possibility of segmenting Internet users. The segmentation may be based on information provided explicitly by users at the time of registration, or information th ey provide implicitly through their browsing and search behavior. Conceptually, segmentation is an obvious attraction to advertisers, who often will be willing to pay a premium for the opportunity to reach a suitable audience. On the other hand, it will no t always be easy to find any single website or service that covers a significant portion of the potential consumers of the advertiser’s product and that allows an advertiser to identify its audience and catch their attention. Some web services offer the p ossibility of discretionally targeting particular groups of users. Depending on the type of information they are able to gather about their visitors, these services will offer different types of segmentation. Sites requiring users to register will be able to offer an audience that is segmented according to multiple criteria: region, demographics, tastes, hobbies, and so on. Acquiring a large audience and building a database of reliable, up -to-date information about that audience is no easy task, however. Th e hopes vested in social networks are founded largely on their promise of delivering precisely that: a wide but perfectly segmented audience. Search engines, whether general or vertical, allow advertisers to segment their audience according to a different criterion, namely, the user’s immediate interest or focus of attention. When a search engine receives a search query, it knows exactly what the Internet user is looking for. In the few milliseconds between receiving the query and returning the results, th e search engine can select advertisements, related to the subject of the search, to be displayed alongside the results. Initially, the search engine has only minimal data about the user: region and language, and the keywords used for the search. Yet this s ystem has proven effective. Other web services that have no formal mechanisms for identifying visitors may still be useful to advertisers insofar as they deal with subjects that are of interest to particular target groups. Internet users who use regional news services, for example, will tend to be inhabitants of that region; users who visit a website on newborns may well have recently had a baby; and so on. Often there will have to be a compromise between the segmentation a website is able to offer, the segmentation the advertiser would like in order to be able to target its message, the size of the site’s audience, the price per page view or click, and so on. More Information about Consumers The Internet is an interactive medium in which people are goin g to express opinions about our sales proposition regardless of whether we have promoted it online or not. Whether the user response is positive, negative or indifferent, we will very soon have a response to assess and will be able to act accordingly. The fact that users respond to our sales proposition does not mean that they send their responses directly to our email address. Often we will have to use a variety of sources and indicators to get a realistic idea of the impact our proposal may have had. The information we obtain from the Business Case #7 advertiser’s website (web analytics) can be very valuable. For example, it will usually tell us which products attracted most visits, whether any other product caught visitors’ attention, or whether a particular section of t he Help file received more visits than it should have done. Advertisements we place on other websites can also provide very useful information, telling us which advertisements were most successful and on which sites, and sometimes even among what customer types and at what times of day. Lastly, we must not forget market surveillance. We will need to monitor opinions on forums and blogs, and even the latest videos and games that might have some bearing on our product. Keeping a finger on the pulse of our po tential customers can be very useful if we are able to adapt accordingly. The Internet is very convenient in this respect, as the parameters of an online campaign can be changed at short notice. A campaign that is not working can be modified or suspended, without using the whole period or budget as initially planned. There is even the option of conducting one or more pilot studies with small groups belonging to our target audience, to see which advertising message proves most effective. Discretion Interne t users are completely free to spend their time on content they are interested in and ignore any website that fails to hold their attention. It is important that we take this element of user discretion into account in our campaigns. What are Internet user s looking for when they visit our website and what can we offer that will meet their needs or otherwise distract them? Questions such as these will need careful consideration when preparing content. This applies both to the advertiser’s website and to any graphic advertisements, promotional videos, sponsored links, and so on. “Global” Coverage The Internet is present practically throughout the world and is particularly well established in Western countries. Furthermore, the cost of publishing a website is much the same whether the target audience is concentrated and nearby, or dispersed and thousands of kilometers away. This combination of factors makes the Internet an effective means of reaching potential customers that could not be reached profitably usi ng traditional media. On the other hand, when promoting a product in a new market, it will be important to ensure that the extended product is as valid remotely as it is locally. If not, any deficiencies will have to be remedied by adapting the offer to m ake it fully competitive. If this is impossible, the promotional effort is likely to be fruitless. Tourist services are an example of a type of product that can benefit from online advertising. As it is the tourists who travel to the place where the produ ct is delivered, the service remains competitive even when purchased remotely. The ability to cut out intermediaries and endorsers often offsets the