E-Marketing Theory and Application PDF

e-marketing
theory and application
Stephen Dann
and
Susan Dann
October 28, 2010 11:55 MAC/DANN Page-i 9780230_203969_01_prexxii

© Stephen Dann and Susan Dann 2011
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6-10 Kirby Street, London EC1N 8TS.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified
as the authors of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First published 2011 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978–0–230–20396–9
This book is printed on paper suitable for recycling and made from fully
managed and sustained forest sources. Logging, pulping and manufacturing
processes are expected to conform to the environmental regulations of the
country of origin.
A catalogue record for this book is available from the British Library.
A catalog record for this book is available from the Library of Congress.
10 9 8 7 6 5 4 3 2 1
20 19 18 17 16 15 14 13 12 11
Printed and bound in China
October 28, 2010 11:55 MAC/DANN Page-ii 9780230_203969_01_prexxii

This book is dedicated to the people who just want their mobile phones
to make phone calls – SMD
To Sascha and his lifelong companion, the late Bert – SJD
And to our family and friends who once more wondered where we went this
time, and why we stopped answering our calls when we bought those shiny
new phones – SMD & SJD
October 28, 2010 11:55 MAC/DANN Page-iii 9780230_203969_01_prexxii

October 28, 2010 11:55 MAC/DANN Page-iv 9780230_203969_01_prexxii
}Short contents
List of figures and tables xi

Preface xv
Acknowledgements xix
About the authors xxi
1 Introduction to e-marketing 3
2 Foundations of e-marketing 29
3 e-marketing strategies 59
4 e-marketing planning 87
5 Online consumer behaviour 123
6 Creation, delivery and exchange of value offerings 153
7 Branding and promotion 185
8 Services and relationship marketing 221
9 Community and networks 253
10 Implementation 279
11 Applications of e-marketing 315
12 Social media 343
October 28, 2010 11:55 MAC/DANN Page-v 9780230_203969_01_prexxii

Short contents
13 m-commerce 381
14 Beyond the Web 407
15 Social impact 437
Index 465
vi
October 28, 2010 11:55 MAC/DANN Page-vi 9780230_203969_01_prexxii

}Contents
List of figures and tables xi

Preface xv
Acknowledgements xix
About the authors xxi
Section 1 Background and planning

1 Introduction to e-marketing 3
Learning objectives 3
Welcome 4
Marketing with an e 4
I can’t believe it’s not e-marketing 6
Defining e-commerce 7
The Internet 8
Network of networks (infrastructure + exchange) 10
Virtual geography (infrastructure + environment) 12
Virtual economy (interaction + environment) 16
A brief history of the Internet 18
The parameters of the book 22
Conclusion 26
References 27
2 Foundations of e-marketing 29
Introduction 30
Marketing 30
Core concepts refresher 35
Features of the e-marketing environment 41
Business considerations for e-marketing 49
vii
October 28, 2010 11:55 MAC/DANN Page-vii 9780230_203969_01_prexxii

Contents
Unique e-marketing issues 54

Conclusion 56
References 56
3 e-marketing strategies 59
Introduction 60
Big picture strategies 60
Objectives and goals 76
Segmentation 80
Positioning 84
Conclusion 85
References 85
4 e-marketing planning 87
Introduction 88
Purpose, nature and point of planning 88
Step 1: Where are we now? 90
Step 2: Where do we want to go? 104
Step 3: How do we get there? 109
Where should we end up? 114
Reporting and documenting: it’s all part of the plan 115
Conclusion 121
References 121
5 Online consumer behaviour 123

Introduction 124
Innovation and the Internet 124
Consumer psychographic characteristics of the Internet 139
Consuming the Internet – consumer behaviour applications
of the Internet 142
Conclusion 149
References 149
Section 2 Principles of e-marketing

6 Creation, delivery and exchange of value offerings 153
Introduction 154
Value offers and customer requirements 154
Marketing mix for value creation 157
Product theory 157
Distribution 167
Pricing theory 172
Conclusion 182
References 182
viii
October 28, 2010 11:55 MAC/DANN Page-viii 9780230_203969_01_prexxii

Contents
7 Branding and promotion 185

Introduction 186
Communications of offerings that have value 189
Communicating online using the promotional mix 198
Principles and tactics 207
The communication checklist 215
Conclusion 218
References 219
8 Services and relationship marketing 221

Introduction 222
Services marketing 222
Relationship marketing 238
Conclusion 249
References 250
9 Community and networks 253

Introduction 254
Cybercommunity 254
Fitting community into e-marketing and e-marketing into
communities 267
Planning for community 269
Conclusion 276
References 276
10 Implementation 279
Introduction 280
Implementation 280
e-marketing management technology: the product–market fit 291
Task 1: Define the product–market fit 292
Task 2: Design the fit 295
Deliver the fit 300
Defend the fit (metric) 306
Effective and ineffective e-marketing application 309
Conclusion 311
References 311
Section 3 Applications
11 Applications of e-marketing 315
Introduction 316
Principles in application: frameworks for classifying the Internet 316
ix
October 28, 2010 11:55 MAC/DANN Page-ix 9780230_203969_01_prexxii

Contents
International and export marketing: putting ‘world wide’

into the Web 326
Applications of the Internet 334
Conclusion 340
References 341
12 Social media 343

Introduction 344
Social media 344
Social media planning process 348
Social media sites 363
Conclusion 379
References 379
13 m-commerce 381
Introduction 382
m-commerce 382
The m-marketing marketspace 391
Conclusion 404
References 405
14 Beyond the Web 407

Introduction 408
The off-web environment 408
Exploring beyond the Web 418
Conclusion 435
References 436
15 Social impact 437

Introduction 438
Dealing with the future present: preserving the ethos of the
‘old Internet’ 442
Clash of cultures: scarce versus abundant 448
Intellectual property 449
Dealing with the new 460
Conclusion 461
References 462
Index 465
October 28, 2010 11:55 MAC/DANN Page-x 9780230_203969_01_prexxii

}List of figures and tables
Figures
1.1 Hoffman and Novak’s model 6

1.2 Conceptual boundaries for defining the Internet 9
1.3 The XKCD map of the Internet 14
1.4 The virtual product 17
2.1 Cutting edge 39
3.1 A minus minus 70
4.1 The planning process 89

4.2 Advanced search 101
4.3 Google alerts 102
4.4 Marketing interview 110
5.1 What’s learned can’t be unlearned – permanent adoption 126

5.2 The companion cube of innovation theory 126
5.3 Contagion diffusion: the ‘if you get it, share it’ approach 127
5.4 Categories of innovations 129
5.5 Complexity (aka I’m an idiot) 131
6.1 Branching diagram of the product components 159

6.2 The virtual product portfolio 160
6.3 Flash games 162
xi
October 28, 2010 11:55 MAC/DANN Page-xi 9780230_203969_01_prexxii

List of figures and tables
6.4 Online to offline 163

6.5 Sleep becomes optional 174
7.1 Communications model 187

7.2 Mispronouncing words 188
7.3 Banner advertising shapes 199
8.1 Service product model 223

8.2 Service/goods analysis 224
8.3 Relationship mapping 247
9.1 Mediated communications model 257

9.2 Hypermediated communications 258
9.3 One-to-many 259
9.4 One-to-many to many-to-one 260
9.5 Computer-mediated communications 261
9.6 One-to-many-to-one 262
9.7 Internet argument 268
10.1 Designing the fit for physical and non-physical products 295
10.2 Delivery situation options 302
10.3 Translating timelines 304
11.1 The inter-blag 317

