TMĐT C5 C8

Chapter 5
E-commerce Security and Payment System
Course name: E-commerce

Chapter 5
E-commerce Security
and Payment Systems
Instructor: Nguyen The Dai Nghia
Email: nghiantd@uel.edu.vn
Phone/Zalo: 0936385487
Chapter 5
Learning Objectives
5.1 Understand the scope of e-commerce crime and security problems, the key dimensions
of e-commerce security, and the tension between security and other values.
5.2 Identify the key security threats in the e-commerce environment.
5.3 Describe how technology helps secure Internet communications channels and protect
networks, servers, and clients.
5.4 Appreciate the importance of policies, procedures, and laws in creating security.
5.5 Identify the major e-commerce payment systems in use today.
5.6 Describe the features and functionality of electronic billing presentment and payment
systems.
Copyright © 2020 Pearson Education Ltd. All Rights Reserved

Chapter 5
The Rise of the Global Cyberattack

• Class Discussion
• Have you or anyone you know been the subject of a cybercrime? If so,
what happened?
• Do you think an agreement among countries akin to the Geneva
Convention will be an effective deterrent for cybercrime? Why or why
not?
• What steps have you taken to protect yourself online?

Chapter 5
The E-commerce Security Environment

• Scope of the problem
• Overall size of and losses due to cybercrime unclear
• McAfee/Center for Strategic and International Studies study: Global
economic impact of cybercrime and cyberespionage between $455
billion to $600 billion
• Reports by security product providers indicate increasing cybercrime
• Online credit card fraud one of the most high-profile forms
• Underground economy marketplaces sell stolen information, malware and
more

Chapter 5
What is Good E-commerce Security?

• To achieve highest degree of security
• New technologies
• Organizational policies and procedures
• Industry standards and government laws
• Other factors
• Time value of money
• Cost of security v s potential loss
ersu
• Security often breaks at weakest link

Chapter 5
Figure 5.1 The E-commerce Security Environment

Chapter 5
Table 5.3 Customer and Merchant Perspectives on the Different Dimensions of
E-commerce Security
Dimension Customer’s Perspective Merchant’s Perspective
Integrity Has information I transmitted or Has data on the site been altered without
received been altered? authorization? Is data being received from
customers valid?
Nonrepudiation Can a party to an action with me Can a customer deny ordering products?
later deny taking the action?
Authenticity Who am I dealing with? How can I be What is the real identity of the customer?
assured that the person or entity is
who they claim to be?
Confidentiality Can someone other than the Are messages or confidential data accessible
intended recipient read my to anyone other than those authorized to
messages? view them?
Privacy Can I control the use of information What use, if any, can be made of personal
about myself transmitted to an data collected as part of an e-commerce
e-commerce merchant? transaction? Is the personal information of
customers being used in an unauthorized
manner?
Availability Can I get access to the site? Is the site operational?

Chapter 5
The Tension between Security and Other Values

• Ease of use
• The more security measures added, the more difficult
a site is to use, and the slower it becomes
• Public safety and criminal uses of the Internet
• Use of technology by criminals to plan crimes or
threaten nation-state

Chapter 5
Security Threats in the E-commerce Environment

• Three key points of vulnerability in e-commerce environment:
• Client
• Server
• Communications pipeline (Internet communications channels)

Chapter 5
Figure 5.2 A Typical E-commerce Transaction

Chapter 5
Figure 5.3 Vulnerable Points in an E-

commerce Transaction

Chapter 5
Malicious Code
• Exploits and exploit kits
• Maladvertising
• Drive-by downloads
• Viruses
• Worms
• Ransomware
• Trojan horses
• Backdoors
• Bots, botnets

Chapter 5
Potentially Unwanted Programs

• Browser parasites
• Monitor and change user’s browser
• Adware
• Used to call pop-up ads
• Spyware
• Tracks users keystrokes, e-mails, IMs, etc.

Chapter 5
Phishing
• Any deceptive, online attempt by a third party to obtain confidential
information for financial gain
• Tactics
• Social engineering
• E-mail scams and Business Email Compromise (BEC) phishing
• Spear phishing
• Used for identity fraud and theft

Chapter 5
Example of “Nigerian letter” scam

Chapter 5
Hacking, Cybervandalism, and Hacktivism

• Hacking
• Hackers v s crackers
ersu
• White hats, black hats, grey hats

• Tiger teams
• Goals: cybervandalism, data breaches
• Cybervandalism:
• Disrupting, defacing, destroying Web site
• Hacktivism

Chapter 5
Data Breaches
• Organization loses control over corporate information to outsiders
• Over 1,575 breaches in 2017, 45% increase over 2016
• Yahoo and Equifax two of the most notorious; Facebook breach in 2018
exposed personal information of 30 million
• Leading causes
• Hacking
• Unauthorized access
• Employee error/negligence

Chapter 5
Credit Card Fraud/Theft

• Stolen credit card incidences about 0.9% on the Web and about 0.8% of
mobile transactions
• Hacking and looting of corporate servers is primary cause
• Central security issue: establishing customer identity
• E-signatures
• Multi-factor authentication
• Fingerprint identification

Chapter 5
Identity Fraud/Theft
• Unauthorized use of another person’s personal data for illegal financial
benefit
• Social security number
• Driver’s license
• Credit card numbers
• Usernames/passwords
• 2017: Almost 17 million U.S. consumers suffered identity fraud

Chapter 5
Spoofing, Pharming, and Spam (Junk) Websites

• Spoofing
• Attempting to hide true identity by using someone
else’s e-mail or IP address
• Pharming
• Automatically redirecting a URL to a different
address, to benefit the hacker
• Spam (junk) websites
• Offer collection of advertisements for other sites,
which may contain malicious code

Chapter 5
Sniffing and Man-In-The-Middle Attacks

• Sniffer
• Eavesdropping program monitoring networks
• Can identify network trouble spots
• Can be used by criminals to steal proprietary
information
• E-mail wiretaps
• Recording e-mails at the mail server level
• Man-in-the-middle attack
• Attacker intercepts and changes communication
between two parties who believe they are
communicating directly

Chapter 5
Denial of Service (DoS) and Distributed Denial of Service (DDoS)

Attacks
• Denial of service (DoS) attack
• Flooding website with pings and page request
• Overwhelm and can shut down site’s web servers
• Often accompanied by blackmail attempts
• Botnets
• Distributed Denial of Service (DDoS) attack
• Uses hundreds or thousands of computers to attack target network
• Can use devices from Internet of Things, mobile devices
• DDoS smokescreening

Chapter 5
Insider Attacks
• Largest threat to business institutions come from insider embezzlement
• Employee access to privileged information
• Poor security procedures
• Insiders more likely to be source of cyberattacks than outsiders

Chapter 5
Poorly Designed Software

• Increase in complexity of and demand for software has led to increase in
flaws and vulnerabilities
• SQL injection attacks
• Zero-day vulnerability
• Heartbleed bug; Shellshock (BashBug); FREAK

Chapter 5
Social Network Security Issues

• Social networks an environment for:
• Viruses, site takeovers, identity fraud, malware-loaded apps, click
hijacking, phishing, spam
• Manual sharing scams
• Sharing of files that link to malicious sites
• Fake offerings, fake Like buttons, and fake apps

Chapter 5
Mobile Platform Security Issues

• Little public awareness of mobile device vulnerabilities
• 2017: Over 26,500 different mobile malware variants identified by Symantec
• Vishing
• Smishing
• SMS spoofing
• Madware

Chapter 5
Insight on Technology: Think Your Smartphone is Secure?

• What types of threats do smartphones face?
• Are there any vulnerabilities specific to mobile
devices?
• What qualities of apps make them a vulnerable
security point in smartphone use?
• Are apps more or less likely to be subject to threats
than traditional PC software programs?

Chapter 5
Cloud Security Issues

• DDoS attacks
• Infrastructure scanning (find vulnerability)
• Lower-tech phishing attacks yield passwords and access
• Use of cloud storage to connect linked accounts
• Lack of encryption and strong security procedures

Chapter 5
Internet of Things Security Issues

• Challenging environment to protect
• Vast quantity of interconnected links
• Near identical devices with long service lives
• Many devices have no upgrade features
• Little visibility into workings, data, or security

Chapter 5
Technology Solutions
• Protecting Internet communications
• Encryption
• Securing channels of communication
• SSL, TLS, VPNs, Wi-Fi
• Protecting networks
• Firewalls, proxy servers, IDS, IPS
• Protecting servers and clients
• OS security, anti-virus software

Chapter 5
Figure 5.5 Tools Available to Achieve E-

commerce Security

Chapter 5
Encryption
• Encryption
• Transforms data into cipher text readable only by
sender and receiver
• Secures stored information and information
transmission
• Provides 4 of 6 key dimensions of e-commerce
security:
• Message integrity
• Nonrepudiation
• Authentication
• Confidentiality

Chapter 5
Symmetric Key Cryptography

• Sender and receiver use same digital key to encrypt and decrypt message
• Requires different set of keys for each transaction
• Strength of encryption: Length of binary key
• Data Encryption Standard (DES)
• Advanced Encryption Standard (AES)
• Other standards use keys with up to 2,048 bits

Chapter 5
Public Key Cryptography

• Uses two mathematically related digital keys
• Public key (widely disseminated)
• Private key (kept secret by owner)
• Both keys used to encrypt and decrypt message
• Once key used to encrypt message, same key cannot be used to decrypt
message
• Sender uses recipient’s public key to encrypt message; recipient uses
private key to decrypt it

Chapter 5
Figure 5.6 Public Key Cryptography: A Simple Case

Chapter 5
Public Key Cryptography Using Digital Signatures and Hash

Digests
• Sender applies a mathematical algorithm (hash function)
to a message and then encrypts the message and hash
result with recipient’s public key
• Sender then encrypts the message and hash result with
sender’s private key-creating digital signature-for
authenticity, nonrepudiation
• Recipient first uses sender’s public key to authenticate
message and then the recipient’s private key to decrypt
the hash result and message

Chapter 5
Figure 5.7 Public Key Cryptography with Digital Signatures

Chapter 5
Digital Envelopes
• Address weaknesses of:
• Public key cryptography
• Computationally slow, decreased transmission speed, increased
processing time
• Symmetric key cryptography
• Insecure transmission lines
• Uses symmetric key cryptography to encrypt document
• Uses public key cryptography to encrypt and send symmetric key

Chapter 5
Figure 4.8 Public Key Cryptography: Creating a Digital

Envelope

Chapter 5
Digital Certificates and Public Key Infrastructure (PKI)

• Digital certificate includes:
• Name of subject/company
• Subject’s public key
• Digital certificate serial number
• Expiration date, issuance date
• Digital signature of CA
• Public Key Infrastructure (PKI):
• CAs and digital certificate procedures
• PGP

Chapter 5
Figure 5.9 Digital Certificates and Certification Authorities

Chapter 5
Limitations of PKI
• Doesn’t protect storage of private key
• PKI not effective against insiders, employees
• Protection of private keys by individuals may be haphazard
• No guarantee that verifying computer of merchant is secure
• CAs are unregulated, self-selecting organizations

Chapter 5
Securing Channels of Communication

• Secure Sockets Layer (SSL)/Transport Layer Security (TLS)
• Establishes secure, negotiated client-server session
• Virtual Private Network (VPN)
• Allows remote users to securely access internal network
via the Internet
• Wireless (Wi-Fi) networks
• WPA2
• WPA3

Chapter 5
Figure 5.10 Secure Negotiated Sessions Using SSL/TLS

Chapter 5
Protecting Networks
• Firewall
• Hardware or software that uses security policy to filter
packets
• Packet filters
• Application gateways
• Next-generation firewalls
• Proxy servers (proxies)
• Software servers that handle all communications from or
sent to the Internet
• Intrusion detection systems
• Intrusion prevention systems

Chapter 5
Figure 5.11 Firewalls and Proxy Servers

Chapter 5
Protecting Servers and Clients

• Operating system security enhancements
• Upgrades, patches
• Anti-virus software
• Easiest and least expensive way to prevent threats to system integrity
• Requires daily updates

Chapter 5
Management Policies, Business Procedures, and Public

Laws
• Worldwide, companies spend more than $86 billion on security hardware,
software, services
• Managing risk includes:
• Technology
• Effective management policies
• Public laws and active enforcement

Chapter 5
A Security Plan: Management Policies

• Risk assessment
• Security policy
• Implementation plan
• Security organization
• Access controls
• Authentication procedures, including biometrics
• Authorization policies, authorization management systems
• Security audit

Chapter 5
Figure 5.12 Developing an E-commerce Security Plan

Chapter 5
The Role of Laws and Public Policy

• Laws that give authorities tools for identifying, tracing, prosecuting
cybercriminals:
• USA Patriot Act
• Homeland Security Act
• Private and private-public cooperation
• US-CERT
• CERT Coordination Center
• Government policies and controls on encryption software
• OECD, G7/G8, Council of Europe, Wassener Arrangement

Chapter 5
E-commerce Payment Systems

• In U.S., credit and debit cards are primary online payment methods
• Other countries have different systems
• Online credit card purchasing cycle
• Credit card e-commerce enablers
• Limitations of online credit card payment
• Security, merchant risk
• Cost
• Social equity

Chapter 5
Figure 5.14 How an Online Credit Card Transaction Works

Chapter 5
Alternative Online Payment Systems

• Online stored value systems:
• Based on value stored in a consumer’s bank,
checking, or credit card account
• Example: PayPal
• Other alternatives:
• Amazon Pay
• Visa Checkout, Mastercard’s MasterPass
• Dwolla

Chapter 5
Mobile Payment Systems

• Use of mobile phones as payment devices
• Established in Europe and Asia
• Expanding in United States
• Near field communication (NFC)
• Different types of mobile wallets
• Universal proximity mobile wallets, such as Apple Pay,
Google Pay, Samsung Pay, PayPal Mobile
• Branded store proximity wallets, offered by Walmart,
Target, Starbucks, others
• P2P mobile payment apps, such as Zelle, Venmo

Chapter 5
Blockchain
• Blockchain
• Enables organizations to create and verify transactions
nearly instantaneously using a distributed P2P database
(distributed ledger)
• Benefits:
• Reduces costs of verifying users, validating transactions,
and risks of storing and processing transaction
information
• Transactions cannot be altered retroactively and
therefore are more secure
• Foundation technology for cryptocurrencies and supply
chain management, as well as potential applications in
financial services and healthcare industries
Chapter 5
Figure 5.16 How Blockchain Works

Chapter 5
Cryptocurrencies
• Use blockchain technology and cryptography to create a purely digital
medium of exchange
• Bitcoin the most prominent example
• Value of Bitcoins have widely fluctuated
• Major issues with theft and fraud
• Some governments have banned Bitcoin, although it is gaining
acceptance in the U.S.
• Other cryptocurrencies (altcoins) include Ethereum/Ether, Ripple, Litecoin
and Monero
• Initial coin offerings (I C Os) being used by some startups to raise capital

Chapter 5
Electronic Billing Presentment and Payment (EBPP)

• Online payment systems for monthly bills
• Four EBPP business models:
• Online banking model (most widely used)
• Biller-direct (monthly telephone bill)
• Mobile
• Consolidator (third party)
• All models are supported by EBPP infrastructure providers

Chapter 5
Careers in E-commerce
• Position: Cybersecurity Threat Management Team Trainee
• Qualification/Skills
• Preparing for the Interview
• Possible Interview Questions

Chapter 5
Copyright E-commerce Security and Payment System

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E-commerce 2019: business. technology. society., 15e (Laudon/Traver)

Chapter 6 E-commerce Marketing and Advertising Concepts
1) Which of the following statements about Internet usage in the United States is not true?
A) In 2018, around 280 million people of all ages had access to the Internet.
B) In 2018, the growth in the number of new online users was less than 2%.
C) Over 90% of all U.S. Internet users access the Internet using a mobile device.
D) Adults in the 25-to-54-age group have the highest percentage of Internet use.
Answer: D
Difficulty: Moderate
AACSB: Application of knowledge
Learning Objective: 6.1: Understand the key features of the Internet audience, the basic concepts
of consumer behavior and purchasing, and how consumers behave online.
2) Research shows the two key factors shaping the decision to purchase online are utility and
trust.
Answer: TRUE
Difficulty: Easy
3) Which of the following is not one of the main stages of the online purchasing process?
A) post-purchase service and loyalty
B) awareness
C) engagement
D) conversation
Answer: D
4) What is the approximate Internet penetration rate for individuals that have attained less than a
high-school education?
A) 55%
B) 65%
C) 75%
D) 85%
Answer: B
Difficulty: Difficult
5) All of the following are online communications used to support the evaluation of alternatives
stages of the consumer decision process except:
A) search engines.
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B) online catalogs.
C) social networks.
D) targeted banner ads.
Answer: D
6) Approximately ________ of U.S. Internet usersresearch online but do not buy.

A) 7.7%
B) 12.7%
C) 15%
D) 19%
Answer: B
7) In modeling online consumer behavior, the concept of "consumer skills" refers to the:
A) education level of the consumer.
B) communication skills of the consumer.
C) knowledge consumers have about how to conduct online transactions.
D) product evaluation skills of the consumer.
Answer: C
8) A roughly equal percentage of men and women use the Internet today.
Answer: TRUE
9) Consumers choose the online channel primarily due to social media influence.
Answer: FALSE
10) Online traffic is driven by offline brands and shopping.

Answer: TRUE
Difficulty: Easy
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11) The majority of online shoppers find vendors by clicking on display ads.
Answer: FALSE
12) Which of the following online advertising formats attracted the least amount of spending in
2018?
A) search
B) classifieds
C) rich media
D) e-mail
Answer: D
Learning Objective: 6.2: Identify and describe the basic digital commerce marketing and
advertising strategies and tools.
13) Google introduced which of the following changes to its search algorithm to weed out low
quality sites from search results?
A) Penguin
B) Hummingbird
C) Panda
D) Knowledge Graph
Answer: C
14) Which of the following forms of online advertising is expected to grow the most between
2018 and 2022?
A) paid search
B) sponsorships
C) search engines
D) video
Answer: D
15) Which of the following is not one of the four main methods advertisers use to behaviorally
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target ads?
A) Nielsen ratings
B) data collected from social networks
C) integration of online data with offline data
D) clickstream data
Answer: A
16) Which of the following search engine algorithm updates targets websites that violate
Google’s guidelines?
A) Panda
B) Penguin
C) Hummingbird
D) Fred
Answer: D
17) Which of the following is not true about search engine advertising?
A) Spending on search engine advertising constitutes about 44% of all online advertising
spending.
B) The top three search engine providers supply over 95% of all online searches.
C) The click-through rate for search engine marketing has been fairly steady over the years.
D) Search engine advertising is the slowest growing type of online advertising.
Answer: D
18) Which of the following is not a practice that degrades the results and usefulness of search
engines?
A) social search
B) link farms
C) content farms
D) click fraud
Answer: A
19) Amazon's Associates program is an example of which of the following?

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A) viral marketing
B) local marketing
C) affiliate marketing
D) lead generation marketing
Answer: C
20) Ad blockers operate in a manner similar to which of the following?

A) anti-virus software
B) firewalls
C) Flash cookies
D) anonymous browsing
Answer: B
21) Which of the following is not a primary source of ad fraud?

A) browser extensions that insert ads into a premium publisher's website and then list the ads as
available on a programmatic ad exchange
B) ad targeting firms that create bots that imitate the behavior of real shoppers and then charge
advertisers
C) botnets hired by publishers to click on web pages to create phony traffic
D) native advertising that is displayed on a social media site
Answer: D
22) The percentage of all e-mail that is spam averaged around ________ in 2017.
A) 55%
B) 65%
C) 75%
D) 85%
Answer: A
23) Which of the following statements about CAN-SPAM is not true?

A) CAN-SPAM went into effect in January 2004.
B) CAN-SPAM prohibits unsolicited e-mail (spam).
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C) CAN-SPAM prohibits the use of deceptive subject lines and false headers.
D) Large spammers are among CAN-SPAM's biggest supporters.
Answer: B
24) Which of the following statements about Canada's anti-spam law is not true?
A) Canada's law is based on an opt-in model.
B) The law has no impact on companies located within the United States.
C) The first phase of the law went into effect in 2014.
D) The law applies to e-mail, texts, and social media messaging.
Answer: B
25) Which of the following is the most important tool in establishing a relationship with the
customer?
A) company website
B) company CRM system
C) Facebook
D) search engine display ads
Answer: A
26) All of the following are "traditional" online marketing tools except:
A) affiliate marketing.
B) e-mail and permission marketing.
C) social marketing.
D) sponsorship marketing.
Answer: C
27) All of the following are among those most frequently affected by ad-blocking except:
A) gaming sites.
B) newsgroup/forums.
C) social network sites.
D) online retailers.
Answer: D
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28) The Nike iD program is an example of which of the following marketing techniques?
A) customer co-production
B) transactive content
C) price discrimination
D) permission marketing
Answer: A
29) The incremental cost of building the next unit of a good is called the:
A) Law of One Price.
B) variable cost.
C) marginal cost.
D) fixed cost.
Answer: C
30) Which of the following statements about a free pricing strategy is false?
A) Free products and services can knock out potential and actual competitors.
B) The free pricing strategy was born in the early days of the Web.
C) It is difficult to convert free customers into paying customers.
D) Free products and services can help build market awareness.
Answer: B
31) Creating multiple variations of information goods and selling these to different market
segments at different prices is called:
A) bundling.
B) customization.
C) dynamic pricing.
D) versioning.
Answer: D
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32) All of the following are fixed price strategies except:

A) bundling.
B) versioning.
C) free pricing.
D) yield management.
Answer: D
33) Which of the following involves getting customers to pass along a company's marketing
message to friends, family, and colleagues?
A) affiliate marketing
B) viral marketing
C) native advertising
Answer: B
34) Group M, the world’s largest advertising buyer, requires which of the following in order for
an ad to be considered viewable?
A) 50% of the pixels must be in view for at least one second.
B) 50% of the pixels must be in view for at least two seconds.
C) 100% of the pixels must be in view for at least one second
D) 100% of the pixels must be in view for at least two seconds
Answer: C
35) Which of the following is based on the idea of complete price transparency in a perfect
information marketplace?
A) the Law of One Price
B) dynamic pricing
D) versioning
Answer: A
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36) Which of the following industries accounts for the highest percentage of spending on online
advertising?
A) financial services
B) retail
C) automotive
D) entertainment
Answer: B
37) Which of the following statements about native advertising is not true?
A) Native advertising’s share of mobile display ad revenues exceeds 75%.
B) Native advertising is a new form of advertising found only online.
C) Native advertising is growing rapidly, especially on social networks.
D) Consumers look at native ads much more frequently than display ads.
Answer: B
38) Which of the following is an automated, auction-based method for matching demand and
supply for online display ads?
A) retargeting
B) behavioral targeting
C) programmatic advertising
D) keyword advertising
Answer: C
39) Research has found that most of the ad impressions served across display advertising
platforms are not viewable.
Answer: TRUE
40) The highest amount of online advertising spending is for online video ads.
Answer: FALSE
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41) Evidence suggests that real-time customer chat increases the dollar value of transactions.
Answer: TRUE
42) Consumers tend to look at native ads more frequently than they look at display ads.
Answer: TRUE
43) Lead generation marketing firms specialize in inbound marketing.

Answer: TRUE
44) The top four display ad companies together account for almost 60% of U.S. display ad
revenues.
Answer: TRUE
45) The concept of "customer satisfaction" is broader than the concept of "customer experience."
Answer: FALSE
46) Bundling is the process of selling two or more products together for a price that is less than
the sum of the two product's individual prices.
Answer: TRUE
47) How are blogs being used for marketing?