amount spent on advertising and may even allow prices to be set at more competitive levels. Business Case #7 Another case w here online marketing works well is high price density products, or products whose origin adds value for the buyer. Computer software, online training courses or products with denomination of origin have no or only minimal distribution costs relative to th eir differential value compared to competing products. Lastly, companies that operate over a wide area also benefit from using the Internet for their campaigns. In this case, the benefit lies not so much in reaching more potential customers as in achievin g the same impact as with conventional campaigns but at a lower cost. Potential of Internet Marketing Marketing covers all the stages consumers go through before purchasing a product, from becoming aware that the product exists to becoming convinced that the product will meet their needs and actually making their purchase. These stages form a continuum and are very flexible in space and time. Persuading consumers to buy a new car will take a lot more time and resources than persuading them to add a small item to their shopping basket at the checkout. Yet both the publicist who designs the automobile advertisement and the person who sets up the display box of chewing gum beside the cash till are doing marketing. In its early days, the Internet was primari ly a new channel for making purchases. It allowed multiple parties to communicate almost instantaneously. From the start it had certain advantages compared to the telephone or regular mail. As a means of building awareness of a product and communicating a value proposition, however, it was not so efficient. Online advertisers could communicate with only a small number of potential customers because Internet users were still a minority. Also, communication was restricted by the technological limitations of t he time and widespread suspicion of the new channel. These obstacles to online marketing have gradually been overcome and more and more companies are making the Internet a significant part of their media plan. Nowadays, the Internet is used both to execut e transactions, create awareness of new products, and build loyalty to a brand. AIDA AIDA is an acronym referring to a classical marketing model which describes the stages of the purchase process. According to this model, the advertising message or the p roduct itself must first attract the attention (A) of the prospective customer, then arouse interest (I) and a desire (D) to have the product, before prompting the customer to take action (A) and buy the product. The AIDA model is a typical framework for ordering and grouping marketing actions according to their function. As we shall see, the Internet is a powerful channel for marketing actions at each stage of the sales process. Business Case #7 Attention Online campaigns are relatively economical and quick to deploy and easy to measure. Given widespread use and the large amounts of time spent online, the Internet is an attractive medium for launching sales propositions. It poses an additional challenge, h owever, in that Internet users are free to choose the content they want to see. They can close an advertising pop -up almost without seeing the content. To catch their attention we must consider their predisposition and profile, and the situation in which they will be receiving our message. When an Internet user is actively looking for something in particular, it is relatively easy to attract his attention. All we need to do is provide an answer to his search query. One of the most successful types of onli ne advertising, sponsored links, is based precisely on this approach. If an Internet user is not actively looking for anything in particular, we will have to make an extra effort to attract his attention. Animated and interactive advertisements have prove n fairly effective in this respect. T hey offer a brief entertainment, which often is enough to capture a person’s attention. This gives the advertiser a few precious seconds in which to arouse interest in its product. Other alternatives are email advertis ing and advertisements embedded in games or movies. Email advertising has the advantage that it can be adapted to the profile of recipients so as to increase the chances of success. Caution is advised, however, as this type of advertising is unsolicited an d unexpected. Consequently, people may consider it intrusive, in which case it will be counterproductive. Lastly, combining advertisements in different media has a multiplier effect. A TV advertisement is soon forgotten, but if we refresh consumers’ memor y when they are online, the advertising message may eventually sink in. Interest and Desire For a prospect to become interested in a product, he must be made to recognize or remember some existing need or interest. In some cases, consumers do not know th at a particular solution exists, so the primary goal will be to create awareness. In other cases, consumers know perfectly well what they want, so all we need to do is encourage them to do something about it. The aim with respect to desire is to explain t o potential customers that our sales proposition is the one that most fully meets their needs. Both these steps – arousing interest and creating desire – can be handled online. For this purpose sellers may use their own advertisements or corporate portals or microsites created specifically for the occasion. Business Case #7 To arouse interest and desire in rational purchase processes, many companies use their own corporate portal. The portal provides abundant information about the company and its products, and may even a llow visitors to compare products. This helps build confidence in the company and gives consumers the information they need in order to choose the right product, while at the same time limiting the number of options. Where the purchase process is more imp ulsive, consumers do not need so much information. It may be sufficient just to reinforce the ideas they associate with the product. Microsites, i.e., small websites set up for a specific communicative purpose, are often a very effective tool for