11.2 Bored with the Internet 323
12.1 Social media components 345

12.2 Social media planning process 348
12.3 Feline the social media momentum 351
12.4 Social media flow chart 360
12.5 You don’t need to join every social media site 361
12.6 YouTube comments 377
13.1 Identifying the mobile marketing platform 383

13.2 iPhone or Droid? 388
13.3 A familiar technology 390
13.4 Product model in mobile marketing 400
13.5 Ringtones 401
14.1 Wheel of retailing (try not to reinvent it) 415
15.1 Abstraction 439

15.2 Approved content 446
15.3 Steal this comic 459
xii
October 28, 2010 11:55 MAC/DANN Page-xii 9780230_203969_01_prexxii

Tables
3.1 Ansoff matrix 71
4.1 Segmentation matrix 106
5.1 Characteristics, categories and innovations 129

5.2 Innovation characteristics by innovation adoption category 137
5.3 Category versus class 139
6.1 Price position 181
7.1 E-mail as branding 193
8.1 Determinants in trust development on the Internet 248
10.1 Metrics for objectives 284

10.2 Revenue 0 business objectives 286
10.6 The product–market fit 292
10.7 Modified Ansoff 2×2 matrix 292
10.8 Definitive options: Be new or improved in one or more category
product 294
10.9 The augmented history tourist application 294
10.10 Links between positioning strategy, objectives and product 297
10.11 Innovation characteristics, innovation adoption category, and strategy 299
10.12 Delivering the fit: four possible delivery scenarios 301
11.1 Characteristics of different international orientations 329

11.2 Combining behaviour, objectives, content, attractor types and the
marketing mix 338
12.1 Innovation characteristics and social media 346

12.2 Sample tactics 352
12.3 Objective, marketing mix and social media 353
12.4 Short list of recommended sites 360
12.5 Convert the planning process to a documented outcome 363
12.6 The social media shopping list 364
12.7 Objectives on Blogger 365
12.8 Objectives on Delicious 366
12.9 Objectives on Facebook 368
12.10 Objectives on Flickr 370
12.11 Objectives on Sidewiki 372
12.12 Objectives on Livejournal 374
xiii
October 28, 2010 11:55 MAC/DANN Page-xiii 9780230_203969_01_prexxii

12.13 Objectives on Twitter 375

12.14 Objectives on YouTube 377
13.1 Innovation characteristics by innovation adoption category 393

13.2 Features versus users 394
13.3 Motives versus devices 395
13.4 Sample tactics 399
14.1 Linking the wheel to objectives, markets and tactics 416

14.2 Attractors in the off-web channels 417
14.3 Beyond the Web 418
15.1 Creative Commons licences 453
xiv
October 28, 2010 11:55 MAC/DANN Page-xiv 9780230_203969_01_prexxii

}Preface
Writing a book on e-marketing is a challenging process of second guessing the future,

monitoring the past and hoping the present will hold still long enough to stop the
sentence you’re writing about the Apple iPad from becoming obsolete.
For the most part, we’ve spent the duration of the project trying out new content,
new frameworks and a host of new websites to the point that if you’ve got the same
name as one of the authors, you’re not going to have any social media sites left that
will accept it as a valid username (which we discovered when one author’s namesake
friended them on Facebook and permanently confused everyone).
In order to put the book together, we made a few decisions at the outset. First, we’d
name brand names so people knew what sort of websites, hardware and technologies
matched the generic home-brand marketing theories. Secondly, that merely naming a
brand wasn’t going to be an endorsement any more than naming the Ansoff matrix
was grounds to automatically assume a business growth strategy. Thirdly, that this was
e-marketing, so we’d bet on the marketing theory ahead of the technology since market-
ing’s older, more robust and runs in online, offline, mobile and in-flight mode. Finally,
we also decided to go for the first person marketer approach of using less third per-
son (apart from the odd cut scene) and more author integration. The only rule we had
was to keep the authors anonymous (so you can’t say for sure which one of them has
the contemporary games habit, and which one believes gaming perfection was reached
with Tetris).
xv
October 28, 2010 11:55 MAC/DANN Page-xv 9780230_203969_01_prexxii

Preface
} Design decisions
Writing a print book about e-marketing is like using time-lapse photography as a naviga-
tion tool. The past looks pretty and it’s a good field guide to what’s been there previously
in the same area. However, as with something as unstable as the Internet, there’s room
for change, upgrade and new concepts. That said, the last time the authors wrote an
offline marketing book, the AMA definition of marketing changed in the same year the
book was published (and that was offline marketing).
We’re used to change being a constant and have factored that into the book’s frame-
works – including putting in some technology predictions that might come to pass
if marketing students were to invest their time, effort and energy into developing and
using these new areas (hint, hint). At the same time, we’re also keenly aware that change
doesn’t negate history, and the cyclical nature of human endeavour is one of action
and reaction. Build a distributed network and someone will compete with a central-
ized structure that in turn will find a distributed network showing up a while later
for a rematch.
} Old theory, new technology

There’s a deliberate strategy behind our selective mixture of antique theory and
cutting-edge content. Back in the early days of the Internet there was a propen-
sity for self-proclaimed and actual experts to declare all of the old rules of business
dead and that the Internet changed everything so fundamentally that new rules
were needed. This turned out to be wrong, and the old rules of profit, loss, rev-
enue and consumer satisfaction still applied (along with the rest of the notes). Fast
forward to a new decade, social media and a new batch of proclamations about
the old rules being dead, and we’re suffering a serious case of deja Google. So we
elected to run with the rules, models and frameworks from the 1990s to showcase
the idea that fundamental principles of marketing outlive software, hardware and self-
proclaimed experts. We may not be using dial-up modems (just the mobile wireless
laptops and smart phones), hopping onto the Internet to check mail on CompuServe
and AOL (Google and Yahoo!) or talking to our friends in IRC (Twitter) or USENET
groups (Facebook groups) but we are still using the new technology for same old
communications outcomes.
} Learning from history

By far and away the most surprising reaction to the Internet has been the opportu-
nity to abandon the social constraints imposed by the Industrial Revolution. Prior to
industrialism (the manufactured goods superhighway), cottage industries dominated
the production landscape as small producers serviced local and niche markets. With
the development of factory systems and the high demand for manual labour, society
recalibrated to cluster workers around their employment sources (factories) in order
xvi
October 28, 2010 11:55 MAC/DANN Page-xvi 9780230_203969_01_prexxii

Preface
to expedite the production processes by getting employees to work as fast as possible.

Cities, suburbs and whole towns were based around geographies that suited the physical
locations of factories, shipyards and other industrial activities.
As the Internet has gradually moved information production into the forefront of
contemporary employment, a ‘revolution’ has taken place. Separation of employees
from the production location is touted as new and revolutionary despite having been
the dominant industrial model several centuries prior to the Internet. The development
of temporary businesses, loose coalitions of individuals who cluster together for the
duration of a project then spread out into their next projects, sounds just like the sort
of thing the Internet was designed to support. Said model of ‘temporary companies’ is
the operational model of Hollywood and the film industries, where the break up of the
big studios was driven by the ‘Company of Strangers’ model, some fifty years prior to
the Internet being little more than a back-of-a-napkin idea.
The lesson for the Internet is to accept that the use or development of a new technol-
ogy does not negate the lessons of history. Anyone sold on the idea of the Internet as
a ‘revolution’ should be reminded (with varying degrees of force) that revolution does
mean 360◦ rotation and going around in circles as much as it means the overthrow of
established order.
Plus ça change, plus c’est la même chose.
} Notes for the readers