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Answer: Blogs have been around for a decade and are a part of the mainstream online culture.
Around 30 million people write blogs, and around 84 million read blogs. Blogs play a vital role
in online marketing. Although more firms use Twitter and Facebook, these sites have not
replaced blogs, and in fact often point to blogs for long-form content. Because blog readers and
creators tend to be more educated, have higher incomes, and be opinion leaders, blogs are ideal
platforms for ads for many products and services that cater to this kind of audience. Because
blogs are based on the personal opinions of the writers, they are also an ideal platform to start a
viral marketing campaign. Advertising networks that specialize in blogs provide some efficiency
in placing ads, as do blog networks, which are collections of a small number of popular blogs,
coordinated by a central management team, and which can deliver a larger audience to
advertisers.
48) How do the Interactive Advertising Bureau’s new standard ad unit portfolio and guidelines
released in July 2017 differ from its earlier guidelines for display ads.
Answer: For many years, IAB categorized display ads based on fixed pixel sizes, such as a
medium rectangle (300 x 250 pixels), large rectangle (336 x 280 pixels), leaderboard (728 x 90
pixels), and half-page (300 x 600 pixels) (the top performing sizes, according to Google).
However, in July 2017, the IAB released the final version of its new standard ad unit portfolio,
based on aspect ratio and size range, rather than fixed pixel size, allowing for flexible sizing and
delivery of a more consistent ad experience across multiple screen sizes and devices. Ad types
are now identified as horizontal (typically placed at the top or bottom of the screen), vertical
(typically placed on the right or left edge of the screen), tiles (typically placed in a grid layout),
or full page (which cover the full screen of the device in either a portrait or landscape layout).
The guidelines are based on HTML5 technology and cover all types of display ads, as well as
new ad experiences such as augmented reality, virtual reality, 360-degree ads, and emoji ads,
among others. Another important aspect of the new guidelines is their incorporation of LEAN
principles. LEAN is an acronym that stands for lightweight, encrypted, AdChoices-supported,
and non-invasive advertising. In an attempt to enhance consumer acceptance of advertising, the
standard contains guidelines with respect to animations, ad expansions, close buttons, user
initiation, interstitials (ads that appear before, in-between, or after the primary content), video
and auto-play video and audio. LEAN also includes a list of disruptive ad experiences that are
no longer permitted, such as pop-up ads (ads that overlay or cover the content after the user has
started viewing the content), auto expansion (ads that expand without user initiation), auto-play
video with audio, and flashing animations.
AACSB: Analytical thinking; Information technology; Written and oral communication
49) Discuss the changes that Google has made to its search algorithms to improve search results
and user experience.
Answer: Google makes frequent changes to their search algorithms to improve search results
and user experience. Google, for instance, reportedly makes over 600 search engine changes in a
year. Most are small unannounced tweaks. Recent major changes have included Panda, Penguin,
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Hummingbird, Knowledge Graph, an unnamed algorithm that has been nicknamed

Mobilegeddon, and Possum. Panda was introduced in 2011 to weed out low quality sites from
search results. Those sites with thin content, duplicate content, content copied from elsewhere on
the Web, and content that did not attract high-quality hits from other sources were systematically
pushed down in the search results. Google introduced Penguin in 2012 to punish websites and
their SEO marketing firms who were manipulating links to their site in order to improve their
rankings. The Google search engine rewards sites that have links from many other sites. What
some marketers discovered is that Google could not tell the quality of these back links, and they
began to manufacture links by putting their clients onto list sites, creating multiple blogs to link
to their clients' site, and paying others to link to their clients' sites. Penguin evaluates the quality
of links to a site and pushes down in the rankings those sites that have poor-quality back links.
Google introduced Hummingbird in September 2013. Rather than evaluate each word separately
in a search, Google's semantically informed Hummingbird will try to evaluate an entire sentence.
Semantic search more closely follows conversational search, or search as you would ordinarily
speak it to another human being. Google introduced Knowledge Graph in 2012 as an effort to
anticipate what you might want to know more about as you search on a topic or answer questions
you might not thought of asking. Since 2013, results of Knowledge Graph appear on the right of
the screen and contain more information about the topic or person you are searching on. Not all
search terms have a Knowledge Graph result. Google displays information based on what other
users have searched for in the past, as well as its database on over 500 million objects (people,
places, and things), and some 18 billion facts. In 2015, Google released a new algorithm update
(nicknamed Mobilegeddon) that made the "mobile-friendliness" of websites a much stronger
ranking factor for mobile searches. Websites that are not optimized for mobile now have a much
lower ranking in mobile search results. Starting in November 2015, Google also began lowering
the search rank of mobile websites that display an ad that obscures the screen and asks users
whether they would like to install the site's mobile app, because such ads are less mobile-
friendly. In 2016, Google introduced Possum, an algorithm update that varies search results
based on the user's location; so, for example, the closer a user is to a business's address, the more
likely it is to appear among the local results. In 2017, Google released the Fred algorithm, which
targets websites that violate Google's guidelines, primarily blogs with low-value, ad-centered
content. Throughout 2018, Google also released several unnamed core algorithm updates, about
which it did not provide many details.
50) Which of the following would you implement to collect and analyze your company's big
data?
A) data warehouse
B) Hadoop
C) SQL
D) profiling
Answer: B
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Learning Objective: 6.3: Identify and describe the main technologies that support online
marketing.
51) Which of the following statements about the Internet's impact on marketing is not true?
A) The Internet has broadened the scope of marketing communications.
B) The Internet has decreased the impact of brands.
C) The Internet has increased the richness of marketing communications.
D) The Internet has expanded the information intensity of the marketplace.
Answer: B
marketing.
52) Which of the following features of e-commerce technology has reduced the cost of
delivering marketing messages and receiving feedback from users?
A) ubiquity
B) richness
C) information density
D) universal standards
Answer: D
marketing.
53) Which feature of e-commerce technology decreases the cost of delivering marketing
messages and receiving feedback from users?
A) personalization/customization
B) universal standards
C) ubiquity
D) interactivity
Answer: B
marketing.
54) The richness made possible by e-commerce technologies does which of the following?
A) It reduces the cost of delivering marketing messages and receiving feedback from users.
B) It allows consumers to become co-producers of the goods and services being sold.
C) It allows video, audio, and text to be integrated into a single marketing message and
consuming experience.
D) It enables worldwide customer service and marketing communications.
Answer: C
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marketing.
55) Which of the following is a Google algorithm update related to local search?
A) Penguin
B) Hummingbird
C) Panda
D) Possum
Answer: D
AACSB: Information technology
marketing.
56) All of the following statements about cookies are true except:
A) cookies can be used to create cross-site profiles of users.
B) the data typically stored in cookies includes a unique ID and e-mail address.
C) cookies make shopping carts possible by allowing a site to keep track of a user's actions.
D) the more cookies are deleted, the less accurate ad server metrics become.
Answer: B
marketing.
57) A web beacon is:

A) a cookie that carries a virus.
B) an executable cookie.
C) an automated applet for performing web searches.
D) a tiny graphics file embedded in an e-mail or web page.
Answer: D
Difficulty: Easy
marketing.
58) ________ is an open source database that can store and analyze both structured and
unstructured data.
A) ASP
B) PHP
C) Hadoop
D) JSP
Answer: C
Difficulty: Easy
marketing.
59) A ________ is a repository of customer information that records all contacts that a customer
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has with a firm and generates a customer profile available to everyone in the firm with a need to
know the customer.
A) customer service chat system
B) CRM system
C) data warehouse
D) transactive content system
Answer: B
Difficulty: Easy
marketing.
60) The marketing technique known as ________ involves merchants offering many products for
which there is little demand.
A) long tail marketing
B) flash marketing
C) yield management
D) bait-and-switch
Answer: A
marketing.
61) Which of the following provides web marketers with a very quick means of identifying a
customer and understanding his or her behavior at a site?
A) transaction logs
B) cookies
C) registration forms
D) data warehouses
Answer: B
marketing.
62) Transaction logs are built into client software.

Answer: FALSE
Difficulty: Easy
marketing.
63) Regular in-app cookies can be shared between apps.

Answer: FALSE
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marketing.
64) What are two methods being developed to track consumers across devices?
Answer: Two methods being developed to track consumers across devices are deterministic
cross-device tracking and probabilistic cross-device tracking. Deterministic cross-device tracking
relies on personally identifiable information such as e-mail address used to log into an app and
website on different devices. Facebook, Google, Apple, Twitter, and other companies that have
very large user bases and have both desktop and mobile properties that require logins are the
most likely to be able to effectively exploit deterministic matching.
Probabilistic cross-device tracking uses algorithms developed by vendors such as Drawbridge,

BlueCava, and Tapad to analyze thousands of anonymous data points, such as device type,
operating system, and IP address, to create a possible match. This type of matching is less
accurate than deterministic matching.
marketing.
65) What is big data and why are marketers interested in it?
Answer: Big data usually refers to very large data sets in the petabyte and exabyte range—in
other words, billions to trillions of records, often from different sources. Big data is produced in
much larger quantities and much more rapidly than traditional data collection mechanisms. Even
though tweets are limited to 140 characters each, Twitter generates more than eight terabytes of
data daily. According to the IDC technology research firm, data is more than doubling every two
years, so the amount of data available to organizations is skyrocketing. The next frontier will be
data derived from the Internet of Things (IoT). Making sense out of big data quickly to gain a
market advantage is critical.
Marketers are interested in big data because it allows them to link huge amounts of data from a
variety of different sources, which in the past they were unable to do, and mine if for patterns of
consumer behavior, with the potential to derive new insights into customer behavior, financial
market activity, or other phenomena. For instance, Evrythng, an IoT platform company, has
partnered with Trueffect, a digital ad firm, to develop ways that marketers can use data generated
by connected appliances and other devices to directly communicate with and target advertising
with consumers. However, to derive business value from this data, organizations need new
technologies and analytic tools capable of managing and analyzing nontraditional data along
with their traditional enterprise data.
marketing.
66) Discuss the revolution in Internet marketing technologies. What are the four main broad
impacts the Internet has had on marketing?
Answer: The Internet has had four broad impacts on marketing. First, the Internet as a
communications medium has broadened the scope of marketing. Marketing messages can now
easily reach a greater number of people. Second, the Internet has increased the richness of
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marketing communications by combining text, video, and audio content into rich messages.
Some even think that the Web is a richer medium than television or video because of the
complexity of messages and the huge amount of, and wide ranging, content that is available.
Third, the Internet has greatly expanded the information intensity of the marketplace by
providing marketers with fine-grained, detailed, real-time information about consumers as they
transact in the marketplace. Fourth, the always-on, always-attached, environment created by
mobile devices results in consumers being much more available to receive marketing messages.
One result is an extraordinary expansion in marketing opportunities for firms.
marketing.
67) What are web transaction logs, and how do they work in combination with registration
forms, shopping cart databases, and tracking files to help firms understand how customers
behave online?
Answer: Transaction logs, which are built into web server software, record user activity at a
website. Log file analysis tools cull information from these files, which can contain tens to
hundreds of entries for each user. Transaction log data becomes more useful when it is combined
with registration form data and shopping cart data. Registration forms and shopping cart database
are two other visitor generated data trails. Merchants use registration forms to gather personal
data such as the name, address, phone number, zip code, e-mail address, and other optional
information on the tastes and interests of the consumer. The shopping cart database captures all
the item selection, purchase, and payment data. The data from transaction logs, registration
forms, and the shopping cart database can also be combined with other information that users
submit on product forms, contribute in chat rooms, or submit via e-mail messages to a firm to
produce a veritable treasure trove of information for both individual merchant sites and for the
industry as a whole.
Although the transaction log represents the foundation of online data collection, it is
supplemented by the use of cookies that are placed on a user's hard drive when he or she visits a
site. Cookies allow a website to store data on a user's machine that can be retrieved later. Cookies
provide marketers with a very quick means to identify each customer and to understand his or
her prior behavior at the site. Cookies can be used to determine how many people are visiting a
site, how many are repeat visitors, and how often they have visited. They also make shopping
cart and quick checkout possible by allowing a site to keep track of a user as he or she adds to
the shopping cart. Cookies can be combined with web bugs to create cross-site profiles. Web
beacons (sometimes called web bugs) are graphic files that are embedded in e-mails and on
websites. When a user opens an HTML format e-mail with an embedded web beacon, a request
is sent to the server for the graphic data. Web beacons are used to automatically transmit
information about the user and the page being viewed to a monitoring server to collect personal
browsing behavior and other personal information.
marketing.
68) Define and describe the functionality of customer relationship management (CRM) systems.
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Answer: Customer relationship management systems are an important Internet marketing

technology. They serve as repositories for customer information that records all of the contacts a
customer has with a firm including its website. CRM systems can generate a profile of each
customer that is available to everyone in the firm who requests the data and they contain
analytical software that will make this data valuable to the firm.
In the past, firms generally did not maintain a single storehouse of customer information, and
any customer data was organized along product lines with each product line maintaining a
separate customer list. CRMs are part of the evolution towards customer-centric and segmented
market-based businesses, and away from this product-based model.
CRMs use database technology with capabilities for assessing the needs of individual customers
and differentiating products to meet those needs. The customer profiles generated by a CRM can
include a map of the customer's relationship with the firm, the products he or she has bought and
the frequency of purchases, the demographic and psychographic profile for each customer,
profitability measures, a complete contact history, and marketing and sales information
containing marketing campaigns that the customer received and the customer's responses to
them.
With these profiles, CRMs can be used to sell additional products and services, develop new
products, increase product utilization, reduce marketing costs, identify and retain profitable
customers, optimize service delivery costs, retain high lifetime value customers, enable personal
communications, improve customer loyalty, and increase product profitability.
marketing.
69) If you want to determine the size of your website's audience, the metric you will use for the
most accurate measurement will be:
A) page views.
B) unique visitors.
C) hits.
D) reach.
Answer: B
Learning Objective: 6.4: Understand the costs and benefits of online marketing communications.
70) Cross-platform attribution refers to:

A) how to assign credit to different marketing initiatives.
B) understanding why visitors to a website purchase a product.
C) understanding how impressions lead to visits.
D) understanding why people click on ads.
Answer: A
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71) VTR measures the ________ response rate to an ad.

A) 30-minute
B) 24-hour
C) 7-day
D) 30-day
Answer: D
72) Uber has been criticized for using which of the following?
A) flash marketing
B) bundling
C) surge pricing
D) freemium
Answer: C
73) What kinds of ads have the lowest CTR?

A) video ads
B) e-mails to an in-house list
C) social network display ads
D) banner display ads
Answer: D
74) Purchasing an online ad on a CPA basis means that the advertiser:

A) pays for impressions in 1,000 unit lots.
B) pays a pre-negotiated fee for each click an ad receives.
C) pays only for those users who perform a specific action, such as registering, purchasing, etc.
D) exchanges something of equal value for the ad space.
Answer: C
75) eCPM measures the ROI of an ad by dividing the total earnings of the ad by which of the
following?
A) the total number of impressions
B) the total number of impressions in hundreds
C) the total number of impressions in thousands
D) the total number of impressions in millions
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Answer: C
76) Which of the following measures the average length of stay at a website?
A) loyalty
B) stickiness
C) page views
D) retention rate
Answer: B
77) Acquisition rate is a measure of the:

A) percentage of visitors who indicate an interest in a site's products by registering or visiting a
product's pages.
B) percentage of visitors who become customers.
C) percentage of existing customers who continue to buy on a regular basis.
D) percentage of shoppers who do not return within a year after their initial purchase.
Answer: A
78) Recency refers to the:

A) percentage of customers who do not return during the next year after an initial purchase.
B) time elapsed since the last visit made by a customer.
D) percentage of customers who return to the site within a year to make additional purchases.
Answer: B
79) View-to-cart ratio is a measure of the:

product's pages.
B) percentage of views that lead to an add-to-cart action.
Answer: B
80) Which of the following measures the ratio of items purchased to product views?
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A) conversion rate
B) cart conversion rate
C) browse-to-buy ratio
D) view-to-cart ratio
Answer: C
81) Which of the following measures the percentage of e-mails that could not be delivered?
A) abandonment rate
B) unsubscribe rate
C) bounce-back rate
D) attrition rate
Answer: C
82) Which of the following is the most meaningful metric for video ads?
A) view time
B) CTR
C) completion rate
D) skip rate
Answer: C
83) Which of the following measures the percentage of times an ad is clicked?

A) retention rate
B) CTR
C) loyalty rate
D) conversion rate
Answer: B
84) What is cross-platform attribution and why is it difficult?

Answer: Cross-platform attribution involves understanding how to assign appropriate credit to
different marketing initiatives on a variety of platforms that may have influenced a consumer
along the way to an ultimate purchase. There is increasing recognition that first-click and last-
click models that focus on either the first or last marketing channel or advertising format that a
consumer engages with prior to a purchase, are not sufficient. Cross-platform attribution is
difficult because there is a lengthy path from simple online ad impressions, website visits, and
page views to the purchase of a product.
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85) What is marketing analytics software and what is it used for?

Answer: Marketing analytics software is a software package that collects, stores, analyzes, and
graphically presents data on each of the stages in the conversion of shopper to customer process
on e-commerce sites. Marketing analytics packages help business managers optimize the return
on investment on their websites and social marketing efforts, by building a detailed
understanding of how consumers behave when visiting their websites. They help analyze where
customers come from, what they do on the site, and which content is most appealing, as well as
how users shop and add to their shopping cart, and whether they abandon their shopping cart.
Marketing analytics also allows managers to measure the impact of specific marketing
campaigns.
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Chapter 6
E-commerce Marketing & Advertising

Chapter 6
E-commerce Marketing &

Advertising
Faculty of Information Systems

Chapter 6
Learning Objectives
6.1 Understand the key features of the Internet audience, the basic concepts of consumer
behavior and purchasing, and how consumers behave online.
6.2 Identify and describe the basic digital commerce marketing and advertising strategies
and tools.
6.3 Identify and describe the main technologies that support online marketing.
6.4 Understand the costs and benefits of online marketing communications.

Chapter 6
Consumers Online: The Internet Audience and Consumer

Behavior (1 of 3)
• Around 280 million in the U.S. have Internet access in 2018
• Growth rate has slowed
• Intensity and scope of use both increasing
• Some demographic groups have much higher percentages of
online usage
• Income, education, age, ethnic dimensions
• In Vietnam, there are 64 million Internet users in 2019 (66% of
the population).

Chapter 6

Behavior (2 of 3)
• Broadband and mobile
• Significant inequalities in broadband access
• Older adults, lower income, lower educational levels
• Non-broadband household still accesses Internet via mobile or
other locations
• In Vietnam, Internet broadband subscriptions are 13 millions, and
mobile broadband subscriptions are 52,8 millions.
• Community effects
• Role of social emulation in consumption decisions
• “Connectedness”
• Top 10-15% are more independent
• Middle 50% share more purchase patterns of friends
• Recommender systems - co-purchase networks
Chapter 6

Behavior (3 of 3)
• Consumer behavior models
• Study of consumer behavior; social science discipline
• Attempt to predict or explain wide range of consumer
decisions
• Based on background demographic factors and other
intervening, more immediate variables
• Profiles of online consumers
• Consumers shop online primarily for convenience

Chapter 6
Figure 6.1 A General Model of Consumer Behavior

Chapter 6
The Online Purchasing Decision (1 of 2)

• Five stages in consumer decision process
• Awareness of need
• Search for more information
• Evaluation of alternatives
• Actual purchase decision
• Post-purchase contact with firm

Chapter 6
Figure 6.2 The Consumer Decision Process and Supporting

Communications

Chapter 6
The Online Purchasing Decision (2 of 2)

• Decision process similar for online and offline behavior
• General online behavior model
• User characteristics
• Product characteristics
• Website features: latency, usability, security
• Attitudes toward online purchasing
• Perceptions about control over Web environment
• Clickstream behavior

Chapter 6
Figure 6.3 A Model of Online Consumer Behavior

Chapter 6
Shoppers: Browsers and Buyers

• Shoppers: Over 90% of Internet users
• Around 80% are buyers
• Around 13% are browsers (purchase offline)
• Online research influenced about $2.6 trillion of retail purchases in 2017
• Online traffic also influenced by offline brands and shopping
• E-commerce and traditional commerce are coupled: Part of a continuum of
consuming behavior.

Chapter 6
How Consumers Shop

• How shoppers find online vendors
• Highly intentional, goal-oriented
• Search engines
• Marketplaces (Amazon, eBay)
• Specific retail site
• About 8% of Internet users don’t shop online
• Trust factor
• Hassle factors (shipping costs, returns, etc.)

Chapter 6
Trust, Utility, and Opportunism in Online Markets

• Two most important factors shaping decision to purchase online:
• Utility:
• Better prices, convenience, speed
• Trust:
• Perception of credibility, ease of use, perceived risk
• Sellers develop trust by building strong reputations for honesty,
fairness, delivery

Chapter 6
Digital Commerce Marketing and Advertising: Strategies and

Tools
• Features of Internet marketing (v s traditional)
ersu
• More personalized
• More participatory
• More peer-to-peer
• More communal
• The most effective Internet marketing has all four features

Chapter 6
Multi-Channel Marketing Plan

• Website
• Traditional online marketing
• Search engine, display, e-mail, affiliate
• Social marketing
• Social networks, blogs, video, game
• Mobile marketing
• Mobile/tablet sites, apps
• Offline marketing
• Television, radio, newspapers

Chapter 6
Strategic Issues and Questions

• Which part of the marketing plan should you focus on first?
• How do you integrate the different platforms for a coherent
message?
• How do you allocate resources?
• How do you measure and compare metrics from
different platforms?
• How do you link each to sales revenues?

Chapter 6
Establishing the Customer Relationship

• Website functions to:
• Establish brand identity and customer expectations
• Differentiating product
• Anchor the brand online
• Central point for all marketing messages
• Inform and educate customer
• Shape customer experience

Chapter 6
Online Marketing and Advertising

• Online advertising
• Display, search, mobile messaging, sponsorships, classifieds, lead
generation, e-mail
• Advantages:
• 18-34 audience is online
• Ad targeting to individuals
• Price discrimination
• Personalization

Chapter 6
Traditional Online Marketing and Advertising Tools

• Search engine marketing and advertising
• Display ad marketing
• E-mail marketing
• Affiliate marketing
• Viral marketing
• Lead generation marketing

Chapter 6
Search Engine Marketing and Advertising (1 of 2)

• Search engine marketing (SEM)
• Use of search engines for
branding
• Search engine advertising
• Use of search engines to
support direct sales
• Types of search engine advertising
• Paid inclusion
• Pay-per-click (PPC) search ads
• Keyword advertising
• Network keyword advertising
(context advertising)

Chapter 6
Search Engine Marketing and Advertising (2 of 2)

• Search engine optimization (SEO)
• Google search engine algorithms
• Social search
• Utilizes social contacts and social graph to provide fewer and more
relevant results
• Search engine issues
• Paid inclusion and placement practices
• Link farms, content farms
• Click fraud

Chapter 6
Display Ad Marketing (1 of 2)
• Banner ads
• Rich media ads
• Interstitial ads
• Video ads
• Far more effective than
other display formats
• Sponsorships
• Native advertising

Chapter 6
Display Ad Marketing (2 of 2)
• Content marketing
• Advertising networks
• Ad exchanges, programmatic advertising, and real-time bidding (RTB)
• Display advertising issues
• Ad fraud
• Viewability
• Ad blocking

Chapter 6
Figure 6.6 How an Advertising Network Works

Chapter 6
E-mail Marketing
• Direct e-mail marketing
• Messages sent directly to interested users
• Benefits include
• Inexpensive
• Average around 3% to 4% click-throughs
• Measuring and tracking responses
• Personalization and targeting
• Three main challenges
• Spam
• Anti-spam software
• Poorly targeted purchased e-mail lists

Chapter 6
Spam
• Unsolicited commercial e-mail
• Around 55% of all e-mail in 2017
• Most originates from bot networks
• Efforts to control spam have largely failed:
• Government regulation (CAN - SPAM)
• State laws
• Voluntary self-regulation by industries (DMA)
• Canada’s stringent anti-spam laws

Chapter 6
Other Types of Traditional Online Marketing

• Affiliate marketing
• Commission fee paid to other websites for sending customers to their
website
• Viral marketing
• Marketing designed to inspire customers to pass message to others
• Lead generation marketing
• Services and tools for collecting, managing, and converting leads

Chapter 6
Social, Mobile, and Local Marketing and Advertising

• Social marketing and advertising
• Use of online social networks and communities
• Mobile marketing and advertising
• Use of mobile platform
• Influence of mobile apps
• Local marketing
• Geotargeting
• Display ads in hyperlocal publications
• Coupons

Chapter 6
Multi-Channel Marketing
• Integration of online and offline marketing
• Increasing percentage of American media consumers use several media at
once
• Reinforce branding messages across media
• Most effective multi-channel campaigns use consistent imagery across
media

Chapter 6
Insight on Business: Are the Very Rich Different from You and
Me?
• What distinguishes luxury marketing from ordinary retail marketing?
• What challenges do luxury retailers have in translating their brands and
the look and feel of luxury shops into Web sites?
• How has social media affected luxury marketing?
• Visit the Net-a-Porter website. What do you find there?

Chapter 6
Other Online Marketing Strategies

• Customer retention strategies
• One-to-one marketing (personalization)
• Behavioral targeting (interest-based advertising)
• Retargeting
• Customization and customer co-production
• Customer service
• FAQs
• Real-time customer service chat systems
• Automated response systems

Chapter 6
Pricing Strategies (1 of 2)
• Pricing: integral part of marketing strategy
• Traditional pricing based on fixed costs, variable costs, demand curve
• Marginal costs
• Marginal revenue
• Piggyback strategy
• Price discrimination

Chapter 6
Pricing Strategies (2 of 2)
• Free and freemium
• Versioning
• Bundling
• Dynamic pricing
• Auctions
• Yield management
• Surge pricing
• Flash marketing

Chapter 6
Long Tail Marketing

• Internet allows for sales of obscure products with little demand
• Substantial revenue because
• Near zero inventory costs
• Little marketing costs
• Search and recommendation engines

Chapter 6
Insight on Technology: The Long Tail: Big Hits and Big Misses
• What are recommender systems? Give an example of one you have
used.
• What is the Long Tail and how do recommender systems support sales
of items in the Long Tail?
• How can human editors, including consumers, make recommender
systems more helpful?

Chapter 6
Internet Marketing Technologies

• Internet’s main impacts on marketing:
• Scope of marketing communications broadened
• Richness of marketing communications increased
• Information intensity of marketplace expanded
• Always-on mobile environment expands marketing opportunities

Chapter 6
Web Transaction Logs

• Built into web server software
• Record user activity at website
• Provides much marketing data, especially combined with:
• Registration forms
• Shopping cart database
• Answers questions such as:
• What are major patterns of interest and purchase?
• After home page, where do users go first? Second?

Chapter 6
Cookies and Tracking Files

• Types of tracking files
• Cookies
• Flash cookies
• Web beacons (“bugs”)
• Tracking headers (supercookies)
• Other tracking methods
• Deterministic cross-device tracking
• Probabilistic cross-device tracking

Chapter 6
Databases
• Enable profiling
• Store records and attributes
• Database management system (DBMS):
• SQL (Structured Query Language):
• Industry-standard database query and manipulation language used in
a relational database
• Relational databases

Chapter 6
Data Warehouses and Data Mining

• Data warehouse:
• Collects firm’s transactional and customer data in single
location for offline analysis by marketers and site managers
• Data mining:
• Analytical techniques to find patterns in data, model behavior
of customers, develop customer profiles
• Query-driven data mining
• Model-driven data mining
• Rule-based data mining

Chapter 6
Hadoop and the Challenge of Big Data

• Big data
• Petabyte, exabyte range
• Web traffic, e-mail, social media, content
• Traditional DBMS unable to process the increasing volume of data
• Hadoop
• Open-source software framework
• Processes any type of data, even unstructured
• Distributed processing

Chapter 6
Marketing Automation and Customer Relationship Management

(CRM) Systems
• Marketing automation systems
• Track steps in lead generation
• CRM systems
• Manage relationship with customers once purchase is
made
• Create customer profiles
• Customer data used to:
• Develop and sell additional products
• Identify profitable customers
• Optimize service delivery, and so on

Chapter 6
Figure 6.9 A Customer Relationship Management System

Chapter 6
Online Marketing Metrics: Lexicon

• Audience size/market share metrics
• Impressions, click-through rate (CTR), page views,
viewability rate, stickiness, loyalty, reach, recency
• Conversion to customer metrics
• Acquisition rate, conversion rate, browse-to-buy ratio, cart
conversion rate, abandonment rate
• Video ad metrics
• View time, completion rate
• E-mail campaign metrics
• Open rate, delivery rate, click-through rate, bounce-back
rate

Chapter 6

Chapter 6
Figure 6.10 An Online Consumer Purchasing Model

Chapter 6
How Well Does Online Advertising Work?

• Use ROI to measure ad campaign
• Difficulty of cross-platform attribution
• Highest click-through rates: Search engine ads, permission
e-mail campaigns
• Online channels compare favorably with traditional
• Most powerful marketing campaigns use multiple channels,
including online, catalog, TV, radio, newspapers, stores

Chapter 6
The Costs of Online Advertising

• Pricing models
• Barter, cost per thousand (CPM), cost per click (CPC), cost per action
(CPA), hybrid, sponsorship
• Measuring issues
• Correlating online marketing to online or offline sales
• In general, online marketing is more expensive on CPM basis, but more
efficient in producing sales
• Effective cost-per-thousand (eCPM)

Chapter 6
Marketing Analytics
• Software that analyzes data at each stage of the customer
conversion process
• Awareness
• Engagement
• Interaction
• Purchase activity
• Loyalty and post-purchase
• Helps managers
• Optimize ROI on website and marketing efforts
• Build detailed customer profiles
• Measure impact of marketing campaigns

Chapter 6
Figure 6.11 Web Analytics and the Online Purchasing Process

Chapter 6
• Position: Digital Marketing Assistant

Chapter 6
Copyright E-commerce Marketing & Advertising

Chapter 7
Social, Mobile, and Local Marketing

Chapter 7
Social, Mobile and Local

Marketing

Chapter 7
Learning Objectives
7.1 Understand the difference between traditional online marketing and the new
social-mobile-local marketing platforms and the relationships between social,
mobile, and local marketing.
7.2 Understand the social marketing process from fan acquisition to sales and the
marketing capabilities of social marketing platforms such as Facebook, Twitter, and
Pinterest.
7.3 Identify the key elements of a mobile marketing campaign.
7.4 Understand the capabilities of location-based local marketing.