achieving this. They can contain large numbers of animations and sounds that allow an advertiser to recreate the atmosphere it wants to associate with its product. Action The final stage of the purchase process is the act of purchasing a product. As the rest of t he process is very flexible, the seller must be ready to close the deal quickly and conveniently at any time. It is important not to frustrate users’ expectations at most delicate moment, causing them to change their mind. The Internet has proven to be a very practical medium for facilitating certain types of purchases. As users have come to appreciate the possibility of shopping at any time of day and from the comfort of their own home and have become familiar with online technology, initial reservations with regard to e -commerce have waned. In some sectors, such as air transport, foodservice and entertainment, demand has been so strong that companies have migrated a large part of their operations online. The most common options for online shopping are:  Set up a company -specific online store. In this case, the important thing is to attract sufficient qualified traffic.  Sell products in a third -party online store. This is clearly the least risky option. Even so, companies must beware that the image or rep utation of the seller does not damage the image of their product.  Provide information online so that consumers can complete the purchase offline. In other words, give details of the nearest point of sale, opening hours, terms of purchase, and so on. Opti ons for Internet marketing In the following section we review the main characteristics of the most popular online marketing tools. Business Case #7 Advertisements Sponsored links Sponsored links are displayed on the results pages of searches conducted in the leading Internet search engines. In typeface and structure they are similar to the search results and are also related in content to the search terms. They are clearly marked a s advertisements, however, and most Internet users do not find them offensive or intrusive. Figure 4 Sponsored links are currently the best -selling form of online advertising. Because Internet search engines are so popular, they are ideal for directing traffic to an advertiser’s website. Also, sponsored links are easy to buy and can be tailored to all bud gets. Because sponsored links give great visibility to the associated website they are particularly useful when Internet users already know our product or are looking for something similar. If we are aiming to enhance our brand image, they will have to be combined with other formats. Buying sponsored links is so simple that it is easy to underestimate the difficulty of using them efficiently. As in any marketing campaign, we must be careful to target our efforts to potential customers and use an effective message. Mounting an efficient campaign is made more difficult by the mechanism used for purchasing sponsored links. Bidding for keywords Sponsored links are purchased via websites set up for that purpose by the search engines.

Advertisers compete with one another on these sites to achieve the desired number of visits. Business Case #7 The mechanism search engines use to decide which links are displayed with the search results has two stages. The first is an auction. Each advertiser must indicate, for each keyword it wants to have associated with its link, how much it is willing to pay for each visitor who follows the link to its website (cost per click). Then, the search engine will choose the advertisement that will maximize its profit. It does this taking into accou nt each seller’s bid and the likelihood that the searcher will be interested in the seller’s advertisement. Exhibit 2 shows the bids suggested by Google for various different keywords and phrases. This system faces advertisers with a series of puzzles. Th ey must decide which keywords to invest in, how much to pay for each keyword, the text of the advertisement, and so on. Considering that large advertisers buy thousands of sponsored links every month, it is easy to appreciate that optimizing the overall in vestment is a complex task. Graphic formats By graphic format we mean any type of image -based advertisement. This is therefore a very broad category. Graphic formats cover everything from pop -ups to animations and interactive advertisements. Figure 5 Graphic formats were one of the first types of online advertising, along with pop -ups and spam. Unlike pop -ups and spam, however, graphic formats are now well established and are not rejected by Internet users. As technology has evolved, they have become more sophisticated. Also, advertisers have realized that intrusive online advertising is usually counterproductive. The success of an online advert will depend on factors such as whether the product is appropriate to the content of the page on which the a d appears; how the ad is visually integrated in the page; and the creativity of the advertising message. Business Case #7 Graphic advertisements may be designed to direct us to another website (“conversion”) or to remind us of a particular brand or product. This is a sig nificant difference compared to sponsored links, as graphic formats can be used to strengthen brand image. The difficulty lies in measuring their impact. Media Vehicles Graphic advertisements can be found on virtually any kind of website. However, the co ntext in which we place our advertisement will affect how Internet users interpret it. So we need to consider the advantages of each location. The most popular are vertical search engines, news portals and social networks. Vertical search engines offer a willing audience who are looking for products similar or related to the one being advertised. Often they allow the advertiser to choose which part of the portal the advertisement appears in, which can result in considerable savings. Another possible locat ion for graphic advertisements is in news portals. In this case, audience segmentation is usually very limited. On the other hand, such portals give access to large audiences and have produced good results in image campaigns. The social networks are anoth er option