Internet marketing, also known as
web marketing,
online marketing,
webvertising, or
e-marketing, is referred to as the
marketing (generally promotion) of products or services over the
Internet. iMarketing is used as an abbreviated form for Internet Marketing.
[citation needed]
Internet marketing is considered to be broad in scope
[citation needed] because it not only refers to
marketing on the
Internet, but also includes
marketing done via e-mail and wireless media. Digital customer data and electronic customer relationship management (
ECRM) systems are also often grouped together under internet marketing.
[1]
Internet marketing ties together the creative and technical aspects of the Internet, including design, development, advertising and sales.
[2] 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, and
Web 2.0 strategies.
[citation needed]
In 2008,
The New York Times, working with
comScore, published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the
hits from advertisements served from advertising networks, the authors found that the potential for collecting data was up to 2,500 times per user per month.
[3]
Types of Internet marketing
Internet marketing is broadly divided in to the following
[4] types:
- Display Advertising: the use of web banners or banner ads placed on a third-party website to drive traffic to a company's own website and increase product awareness.[4]
- Search Engine Marketing (SEM): a form of marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs) through the use of either paid placement, contextual advertising, and paid inclusion, or through the use of free search engine optimization techniques.[5]
- Search Engine Optimization (SEO): the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid ("organic" or "algorithmic") search results.[6]
- Social Media Marketing: the process of gaining traffic or attention through social media sites.[7]
- Email Marketing: involves directly marketing a commercial message to a group of people using electronic mail.[8]
- Referral Marketing: a method of promoting products or services to new customers through referrals, usually word of mouth.[9]
- Affiliate Marketing: a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts.[10]
- Content Marketing: involves creating and freely sharing informative content as a means of converting prospects into customers and customers into repeat buyers.[11]
Business models
Internet marketing is associated with several
business models:
- E-commerce: a model whereby goods and services are sold directly to consumers (B2C), businesses (B2B), or from consumer to consumer (C2C) using computers connected to a network.[12]
- Lead-based websites: a strategy whereby an organization generates value by acquiring sales leads from its website.[citation needed] Similar to walk-in customers in retail world. These prospects are often referred to as organic leads.
- Affiliate Marketing: a process wherein a product or service developed by one entity is sold by other active sellers for a share of profits.[citation needed] The entity that owns the product may provide some marketing material (e.g., sales letters, affiliate links, tracking facilities, etc.); however, the vast majority of affiliate marketing relationships come from e-commerce businesses that offer affiliate programs.[citation needed]
- Local Internet marketing: a strategy through which a small company utilizes the Internet to find and to nurture relationships that can be used for real-world advantages.[citation needed] Local Internet marketing uses tools such as social media marketing, local directory listing,[13] and targeted online sales promotions.
One-to-one approaches
In a one-to-one approach, marketers target a user browsing the Internet alone and so that the marketers' messages reach the user personally.
[14] This approach is used in search marketing, for which the advertisements are based on
search engine keywords entered by the users. This approach usually works under the
pay per click (PPC) method.
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Appeal to specific interests
When appealing to specific interests, marketers place an emphasis on appealing to a specific behavior or interest, rather than reaching out to a broadly defined demographic.
[citation needed] These marketers typically segment their markets according to age group, gender, geography, and other general factors.
[citation needed]
Niche marketing
Niche and hyper-niche internet marketing put further emphasis on creating destinations for web users and consumers on specific topics and products.
[citation needed] Niche marketers differ from traditional Internet marketers as they have a more specialized topic knowledge.
[citation needed] For example, whereas in traditional Internet marketing a website would be created and promoted on a high-level topic such as kitchen appliances, niche marketing would focus on more specific topics such as 4-slice toasters.
[citation needed]
Niche marketing provides end users of such sites very targeted information, and allows the creators to establish themselves as authorities on the topic or product.
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Geo-targeting
In Internet marketing,
geo targeting and geo marketing are the methods of determining the
geolocation of a website visitor with
geolocation software, and delivering different
content to that visitor based on his or her location, such as latitude and longitude, country, region or state, city, metro code or
zip code, organization,
Internet Protocol (IP) address,
ISP, and other criteria.
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Advantages and limitations of Internet marketing
Advantages
Internet marketing is inexpensive when examining the ratio of cost to the reach of the target audience.
[citation needed] Companies can reach a wide audience for a small fraction of traditional advertising budgets.
[citation needed] The nature of the medium allows consumers to research and to purchase products and services conveniently.