There are a couple of points we’d like to highlight about the book.
Cross-linked content
The chapters are sufficiently cross-wired that you’ll probably try to click the (chapter)
references out of habit. As soon as we’re doing this in an e-book, that’ll work. For now,
we’ve heavily cross-linked and cross-referenced the content so you know where it first
appeared and when it’s next likely to appear. When you reach the far end of the book,
the cross-referencing increases dramatically as we’re drawing together a whole book’s
worth of the content to showcase how to use the concepts, theory and notes in more
practical examples.
It’s a trap
There’s one thing we should warn you about this book – it’s loaded with links to highly
interesting places that will capture your attention. If you’re easily distracted, buy a
kitchen timer and ration your online research time into short units. That said, we’d
also like to point out that we had to field test our research in Facebook games, which
meant playing around in addictive Flash gaming as a form of work. It’s the only time
procrastinating about our homework resulted in a book chapter being written.
xvii
October 28, 2010 11:55 MAC/DANN Page-xvii 9780230_203969_01_prexxii

Preface
Cats
The Internet is powered by cats. We don’t know why, but if you’re a dog person (or
chicken person), then it might be a bit annoying to constantly have cat references lit-
tered throughout the online world. You’d have our sympathy, but we’re cat people, and
the plethora of captioned cat photos is quite relevant to our interests.
Oh my god, it’s full of cats

Source: http://xkcd.com/262
e-introduction (aka Chapter 0, the Web chapter)

The dead tree edition of the book comes with an online chapter that is variously known
as Chapter 0 (since it’s the precursor to Chapter 1), e-introduction or ‘that web chapter’.
The chapter covers the sign up and registration details for a range of e-marketing
activities, and since the Internet is considerably volatile we figured a chapter full of
screenshots, URLs and recommended web companies being printed out was just asking
for trouble. The chapter will probably go through a few revisions over the lifespan of
the printed book since web pages change, companies, brands and products come and
go, and all the screenshots will fall victim to the passage of time and web design fash-
ions. The e-introduction is available on the Companion Website: www.palgrave.com/
business/dann.
xviii
October 28, 2010 11:55 MAC/DANN Page-xviii 9780230_203969_01_prexxii

}Acknowledgements
The authors would like to acknowledge the ongoing support of the backroom workers
of the Dann & Dann publishing machine. Thank you to Jean Shepley, Michael Dann,
Peter Dann and Jennifer Gearing for their ongoing support. Thanks also to the team
at Palgrave Macmillan who shook hands with us and said, ‘Call when it’s done’. Since
we’re still figuring out that bit of our phones, we e-mailed them instead.
Stephen would like to thank his colleagues at the Australian National University for
their contributions, suggestions and assistance over time, and the IT team at the College
of Business and Economics, who steadfastly refused to ask what precisely he was doing
with that computer (it’s been much appreciated and heavily documented). Thanks go
to everyone who has contributed to this book by being part of Stephen’s online life
through USENET, IRC, Facebook, MSN, Twitter, e-mail and the many hundreds of hours
logged in game servers. It’s the people who make the Internet, especially the thousands
of you who will never read this dedication because it’s printed on a dead tree. Susan
and Stephen would like to thank Randall Munroe of XKCD.com for providing us with
the opportunity to use his cartoons throughout the text. XKCD has been proof that the
Internet can bring together the extremely potent combinations of awesome observation
and stick figures into a powerful force for good (even if mouseover text is impossibly
hard to render in print).
Finally, Susan and Stephen would like to thank you for reading this page.
xix
October 28, 2010 11:55 MAC/DANN Page-xix 9780230_203969_01_prexxii

October 28, 2010 11:55 MAC/DANN Page-xx 9780230_203969_01_prexxii
}About the authors
There are two authors. Neither remembers who was lead author and since they’re both
Dann, S., it doesn’t actually matter. For the record, their parents never expected them
both to work in the same field, co-author books and generally have copious confusion
when the letters addressed to Dr S. Dann arrive at the mail box (which is one reason
they both like e-mail).
Dr Stephen Dann (BA, B Com (Hons First Class), GCHE, MHE, PhD)
Dr Stephen Dann’s Avatar logo
Stephen Dann is a senior lecturer at the Australian National University in Canberra,

Australia. Stephen’s research specializations include social marketing, strategy,
consumer behaviour and Internet marketing. His ambition is to collect one of each
qualification available in post-secondary school education.
URL: www.stephendann.com
xxi
October 28, 2010 11:55 MAC/DANN Page-xxi 9780230_203969_01_prexxii

About the authors
Dr Susan Dann (BA, MPubAdmin, PhD, FAMI, CPM, MAICD)
Dr Susan Dann’s Avatar logo
Dr Susan Dann is Professor of Marketing and Deputy Head, School of Business,

Australian Catholic University. Susan combines an extensive career in academia with
a role as an independent company director, bringing marketing expertise to a number
of boards and as a member of government tribunals. She first taught an e-marketing
subject in 1994 where students complained about having tutorial exercises e-mailed
to them, and asked why they couldn’t come to class to get the notes instead. Susan’s
research specializations are in the non-commercial applications of marketing, includ-
ing social marketing and corporate-level marketing strategy, and she has a publication
background in business strategy, marketing and public policy. Her ambition is to find
out the best three laws people would pass if they were arbitrarily made ruler of their
local area.
URL: www.susandann.com
xxii
October 28, 2010 11:55 MAC/DANN Page-xxii 9780230_203969_01_prexxii

SECTION 1}
Background and planning
S
ection 1 of the text includes the first five chapters of the book, which cover the
groundwork for e-marketing from the background history of the medium, mar-
keting and the role of strategy, planning and consumer behaviour. Chapter 1 is
the history lesson on where the Internet and e-marketing have come from, and how
this shapes the direction and development of where it can (and should) head in the
future. Chapter 2 brings together a background briefing on marketing theory from the
usual suspects of the marketing mix to some of the more influential marketing mod-
els and ideas that recur through the advance stages of the book. Chapter 3 introduces
strategy to e-marketing with an emphasis on thinking through the practical decisions
needed to be addressed, and the questions that need to be answered before any of the
tactical elements can be considered. This leads directly to Chapter 4, which outlines
the procedures for documenting the decisions of the previous chapter through a range
of different plans and planning processes. Finally, Chapter 5 delves into the consumer
behaviour aspects of the Internet with a review of the common models, assumptions
and insights into how people use the Internet to set the context before Section 2 reviews
the implementation issues of addressing consumers through e-marketing.
October 29, 2010 9:4 MAC/DANN Page-1 9780230_203969_02_cha01

CHAPTER 1}
Introduction to e-marketing
Learning objectives }
By the end of this chapter, you should:
• understand the basics of e-marketing and the distinctive styles of using

technology for marketing purposes
• be conversant with different perspectives of the Internet, including a brief
history of the medium
• appreciate how different social, technological and economic influences
have shaped the Internet
• understand where some of the services mentioned in the e-introduction
(setting up for e-marketing) fit into the bigger picture of the Internet.

