Importance of Online Marketing

Audrey Gonzales University of Denver University College Capstone Project for Master of Applied Communications May 28, 2009

_____________________ Jerry Call Capstone Advisor _____________________ Patricia Greer Academic Director Upon the Recommendation of the Department _____________________ James Davis, Ph.D. Dean

Abstract Marketing on the internet enables marketers to expand their marketing from traditional mediums and limited cable channels to millions of web channels. Consumer behavior is drastically changing as society adopts all that the internet has to offer. Online shopping trends are migrating towards an automated and technology storefront versus a brick and mortar. This new marketing medium has opened a new portfolio of marketing tactics and ways to reach a target market. Through, websites, e-mail, search, display banners, social media, video and mobile, the integration of offline and online marketing is a whole new ball game. Marketers need to identify this trend and incorporate online marketing into their traditional marketing mix in order to attract and reach today’s consumers.

Gonzales-ii Table of Contents

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Introduction Online marketing is an imperative addition to a company’s marketing communication plan in order to be successful in reaching customers. Consumers are inundated with advertising. At every turn one is exposed to a brand name, logo, or icon placed on just about everything. According to the Daniel Yankelovich Group, “the average citizen who lives in a city may encounter up to 5,000 advertising messages a day. That translates to more than three each minute” (Vollmer and Precourt 2008, 8). With advertising being so prevalent in the lives of consumers, it is more important than ever to break through the clutter and keep up with the competition. In today’s competitive market, companies are challenged to find ways to stay ahead of their competitors. Online marketing is a key component in staying ahead of the competitive curve. It is not a surprise that a company’s competitor is most likely investing in new ways to connect with their consumers, such as using search tactics, social media, display banners, and even mobile and video tactics. In order to keep up or keep ahead of competitors, it is imperative to understand where the target market is spending their time and make sure to be there. For example, Comcast has taken the initiative to utilize Twitter as a customer service tool and a great way to provide value for customers. Comcast’s director of Digital Care has launched a strategy within Twitter to handle customer service questions quickly and efficiently. Comcast is one of Twitter’s best customer service

Gonzales-2 tools today and is gaining a lot of attention from both Comcast’s customers and Comcast’s competitors. Integrating online marketing into a company’s marketing mix will require breaking away from primary use of traditional marketing mediums such as TV, radio and print. Internet usage is not a trend therefore online marketing should neither be considered a trend. In fact, broadband adoption in US households has continued to have an upward growth trend since its conception.

Chart 1 Broadband growth trend in US homes.

Accessed at http://www.internetworldstats.com/stats.htm on 4/29/09

Gonzales-3 A successful marketing approach involves being present where one’s customers are. Today, the likelihood of customers being online is extremely high. In a survey given by eMarketer, before the 2008 holiday season, 67% of respondents stated that they would plan to do the majority of their holiday shopping online. Unfortunately, many companies continue to view online media as a new trend or experiment, versus a necessary component within an integrated marketing campaign. According to a 2007 Jupiter Research survey, “Only 36 percent of all businesses with fewer than 100 employees had a web presence” (Claxton and Woo 2008, 3). With an online marketing plan, a business can adapt with consumers and capture their audience as they are surfing, shopping or doing business on the web. It is incredibly important for companies of all sizes to expand their marketing tactics to the online space in order to connect with customers as well as keep up with the competitive market. Lena Claxton, author of “How to Say It: Marketing with New Media” stated that “without an online presence your business is likely to be perceived as nonexistent” (Claxton and Woo 2008, 21). This holds true in many respects. More and more customers utilize the internet to research products and services before they choose to purchase and if a company does not have an online presence they will not be present therefore resulting in lost opportunities.

Gonzales-4 Literature Review The amount of documented literature on the internet is overwhelming. People can access information on any topic within seconds. Information can be accessed through websites, e-mail, blogs, online journals, online forums, live chat and the list continues. The amount of information pertaining to online marketing is not nearly as accessible or in abundance as the information on the actual web itself. The subject of online marketing is starting to gain strong traction, however at this time there is not a lot of documentation and resources available regarding each tactic or successful implementations and case studies. Technology is a topic that will continuously change and therefore the documentation will also continuously change and need be updated and evaluated. Much of what is known about the subject of online marketing today will change as online marketing progresses with changing technologies. Many of the key tactics of online marketing, such as search, email, behavior targeting, social media and key metrics have been documented. While each of these tactics will gain new technological capabilities and innovative approaches, the foundational knowledge of the subject has been recorded. In this early stage of online marketing, the strategic aspects of the industry including successes, failures, pros, cons, analysis and complicated algorithms about the web and digital marketing are still being figured out.

Gonzales-5 Currently, there still are gaps in the online marketing industry’s body of knowledge. This is not because of the lack of attention to this subject, but rather to the newness of the industry. There is not yet a defined formula for online marketing. There is limited information on the newest online marketing capabilities and proven benefits to a company. This is because these strategies are currently being executed and experimented with on a daily basis. There is also limited information regarding the relationship of offline and online marketing integration. It is difficult to find studies that can discuss the positive and/or negative outcomes when running particular online marketing tactics with offline marketing tactics. This lack of information is also true for the analysis of the concept of an engagement map, which is the formula of success when running combinations of search with display, video with search, email with display, etc. As companies are starting to understand the importance of this medium for reaching their target markets, online marketing authors and experts, such as Christopher Vollmer, Vice President of Booz Allen Hamilton are “realizing a demand from business leaders for the tools and resources required to make this transition into the digital world of marketing” (Vollmer and Precourt 2008, ii). There is absolutely a consensus among the researchers that the internet has changed consumer’s behavior however, there is not yet a consensus on a proven recipe and/or strategy to make online marketing a success for businesses.

Gonzales-6 Design and Implementation Due to the abundance and accessibility of online information, much of the literature that has been utilized for this capstone is found online. Much of the internet’s content is user generated and user published therefore it is very important to be considerate and careful in using credited and reliable sources such as comScore Research, Forrester Research and others. Many online research companies, such as Forrester Research, comScore Research, and various survey groups will be utilized to support the capstone thesis as well as give the reader important insight into the online community. Forrester Research, Inc. has proven to be an industry leader in research and consulting for the past twenty- five years. Forrester is an independent research company that provides factual based advice to global leaders within the business and technology industry. Another relevant and credible resource to the digital advertising industry is comScore. comScore is a global leader in measuring the digital world and a preferred source for digital marketing intelligence. These research study groups will add credible and up-to-date online data which will emphasize the fact that consumer behavior is moving towards a new digital medium. An extreme benefit of utilizing these online companies and sources is that the data is very current. Given the nature of this topic, it is imperative that the data is as new as possible. The internet changes daily and new trends are developing regularly, therefore these

Gonzales-7 online research groups inform the readers with the most up to date trends that are driving online consumer behavior. Since the nature of the internet is so fluid, it was a concern to find up to date research in offline sources, however this was not the case. Many books are available about the web are relevant today. Utilizing books that were published from 2007 and on is important in supporting the thesis of the paper. One of the books that was found and had a particularly strong addition to the body of knowledge both on and offline was, “Always On” by Christopher Vollmer and Geoffrey Precourt. Always On discusses many facets of online marketing as an opinion leader. As a true advocate of online marketing, a subscription to a publication called OMMA (Online Media, Marketing and Advertising) is a helpful resource to keep up with the industry as well as utilize for this capstone. This is a monthly publication that reports on the newest online initiatives in the current market. There are many case-studies and reports about many company online launches and associated success and learnings. The research that has been conducted coupled with my current profession in online marketing will be a beneficial addition to the body of knowledge that currently exists. Being in the online industry, I was able to perform a relevant interview Ana Schultz whom is the Search manager for Qwest Communications and was able to give valuable insight into key topics within Search.

