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CHAPTER II

REVIEW OF RELATED LITERATURE

History of Online Marketing

On October 27, 1994, the world of advertising was forever transformed by

a small graphic bearing the presumptive words, "Have you ever clicked your

mouse right here? You will," in a kitschy rainbow font. The age of banner ads had

officially begun. The publication devised a plan to set aside portions of its website

to sell space to advertisers, similar to how ad space is sold in a print magazine.

They called the ad spaces "banner ads," and charged advertisers an upfront cost

to occupy the real estate for a set time period -- very different from today's pay-

per-click model. AT&T paid HotWired $30,000 to place the banner ad above on

their site for three months. The ad enjoyed a click-through-rate of 44% -- a

number that would make most marketers balk in disbelief today. To put that in

perspective, the average clickthrough rate on display ads today -- 22 years later

-- is closer to 0.06%. 

It would be an understatement to say that pop-up ads suffer from a poor image

problem. They've been called internet's original sin and the most hated

advertising technique, and one of the original developers has even apologized for

creating the underlying code that unleashed them upon unsuspecting web
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surfers. Even so, these much-maligned ads hold an undeniable place in the

history of online advertising.

Spam Advertising

Spam is flooding the Internet with many copies of the same message, in

an attempt to force the message on people who would not otherwise choose to

receive it. Most spam is commercial advertising, often for dubious products, get-

rich-quick schemes, or quasi-legal services. Spam costs the sender very little to

send -- most of the costs are paid for by the recipient or the carriers rather than

by the sender. The creator of the first spam email advertisement ever to hit the

inbox was Gary Thuerk, also known as the father of spam. He was a marketing

manager at the Digital Equipment Corporation. Although DEC had a strong

presence in the East Coast, considering the fact that it was an East Coast based

corporation, the email was an attempt to reach the West Coast technological

enthusiasts. Specifically, the email was an invitation to West Coast users to a

product demonstration of the then new Decsystem-20 by Digital. Although

annoying, Spam Advertising is still considered as advertising because it still

markets or advertises your product even though it is not commendable and

serves as a nuisance to your target market.

Social Media as an Online Marketing Strategy

With the advent of social networking, social scientists and media experts

have wondered about the benefits social networking brings to communication.

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While some of these are obvious, some others have only become apparent as

users have become familiar with social networking. The ability to increase our

networking potential or work with others regardless of distance presents new

ways for us to do business. Furthermore, the ability to stay in contact with friends

and family allows us to maintain closer ties to our loved ones across long

distances. Social media generates a huge amount of data about your customers

in real time. Every day there are over 500 million Tweets, 4.5 billion Likes on

Facebook, and 95 million photos and videos uploaded to Instagram. Behind

these staggering numbers is a wealth of information about your customers—who

they are, what they like, and how they feel about your brand. When you have a

presence on social media, you make it easier for your customers to find and

connect with you. And by connecting with your customers on social, you’re more

likely to increase customer retention and brand loyalty. A study by The Social

Habit shows that 53 percent of Americans who follow brands on social are more

loyal to those brands. Social media increases sales and customer retention

through regular interaction and timely customer service. In the 2015 Sales Best

Practices Study from research institute MHI Global, world-class companies rated

social media as the most effective way to identify key decision makers and new

business opportunities. In the State of Social Selling in 2015, nearly 75 percent of

companies that engaged in selling on social media reported an increase in sales

in 12 months. Updating your social media accounts takes time and effort. A

senior person with knowledge about the company and products should handle

your social media presence, and the cost in time means the media is not
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completely free. It is ongoing work to find new angles about your products

continually and to post and re-post information. The information is only visible for

a short time before newer posts replace it. In addition, publishing obvious

advertising copy is unacceptable in the social media world, therefore you must

present the information in the form of conversation or you will lose followers.

Three distinct levels for measuring marketing effectiveness

One of authors was the marketing director of a certain company 30 years

ago. There were many well tried and tested models for measuring the

effectiveness of marketing promotional expenditure and there were quite

sophisticated mathematical models too. These models were passed through

business to business and even service kind of business. In our time, some

organization uses the shareholder's money for such promotions and its really

quite a shame if the organization did not make their marketing promotion

effective. Since there are many promotional methods right now the problems of

how to measure the effectiveness has also increased considerably. This

challenge really made the research and specialists at Cranfield School of

Management continue to apace. Accountability can only be measured by the

attitude or awaremess change that can be measured quantitavely. Besides the

awareness, profit or sales is also one of the things that could determine the

effectiveness of marketing but in sales, there are many variables that could affect

it such as the competitors, packaging and the like. The problem of marketing
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accountability is not really on how to measure the effectiveness of the

promotional expenditure because marketing is even more than that. According to

the World Class Organization, marketing is a discipline that is responsible to

defining and understanding the markets for instance what are their needs and

such. The three levels of determining the effectiveness of marketing are: Level 1

"Marketing due diligence", you could say that the marketing strategy or who they

are targeting is what this is all about. The assessment is for determining if the

marketing strategy is effective or not which is if they could will create or destroy

the shareholder's value. Level 2 is the "Marketing Effectiveness", in this level

marketing tactics is what you should consider or their way to promote their

product in line with their marketing strategy. This is when they had created

advantages in each of the segments. Lastly is the Level 3 "Promotional

Effectiveness", this includes the marketing communications strategy or how you

made your customers aware of your product.

Reference:

http://spam.abuse.net/overview/whatisspam.shtml

https://www.adpushup.com/blog/the-history-of-online-advertising/

https://blog.hubspot.com/marketing/history-of-online-advertising

http://smallbusiness.chron.com/advantages-social-network-sites-32069.html

https://blog.hootsuite.com/social-media-for-business/

http://smallbusiness.chron.com/advantages-disadvantages-social-media-marketing-21890.html