The Ministry of Education and Science of the Russian Federation

Plekhanov Russian Academy of Economics 
 
 

      Chair of Foreign Languages  
 
 
 

PROJECT 

“Internet marketing” 
 
 
 
 
 

Performed by

Zezyulina Y.A.

Marketing Faculty

Group 1509 

Supervised by

  Mironova D.A. 
 
 
 

Project defended on: 

14/10/2011 

Evaluation:

____________________  

Tutor’s signature: 

____________________  
 
 
 
 

Moscow 2011

PROJECT PAPER ANNOTATION 

By Zezyulina Yana, group 1509, Marketing Faculty 
 

Theme:

«Internet marketing» 
 
 
 
 
 

______________________________ (Student’s signature)

 

Contents

 

  Introduction

Internet marketing, also known as digital marketing, web marketing, online marketing, search marketing or e-marketing, is referred to as the marketing (generally promotion) of products or services over the Internet. Internet marketing ties together the creative and technical aspects of the Internet, including design, development, advertising, and sales. Internet marketing also refers to the placement of media along many different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, email marketing, mobile advertising.

The relevance of this topic is due to the astonishing growth of the internet: in less than 10 years it has became the most profitable advertising medium in the world. The statistics speak for themselves:

• As of March 2011, 2,1 billion people use the internet, representing 30% of the world’s population (app.1).In other words every third in the world uses the Internet.
• The Internet has grown by 480% since the year 2000. That means that in the last 11 years the number of people using the Internet has increased five-fold.
• Worldwide spending on internet advertising totaled $65 billion in 2008, grew 20% a year and reached $80 billion in 2010 (13.6% of total ad spend).
• According to the data available with Internet World Stats, 59 million people in Russia use the Internet (42,8% of hole population) (app.2). About 60% of Russian Internet users are chiefly found in the age group of 19-34. Almost 65% of Internet users are males. It is estimated that the Internet user spends an average of 13 hours per week on the Net. More than 55% of such Internet users live in towns. Russian users are most likely to use the Net for communication, information seeking, entertainment and purchasing.

 

In today’s technology driven world, a new fast paced digital economy is emerging. Even now it is not surprising that there are many companies that exist only inside computer networks. In the nearest future most business transactions will be made electronically, directly from the producer to the consumer, bypassing the supply chain. In the digital marketing environment, the consumer becomes an integral player in the development of the product. In fact, a consumer might build the product himself from a wide array of parts provided by the company. It is e-commerce that is changing the way products and services are conceived, manufactured, promoted, priced, distributed and sold. The reason being that it is much cheaper; it allows vast coverage and helps in serving the customer better.

 

1. 7 P's of Marketing on the Internet

The four P's - Product, Price, Place and Promotion have long been associated with marketing, but things have changed on the Internet. So along with a change in the nature of the four P’s there are three new P’s which are relevant to the internet marketer. 

1. The Product on the Internet usually changes form online, and the user experiences it electronically, in the form of text, images and multimedia. Physical goods are usually presented in the form of a detailed online catalogue that the customer can browse through. Technology allows the user to virtually touch and feel the product on the Internet - rotate it, zoom in or zoom out and even visualize the product in different configurations and combination. The example of the above can be seen at dell.com where the company offers the user to virtually feel every aspect of their product before they go into a buy decision. Content and software are two avatars of digitized products that can be even distributed over the Internet. On the Internet, E-marketing will be based more on the product qualities rather than on the price. Every company will be able to bring down the cost of its products and hence competition will not be on price. It will rather be on the uniqueness of the product. To be able to attract the customers and retain them, the company will have to provide nouvelle and distinct products that forces the net users to purchase and come back for more.

 

2. The Price has been drastically changed over the Internet. It lets the buyer decides the price. Also it gives the buyers information about multiple sellers selling the same product. It leads to best possible deal for the buyers in terms of price. A website Market.yandex.ru is extremely popular as its compares the price of many products and offers the least price to the buyer. The very famous ebay.com follows the same principles. Pricing is dynamic over the Internet.

 

3. The Place revolves around setting up of a marketing channel to reach the customer. Internet serves as a direct marketing channel that allows the producer to reach the customer directly. The elimination of the intermediate channel allows the producer to pass the reduced distribution cost to the customer in the form of discounts. Dell Computers have used this strategy very effectively and hence they have been able to reduce their prices of their laptops drastically and reaped huge profits.