Gonzales-8 In addition to my research and my profession, I am also a generation Y consumer and professional that has lived and breathed the internet since its early years. I can easily recognize the growth of the internet because I am a contributing member to its growth and use it in my everyday life. As an avid user of the internet and an academic student, I believe I can educate my audience about the importance and necessity of online marketing. The main challenges that were encountered during the development of the capstone were finding research that reflected the effects of changing trends from 2007 or after as well as sorting through some conflicting data. There were often situations where one resource would report a particular study outcome and another resource performing the same study would report conflicting data. This will be a constant challenge for online research because the majority of current statistics are developed through online surveys, which will naturally have conflicting data dependant upon the audience surveyed. Results - Consumer Behavior Consumer behavior is changing. Consumers want things quickly and done correctly. They want to interact on their level and on their time. The era of waiting for anything is in the past. We live in the age of instant gratification. One can even order pizza online and have it delivered without ever having to engage in the cumbersome activity of speaking to a live person. The data shows that consumer’s are rapidly adopting the use of

Gonzales-9 technology for their research and shopping needs. Companies need to recognize this change and adopt their marketing strategies as well. To understand consumer’s behavior, it is important to refer back to the basics of marketing and the purchase decision process. Behind every act of making a purchase lays an important decision process for every consumer. Within the purchase decision process there are five stages. Although this model was originated many years ago, the same purchase decision process still applies today. However, the way that consumer’s go through the different stages are changing due much to the capabilities and offerings of the internet.

Figure 1 Purchase decision process.

Marketing – The Core (Kerin 2004, 122) The first stage of the purchase decision process, problem recognition, remains the same as when the model was built. Consumers still go through this initial step when a need or want is recognized. Stage two, information search still applies in the consumer purchase decision process as well; however the way that consumers go about searching for information is done much differently now than it was done ten

Gonzales-10 years ago. Ten years ago, consumers may have searched for product information by visiting a store, asking friends and family, watching the news and reading consumer reports. Today, consumers approach this stage much differently. About 65% of consumers research a product online before making a purchase. Consumer’s can shop prices, colors and availability all before leaving the comfort of their home. The internet has transformed stage two of the purchase decision process into a fairly easy and time efficient task. Phase three, evaluation of alternatives and value assessment has also become an extremely simple process to do online. There are websites for every product and service and these websites often list product benefits and downfalls. Comparison websites are available and dedicated to gathering as much information as possible and displaying it in one place. Sites such as expedia.com will search multiple airlines or hotels and display desired results by price, convenience, and many other factors. Progressive.com is known for displaying their own rates as well as many of their competitors for insurance rates of auto, home and other insurance policies. The technological capabilities of the internet simplify the task of evaluating alternative products and services. Not only has information for comparison shopping become easy, it is also encouraged. Consumers can subscribe to consumer reports on sites such as consumerreports.org for just about every product under the sun. Consumer ratings and reviews are also available on many

Gonzales-11 company’s websites, such as Bestbuy.com, and Kraftfoods.com. These rating systems are a great way to get feedback from real consumers that have already purchased the product while in the evaluation of alternatives stage of the purchase decision process. This stage exemplifies the opportunity that marketers have to satisfy the research needs of consumers through online marketing. With internet users conducting an average of 12.3

searches per week in 2009 search is a necessary addition to the traditional marketing tactics that companies are accustomed to using (Mitchell et al. 2009, 15). The fourth stage of the purchase decision process also remains the same as when the model was built. However, again the difference is how the customer moves through this stage. Stage four is the actual purchase decision. Today, consumers have many options for making a purchase. Ten years ago, companies gave consumers one primary way of purchasing, which was to physically visit their brick and mortar location and purchase a product. Today, this process is much different. Businesses can no longer dictate how their customer’s perform business with them, but instead need to adapt and do business the way their customer wants. Consumers expect to be able to make most purchases twenty-four hours a day. The convenience of the internet’s purchasing capabilities is placing a whole new demand on companies. Since the purchasing process is primarily in the

Gonzales-12 customer’s hands, it is necessary to give customers the purchasing path that they desire using. Today’s consumers expect nothing less than to be able to research a product online and then make a seamless purchase in the same place. There are many examples of how companies have successfully adapted to consumer’s behavior patterns. For example, the auto industry has given customers the ability to buy a $50,000 car online and have it shipped to the nearest dealership or even to the customer’s home. Another example is Circuit City. A consumer can purchase from circuitcity.com and have the purchased item ready for pick up at a store location of their choice in one-hour or less satisfying customer’s instant gratification attitudes. Phase four of the purchase decision process is becoming more and more customer centric which is causing additional complexity and competition in today’s market place. An online presence is very important for companies to satisfy the demands of their customers. If marketers do not provide an online purchase solution, there is a significant chance that their customers will shop with a competitor who can satisfy this need. The nature of the internet is obviously changing the way people make purchases. Consumer’s often make purchases without ever seeing or touching a product beforehand. Marketers then fear that online purchases will result in an abundance of post purchase behavior, which is stage five of the purchase decision process. For this exact reason, companies with an online purchase solution are very strategic in finding ways to alleviate this

Gonzales-13 common negative consumer response. While post purchase dissonance is a valid concern, it can be managed. Company websites attempt to equip customers with product information and pictures to help consumers feel confident in their purchase and eliminate negative post purchase behavior before it begins. In actuality, online marketing creates tremendous opportunity for alleviating post purchase dissonance because of the robust capabilities to provide consumers with extensive detailed product information, reviews and photos. An example of a successful strategy for managing post purchase dissonance within in a company is that of Amazon.com. Amazon.com allows users to hear small clips of music and view select pages within a book before making a purchase. Websites provide multiple pictures and different views of products in hopes of providing customers the necessary product information and leaving nothing to surprise when the customer receives the product. Another way to manage post purchase dissonance on the internet is to offer free return shipping and handling in the event that the customer is not completely satisfied with their purchase. Zappos.com is an online only retailer of shoes, handbags and accessories that has found great success in offering free return shipping to unsatisfied customers and lessening post purchase dissonance. While post purchase dissonance can be a considerable concern for companies initially starting to offer an online purchasing option they will

Gonzales-14 soon find that the amount of negative post purchase behavior does not outweigh the ROI for offering online purchases. Online purchasing is becoming an expected sales funnel in consumer’s mind and a company website is an essential marketing tool for companies that are competing in today’s environment.