e-marketing
} Welcome
Welcome to e-marketing: the book (the musical is under contract negotiation). This
chapter will briefly introduce you to e-marketing, give you an overview of the nature of
the Internet, fill in some of the history of how a Cold War weapon system evolved
into a global communications framework and set the scene for some of the ideas
expressed later in the book. This chapter is more focused on the Internet than mar-
keting. Chapter 2 is more about marketing and less focused on the Internet. Combined,
Chapters 1 and 2 lay the groundwork for getting into the e-marketing frame of mind
before you start the strategy (Chapter 3) and planning (Chapter 4).
A word of note: the authors write in a cross-referenced style, pointing out the con-
nections between ideas in the current chapter and other information in the book.
As e-marketing makes copious use of hypertext and linking to relate content, the
authors use the nearest print equivalent, which is the bracketed (Chapter) statement,
to point out where the related ideas reside. It’s also worth noting that marketing and
the Internet are equally self-referential and that circular logic applies to both areas –
marketing is an ongoing cycle of measurement, action, measurement and reaction (and
more measurement). At the same time, the Internet has the capacity to generate an
infinite loop of cross-links, cross-references and cyclical activity.
} Marketing with an e
e-marketing is any type of marketing activity that needs some form of interactive tech-
nology for its implementation. Throughout the book, the term e-marketing is used as
an umbrella definition to describe a range of means, mechanisms and approaches for
making the best use of technology for delivering marketing. That said, it’s worth defin-
ing the different styles of e-marketing that sit under the central definition, much in
the same way that cricket has a core set of rules which translate into the stylistically
different test matches, Twenty20 and the one-day series whilst all still being cricket.
The same deal applies to e-marketing – there’s a core set of rules (electronic, interactive,
marketing) which can be applied in a range of interesting ways to make the best use of
the features of the particular technology. There are three different forms of interactive
marketing to examine:
◦ marketing over IP
◦ interactive marketing
◦ mobile marketing.
Marketing over IP
‘Marketing over Internet protocol’ (MOIP) is our term for all forms of marketing that
make use of any part of the Internet. If the marketing requires an Internet connec-
tion to take place, then it’s MOIP in nature. MOIP is the dominant theme of this book
and will be the mainstay of most of the chapters (Chapter 13, m-commerce, being the

obvious exception). The book takes a slightly broader approach to MOIP to avoid lim-
iting marketing thinking to just web-based campaigns and product delivery to include:
Internet-based systems such as social networks and virtual worlds (Chapter 9); non-web
technologies such as peer-to-peer file sharing, instant messenger chat, IRC channels, FTP
sites and even e-mail (Chapter 14); and Internet-connected devices such as the Xbox,
Wii, Playstation and Internet fridges (Chapter 14 again). All are considered in relation
to what their specific technical merits can contribute to marketing.
The Internet fridge: TCP/ IP + cold storage }
Somewhere around 2002, the refrigeration industry was going to be revolutionized by

providing Internet connections straight to the refrigerator door. This was, and may yet
remain, one of the most improbable ideas concerning Internet access. Adding an LCD
touch screen to a cold storage device was supposed to revolutionize food ordering,
with pull-down menus of ingredients, automatic reordering of food, barcode scanning
and a whole host of concepts that look okay on paper but fail miserably in practice.
The fridge wasn’t smart enough to tell the difference between an empty and full milk
bottle, the (few) users trying out the barcode service usually forgot to scan in or scan
out the empties and the on-screen touch screen ordering of food from a website ran
into the problem that it was usually quicker and cheaper to head to the shops for
whatever you needed to restock the fridge. In short, it turned out that you could
put a fridge on the Internet, and the Internet on a fridge; it was just not that useful.
As such, the term ‘ Internet fridge’ is occasionally used to describe a technology that’s
technically feasible but utterly useless in practice.
Interactive marketing
Interactive marketing excludes any MOIP devices to focus on the use of non-Internet,
non-mobile, interactive systems. This allows marketers to consider options outside of
the standard Internet or mobile phone frameworks to make use of other technologies
such as sample media (e.g. DVD, CD), pre-loaded demonstration devices (e.g. iPods,
USB sticks), in-store devices (electronic kiosks, CD printers, iPod docks) and even the
interactive capacity of digital television. Interactive marketing is the older sibling of
Internet marketing, and whilst the Internet can handle dynamic interaction and small-
to-medium-sized file distribution, there’s still no faster way to place content in the
hands of a customer than a physical object. A single, standard 4GB USB or DVD can
hand over several hours of downloadable content in mere seconds. Interactive mar-
keting devices will periodically show up throughout the book where they can be used
to augment the e-marketing thinking. (They’ll feature in Chapter 14 and make cameo
appearances in Chapter 13 as means to augment mobile marketing.) Interactive mar-
keting also features the use of some conventional cinematic and television devices such
as product placement in video games or sponsorship of downloads, content or data
(Chapters 7 and 14).

e-marketing
Mobile marketing
Mobile marketing (m-marketing) uses a distinctive suite of communication protocols
and tools such as wireless access, Bluetooth devices, multimedia messaging (MMS) and
short messaging systems (SMS). Whilst the average mobile device seems capable of Inter-
net access, accessing the Internet by a handheld device doesn’t necessarily mean the use
of MOIP. (Consider the distinction being whether the user needs an e-mail address or
mobile number to sign up for the offer.)
If you send a product announcement out by e-mail, tweet it and post it to the com-
pany website, you’re probably thinking MOIP even if all of the above can be read on an
iPhone. However, if you use the native mobile technologies to send out an SMS, or have
an interactive billboard broadcasting a Bluetooth downloadable voucher, or send content
through the GPRS networks, then you’re definitely using m-marketing. M-marketing as
a distinctive approach within e-marketing is covered in depth in Chapter 13.
} I can’t believe it’s not e-marketing

The chief boundary line that determines whether the marketing is conventional mar-
keting or e-marketing is whether or not the marketing process fits within the Hoffman
and Novak (1996) one-to-many-to-one communications model. Back in the dawn of
the commercial Internet, Hoffman and Novak put forward a simple model of computer-
mediated communication in an interactive environment, which basically asks whether
the recipient of the communication (consumer) can interact with the sender (company)
in a way that links both customer and consumer (Figure 1.1).
F
F
Content
C Content Medium Content F
C
Content
C
C
Figure 1.1 Hoffman and Novak’s model

Source: http://jcmc.indiana.edu/vol1/issue3/hoffman.html

One-to-many-to-one communications are those computer-mediated communica-

tions that are published by an individual into a public sphere, such as Facebook,
and are read and responded to either directly (to the individual by direct message)
or indirectly (to the Facebook group) by other readers (Hoffman and Novak, 1996).
Computer-mediated communications (CMC) is the use of computers and computer
networks as communication tools by people who are collaborating with each other
to achieve a shared goal that does not require the physical presence or co-location of
participants and which can provide a forum for continuous communication free of time
constraints (Kaye, 1991). Hoffman and Novak’s (1996) house rule didn’t require actual
interaction, just the capacity for interaction if desired between consumer and marketer.
This approach neatly isolates television and radio into non-electronic marketing due
to the lack of interactive capacity (print media loses on the grounds it’s not electronic)
whilst preserving a role for the interactive television broadcasts such as the ‘red but-
ton’ voting system on Sky News (news.sky.com). There’s a grey area over SMS voting
for reality television shows and the live phone call request lines on radio counting as
interactivity – thankfully, that’s resolved by neither of them being marketing.
} Defining e-commerce
e-commerce forms the broader business domain of using electronic-mediated sys-
tems for commercial activity and is the parent business activity which contains
e-marketing. It encompasses all electronic business models, including those which
operate between customer and provider through the Internet as well as the direct elec-
tronic exchange of data between business-to-business partners. e-commerce provides
commercial frameworks for organizations to manage customers and partners for profit.
e-commerce and e-marketing are often used interchangeably to describe e-marketing
activity. For the purpose of this book, e-commerce is the broader platform of commer-
cial activity conducted using electronic systems (Gilmore, Gallagher and Henry, 2007).
When a customer uses an ATM to withdraw cash, e-commerce covers the electronic data
interchange (EDI) that occurs between the ATM and the customer’s bank. As an ATM ter-
minal is displaying adverts for additional products or services, e-marketing is also taking
place. The core differentiating factor for e-marketing is the involvement of a targeted
customer rather than just the use of a network to facilitate a commercial transaction.
e-commerce can, and does, occur without e-marketing. Radio frequency identity
(RFID) tags can be used for inventory management through automated systems that
maintain and update accounting records (Chapter 14). The supermarket checkout scan-
ner’s automated data systems provide inventory control, accounting and auditing as
they validate the transaction and adjust stock levels to enable just-in-time order-
ing systems to function. Although these systems may be used for marketing, they
function independently of an e-marketing programme. Just as an organization can
engage in commerce without using marketing, it’s entirely possible to forgo e-marketing
and still be in the e-commerce business. The importance of isolating e-commerce
from e-marketing is the recognition that e-marketing is not the be-all and end-all
of commercial activity on the Internet. e-marketing has the distinctive focus on