[citation needed] Therefore, businesses have the advantage of appealing to consumers in a medium that can bring results quickly.
[citation needed] The strategy and overall effectiveness of marketing campaigns depend on business goals and
cost-volume-profit (CVP) analysis.
Internet marketers also have the advantage of measuring statistics easily and inexpensively; almost all aspects of an Internet marketing campaign can be traced, measured, and tested, in many cases through the use of an
ad server.
[citation needed] The advertisers can use a variety of methods, such as
pay per impression,
pay per click,
pay per play, and
pay per action. Therefore, marketers can determine which messages or offerings are more appealing to the audience.
[citation needed] The results of campaigns can be measured and tracked immediately because online marketing initiatives usually require users to click on an advertisement, to visit a website, and to perform a targeted action.
[citation needed]
Limitations
However, from the buyer's perspective, the inability of shoppers to touch, to smell, to taste, and "to try on" tangible goods before making an online purchase can be limiting.
[citation needed] However, there is an industry standard for e-commerce vendors to reassure customers by having liberal return policies as well as providing in-store pick-up services.
[citation needed]
Security concerns
Information security is important both to companies and consumers that participate in online business. Many consumers are hesitant to purchase items over the Internet because they do not believe that their personal information will remain private. Some companies that purchase customer information offer the option for individuals to have their information removed from their promotional redistribution, also known as
opting out. However, many customers are unaware if and when their information is being shared, and are unable to stop the transfer of their information between companies if such activity occurs. Additionally, companies holding private information are vulnerable to data attacks and leaks. Internet browsing privacy is a related consumer concern. Web sites routinely capture browsing and search history which can be used to provide targeted advertising. Privacy policies can provide transparency to these practices. Spyware prevention software can also be used to shield the consumer.
Another consumer e-commerce concern is whether or not they will receive exactly what they purchase. Online merchants have attempted to address this concern by investing in and building strong consumer brands (e.g.,
Amazon.com,
eBay, and
Overstock.com), and by leveraging merchant and feedback rating systems and e-commerce
bonding solutions.
[citation needed] All these solutions attempt to assure consumers that their transactions will be free of problems because the merchants can be trusted to provide reliable products and services.
[citation needed] Additionally, several major online payment mechanisms (
credit cards,
PayPal,
Google Checkout, etc.) have provided
back-end buyer protection systems to address problems if they occur.
[citation needed]
Usage trends
Technological advancements in the telecommunications industry have dramatically affected
online advertising techniques.
[citation needed] Many firms are embracing a paradigm that is shifting the focus of
advertising methodology from traditional text and image advertisements to those containing more recent technologies like
JavaScript and
Adobe Flash.
[citation needed] As a result,
advertisers can more effectively engage and connect their audience with their campaigns that seek to shape consumer attitudes and feelings towards specific products and services.
[citation needed]
Effects on industries
The number of banks offering the ability to perform banking tasks over the internet has increased.
[citation needed] Online banking appeals to customers because it is often faster and considered more convenient than visiting
bank branches.
[15]
Internet auctions
Internet auctions have become a multi-billion dollar business. Unique items that could only previously be found at
flea markets are now being sold on Internet auction websites such as
eBay. Specialized
e-stores sell a vast amount of items like antiques, movie props, clothing, gadgets, and so on.
[16][17]
As the premier online reselling platform, eBay is often used as a price-basis for specialized items. Buyers and sellers often look at prices on the website before going to flea markets; the price shown on eBay often becomes the item's selling price.
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Advertising industry
In addition to the major effect internet marketing has had on the technology industry, the effect on the advertising industry itself has been profound. In just a few years,
online advertising has grown to be worth tens of billions of dollars annually.
[18][19][20] PricewaterhouseCoopers reported that US$16.9 billion was spent on Online marketing in the U.S. in 2006.
[21]
This has caused a growing impact on the United States'
electoral process. In 2008, candidates for President heavily utilized Internet marketing strategies to reach constituents. During the 2007 primaries candidates added, on average, over 500 social network supporters per day to help spread their message.
[22] President
Barack Obama raised over US$1 million in one day during his extensive Democratic candidacy campaign, largely due to online donors.
[23]
Several industries have heavily invested in and benefited from internet marketing and online advertising. Some of them were originally
brick and mortar businesses such as
publishing, music,
automotive or gambling, while others have sprung up as purely online businesses, such as digital design and media,
blogging, and internet service hosting.
[citation needed]
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