Results - Online Shopping Trends Traditional media consumption is taking a vast change as we continue into the 20th century. According to the North American Technographics® Benchmark Survey that was done in 2008, consumers are spending approximately 12.5 hours a week on the internet. This is only .58 less time than a consumer spends watching television. Marketing online is an optimal way to reach customers as their media consumptions migrate online. It is not a debate, today’s businesses need to adapt with the environment in order to survive and be present where their customers are. Chart 2 Traditional media time is losing ground.

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Traditional media time is losing ground
Media consumption: average hours per week
Watching TV

13.08 12.5 6.79 3.58 2.64 2.12

Internet time (personal & work)

Listening to the radio (broadcast) Playing video games (computer & console) Reading newspapers (print)

Reading magazines (print)

Base: US adults Source: North American Technographics ® Benchmark Survey, 2008

In today’s economic recession, many businesses are forced to cut marketing budgets. CEO’s and executives are being challenged to find ways to bring in the most revenue for the least amount of cost. Online advertising is making a break-through during this recession which is a compelling reason why it is vital for marketers to incorporate online marketing into their online media mix. Companies that have an e-commerce platform are realizing that the web is a purchase channel with a fixed cost and is most likely the lowest cost channel in the organization. Online marketing is proving to be more cost efficient than traditional media both in and out of a recession. Forrester Research Company has stated that they will actually see a 26% increase in company’s online spending during a recession. This is a true testament that businesses are starting to see the potential and overwhelming effect that online media has on today’s market.

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Chart 3 Interactive marketing spend in a recession. Spend will stay constant or increase even during a recession

Results - The Importance of Online Marketing In order to grasp the importance of online marketing on a company’s ability to reach an audience in today’s society, it is first necessary to gain an understanding of how prevalent the internet is worldwide as well as in the US. The internet is a growing phenomenon that continues to gain more and more users everyday. The internet is accessible in all seven continents and in multiple languages. Asia over indexes every continent with the most internet users in the world at over 657,000,000 reported internet users in March 2009.

Gonzales-17 Chart 4 Internet Users in World by Geographic Region

Accessed at http://www.internetworldstats.com/stats.htm on 4/29/09 According to Nielsens/Net Ratings, there are 220,141,969 Internet users in the United States as of June 2008, which is 72.5% of the US population. From a marketing reach perspective, marketing on the internet is the most effective way to gain the reach of any marketing vehicle today. With roughly three out of four US citizens being categorized as internet users, it is imperative for marketers to be present in this space. As seen in the graph below, the rate of internet users is increasing every year and is expected to continue this same trend.

Table 1 US Internet Usage and Population Growth.

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Accessed at http://internetworldstats.com/am/us.htm on 4/28/09.

As internet user numbers grow, it is logical to assume that the amount of user time spent on the web and away from traditional mediums is also growing. Many companies are recognizing the importance of online marketing but are hesitant to move away from the comfort that has been established with traditional marketing tactics. Many of the reasons for resistance are due to fear of the unknown. It is difficult for a company who has traditionally participated in the offline arena to be comfortable in moving resources online without being able to predict the results. For most companies, incorporating online marketing into the marketing mix requires a complete change of company culture. This is why there is such a discrepancy in the amount of marketing dollars spent for online marketing compared to traditional marketing. A survey conducted by the North American Technographics® Benchmark survey reported that the average consumer spent 29% of their week interacting with the internet, yet companies only allocated 8% of their

Gonzales-19 marketing spend in this area. Chart 5 below compares consumer’s time interacting with different marketing mediums and overall company budget allocated. Chart 5 Consumer media time spent in a typical week.

It is apparent that companies need to take a better look at where their customers are spending their time and allocate budget more appropriately. Better integration between traditional offline marketing tactics and digital marketing need to take place in order for companies to capture their audience in this growing internet environment. It is important to try and gain an understanding of the basic principles and vocabulary of the online world. The web has been adopted by such a broad range of people the vocabulary is actually quite simple. “According to some analysts, as much as 70 percent of consumer time online is now spent

Gonzales-20 viewing content created not by professional editors, but by fellow consumers” (Honig et al. 2009, 24). This means that the average customer, student, sports fan or soccer moms are the people writing a good majority of what is currently found on the web.

Results – Online Tactics There are many online factors that can be added to a marketing mix to have a truly integrated offline and online campaign. Each tactic is different and has specific goals and objectives. A company does not have to utilize every online tactic to be successful, however it is important to develop a strategy in utilizing some or all of these online marketing tactics. The below list of online tactics do not encompass every online opportunity, but are the most established online tactics within this early stage of this industry. Within the capstone results, there will be a discussion of each tactic in detail and the importance of adding it to a company’s overall marketing mix.

10 Online Tactics to integrate into a company’s marketing mix that will enhance a company’s competitive advantage and increase the bottom line 1. Company website 2. e-mail program/ newsletters 3. SEO – Search Engine Optimization 4. SEM – Search Engine Marketing

Gonzales-21 5. Display Banners 6. Integrate online and offline tactics 7. Participate in Social Media 8. Video 9. Mobile Marketing 10. Track, test and optimize

Online Tactic #1 - Company Website It is imperative for all companies in today’s competitive market to have a website. With over 251,290,489 internet users in North America as of March 2009 (http://www.internetworldstats.com/stats.html (accessed on 4/29/09), the importance of a company website as a marketing vehicle is critical for a company’s success. The internet is a phenomenon that is here to stay. It is a resource for customers and a marketing tool for businesses. According to a 2007 Jupiter Research survey, only 36 percent of all businesses with fewer than 100 employees had a web presence” (Claxton and Woo 2008, 3). As consumer behavior and shopping patterns are changing, the need for a company website to be a part of an integrated marketing strategy is greater than ever. A website is a necessary marketing tool to compliment a company’s overall marketing communication plan. The vast majority of online marketing strategies are specifically built to send traffic to a company’s website.

Gonzales-22 Customers are becoming trained to find information about a product or service through a company’s website and will look for a web address on all marketing collateral. Websites are also a great place to capture email addresses which will allow a business to stay in contact with their customers. This online tactic is imperative in satisfying customer’s needs in today’s environment.

Online Tactic #2 - Start an e-mail program E-mail is an inexpensive and efficient tactic that can be easily added to a company’s overall marketing plan. With consumers spending a significant amount of their time online, e-mail is one of the most optimal ways to communicate upcoming events, sales and other information. “Marketing studies indicate that potential customers or clients need to hear your message at least seven times before they make a decision to buy” (Claxton and Woo 2008, 69). E-mail is one of the most preferable ways that customers would like to be communicated with. Marketers need to recognize this desire and preference in communication for their target market and add this medium to reach the suggested seven times of communicating a marketing message. In addition, wireless internet is becoming more and more popular and accessible. E-mail can be accessed at anytime and most everywhere which is extremely beneficial for marketers. As mentioned before, e-mail is one of the

Gonzales-23 lowest cost tactics with one of the greatest returns. This is a great tactic in a slowing economy. E-mail can also be fully tracked, which is another reason that e-mail is one of the strongest and most effective forms of online marketing. Adding a strategic e-mail campaign to traditional communication tactics is extremely beneficial because it tends to garner the greatest returns. The success of e-mail coupled with traditional marketing tactics is due to the following reasons. • Customers tend to volunteer to give their email addresses through retail interactions with little hesitancy. This proves that there is already a vested interest in the company. • A customer management system (CMS) enables marketers to tailor their e-mail campaigns to meet customer’s needs. As e-mails are targeted and are relevant to their customers, open rates and conversion rates will increase.