e-marketing
the marketer–marketplace–society trifecta for value creation that is part of the larger
e-commerce agenda but only one aspect amongst many (no matter how important we
might want to see ourselves as being).
} The Internet
The Internet is a giant network of interconnected networks which combine to host
a virtual economy, a massive virtual infrastructure and the dynamics of the interac-
tions of real people around the world, all off the back of cables, servers and a lot
of electricity generation. Back at the start of the commercialization of the Internet,
the American Federal Networking Council (FNC) (www.itrd.gov) produced a definitive
statement outlining the Internet as a multi-layered platform consisting of separate yet
connected distinct components which covered the hardware, software, intellectual and
social infrastructure which produced the Internet as recognized by the end users.
Component parts of the Internet

For the purpose of this book, and based on the FNC’s original definition, the Inter-
net is divided into four equal component parts: infrastructure; exchange; interaction
and environment.
Infrastructure
Technical infrastructure covers the hardware infrastructure such as the computers,
cables, power lines and power supplies that provide the backbone through which the
Internet is housed and accessed. If you emphasize this aspect of the Internet, you prob-
ably think of it as a ‘network of networks’ where the priorities are the computer and
software issues. At the same time, the physicality of the Internet as a set of machines,
cables and servers is also connected to viewing the Internet as a place and emphasizing
the virtual geography of the medium (particularly if you play online as game servers
become their own pocket universes).
Exchange
Interactive exchanges are the second aspect of the Internet which covers both the
interactivity of Hoffman and Novak’s (1996) computer-mediated communication and
the software infrastructure of the Internet. The software infrastructure is the veritable
alphabet soup of communication protocols that govern how the interconnected net-
work of networks actually exchange data. This covers aspects such as TCP/IP protocols,
IP addresses, packet routing, HTTP, FTP, bittorrent traffic, VOIP, SMTP and any other
future protocols. For the most part, this level of the Internet is almost invisible to the
end user insofar as the computers go about their business largely without human inter-
vention or human observation. If this is your dominant way of thinking about the
Internet, you’ll either be at the network of networks approach or considering the user
experience of the Internet as a service delivery platform.

Interaction
Social interaction is the social infrastructure that relates to the human-to-human,
human-to-business relationships that are conducted via the medium of the Internet.
This also incorporates an intellectual infrastructure of online content that was cre-
ated by and for other Internet users. If you think of this as the Internet, you most
likely consider virtual presence as a key issue for e-marketing. The combination of vir-
tual goods, services, experiences and knowledge forms economic goods of value for a
virtual economy and provides the required shared goods of value to create the basic
community framework for interpersonal interaction (see Chapter 9 for more on shared
goods of value).
Environment
Virtual environments are the culmination of the human need to conceptualize the unfa-
miliar with the nearest metaphor that almost fits – hence, on the Internet where nothing
is remotely real, the metaphorical terminology relates to the physical world in terms of
‘home page’, ‘site’, ‘virtual world’ and ‘virtual economies’. The virtual environment
is a way of collectively understanding how the infrastructure, social interaction and
seamless exchange of data and human interaction results in an economic and social
structure. If you focus on this aspect of the Internet, then your interests are likely to
lie in the development of virtual worlds and the virtual geography as an exploration
of the spaces of the Internet. Alternatively, if you’re interested in the meta-level results
of the dynamic interaction of people, places and exchange, you’re probably captivated
by the virtual economy. Figure 1.2 outlines a visual representation of the conceptual
boundaries of the Internet.
Figure 1.2 intentionally locates each of the four categories at the mid point between
their respective defining terms as there are no absolutes within the model. For example,
Infrastructure Environment
Virtual geography
Virtual worlds
cybercommunity
social networks
Network of networks Virtual economy

TCP/IP e-business
HTML standards e-marketing
W3C
Virtual presence
People
services
systems
Exchange Interaction
Figure 1.2 Conceptual boundaries for defining the Internet

e-marketing
there are no pure infrastructure applications in that either the infrastructure does some-
thing (network of networks) or is something (virtual geography). Similarly, environment
facilitates virtual geography or the virtual economy (or both). The following section
outlines how the network of networks, virtual geography, virtual economy and vir-
tual presence classifications can be used to encapsulate different types of e-marketing
activity, websites and non-web activity.
} Network of networks (infrastructure + exchange)

The Internet is a legacy of a much different world. Borne out of the later part of the
twentieth century, the Internet was designed to augment the capacity of the American
military-intellectual infrastructure to survive a series of direct nuclear hits in the event
of the Cold War turning into a nuclear war. The original design of the Internet was
based on combining the principles of load sharing with a distributed infrastructure
that avoided implementing a vulnerable central command point that could be targeted
for destruction. Consequently, the schematics for the Internet included the capacity to
function without a central hierarchy, withstand massive damage from the loss of vari-
ous nodes without collapse and still contain most of the useful stuff you’d want in the
event of having to exchange nuclear missile fire with another nation. The practical real-
ity of the Internet’s infrastructure includes a realistic chance of an Internet Brownout if
you combine peak demand with the loss of a large slice of any nation’s power grid, and
the geographic reality of isolated chokepoints at various points on the map – notably,
the undersea cable that connects each continent and island to the rest of the grids.
However, as the Internet was designed to function as a decentralized system, it also
invoked a sense of distributed responsibility within the system’s administrators and
programmers. The principle of network neutrality was paramount when networks were
limited and demand could easily exceed supply on one pipeline. Network neutrality
solved the infrastructure issue by allowing unfettered carriage of information between
the various networks as a distributed (and mutual) load-sharing scheme. Any data
packet can use any network equally to avoid blockages with the overall system, mean-
ing that all packets can seek the most efficient path from A to B. As the nature of digital
transmission and replication is relatively lossless, the decentralized sharing of carriage
also created an unexpected by-product in the form of a mindset of information sharing
for the human operators of the networks. As the Internet demonstrated the technical
feasibility of near-limitless replication of data, it led people to challenge the applicability
of physical world economic models of scarcity within the new environment.
One particular point to be noted here is that the Internet’s ‘blockage as damage’
approach to shifting data combined with the lack of scarcity to generate a notion that
‘information wants to be free’ where ‘free’ meant ‘able to move about the network’.
(The ‘free’ bit is sometimes co-opted as ‘information wants to be distributed without
charge’. It’s not strictly true since information pretty much enjoys the journey as much
as the destination.) As the Internet needed to be able to seamlessly re-route around bro-
ken, blocked or destroyed nodes in the network, and be able to reconcile and replicate
dozens of different redundant systems, it was custom designed to create value through
10

duplication and multiple redundant copies of information. This is absolutely counter-

intuitive to the conventional physical world model of commerce where value comes
from scarcity. Understandably, if you invert the physical models of value from scarcity,
it requires some serious recalibration of commerce, intellectual property law and prop-
erty rights. The recalibration is currently under way in a range of legal, practical and
social manners which are discussed further in Chapter 15. Similarly, network neutral-
ity is also an unusual framework from a physical world perspective and is periodically
challenged by organizations that try to apply a physical world model of scarcity to the
online world’s surplus model (Chapter 15).
From an e-marketing perspective, there are a few reasons to take an interest in the net-
work of networks. First, it allows you to understand the physical constraints that limit
the capacity of the Internet to deliver on promises of value. Secondly, it ties back into
virtual geography (Chapter 9) and encourages an expansive view of the Internet beyond
the Web (Chapter 14). Finally, it’s also thoroughly fascinating (if you have the slightest
geek propensity) to be able to appreciate the logistical feats that underpin how the Inter-
net actually functions at the code level. (If the section on HTML in the e-introduction
(setting up for e-marketing) sparked any interest, it’s worth pursuing the network of
networks view further in your own research.)
Machinery and the Internet