Chapter 7
Pinterest Expands Around the Globe

• Do you use Pinterest and if so, how often? What are your main
interests? What has the experience been like? Have you used any
other curation sites? If so, how do they compare to Pinterest?
• Have you purchased anything based on a pin or board on Pinterest or
any other curation site?
• Why do you think Pinterest links drive more purchasing than Facebook
links?

Chapter 7
Introduction to Social, Mobile, and Local Marketing

• New marketing concepts
• Conversations
• Engagement
• Impact of smartphones and tablets
• Social-mobile-local nexus
• Strong ties between consumer use of social networks,
mobile devices, and local shopping

Chapter 7
Figure 7.3 Online Marketing Platforms

Chapter 7
Social Marketing
• Traditional online marketing goals
• Deliver business message to the most consumers
• Social marketing goals
• Encourage consumers to become fans and engage
and enter conversations
• Strengthen brand by increasing share of online
conversation

Chapter 7
Social Marketing Players

• The most popular sites account for over 90% of all social network visits
• Facebook, Twitter, LinkedIn, Pinterest, Instagram, Snapchat, Tumblr
• Unique visitors v s engagement
ersu
• Engagement measures the amount and intensity of user

involvement
• Facebook dominates in both measures
• Dark social - sharing outside of major social networks (e-mail, IM,
texts, etc.)

Chapter 7
Figure 7.4 The Social Marketing Process

Chapter 7
Facebook Marketing
• Basic Facebook features
• News Feed
• Timeline (Profile)
• Search
• Social density of audience is magnified
• Facebook is largest repository of deeply personal information
• Facebook geared to maximizing connections between users

Chapter 7

Chapter 7
Facebook Marketing Tools

• Reactions Buttons
• Brand Pages
• News Feed Page Post Ads
• Right-Hand Column Sidebar Ads
• Facebook Live
• Facebook Watch
• Video Ads
• Mobile Ads
• Facebook Messenger
• Facebook Exchange (FBX)

Chapter 7
Typical Facebook Marketing Campaign

• Establish Facebook brand page
• Use comment and feedback tools to develop fan comments
• Develop a community of users
• Encourage brand involvement through video, rich media, contests
• Use display ads for other Facebook pages and social search
• Display Like button liberally

Chapter 7
Measuring Facebook Marketing Results

• Basic metrics:
• Fan acquisition (impressions)
• Engagement (conversation rate)
• Amplification (reach)
• Community
• Brand strength/sales
• Facebook analytics tools
• Facebook Page Insights
• Social media management systems (HootSuite)
• Analytics providers (Google Analytics, Webtrends)

Chapter 7

Chapter 7
Marketing on Other Social Networks

• Instagram
• Brand profiles, ad campaigns (display and video), Buy buttons,
Marquee ads
• Snapchat
• Snapchat Stories, Live Stories, Discover, Snap Ads, Sponsored
Geofilters, Sponsored Lenses
• LinkedIn
• Company profiles, showcase pages, Career Page, Display ads
(Feeds), self-service ads or Advertising Partner Solutions, sponsored
inMail, LinkedInPulse

Chapter 7
The Downside of Social Marketing

• Loss of control
• Where ads appear in terms of other content
• What people say
• Posts
• Comments
• Inaccurate or embarrassing material
• In contrast, TV ads maintain near complete control

Chapter 7
Mobile Marketing
• Over 255 million Americans use a mobile device for Internet access
• Devices used multiple times per day
• By 2021, m-commerce will account for more than 50% of all retail and
travel e-commerce.
• Challenges: Mobile search
• Motivating consumers to click
• Raising fees for each click

Chapter 7
Figure 7.5 The Growth of M-commerce

Chapter 7
How People Actually Use Mobile Devices

• Average of over three and a half hours daily on mobile
devices
• Over 55% entertainment
• Over 20% social networks
• Almost 70% occur in home
• Activities are similar to desktop activities
• Rapidly growing smartphone m-commerce sales
• Mobile devices currently used more for communicating
and entertainment than for shopping and buying

Chapter 7
In-App Experiences and Ads

• Mobile use
• Smartphone apps-70% of total time using mobile apps
• Over 90% of app time spent on user’s top 5 apps
• Users use about 20 apps/month.
• App marketing
• Most effective are in-app ads
• Placed in most popular apps
• Targeted to immediate activities and interests

Chapter 7
How the Multi-Screen Environment Changes the Marketing

Funnel
• Consumers becoming multi-platform
• Desktops, smartphones, tablets, TV
• 90% of multi-device users use multiple devices to
complete a specific action
• View ad on TV, search on smartphone, purchase
on tablet
• Marketing implications
• Consistent branding
• Responsive design
• Increased complexity, costs

Chapter 7
Mobile Marketing Features

• Mobile marketing almost 70% of all online marketing
• Dominant players are Google, Facebook
• Mobile device features
• Personal communicator and organizer
• Screen size and resolution
• GPS location
• Web browser
• Apps
• Ultraportable and personal
• Multimedia capable
• Touch/haptic technology

Chapter 7
Mobile Marketing Tools: Ad Formats

• Mobile marketing formats
• Search ads
• Display ads
• Video
• Text/video messaging
• Other: e-mail, classifieds, lead generation
• Mobile interface versions of social network techniques

Chapter 7
Figure 7.9 U.S. Mobile Ad Spending by Format

Chapter 7
Mobile Marketing Campaigns

• Mobile website
• Facebook and Twitter brand pages
• Mobile versions of display advertising campaigns
• Ad networks
• Interactive content aimed at mobile user
• Tools for measuring responses
• Key dimensions follow desktop and social marketing metrics

Chapter 7
Figure 7.10 Measuring the Effectiveness of a Mobile and Social Marketing

Branding Campaign

Chapter 7
Local and Location-Based Marketing

• Location-based marketing
• Targets messages to users based on location
• Marketing of location-based services
• Location-based services
• Provide services to users based on location
• Personal navigation
• Point-of-interest
• Reviews
• Friend-finders, family trackers
• Consumers have high likelihood of responding to local ads

Chapter 7
The Growth of Local and Location-Based Mobile Marketing

• Prior to 2005, nearly all local advertising was non-digital
• Google Maps (2005)
• Enabled targeting ads to users based on IP address and general
geographic location
• Smartphones, Google’s mobile maps app (2007)
• Enabled targeting ads based on GPS
• Location-based mobile marketing
• Expected to triple over next five years

Chapter 7
Figure 7.11 Location-Based Mobile Marketing in Perspective

Chapter 7
Location-Based Marketing Platforms

• Google
• Android OS, Google Maps, Google Places, AdMob, AdWords
• Facebook
• Oath
• Twitter

Chapter 7
Location-Based Mobile Marketing Technologies

• Two types of location-based marketing techniques
• Geo-aware techniques
• Identify location of user’s device and target ads, recommending actions within
reach
• Proximity marketing
• Identify a perimeter around a location and target ads and recommendations
within that perimeter
• Identifying locations
• GPS signals
• Cell-tower locations
• Wi-Fi locations

Chapter 7
Why is Local Mobile Attractive to Marketers?

• Mobile users more active, ready to purchase than
desktop users
• Over 80% of U.S. consumers use mobile devices to
search for local products, services
• 50% of smartphone users visit a store within 1 day of
local search
• 18% of smartphone users make a purchase

Chapter 7
Location-Based Marketing Tools

• Geo-social-based services marketing
• Location-based services marketing
• Mobile-local social network marketing
• Proximity marketing
• In-store messaging
• Location-based app messaging

Chapter 7
Location-Based Marketing Campaigns

• Location-based considerations
• Action-based, time-restrained offers and opportunities
• Target demographic and location-aware mobile user demographics
• Strategic analysis of marketspaces
• Measuring marketing results
• Same measures as mobile and Web marketing
• Metrics for unique characteristics
• Inquire
• Reserve
• Click-to-call
• Friend
• Purchase

Chapter 7

Chapter 7
• Position: Social Media Associate

Chapter 7
Copyright

lOMoARcPSD|16057205

lOMoARcPSD|16057205

1) Which of the following statements about Internet usage in the United States is not true?
A) In 2018, around 280 million people of all ages had access to the Internet.
B) In 2018, the growth in the number of new online users was less than 2%.
C) Over 90% of all U.S. Internet users access the Internet using a mobile device.
D) Adults in the 25-to-54-age group have the highest percentage of Internet use.
Answer: D
2) Research shows the two key factors shaping the decision to purchase online are utility and
trust.
Answer: TRUE
Difficulty: Easy
B) awareness
C) engagement
D) conversation
Answer: D
4) What is the approximate Internet penetration rate for individuals that have attained less than a
high-school education?
A) 55%
B) 65%
C) 75%
D) 85%
Answer: B
5) All of the following are online communications used to support the evaluation of alternatives
stages of the consumer decision process except:
A) search engines.
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B) online catalogs.
C) social networks.
Answer: D
6) Approximately ________ of U.S. Internet usersresearch online but do not buy.

A) 7.7%
B) 12.7%
C) 15%
D) 19%
Answer: B
Answer: C
8) A roughly equal percentage of men and women use the Internet today.
Answer: TRUE
9) Consumers choose the online channel primarily due to social media influence.
Answer: FALSE

Answer: TRUE
Difficulty: Easy
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Answer: FALSE
2018?
A) search
B) classifieds
C) rich media
D) e-mail
Answer: D
13) Google introduced which of the following changes to its search algorithm to weed out low
quality sites from search results?
A) Penguin
B) Hummingbird
C) Panda
D) Knowledge Graph
Answer: C
14) Which of the following forms of online advertising is expected to grow the most between
2018 and 2022?
A) paid search
B) sponsorships
C) search engines
D) video
Answer: D
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target ads?
A) Nielsen ratings
D) clickstream data
Answer: A
16) Which of the following search engine algorithm updates targets websites that violate
Google’s guidelines?
A) Panda
B) Penguin
C) Hummingbird
D) Fred
Answer: D
A) Spending on search engine advertising constitutes about 44% of all online advertising
spending.
D) Search engine advertising is the slowest growing type of online advertising.
Answer: D
engines?
A) social search
B) link farms
C) content farms
D) click fraud
Answer: A

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A) viral marketing
B) local marketing
Answer: C
20) Ad blockers operate in a manner similar to which of the following?

B) firewalls
C) Flash cookies
Answer: B

A) browser extensions that insert ads into a premium publisher's website and then list the ads as
advertisers
C) botnets hired by publishers to click on web pages to create phony traffic
Answer: D
22) The percentage of all e-mail that is spam averaged around ________ in 2017.
A) 55%
B) 65%
C) 75%
D) 85%
Answer: A

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Answer: B
Answer: B
customer?
A) company website
C) Facebook
Answer: A
Answer: C
A) gaming sites.
Answer: D
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Answer: A
B) variable cost.
C) marginal cost.
D) fixed cost.
Answer: C
Answer: B
A) bundling.
B) customization.
C) dynamic pricing.
D) versioning.
Answer: D
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A) bundling.
B) versioning.
C) free pricing.
Answer: D
B) viral marketing
Answer: B
34) Group M, the world’s largest advertising buyer, requires which of the following in order for
an ad to be considered viewable?
A) 50% of the pixels must be in view for at least one second.
B) 50% of the pixels must be in view for at least two seconds.
C) 100% of the pixels must be in view for at least one second
D) 100% of the pixels must be in view for at least two seconds
Answer: C
B) dynamic pricing
D) versioning
Answer: A
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advertising?
B) retail
C) automotive
D) entertainment
Answer: B
A) Native advertising’s share of mobile display ad revenues exceeds 75%.
Answer: B
A) retargeting
Answer: C
39) Research has found that most of the ad impressions served across display advertising
platforms are not viewable.
Answer: TRUE
Answer: FALSE
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Answer: TRUE
Answer: TRUE

Answer: TRUE
44) The top four display ad companies together account for almost 60% of U.S. display ad
revenues.
Answer: TRUE
Answer: FALSE
Answer: TRUE
47) How are blogs being used for marketing?

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Answer: Blogs have been around for a decade and are a part of the mainstream online culture.
Around 30 million people write blogs, and around 84 million read blogs. Blogs play a vital role
in online marketing. Although more firms use Twitter and Facebook, these sites have not
replaced blogs, and in fact often point to blogs for long-form content. Because blog readers and
creators tend to be more educated, have higher incomes, and be opinion leaders, blogs are ideal
platforms for ads for many products and services that cater to this kind of audience. Because
blogs are based on the personal opinions of the writers, they are also an ideal platform to start a
viral marketing campaign. Advertising networks that specialize in blogs provide some efficiency
in placing ads, as do blog networks, which are collections of a small number of popular blogs,
coordinated by a central management team, and which can deliver a larger audience to
advertisers.
48) How do the Interactive Advertising Bureau’s new standard ad unit portfolio and guidelines
released in July 2017 differ from its earlier guidelines for display ads.
Answer: For many years, IAB categorized display ads based on fixed pixel sizes, such as a
medium rectangle (300 x 250 pixels), large rectangle (336 x 280 pixels), leaderboard (728 x 90
pixels), and half-page (300 x 600 pixels) (the top performing sizes, according to Google).
However, in July 2017, the IAB released the final version of its new standard ad unit portfolio,
based on aspect ratio and size range, rather than fixed pixel size, allowing for flexible sizing and
delivery of a more consistent ad experience across multiple screen sizes and devices. Ad types
are now identified as horizontal (typically placed at the top or bottom of the screen), vertical
(typically placed on the right or left edge of the screen), tiles (typically placed in a grid layout),
or full page (which cover the full screen of the device in either a portrait or landscape layout).
The guidelines are based on HTML5 technology and cover all types of display ads, as well as
new ad experiences such as augmented reality, virtual reality, 360-degree ads, and emoji ads,
among others. Another important aspect of the new guidelines is their incorporation of LEAN
principles. LEAN is an acronym that stands for lightweight, encrypted, AdChoices-supported,
and non-invasive advertising. In an attempt to enhance consumer acceptance of advertising, the
standard contains guidelines with respect to animations, ad expansions, close buttons, user
initiation, interstitials (ads that appear before, in-between, or after the primary content), video
and auto-play video and audio. LEAN also includes a list of disruptive ad experiences that are
no longer permitted, such as pop-up ads (ads that overlay or cover the content after the user has
started viewing the content), auto expansion (ads that expand without user initiation), auto-play
video with audio, and flashing animations.
49) Discuss the changes that Google has made to its search algorithms to improve search results
and user experience.
Answer: Google makes frequent changes to their search algorithms to improve search results
and user experience. Google, for instance, reportedly makes over 600 search engine changes in a
year. Most are small unannounced tweaks. Recent major changes have included Panda, Penguin,
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Hummingbird, Knowledge Graph, an unnamed algorithm that has been nicknamed

Mobilegeddon, and Possum. Panda was introduced in 2011 to weed out low quality sites from
search results. Those sites with thin content, duplicate content, content copied from elsewhere on
the Web, and content that did not attract high-quality hits from other sources were systematically
pushed down in the search results. Google introduced Penguin in 2012 to punish websites and
their SEO marketing firms who were manipulating links to their site in order to improve their
rankings. The Google search engine rewards sites that have links from many other sites. What
some marketers discovered is that Google could not tell the quality of these back links, and they
began to manufacture links by putting their clients onto list sites, creating multiple blogs to link
to their clients' site, and paying others to link to their clients' sites. Penguin evaluates the quality
of links to a site and pushes down in the rankings those sites that have poor-quality back links.
Google introduced Hummingbird in September 2013. Rather than evaluate each word separately
in a search, Google's semantically informed Hummingbird will try to evaluate an entire sentence.
Semantic search more closely follows conversational search, or search as you would ordinarily
speak it to another human being. Google introduced Knowledge Graph in 2012 as an effort to
anticipate what you might want to know more about as you search on a topic or answer questions
you might not thought of asking. Since 2013, results of Knowledge Graph appear on the right of
the screen and contain more information about the topic or person you are searching on. Not all
search terms have a Knowledge Graph result. Google displays information based on what other
users have searched for in the past, as well as its database on over 500 million objects (people,
places, and things), and some 18 billion facts. In 2015, Google released a new algorithm update
(nicknamed Mobilegeddon) that made the "mobile-friendliness" of websites a much stronger
ranking factor for mobile searches. Websites that are not optimized for mobile now have a much
lower ranking in mobile search results. Starting in November 2015, Google also began lowering
the search rank of mobile websites that display an ad that obscures the screen and asks users
whether they would like to install the site's mobile app, because such ads are less mobile-
friendly. In 2016, Google introduced Possum, an algorithm update that varies search results
based on the user's location; so, for example, the closer a user is to a business's address, the more
likely it is to appear among the local results. In 2017, Google released the Fred algorithm, which
targets websites that violate Google's guidelines, primarily blogs with low-value, ad-centered
content. Throughout 2018, Google also released several unnamed core algorithm updates, about
which it did not provide many details.
50) Which of the following would you implement to collect and analyze your company's big
data?
A) data warehouse
B) Hadoop
C) SQL
D) profiling
Answer: B
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marketing.
Answer: B
marketing.
A) ubiquity
B) richness
Answer: D
marketing.
53) Which feature of e-commerce technology decreases the cost of delivering marketing
messages and receiving feedback from users?
B) universal standards
C) ubiquity
D) interactivity
Answer: B
marketing.
Answer: C
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marketing.
55) Which of the following is a Google algorithm update related to local search?
A) Penguin
B) Hummingbird
C) Panda
D) Possum
Answer: D
marketing.
A) cookies can be used to create cross-site profiles of users.
Answer: B
marketing.
57) A web beacon is:

C) an automated applet for performing web searches.
D) a tiny graphics file embedded in an e-mail or web page.
Answer: D
Difficulty: Easy
marketing.
58) ________ is an open source database that can store and analyze both structured and
unstructured data.
A) ASP
B) PHP
C) Hadoop
D) JSP
Answer: C
Difficulty: Easy
marketing.
59) A ________ is a repository of customer information that records all contacts that a customer
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has with a firm and generates a customer profile available to everyone in the firm with a need to
know the customer.
B) CRM system
C) data warehouse
Answer: B
Difficulty: Easy
marketing.
60) The marketing technique known as ________ involves merchants offering many products for
which there is little demand.
B) flash marketing
C) yield management
D) bait-and-switch
Answer: A
marketing.
61) Which of the following provides web marketers with a very quick means of identifying a
customer and understanding his or her behavior at a site?
A) transaction logs
B) cookies
C) registration forms
D) data warehouses
Answer: B
marketing.
62) Transaction logs are built into client software.

Answer: FALSE
Difficulty: Easy
marketing.
63) Regular in-app cookies can be shared between apps.

Answer: FALSE
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marketing.
64) What are two methods being developed to track consumers across devices?
Answer: Two methods being developed to track consumers across devices are deterministic
cross-device tracking and probabilistic cross-device tracking. Deterministic cross-device tracking
relies on personally identifiable information such as e-mail address used to log into an app and
website on different devices. Facebook, Google, Apple, Twitter, and other companies that have
very large user bases and have both desktop and mobile properties that require logins are the
most likely to be able to effectively exploit deterministic matching.
Probabilistic cross-device tracking uses algorithms developed by vendors such as Drawbridge,

BlueCava, and Tapad to analyze thousands of anonymous data points, such as device type,
operating system, and IP address, to create a possible match. This type of matching is less
accurate than deterministic matching.
marketing.
65) What is big data and why are marketers interested in it?
Answer: Big data usually refers to very large data sets in the petabyte and exabyte range—in
other words, billions to trillions of records, often from different sources. Big data is produced in
much larger quantities and much more rapidly than traditional data collection mechanisms. Even
though tweets are limited to 140 characters each, Twitter generates more than eight terabytes of
data daily. According to the IDC technology research firm, data is more than doubling every two
years, so the amount of data available to organizations is skyrocketing. The next frontier will be
data derived from the Internet of Things (IoT). Making sense out of big data quickly to gain a
market advantage is critical.
Marketers are interested in big data because it allows them to link huge amounts of data from a
variety of different sources, which in the past they were unable to do, and mine if for patterns of
consumer behavior, with the potential to derive new insights into customer behavior, financial
market activity, or other phenomena. For instance, Evrythng, an IoT platform company, has
partnered with Trueffect, a digital ad firm, to develop ways that marketers can use data generated
by connected appliances and other devices to directly communicate with and target advertising
with consumers. However, to derive business value from this data, organizations need new
technologies and analytic tools capable of managing and analyzing nontraditional data along
with their traditional enterprise data.
marketing.
66) Discuss the revolution in Internet marketing technologies. What are the four main broad
impacts the Internet has had on marketing?
Answer: The Internet has had four broad impacts on marketing. First, the Internet as a
communications medium has broadened the scope of marketing. Marketing messages can now
easily reach a greater number of people. Second, the Internet has increased the richness of
16

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marketing communications by combining text, video, and audio content into rich messages.
Some even think that the Web is a richer medium than television or video because of the
complexity of messages and the huge amount of, and wide ranging, content that is available.
Third, the Internet has greatly expanded the information intensity of the marketplace by
providing marketers with fine-grained, detailed, real-time information about consumers as they
transact in the marketplace. Fourth, the always-on, always-attached, environment created by
mobile devices results in consumers being much more available to receive marketing messages.
One result is an extraordinary expansion in marketing opportunities for firms.
marketing.
67) What are web transaction logs, and how do they work in combination with registration
forms, shopping cart databases, and tracking files to help firms understand how customers
behave online?
Answer: Transaction logs, which are built into web server software, record user activity at a
website. Log file analysis tools cull information from these files, which can contain tens to
hundreds of entries for each user. Transaction log data becomes more useful when it is combined
with registration form data and shopping cart data. Registration forms and shopping cart database
are two other visitor generated data trails. Merchants use registration forms to gather personal
data such as the name, address, phone number, zip code, e-mail address, and other optional
information on the tastes and interests of the consumer. The shopping cart database captures all
the item selection, purchase, and payment data. The data from transaction logs, registration
forms, and the shopping cart database can also be combined with other information that users
submit on product forms, contribute in chat rooms, or submit via e-mail messages to a firm to
produce a veritable treasure trove of information for both individual merchant sites and for the
industry as a whole.
Although the transaction log represents the foundation of online data collection, it is
supplemented by the use of cookies that are placed on a user's hard drive when he or she visits a
site. Cookies allow a website to store data on a user's machine that can be retrieved later. Cookies
provide marketers with a very quick means to identify each customer and to understand his or
her prior behavior at the site. Cookies can be used to determine how many people are visiting a
site, how many are repeat visitors, and how often they have visited. They also make shopping
cart and quick checkout possible by allowing a site to keep track of a user as he or she adds to
the shopping cart. Cookies can be combined with web bugs to create cross-site profiles. Web
beacons (sometimes called web bugs) are graphic files that are embedded in e-mails and on
websites. When a user opens an HTML format e-mail with an embedded web beacon, a request
is sent to the server for the graphic data. Web beacons are used to automatically transmit
information about the user and the page being viewed to a monitoring server to collect personal
browsing behavior and other personal information.
marketing.
68) Define and describe the functionality of customer relationship management (CRM) systems.
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Answer: Customer relationship management systems are an important Internet marketing

technology. They serve as repositories for customer information that records all of the contacts a
customer has with a firm including its website. CRM systems can generate a profile of each
customer that is available to everyone in the firm who requests the data and they contain
analytical software that will make this data valuable to the firm.
In the past, firms generally did not maintain a single storehouse of customer information, and
any customer data was organized along product lines with each product line maintaining a
separate customer list. CRMs are part of the evolution towards customer-centric and segmented
market-based businesses, and away from this product-based model.
CRMs use database technology with capabilities for assessing the needs of individual customers
and differentiating products to meet those needs. The customer profiles generated by a CRM can
include a map of the customer's relationship with the firm, the products he or she has bought and
the frequency of purchases, the demographic and psychographic profile for each customer,
profitability measures, a complete contact history, and marketing and sales information
containing marketing campaigns that the customer received and the customer's responses to
them.
With these profiles, CRMs can be used to sell additional products and services, develop new
products, increase product utilization, reduce marketing costs, identify and retain profitable
customers, optimize service delivery costs, retain high lifetime value customers, enable personal
communications, improve customer loyalty, and increase product profitability.
marketing.
69) If you want to determine the size of your website's audience, the metric you will use for the
A) page views.
B) unique visitors.
C) hits.
D) reach.
Answer: B
70) Cross-platform attribution refers to:

A) how to assign credit to different marketing initiatives.
B) understanding why visitors to a website purchase a product.
C) understanding how impressions lead to visits.
D) understanding why people click on ads.
Answer: A
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71) VTR measures the ________ response rate to an ad.

A) 30-minute
B) 24-hour
C) 7-day
D) 30-day
Answer: D
A) flash marketing
B) bundling
C) surge pricing
D) freemium
Answer: C
73) What kinds of ads have the lowest CTR?

A) video ads
B) e-mails to an in-house list
C) social network display ads
D) banner display ads
Answer: D

Answer: C
following?
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Answer: C
76) Which of the following measures the average length of stay at a website?
A) loyalty
B) stickiness
C) page views
D) retention rate
Answer: B

product's pages.
Answer: A

Answer: B
79) View-to-cart ratio is a measure of the:

product's pages.
B) percentage of views that lead to an add-to-cart action.
Answer: B
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A) conversion rate
Answer: C
A) abandonment rate
B) unsubscribe rate
C) bounce-back rate
D) attrition rate
Answer: C
A) view time
B) CTR
C) completion rate
D) skip rate
Answer: C
83) Which of the following measures the percentage of times an ad is clicked?

A) retention rate
B) CTR
C) loyalty rate
D) conversion rate
Answer: B
84) What is cross-platform attribution and why is it difficult?

Answer: Cross-platform attribution involves understanding how to assign appropriate credit to
different marketing initiatives on a variety of platforms that may have influenced a consumer
along the way to an ultimate purchase. There is increasing recognition that first-click and last-
click models that focus on either the first or last marketing channel or advertising format that a
consumer engages with prior to a purchase, are not sufficient. Cross-platform attribution is
difficult because there is a lengthy path from simple online ad impressions, website visits, and
page views to the purchase of a product.
21

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85) What is marketing analytics software and what is it used for?