In order for an e-mail strategy to be effective, the first and foremost step to master is collecting e-mail addresses. It is important for businesses to collect e-mail addresses every chance. E-mail is an easy addition to a marketer’s overall marketing integration plan because companies can easily train their sales force to ask for e-mail addresses. An opportunity for e-mail

Gonzales-24 address gathering happens at every sales call, retail store interaction, and home visit as well as through the company’s website. Gathering customer information through offline and online tactics, such as e-mail, is also an opportunity to help a business grow their CMS. This will allow marketers to know exactly where their customers are in their purchase decision process and will help in predicting their customer’s needs in order to send relevant marketing communications at the right time. If a company sells a tangible item like facial products, it is likely that they can predict how long the .07 oz face cream will last an average customer. Therefore, after the initial sale of the cream, recording which cream the customer purchased and on what date the customer made the purchase are important pieces of information to place in the CMS. In three months, the estimated time that the customer will be due for a refill, an e-mail can be sent with a 10% coupon for the exact same cream that the customer has. The likelihood of the customer opening the e-mail is very high, as the product is relevant and the timing is perfect. This is just one many examples how integrating e-mail into a company’s marketing communication plan can prove successful in increasing ROI. It is important to understand some quick tips and e-mail basics. Below is a list that can be used as a good outline of key e-mail tips.

Quick Tips on E-Mail Masterpiece Making

Gonzales-25 • The subject line is critical: It’s like getting them to open the envelope. • Grab their attention in your opening sentence and then keep them reading. • • Deliver value or they’ll stop wanting to hear from you. Take care with layout and design to make it (a) readable and (b) professional. • • • • Personalize to whatever degree you can afford. Provide a clickthrough as the response mechanism. Carefully tailor the landing page (the page they hit after clicking). Test and measure, test and measure, test and measure as a life style. (Sterne 2001, 308) Online Tactic #3 - Search Engine Optimization (SEO) Search engine optimization is one of the most effective and underutilized online tactics that marketers can participate in. SEO is key in bringing customers to the company’s website and honing in on a potential sale. SEO is often looped in with the general online tactic of “search.” For the purposes of this paper, search optimization will be broken into its own category. It is very important for business owners to understand that SEO and SEM are related but are very different.

Gonzales-26 SEO (Search engine optimization) is often referred to as “natural” or “organic” search. SEO is the “non-paid” form of search. The search results displayed are based on relevancy to the search as opposed to a paid placement displayed result.

Figure 2 Paid Search.
Search Term Paid Results

Paid Results

Organic Results

Many small business marketers and owners are not aware of the strategy behind SEO and are missing valuable opportunities because of it. Participating in SEO is as simple as combining the right variables from a company website that will attract the Search Engine “spiders” or “crawlers” and place the website appropriately in the search results. “Search engines are highly pragmatic. They don’t all work the same way but are, by nature, very programmatic. They look at HTML document titles, meta tags, text, links, referrals – the works- and they pigeonhole what they find. In doing so,

Gonzales-27 the search engines actually evaluate your site for the prospective customer on the other side of the mouse” (Sterne 2001, 281). It is incredibly important to understand that the search engines continue to change their algorithm which returns better results for the user and avoids any one company figuring out all of the search engine secrets. SEO seems to be a very tricky business, but in reality it keeps marketers striving to keep their websites updated and at an optimal level for their customers. The thought process behind the search engine algorithm ends up creating a better experience for the customer. One reason that companies may be hesitant in adding SEO to a company’s marketing strategy is because search engine experts are really difficult to find. This is a very niche tactic that demands a strong knowledge of how websites, linking strategies, etc. will affect a business’ search rankings. “Over the past decade of SEO, I’ve found that one common problem often gets in the way of implementing fundamental SEO tactics. That problem is that nine out of 10 times, the person in charge of SEO internally is not technical. They are in marketing and they typically have no contact with the developers who build and run the website” (Friesen 2009, 18). Finding the resources to enhance a company’s SEO strategy is extremely beneficial in the long run. Connecting with the customer is one of the overall goals of marketing. As customer’s search for their products and services online, SEO is a key

Gonzales-28 component in reaching these customers and resulting in a sale. Utilizing key learning from offline tactics, such as tag lines and marketing messages can be integrated into SEO tactics within meta tags and alt tags. Traditional marketing is most often responsible for the heavy lifting in securing key branding terms. SEO tactics will help carry these branding terms by helping the company’s website show up through search engines when customers search for specific branding terms that have been established by traditional marketing efforts.

Online Tactic #4 - Search Engine Marketing (SEM) There are many online tactics that can be incorporate into a company’s overall marketing strategy and budget, but SEM is one of the online tactics that should be given extra consideration for incorporation into a company’s overall marketing mix. First, to explain the difference between SEO and SEM (search engine marketing), is that SEM is strictly a paid tactic. Referring back to Figure 2, the “sponsored links” both at the top and on the right side of the search results page are paid tactics. In today’ society, search is the primary way to start researching a product or service and therefore needs to be given considerable thought. As stated before, the average user searches 12.3 times a week for a product or service. With consumers utilizing the internet’s search engines so often,

Gonzales-29 search is a crucial component for companies to be present where their customers are actually looking. With tough economic times resulting in budget cuts, search marketing is one of the most measurable of direct-response advertising. “Agencies see search as a safe haven for their marketing investments. You can track every click and conversion down to the penny” (Kuchinskas, 2008, 33). With search marketing, marketers can track every dollar spent and make budget allocation decisions more confidently. Although traditional marketing is often a more comfortable route for marketers, in situations where ROI is expected, Search marketing will perform the task. In an interview with the Qwest Search expert on April 10, 2009, Ana Schultz states that, “People use search to find information. Whether you want to find a drycleaner or whatever, you use Google, MSN, Yahoo, etc. Search is truly a channel to find information. Companies that are not online are making a big mistake and even appear as unprofessional.” As stated before, companies who do not have a website are considered non existent. This holds true with search as well. If a consumer searches for a particular company and there is not a search result rendered for this company, it can be perceived that the company does not exist or is out of business. The customer will then most likely interact with a competitor based on their search result. According to Jupiter Research report, “40% of

Gonzales-30 consumers believe companies whose websites are at the top of the search page are the top brands in their field”. Paid search is arguably the most ROI driven online tactic. This is because paid search can be bought by a couple different ways. CPA is a “cost per acquisition” buy that can track the click to the ad copy from the sponsored link to a sale on your website. CPA models are becoming more and more popular as companies demand return on their investment. Another method to purchase paid search is through a CPC (cost per click) model. Each model is often used to accomplish different goals for a company. Through an interview with SEM manager at Qwest on April 10, 2009, Schultz states, “CPC model works well for someone who has a strong financial backup. However, less and less companies are using a CPC model. CPC was used in the infancy of search, when not a lot of metrics or technology was yet in place.” In traditional marketing, the media buy of television is often a large factor for the reason of success or failure. With search, the media buy is simple. Companies want their terms to be returned on the largest search engines. Google continues to dominate the search world. In October 2008, Google had more search activity on their network than Yahoo, Ask Network, Microsoft and Time Warner Network combined.