for online advertising. The advertiser can choose which users will see the advertisements, based on demographic and geographic criteria. However, the amount of attention such advertisements receive is low. Sponsored Videos Although sponsored videos have only a marginal presence online, their share of the advertising formats market is expected to increase in the next few years. Online video consumption is growing rapidly and it is expected that many companies will want to add ress this new audience. One advantage is that, as yet, there is no widespread sensation of advertising saturation among Internet users who watch videos on their computer. Figure 6 Business Case #7 One obstacle is that advertisers have not yet found an ideal way of pres enting this type of advertisement. “Pre -rolls” (advertisements screened just before the requested video) are widely considered user -unfriendly. Some companies have dropped them and instead use text links that appear at the bottom of the videos (see Figure 6). So far, however, this type of advertising does not seem to be very effective. Other obstacles are the difficulty of automatically classifying videos and segmenting the audience. Other Online Marketing Tools Sponsoring a Section of a Website This is where a brand or company sponsors a section of a website which has content that is especially attractive to its target audience. The aim is to reinforce the brand image. T he sponsor may contribute specific content to the section (“bartering”) or it may not . In fact, the section does not even have to be explicitly related to the sponsor’s business. Because each sponsored section is very specific and the results are difficult to measure, this type of sponsorship is unlikely to become widely used. Even so, it has increased as blogs have gained in popularity. Figure 7 Business Case #7 Direct Email Direct email is used to deliver specific offers to potential customer groups. It differs from spam in that it involves sending marketing information to people who have previously agreed to receive such information. That is not to say that they have necessa rily given permission directly to the advertiser to send them such information; often the permission has been given to third parties, which sell lists of contact details (though users have the right to demand that their information be deleted from such lis ts). Spam, in contrast, involves sending emails indiscriminately to people who have never agreed to receive it and makes those who send it liable to prosecution. Figure 8 Microsites A microsite is a website created for a specific communicative purpose, whether to promote a brand, a product or a special offer. Microsites usually have a limited life span and are used in multi - channel campaigns. Being relatively small, they are not used so much for giving large amounts of information as for reinforcing a m essage or brand image. Business Case #7 Figure 9 The main advantage of a microsite compared to other formats is that it gives the advertiser complete control over the content that Internet users see. Depending on the type of communication an advertiser wants to establi sh with potential customers, the microsite will be simpler or more complex, suggestive or more practical, with links to a online store or not, and so on. In a microsite the advertiser can choose which technology is used to achieve all these objectives, wit hout any limitations on image or file size. The main disadvantage is that the microsite needs to be advertised in order to attract visitors.

Nobody is going to stumble across a microsite by chance. But it will be important not to spend too much on adverti sing the site, as it will have a limited life span. Online Stores Many companies set up their own online stores to give customers access to their products via the Internet. Sometimes, market trends virtually force them to do so. This has been the case in ticket sales, airlines and company directories, for example. As a rule, online sales do not completely replace traditional or catalogue sales; but they have led to the development of new types of commercial offerings that have found their place in the mar ket. Figure 10 Business Case #7 An online store has certain advantages over a conventional store. It can serve customers across huge geographical distances, can be open all hours, needs no display space, and is relatively easy to update. Yet opening and promoting an on line store entails certain challenges, notably ensuring that the store is efficient and appropriate for the product and the company’s customers, and attracting sufficient visitor traffic at a reasonable price given the conversion rate. The Internet Market ing Market The Internet marketing market comprises the various services offered to sellers with the promise of helping them to increase their online sales. Based on this broad definition, we can broadly identify the players, which range from consultants w ho help companies plan online marketing actions to small IT firms that develop bespoke websites. The following section centers on the most important players in the sector and describes the services they offer to companies wishing to implement a marketing c ampaign. Advertising Space Sellers Basically, there are three types, each offering different types of products. First, there are the large sellers of online advertising space, Google, Yahoo! and Microsoft. All three have their own search engines, in which they sell sponsored links, and extensive networks of affiliated websites in which advertisers can place differen t types of advertisements. All three have automated the process of purchasing advertising space and have developed complete suites of tools for their customers. Second, there are numerous websites and small groups of portals that guarantee more or less cl early segmented traffic. This group includes social networking sites, vertical search engines, and online newspapers, among others. In most cases, these portals offer space for graphic advertisements. T he audience segmentation and services they offer vary. Business Case #7 Social networks offer a very complete demographic and geographical segmentation of their users.