Answer: Marketing analytics software is a software package that collects, stores, analyzes, and
graphically presents data on each of the stages in the conversion of shopper to customer process
on e-commerce sites. Marketing analytics packages help business managers optimize the return
on investment on their websites and social marketing efforts, by building a detailed
understanding of how consumers behave when visiting their websites. They help analyze where
customers come from, what they do on the site, and which content is most appealing, as well as
how users shop and add to their shopping cart, and whether they abandon their shopping cart.
Marketing analytics also allows managers to measure the impact of specific marketing
campaigns.
22

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test bank for chapter 6 and 7
Principles of management (Princess Nora bint Abdulrahman University)

lOMoARcPSD|16057205
E-commerce 2016: Business. Technology. Society., 12e (Laudon)

1) Around ________ % of households in the United States have broadband access to the Internet.
A) 45
B) 55
C) 75
D) 85
Answer: C
LO: 6.1: Understand the key features of the Internet audience, the basic concepts of consumer
2015?
A) search
B) classifieds
C) rich media
D) e-mail
Answer: D
B) awareness
C) engagement
D) conversation
Answer: D
4) In 2015, what was the approximate Internet penetration rate for individuals that have attained
less than a high-school education?
A) 25%
B) 33%
C) 66%
D) 75%
Answer: C

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5) All of the following are online communications that are used to support the evaluation of
alternatives stage of the consumer decision process except:
A) search engines.
B) online catalogs.
C) social networks.
Answer: D
6) Online buyers constitute approximately ________ % of the online Internet audience.

A) 65
B) 75
C) 85
D) 95
Answer: B
Answer: C
8) In the early years of e-commerce, prior to 2000, single, white, young college-educated males
with high income dominated the Internet in terms of percentage of Internet usage.
Answer: TRUE

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9) Consumers choose the online channel primarily because it offers lower prices.
Answer: TRUE

Answer: TRUE
Difficulty: Easy
Answer: FALSE
12) Research shows that the two most important factors shaping the decision to purchase online
are utility and trust.
Answer: TRUE
Difficulty: Easy
13) Google introduced which of the following changes to its search algorithm in 2011 to weed
out low quality sites from search results?
A) Penguin
B) Hummingbird
C) Panda
D) Knowledge Graph
Answer: C
LO: 6.2: Identify and describe the basic digital commerce marketing and advertising strategies
and tools.
14) Which of the following forms of online advertising is expected to grow the fastest between
2015 and 2019?
A) paid search
B) sponsorships
C) search engines

lOMoARcPSD|16057205
D) rich media
Answer: D
and tools.
target ads?
A) Nielsen ratings
D) clickstream data
Answer: A
and tools.
16) Which of the following search engine algorithm updates enables Google's search engine to
evaluate an entire sentence rather than just a key word?
A) Panda
B) Penguin
C) Hummingbird
D) Graph Search
Answer: C
and tools.
A) Spending on search engine advertising constitutes over 40% of all online advertising
spending.
D) Search engine advertising is the fastest growing type of online advertising.
Answer: D
and tools.

lOMoARcPSD|16057205
engines?
A) social search
B) link farms
C) content farms
D) click fraud
Answer: A
and tools.

A) viral marketing
B) local marketing
Answer: C
and tools.
20) Ad blockers operate in a manner very similar to which of the following?

B) firewalls
C) Flash cookies
Answer: B
and tools.

A) browser extensions that insert ads into a premium publisher's Web site and then list the ads as
advertisers
C) botnets hired by publishers to click on Web pages to create phony traffic
Answer: D
and tools.

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22) In the first seven months of 2015, the percentage of all e-mail that is spam averaged
around ________ %.
A) 50
B) 60
C) 70
D) 80
Answer: A
and tools.

Answer: B
and tools.
Answer: B
and tools.
customer?
A) company Web site
C) Facebook
Answer: A
and tools.

lOMoARcPSD|16057205
Answer: C
and tools.
A) gaming sites.
Answer: D
and tools.
Answer: A
and tools.
B) variable cost.
C) marginal cost.
D) fixed cost.
Answer: C
and tools.

lOMoARcPSD|16057205
Answer: B
A) bundling.
B) customization.
C) dynamic pricing.
D) versioning.
Answer: D
and tools.

A) bundling.
B) versioning.
C) free pricing.
Answer: D
and tools.
B) viral marketing
Answer: B
and tools.

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34) Google's AdSense is an example of which of the following?

A) context advertising
B) SEO
D) viral marketing
Answer: A
and tools
B) dynamic pricing
D) versioning
Answer: A
and tools.
advertising?
B) retail
C) automotive
D) entertainment
Answer: B
and tools.
A) Native advertising is controversial.
Answer: B
and tools.

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A) retargeting
Answer: C
and tools.
39) Research has found that of all the standard formats of display ads, leaderboard ads are the
most effective at getting and holding a user's attention.
Answer: FALSE
and tools.
Answer: FALSE
and tools.
Answer: TRUE
and tools.
Answer: TRUE

Answer: TRUE

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44) An ad is considered viewable if half of the ad can be viewed for at least two consecutives
seconds.
Answer: TRUE
and tools.
Answer: FALSE
and tools.
Answer: TRUE
and tools.
50) Which of the following would you implement to collect and analyze your company's Big
Data?
A) data warehouse
B) Hadoop
C) SQL
D) profiling
Answer: B
LO: 6.3: Identify and describe the main technologies that support online marketing.
Answer: B

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A) ubiquity
B) richness
Answer: D
53) Which of the following features of e-commerce technology allows fine-grained, highly
detailed information on consumers' real-time behavior to be gathered and analyzed?
B) information density
C) ubiquity
D) interactivity
Answer: B
Answer: C
55) For a Web site that has 100,000 visitors a month, and where on average, a visitor makes five
page requests per visit, there will be ________ entries in the transaction log each month.
A) 50,000
B) 500,000
C) 5 million
D) 50 million
Answer: B

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A) cookies can be used with Web bugs to create cross-site profiles of users.
Answer: B
57) A Web beacon is:

C) an automated applet for performing Web searches.
D) a tiny graphics file embedded in an e-mail or Web page.
Answer: D
Difficulty: Easy
58) ________ is an industry-standard database query and manipulation language.

A) SQL
B) PHP
C) DBMS
D) JSP
Answer: A
Difficulty: Easy
59) A ________ is a repository of customer information that records all of the contacts that a
customer has with a firm and generates a customer profile available to everyone in the firm with
a need to know the customer.
B) CRM system
C) data warehouse
Answer: B
Difficulty: Easy

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60) The marketing technique known as ________ involves merchants offering products or
services for a very low price for a short period of time.
B) flash marketing
C) yield management
D) bait-and-switch
Answer: B
61) To answer a question such as "At what time of day does our company sell the most
products?" you would use ________ data mining.
A) query-driven
B) customer profiling
C) model-driven
D) behavioral
Answer: A
62) Transaction logs are built into Web server software.

Answer: TRUE
Difficulty: Easy
63) Cookies, when combined with Web beacons, can be used to create cross-site profiles.
Answer: TRUE
69) If you want to determine the size of your Web site's audience, the metric you will use for the
A) page views.
B) unique visitors.
C) hits.
D) reach.
Answer: B
LO: 6.4: Understand the costs and benefits of online marketing communications.

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70) Impressions are a measure of the:

A) number of times an ad is clicked.
B) number of times an ad is served.
C) number of http requests.
D) number of pages viewed.
Answer: B
71) View-through rate measures the ________ response rate to an ad.

A) 30-minute
B) 24-hour
C) 7-day
D) 30-day
Answer: D
A) flash marketing
B) bundling
C) surge pricing
D) freemium
Answer: C
73) Hits are a measure of the:

C) number of HTTP requests.
Answer: C

Answer: C

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following?
Answer: C
76) Which of the following measures the average length of stay at a Web site?
A) loyalty
B) stickiness
C) page views
D) retention rate
Answer: B

product's pages.
Answer: A

Answer: B

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79) Conversion rate is a measure of the:

product's pages.
Answer: B
A) conversion rate
Answer: C
A) abandonment rate
B) unsubscribe rate
C) bounce-back rate
D) attrition rate
Answer: C
A) view time
B) click-through rate
C) completion rate
D) skip rate
Answer: C

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83) Which of the following measures the percentage of customers who purchase once but never
return within a year?
A) retention rate
B) attrition rate
C) loyalty rate
D) conversion rate
Answer: B
E-commerce 2018: Business. Technology. Society., 14e (Laudon/Traver)

Chapter 7 Social, Mobile, and Local Marketing
1) All of the following were popular types of online marketing before 2007 except:
A) e-mail.
B) corporate websites.
C) mobile marketing.
D) display ads.
Answer: C
Learning Objective: 7.1: Understand the difference between traditional online marketing and the
new social-mobile-local marketing platforms and the relationships between social, mobile, and
local marketing.
2) Which of the following is not true about social marketing?

A) More than 50% of Twitter's ad revenues are generated by desktop users.
B) The top seven social networks account for over 90% of all visits.
C) Social marketing differs markedly from traditional online marketing.
D) In social marketing, business cannot tightly control their brand messaging.
Answer: A
local marketing.
3) How much time a month does the average person spend using the Facebook app on mobile
devices?
A) about 3 hours
B) about 10 hours
C) about 13 hours
D) about 23 hours
Answer: C

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local marketing.

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4) By 2019, it is estimated that advertisers will be spending which of the following amounts on
mobile marketing?
A) $82 million
B) $820 million
C) $8.2 billion
D) $82 billion
Answer: D
AACSB: Analytical thinking
local marketing.
5) By 2019, spending on social marketing will be almost triple the amount spent on mobile
marketing.
Answer: FALSE
Difficulty: Easy
local marketing.
6) By 2018, mobile marketing is expected to account for almost 75% of all digital ad spending.
Answer: TRUE
local marketing.
7) Instagram is owned by Facebook

Answer: TRUE
Difficulty: Easy
local marketing.

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9) Which of the following is known primarily for blogs?

A) Facebook
B) Tumblr
C) Google
D) Instagram
Answer: B
Difficulty: Easy
Learning Objective: 7.2: Understand the social marketing process from fan acquisition to sales
and the marketing capabilities of social marketing platforms such as Facebook, Twitter, and
Pinterest.
10) Which of the following is the first step in the social marketing process?
A) community
B) amplification
C) fan acquisition
D) engagement
Answer: C
Difficulty: Easy
Pinterest.
11) Encouraging users to click a Like button is an example of which step in the social marketing
process?
A) fan acquisition
B) brand strength
C) community
D) amplification
Answer: D
Pinterest.
12) Your Facebook News Feed includes all of the following except:
A) status updates.
B) app activity.
C) Likes.
D) tweets.
Answer: D
Difficulty: Easy

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Pinterest.
13) Which of the following statements about Facebook Exchange is not true?
A) It competes with DoubleClick.
B) It allows advertisers to target ads.
C) It is a social search engine.
D) It involves cookies.
Answer: C
Pinterest.
14) Ads that appear in a Facebook user's News Feed are called:
A) Marketplace Ads.
B) Promoted Ads.
C) Page Post Ads.
D) Brand Ads.
Answer: C
Difficulty: Easy
Pinterest.
15) About how many hours a month do online social network users spend on average on all
social networks combined?
A) 15
B) 20
C) 25
D) 30
Answer: D
Pinterest.
16) Which of the following is a history of your actions on Facebook?

A) News Feed
B) Timeline
C) Ticker
D) Open Graph
Answer: B

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Pinterest.
17) Which of the following statements is not true?

A) Almost 60% of Facebook's active user base are mobile-only members.
B) The only way to access Facebook from a mobile device is to use a mobile app.
C) Mobile ads are displayed in Facebook users' News Feeds.
D) In the second quarter of 2017, Facebook's mobile ad revenue accounted for over 85% of
Facebook's total revenue.
Answer: B
Pinterest.
18) All of the following marketing tools on Facebook require payment except:
A) Brand Pages.
B) Right-Hand Sidebar Ads.
C) News Feed Page Post Ads.
D) Mobile Ads.
Answer: A
Pinterest.
19) The ratio of impressions to fans is a measure of:

A) engagement.
B) amplification.
C) community.
D) fan acquisition.
Answer: D
Pinterest.
20) Which of the following Twitter marketing tools provides marketers with a real-time digital
dashboard so they can see tweet activity about a TV show, commercial, or brand?
A) Enhanced Profile Pages
B) Amplify
C) Lead Generation Cards

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D) Promoted Accounts
Answer: B
Pinterest.
21) Which of the following Twitter marketing tools involves a coupon or other promotional offer
that appears in users' Twitter timeline?
A) Promoted Tweet
B) Promoted Trend
C) Promoted Account
D) Lead Generation Card
Answer: D
Pinterest.
22) Which of the following statements about Pinterest is not true?

A) Pinned photos and photo boards are available to all Pinterest users.
B) Men are Pinterest's fastest growing demographic.
C) Pinterest enables users to integrate their pins into their Facebook News Feeds and Twitter
streams.
D) Pinterest is the only one of the major social networks that does not accept paid advertising.
Answer: D
Pinterest.
23) Which of the following are features of both Pinterest and Twitter?
A) tweets
B) hashtags
C) pins
D) Image Hover widget
Answer: B
Pinterest.

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24) All of the following are Pinterest marketing tools except:

A) Brand pages.
B) Rich Pins.
C) Promoted Pins.
D) Promoted Accounts.
Answer: D
Pinterest.
25) The number of people exposed to pins on Pinterest is a measure of which of the following?
A) engagement
B) community
C) brand strength
D) fan acquisition
Answer: D
Pinterest.
26) Which of the following is an online service specifically aimed at measuring the impact of
Pinterest and other visual social media?
A) TweetDeck
B) Curalate
C) Amplify
D) Webtrends
Answer: B
Pinterest.
27) Which of the following is another term for amplification?

A) impressions
B) reach
C) conversation rate
D) conversion ratio
Answer: B

lOMoARcPSD|16057205
Pinterest.
28) All of the following are examples of dark social except:

A) e-mail.
B) tweets.
C) SMS texts.
D) Snapchat.
Answer: B
Pinterest.
29) Facebook's share price fell dramatically after its IPO because investors feared that:
A) Facebook's new marketing solutions would be difficult to monetize.
B) new social networks such as Instagram were cannibalizing Facebook's audience.
C) privacy concerns were driving users away.
D) Facebook would be unable to increase advertising revenues fast enough to justify its price.
Answer: D
Pinterest.
30) Which of the following allows Facebook to track user behavior on other sites?
A) Open Graph
B) Like button
C) hashtags
D) Whatsapp
Answer: B
Pinterest.
31) Which of the following is not true about Facebook News Feed Page Post Ads?
A) They have a tiny tag indicating that they are sponsored.
B) They can be liked, shared, and commented on, just like any news feed post.
C) They cannot contain links.
D) They have social context.
Answer: C

lOMoARcPSD|16057205
Pinterest.
32) Which of the following is a micro-blogging social network site that allows users to send and
receive 140-character messages?
A) Facebook
B) Twitter
C) Pinterest
D) Instagram
Answer: B
Difficulty: Easy
Pinterest.
33) Companies are not permitted to collect personal information from children under the age of
________ without parental consent.
A) 8
B) 10
C) 13
D) 16
Answer: C
Pinterest.
34) Which of the following was the object of the FTC's highest penalty for a COPPA violation to
date?
A) Disney's Playdom
B) W3 Innovation
C) Snapchat
D) Yelp
Answer: B
Pinterest.

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35) Which of the following is most similar to Pinterest?

A) LinkedIn
B) Instagram
C) YouTube
D) Tumblr
Answer: B
Pinterest.
36) Which social marketing proved the most effective for ExchangeHunterJumper.com?
A) Facebook
B) YouTube
C) Pinterest
D) Instagram
Answer: A
Pinterest.
37) Which of the following refers to the number of interactions among members of a group and
reflects the "connectedness" of the group, even if these connections are forced on users?
A) engagement
C) social density
D) amplification
Answer: C
Pinterest.

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38) Which of the following refers to those forms of social sharing that occur off the major social
networks, through alternative communication tools?
A) social density
B) dark social
C) amplification
D) engagement
Answer: B
Pinterest.
39) Which of the following is a real-time bidding system that allows advertisers to target their
ads to specific users based on personal information provided by Facebook?
A) Amplify
B) FBX
C) DoubleClick
D) PTAT
Answer: B
Pinterest.
40) Which of the following social networks allows a user to buy products directly on its site and
pay with Apple Pay?
A) Twitter
B) LinkedIn
C) Pinterest
D) Snapchat
Answer: C
Pinterest.

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41) Which of the following involves using a variety of tools to encourage users to interact with
content and brand?
A) social density
B) engagement
C) amplification
D) dark social
Answer: B
Pinterest.
42) Which of the following involves using the inherent strength of social networks to encourage
visitors and fans to share their Likes and comments with friends?
A) social density
B) engagement
C) amplification
D) dark social
Answer: C
Pinterest.
43) Which of the following is a Facebook feature that allows app developers to integrate their
apps into the Facebook pages of users who sign up for the app?
A) Whatsapp
B) Like button
C) Messenger
D) Open Graph
Answer: D
Pinterest.
44) Facebook's Messenger app allows users to make payments to advertisers via Stripe or PayPal
without having to leave the app.
Answer: TRUE

lOMoARcPSD|16057205
Pinterest.
45) Facebook's Search functionality includes everyone's public posts, Likes, photos, and
interests, and makes them available to all users of Facebook, even those who are not friends.
Answer: TRUE
Pinterest.
46) Facebook does not sell display ads.

Answer: FALSE
Difficulty: Easy
Pinterest.
47) Brand pages on Facebook typically attract more visitors than a brand's website.
Answer: TRUE
Pinterest.
48) Promoted Trends is Twitter's version of Google's Ad Words.

Answer: FALSE
Pinterest.
49) Pinterest's users are predominantly women.

Answer: TRUE
Difficulty: Easy
Pinterest.

lOMoARcPSD|16057205
50) In 2017, Millennials make up almost 65% of Snapchat's monthly active U.S. users.
Answer: TRUE
Pinterest.
55) Which of the following is not true about mobile marketing?

A) Mobile marketing is the fastest growing form of online marketing.
B) In 2017, spending on mobile marketing will comprise over 70% of the amount spent on all
types of online marketing.
C) A substantial part of mobile marketing should be counted as social marketing.
D) People use most of their mobile minutes while they are on the go.
Answer: D
Learning Objective: 7.3: Identify the key elements of a mobile marketing campaign.
56) Which of the following is the top app in terms of both audience size and share of time spent?
A) YouTube
B) iTunes
C) Twitter
D) Facebook
Answer: D
57) On average, users use about ________ apps a month on their smartphone.
A) 10
B) 15
C) 25
D) 50
Answer: C

A) Google is the leading display ad site on mobile devices.
B) Google has four of the top eight apps.
C) Google still dominates mobile advertising in terms of U.S. revenue, but Facebook has gained
significant market share.
D) Google generates almost two-thirds of all mobile search ad spending.
Answer: A

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59) Which of the following is the most popular use for mobile devices?
A) shopping
B) socializing
C) entertainment
D) performing tasks, such as finances
Answer: C
60) Which of the following is the second-most popular mobile marketing format?
A) search engine advertising
B) display advertising
C) video advertising
D) mobile messaging
Answer: C
61) Which of the following accounts for the most time people spend using a mobile device?
A) watching video
B) social networks
C) listening to music
D) reading news and magazines
Answer: C
62) While using apps, users spend about 75% of the time on just ________ of them.
A) 2
B) 3
C) 4
D) 10
Answer: B
63) By 2021, spending on mobile marketing is expected to account for almost ________ of all
online marketing and almost ________ times as much spent on desktop advertising.
A) 65%; three
B) 70%; three

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C) 75%; four
D) 80%; four
Answer: C
64) Which of the following accounts for the most mobile ad spending?
A) display ads
B) search engine advertising
C) video ads
D) SMS text messages
Answer: B
65) Which of the following is not a major provider of mobile display advertising?
A) MoPub
B) Millennial Media
C) AdMob
D) Webtrends
Answer: D
66) Which of the following is the leading mobile retailer in the United States?
A) Walmart
B) Amazon
C) Google
D) QVC
Answer: B
Difficulty: Easy
67) Which of the following hardware technologies has Apple adopted for Apple Pay?
A) GPS
B) NFC
C) BLE
D) QR codes
Answer: B

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68) Which of the following statements about BLE is not true?

A) Only Apple iPhones can use BLE.
B) BLE uses less power than traditional Bluetooth or GPS.
C) BLE has a two-way, push-pull communication capability.
D) BLE is more accurate than targeting through Wi-Fi triangulation.
Answer: A
69) What percentage of the population use a mobile device to research products online before
purchasing?
A) about 25%
B) about 33%
C) about 50%
D) about 75%
Answer: C
70) It is expected that by 2021, m-commerce will account for more 50% of all e-commerce in the
retail and travel industries.
Answer: TRUE
71) Purchases made on tablet computers are the fastest growing and largest source of m-
commerce revenues.
Answer: FALSE
72) SMS text messaging generates most of mobile marketing spending.

Answer: FALSE
76) Which of the following is currently a small part of the online marketing universe, but is
expected to triple over the next five years?
A) local marketing
B) location-based mobile marketing
C) mobile marketing
D) social marketing on Facebook

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Answer: B
Difficulty: Easy
Learning Objective: 7.4: Understand the capabilities of location-based local marketing.
77) Macy's deployed which of the following technologies in many of its retail stores in 2014?
A) QR codes
B) iBeacon
C) E9-1-1
D) Geo-search
Answer: B
78) Which of the following dominates the local mobile search market?
A) Twitter
B) Apple
C) Facebook
D) Google
Answer: D
Difficulty: Easy
79) Apple's iBeacon uses which of the following technologies?

A) BLE
B) NFC
C) E9-1-1
D) QR codes
Answer: A
80) Which of the following is the leading location-based mobile ad format?

A) search ads
B) display ads
C) native/social ads
D) video ads
Answer: A
81) Google uses which of the following to build a global database of wireless access points and
their geographic locations?

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A) E9-1-1
B) Street View cars
C) iBeacons
D) BLE
Answer: B
82) Eddystone is an open-source standard for beacon technology.

Answer: TRUE
83) A cell phone's GPS is accurate to within five feet of the actual location of the phone.
Answer: FALSE

Chapter 8
Ethical, Social, and Political Issues in E-commerce

Chapter 8
Ethical, Social, and Political

Issues in E-commerce

Chapter 8
Learning Objectives
8.1 Understand why e-commerce raises ethical, social, and political
issues.
8.2 Understand basic concepts related to privacy and information rights,
the practices of e-commerce companies that threaten privacy, and the
different methods that can be used to protect online privacy.
8.3 Understand the various forms of intellectual property and the
challenges involved in protecting it.
8.4 Understand how the Internet is governed and why taxation of e-
commerce raises governance and jurisdiction issues.
8.5 Identify major public safety and welfare issues raised by e-
commerce.

Chapter 8
The Right to Be Forgotten: Europe Leads on Internet Privacy

• Is Google responsible for the accuracy of links to other information?
Why or why not?
• Why do European and American views on privacy protection differ so
dramatically?
• How can the different perspectives on privacy be managed in a global
environment like the Internet?

Chapter 8
Understanding Ethical, Social, and Political Issues in E-

commerce
• Internet, like other technologies, can:
• Enable new crimes
• Affect environment
• Threaten social values
• Costs and benefits must be carefully considered, especially when there are
no clear-cut legal or cultural guidelines

Chapter 8
A Model for Organizing the Issues

• Issues raised by Internet and e-commerce can be viewed at individual,
social, and political levels
• Four major categories of issues:
• Information rights
• Property rights
• Governance
• Public safety and welfare

Chapter 8
Figure 8.1 The Moral Dimensions of an Internet Society

Chapter 8
Basic Ethical Concepts

• Ethics
• Study of principles used to determine right and wrong courses of action
• Responsibility
• Accountability
• Liability
• Laws permitting individuals to recover damages
• Due process
• Laws are known, understood
• Ability to appeal to higher authorities to ensure laws applied correctly

Chapter 8
Analyzing Ethical Dilemmas

• Process for analyzing ethical dilemmas:
1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the higher-order values
involved
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the potential consequences of your options

Chapter 8
Candidate Ethical Principles

• Golden Rule
• Universalism
• Slippery Slope
• Collective Utilitarian Principle
• Risk Aversion
• No Free Lunch
• The New York Times Test
• The Social Contract Rule

Chapter 8
Privacy and Information Rights

• Privacy
• Moral right of individuals to be left alone, free from surveillance or interference from
other individuals, organizations, or state
• Information privacy: 4 premises
• Right to control information collected about them
• “Right to be forgotten”
• Right to know when information is collected and give consent
• “Informed consent”
• Right to personal information due process
• Right to have personal information stored in a secure manner

Chapter 8
Table 8.2 The FTC’s Fair Information Practice Principles

Principle Description
Notice/Awareness (core Sites must disclose their information practices before collecting data.
principle) Includes identification of collector, uses of data, other recipients of data,
nature of collection (active/inactive), voluntary or required, consequences
of refusal, and steps taken to protect confidentiality, integrity, and quality
of the data.
Choice/Consent (core principle) There must be a choice regime in place allowing consumers to choose how
their information will be used for secondary purposes other than
supporting the transaction, including internal use and transfer to third
parties. Opt-in/opt-out must be available.
Access/Participation Consumers should be able to review and contest the accuracy and
completeness of data collected about them in a timely, inexpensive
process.
Security Data collectors must take reasonable steps to assure that consumer
information is accurate and secure from unauthorized use.
Enforcement There must be a mechanism to enforce FIP principles in place. This can
involve self-regulation, legislation giving consumers legal remedies for
violations, or federal statutes and regulation.

Chapter 8
Privacy in The Public Sector: Privacy Rights of Citizens

• Public sector privacy rights have long history
• First Amendment
• Fourth Amendment
• Fourteenth Amendment
• Constitutional, implied privacy rights did not cover collection and use of
personal information
• 1974 Privacy Act
• Federal and state law to protect individuals against unreasonable
government intrusion

Chapter 8
Privacy in The Private Sector: Privacy Rights of Consumers

• Privacy issues rose with first large-scale, nationwide computerized
systems
– Credit card systems, credit rating agencies
• Piecemeal federal and state privacy legislation, applying to specific
industries
– Spoke v Robins: what harm must be shown in order to sue?
ersus
• Historically, few claims to privacy in public, open markets such as in e-

commerce
• Emergence of Internet has created enormous collections of personal
data
– Ideal environment for business and government to invade personal
privacy of consumers
– Google, Amazon, Netflix, etc.