Table 2 Share of toolbar searches.

Gonzales-31 SHARE OF TOOLBAR SEARCHES – Search initiated from a search Site Google Sites Yahoo Sites Ask Network Microsoft Sites Time Warner Network engine toolbar in October 2008 Share of Search 63.0% 25.4% 10.1% 1.1% 0.5%

October 2008. Provided by comScore (Freisen 2009, 48) The act of searching for products online is not slowing. In fact, it is actually increasing. As more and more people migrate online to do research, marketers are quickly realizing the importance and effectiveness of having their company’s names listed in the search results. Forrester Marketing forecasts search marketing to triple in the next 5 years. The amount of money being spent on search is a testimony in itself. Forrester is predicting that search marketing will grow to $25 million in marketing spend by 2012. This is exponential growth, considering $4.5 million was the reported spend in 2007. Search is one of many online tactics that will start to replace certain traditional marketing, such as yellow page ads, white pages and even newspaper advertising.

Chart 6 Search marketing spend predicted to triple in five years.

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Source: Q12008 Forrester/MarketingProfs Global Interactive Marketing Maturity Online Survey

Online Tactic #5 – Display Advertising Display advertising is a similar concept to television advertising in traditional tactics in that it is often used as a brand oriented tactic. Display advertising is one of the more sexy online advertising tactics. The amount of time and money that is spent in producing display advertising is often very timely and costly. Although display advertising is one of the more costly online tactics, it is not nearly as expensive as a traditional 30 or 60 second commercial. Both the production and the media buy are significantly less

Gonzales-33 expensive for display advertising. Display advertising is not meant to replace television ads, but rather compliment them. Display advertising is very effective at driving brand awareness and reinforcing brand messaging from traditional marketing tactics. Although display advertising is not considered the most direct revenue driving online tactic, it is still considered one of the most important online tactics for companies to ad to their online marketing mix. The research shows that mixing display advertising and other online tactics, such as search has a positive correlation and will result in higher conversions. Display advertising is mainly divided into two main categories. The first is the actual display unit itself and the second is the media that the display unit runs on. This is very similar to television and the production of a commercial and the channels the commercial is aired on. The display unit can be grouped into many different categories. There are concept banners, retail banners, rich media banners, dynamic banners and video banners. Concept and retail banners tend to be relatively straight forward with strong sales messages that usually have less production costs. Rich media and video banners are often interactive and eye catching, but tend to have higher production costs. All different types of banners are utilized for different reasons. Retail banners are used to drive direct responses much like direct mail. Rich media banners tend to have interaction goals, such as

Gonzales-34 time spent with the unit, or total clicks. Each banner type can be utilized differently based on the company’s desired goals. The other largest aspect of display advertising is the media portion. Unlike television, display advertising has thousands of sites to advertise on. The amount of websites that offer advertising placements is overwhelming. Display advertising is most often sold on a cost per impression (CPM) basis. An impression is a view of the banner when a webpage loads with the display unit. Marketers can pay as little as a couple of dollars to have 1000 impressions of their display unit served to internet browsers. One of the most interesting and important aspects of display advertising is the ability to target customers. This process has taken on a more robust approach than traditional marketing. Large networks, such as Platform-A, Yahoo, and many others have developed very sophisticated programs that allow marketers to drill down and target a specific audience through multiple behavioral factors. This strategy is a significant benefit of online marketing. “A core preoccupation of online targeting thus far has been to locate the most likely prospects to pursue among the millions of active Web searchers, shoppers and browsers. In theory, behavioral targeting (BT) opens up a far larger universe of potential inventory than contextual or demographic targeting. Once a consumer is identified as “in market” by their actual online activities, they can be reached anytime, anywhere online” (TARGUSinfo, 2009). Accessing a customer anytime and anywhere lends

Gonzales-35 itself to online marketing capabilities. The core basics of traditional marketing is being replaced with sophisticated technological algorithms that result in a more targeted approach than direct mail, radio and even specific public relation tactics. Traditional marketers often accept and relate to display advertising easier than many of the other online tactics. Display advertising is less expensive than television, but can deliver the same brand awareness and reach. This online tactic can be a great tool as marketing budgets are continuously being reduced. Online Tactic # 6: Integrate Online and Offline Marketing Tactics Although it is imperative for companies to participate and market in the online space today, this is not to say that offline mediums should no longer be used. The key to true success is finding the right mix of the two. It is true that consumers are spending more and more of their time online. However, this does not mean that traditional media is invalid. Each generation within society is at a different stage with this new media. There are still large amounts of consumers that prefer to receive their communication offline and through traditional means such as TV, radio, direct mail and newspaper. Success lies in understanding what target market a company is focusing on and the effective ways to communicate with this group. It is important to have a general understanding of each generation and where they fall in the digital media consumption scale.

Gonzales-36 The generation prior to the baby boomers can be considered a “traditionalist” in the sense that this generation is still most susceptible to the traditional media such as TV, radio and newspapers. This generation is mostly comprised of elderly consumers whom cannot live without a television and has a hard time understanding and accepting all of the new technologies of the world. The best way to reach this audience is not through an online social media campaign like Facebook, but through traditional media which this generation is accustomed to. Following the traditionalists (between the late 1940s and the early 1960s), the baby boomer generation was born. This group is now approaching retirement but is surprisingly interested in digital media. Baby boomers were the first to recognize the power of digital media. “Microsoft founder Bill Gates, Apple Computer founder Steve Jobs, and World Wide Web inventor Tim Bernes-Lee are all members of the baby boomer group” (Vollmer and Precourt 2008, 60). Advertising to this group is where true online and offline integration occurs. Baby boomers grew up watching broadcast television and listening to vinyl records, thus their reception to advertising is primarily through traditional media. However, baby boomers are rapidly adapting to utilize technology, especially as this generation strives to keep up with their children in Generation Y; whose primary form of communication is the internet.