In general, they offer a full range of solutions for advertisers, and some have even developed automated advertisement publishing systems. Vertical search en gines, on the other hand, offer a much more limited demographic segmentation, Even so, they can group their users according to the interests each has shown while searching, which has proven to be a very useful method of segmentation. These search engines a lso offer numerous additional services and a deep knowledge of their market. News portals are a special case. Many are online versions of traditional newspapers that have tried to adapt their infrastructure to the Internet. Audience segmentation is usuall y very limited, basically regional. The last group of advertising space sellers are adservers. Adservers act as intermediaries between portals and the companies that want to advertise on them. They provide the infrastructure for administering advertisers’ accounts and manage their advertising based on individual agreements. Online Media Agencies The function of online media agencies is to manage their clients’ advertising investment and online external communications. To do this they use their knowledge of online fashions and trends, technologies, and the types of segmentation available in each portal, as well as their relationships with online opinion leaders, etc. Because most of the information that will be published about a product online is beyond t he seller’s control, the agency coordinates the seller’s advertising efforts very closely with its public relations activities. This is a fundamental difference compared to the role of traditional media agencies, which generally manage advertising that is essentially one -way. Online, the success of a campaign depends on reacting quickly to audience responses, interacting with opinion leaders, and supporting the campaign efficiently through external communications. Even so, the biggest online media agencies are traditional agencies at different stages of transition. Seeing how fast the Internet is developing and realizing that most of their clients want to have an online presence, some have tried to make the transition swiftly. In many cases, this has meant hiring new employees, retraining existing staff or forming work groups with a mixture of experienced and inexperienced staff. In any case, traditional agencies have seen how SEO and SEM agencies have broadened their service offering to include managing th eir clients’ online presence and thus have become competitors. SEO and SEM Optimizing companies’ investment in sponsored links and improving their search engine positioning are complex but potentially very profitable tasks. This has led to the appearance of a Business Case #7 new market, the search engine optimization market. It is populated basically by small services firms that adapt to the needs of each advertiser. A distinction is commonly made between search engine marketing (SEM) and search engine optimization (SEO ). Most companies in the industry offer both services. SEM The purpose of SEM is to optimize the investment in search engine advertising (sponsored links). This is done by adjusting the segmentation options available to advertisers, including which keywo rds to sponsor and at what times to activate the advertisements, the geographical scope, the text of the links for each keyword, and so on. The most complicated part is choosing the keywords with which the advertisement is to be associated and how much to bid for each keyword. There are thousands of combinations of words that may be worth sponsoring, each with a different likelihood of generating sales. SEO SEO companies help advertisers position their website higher up in the list of search engine result s. The weight that a search engine gives to each of the metrics it uses to assess a site’s relevance is a closely guarded secret. The basic criteria are well known, however. For a search engine to consider a website important, the site must convince it of two things: that it is well made and useful; and that a large number of people think the same. A SEO service will therefore aim to improve the advertiser’s website and get other websites to link to it and promote it. The problem when dealing with SEM/SEO companies is how to measure the effectiveness of the service they provide. Customers have little choice but to trust their SEM/SEO provider to do a good job, and there are suspicions as to how capable many of them are. Google has tried to tackle this probl em by starting its own certification program. A Google certificate certifies that an agency has adequate knowledge of the functioning of Google’s SEM management tool AdWords. Results to date have not been very satisfactory. Google certification has failed to shed much light on the market. SMM Social media marketing (SMM) services have appeared in response to the popularization of online interactive services. Blogs, forums and social networks are sites where consumers devote time and energy to exchanging opinions about all kinds of products. Man y companies have started to actively take part in these exchanges in an effort to channel opinion or simply increase brand recognition. How to do this in environments where companies control only part of the content is far from obvious. Hence the appearanc e of SMM services. Among other things, SMM services identify the browsing profile of a company’s potential customers, i.e., the websites they visit, the services and promotions that are likely to interest them, the bloggers they trust most, and so on. Thi s serves as the starting point for a complete communication strategy. Among other things, companies may try to draw debate toward websites Business Case #7 that are controlled by them, give preferential treatment to the most influential bloggers, propose games that Interne t users then recommend to one another, and so on. Web Analytics Web analytics consists of compiling, measuring and evaluating data on a website’s visitor traffic.