Chapter 8
Information Collected by Websites

• Data collected includes
• Personally identifiable information (PII)
• Anonymous information
• Types of data collected
• Name, address, phone, e-mail, social security
• Bank and credit accounts, gender, age, occupation, education
• Preference data, transaction data, clickstream data, browser type

Chapter 8
Key Issues in Online Privacy of Consumers

• Top concerns
• Profiling and ad targeting
• Social network privacy
• Sharing of information by marketers
• Mobile phone privacy
• Digital assistant privacy

Chapter 8
Marketing: Profiling, Behavioral Targeting, and Retargeting (1

of 2)
• Profiling
• Creation of data images that characterize online individual and group behavior
• Anonymous profiles
• Personal profiles
• Facial recognition a new dimension
• Advertising networks
• Track consumer and browsing behavior on Web
• Dynamically adjust what user sees on screen
• Build and refresh profiles of consumers
• Google’s new privacy policy

Chapter 8
Marketing: Profiling, Behavioral Targeting, and Retargeting (2
of 2)
• Business perspective:
• Increases effectiveness of advertising, subsidizes content
• Enables sensing of demand for new products
• Critics’ perspective:
• Undermines expectation of anonymity and privacy
• Enables price discrimination

Chapter 8
Social Networks: Privacy and Self-Revelation

• Social networks
• Encourage sharing personal details
• Pose unique challenge to maintaining privacy
• Facebook
• Massive database
• Serving ads to users not on Facebook
• Sharing information with third parties
• Personal control over personal information v s Organization’s desire to
ersu
monetize social network

Chapter 8
Mobile Devices: Privacy Issues

• Mobile apps
• Funnel personal information to mobile advertisers for targeting ads
• Track and store user locations
• Track users’ use of other apps
• Persistent location tracking
• U.S. Supreme Court rules that police need warrant prior to searching a cell
phone for information

Chapter 8
Consumer Privacy Regulation: the FTC (1 of 2)

• Fair Information Practice (FIP) principles
• Informed consent: Opt-in and opt-out
• Harm-based approach
• “Do Not Track” mechanism
• Recent emphasis is to give consumer rights regarding collected personal
information

Chapter 8
Consumer Privacy Regulation: the FTC (2 of 2)

• FTC’s current privacy framework
• Scope:
• Applies to all commercial entities
• Privacy by Design:
• Companies should promote consumer privacy throughout the organization
and at all stages in the development of products
• Simplified Choice
• Companies should simplify consumer choice
• Greater Transparency

Chapter 8
Consumer Privacy Regulation: the Federal Communications

Commission (FCC)
• 2015 classification of broadband ISPs as similar to public utility
services and subject to FCC regulation
• 2016 FCC approved new privacy rules for broadband ISPs
• Must notify users of privacy options or obtain user consent to
collect information
• Service cannot be contingent on users surrendering privacy
• 2017 Congress voted to repeal privacy rules for broadband ISPs

Chapter 8
Privacy Policies
• Website Terms of Use Notices
• Recent study showed these polices would take average reader 8 hours to
read policies
• Have conflicting statements
• Little oversight and comparison between policies of different companies

Chapter 8
Privacy Protection in Europe

• European privacy protection much stronger than in U.S
• 2016 General Data Protection Regulation (GDPR)
• Replaces Data Protection Directive of 1998
• Applies to all organizations that operate in EU
• Protects wide variety of PII
• Strengthens citizens’ rights to their own personal data
• Strengthens oversight of firms to ensure compliance
• Environment has turned against U.S. firms like Facebook and unfettered
collection and use of personal data.

Chapter 8
Cyber Security in Vietnam

• The Law on Cyber Information Security 2015 protects the information
security on 03 aspects:
• Information integrity
• Information confidentiality
• Availability of information
• The Law on Cyber Security 2018 focuses on combating malicious
information, infringing upon national security, social order and safety, and
the legitimate rights and interests of the individuals, organizations and
agencies in the network environment.

Chapter 8
Industry Self-Regulation
• Privacy seal programs
• Network Advertising Initiative (NAI)
• Ad Choices Program
• In general, self-regulation has not succeeded in reducing American fears of
privacy invasion or reducing the level of privacy invasion

Chapter 8
Technology Solutions
• Solutions include
• Intelligent Tracking Protection (ITP)
• Differential privacy software
• Privacy default browsers
• Message encryption
• Spyware blockers
• Pop-up blockers and ad blockers
• Secure e-mail, anonymous remailers
• Cookie managers
• Public key encryption

Chapter 8
Privacy Protection
• Privacy protection as a business
• Personal Data Economy (PDE)
• Internet of Me
• Life Management tools
• Privacy advocacy groups

Chapter 8
Limitations on The Right to Privacy (1 of 2)

• Law enforcement and surveillance
• Edward Snowden and NSA Prism program
• Legislation that strengthens ability of law
enforcement to monitor Internet users without their
knowledge
• CALEA, USA Patriot Act, Cyber Security
Enhancement Act, Homeland Security Act, USA
Freedom

Chapter 8
Limitations on The Right to Privacy (2 of 2)

• Apple’s iPhone 6 and encryption controversy
• Supreme Court cases limiting law enforcement’s
ability to obtain data from mobile phones without
a warrant
• Riley v California
• United States v Jones
• Use of personal data by government agencies is
widespread

Chapter 8
Intellectual Property Rights

• Intellectual property:
• All tangible and intangible products of human mind
• Major ethical issue:
• How should we treat property that belongs to others?
• Major social issue:
• Is there continued value in protecting intellectual property in the Internet age?
• Major political issue:
• How can Internet and e-commerce be regulated or governed to protect
intellectual property?

Chapter 8
Intellectual Property Protection

• Main types of protection:
• Copyright
• Patent
• Trademark law
• Trade secrets law
• Goal of intellectual property law:
• Balance two competing interests-public and private
• Maintaining this balance of interests is always challenged by the invention of new
technologies

Chapter 8
E-commerce Patents
• 1998 State Street Bank & Trust v. Signature Financial Group
• Business method patents
• 2014 Alice Corporation lawsuit
• Supreme Court rules that software does not make a basic
business method or abstract idea patentable
• E-commerce patents
• Amazon: One-click purchasing
• Akamai: Internet content delivery global hosting system

Chapter 8
Trademarks
• Identify, distinguish goods, and indicate their source
• Purpose
• Ensure consumer gets what is paid for/expected to receive
• Protect owner against piracy and misappropriation
• Infringement
• Dilution
• Federal Trademark Dilution Act and Trademark Dilution Revision Act
• Uniform Rapid Suspension System (URS)

Chapter 8
Trademarks and the Internet

• Cybersquatting and brand-jacking
• Anticybersquatting Consumer Protection Act (ACPA)
• Cyberpiracy
• Typosquatting
• Metatagging
• Keywording
• Linking and deep linking
• Framing

Chapter 8
Trade Secrets
• Business procedures, formulas, methods of manufacture and service
delivery
• May not be unique or novel
• Trade secrets are
• (a) secret
• (b) have commercial value to owner
• (c) owner has taken steps to protect
• 2016 Defend Trade Secrets Act

Chapter 8
Who Governs the Internet and E-commerce?

• Mixed mode environment
• Self-regulation, through variety of Internet policy and technical bodies,
co-exists with limited government regulation
• ICANN : Domain Name System
• Internet can be easily controlled, monitored, and regulated from a central
location

Chapter 8
Taxation
• Non-local nature of Internet commerce complicates governance and jurisdiction issues
• Sales taxes
• Governments in Europe and U.S. rely on sales taxes
• As e-commerce grew, states began to argue their inability to tax remote e-commerce sales was
siphoning away billions of tax dollars
• Supreme Court ruled in South Dakota v Wayfair that states could tax online sales even when seller
ersus
did not have physical location in the state

• Internet Tax Freedom Act

Chapter 8
Net Neutrality
• All Internet activities charged the same rate, regardless of bandwidth
used
• Netflix and YouTube together consume about 50% of bandwidth in
United States
• Prior to 2015, ISPs could throttle high-volume users
• February 2015, FCC ruled that broadband ISPs should be viewed and
regulated as public utilities
• Under Trump administration, net neutrality regulations have been
repealed, but many states are attempting to reinstate them via state
laws and regulations

Chapter 8
Public Safety and Welfare

• Protection of children against pornography and privacy infringement
– Passing legislation that will survive court challenges has proved difficult
• Efforts to control gambling and restrict sales of drugs and cigarettes
• Prevent All Cigarette Trafficking Act
• Unlawful Internet Gambling Enforcement Act
• Increase in number of states allowing online gambling

Chapter 8
Copyright

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Chapter 8 Ethical, Social, and Political Issues in E-commerce
1) Which of the following e-commerce technology dimensions creates greater opportunities for
cyberbullying?
A) information density
B) interactivity
C) social technology
D) ubiquity
Answer: C
Learning Objective: 8.1: Understand why e-commerce raises ethical, social, and political issues.
2) Which of the following e-commerce technology dimensions has the potential to reduce
cultural diversity in products?
A) ubiquity
B) interactivity
D) global reach
Answer: D
3) Which of the following is not one of the four basic principles shared by ethical schools of
thought in western culture?
A) accountability
B) privacy
C) responsibility
D) liability
Answer: B
AACSB: Ethical understanding and reasoning
4) What is the first step in analyzing an ethical dilemma?

A) Define the conflict or dilemma and identify the higher-order values involved.
B) Identify the potential consequences of your opinions.
C) Identify the options you can reasonably take.
D) Identify and describe the facts.
Answer: D
5) Which ethical principle states that, when confronted with an ethical dilemma, individuals
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should take the action that achieves the greater value for all of society?
A) the Golden Rule
B) Risk Aversion
C) the Collective Utilitarian principle
D) the Social Contract Rule
Answer: C
6) Which ethical principle emphasizes putting oneself into the place of others and thinking of
oneself as the object of the decision?
A) the Golden Rule
B) Universalism
Answer: A
7) Which ethical principle asks you to assume that virtually all tangible and intangible objects are
owned by someone else unless there is a specific declaration otherwise?
A) the Golden Rule
B) the Slippery Slope
C) the Social Contract Rule
D) No Free Lunch
Answer: D
8) Which ethical principle states that if an action cannot be taken repeatedly, then it's not right to
take at all?
A) Universalism
D) the Golden Rule
Answer: B
9) Which ethical principle asks you to consider the impact of your decision if the principles
underlying your decision became an organizing principle of the entire society?
A) the Golden Rule
B) Risk Aversion
C) the Slippery Slope
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Answer: D
10) Which ethical principle tells you that it is wise to assume perfect information markets?
A) the Golden Rule
B) the New York Times test
D) the Collective Utilitarian principle
Answer: B
11) Which ethical principle states that when confronted with an ethical dilemma, an individual
should take the action that produces the least harm, or the least potential cost?
A) the Slippery Slope
B) Risk Aversion
C) No Free Lunch
Answer: B
12) A social consequence of the richness of Internet information is:

A) an increase in shallowness.
B) an increase in the ease of creating misleading information.
C) very persuasive messages might reduce the need for multiple independent sources of
information.
D) an increase in vulnerability to hacking attacks.
Answer: C
13) Downloading a music track owned by a record company without paying for it is an example
of a violation of:
A) patent law.
B) copyright law.
C) trademark law.
D) privacy law.
Answer: B
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14) Which of the following features of e-commerce technology can result in work and shopping
invading family life?
A) interactivity
B) ubiquity
D) global reach
Answer: B
15) Liability is a feature of political systems in which a body of law is in place that permits
individuals to recover damages done to them by other actors, systems, or organizations.
Answer: TRUE
16) The principle of responsibility means that individuals, organizations, and societies should be
held accountable to others for the consequences of their actions.
Answer: FALSE
17) The ethical principle of Universalism states that if an action is not right for all situations,
then it is not right for any situation.
Answer: TRUE
18) Discuss in depth one ethical, social, or political issue that is presently in the news
surrounding the Internet and e-commerce.
Answer: A student might answer this issue by focusing on any one of a number of ethical, social,
or political issues currently surrounding the Internet and e-commerce. Possible topics include
privacy issues, intellectual property rights issues (copyright, patents, or trademarks), taxation,
Internet governance issues such as net neutrality and the impact of “big tech,” and Internet public
safety and welfare issues such as the regulation of online pornography, gambling, or the sale of
drugs.
19) Describe the five-step process that can be used to analyze an ethical dilemma. What other
guidelines are there to help in understanding a complicated ethical or moral situation?
Answer: The five-step process is:
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1. Identify and describe the facts. Find out who did what to whom, and where, when, and how.
It helps to get the opposing parties involved in an ethical dilemma to agree on the facts.
2. Define the conflict or dilemma and identify the higher-order values involved. Ethical,
social, and political issues always reference higher values. Otherwise, there would be no debate.
The parties to a dispute all claim to be pursuing higher values (e.g., freedom, privacy, protection
of property, and the free enterprise system).
3. Identify the stakeholders. Every ethical, social, and political issue has stakeholders: players
in the game who have an interest in the outcome, who have invested in the situation, and usually
who have vocal opinions. Find out the identity of these groups and what they want. This will be
useful later when designing a solution.
4. Identify the options that you can reasonably take. You may find that none of the options
satisfies all the interests involved, but that some options do a better job than others. Sometimes,
arriving at a "good" or ethical solution may not always be a balancing of consequences to
stakeholders.
5. Identify the potential consequences of your options. Some options may be ethically correct,
but disastrous from other points of view. Other options may work in this one instance, but not in
other similar instances. Always ask yourself, "What if I choose this option consistently over
time?"
Other things to consider when appraising an ethical dilemma include basic ethical concepts such
as responsibility, accountability, and liability and how these play into the situation. Additionally,
you can judge the situation against candidate ethical principles, such as the Golden Rule, the
Slippery Slope theory, Universalism, the Collective Utilitarian principle, Risk Aversion theory,
the No Free Lunch theory, the New York Times test (Perfect Information rule), and the Social
Contract rule. Actions that do not easily pass these guidelines deserve some very close attention
and a great deal of caution because the appearance of unethical behavior may do as much harm
to you and your company as the actual behavior.
AACSB: Analytical thinking; Written and oral communication; Ethical understanding and
reasoning
20) Which of the following basic ethical concepts plays an important role in defining privacy?
A) responsibility
B) accountability
C) liability
D) due process
Answer: D
Learning Objective: 8.2: Understand basic concepts related to privacy and information rights,
the practices of e-commerce companies that threaten privacy, and the different methods that can
be used to protect online privacy.
21) Which of the following is not aimed at strengthening the ability of law enforcement agencies
to monitor Internet users without their knowledge?
A) USA PATRIOT Act
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B) Homeland Security Act

C) Communications Assistance for Law Enforcement Act
D) USA Freedom Act
Answer: D
22) Which of the following is used to track individuals as they move among thousands of
websites?
A) first-party cookies
B) digital wallets
C) advertising networks
D) shopping carts
Answer: C
23) Which of the following uses software installed at the ISP level to track user clickstream
behavior?
A) shopping carts
B) trusted computing environments
C) deep packet inspection
D) DRM
Answer: C
Difficulty: Easy
24) Which of the following statements about industry self-regulation regarding privacy is not
true?
A) The AdChoices program is an industry-sponsored initiative to encourage websites to be more
transparent about how they use personal information and to make it more likely that appropriate
ads are shown to users.
B) The NAI offers consumers a global opt-out feature to prevent network advertising agencies
from placing cookies on a user's computer.
C) Industry efforts have not so far succeeded in reducing American fears of privacy invasion.
D) Critics argue that the most effective form of industry self-regulation to safeguard privacy are
online seal programs that attest to a company's privacy policies.
Answer: D
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25) The Spokeo case involved a claim for damages based on which of the following?
A) Fair Credit Reporting Act
B) Digital Millennium Copyright Act
C) Anticybersquatting Consumer Protection Act
D) Defend Trade Secrets Act
Answer: A
26) Which of the following requires financial institutions to inform consumers of their privacy
policies and permits consumers some control over their records?
A) Freedom of Information Act
B) Gramm-Leach-Bliley Act
C) COPPA
D) HIPAA
Answer: B
27) Which of the following is a core Fair Information Practices (FIP) principle?
A) Choice/Consent
B) Access/Participation
C) Security
D) Enforcement
Answer: A
28) Which of the FTC's Fair Information Practices (FIP) principles requires identification of the
collector of data?
A) Notice/Awareness
B) Choice/Consent
C) Access/Participation
D) Security
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Answer: A
29) Which of the FTC's Fair Information Practices (FIP) principles requires opt-in or opt-out
policies to be in place?
A) Notice/Awareness
B) Choice/Consent
D) Security
Answer: B
30) What is the FTC recommendation regarding choice as it relates to personally identifiable
information (PII)?
A) Require firms to have consumers affirmatively opt-in before PII is collected.
B) Require firms to allow consumers to opt-out before PII is collected.
C) Make collection of PII illegal.
D) Require robust notice only before PII is collected.
Answer: A
31) "Do Not Track" falls under which of the following principles in the FTC's current privacy
framework?
A) Privacy by Design
B) Simplified Choice
C) Greater Transparency
D) Scope
Answer: B
32) Which of the following technologies reduces the ability to merge different files and de-
anonymize consumer data?
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A) anonymous surfing
B) anonymous remailers
C) differential privacy software
D) public key encryption
Answer: C
33) Which of the following is an example of a pay-for-privacy (PFP) approach?

A) AT&T’s GigaPower service
B) Meeco.me’s life management tool
C) Digi.me’s app
D) The Hub of All Thing’s open source project
Answer: A
34) All of the following are required for information to be considered a trade secret except:
A) it must have commercial value to its owner.
B) the owner must have taken steps to protect it.
C) it must be unique.
D) it must be something that others do not know.
Answer: C
Learning Objective: 8.3: Understand the various forms of intellectual property and the
35) According to data from Pew Research Center, which of the following is the action which the
highest percentage of Internet users has taken to preserve their privacy online?
A) used an anonymous web browsing service
B) encrypted their communications
C) cleared web browser history and cookies
D) posted comments online anonymously
Answer: C
36) Which of the following statements about the General Data Protection Regulation (GDPR) is
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not true?
A) The GDPR replaces the Data Protection Directive.
B) The GDPR applies to any firm operating in any E.U. country.
C) The GDPR eliminate the right to be forgotten.
D) The GDPR limits the ability of companies to use data for purposes other than those for which
it was collected.
Answer: C
37) Which of the following is not a privacy advocacy group?

A) EPIC
B) TIO
C) CDT
D) EFF
Answer: B
38) Which of the following was the first state law in the United States requiring owners of
commercial websites or online services to post a privacy policy.
A) California Consumer Privacy Act
B) California Net Neutrality Act
C) California Electronic Communications Privacy Act
D) California Online Privacy Protection Act
Answer: D
39) In the United States, Google is not required to remove results from its search engine if
requested.
Answer: TRUE
40) The main objective of the GDPR is to strengthen the rights of citizens to their own personal
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information and to strengthen oversight of firms to ensure that they implement these individual
rights.
Answer: TRUE
41) The opt-in model for informed consent requires an affirmative action by the consumer before
a company can collect and use information.
Answer: TRUE
42) The Federal Communications Commission's privacy rules, applicable to broadband ISPs,
were repealed by Congress in 2017.
Answer: TRUE
43) The TrustArc program is an industry-sponsored initiative to encourage websites to be more

transparent about how they use personal information, and to make it more likely that appropriate
ads are shown to users.
Answer: FALSE
44) In what ways has the European environment turned against American firms such as
Facebook and Google?
Answer: The EU General Data Protection Regulation (GDPR) is clearly aimed at Facebook,
Google, Twitter, and other ad-based online businesses that build collections of personal data by
tracking individuals across the Web, merging that data with data from firms and data brokers in
order to build comprehensive digital images (profiles) and to target these persons with ads.
Google and Facebook are both extremely popular in Europe, and dominate their markets, but at
the same time are widely criticized for invading privacy and not protecting PII. European
regulators and politicians point to Facebook allowing Cambridge Analytica, a political consulting
firm, to gain access to over 100 million user accounts in 2016 and a 2018 data breach of 50
million Facebook accounts as evidence that Facebook is unable to protect the privacy of
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Europeans. Google is also in the cross-hairs of EU regulators for its monopoly on search in the
EU, abuse of that monopoly by ranking Google services above others on its search pages, and
abuse of its ownership of the Android operating system by requiring smartphone manufacturers
to pre-install Google apps on Android phones, as well as evading taxes on revenues earned in EU
countries. Both firms, along with Microsoft’s Windows 10 operating system, are accused of
“deceit by design” through the use of threats against users who choose strong privacy protections
on their services, and screen designs that encourage users to give up as much personal
information as possible.
AACSB: Application of knowledge; Written and oral communication
45) How is it possible to measure the strength of privacy policies?

Answer: Very little attention has been paid to measuring the strength of privacy policies for
individual companies, comparing them to other companies, and understanding how privacy
policies have changed over time at a specific company. However, researchers have developed a
measure of privacy policies by applying 10 privacy policy principles when reviewing policies.
These principles are as follows:
• Can the privacy policy be easily found, reviewed, and understood by users?
• Does the privacy policy fully disclose how personal information will and will not be used by
the organization? Is information about users ever shared or sold without users' explicit
permission?
• Can users decide if they want to participate?
• Can users decide and actively indicate that they agree to be profiled, tracked, or targeted?
• Can users decide how and if their sensitive information is shared?
• Are users able to change any information that they input about themselves?
• Can users decide who can access their information?
• Are users notified promptly if their information is lost, stolen, or improperly accessed?
• Can users easily report concerns and get answers?
• Do users receive a copy of all disclosures of their information?
The dimensions are measured on a four-point scale from 0 to 4 (0 meaning the privacy policy
fails to meet the criterion and 4 indicating the criterion was fully achieved).
46) Describe the fantasy sport business and the issues it raises.
Answer: Two firms dominate the online fantasy sports market: DraftKings and FanDuel. Both
firms advertise heavily during college and professional sports games. In fantasy sports, players
assemble their ideal fantasy teams, drafting real-life athletes to their team, and then, based on the
performance of those players in real games, they can win significant prizes. The most popular
sports are college football and basketball, and professional football and baseball. Players are
given a budget that they can use to draft players, and some of the combined fees for each game
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make up the pool for which players compete. Entry fees range widely from less than a dollar, to
over $1,000. Fantasy sports were exempted from the Unlawful Internet Gambling Enforcement
Act of 2006 (UIGEA) under industry pressure from the then much smaller fantasy sports
business. The industry argued that fantasy sports are not gambling, but instead games of skill like
chess or Scrabble.
As the industry has grown to billion-dollar venture capital valuations, however, and with
allegations of cheating customers, deceptive practices, lack of transparency, and insider
irregularities, state and federal legislators are holding hearings and considering regulations. In
2015, the New York State attorney general told both DraftKings and FanDuel to stop taking
entries from New York State residents because, in the state's opinion, their operations constituted
illegal gambling and the sites engaged in false and misleading advertising. Citibank cut off credit
card processing for both sites.
After lengthy legislative hearings and strong support from sports fans, New York reversed its
position, agreeing that when played fairly, fantasy sports is a game of skill, not gambling. The
governor signed legislation legalizing fantasy sports as a state regulated industry, claiming it
would add $4 billion to the state's education fund. The sites also agreed to pay $12 million in
fines. In November 2016, DraftKings and FanDuel proposed to merge. Together the two
companies control more than 90% of the U.S. market. In June 2017, the FTC, along with the
attorneys general of California and the District of Columbia, sued to block the merger and in July
2017 the companies decided to abandon the plan.
Learning Objective: 8.5: Identify major public safety and welfare issues raised by e-commerce.
47) Define privacy, information privacy, the right to be forgotten, and informed consent.
Answer: Privacy is the moral right of individuals to be left alone, free from surveillance or
interference from other individuals including the state.
Information privacy includes both the right to prohibit certain information from being collected
by either governments or businesses, and the right to control the use of whatever information is
collected about you. The core concept is the control of your own personal information.
The right to be forgotten is the claim of individuals to be able to edit and delete personal
information online.
Informed consent means that an individual has knowledge of all the material facts needed to
make a rational decision and consent has been given to collect information. In the United States,
business firms and government agencies can gather transaction data from the marketplace and
use it for other marketing purposes without the informed consent of the individual. In Europe, on
the other hand, this is illegal. European businesses can only use transaction data to support the
current transaction if they have asked for and received the informed consent of the individual.
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48) Discuss the Authors Guild's lawsuit against Google with respect to Google's Library Project
and explain why the courts ultimately ruled in Google's favor.
Answer: Google's Library Project involved an effort by Google to scan all the books in several
university and public libraries, and then make snippets and parts of the book available online
without receiving permission from the publishers or paying royalties. Google said it would never
show a full page, just relevant portions of a page in response to searches. In 2005, the Authors
Guild and the large book publishers filed a lawsuit seeking to prevent Google from implementing
the Library Project. Google argued that the Library Project constituted fair use of publishers'
copyrighted works because it only published snippets. Moreover, Google claimed that it was
simply helping libraries do what they are intended to do, namely, lend books. Library lending is
considered a fair use following an agreement in the late 1930s with publishers, and such lending
was codified into the Copyright Act of 1976. Google claimed that helping libraries make books
more available to the public was in the broader public interest and extended existing rights of
libraries to encourage book availability. In 2013, a federal court finally found in favor of Google
without reservation by ruling that Google's scanning and making snippets of text available to the
public was "fair use" under U.S. copyright law. The judge believed the project had a broad public
purpose of making it easier for students, researchers, teachers, and the general public to find
books, while also preserving consideration for author and publisher rights. The Google project
was "transformative" in the court's view, giving books a new character and purpose, making it
easier to discover old books, and leading to increased sales. The Supreme Court ruled in 2016
that Google's Library Project was fair use, and the matter is settled from a legal perspective. In
the meantime, the project itself has stalled, and efforts to scan so-called orphan books in libraries
where the copyright holder could not be identified have ended. Google now appears less than
enthusiastic about pursuing the project, in part, analysts believe, because the project offered no
hope of ever making a return on the investment and created a rift with the author and publishing
community upon which it depends for content against which to show ads.
49) How does Apple’s Intelligent Tracking Prevention (ITP) technology work?
Answer: ITP uses machine learning techniques in the browser (not on a central server) to
identify which cookies represent a tracking threat and prevents them from communicating with
their servers, disarming them. Safari notifies the user when a cookie attempts to connect to a
third-party server, asking users if they want to allow it. If tracking cookies make three attempts
to communicate with external servers in 24 hours despite user choices, they are eliminated from
the browser.
50) Which of the following cases has chipped away at the Digital Millennium Copyright Act
(DMCA) safe harbor protection?
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A) Field v. Google, Inc.

B) Alice Corporation Pty. Ltd. v. CLS Bank International
C) BMG Rights Management v. Cox Communications
D) Perfect 10, Inc. v. Amazon.com, Inc. et al.
Answer: A
51) What is the major reason why the Internet has such potential for destroying traditional
conceptions and implementations of intellectual property law?
A) the ability to make perfect copies of digital works at little cost
B) the anonymous nature of the Internet
C) the support for instant peer-to-peer communication
D) the use of standards for file formats
Answer: A
Difficulty: Easy
52) Which of the following protects original forms of expression in a tangible medium?
A) trade secret law
B) copyright law
C) patent law
D) trademark law
Answer: B
53) How long does copyright protection extend for corporate-owned works?
A) 25 years
B) 50 years
C) 75 years
D) 95 years
Answer: D
54) Which of the following situations would not qualify for the fair use exception to U.S.
copyright law?
A) A professor clips a newspaper article just before class and distributes copies of it to his class.
B) A journalist quotes a paragraph from a book in a review of the book.
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C) A student copies a photograph of his favorite band from a website created by the band's record
label and places it on the student's personal website.
D) Google posts thumbnail images of books in the Google Book Search Project.
Answer: C
55) All of the following are factors that will be considered in determining whether use of
copyrighted material is "fair use" except the:
A) nature of the work used.
B) amount of the work used.
C) market effect of the use.
D) free availability of the work on the Web.
Answer: D
56) All of the following are possible penalties for violating the Digital Millennium Copyright Act
(DMCA) except:
A) up to ten years imprisonment for a first offense.
B) fines up to $500,000 for a first offense.
C) fines up to $1 million for a repeat offense.
D) restitution to the injured parties for any losses due to infringement.
Answer: A
57) All of the following statements about the Digital Millennium Copyright Act (DMCA) are
true except:
A) the DMCA makes it illegal to circumvent technological measures to protect works.
B) the DMCA makes Internet Service Providers (ISPs) responsible and accountable for hosting
websites or providing services to infringers regardless of whether the ISP is aware of
infringement.
C) the DMCA requires search engines to block access to infringing sites.
D) the DMCA allows libraries to make digital copies of works for internal use only.
Answer: B
58) Which of the following allows someone to obtain an exclusive monopoly on the ideas behind
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an invention for 20 years?