Gonzales-37 The next generation, know as Generation X “was the first true PC generation – a heritage of hands-on technology that helps explain why its constituents are at the forefront of entrepreneurship and the Internet” (Vollmer and Precourt 2008, 60). Although Generation X grew up in front of the TV, they are not easily influenced by mass advertising. Gen X is the first to adopt Atari and immerse themselves in video games. Today, Gen X is aggressively adopting digital media. Currently, they use digital media as a tool to help lead a productive life. Paying bills online, checking bank accounts and sending e-mails to friends and family has become a daily activity for Gen X. Gen X is forced to find a balance between having full time jobs, raising children and managing a household. Thus, it is important to use a strategic mix of marketing tactics both online and offline to capture this audience’s attention. One common behavior of Generation X is to receive direct mail pieces or marketing collateral and check to see if there is a web address to learn more about it before taking the time to drive to a store or make a phone call. As an industry best practice, including a website address or vanity URL on all marketing collateral is an effective way to utilize both online and offline marketing tactics to satisfy the needs of this audience. Although Gen X still utilizes traditional media, much of their free time is being used to enhance their lives and home productivity through the internet. As marketers research and understand their target markets and

Gonzales-38 persona’s, it will allow a marketer to tailor a marketing campaign appropriately. A Gen X consumer may watch a sitcom after work and then may jump online to catch the daily news and check weather for the next day. Generation X values time and has little of it therefore a mix of offline and online tactics is most appropriate for this generation. Generation Y is the start of a whole new generation that is considered “always on.” Generation Y was born between the launching of MTV and the commercialization of the Internet in 1996. Generation Y are the children of the baby boomers, so the amount of people included in this group is very large and therefore very influential. “They are the first consumers whose habits have been shaped by digital media. They’ve been plugged in almost since birth-not just to the PC and the Web, but to mobile phones, social networks, instant messaging and video games” (Vollmer and Precourt 2008, 60). Generation Y has an entirely different mentality than both the traditionalists and much of the baby boomers. Generation Y has grown up in a world of instant gratification. Everything is accessible at a click of a button and can be accessible in any form. iTunes, cable television, Skype, video on demand, Hulu TV, Facebook, Second Life and satellite radio is an expectation to Gen Y, rather than a luxury. All of these examples are media habits that Generation Y participates in on a daily basis. All of these applications are accessible twenty four hours a day and are mostly free, which is exactly

Gonzales-39 what Gen Y expects. The people of Generation Y are very intimate with technology and cannot imagine a world without it. They have been brought up in a digital world since birth. Marketers strive to keep up with the emerging trends and attitude changes of Generation Y. This is a market that businesses need to research and understand in order to gain brand awareness and loyalty, so they can rely on it for years to come. If a company is marketing to Generation Y, it may be beneficial to have a larger mix of online tactics and strategies than offline. It is hard to pin point an exact mix of online and offline tactics for this generation because their habits and behaviors are changing on a daily basis. However, if the trends of this generation are studied, the observations will show the majority of their time is spent interacting with others through mobile phones and the internet. Generation Y is a large and influential group. It includes more than 60 million U.S. consumers, 90 million European consumers and 20 million Japan consumers. This is a key market that demands marketer’s attention. Generation Y will be the baby boomers of tomorrow, and winning brand preference now is a key component for the future. Generation Y is spending so much time being connected through both the internet and their cell phones, that the preferred and best way to be contacted is through one of these mediums. Gen Y watches TV on their terms with Tivo, On Demand and through the internet with programs such as

Gonzales-40 Hulu. Gen Y may listen to public radio stations to catch the newest songs, but will download this music to their iPod and/or computer eliminating the immediate need to tune back into radio. Gen Y understands the concept of junk mail and hates it. They tend to throw out junk mail and used the internet to find the products they are interested in. Gen Y is definitely a new animal to cage. Marketers need to constantly be on their toes in keeping up with the newest trends. Generation Y does not operate like the generations in the past and in order to keep up with this constant moving target, an online approach is mandatory. Generation Z are today’s children who are born at the turn of the century and beyond. They are growing up in a world that is still being developed. Predictions of this generation cannot yet be fully understood, as it is hard to understand what technology will bring within the next 10 years. However, there is no secret that Generation Z will be even more immersed in a world of ever-changing technology. It will be truly amazing as marketers face the challenges of gaining the attention Generation Z. Online Tactic #7 - Participate in Social Media Social media is becoming one of the most popular online activities. Social media engages customers in a whole new way. It allows customers to interact with a brand while conversing with others. Customers like to be heard and feel valued. Conventional marketing wisdom has continuously preached that a dissatisfied customer will tell ten people, but with the new

Gonzales-41 tools of social media, dissatisfied customers can post a blog for ten million people to read. This can hold the same truth for satisfied customers who may become evangelists for a company’s brand. Blogs are a form of social media that are proving to be a great place for customers to express positive experiences with a company as well as negative. Social media is drastically changing the way people connect with one another. Social media is an online activity that is making large strides very quickly. According to a 2008 report by comScore, “the number of worldwide visitors to social networking sites has grown to 530 million, representing approximately two out of every three Internet users” (Claxton and Woo 2008, 187). Social media giants, Facebook and MySpace are rendering more than 100 million visitors per month. This incredible adoption rate from consumers is gaining a lot of attention from marketers and company executives. Unlike traditional media, social media is a two way conversation. Regardless if social media is in a company’s marketing budget or not, this will not prevent consumers from making posts. Companies can choose to ignore the comments and posts their customers are making or they can choose to respond. Unlike the other online tactics, social media participation is determined by the customer. Marketers need to realize that there is no such thing as a one way conversation and that a social media strategy should be on top of this list of marketing opportunities and implementations for 2009.

Gonzales-42 Developing a social media strategy is a great opportunity for marketers to take advantage of this high visibility vehicle and be present as customers spend more and more time in the social media realm. “Go where the people are having the conversations – don’t make them come to you; be as efficient as possible in giving them the content they want and make it easy for them to default to your brand; crate a dialogue, not a monologue, and be willing to give up some control”(Whylly 2009, 22). Social media participation is expected to continue growing at a rapid rate. There has been a 19% growth in social media participation from 2007 to 2008. As consumers are becoming more comfortable with the dynamics of the internet, they are developing an addiction to social media’s interactive and participatory model. The following chart shows five different levels of social media participation and how each is changing over a one year period; 2007 to 2008. Consumers are graduating from simply being spectators into joiners, collectors, critics and creators. Chart 7 Social media participation; 2007 - 2008.

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Source: Forrester Technographics Q2 2008. Percentages include respondents who said that they engage in social media activity at least once a month. Social media is proving to be an additional component needed in a marketer’s integrated plan. In a 2008 Forrester survey, 75% of U.S online adults said that they engage in social media activity at least once a month. With one out of four people engaging in social media, it is an obvious necessary addition to traditional marketing tactics. This is especially critical as users move from spectators to more interactive participation. The following graph shows how users are participating with social media. Within each group, spectators, joiners, collectors, critics and creators, there are many opportunities for marketers to engage with their customers and project their brand voice and retail messages.

Gonzales-44 Chart 8 Social media interaction 2008.

Source: Forrester Technographics Q2 2008. Percentages include respondents who said that they engage in social media activity at least once a month. There is an outstanding skepticism about the direct ROI that social media generates, however brand loyalty, brand advocacy, reduced churn and even the benefits of the net promoter score have not yet been proven out because this medium is so new. Katie Pain, whom is a PR executive in the technology industry, has often been referred to as “the queen of blog ROI,” states, “The blogging question between competitive necessity and competitive advantage” (Gillin 2007, 93). As the ROI debate continues to unfold, what is most important is recognizing the high level of consumer

Gonzales-45 participation and the countless opportunities where marketers can insert themselves within this interaction.