 

4. Promotion is extremely necessary to entice the customer to its website, as there are currently more than one billion web pages. Promoting a website includes both online and offline strategies. Online strategies include search engine optimization, banner ads, multiple points of entry, viral marketing, strategic partnership and affiliate marketing. Presently, the cyberspace is already cluttered with thousands of sites probably selling similar products. For the customers to know of the Company’s existence and to garner information on the kind of products or services that the company is offering, promotion has to be carried out. There can be traded links or banner advertisements for the same. Also the traditional mediums like print, outdoor advertising and television can be used to spread awareness. Email campaigns and spamming the Chat rooms on almost every server has been exploited to the maximum for the cause of promoting their website.

5. Presentation The presentation of the online business needs to have an easy to use navigation. The look and the feel of the web site should be based on corporate logos and standards. About 80% of the people read only 20% of the web page. Therefore, the web page should not be cluttered with a lot of information. Also, simple but powerful navigational aids on all web pages like search engines make it easy for customer to find their way around. The principle of K.I.S.S (Keep it simple stupid) is the most important factor that has to be considered while presenting the online business

 
 

6. Processes Customer supports needs to be integrated into the online web site. A sales service that will be able to answer the questions of their customers fast and in a reliable manner is necessary. To further enhance after sales service, customers must be able to find out about their order status after the sale has been made. For example, Ozon.ru allows its customers to keep track of the parcel and they are well informed about the status of their order.

 

7. Personalization Using the latest software from it is possible to customize the entire web site for every single user, without any additional costs. The mass customization allows the company to create web pages products and services that suit the requirement of the user. A customized web page does not only include the preferred layout of the customer but also a pre selection of goods the customer may be interested in.

 

2. Advertising options available on the Internet.

The Internet offers a variety of options for the marketer to advertise her/his products/brands. These include

1. Banner ads and their variations

2. E-mailers and their variations

3. Sponsorships

4. Search Engines

5. Affiliate marketing

In Russia banners still remain the most popular option. However, wider options are now available to the marketer which, even at the cost of being intrusive, serves to enhance the visibility and effectiveness of the banner. The goal of banner advertising is not to increase sales, but make strong and recognizable brand.

The Variants of Banners include :

1.  Banner Ad - a graphical web advertising unit, typically measuring 468 pixels wide and 60 pixels tall (i.e. 468x60).

2.  Beyond the Banner - online advertising not involving standard GIF and JPEG banner ads.

3.  Button Ad- a graphical advertising unit, smaller than a banner ad.

4.  HTML banner - a banner ad using HTML elements, often including interactive forms, instead of (or in addition to) standard graphical elements.

5.  Iterstitial - an advertisement that loads between two content pages.

6.  Pop-up Ad - an ad that displays in a new browser window.

7.  Pop Under Ad - an ad that displays in a new browser window behind the current browser window.

8.  Rectangle Ad - any one of the large, rectangular banner sizes suggested by the IAB.

9.  Rich Media- new media that offers an enhanced experience relative to older, mainstream formats.

10. Skyscrapper Ad- an online ad significantly taller than the 120x240 vertical banner.

11. Text Ad - advertisement using text-based hyperlinks.

12. Surround Session - advertising sequence in which a visitor receives ads from one advertiser throughout an entire site visit.

13. Vertical Banner - a banner ad measuring 120 pixels wide and 240 pixels tall.

Given the highly interactive nature of the Internet, and the also fact that unlike other media it offers a higher level of identification of the user, simple direct marketing tools such as email can also be used more effectively.

Then again there are sponsorships, which can be effectively used to increase brand salience and even change image.

The other tool on the web with enormous potential is the search engine. Marketers can own either popular keywords or make use of meta-tags (these are similar to the keywords which the search engines uses to catalogue various websites/products) in order to go higher on the search lists. The above is used by the search engine giant Google.ru and Yandex.ru.

 

3. Internet Marketing Tactics

There are many different technologies to facilitate your Internet marketing strategy. Some of the most common and effective tools are: 

Search Engines and Directories: Search engines are one of the most popular means of finding web sites, second only to following links on web pages.

Search engines help people find relevant information on the Internet. Major search engines maintain huge databases of web sites that users can search by typing in keywords or phrases.

Advertise your message. Web directories/search engines are information, gateways that have high traffic and are good for displaying advertisement banners. They are used to find Internet information and for this reason, appeal to broad target groups. 