A) copyright law
B) trade secret law
C) patent law
D) trademark law
Answer: C
59) All of the following statements about patents are true except:
A) it is more difficult to obtain a copyright than it is to obtain a patent.
B) the four types of inventions protected by patent law are machines, manmade products,
compositions of matter, and processing methods.
C) computer programs can be patented.
D) in order to be patented, an invention must be nonobvious.
Answer: A
60) Which case was instrumental in paving the way for Internet business methods patents?
A) Bilski et al. v. Kappos
B) State Street Bank & Trust Co. v. Signature Financial Group, Inc.
C) Alice Corporation Pty. Ltd. v. CLS Bank International
D) Ticketmaster Corp. v. Tickets.com
Answer: B
61) Which of the following is considered one of the most contentious e-commerce patents?
A) Acacia Technologies’ patent on streaming video media transmission
B) Priceline’s patent on buyer-driven name your price tools
C) Amazon’s patent on one-click purchasing
D) Google's PageRank patent
Answer: C
62) Disputes over federal trademarks involve establishing:

A) underlying ideas.
B) intent.
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C) piracy.
D) infringement.
Answer: D
63) Registering a domain name similar or identical to trademarks of others to extort profits from
legitimate holders is an example of:
A) cybersquatting.
B) cyberpiracy.
C) framing.
D) metatagging.
Answer: A
Difficulty: Easy
64) Which of the following handles cybersquatting cases under its Uniform Dispute Resolution
procedures?
A) ICANN
B) FTC
C) WIPO
D) USPTO
Answer: C
65) Registering a domain name similar or identical to trademarks of others to divert web traffic
to their own sites is an example of:
A) cybersquatting.
B) cyberpiracy.
C) framing.
D) metatagging.
Answer: B
66) Registering the domain name Faceboik.com with the intent to divert web traffic from people
misspelling Facebook.com is an example of:
A) cybersquatting.
B) typosquatting.
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C) metatagging.
D) linking.
Answer: B
Difficulty: Easy
67) In which of the following cases did the U.S. Supreme Court rule that basic business methods
cannot be patented?
A) State Street Bank & Trust v. Signature Financial Group, Inc.
B) Bilski et al. v. Kappos
D) BMG Rights Management v. Cox Communications
Answer: C
68) The display of a third-party's website or page within your own website is called:
A) cybersquatting.
B) metatagging.
C) framing.
D) deep linking.
Answer: C
69) Safe harbor provisions of the Digital Millennium Copyright Act (DMCA) were at issue in all
the following lawsuits except:
A) a lawsuit filed by the Authors Guild and five major publishing companies against Google
B) a lawsuit brought by Viacom against YouTube and Google
C) BMG Rights Management v. Cox Communications.
D) Mavrix Photographs, LLC v. LiveJournal, Inc.
Answer: A
70) According to the chapter-ending case study, all of the following are examples of big tech
firms that have engaged in activities that raise antitrust issues, except:
A) Amazon
B) Apple
C) Google Drive
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D) Facebook
Answer: B
Learning Objective: Learning Objective: 8.4: Understand how the Internet is governed and why
taxation of e-commerce raises governance and jurisdiction issues.
71) Which of the following cases involved the issue of keywording?

A) Ticketmaster Corp. v. Tickets.com
B) Bernina of America, Inc. v. Fashion Fabrics Int'l, Inc.
C) Government Employees Insurance Company v. Google, Inc.
D) E. & J. Gallo Winery v. Spider Webs Ltd.
Answer: C
72) Which of the following involves bypassing the target site's home page and going directly to a
content page?
A) cybersquatting
B) metatagging
C) framing
D) deep linking
Answer: D
73) All of the following cases involved the doctrine of fair use except:
A) Spokeo v. Robins
B) Perfect 10, Inc. v. Amazon.com, Inc. et al.
C) Field v. Google, Inc.
D) Kelly v. Arriba Soft.
Answer: A
74) Copyright protection protects against others copying the underlying ideas in a work.
Answer: FALSE
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75) Owners of gTLDs have the right to create and sell new domains with the gTLD suffix.
Answer: TRUE
76) Google defended its Library Project on the grounds of fair use.
Answer: TRUE
77) Describe the purpose of intellectual property law and outline the main types of intellectual
property protection.
Answer: The purpose of intellectual property law is to balance two competing interests: the
public and the private. The public interest is served by the creation of inventions, works of art,
music, literature, and other types of intellectual expression. The private interest is served by
rewarding creators of intellectual property by a time-limited monopoly that grants exclusive use
to the creator.
There are three main types of intellectual property protection: copyright, patent, and trademark
law. Copyright law protects original forms of expression such as books, periodicals, and other
forms of written expression, art, drawings, photographs, music, movies, performances, and
computer programs. Patents grant the owner a 20-year exclusive monopoly on the ideas behind
an invention. There are four types of inventions for which patents are granted under patent law:
machines, manmade products, compositions of matter, and processing methods. Trademark law
is used to protect trademarks — marks used to identify and distinguish goods and indicate their
source.
AACSB: Analytical thinking; Written and oral communication
78) Which of the following Supreme Court cases established that states can compel online
retailers to collect and remit sales taxes even if they do not have a physical presence within the
state?
A) South Dakota v. Wayfair
C) Quill v. North Dakota
D) Alice Corporation v. CLS Bank International
Answer: A
Learning Objective: 8.4: Understand how the Internet is governed and why taxation of e-
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79) The Day of Action was a protest to proposed changes in regulations pertaining to which of
the following?
A) fantasy sports
B) Internet sales taxes
C) net neutrality
D) the online sale of prescription drugs
Answer: C
80) Net neutrality refers to the idea that Internet service providers (ISPs), including cable
Internet and wireless carriers, should treat all data on the Internet in the same manner, and not
discriminate or price differentially by content, protocol, platform, hardware, or application.
Answer: TRUE
81) Explain why the taxation of e-commerce raises governance and jurisdiction issues.
Answer: The taxation of e-commerce illustrates the complexity of the governance and
jurisdictional issues in the global economy. Most of the issues surround the sales tax imposed by
various states or countries on products sold to residents of their state or country. Governments
the world over rely on sales taxes to fund various types of government initiatives and programs
including the building of roads, schools, and sewers or other utilities to support business
development.
In the United States, between the fifty states and the multiple counties and municipalities, there
are thousands of different tax rates and policies. For example, food is not taxed at all in some
states, and there are a myriad of different exceptions and inclusions depending on the locality.
The development of MOTO (mail order/telephone) retail in the 1970s began the discussion on
the taxing of remote sales. State and local tax authorities wanted MOTO retailers to collect taxes
based upon the address of the recipients, but the Supreme Court originally ruled that states could
not force MOTO retailers to collect taxes unless the business had a physical presence in the state.
Legislation to the contrary was never able to garner sufficient support in Congress due to
pressure from the catalog merchants, leaving intact an effective tax subsidy for MOTO
merchants.
The explosive growth of e-commerce raised the issue of how — and if — to tax online sales.
Since its inception, e-commerce has benefited from a tax subsidy of up to 13% for goods shipped
to high sales tax areas. Local retail merchants complained bitterly about the e-commerce tax
subsidy. E-commerce merchants argued that e-commerce needed to be nurtured and encouraged,
and that in any event, the crazy quilt of sales and use tax regimes would be difficult to administer
for Internet merchants. Online giants like Amazon originally argued they should not have to pay
taxes in states where they had no operations because they did not benefit from local schools,
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police, fire, and other governmental services. State and local governments meanwhile saw
billions of tax dollars slipping from their reach. As Amazon's business model changed with its
building of large distribution centers close to urban areas to enable next-day delivery, its
opposition to paying sales taxes softened. In 2015, the Supreme Court upheld a challenge to a
Colorado law that would have required firms to report online sales to state residents as one step
to ensure the residents paid taxes on such sales in Colorado, which is required by state law.
In 2018, in the landmark South Dakota v. Wayfair case, the Supreme Court reversed its earlier
position and ruled that states can levy sales taxes on online sales. The businesses that may be
most drastically affected by the Wayfair ruling are smaller sellers, such as third-party Amazon
merchants, sellers on smaller marketplaces such as Etsy, and other independent e-commerce
retailers who will now have to comply with thousands of tax jurisdiction requirements across the
country. These sellers will be forced to invest in tax reporting software and other compliance
technology, which may prove prohibitive for businesses without the profit margins to sustain the
additional costs. Congress is expected to introduce legislation protecting small businesses from
potential overreach from states by 2019. A group of senators from states that do not levy sales
taxes have already put forth a bill that would reverse the Wayfair decision and reintroduce the
provisions of the Quill ruling and regulate the powers of the states to control interstate e-
commerce. It’s not clear that this bill will succeed where so many others have failed, but at the
very least, small businesses will now be eagerly looking to Congress to create federal guidelines
for regulatory compliance, relieving businesses of much of the burden facing them in the wake of
Wayfair.
82) Which of the following is not an e-commerce public safety and welfare issue?
A) regulation of gambling
B) regulation of cigarette sales
C) regulation of pornography
D) regulation of taxation
Answer: D
83) The Children's Internet Protection Act (CIPA) has been struck down by the U.S. Supreme
Court as unconstitutional.
Answer: FALSE
84) Section 230 of the Communications Decency Act (CDA) provides immunity for providers
and users of interactive computer services (such as ISPs and websites) from being considered a
publisher that might be liable for harmful content posted by others.
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Answer: TRUE
85) Online gambling is now legal throughout the United States.

Answer: FALSE
Difficulty: Easy
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ECON (The University of British Columbia)

Downloaded by Anh Hoa Qu? (ivyanhhoaque@gmail.com)
lOMoARcPSD|33918417

Chapter 5 E-commerce Security and Payment Systems
1) Confidentiality is sometimes confused with:

A) privacy.
B) authenticity.
C) integrity.
D) nonrepudiation.
Answer: A
Difficulty: Easy
Learning Objective: 5.1: Understand the scope of e-commerce crime and security problems, the
key dimensions of e-commerce security, and the tension between security and other values.
2) ________ is the ability to ensure that e-commerce participants do not deny their online
actions.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity
Answer: A
3) ________ is the ability to identify the person or entity with whom you are dealing on the
Internet.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity
Answer: B
4) Which of the following is an example of an integrity violation of e-commerce security?

A) A website is not actually operated by the entity the customer believes it to be.
B) A merchant uses customer information in a manner not intended by the customer.
C) A customer denies that he is the person who placed the order.
D) An unauthorized person intercepts an online communication and changes its contents.
Answer: D
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5) ________ is the ability to ensure that an e-commerce site continues to function as intended.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity
Answer: C
6) Which of the following is an example of an online privacy violation?

A) your e-mail being read by a hacker
B) your online purchasing history being sold to other merchants without your consent
C) your computer being used as part of a botnet
D) your e-mail being altered by a hacker
Answer: B
7) ________ is the ability to ensure that messages and data are only available to those authorized
to view them.
A) Confidentiality
B) Integrity
C) Privacy
D) Availability
Answer: A
8) Typically, the more security measures added to an e-commerce site, the slower and more
difficult it becomes to use.
Answer: TRUE
9) Why is it difficult to accurately estimate the actual amount of cybercrime?

Answer: It is difficult to accurately estimate the actual amount of cybercrime, in part, because
many companies are hesitant to report it due to the fear of losing the trust of their customers, and
because even if crime is reported, it may be difficult to quantify the actual dollar amount of the
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loss.
Difficulty: Easy
10) Which of the following statements about data breaches in 2017 is not true?
A) According to the Identity Theft Resource Center, the number of breaches in 2017 increased by
almost 45% from 2016.
B) According to the Identity Theft Resource Center, over 50% of data breaches involved social
security numbers.
C) According to the Identity Theft Resource Center, employee error was the leading cause of
data breaches.
D) According to the Identity Theft Resource Center, data breaches involving the business sector
represented over 55% of all breaches.
Answer: C
Learning Objective: 5.2: Identify the key security threats in the e-commerce environment.
11) All of the following are examples of cryptocurrencies except:

A) Ethereum.
B) Ripple.
C) Zelle.
D) Monero.
Answer: C
Learning Objective: 5.5: Identify the major e-commerce payment systems in use today.
12) The overall rate of online credit card fraud is ________ of all online card transactions.
A) less than 1%
B) around 5%
C) around 10%
D) around 15%
Answer: A
13) Which of the following did the Internet Advertising Bureau urge advertisers to abandon?
A) HTML
B) HTML5
C) Adobe Flash
D) Adobe Acrobat
Answer: C
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14) Accessing data without authorization on Dropbox is an example of a:

A) social network security issue.
B) cloud security issue.
C) mobile platform security issue.
D) sniffing issue.
Answer: B
15) Which of the following is not a key factor for establishing e-commerce security?
A) data integrity
B) technology
C) organizational policies
D) laws and industry standards
Answer: A
16) Conficker is an example of a:

A) virus.
B) worm.
C) Trojan horse.
D) botnet.
Answer: B
17) Which of the following is the leading cause of data breaches?

A) theft of a computer
B) accidental disclosures
C) hackers
D) DDoS attacks
Answer: C
18) Software that is used to obtain private user information such as a user's keystrokes or copies
of e-mail is referred to as:
A) spyware.
B) a backdoor.
C) browser parasite.
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D) adware.
Answer: A
19) According to Symantec, almost half of the e-mail addresses involved in business e-mail
compromise (BEC) phishing that it analyzed had an IP address originating in:
A) China.
B) Russia.
C) Nigeria.
D) North Korea.
Answer: C
Difficulty: Easy
20) What is the most frequent cause of stolen credit cards and card information today?
A) lost cards
B) the hacking and looting of corporate servers storing credit card information
C) sniffing programs
D) phishing attacks
Answer: B
21) Which dimension(s) of security is spoofing a threat to?

A) integrity
B) availability
C) integrity and authenticity
D) availability and integrity
Answer: C
22) Which of the following is not an example of malicious code?

A) scareware
B) Trojan horse
C) bot
D) sniffer
Answer: D
23) The attack on Dyn Inc. in 2016 is an example of which of the following?
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A) SQL injection attack

B) browser parasite
C) DDoS attack
D) MitM attack
Answer: C
24) Beebone is an example of which of the following?

A) worm
B) botnet
C) phishing
D) hacktivism
Answer: B
25) Malware that comes with a downloaded file that a user requests is called a:
A) Trojan horse.
B) backdoor.
C) drive-by download.
D) PUP.
Answer: C
26) Which of the following is not an example of a potentially unwanted program (PUP)?
A) adware
B) browser parasite
C) drive-by download
D) spyware
Answer: C
27) Which of the following was designed to cripple Iranian nuclear centrifuges?
A) Stuxnet
B) Shamoon
C) Snake
D) Storm
Answer: A
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28) Automatically redirecting a web link to a different address is an example of which of the
following?
A) sniffing
B) social engineering
C) pharming
D) DDoS attack
Answer: C
29) According to the Identity Theft Resource Center, the number of data breaches in 2017
increased by ________ compared to 2016.
A) 15%
B) 45%
C) 55%
D) 75%
Answer: C
30) According to Ponemon Institute's 2017 survey, which of the following was not among the
causes of the most costly cybercrimes?
A) malicious insiders
B) malicious code
C) denial of service
D) botnets
Answer: D
31) ________ typically attack governments, organizations, and sometimes individuals for
political purposes.
A) Crackers
B) White hats
C) Grey hats
D) Hacktivists
Answer: D
32) IoT botnets became the preferred platform for launching DDoS attacks in 2017.
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Answer: TRUE
33) A Trojan horse appears to be benign, but then does something other than expected.
Answer: TRUE
34) Phishing attacks rely on browser parasites.

Answer: FALSE
35) WannaCry is an example of ransomware.

Answer: TRUE
36) Spoofing is the attempt to hide a hacker's true identity by using someone else's e-mail or IP
address.
Answer: TRUE
37) Exploit kits can be purchased by users to protect their computers from malware.
Answer: FALSE
38) A drive-by download is malware that comes with a downloaded file that a user intentionally
or unintentionally requests.
Answer: TRUE
39) FREAK is an example of a software vulnerability.

Answer: TRUE
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40) What is the Internet of Things (IoT) and what security issues and challenges does it raise?
Answer: The Internet of Things (IoT) involves the use of the Internet to connect a wide variety
of sensors, devices, and machines, and is powering the development of a multitude of smart
connected things, such as home electronics (smart TVs, thermostats, home security systems, and
more). IoT also includes connected cars, medical devices and industrial equipment that supports
manufacturing, energy, transportation, and other industrial sectors.
Unfortunately, IoT raises a host of security issues similar to existing security challenges, but
even more challenging, given the need to deal with a wider range of devices, operating in a less
controlled, and global environment. In a world of connected things, the devices, the data
produced and used by the devices, and the systems and applications supported by those devices,
can all potentially be attacked. For instance, many IoT devices, such as sensors, are intended to
be deployed on a much greater scale than traditional Internet-connected devices, creating a vast
quantity of interconnected links that can be exploited. Existing tools, methods, and strategies
need to be developed to deal with this unprecedented scale. Many instances of IoT consist of
collections of identical devices that all have the same characteristics, which magnifies the
potential impact of security vulnerabilities.
Many IoT devices are anticipated to have a much longer service life than typical equipment,
which raises the possibility that devices may "outlive" the manufacturer, leaving them without
long-term support that creates persistent vulnerabilities. Many IoT devices are intentionally
designed without the ability to be upgraded, or the upgrade process is difficult, which raises the
possibility that vulnerable devices cannot or will not be fixed, leaving them perpetually
vulnerable. Many IoT devices do not provide the user with visibility into the workings of the
device or the data being produced, nor alert the user when a security problem arises, so users
may believe an IoT device is functioning as intended when in fact, it may be performing in a
malicious manner. Finally, some IoT devices, such as sensors, are unobtrusively embedded in the
environment such that a user may not even be aware of the device, so a security breach might
persist for a long time before being noticed.
41) Define the terms tiger team, white hat, black hat, and grey hat and discuss the difference
between them.
Answer:
Groups of hackers called tiger teams are sometimes used by corporate security departments to
test their own security measures. By hiring hackers to break into the system from the outside, the
company can identify weaknesses in the computer system’s armor. These “good hackers” became
known as white hats because of their role in helping organizations locate and fix security flaws.
White hats do their work under contract, with agreement from the target firms that they will not
be prosecuted for their efforts to break in. Hardware and software firms such as Apple,
Microsoft, Intel, HP, and many others pay bounties of $25,000 to $250,000 to white hat hackers
for discovering bugs in their software and hardware.
In contrast, black hats are hackers who engage in the same kinds of activities but without pay or
any buy-in from the targeted organization, and with the intention of causing harm. They break
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into websites and reveal the confidential or proprietary information they find. These hackers
believe strongly that information should be free, so sharing previously secret information is part
of their mission.
Somewhere in the middle are the grey hats, hackers who believe they are pursuing some greater
good by breaking in and revealing system flaws. Grey hats discover weaknesses in a system’s
security, and then publish the weakness without disrupting the site or attempting to profit from
their finds. Their only reward is the prestige of discovering the weakness. Grey hat actions are
suspect, however, especially when the hackers reveal security flaws that make it easier for other
criminals to gain access to a system.
42) What is a sniffing attack and how does it differ from a MitM attack?
Answer: A sniffer is a type of eavesdropping program that monitors information traveling over a
network. When used legitimately in a sniffing attack, hackers use sniffers to steal proprietary
information from a network, including passwords, e-mail messages, company files, and
confidential reports. A man-in-the-middle (MitM) attack also involves eavesdropping but is more
active than a sniffing attack, which typically involves passive monitoring. In a MitM attack, the
attacker can intercept communications between two parties who believe they are directly
communicating with one another, when in fact the attacker is controlling the communications.
43) Discuss and explain the various types of malicious code and how they work. Include the
different types of viruses.
Answer: Malicious code includes a variety of threats such as viruses, worms, Trojan horses,
ransomware, and bot programs. A virus is a computer program that can replicate or make copies
of itself and spread to other files. Viruses can range in severity from simple programs that display
a message or graphic as a "joke" to more malevolent code that will destroy files or reformat the
hard drive of a computer, causing programs to run incorrectly. Worms are designed to spread not
only from file to file but from computer to computer and do not necessarily need to be activated
in order to replicate. A Trojan horse is not itself a virus because it does not replicate but it is a
method by which viruses or other malicious code can be introduced into a computer system. It
appears benign and then suddenly does something harmful. For example, it may appear to be
only a game and then it will steal passwords and mail them to another person. A backdoor is a
feature of worms, viruses, and Trojans that allow attackers to remotely access compromised
computers. Ransomware is a type of malware (often a worm) that locks your computer or files to
stop you from accessing them. Bot programs are a type of malicious code that can be covertly
installed on a computer when it is attached to the Internet. Once installed, the bot responds to
external commands sent by the attacker, and many bots can be coordinated by a hacker into a
botnet.
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44) Next generation firewalls provide all of the following except:

A) an application-centric approach to firewall control.
B) the ability to identify applications regardless of the port, protocol, or security evasion tools
used.
C) the ability to automatically update applications with security patches.
D) the ability to identify users regardless of the device or IP address.
Answer: C
Learning Objective: 5.3: Describe how technology helps secure Internet communications
channels and protect networks, servers, and clients.
45) Asymmetric key cryptography is also known as:

A) public key cryptography.
B) secret key cryptography.
C) PGP.
D) PKI.
Answer: A
46) All the following statements about symmetric key cryptography are true except:
A) in symmetric key cryptography, both the sender and the receiver use the same key to encrypt
and decrypt a message.
B) the Data Encryption Standard is a symmetric key encryption system.
C) symmetric key cryptography is computationally slower.
D) symmetric key cryptography is a key element in digital envelopes.
Answer: C
47) The Data Encryption Standard uses a(n) ________-bit key.

A) 8
B) 56
C) 256
D) 512
Answer: B
48) All of the following statements about public key cryptography are true except:
A) public key cryptography uses two mathematically related digital keys.
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B) public key cryptography ensures authentication of the sender.

C) public key cryptography does not ensure message integrity.
D) public key cryptography is based on the idea of irreversible mathematical functions.
Answer: B
49) All of the following are features of WPA3 except:

A) it implements a more robust key exchange protocol.
B) it enables the creation of a VPN.
C) it provides a more secure way to connect IoT devices.
D) it features expanded encryption for public networks.
Answer: B
50) All of the following statements about PKI are true except:
A) the term PKI refers to the certification authorities and digital certificate procedures that are
accepted by all parties.
B) PKI is not effective against insiders who have a legitimate access to corporate systems
including customer information.
C) PKI guarantees that the verifying computer of the merchant is secure.
D) the acronym PKI stands for public key infrastructure.
Answer: C
51) A digital certificate contains all of the following except the:

A) subject's private key.
B) subject's public key.
C) digital signature of the certification authority.
D) digital certificate serial number.
Answer: A
52) Which of the following dimensions of e-commerce security is not provided for by
encryption?
A) confidentiality
B) availability
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C) message integrity
D) nonrepudiation
Answer: B
53) All of the following are methods of securing channels of communication except:
A) SSL/TLS.
B) digital certificates.
C) VPN.
D) FTP.
Answer: D
54) A ________ is hardware or software that acts as a filter to prevent unwanted packets from
entering a network.
A) firewall
B) virtual private network
C) proxy server
D) PPTP
Answer: A
Difficulty: Easy
55) Proxy servers are also known as:

A) firewalls.
B) application gateways.
C) dual home systems.
D) packet filters.
Answer: C
56) All of the following are used for authentication except:

A) digital signatures.
B) certificates of authority.
C) biometric devices.
D) packet filters.
Answer: D
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57) An intrusion detection system can perform all of the following functions except:
A) examining network traffic.
B) setting off an alarm when suspicious activity is detected.
C) checking network traffic to see if it matches certain patterns or preconfigured rules.
D) blocking suspicious activity.
Answer: D
58) Which of the following is not an example of an access control?

A) firewalls
B) proxy servers
C) digital signatures
D) login passwords
Answer: C

A) A VPN provides both confidentiality and integrity.
B) A VPN uses both authentication and encryption.
C) A VPN uses a dedicated secure line.
D) The primary use of VPNs is to establish secure communications among business partners.
Answer: C

A) Apple's Touch ID stores a digital replica of a user's actual fingerprint in Apple's iCloud.
B) Biometric devices reduce the opportunity for spoofing.
C) A retina scan is an example of a biometric device.
D) Biometric data stored on an iPhone is encrypted.
Answer: A
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61) Face ID is an example of which of the following?

A) biometrics
B) encryption
C) IDS
D) firewall
Answer: A
62) Which of the following is the most common protocol for securing a digital channel of
communication?
A) DES
B) SSL/TLS
C) VPN
D) HTTP
Answer: B
63) SSL/TLS cannot provide irrefutability.