Online Tactic #8 - Video As consumer wants and needs continue to change, one of the most successful ways to satisfy this is through online video. According to a 2008 ComScore research finding, “online video has become the dominant online entertainment format, led by the global popularity of YouTube with more than 250 million visitors” (Claxton and Woo 2008, 191). Consumers are accustomed to watching video through the television and are demanding to have the same luxury online. This trend is one of many of the online trends that marketers must recognize in order to gain the interaction and attention of their customers. Online video is proven to attract users as well as make a website stickier. A sticky website will result in return visits to a website. Return visitors is exactly like return visits to a storefront; this gives marketers another opportunity to make a sale. As a testament to the online industry, the demand for online video is starting to make an impact on marketer’s budgets. The marketing spend for online video is predicted to significantly grow from 2009 through 2012.

Gonzales-46 Chart 9 Online video projected to have steep growth curve.

Source: Q12008 Forrester/MarketingProfs Global Interactive Marketing Maturity Online Survey This is not a surprise since online video is becoming so easy to access and easy to produce. With the increase in internet speed and enhanced capabilities, online video demand will eventually dominate the visits of internet users. In fact, a Break Media study recently found that “60 percent of males 18-34 would give up TV before they would give up the internet” (Whitney 2008, 36). This study is one of many studies that clearly support the need for businesses to recognize the popularity and strength that that internet has on today’s consumers and the demand to integrate online video into their marketing mix.

Gonzales-47 Online Tactic #9 - Mobile Marketing Mobile marketing is a new and emerging opportunity that many companies have found difficult to integrate into their marketing communication plans. However, mobile internet is rapidly increasing. According to a 2009 survey conducted by Goldman Sachs, 25% of smart phone users use their devices for accessing the internet. Across age groups, 11% of those surveyed were age’s 18-29, 6% were ages 30-49 and 2% ages 50 and above (Mitchell et al. 2009, 23). This survey enforces the fact that Generation X and Y have an obsession with the need to always be connected. If a company’s target market falls with Gen X and Gen Y consumers, which is highly likely, it is important to understand and adapt to this increasing trend of mobile internet access. Mobile internet marketing is in its infancy but will not be for long. Marketers are investigating ways to utilize this new form of digital media and to take advantage of it before it becomes congested and ineffective. One of the emerging trends for companies is to make sure their websites and web applications are WAP enabled. “Wireless Application Protocol (commonly referred to as WAP) is an open international standard for application layer network communication in a wireless communication environment. Its main use to enable access to the Internet (HTTP) from a mobile phone or PDA” (http://www.webopedia.com/TERM/W/WAP.html, accessed 4/17/09).

Gonzales-48 Mobile marketing may not be an effective marketing strategy for every company but like many of the online tactics it is something that should be considered based on the target market. With “20.8 million US customers in 2008 using their cell phones to access search services” (Smith 2008, 32), this is a trend that will continue to grow creating great opportunities for marketers.

Online Tactic #10 - Track, Test and Optimize Tracking: Traditional media is often measured by audience exposure and/or reach. With television, it is very difficult to see the exact sales attributed to the success of one commercial. A company could track overall lift through a defined period of time and make assumptions that it was based on a particular commercial but there is not an identified translation at this time. Today’s marketers are demanding more. With the competitive market continuing to grow and marketing budgets being reduced, marketers need to be able to make direct correlations from a marketing effort to a sale. An advantage of online marketing is the ability to track effectively. “No other medium has the capability to deliver measurable results that allow marketers to glean new knowledge, leading to the continual optimization of those results” (Sharpe 2008, 14). The ability to track in the digital space is a fundamental reason that online marketing is increasing in popularity. Not

Gonzales-49 only does this digital medium allow marketers to see the effectiveness of an online advertisement, it can be realized very quickly. Marketers do not need to wait 15-30 days to determine if an ad is successful. As marketers become aware of this advantage to online marketing they are changing the way they do business. Marketers are “no longer satisfied with media placements that merely elicit awareness or even consideration from consumers. They are demanding far more substantive measures of an advertisement’s influence on consumer preferences, purchases and loyalty” (Vollmer and Precourt 2008, 110).

Table 3 Online marketing metrics. Marketers Need New Metrics The ways in which marketers evaluate their campaigns are evolving from metrics defined around the following.  Reach, frequency and traditional gross rating points  Demographics (age, income levels, gender, location)  Brand metrics (aided awareness, ad awareness message association, brand favorability, purchase intent/consideration) to metrics that are both behavior-specific and action-focused:  Engagement: ad recall, session time, traffic-to-marketer Web site, measures of active attention to content, and “transference” (brand halo from media)  Quality and concentration of audience (early adopter

Gonzales-50 influence, word of mouth/pass-along measure)  Impact on purchase behavior (went to store, trial, repeat purchasing)  Actual viewership (uniques, click-throughs, downloads, commercial ratings) (Vollmer and Precourt 2008, 113). Test and Optimize: Tracking is undoubtedly one of the most beneficial factors that online marketing has to offer. Because of this benefit, online marketing’s quick and accurate tracking capabilities allow marketers an incredible ability to use the web as a test market. Traditional marketing can limit marketers from continuously testing new ideas. This is often because of the amount of time marketers need to wait to see results as well as the cost involved to implement and run new tests. In contrast, the web can be used as an inexpensive and accelerated focus group for marketers. Marketers can test new messaging and creative concepts in a matter of hours. As stated above, search engine marketing renders direct responses from customers, so it is easy to test two messages against each other and compare which is performing best. This holds the same truth for display advertising. It is less expensive to produce an online banner ad and utilize a media buy to test out new creative. With dynamic banner ads, the variations are endless. Another popular form of online market research is web surveys. Companies can easy implement a simple

Gonzales-51 survey form for customers on their websites to get immediate feedback. The research has always shown that people want to be heard and enjoy giving their opinions if asked. What better way to satisfy society’s need than to ask a few key questions on a website and get instantaneous feedback. Testing on the web is one of the most advantageous opportunities for marketers. Marketers can test on the web for minimal costs and use the learnings online and in their traditional marketing efforts. The same audience that would normally participate in focus groups and market research are on the web, so the transparency of data should not be a concern. With the economy in a less than optimal state, it is a great time for companies to move a portion of their research dollars away from costly activities like surveys and focus groups and utilize the web. “Now is actually a good time to experiment – but with practical, data-backed marketing tactics” (Whitney 2008, 6). Making continuous optimizations to marketing campaigns will help a company recognize failing campaigns and make changes quickly, which will reduce wasted in spending. Online marketing metrics can be sliced and diced in so many ways, the amount of data that can be gathered is more than enough to start making optimizations immediately. The results that are found from tracking and testing can be used for both online and offline marketing efforts. Online optimizations are very cost efficient. With free software like Google Analytics, marketers can tag their landing pages to have insight into every