The Internet is both the machinery and the machinations of technology, software and
systems interacting with each other as much as the interactions that take place between
the human members of the community. Predictions of intelligent shopping agents who
scour the Internet for the best bargains, deals and prices are perpetually in the process of
‘coming soon’. Ultimately though, digital agent (and related systems) still report back
to human masters. Only when computers are capable of applying for their own credit
cards and earning their own incomes will marketing need to focus on the computer-
to-computer transactions that are currently the domain of the engineers (even if the
equipment in NASA’s space programme has its own Twitter account, it’s still a human
operator typing up the mission output in human-readable format). Marketing strategies
remain aimed at human interactions for the majority of Internet transactions, with the
possible exception of the search engine optimization strategies.
Computers as customers: the case of search engine optimization

Search engine optimization (SEO) is an odd area of marketing that is ostensibly business-
to-business in nature, but bordering on business to computer in actual conduct. SEO
marketing attempts to develop the optimum mix of content and metadata to improve
the search engine’s automated review of the site’s content. Although SEO is formally
considered a form of advertising and promotion, there is a possibility that it may
have become the first foray into a human-AI barter programme. If you consider the
search engine’s computer as a customer, SEO is about swapping ease of indexing for the
computer for a decent result in the computer’s automated report. The process of SEO
involves placing a range of formalized structures such as metadata information into
11

e-marketing
websites, videos, Flash animations and other elements which are in formats that are
easiest to read for the automated search systems that build the search engine databases.
What complicates the issue beyond mere administrative Internet paperwork is the
nature of something like the Google Index which has a consumer behaviour style ‘black
box’ complexity to it. In an eerie parallel to CB theory, the Google Index is approxi-
mately 200 known variables, with a range of unknown elements including the differing
priorities, importance and weighting placed on each variable. In marketing terms, the
process of SEO revolves around developing a product that offers superior performance
in meeting the varying needs of the automated search engine software programs. If sat-
isfied with the data product, the search engine software exchanges a good placement
in the search engine rankings for ease of search, indexing and ‘optimized’ information.
Although it is still mostly discussed as an advertising issue (Chapter 7), there’s still a
sense of value for value swap between marketer and automated system that may just
make this a new form of marketing.
} Virtual geography (infrastructure + environment)

Virtual geography is the ways and means in which the Internet can be subdivided in
regions, zones and locations based on a range of different factors. Geographic metaphors
dominate the market with their ability to make the intangible, ethereal nature of
the Internet into something that at least feels real (even if it’s only a model). The
value of thinking of the Internet as a physical place is examined throughout the book
with a strong emphasis on the value of ‘place’ in the formation of cybercommunities
(Chapter 9) and the role of virtual geography in e-marketing distribution (Chapter 6).
The book focuses on a microcosm of ways of thinking about the Internet as a physical
location through:
◦ cyberspace
◦ marketspaces and marketplaces
◦ virtual geographic boundaries
◦ virtual worlds.
Cyberspace
No discussion of the Internet as a virtual space can avoid mentioning cyberspace. That
said, the word ‘cyber’ tends to rank alongside ‘information superhighway’ as a term
to avoid using unless you’re hosting a 1990s retro party. Cyberspace as a concept talks
about the Internet as a place, environment or thing that’s just there at the back of the
computer screen. The best (and prettiest) forerunner to the discussion of the Internet
as an inherently physical place comes from William Gibson’s (1984) definition of
‘cyberspace’ as physicality created by shared understanding. Gibson (1984, p. 51) wrote:
Cyberspace. A consensual hallucination experienced daily by billions of legitimate

operators, in every nation, by children being taught mathematical concepts . . .
12

A graphical representation of data abstracted from the banks of every computer in

the human system. Unthinkable complexity. Lines of light ranged in the non-space of
the mind, clusters and constellations of data. Like city lights, receding . . .
Gibson’s cyberspace was purely fictional playground for his novels which, as part of
the cyberpunk movement (another 1990s concept gone awry), provide a large amount
of inspiration for the graphical visualization of the Internet (partly because most of us
early Internet fans were also reading Gibson’s work). In addition to the notion of the
Internet as a physical structure, the development of the Internet also borrowed heav-
ily from the lexicon of libraries with the use of terms such as index, directory and
searching. The next wave of metaphors came from the interlinked structural diagrams
of the World Wide Web, which looked like some form of bizarre spider web. Bad puns
and in-jokes about spiders and web crawlers took over a little slice of the language.
Finally, and noticeably coinciding with the rise of Web 2.0, the language of the Inter-
net is increasingly evocative of interpersonal ownership aspects (my∗ , you∗ , face∗ etc.).
Cyberspace, however, remains a conceptual framework that allows the end user to place
a familiar mental model of the physical world over the top of the incredibly unfamiliar
Internet infrastructure. It also gave the world the comparatively less popular concept of
‘meatspace’ to describe the physical world.
Marketspaces and marketplaces

If you consider cyberspace as the end-user’s metaphor for the virtual landscape of the
Internet, then marketspace is the business world’s way of converting its familiar frame-
works for understanding how the Internet functions. The ‘marketspace’ is the parallel
digital world that accompanies the physical world of the marketplace as a conjunction
between ideas and exchange, where goods, services, ideas and money can be exchanged
as items of value (Weiber and Kollman, 1998). The marketspace–marketplace contin-
uum demonstrates that value chains of product services, procurement, distribution and
production can be found and solved in both online and offline environments.
Marketspace is independent of the Internet in that it exists at the local shop with the
scanner data feeding into the supply chain network that allows Tesco, for example, to
automatically re-order stock based on actual sales figures. At the same time, marketspace
also encompasses the entire e-commerce world where payments move from end users
(consumer or businesses) through the retail networks to suppliers, distributors and
producers (Chapter 4).
Virtual geographic boundaries

The geography of the Internet also indicates the ways and means of accessing the
content. For example, the multiple web browsers featured in the e-introduction (setting
up for e-marketing) can all access the front end of the World Wide Web for viewing
and interaction, whereas the FTP clients access specific parts of the back end of the
Internet. Similarly, virtual worlds exist isolated from the Web (Chapter 9) through the
need for specific-purpose pieces of client software (Second Life, World of Warcraft),
or operate as closed catalogue environments (iTunes, Steam) for content distribution
13

e-marketing
(Chapter 14). Appreciating that there are issues of geography within the Internet aids
the development of e-marketing distribution strategies (Chapter 3), market segmenta-
tion (Chapter 4) and the understanding of online consumer behaviour (Chapter 5) as
virtual boundaries also arise from the development of cybercommunities (Chapter 9).
Geographies of the Internet also provide useful metaphors for understanding social
clanning behaviour and shared interests – and great visual metaphors for webcomic
cartoonists (Figure 1.3).
Much like the physical world, the geographies of the Internet present their own,
different operating conditions. Online interaction is usually classified as lean or rich
media depending on the extent to which you have more than just text or static images
at your disposal. Lean media environments are communications media that tend to
strip away non-verbal cues and information otherwise available in a face-to-face envi-
ronment – usually by relying mostly on text-based communication (Montoya-Weiss,
Massey and Clapper, 1998). For the record, the textbook is semi-lean media in that we
get away with images, links and sending you off on quests, but do so without the ben-
efit of rich media engagement. Similarly, if you consider the visual differences between
Delicious (http://delicious.com) and Flickr (www.flickr.com), you can see how the infras-
tructure of a website influences the users and how they interact. Delicious is for tagging,
Figure 1.3 The XKCD map of the Internet