E-zines (Online magazines): These publications are focused on specific topics and may be a way to reach a target audience interested in that subject. Some companies have gathered the e-mail addresses of potential customers and used these lists to send out product information specific to client interests.

Seven good reasons to establish an E-Zine

1. Establishes Trust

2. Brings Visitors Back

3. Establishes You as an Expert

4. Keeps Current & Potential Customers Up to Date on New Products & Services

5. Builds Relationships

6. Allows You to Build an Opt-In Email Marketing List

7. Keeps Your Website Fresh in Visitors' Minds 

E-mail: Ethical methods of gathering e-mail addresses are through on-line registration built into your corporate Web sites, or requests for information forms that request submission to your opt-in lists.

An alternative is to purchase lists of customer e-mail addresses indexed by special interests from a private company such as 'Postmaster Direct'.

Online customers are becoming increasingly selective about their relationships, the brands they trust, and what they consider relevant. While most marketers are aware of privacy issues and the risks of Spam, there is still need for improvement. Email marketing campaign management is still fairly unsophisticated even at the largest of organizations.

Marketers have to think about the drivers of customer response and purchase. Over time, as more is learned about your customer buying behavior, you can will isolate campaign and program characteristics that drive your customer or visitor response and action. Isolating the behavior of high value customers, business customers, or the minority of customers who prefer to buy online will be critical. For example, new online buyers get referrals when shopping online, while experienced frequent buyers prefer search engines. 

Affiliate Marketing: Affiliate Marketing enables you to increase online sales by promoting your products and services through a network of Affiliate sites on a payment-by-results basis.

It also provides the opportunity to generate additional revenue by exploiting your site's own content to promote the products and services of other online Merchants.

A Merchant recruits content sites to partner with them as Affiliates in exchange for commissions. A common third party provider such as Commission Junction can be used.

The Merchant provides their advertising banners and links to their Affiliates and assigns a commission for each click-through to their site, subscription to their service, or purchase of their products that is generated from those links.

Affiliates place the tracking code for these ads and links on their Web sites. This allows clickthrough's to be tracked online and commissions to be calculated. If a product or service is purchased, the customer pays the Merchant directly and the Affiliate is paid a commission for that transaction. The dating giant adultfriendfinder.com has used this strategy to the maximum and has earned millions of dollars by proper implementation of this strategy. 

Banner Advertising: Banner advertising can play an extremely important role within your website strategy. One can use banner advertising as a means of promoting it’s own products and services, raising awareness, or as a way of generating revenue by selling advertising space on your own website. 

Purchasing Advertising: There are currently two widely recognized methods of purchasing banner advertising. The rates for these are usually quoted on a cost per thousand basis or (CPM). The rates you pay can vary tremendously as there is currently no standard price model - so be prepared to negotiate!

• Pay-Per-Impression: This method of purchasing banner advertising is based on a charge for the number of times someone sees your banner. There are no guarantees as to how many visitors will come to your site as a result of seeing your banner; you are simply paying for the number of times your banner is displayed. Websites that offer such programs include paypopup.com and adclicksor.com
• Pay-Per-Visitor: This method of purchasing banner advertising is based on a charge for the number of times someone visits your site as a result of clicking on your banner. This is a better method of purchasing banner advertising as you are only paying for results, although expect to pay a premium.
• Pay-Per-Click: The revenue model of the Internet giant google.com has its very own service which offers certain share of the profit that it makes by the click-thru that a website generates from its ad sense codes. The revenue model is known as google adsense and almost every successful website uses this model to make profits. The Google adsense ads can be seen on websites like Times of India, Moneycontrol.com, ManagementParadise.com and a lot many other reputed websites.
• Branding. While CTR and cost per sale relate to direct marketing objectives, another way of looking at banner ads is as "branding" tools. They create brand awareness, and a brand image in the viewer's mind, whether or not the viewer clicks on the ad. Branding is very difficult to measure, but can be very powerful.

The average click through ratio on banners is just under 1%, although with a well planned and executed advertising campaign using effective banners you can increase this to as much as 15%, but be prepared to work at it.

It is a good idea to have a number of different banner ideas so that you can carry out small test marketing campaigns with each one until you find those that work best.

There are a number of key issues that must be considered when designing a successful banner:

• It must have an attention-grabbing headline.
• It must be simple and get your point across.
• It must invoke action (i.e.: "Click here")
• It must download quickly.
• It must be placed effectively on a web site, Location, Location, Location