Gonzales-52 action that is taken. Google analytics (among other tracking applications) enhance marketer’s ability to make constant optimizations. Making optimizations on the web is much like a puzzle. Finding the right piece and making it fit in the right place is challenging, but also intriguing and profitable. Discussion Online marketing has become a focal point for many companies within the last five years. Compared to traditional advertising, it is in its infancy as a new strategic initiative. Much of the literature that is written about online marketing are in depth overviews of different tactics and the operations behind them, as opposed to the necessity of adding online marketing to a company’s overall marketing mix. There is also a plethora of marketing material on traditional marketing tactics, but little research done on the integration of both online and offline research. This capstone gives a good overview of how consumer behavior is changing and is migrating towards a digital world. As shopping patterns change, my capstone explains to the audience that this trend needs to be recognized and addressed. Marketer’s can no longer continue to do things the way they have always been done. If this is the case, they will be left behind, lose sales opportunities and become non-existent to the consumer. This capstone also adds to the body of knowledge by addressing each generation and their current place in the digital world. This will be very

Gonzales-53 beneficial to readers allowing them to pin point their target market’s primary generation and make changes based on the researched trends and behavior. Each generation needs a different mix of offline and online media. This section will discuss the current state of each generation and a recommendation of an optimal mix of communication. The overview given of ten online tactics is a beneficial addition to the current body of knowledge. There are few publications that discuss each tactic, the changing trends and adoption rate as well as the need to include this in a marketing plan. Current research is given for each online tactics which will make it apparent to the reader of the importance of having an online marketing strategy. This capstone is very direct in explaining to the reader that the choice may be a matter of success of failure. Consumers understand that there are a lot of online marketing opportunities available but are not sure exactly what they are. This capstone addresses several specific online marketing opportunities in depth. It discusses the benefits and drawbacks of employing specific tactics and then encourages the reader to investigate their own target market to see if the discussed segment of online marketing would be a beneficial tactic for reaching their audience. An apparent benefit of online marketing is the sizeable cost savings to a company. Throughout the capstone, multiple mentions of this cost savings are addressed in comparison to traditional marketing. The ten tactics that are discussed in the capstone each have a component of cost savings

Gonzales-54 compared to their comparable offline tactic. The web is a low cost channel for both marketing and purchasing. This is because the web gives marketers the ability to reach thousands or customers at fractions of the cost of a television commercial, radio advertisement and even direct mail piece. The web is also a true cost savings to companies because of the amount of overhead and labor dollars saved through both online production costs and web purchasing. The manpower needed to reach potential customers on the web and convert into sales is much less than that the production associated with traditional marketing as well as the staffing needed for retail store labor.

Areas for Further Research This capstone attempts to educate marketers and business leaders about how consumer behavior is changing due to the internet’s wide array of offerings. Based on this research, the importance that online marketing has on a business is solidified. However, throughout the research it was identified that online marketing is not securing the amount of resources and budget that it deserves. This resistance to change is due to multiple factors. One of the most apparent and important factors is the need for a cultural shift within a company. Online marketing demands a new thought process and approach than many tactics within traditional marketing. Business leaders are accustomed

Gonzales-55 to running a company a certain way and are comfortable managing the business by tactics and metrics that have been established and are comprehensible to them. The amount of change that is needed in a company’s culture and attitude to adopt many of the online strategies seems intimidating and unpredictable. It would be interesting to do research on the change management needed to result in a successful and confident culture shift to move budget and resources to online marketing. There are numerous companies that are on the verge of moving to this new digital medium, but are hesitant to do so. As our society continues to use the internet as a focal point, companies will have to choose to take this leap of faith and utilize online marketing tactics. It would be intriguing to understand all of the facets behind common fears and ways to alleviate them.

References Anonymous.2009. Taking online targeting to the next level.VA: TARGUSinfo On-Demand Insight. Claxton, Lena, Woo Alison. 2008. How to Say It: Marketing with New Media. New York: Penguin Group, USA Inc.

Gonzales-56 eMarketer US online holiday shoppers, January 2008. http://www.emarketer.com/ accessed 12/25/2008. Forrester/marketingprofs global interactive marketing maturity online survey. 2008. Search marketing will triple in 5 years. Boston: Forrester Research Company. Freisen, Todd. 2009. The wayback machine. The Magazine of Online Media, Marketing & Advertising. 10 (January): 18. Gillinm, Paul. 2007. The New Influencers. Fresno, California: Quill Driver Books. Honig, David, Steckler Lewis, Lynn Russo Whylly, Steve Carbone, Christine Champagne, Erin Dejesus, Susan Kuchinskas, et al. 2009. The wayback machine. The Magazine of Online Media, Marketing & Advertising. 10 (February): 24. Internet users by region, January 2008. http://www.internetworldstats.com/stats.html accessed 4/29/2009. Jupiter Research. 2007. Search is necessary for brand perception. Quoted in Claxton, Lena, Woo Alison, How to Say It: Marketing with New Media. New York: Penguin Group, USA Inc. Kerin, Roger, Steven Hartley, Wiliam Rudelius. 2004. Marketing: The Core. New York: The McGraw-Hill Companies, Inc. Kuchinskas, Susa, Chris Kolbenschlag, Lynn Whitney, Kathy Sharpe, Steve Smith, Abe Mezrich, et al. 2009. 10 Things you need to know about 10 things to survive. The Magazine of Online Media, Marketing & Advertising. 19 (December): 6-35. Mitchell, James, Jennifer Watson, Jordan Monaham, Fred Krom. 2009. Independent insight: seventh annual online internet survey. New York: The Goldman Sachs Group, Inc. Nielsens/Net Ratings. Broadband Connection Speed Trend – Home Users (US). 2008. http://www.websiteoptimization.com/bw/0403/. Accessed 5/10/2009. Nielsens/Net Ratings. Internet usage and population growth. 2008. http://www.internetworldstats.com/stats.html accessed 4/29/2009.

Gonzales-57 North American Technographics® benchmark survey. 2008. Media Consumption. Boston: Forrester Research Company. Siegal, Carolyn. 2007. Internet Marketing – Foundations and Applications. New York: South-Westerd College Publication. Sharp, Kathy, Chris Kolbenschlag, Susa Kuchinskas, Lynn Whitney, Steve Smith, Abe Mezrich, et al. 2009. 10 Things you need to know about 10 things to survive. The Magazine of Online Media, Marketing & Advertising. 19 (December): 6-35. Smith, Steve, Chris Kolbenschlag, Susa Kuchinskas, Lynn Whitney, Kathy Sharpe, Abe Mezrich, et al. 2009. 10 Things you need to know about 10 things to survive. The Magazine of Online Media, Marketing & Advertising. 19 (December): 6-35. Sterne, Jim. 2001.World wide web marketing. New York: Library of Congress Cataloging–in-Publication Data. Vollmer, Christopher, Geofrey Precourt. 2008. Always on. United States: The McGraw-Hill Companies, Inc. Webopedia Online Dictionary. 2009. http://www.webopedia.com/TERM/W/WAP.html accessed 3/31/2009. Whitney, Lynn, Chris Kolbenschlag, Susa Kuchinskas, Kathy Sharpe, Steve Smith, Abe Mezrich, et al. 2009. 10 Things you need to know about 10 things to survive. The Magazine of Online Media, Marketing & Advertising. 19 (December): 6-35. Whylly, Lynn Russo, David Honig Steckler Lewis, Steve Carbone, Christine Champagne, Erin Dejesus, Susan Kuchinskas, et al. 2009. The wayback machine. The Magazine of Online Media, Marketing & Advertising. 10 (February): 24.

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