14

organizing and adding commentary to saved web addresses (like an oversized annotated
phonebook), whereas Flickr is the family photo album or scrapbook. Both use tags and
annotations, and have community capacity – the primary differentiation is in the pur-
pose of the system (discussion of the URL and its contents versus looking at pictures).
Delicious’s community structure is less intra-site focused than Flickr and doesn’t tend
towards Flickr’s ‘friends and family’-style community.
At the other end of the spectrum are the rich media environments which cover sites
where the Internet medium extends itself to capturing the visual and verbal nuances
of the conversation through audio (podcasts), video (YouTube) and graphical elements
(Flickr). If you look at YouTube’s capacity to publish video responses to allow people to
talk at each other (rather than to each other), you’ll notice that you can capture nuances
of sarcasm and humour through the non-verbal cues. You’ll also find that the text com-
ments below those videos lack any such nuance since they’re lean media responses to
rich media content (it’s a partial excuse for the sad state of YouTube text commentary).
Each of these ‘regions’ within the Internet has also functioned in a manner remi-
niscent of the geography for creating regional characteristics, traits and social norms.
The ‘physical’ features of various Internet environments help shape the cultural
norms of the cybercommunity structures that form around these virtual environments
(Chapter 9). Even the choice of web browser can shape the physical experience of the
Internet – compare the look of the Flock browser, with its constant reminder that there
are other real-life people on the other end of the Internet, with the more impersonal
lines of Internet Explorer, Google Chrome or Firefox. Facebook (www.facebook.com)
and Gmail (http://mail.google.com) constantly remind you that other people exist (and
they can see you) within their own networks through their chat status updates on the
side of the page.
Virtual worlds
Virtual worlds are the text-based, two-dimensional and three-dimensional self-
contained environments that exist in isolation from the rest of the Internet. The most
widely known virtual worlds are usually gaming orientated with World of Warcraft
(www.worldofwarcraft.com), EVE Online (www.eveonline.com/) and City of Heroes
(http://eu.cityofheroes.com/en/) being high-profile entrants in the genre. In the non-
gaming universe, Second Life (www.secondlife.com) remains the highest profile virtual
environment that’s not linked to some form of video game. The distinguishing fea-
tures of these virtual worlds are the need for a specialist piece of software to access
the environment (client software) and their status as pocket universes that support
real-time interaction with both computer-generated characters and other human par-
ticipants (Chapter 9). There’s also a case to argue that the Xbox Live (www.xbox.
com/en-GB/), Sony Playstation Home (uk.playstation.com/psn/pshome) and even the
Nintendo Wii’s (uk.wii.com) Internet channel are all virtual worlds by virtue of their
pocket universe status – access requires specific hardware, and the hardware is linked
to persistent, ongoing worlds. For instance, you can’t transfer between the hardware
worlds – a Mii character from the Nintendo platform can’t migrate to an Xbox. The
same Mii character can, however, travel from one Wii to another across the Nintendo
15

e-marketing
network. Consequently, it’s possible to consider the consoles as the gateway devices to
virtual worlds (Chapter 14).
} Virtual economy (interaction + environment)

The virtual economy is the consequence of a supportive Internet environment for
commerce and interactions that occur within that commercially orientated side of the
Internet. It’s vitally important to realize that the commercial and commercialized side
of the Internet is a small and absolutely replaceable part of online life. The Internet
functioned just fine without commercial interference and, with the development of
Internet2 (www.Internet2.edu) as a non-commercial Internet infrastructure, it may well
function just fine without us again. Whilst e-commerce has added some useful elements
to the online environment, it wasn’t the foundation or cornerstone of the development
of the technology. Consequently, it needs to retain a sense of perspective as to how com-
mercial activity fits within the broader socio-political landscape of the Internet. From
our perspective, there are three aspects worth considering: the e-business environment,
e-marketing and the virtual product.
e-business environment
Most of the focus of this book is on business-to-consumer (B2C) and consumer-to-
consumer (C2C) activity. However, an entire level of business-to-business (B2B) activity
exists on the Internet in terms of product acquisition, sales, catalogues and even the
shipping and logistical infrastructure that underpins the ability of companies to offer
seamless B2C services. For example, while Zazzle (www.zazzle.com) and Lulu (www.
lulu.com) both provide print-on-demand solutions with the consumer market in mind,
they also function as brokers, printers and distributors in a B2B context. For exam-
ple, when celebrity geek author Wil Wheaton (www.wilwheaton.typepad.com) used
Lulu as a print-on-demand distribution system for his book Sunken Treasure (http://
stores.lulu.com/wilwheaton), Lulu took on an e-business role for the author and func-
tioned as a B2C transaction hub for buyers of the book. Further, as Lulu operates as
a virtual business, where the content is digitally uploaded to the server for printing
and physical shipping, the company also handles the logistical issues of integration
with Amazon.com, ISBN acquisition and cataloguing, and related publishing tasks of
printing, shipping, warehousing and order fulfilment.
e-marketing
Given the nature of this book, most of the discussion of e-marketing happens within
the next fourteen chapters. However, from the perspective of understanding how
e-marketing fits into the Internet framework, it’s worth noting three things. First, the
market research and metrics aspect of e-marketing is a natural by-product of Internet
web server capacity to handle mass documentation of interaction with end users. Orig-
inally developed to assist the debugging of broken systems, server logs have become
16

valuable marketing metrics as they explain, classify and categorize different users vis-
iting the sites, where they’re from, how long they stayed and which was the last page
they viewed on the site before leaving (Chapter 10). Secondly, e-marketing exists in the
open as part of the Internet landscape of downloadable products, embedded advertis-
ing, advertorial content and a range of overt commercial activities, including everything
from the shopping cart at Amazon (www.amazon.co.uk/) to the very nature of Paypal
(www.paypal.co.uk) as a means to send money for goods won on eBay (www.ebay.co.
uk/) auctions. Finally, e-marketing is less visible and the ethereal touch when it comes
to using the knowledge of the marketplace to develop better user experiences, improve
product performance and quietly reduce the time, energy or effort requirements of
engaging with an online experience.
The virtual product