Answer: TRUE
64) The easiest and least expensive way to prevent threats to system integrity is to install anti-
virus software.
Answer: TRUE
65) Explain the difference between symmetric key cryptography and public key cryptography.
Which dimensions of e-commerce security does encryption address?
Answer: Symmetric key cryptography involves the use of a secret cipher that transforms plain
text into cipher text. Both the sender and the receiver use the same key to encrypt and decrypt the
message. The possibilities for simple substitution and transposition ciphers are endless, but there
are several flaws in these types of systems that make them inadequate for use today. First, for the
sender and the receiver to have the same key, it must be sent over a communication medium that
is insecure or they must meet in person to exchange the key. If the secret key is lost or stolen, the
encryption system fails. This method can be used effectively for data storage protection but is
less convenient for e-mail since the correspondents must pass the secret key to one another over
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another secure medium prior to commencing the communication. Second, in the digital age,
computers are so fast and powerful that these ancient encryption techniques can be quickly and
easily broken. Modern digital encryption systems must use keys with between 56 and 512 binary
digits to ensure that decryption would be unlikely. Third, for commercial use on an e-commerce
site each of the parties in a transaction would need a secret key. In a population of millions of
Internet users, thousands of millions of keys would be needed to accommodate all e-commerce
customers.
Public key cryptography solves the problem of exchanging keys. In this method every user has a
pair of numeric keys: private and public. The public key is not secret; on the contrary, it is
supposed to be disseminated widely. Public keys may be published in company catalogs or on
online. The public key is used by outside parties to encrypt the messages addressed to you. The
private or secret key is used by the recipient to decipher incoming messages. The main advantage
of a public key cryptographic system is its ability to begin secure correspondence over the
Internet without prior exchanging of the keys and, therefore, without the need for a meeting in
person or using conventional carriers for key exchange.
Encryption can provide four of the six key dimensions of e-commerce security. It can provide
assurance that the message has not been altered (integrity), prevent the user from denying that
he/she has sent the message (nonrepudiation), provide verification of the identity of the message
(authentication), and give assurance that the message has not been read by others
(confidentiality).
66) What dimensions do digital signatures and hash digests add to public key cryptography and
how do they work?
Answer: Digital signatures and hash digests can add authentication, nonrepudiation, and
integrity when used with public key encryption. Encryption technology also allows for digital
signatures and authentication. The sender encrypts the message yet again using their private key
to produce a digital signature.
To check the confidentiality of a message and ensure it has not been altered in transit, a hash
function is used first to create a digest of the message. A hash function is an algorithm that
produces a fixed-length number called a hash or message digest. To ensure the authenticity of the
message and to ensure nonrepudiation, the sender encrypts the entire block of cipher text one
more time using the sender's private key. This produces a digital signature or "signed" cipher
text. The result of this double encryption is sent over the Internet to the recipient. Then, the
recipient first uses the sender's public key to authenticate the message. Once authenticated, the
recipient uses his or her private key to obtain the hash result and original message. As a final
step, the recipient applies the same hash function to the original text and compares the result with
the result sent by the sender. If the results are the same, the recipient now knows the message has
not been changed during transmission. The message has integrity.
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67) Discuss the security of communications channels. Include definitions and explanations for
the terms Secure Sockets Layer/Transport Layer Security (SSL/TLS), secure negotiated session,
session key, and VPN.
Answer: The Secure Sockets Layer of the Transmission Control Protocol/Internet Protocol
(TCP/IP) communications protocol is the main method for securing communications channels on
the Web. When you receive a message from a web server then you will be communicating
through a secure channel; this means that SSL/TLS will be used to establish a secure negotiated
session. A secure negotiated session is a client-server session in which the URL of the requested
document, its contents, and the contents of the forms filled out by the user on the page, as well as
the cookies that are exchanged, are all encrypted. The browser and the server exchange digital
certificates with one another, determine the strongest shared form of encryption, and begin
communicating using a unique symmetric encryption key, agreed upon for just this encounter.
This is called a session key. SSL/TLS provides data encryption, server authentication, optional
client authentication (as yet still rare for individual users), and message integrity for the TCP/IP
connections between two computers.
SSL/TLS addresses the threat of authenticity by allowing users to verify another user's identity
or the identity of a server. It also protects the integrity of the messages exchanged. However,
once the merchant receives the encrypted credit and order information, that information is
typically stored in unencrypted format on the merchant's servers. While SSL/TLS provides
secure transactions between merchant and consumer, it only guarantees server-side
authentication. Client authentication is optional. In addition, SSL/TLS cannot provide
irrefutability — consumers can order goods or download information products and then claim
the transaction never occurred.
Virtual private networks (VPNs) enable remote users to access an internal network from the
Internet. They use protocols to create a private connection between a user on a local ISP and a
private network. This process is called tunneling because it creates a private connection by
adding an encrypted wrapper around the message to hide its content. It is called virtual because it
appears to be a dedicated secure line when in fact it is a temporary secure line. VPNs are used
primarily for transactions between business partners because dedicated connections can be very
expensive. The Internet and VPNs can be used to significantly reduce the costs of secure
communications.
68) What is the first step in developing an e-commerce security plan?

A) Create a security organization.
B) Develop a security policy.
C) Perform a risk assessment.
D) Perform a security audit.
Answer: C
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Learning Objective: 5.4: Appreciate the importance of policies, procedures, and laws in creating
security.
69) To allow lower-level employees access to the corporate network while preventing them from
accessing private human resources documents, you would use:
A) a firewall.
B) an authorization management system.
C) security tokens.
D) an authorization policy.
Answer: B
Difficulty: Easy
security.

A) A majority of states require companies that maintain personal data on their residents to
publicly disclose when a security breach affecting those residents has occurred.
B) The USA Patriot Act broadly expanded law enforcement's investigative and surveillance
powers.
C) The Cybersecurity Information Sharing Act was strongly supported by most large technology
companies and privacy advocates.
D) The Federal Trade Commission has asserted that it has authority over corporations' data
security practices.
Answer: C
security.
71) Which of the following statements about blockchain is not true?

A) A blockchain system is composed of a distributed network of computers.
B) A blockchain system is inherently centralized.
C) A blockchain system is a transaction processing system.
D) Cryptocurrencies are based on blockchain technology.
Answer: B
72) All of the following statements about Apple Pay are true except which of the following?
A) Apple Pay is the most popular alternative payment method in the United States.
B) Apple Pay is an example of a universal proximity mobile wallet.
C) Apple Pay can be used for mobile payments at the point of sale at a physical store.
D) Apple Pay has more users than either Google Pay or Samsung Pay.
Answer: A
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73) PayPal is an example of what type of payment system?

A) online stored value payment system
B) digital checking system
C) accumulating balance system
D) digital credit card system
Answer: A
74) PCI-DSS is a standard established by which of the following?

A) the banking industry
B) the credit card industry
C) the federal government
D) the retail industry
Answer: B
75) Which of the following is not a major trend in e-commerce payments in 2018-2019?
A) Mobile retail payment volume decreases.
B) PayPal remains the most popular alternative payment method.
C) Large banks enter the mobile wallet and P2P payments market.
D) Payment by credit and/or debit card remains the dominant form of online payment.
Answer: A
76) All of the following are limitations of the existing online credit card payment system except:
A) poor security.
B) cost to consumers.
C) cost to merchant.
D) social equity.
Answer: B
77) Which of the following statements about Bitcoin is not true?

A) The computational power required to mine Bitcoins has increased over time.
B) Bitcoins are completely secure.
C) Bitcoins are illegal in some countries.
D) In 2018, Bitcoin reprsented just under 40% of the full market for cryptocurrencies.
Answer: B
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78) Which of the following is a set of short-range wireless technologies used to share
information among devices within about two inches of each other?
A) DES
B) NFC
C) IM
D) text messaging
Answer: B
79) Zelle is an example of a P2P mobile payment app.

Answer: TRUE
Difficulty: Easy
80) The creation of Bitcoins consumes a significant amount of energy.

Answer: TRUE
81) Bluetooth is the primary enabling technology for mobile wallets.

Answer: FALSE
Difficulty: Easy
82) There is a finite number of Bitcoins that can be created.

Answer: TRUE
83) Explain how an online credit card transaction works, identifying the parties involved and
describing how SSL/TLS is involved. What are the limitations of online credit card payment
systems?
Answer: The five parties involved in a credit card transaction are the consumer, the merchant,
the clearinghouse, the merchant bank (acquiring bank), and the consumer's card issuing bank.
The basic payment transaction process works like this: The consumer first makes an online
payment by sending his or her credit card information via an online form at the merchant's
website. Once this information is received by the merchant, the merchant software contacts a
clearinghouse (a financial intermediary that authenticates credit cards and verifies account
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balances). The clearinghouse contacts the card issuing bank to verify the account information.
Once verified, the issuing bank credits the account of the merchant at the merchant's bank. The
debit to the consumer account is transmitted to the consumer in a monthly statement. SSL is
involved in sending the consumer's credit card information safely to the merchant's website.
When the consumer checks out using the merchant's shopping cart software, a secure tunnel
through the Internet is created using SSL/TLS. Using encryption, SSL/TSL secures the session
during which credit card information will be sent to the merchant and protects the information
from interlopers on the Internet.
There are a number of limitations to the existing credit card payment system, most importantly
involving security, merchant risk, cost, and social equity. The security of the transaction is very
poor because neither the merchant nor the consumer can be fully authenticated. The risks
merchants face is high. Banks think of Internet credit card orders as the same type of transactions
as mail orders or telephone orders. In these transactions, the credit card is not present. There is
no way for the merchant to verify the legitimacy of the customer's card or identity before
confirming the order. In these transactions, the merchant carries all the risk for fraudulent credit
card use. Consumers can disclaim charges even though the items have already been shipped.
Merchants also must pay significant charges. These high costs make it unprofitable to sell small
items such as individual articles or music tracks over the Internet. Furthermore, credit cards are
not very democratic. Millions of young adults and other adult Americans who cannot afford
credit cards or who have low incomes and are, therefore, considered poor credit risks cannot
participate in e-commerce as it is presently structured in the United States.
84) Today, online bill payment accounts for ________ of all bill payments, while paper checks
account for ________.
A) less than 10%; less than 25%
B) about 25%; about 10%
C) more than 55%; less than 20%
D) about 95%; about 5%
Answer: C
Learning Objective: 5.6: Describe the features and functionality of electronic billing
presentment and payment systems.
85) Define and explain how electronic billing presentment and payment systems (EBPP) systems
work. Describe each of the main EBPP business models.
Answer: EBPP refers to electronic billing presentment and payment systems, which are systems
that enable the online delivery and payment of monthly bills. EBPP services allow consumers to
view bills electronically using either their desktop PC or mobile device and pay them through
electronic funds transfers from bank or credit card accounts. More and more companies are
choosing to issue statements and bills electronically, rather than mailing out paper versions,
especially for recurring bills such as utilities, insurance, and subscriptions.
There are four main types of EBPP business models: online banking, biller-direct, mobile, and
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consolidator. The online banking model is the most widely used today. Consumers establish an
online payment service with their banks and use it to pay bills as they come due or automatically
make payments for, say, rent. The payments are made directly to the seller's bank account. This
model has the advantage of convenience for the consumer because the payments are deducted
automatically, usually with a notice from the bank or the merchant that their account has been
debited. In the biller-direct model, consumers are sent bills by e-mail notification, and go to the
merchant's website to make payments using their banking credentials. This model has the
advantage of allowing the merchant to engage with the consumer by sending coupons or
rewards.
The biller-direct model is a two-step process, and less convenient for consumers. The mobile
model allows consumers to make payments using mobile apps, once again relying on their bank
credentials as the source of funds. Consumers are notified of a bill by text message and authorize
the payment. An extension of this is the social-mobile model, where social networks like
Facebook integrate payment into their messaging services. The mobile model has several
advantages, not least of which is the convenience for consumers of paying bills while using their
phones, but also the speed with which bills can be paid in a single step. This is the fastest
growing form of EBPP. In 2016, Facebook and PayPal announced a deal in which Facebook
users can pay for purchases on Facebook using PayPal. Facebook Messenger can be used for P2P
payments and payments to groups to pay for meals and other activities. Facebook is not charging
for these transfers and receives 97% of its Messenger revenue from advertising.
In the consolidator model, a third party, such as a financial institution or a focused portal such as
Intuit's Paytrust, Fiserv's MyCheckFree, Mint Bills, and others, aggregates all bills for consumers
and permits one-stop bill payment. This model has the advantage of allowing consumers to see
all their bills at one website or app. However, because bills come due at different times,
consumers need to check their portals often. The consolidator model faces several challenges.
For billers, using the consolidator model means an increased time lag between billing and
payment, and inserts an intermediary between the company and its customer.
Supporting these primary business models are infrastructure providers such as Fiserv, Yodlee,
FIS Global, ACI Worldwide, MasterCard RPPS (Remote Payment and Presentment Service), and
others that provide the software to create the EBPP system or handle billing and payment
collection for the biller.
Learning Objective: 5.6: Describe the features and functionality of electronic billing
presentment and payment systems.
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Chapter 5 E-commerce Security and Payment Systems
1) Confidentiality is sometimes confused with:
A) privacy.
B) authenticity.
C) integrity.
D) nonrepudiation.
Answer: A
2) ________ refers to the ability to ensure that e-commerce participants do not deny
their online actions.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity Answer: A
3) ________ refers to the ability to identify the person or entity with whom you are
dealing on the Internet.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity
Answer: B
4) Which of the following is an example of an integrity violation of e-commerce

security?
A) A Web site is not actually operated by the entity the customer believes it to be.
B) A merchant uses customer information in a manner not intended by the customer.
C) A customer denies that he or she is the person who placed the order.
D) An unauthorized person intercepts an online communication and changes its
contents.
Answer: D
5) ________ refers to the ability to ensure that an e-commerce site continues to

function as intended.
A) Nonrepudiation
B) Authenticity
C) Availability
D) Integrity
Answer: C
6) Which of the following is an example of an online privacy violation?
A) your e-mail being read by a hacker
B) your online purchasing history being sold to other merchants without your consent
C) your computer being used as part of a botnet
D) your e-mail being altered by a hacker
Answer: B
7) ________ refers to the ability to ensure that messages and data are only available to
those authorized to view them.
A) Confidentiality
B) Integrity
C) Privacy
D) Availability
Answer: A
10) All of the following experienced high-profile data breaches in 2014 except:
A) eBay.
B) Home Depot.
C) Amazon.
D) Sony.
Answer: C
11) Bitcoins are an example of:
A) digital cash.
B) virtual currency.
C) a stored value payment system.
D) an EBPP system.
Answer: A
12) The overall rate of online credit card fraud is ________ of all online card
transactions.
A) less than 1%
B) around 5%
C) around 10%
D) around 15%
Answer: A
13) Which of the following has the Internet Advertising Bureau urged advertisers to
abandon?
A) HTML
B) HTML5
C) Adobe Flash
D) Adobe Acrobat
Answer: C
14) Accessing data without authorization on Dropbox is an example of which of the
following?
A) social network security issue
B) cloud security issue
C) mobile platform security issue
D) sniffing
Answer: B
15) All of the following are prominent hacktivist groups except:
A) Anonymous.
B) LulzSec.
C) Impact Team.
D) Avid Life.
Answer: D
16) Slammer is an example of which of the following?
A) virus
B) worm
C) Trojan horse
D) botnet
Answer: B
17) Which of the following is the leading cause of data breaches?
A) theft of a computer
B) accidental disclosures
C) hackers
D) DDoS attacks
Answer: C
18) Software that is used to obtain private user information such as a user's keystrokes
or copies of e-mail is referred to as:
A) spyware.
B) a backdoor.
C) browser parasite.
D) adware.
Answer: A
19) In 2014, Sony experienced which of the following?
A) a high-profile data breach
B) a DDoS attack that shut down its Web site
C) a hacktivist attack to protest its employment policies
D) a browser parasite
Answer: A
20) What is the most frequent cause of stolen credit cards and card information today?
A) lost cards
B) the hacking and looting of corporate servers storing credit card information
C) sniffing programs
D) phishing attacks
Answer: B
21) Which dimension(s) of security is spoofing a threat to?
A) integrity
B) availability
C) integrity and authenticity
D) availability and integrity

Answer: C
22) Which of the following is not an example of malicious code?
A) scareware
B) Trojan horse
C) bot
D) sniffer
Answer: D
23) Zeus is an example of which of the following?
A) SQL injection attack
B) browser parasite
C) DDoS attack
D) Trojan horse/botnet
Answer: D
24) Rustock is an example of which of the following?
A) worm
B) botnet
C) phishing
D) hacktivism
Answer: B
25) Malware that comes with a downloaded file that a user requests is called a:
A) Trojan horse.
B) backdoor.
C) drive-by download.
D) PUP.
Answer: C
26) Which of the following is not an example of a PUP?
A) adware
B) browser parasite
C) drive-by download
D) spyware
Answer: C
27) Which of the following was designed to cripple Iranian nuclear centrifuges?
A) Stuxnet
B) Flame
C) Snake
D) Storm
Answer: A
28) Automatically redirecting a Web link to a different address is an example of which

of the following?
A) sniffing
B) social engineering
C) pharming
D) DDoS attack
Answer: C
29) FREAK is an example of which of the following?
A) mobile malware
B) software vulnerability
C) botnet
D) Trojan horse
Answer: B
30) According to Ponemon Institute's 2015 survey, which of the following was not
among the causes of the most costly cybercrimes?
A) malicious insiders
B) malicious code
C) denial of service
D) botnets
Answer: C
31) ________ typically attack governments, organizations, and sometimes individuals

for political purposes.
A) Crackers
B) White hats
C) Grey hats
D) Hacktivists
Answer: D
44) Next generation firewalls provide all of the following except:
A) an application-centric approach to firewall control.
B) the ability to identify applications regardless of the port, protocol, or security

evasion tools used.
C) the ability to automatically update applications with security patches.
D) the ability to identify users regardless of the device or IP address.
Answer: C
45) Symmetric key cryptography is also known as:
A) public key cryptography.

B) secret key cryptography.
C) PGP.
D) PKI.
Answer: B
46) All the following statements about symmetric key cryptography are true except:
A) in symmetric key cryptography, both the sender and the receiver use the same key
to encrypt and decrypt a message.
B) the Data Encryption Standard is a symmetric key encryption system.
C) symmetric key cryptography is computationally slower.
D) symmetric key cryptography is a key element in digital envelopes.
Answer: C
47) The Data Encryption Standard uses a(n) ________-bit key.
A) 8
B) 56
C) 256
D) 512
Answer: B
48) All of the following statements about public key cryptography are true except:
A) public key cryptography uses two mathematically related digital keys.
B) public key cryptography ensures authentication of the sender.
C) public key cryptography does not ensure message integrity.
D) public key cryptography is based on the idea of irreversible mathematical

functions.
Answer: B
49) Which of the following is the current standard used to protect Wi-Fi networks?
A) WEP
B) TLS
C) WPA2
D) WPA3
Answer: C
50) All of the following statements about PKI are true except:
A) The term PKI refers to the certification authorities and digital certificate
procedures that are accepted by all parties.
B) PKI is not effective against insiders who have a legitimate access to corporate
systems including customer information.
C) PKI guarantees that the verifying computer of the merchant is secure.
D) The acronym PKI stands for public key infrastructure.
Answer: C
51) A digital certificate contains all of the following except the:
A) subject's private key.
B) subject's public key.
C) digital signature of the certification authority.
D) digital certificate serial number.
Answer: A.
52) Which of the following dimensions of e-commerce security is not provided for by
encryption?
A) confidentiality
B) availability
C) message integrity
D) nonrepudiation
Answer: B
53) All of the following are methods of securing channels of communication except:
A) SSL/TLS.
B) certificates.
C) VPN.
D) FTP.
Answer: D
54) A ________ is hardware or software that acts as a filter to prevent unwanted

packets from entering a network.
A) firewall
B) virtual private network
C) proxy server
D) PPTP
Answer: A
55) Proxy servers are also known as:
A) firewalls.
B) application gateways.
C) dual home systems.
D) packet filters.
Answer: C
56) All of the following are used for authentication except:
A) digital signatures.
B) certificates of authority.
C) biometric devices.
D) packet filters.
Answer: D
57) An intrusion detection system can perform all of the following functions except:
A) examining network traffic.
B) setting off an alarm when suspicious activity is detected.
C) checking network traffic to see if it matches certain patterns or preconfigured rules.
D) blocking suspicious activity.
Answer: D
58) Which of the following is not an example of an access control?
A) firewalls
B) proxy servers
C) digital signatures
D) login passwords
Answer: C
A) A VPN provides both confidentiality and integrity.
B) A VPN uses both authentication and encryption.
C) A VPN uses a dedicated secure line.
D) The primary use of VPNs is to establish secure communications among business

partners.
Answer: C
A) Apple's Touch ID stores a user's actual fingerprint.
B) Biometric devices reduce the opportunity for spoofing.

C) A retina scan is an example of a biometric device.
D) Biometric data stored on an iPhone is encrypted.
Answer: A
61) A fingerprint scan is an example of which of the following?
A) biometrics B) encryption C) IDS D) firewall
Answer: A
62) Which of the following is the most common protocol for securing a digital
channel of communication?
A) DES B) SSL/TLS C) VPN D) HTTP
Answer: B
68) What is the first step in developing an e-commerce security plan?
A) Create a security organization.
B) Develop a security policy.
C) Perform a risk assessment.
D) Perform a security audit.
Answer: C
69) To allow lower-level employees access to the corporate network while preventing
them from accessing private human resources documents, you would use:
A) access controls. B) an authorization management system.
C) security tokens. D) an authorization policy.
Answer: B
A) A majority of states require companies that maintain personal data on their

residents to publicly disclose when a security breach affecting those residents has
occurred.
B) The USA Patriot Act broadly expanded law enforcement's investigative and
surveillance powers.
C) The Cybersecurity Information Sharing Act is strongly supported by most large

technology companies and privacy advocates.
D) The Federal Trade Commission has asserted that it has authority over corporations'
data security practices.
Answer: C
71) All of the following are examples of social/mobile peer-to-peer payment systems
except:
A) Venmo. B) Bill Me Later. C) Square Cash. D) Google Wallet.
Answer: B
72) All of the following statements about Apple Pay are true except which of the
following?
A) Apple Pay is available for both iPhone 5s and iPhone 6s.
B) Apple Pay is based on Touch ID biometric fingerprint scanning.
C) Apple Pay can be used for mobile payments at the point of sale at a physical store.
D) Apple Pay relies on NFC chip technology.
Answer: A
73) PayPal is an example of what type of payment system?
A) online stored value payment system
B) digital checking system
C) accumulating balance system
D) digital credit card system
Answer: A
74) PCI-DSS is a standard established by which of the following?
A) the banking industry

B) the credit card industry
C) the federal government
D) the retail industry
Answer: B
75) Which of the following is not a major trend in e-commerce payments in

2015-2016?
A) Mobile retail payment volume decreases.
B) PayPal remains the most popular alternative payment method.
C) Apple introduces Apple Pay.
D) Payment by credit and/or debit card remains the dominant form of online payment.
Answer: A
76) All of the following are limitations of the existing online credit card payment
system except:
A) poor security. B) cost to consumers.
C) cost to merchant. D) social equity.
Answer: B
77) Linden Dollars, created for use in Second Life, are an example of:
A) digital cash. B) virtual currency.
C) EBPP. D) peer-to-peer payment systems.
Answer: B
78) Which of the following is a set of short-range wireless technologies used to share
information among devices within about two inches of each other?
A) DES B) NFC C) IM D) text messaging
Answer: B
84) In 2014, online bill payment accounted for ________ of all bill payments, while paper
checks accounted for ________.
A) less than 10%; less than 25%
B) about 25%; about 10%
C) more than 50%; less than 25%
D) 100%; 0%
Answer: C
Chapter 6. E-commerce Marketing and Advertising Concepts
1) Around ________ % of households in the United States have broadband access to the
Internet.
A) 45
B) 55
C) 75
D) 85
Answer: C
2) Which of the following online advertising formats attracted the least amount of spending
in 2015?
A) search
B) classifieds
C) rich media
D) e-mail
Answer: D
3) Which of the following is not one of the main stages of the online purchasing process? A)
post-purchase service and loyalty
B) awareness
C) engagement
D) conversation
Answer: D
4) In 2015, what was the approximate Internet penetration rate for individuals that have
attained less than a high-school education?
A) 25%
B) 33%
C) 66%
D) 75%
Answer: C
5) All of the following are online communications that are used to support the evaluation of
alternatives stage of the consumer decision process except:
A) search engines.
B) online catalogs.
C) social networks.
Answer: D
6) Online buyers constitute approximately ________ % of the online Internet audience.
A) 65
B) 75
C) 85
D) 95
Answer: B
Answer: C
13) Google introduced which of the following changes to its search algorithm in 2011 to
weed out low quality sites from search results?
A) Penguin
B) Hummingbird
C) Panda
D) Knowledge Graph
Answer: C
14) Which of the following forms of online advertising is expected to grow the fastest
between 2015 and 2019?
A) paid search
B) sponsorships
C) search engines
D) rich media
Answer: D
15) Which of the following is not one of the four main methods advertisers use to
behaviorally target ads?
A) Nielsen ratings
D) clickstream data
Answer: A
16) Which of the following search engine algorithm updates enables Google's search engine
to evaluate an entire sentence rather than just a key word?
A) Panda
B) Penguin
C) Hummingbird
D) Graph Search
Answer: C
A) Spending on search engine advertising constitutes over 40% of all online advertising
spending.
D) Search engine advertising is the fastest growing type of online advertising.
Answer: D
18) Which of the following is not a practice that degrades the results and usefulness of
search engines?
A) social search
B) link farms
C) content farms
D) click fraud
Answer: A
A) viral marketing
B) local marketing
Answer: C
20) Ad blockers operate in a manner very similar to which of the following?
B) firewalls
C) Flash cookies
Answer: B
A) browser extensions that insert ads into a premium publisher's Web site and then list the
ads as available on a programmatic ad exchange
B) ad targeting firms that create bots that imitate the behavior of real shoppers and then
charge advertisers
C) botnets hired by publishers to click on Web pages to create phony traffic
Answer: D
22) In the first seven months of 2015, the percentage of all e-mail that is spam averaged
around ________ %.
A) 50
B) 60
C) 70
D) 80
Answer: A
Answer: B
Answer: B
customer?
A) company Web site
C) Facebook
Answer: A
Answer: C
A) gaming sites.
Answer: D
Answer: A
B) variable cost.
C) marginal cost.
D) fixed cost.
Answer: C
Answer: B
A) bundling.
B) customization.
C) dynamic pricing.
D) versioning.
Answer: D
A) bundling.
B) versioning.
C) free pricing.
Answer: D
B) viral marketing
Answer: B
34) Google's AdSense is an example of which of the following?
A) context advertising
B) SEO
D) viral marketing
Answer: A
B) dynamic pricing
D) versioning
Answer: A
36) Which of the following industries accounts for the highest percentage of spending on
online advertising?
B) retail
C) automotive
D) entertainment
Answer: B
A) Native advertising is controversial.
Answer: B
38) Which of the following is an automated, auction-based method for matching demand
and supply for online display ads?
A) retargeting
Answer: C
50) Which of the following would you implement to collect and analyze your company's
Big Data?
A) data warehouse
B) Hadoop
C) SQL
D) profiling
Answer: B
Answer: B
A) ubiquity
B) richness
Answer: D
53) Which of the following features of e-commerce technology allows fine-grained, highly
detailed information on consumers' real-time behavior to be gathered and analyzed?
C) ubiquity
D) interactivity
Answer: B
Answer: C
55) For a Web site that has 100,000 visitors a month, and where on average, a visitor makes
five page requests per visit, there will be ________ entries in the transaction log each
month.
A) 50,000
B) 500,000
C) 5 million
D) 50 million
Answer: B
A) cookies can be used with Web bugs to create cross-site profiles of users.
Answer: B
57) A Web beacon is:
C) an automated applet for performing Web searches.
D) a tiny graphics file embedded in an e-mail or Web page.
Answer: D
58) ________ is an industry-standard database query and manipulation language.
A) SQL
B) PHP
C) DBMS
D) JSP
Answer: A
59) A ________ is a repository of customer information that records all of the contacts that
a customer has with a firm and generates a customer profile available to everyone in the
firm with a need to know the customer.
B) CRM system
C) data warehouse
Answer: B
60) The marketing technique known as ________ involves merchants offering products or
services for a very low price for a short period of time.
B) flash marketing
C) yield management
D) bait-and-switch
Answer: B
61) To answer a question such as "At what time of day does our company sell the most
products?" you would use ________ data mining.
A) query-driven
B) customer profiling
C) model-driven
D) behavioral
Answer: A
69) If you want to determine the size of your Web site's audience, the metric you will use for
the most accurate measurement will be:
A) page views.
B) unique visitors.
C) hits.
D) reach.
Answer: B
70) Impressions are a measure of the:
C) number of http requests.
Answer: B
71) View-through rate measures the ________ response rate to an ad.
A) 30-minute
B) 24-hour
C) 7-day
D) 30-day
Answer: D
A) flash marketing
B) bundling
C) surge pricing
D) freemium
Answer: C
73) Hits are a measure of the:
C) number of HTTP requests.
Answer: C
C) pays only for those users who perform a specific action, such as registering, purchasing,
etc.
Answer: C
75) eCPM measures the ROI of an ad by dividing the total earnings of the ad by which of
the following?
Answer: C
76) Which of the following measures the average length of stay at a Web site?
A) loyalty
B) stickiness
C) page views
D) retention rate
Answer: B
A) percentage of visitors who indicate an interest in a site's products by registering or
visiting a product's pages.
Answer: A
D) percentage of customers who return to the site within a year to make additional
purchases.
Answer: B
79) Conversion rate is a measure of the:
A) percentage of visitors who indicate an interest in a site's products by registering or
visiting a product's pages.
Answer: B
A) conversion rate
Answer: C
A) abandonment rate
B) unsubscribe rate
C) bounce-back rate
D) attrition rate
Answer: C
A) view time
B) click-through rate
C) completion rate
D) skip rate
Answer: C
83) Which of the following measures the percentage of customers who purchase once but
never return within a year?
A) retention rate
B) attrition rate
C) loyalty rate
D) conversion rate
Answer: B
Chapter 7 Social, Mobile, and Local Marketing
1) All of the following were popular types of online marketing before 2007 except:
A) e-mail. B) corporate Web sites. C) mobile marketing. D) display ads.
Answer: C
2) Which of the following is not true about social marketing?
A) More than 50% of Twitter's ad revenues are generated by desktop users.
B) Social marketing is growing at around 30% a year.
C) Social marketing differs markedly from traditional online marketing.
D) In social marketing, business cannot tightly control their brand messaging.
Answer: A
3) The second most popular social network in terms of average minutes per visitor is:
A) Instagram. B) Pinterest. C) LinkedIn. D) Tumblr.
Answer: D
4) Which of the following most helped Dagny Aslin of ExchangeHunterJumper.com