An analytical study of this kind will tell us how visitors come to our website, which pages they visit and in what order, which links they have followed, and so on. This information will indicate what type of advertising is most effective, which sections or products attract most visitors, whether visitors regularly consult the Help pages, which Help pages are most useful, and so on. Broadly speaking, web analytics can be done internally, using specific software, or outsourced to a specialized company. Most portals can be significantly improved just by making good use of the freeware tool Google Analytics. Examples of Internet Use Multi -Channel Campaign – “The Pink Bubble” by the Uriach Group Between May and July 2009, the Uriach Group, a pharmaceutical company, launched a multi - channel campaign to promote an antiflatulent called Aerored . The target market were women between the ages of 30 and 65, and the goal was to make them aware of a product that was rarely spoken about openly because it was so intimate and personal. The online campaign would revolve around humorous videos of the “Pi nk Bubble” character who appeared in the television advertisement. These videos would be used to make the advertisement popular among Internet users. The specific goals for the online medium were: 1) reach a total of 100,000 views in the Aerored channel on YouTube (BurbujaAeroRed) through a series of low - cost videos filmed with a handheld camera; and 2) stimulate discussion and interaction among Internet users in relation to Aerored. The online marketing agency Digital Seed, which was experienced in SMM, w as commissioned to achieve those goals. It established a series of complementary lines of action, converging on the two goals. 1) Pages featuring the Pink Bubble were created on YouTube, Facebook and T witter.

2) The target audience on Facebook was located and invited to visit the Pink Bubble’s Facebook page. 3) Groups and websites related to the brand, the product and activities associated with the target audience were contacted in order to non -intrusively reach people who might be interested. 4) Bloggers a nd key influencers were contacted through Twitter and provided with information, so that they could talk about the campaign. And lastly, 5) the online strategy was used to generate online conversations around the campaign and its main character, the Pink B ubble, and so direct traffic to the Aerored channel in YouTube and generate more Facebook fans. The results of the campaign amply exceeded the initial goals. The YouTube videos got more than 100,000 views and acquired a fan base of more than 5,000 Faceboo k users, 71% of them falling within the product’s target profile. More than 600,000 users were just two clicks away, and posts about the campaign appeared in 25 of the top marketing and advertising blogs in Spain. Business Case #7 Viral Campaign - Banco Gallego’s “Depósit o Amigo” (“Friend Deposit”) In January 2009, the footballer Fernando Torres made headlines for having appeared in three fairly tacky advertisements for what were rumored to be friends of his. The fact that an international footballer should lend his image to such campaigns aroused a fair amount of sympathy among online audiences, who quickly circulated links to the promotional videos. It was not long before doubts were raised about the authenticity of the advertisements, but this merely served to fuel the debate and so brought even more exposure. On February 6, 2009, Banco Gallego and Fernando Torres revealed the true purpose of the advertisements: they were part of a much broader campaign to advertise a new financial product.