in establishing her brand in the niche area of selling high-end competition horses?
A) integrating online and offline marketing techniques to establish a consistent brand
B) adapting marketing techniques to keep up with new Internet technologies
C) valuing quality over quantity at each stage in the Web site development process
D) establishing customer needs and habits as the top priority in all marketing
decisions
Answer: D
9) Which of the following is known primarily for blogs?
A) Facebook B) Tumblr C) Google D) Instagram
Answer: B
10) Which of the following is the first step in the social marketing process?
A) community B) amplification C) fan acquisition D) engagement
Answer: C
11) Encouraging users to click a Like button is an example of which step in the social
marketing process?
A) fan acquisition B) brand strength C) community D) amplification
Answer: D
12) Your Facebook News Feed includes all of the following except:
A) status updates. B) app activity. C) Likes. D) tweets.
Answer: D
13) Which of the following statements about Facebook Exchange is not true?
A) It competes with DoubleClick.
B) It allows advertisers to target ads.
C) It is a social search engine.
D) It involves cookies.
Answer: C
14) Ads that appear in a Facebook user's News Feed are called:
A) Marketplace Ads. B) Promoted Ads. C) Page Post Ads. D) Brand Ads.
Answer: C
15) Which of the following do Facebook users spend the most time on?
A) News Feed B) Photos C) Profiles D) Graph Search
Answer: A
16) Which of the following is a history of your actions on Facebook?
A) News Feed B) Timeline C) Ticker D) Open Graph
Answer: B
A) About 75% of Facebook's ad revenue in 2015 is expected to come from its mobile
ad platform
B) The only way to access Facebook from a mobile device is to use a mobile app.
C) Mobile ads are displayed in users' News Feeds.
D) Facebook's mobile ad revenues are its fastest growing revenue stream.
Answer: B
18) All of the following marketing tools on Facebook require payment except:
A) Brand Pages.
B) Right-Hand Sidebar Ads.
C) News Feed Page Post Ads.
D) Mobile Ads.
Answer: A
19) The ratio of impressions to fans is a measure of:
A) engagement. B) amplification. C) community. D) fan acquisition.
Answer: D
20) Which of the following provides marketers with a real-time digital dashboard so
they can see tweet activity about a TV show, commercial, or brand?
A) Enhanced Profile Pages B) Amplify
C) Lead Generation Cards D) Promoted Accounts
Answer: B
21) Which of the following involves a coupon or other promotional offer that appears
in users' Twitter timeline?
A) Promoted Tweet B) Promoted Trend
C) Promoted Account D) Lead Generation Card

Answer: D
22) Which of the following statements about Pinterest is not true?
A) Pinned photos and photo boards are available to all Pinterest users.
B) Pinterest users are overwhelmingly female.
C) Pinterest enables users to integrate their pins into their Facebook News Feeds and
Twitter streams.
D) Pinterest is the only one of the major social networks that does not accept paid
advertising.
Answer: D
23) Which of the following are features of both Pinterest and Twitter?
A) tweets B) hashtags C) pins D) Image Hover widget
Answer: B
24) All of the following are Pinterest marketing tools except:
A) Brand pages. B) Product Pins. C) Promoted Pins. D) Promoted Accounts.
Answer: D
25) The number of people exposed to pins is a measure of which of the following?
A) engagement B) community C) brand strength D) fan acquisition
Answer: D
26) Which of the following is an online service specifically aimed at measuring the
impact of Pinterest and other visual social media?
A) TweetDeck B) Curalate C) Amplify D) Webtrends
Answer: B
27) Which of the following is another term for amplification?
A) impressions B) reach C) conversation rate D) conversion ratio
Answer: B
28) All of the following are examples of dark social except:
A) e-mail. B) tweets. C) SMS texts. D) Snapchat.
Answer: B
29) Facebook's share price fell dramatically after its IPO because investors feared that:
A) Facebook's new marketing solutions would be difficult to monetize.
B) new social networks such as Instagram were cannibalizing Facebook's audience.
C) privacy concerns were driving users away.
D) Facebook would be unable to increase advertising revenues fast enough to justify

its price.
Answer: D
30) Which of the following allows Facebook to track user behavior on other sites and
then sell the information to marketers?
A) Open Graph B) Like button C) hashtags D) Whatsapp
Answer: B
31) Which of the following is not true about Facebook News Feed Page Post Ads?
A) They have a tiny tag indicating that they are sponsored.
B) They can be liked, shared, and commented on, just like any News Feed post.
C) They cannot contain links.
D) They have social context.
Answer: C
32) Which of the following is a micro-blogging social network site that allows users to
send and receive 140-character messages?
A) Facebook B) Twitter C) Pinterest D) Instagram
Answer: B
33) Companies are not permitted to collect personal information from children under
the age of ________ without parental consent.
A) 8 B) 10 C) 13 D) 16
Answer: C
34) Which of the following was the object of the FTC's first-ever COPPA enforcement
action involving mobile apps?
A) Disney's Playdom B) W3 Innovation C) Snapchat D) Yelp
Answer: B
35) Which of the following is most similar to Pinterest?
A) LinkedIn B) Instagram C) YouTube D) Tumblr
Answer: B
36) Which social marketing proved the most effective for

ExchangeHunterJumper.com?
A) Facebook B) YouTube C) Pinterest D) Instagram Answer: A
37) Which of the following refers to the number of interactions among members of a
group and reflects the "connectedness" of the group, even if these connections are
forced on users?
A) engagement B) information density
C) social density D) amplification
Answer: C
38) Which of the following refers to those forms of social sharing that occur off the
major social networks, through alternative communication tools?
A) social density B) dark social C) amplification D) engagement
Answer: B
39) Which of the following is a real-time bidding system that allows advertisers to
target their ads to specific users based on personal information provided by Facebook?
A) Amplify B) FBX C) DoubleClick D) PTAT
Answer: B
40) All of the following are in the process of either testing or offering Buy button to
advertisers except:
A) Facebook. B) LinkedIn. C) Pinterest. D) Instagram.
Answer: B
41) Which of the following involves using a variety of tools to encourage users to
interact with content and brand?
A) social density B) engagement C) amplification D) dark social
Answer: B
42) Which of the following involves using the inherent strength of social networks to
encourage visitors and fans to share their Likes and comments with friends?
A) social density B) engagement C) amplification D) dark social
Answer: C
43) Which of the following is a Facebook feature that allows app developers to
integrate their apps into the Facebook pages of users who sign up for the app?
A) Whatsapp B) Like button C) Graph Search D) Open Graph
Answer: D
55) Which of the following is not true about mobile marketing?
A) Mobile marketing is the fastest growing form of online marketing.
B) Mobile marketing is growing at around 30% a year.
C) A substantial part of mobile marketing should be counted as social marketing.
D) People use most of their mobile minutes while they are on the go.
Answer: D
56) Which of the following is the top app in terms of both audience size and share of
time spent?
A) YouTube B) iTunes C) Twitter D) Facebook
Answer: D
57) How many retail-oriented apps are there in the top 25 apps?
A) 0 B) 1 C) 2 D) 5
Answer: C
A) Google is the leading display ad site on mobile devices.
B) Google is the largest distributor of video ads on the mobile platform.
C) Mobile advertising is dominated by Google.
D) Google generates almost two-thirds of all mobile search ad spending.
Answer: A
59) Which of the following is the most popular use for mobile devices?
A) shopping B) socializing C) entertainment D) performing tasks, such as finances
Answer: C
60) According to a recent National Federation of Retailers survey, what percentage of

tablet users plan to purchase anything with their tablets?
A) Around 75% B) Around 50% C) Around 33% D) Around 35%
Answer: C
61) Which of the following accounts for the most time people spend using a mobile
device?
A) watching video B) social networks
C) listening to music D) reading news and magazines
Answer: C
62) Around how many apps do users regularly use a month?
A) 10 B) 26 C) 30 D) 50
Answer: B
63) In 2015, mobile marketing was about ________% of all online marketing.
A) 15% B) 25% C) 40% D) 50%
Answer: C
64) Which of the following accounts for the most mobile ad spending?
A) display ads B) search engine advertising
C) video ads D) SMS text messages
Answer: B
65) Which of the following is not a major provider of mobile display advertising?
A) MoPub B) iAd C) AdMob D) Webtrends
Answer: D
66) Which of the following is the leading mobile retailer in the United States?
A) Walmart B) Amazon C) Google D) QVC
Answer: B
67) Which of the following technologies has Apple adopted in its hardware for Apple
Pay?
A) GPS B) NFC C) BLE D) QR codes
Answer: B
68) Which of the following statements about BLE is not true?
A) Only Apple iPhones can use BLE.
B) BLE uses less power than traditional Bluetooth or GPS.
C) BLE has a two-way, push-pull communication capability.
D) BLE is more accurate than targeting through Wi-Fi triangulation.
Answer: A
69) According to a recent National Federation of Retailers survey, consumers are

more likely to use tablets rather than smartphones for all of the following except:
A) research products. B) purchase products.

C) redeem coupons. D) check for in-store availability.
Answer: C
76) Which of the following is currently a small part of the online marketing universe,
but is expected to triple over the next five years?
A) local marketing B) location-based mobile marketing
C) mobile marketing D) social marketing on Facebook
Answer: B
77) Macy's deployed which of the following technologies in many of its retail stores
in 2014?
A) QR codes B) iBeacon C) E9-1-1 D) Geo-search
Answer: B
78) Which of the following earns the most location-based marketing revenue?
A) Twitter B) Apple C) Facebook D) Google
Answer: D
79) Apple's iBeacon uses which of the following technologies?
A) BLE B) NFC C) E9-1-1 D) QR codes
Answer: A
80) A recent Google survey found that ________ % of smartphone users visit a store
within a day of conducting a local search.
A) 15 B) 25 C) 50 D) 75
Answer: C
81) Google uses which of the following to build a global database of wireless access points
and their geographic locations?
A) E9-1-1
B) Street View cars
C) iBeacons
D) BLE
Answer: B
Chapter 8. Ethical, Social, and Political Issues in E-commerce
1) Which of the following e-commerce technology dimensions creates greater opportunities
for cyberbullying?
A) information density
B) interactivity
C) social technology
D) ubiquity
Answer: C
2) Which of the following e-commerce technology dimensions has the potential to reduce
cultural diversity in products?
A) ubiquity
B) interactivity
D) global reach
Answer: D
3) Which of the following is not one of the four basic principles shared by ethical schools of
thought in western culture?
A) accountability
B) privacy
C) responsibility
D) liability
Answer: B
4) What is the first step in analyzing an ethical dilemma?
A) Define the conflict or dilemma and identify the higher-order values involved.
B) Identify the potential consequences of your opinions.
C) Identify the options you can reasonably take.
D) Identify and describe the facts.
Answer: D
5) Which ethical principle states that, when confronted with an ethical dilemma, individuals
should take the action that achieves the greater value for all of society?
A) the Golden Rule
B) Risk Aversion
D) the Social Contract rule
Answer: C
6) Which ethical principle emphasizes putting oneself into the place of others and thinking
of oneself as the object of the decision?
A) the Golden Rule
B) Universalism
Answer: A
7) Which ethical principle asks you to assume that virtually all tangible and intangible
objects are
owned by someone else unless there is a specific declaration otherwise?
A) the Golden Rule
C) the Social Contract rule
D) No Free Lunch
Answer: D
8) Which ethical principle states that if an action cannot be taken repeatedly, then it is not
right to
take at all?
A) Universalism
D) the Golden Rule
Answer: B
9) Which ethical principle asks you to consider the impact of your decision if the principles
underlying your decision became an organizing principle of the entire society?
A) the Golden Rule
B) Risk Aversion
C) the Slippery Slope
Answer: D
10) Which ethical principle tells you that it is wise to assume perfect information markets?
A) the Golden Rule
B) the New York Times test
Answer: B
11) Which ethical principle states that when confronted with an ethical dilemma, an
individual
should take the action that produces the least harm, or the least potential cost?
A) the Slippery Slope
B) Risk Aversion
C) No Free Lunch
Answer: B
12) A social consequence of the richness of Internet information is:
A) an increase in shallowness.
B) an increase in the ease of creating misleading information.
C) very persuasive messages might reduce the need for multiple independent sources of
information.
D) an increase in vulnerability to hacking attacks.
Answer: C
13) Downloading music tracks owned by record companies without paying for them is an
example of a violation of:
A) patent law.
B) copyright law.
C) trademark law.
D) privacy law.
Answer: B
14) Which of the following features of e-commerce technology can result in work and
shopping invading family life?
A) interactivity
B) ubiquity
D) global reach
Answer: B
20) Which of the following basic ethical concepts plays an important role in defining
privacy?
A) responsibility
B) accountability
C) liability
D) due process
Answer: D
21) Which of the following is not aimed at strengthening the ability of law enforcement
agencies to monitor Internet users without their knowledge?
A) the USA PATRIOT Act
B) the Homeland Security Act
C) the Communications Assistance for Law Enforcement Act
D) the USA Freedom Act
Answer: D
22) Which of the following tools can companies use to track user statements and views on
newsgroups, chat groups, and other public forums?
A) cookies
B) digital wallets
C) search engines
D) shopping carts
Answer: C
23) Which of the following can be used to record all keyboard activity of a user?
A) shopping carts
B) trusted computing environments
C) spyware
D) DRM
Answer: C
24) Which of the following statements about industry self-regulation regarding privacy is
not true?
A) OPA members are required to implement the OPA's privacy guidelines.
B) The primary focus of industry efforts has been the use of online "seals" that attest to the
site's policies.
C) Industry efforts have not so far succeeded in reducing American fears of privacy
invasion.
D) The NAI's privacy policies have established the TRUSTe seal.
Answer: D
25) The sharing of a user's stored cookie information between Web sites and without the
user's knowledge is:
A) legal in the United States but illegal in Europe.
B) illegal in the United States but legal in Europe.
C) legal in both the United States and Europe.
D) illegal in both the United States and Europe.
Answer: A
26) Which of the following requires financial institutions to inform consumers of their
privacy policies and permits consumers some control over their records?
A) Freedom of Information Act
B) Gramm-Leach-Bliley Act
C) COPPA
D) HIPAA
Answer: B
27) Which of the following is a core Fair Information Practices (FIP) principle?
A) Choice/Consent
B) Access/Participation
C) Security
D) Enforcement
Answer: A
28) Which of the FTC's Fair Information Practices (FIP) principles requires identification of
the collector of data?
A) Notice/Awareness
B) Choice/Consent
D) Security
Answer: A
29) Which of the FTC's Fair Information Practices (FIP) principles requires opt-in or opt-out
policies to be in place?
A) Notice/Awareness
B) Choice/Consent
D) Security
Answer: B
30) What is the FTC recommendation regarding choice as it relates to personally
identifiable information (PII)?
A) Require firms to have consumers affirmatively opt-in before PII is collected.
B) Require firms to allow consumers to opt-out before PII is collected.
C) Make collection of PII illegal.
D) Require robust notice only before PII is collected.
Answer: A
31) "Do Not Track" falls under which of the following principles in the FTC's new privacy
framework?
A) Privacy by Design
B) Simplified Choice
C) Greater Transparency
D) Scope
Answer: B
32) Which of the following technologies allows you to send e-mail without a trace?
A) anonymous surfing
B) P3P
C) anonymous remailers
D) public key encryption
Answer: C
33) Which of the following is not true about the evolution of Facebook's privacy policies
over the ten-year period from 2005 to 2015?
A) The amount of information gathered and monitored by Facebook increased.
B) Facebook's privacy policies improved from 2005 to 2009.
C) Facebook's privacy policy became easier to understand.
D) Facebook's privacy policies have steadily declined since 2009.
Answer: C
34) The President's Council of Advisors on Science and Technology has called for all of the
following except:
A) a consumer privacy bill of rights.
B) a data breach law requiring firms to report losses of consumer data.
C) an amendment of the Electronic Communications Privacy Act to strengthen protections
against government surveillance.
D) a blanket prohibition on commercial data brokers.
Answer: D
35) According to data from Pew Research Center, which of the following is the action
which the highest percentage of Internet users has taken to preserve their privacy online?
A) used an anonymous Web browsing service
B) encrypted their communications
C) cleared Web browser history and cookies
D) posted comments online anonymously
Answer: C
36) Which of the following statements about the new proposed E.U. General Data
Protection Regulation (GDPR) is not true?
A) The GDPR will replace the E.U.'s existing Data Protection Directive.
B) The GDPR will apply across all E.U. countries.
C) The GDPR eliminate the right to be forgotten.
D) The GDPR will limit the ability of companies to use data for purposes other than those
for which it was collected.
Answer: C
37) Which of the following is not a privacy advocacy group?
A) Epic.org
B) Reputation.com
C) Cdt.org
D) Privacy.org
Answer: B
38) Which of the following operates the largest private personal database in the world?
A) Experian
B) Acxiom
C) TransUnion Corporation
D) Apple
Answer: B
50) Which of the following is a tiered notice and response system aimed at reducing
copyright infringement over P2P networks?
A) the CAS
B) FIP
C) Surfright
D) the Open Internet Order
Answer: A
51) What is the major reason that the Internet has such potential for destroying traditional
conceptions and implementations of intellectual property law?
A) the ability to make perfect copies of digital works at little cost
B) the anonymous nature of the Internet
C) the support for instant peer-to-peer communication
D) the use of standards for file formats
Answer: A
52) Which of the following protects original forms of expression in a tangible medium?
A) trade secret law
B) copyright law
C) patent law
D) trademark law
Answer: B
53) How long does copyright protection extend for corporate-owned works?
A) 25 years
B) 50 years
C) 75 years
D) 95 years
Answer: D
54) Which of the following situations would not qualify for the fair use exception to U.S.
copyright law?
A) A professor clips a newspaper article just before class and distributes copies of it to his
class.
B) A journalist quotes a paragraph from a book in a review of the book.
C) A student copies a photograph of his favorite band from a Web site created by the band's
record label and places it on the student's personal Web site.
D) Google posts thumbnail images of books in the Google Book Search Project.
Answer: C
55) All of the following are factors that will be considered in determining whether use of
copyrighted material is "fair use" except the:
A) nature of the work used.
B) amount of the work used.
C) market effect of the use.
D) free availability of the work on the Web.
Answer: D
56) All of the following are possible penalties for violating the Digital Millennium
Copyright Act (DMCA) except:
A) up to ten years imprisonment for a first offense.
B) fines up to $500,000 for a first offense.
C) fines up to $1 million for a repeat offense.
D) restitution to the injured parties for any losses due to infringement.
Answer: A
57) All of the following statements about the Digital Millennium Copyright Act (DMCA)
are true except:
A) the DMCA makes it illegal to circumvent technological measures to protect works.
B) the DMCA makes Internet Service Providers (ISPs) responsible and accountable for
hosting Web sites or providing services to infringers regardless of whether the ISP is aware
of infringement.
C) the DMCA requires search engines to block access to infringing sites.
D) the DMCA allows libraries to make digital copies of works for internal use only.
Answer: B
58) Which of the following allows someone to obtain an exclusive monopoly on the ideas
behind an invention for 20 years?
A) copyright law
B) trade secret law
C) patent law
D) trademark law
Answer: C
59) All of the following statements about patents are true except:
A) it is more difficult to obtain a copyright than it is to obtain a patent.
B) the four types of inventions protected by patent law are machines, manmade products,
compositions of matter, and processing methods.
C) computer programs can be patented.
D) in order to be patented, an invention must be nonobvious.
Answer: A
60) Which case was instrumental in paving the way for Internet business methods patents?
A) Brown Bag v. Symantec
B) State Street Bank & Trust Co. v. Signature Financial Group, Inc.
D) Ticketmaster Corp. v. Tickets.com
Answer: B
61) Amazon has a patent on:
A) download-based sales
B) display of third-party advertisements in floating windows.
C) one-click purchasing.
D) hyperlinks.
Answer: C
62) Disputes over federal trademarks involve establishing:
A) underlying ideas.
B) intent.
C) piracy.
D) infringement.
Answer: D
63) Registering a domain name similar or identical to trademarks of others to extort profits
from legitimate holders is an example of:
A) cybersquatting.
B) cyberpiracy.
C) framing.
D) metatagging.
Answer: A
64) Which of the following handles cybersquatting cases under its Uniform Dispute
Resolution procedures?
A) ICANN
B) FTC
C) WIPO
D) USPTO
Answer: C
65) Registering a domain name similar or identical to trademarks of others to divert Web
traffic to their own sites is an example of:
A) cybersquatting.
B) cyberpiracy.
C) framing.
D) metatagging.
Answer: B
66) Registering the domain name Faceboik.com with the intent to divert Web traffic from
people misspelling Facebook.com is an example of:
A) cybersquatting.
B) typosquatting.
C) metatagging.
D) linking.
Answer: B
67) In which of the following cases did the U.S. Supreme Court rule that basic business
methods cannot be patented?
A) State Street Bank & Trust v. Signature Financial Group, Inc.
D) Brown Bag Software v. Symantec Corp.
Answer: C
68) The display of a third-party's Web site or page within your own Web site is called:
A) cybersquatting.
B) metatagging.
C) framing.
D) deep linking.
Answer: C
69) Which of the following statements about the patent battle between Apple and Samsung
is not true?
A) The courts have decided that Apple does not have a valid patent on the iPhone's user
interface.
B) The courts have ruled that Samsung has infringed on some of Apple's patents.
C) Analysts believe the cost to Apple of this litigation is at least equal to the damage award
it may ultimately be paid.
D) Over the last five years of litigation, Samsung has changed its interface and functionality
to greatly reduce its infringement.
Answer: A
70) Megaupload's founder, Kim Dotcom, was arrested in connection with which of the
following?
A) copyright infringement
B) patent infringement
C) trademark infringement
D) privacy violation
Answer: A
71) Which of the following cases involved the issue of keywording?
A) Ticketmaster Corp. v. Tickets.com
B) Bernina of America, Inc. v. Fashion Fabrics Int'l, Inc.
C) Government Employees Insurance Company v. Google, Inc.
D) E. & J. Gallo Winery v. Spider Webs Ltd.
Answer: C
72) Which of the following involves bypassing the target site's home page and going
directly to a content page?
A) cybersquatting
B) metatagging
C) framing
D) deep linking
Answer: D
73) All of the following cases involved the doctrine of fair use except:
A) Brown Bag Software vs. Symantec Corp.
B) Perfect 10, Inc. v. Amazon.com, Inc. et al.
C) Field v. Google, Inc.
D) Kelly v. Arriba Soft.
Answer: A
78) Which of the following is not one of the issues complicating the taxation of e-commerce
sales?
A) Taxes raised are used for different government purposes.
B) Sales taxes and policies vary by state and country.
C) Retailers legally only have to charge sales tax if they have operations located in the same
state as a consumer.
D) Small online businesses are unable to manage sales taxes to thousands of different
jurisdictions.
Answer: A
79) Which of the following statements about net neutrality is not true?
A) The FCC now regulates ISP pricing.
B) The FCC ruled that Internet broadband service providers should be viewed as public
utilities similar to telephone companies.
C) The FCC overruled state laws that made it difficult for cities to operate their own
broadband networks.
D) ISPs can no longer discriminate against users on the basis of protocol or amount of
usage.
Answer: A
82) Which of the following is not a major e-commerce public safety and welfare issue?
A) regulation of gambling
B) regulation of cigarette sales
C) regulation of pornography
D) regulation of taxation
Answer: D

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Chapter 5

E-commerce Security and Payment System

Course name: E-commerce

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The Rise of the Global Cyberattack

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The E-commerce Security Environment

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What is Good E-commerce Security?

• Security often breaks at weakest link

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Figure 5.1 The E-commerce Security Environment

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The Tension between Security and Other Values

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Security Threats in the E-commerce Environment

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Figure 5.2 A Typical E-commerce Transaction

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Figure 5.3 Vulnerable Points in an E-

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Potentially Unwanted Programs

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Example of “Nigerian letter” scam

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Hacking, Cybervandalism, and Hacktivism

• White hats, black hats, grey hats

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Credit Card Fraud/Theft

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Spoofing, Pharming, and Spam (Junk) Websites

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Sniffing and Man-In-The-Middle Attacks

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Denial of Service (DoS) and Distributed Denial of Service (DDoS)

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Poorly Designed Software

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Social Network Security Issues

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Mobile Platform Security Issues

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Insight on Technology: Think Your Smartphone is Secure?

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Cloud Security Issues

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Internet of Things Security Issues

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Figure 5.5 Tools Available to Achieve E-

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Symmetric Key Cryptography

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Public Key Cryptography

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Figure 5.6 Public Key Cryptography: A Simple Case