Once the campaign had caught the audience’s attention, it would continue with “conventional” advertisements.7 The ads disseminated via the Internet undoubtedly helped build awareness of the campaign at a ridiculously low price. On YouTube alone the first of the ads was viewed more th an 250,000 times, and the next two, more than 60,000 times.8 Interactive campaign - Quiksilver’s “Ambassador in Spain” Between March and June 2009, fashion brand Quiksilver conducted an online campaign to promote its new line of women’s clothing. The cam paign consisted of a competition to choose the brand’s “ambassador” in Spain. The ambassador had to be a young artist, whether a painter, fashion designer or singer. The winner would have the opportunity to promote her career by becoming the brand’s public image and taking part in its events. The competition was presented through a microsite that was open to candidates and the general public. People who did not take part in the competition could follow the campaign’s progress while learning about the brand ’s latest products in the competition blog. They could also vote for their favorite candidate before the brand announced the name of the winner on June 23. The Quiksilver campaign was talked about in numerous fashion blogs and more than 10,000 people subm itted votes. Exhibit 1 Updated Sources of Information ONTSI The National Telecommunications and Information Society Observatory is a body attached to the public agency red.es, which monitors and analyzes the telecommunications and information society se ctor. ONTSI produces, collects, summarizes and systematizes indicators, prepares studies, and provides information and news services about the information society. Business Case #7 Website: http://www.ontsi.red.es IAB The Interactive Advertising Bureau is an associatio n of companies involved with Internet marketing. Its members include online advertising agencies, advertising space providers, technology providers, etc. The IAB publishes an annual report on the evolution of the online marketing market for its members. A n abbreviated version of this study is made available to the general public. Website: http://www.iabspain.net Infoadex Infoadex monitors and analyzes advertising (ADEX) in Spain. For 365 days a year, it monitors, archives and analyzes each and every adv ertisement inserted in all the conventional media: cinema, newspapers, billboards, Internet, radio, magazines, Sunday supplements and television. These data are used to produce reports for customers. Infoadex also publishes a reduced version of some of it s reports for the general public. Website: http://www.infoadex.es The Cocktail Analysis The Cocktail Analysis is a research agency and marketing consultancy that specializes in consumption trends, communication and new technologies. Website: http://www.tcanalysis.com Exhibit 2 Number of Internet Users in Spain, 1996 -2008 Business Case #7 Exhibit 3 Sample Prices of Keywords for Different Searches Business Case #7 Questionnaire Q1. With online internet marketing as a tool the targeting of audiences is potentially more accurate. If a company wishes to aim a certain demography of males then it is simple enough to direct traffic to sites where the bigger hits are recorded. Does this then marginalize other males who reside outside this bracket? Q2. Table 2 shows a demographic breakdown of internet users in Spain over a 10 year period, the greater income level user is that in the middle income bracket and above. This goes to show that the internet is not as accessible to people on lower incomes that we are le d to believe. Why are lower income people not presented with more opportunities for internet access? Q3. Statistics showing that 99.9% of large companies in Spain have internet access, a figure which can easily be transferred to most western European count ries, are we not moving away from the personal side of business in favor of an electronic approach? Q4. Internet Marketing has revolutionized the way we look at products and services and how we now purchase our goods. With the correct approach new companie s can progress from inception to profit with very little outlay, especially service industries. Q5. The growth of internet marketing and subsequently the year on year growth of internet purchases, are the smaller vendors who are traditionally a face -to-face seller having to fall in line with the internet only sellers who can provide the same product at a lower price? Q6. The speed of the internet could well be providing an added bonus and in some cases a hindrance to companies and their customers . After sales service has now become the norm with customers only a click or two away from a formal complaint being made. Can some companies make good use of this and gain client confidence by dealing with issues speedily? Q7. (True /False) When developing a marketing c ampaign great care has to be taken into account with regards to budget and of course the benefits in relation to the spend. If, for instance television was the chosen Business Case #7 medium, then slots for broadcast would have to be booked in advance and a great cost, the internet however, has switch -on switch -off capability as needed dependent on the digital tracking results. Q8. (True /False) Despite the internet being accessible throughout the whole world, virtually, and markets similarly open to the world, marketing campaigns still have no guarantee that their ads will be seen let alone read, consequently ads need to still have the grab factor. A hit on a website will not show what content has been read and what hasn't . Q9. Is it possible for an internet based marketing campaign to h ave such an impact on users that it can develop a market that hardly existed before? How can a marketer get the message out to prospective consumers at minimal cost? Q10 . Sponsored advertising with selected search engines can bring extra traffic through a particular website. These are dependent on search terms being used however they are directed to the top of the first page on a search. If the term is specific enough the customer needs to go no further than to click on the first site. Does this give value for money given that the search terms in some cases will need to be fairly exact?