The third aspect of the virtual economy is a brief detour into the development of
product theory (Chapter 6). Figure 1.4 introduces a visual representation of the four
different categories of the virtual product (this gets a more detailed exploration later
in Chapter 6).
The unusual nature of e-marketing is that it can be dealing with movement of phys-
ical goods (atoms) facilitated by e-commerce and e-marketing activity. For example,
the printed book purchased from Lulu is an atom-based product that requires physical-
world logistics to move it from the point of production to the point of consumption.
At the same time, you can also buy a virtual good – a PDF version of the book – which
requires virtual logistics to move from the point of production (the server) to the point
of consumer (you) whilst being semi-tangible in that it takes up storage space on your
Computer-based Stored Semi-permanent
Virtual goods
Files (eg MP3s, PDF, PPT)
downloads
installed software
virtual world assets
Services
Absorbed
Content
Used
Search
Ideas,
chat, e-mail
knowledge
calender
thoughts
file hosting
Experiences
Conversations
emotions
interpersonal interaction
interactivity
Temporary Felt Person-based
Figure 1.4 The virtual product
17

e-marketing
computer (or iPhone, iPod, Kindle, etc). In contrast, content delivery such as YouTube
videos (which occupy an amazingly large amount of server space somewhere in Google’s
Volcano Fortress) never reside on your own devices (or at least, not without third-party
assistance). Similar issues arise when you read a blog, the online news or Wikipedia
(en.wikipedia.org) – the ideas are stored in your head rather than on the computer.
Much in the same way, the experience of virtual life in a three-dimensional game is tem-
porary, internalized to you (the rush of victory, the annoyance of defeat, the conflicting
desire for a pizza versus staying in the raid) and non-retrievable after the event. Finally,
to really mess things up, if content, virtual goods and experiences weren’t enough,
there’s also a whole slew of virtual services such as online calendars, cloud computing,
file hosting, chat and even online banking which do little more than move data flags
in some remote computer based on whatever you’re doing at your computer. It’s also
worth noting that none of the four components is ‘real’ in the sense of being tangi-
ble goods. An iPod is the tangible product that contains the virtual goods (audio book)
which were purchased through a virtual service (iTunes) which are then consumed to
create experiences (happiness) and content acquisition (learning).
} A brief history of the Internet

According to a consensus of opinion across a range of Internet history websites, it
appears that the launch of Sputnik in 1957 was largely responsible (or to blame) for
the development of the Internet. The launch of Sputnik created the America–Soviet
Union arms and technology race, which in turn was responsible for the creation of
DARPA (Defense Advanced Research Project Agency). Following a series of developments
in computers, information technology, communications systems and university science
labs, Internet 1.0 emerged as a recognizable form in 1969 as the ARPANET. From there, it
linked universities, government and military agencies and was restricted to these agen-
cies. Between 1969 and 1990, the development of Internet technology contained many
milestones of significance to the IT/ Internet community that are best read through the
Internet Society’s history pages (www.isoc.org/Internet/history).
Dawn of e-marketing
The first significant milestone for e-marketing occurred in 1990, as the Internet changed
from a private network between academia, government, the military and select industry
groups to become part of mainstream society. The World Wide Web made its debut in
1990, courtesy of Tim Berners-Lee and his web server software. What happened next
is a complicated explosion of web-related software and popularity with Mosaic (www.
ncsa.uiuc.edu/SDG/Software/WinMosaic), then Netscape (browser.netscape.com), Inter-
net Explorer (www.microsoft.com) and Lynx (lynx.browser.org), providing easier access
to the Internet.
The first major wave of commercial Internet access arrived in 1995, when a signif-
icant spike of Internet and web-related users appeared from outside of the university
and government sectors. From there, the rapid expansion of the Internet has seen an
18

unheralded march of technology, people and ideas using the Internet for commercial
and non-commercial purposes.
The World Wide Web (Version 1.0)

Strangely enough, there never was an official Web 1.0 statement when the concept
rolled out back in the 1990s. The World Wide Web is the graphical, user-friendly end
of the Internet, which came to prominence in the mid-1990s following the success of a
series of web browser software programs. It has remained the most accessible element of
the Internet for self-publication because websites can be created, published and accessed
without reference to a centralized broadcast authority. The Web is based primarily on
hypertext mark-up language (HTML) protocol and a series of programming languages
such as Java, Perl and common gateway interface (CGI). For a comprehensive list of the
web technologies, see the World Wide Web Consortium website (www.w3.org). Away
from the alphabet soup of programming, file types and ∗ .htm, ∗ .asp, ∗ .php and ∗ .shtml
file extensions, the most significant aspect of the Web is the hyperlink. The hypertext
system allows the user to navigate to, from and through websites providing an almost
seamless journey through the graphical front end of the Internet (one small step for
code, one giant link for webkind).
For marketing, the Web is the place to be conducting business, hawking the company
wares and developing an effective customer interface. Even in the early days of the
commercialization of the Internet, the Web was seen as the ‘official’ venue for electronic
commerce, and it is conceded by even the non-business Internet purists as a place to
allow commercial endeavours. The ease of access for publishing websites, the speed of
updating and near ubiquity of the ‘Web as Internet’ mindset in the general public makes
the Web a viable venue for conducting business.
Boom
In the late 1990s/early 2000, the siren call of the Internet also led to a significant and
short-lived economic boom based around investments in the Internet and the promise
of future rewards that were just around the corner for the company with the largest
market share. The first dot.com collapse was almost inevitable as the attitude of the
day was summarized as ‘the old rules don’t apply’ when, really, those rules about profit,
funding and economic return were fully armed and operational.
Kaboom
As with most economic booms, the economic bust that followed led to recriminations,
allegations and a range of venture capitalists dusting themselves off and looking for
somewhere else to invest to recoup their losses. The difference for Internet marketing
and Internet marketers is that commercial realities had finally arrived to a sector that
was prepared to invest money on the basis of a good idea, rather than on the basis
of business plans, market research and financial forecasting. While some might bemoan
the end of the dot.com revolution, the final result brought a level of realism and stability
19

e-marketing
to a sector that had been entirely too gung-ho in believing that operational profits were
no longer a necessary part of basic accounting.
Boom 2.0
After recovering from an outbreak of poor business practice that led to the first bust,
the Internet business community found its footing again, in part augmented by a very
large number of venture capitalists who were searching for ways to recapture the money
lost when the first dot.com bubble burst. This period following the dot.com bust also
brought a greater sense of understanding of the online market and a realization that
the market itself was still in the process of evolution as it moved from being mostly
innovators into the early adopter category (and a hint of the early majority to come
after them).
Web 2.0
The rise of Web 2.0 can be traced to the development of better Internet technologies
and the increased volume of early adopters in the Internet. Whereas innovators are
notoriously fickle, novelty seeking and move in packs from one new thing to the next
new thing, early adopters are distinguished by their role as the respectable social leaders
in their networks. Consequently, as the respectable voices of social authority started
arriving en masse to the Internet, the Internet shifted towards a platform that allowed
for user-created space, self-selected social networks and the capacity to easily broadcast
opinion leadership to a listening (or reading) audience.
The term Web 2.0 has a benchmark starting point around 2004, which indicates a
rough decade-long time frame for Web 1.0. It’s important to realize that Web 1.0 and
Web 2.0 technologies co-exist in parallel – there are numerous ‘1.0’-style websites that
are fully functional and still successfully achieving their organizational goals. On the
upside, the Web 2.0 approach of treating the Web as a platform has meant a rise in
the use of the online environments for service delivery and as the place for the whole
experience, rather than just the shopping cart that helps get the physical goods shipped
to you later. For lack of a better descriptor, the Web 2.0 technologies are also what’s
happening with the Internet at the time of writing this book, with the consequence
that if you’ve followed the steps in the e-introduction (setting up for e-marketing),
you’re well and truly embedded in the ‘new’ web experience. It’s also worth noting
that ‘new’ is an entirely relative term in the sense that Web 2.0 isn’t a new technologi-
cal breakthrough when you’ve always had Facebook (www.facebook.com) and MySpace
(uk.myspace.com).
Cloud computing (not Web 3.0)

Cloud computing is the next point in the evolutionary model of the Internet, from
the static pages of Web 1.0, through the dynamics of Web 2.0, into the ‘software as
service’ approach of cloud computing (Chapter 14). Cloud computing moves the loca-
tion of the software processing and data storage away from the computer in front of
you and into a ‘cloud’ of distributed servers and systems. It’s a strange model that draws
20

the locus of control of the user experience from the personal computer to the server
side, at the same time as personal computers are probably the most powerful they’ve
ever been. Having committed that prediction to print, Moore’s Law may yet wreck that
idea.) Simultaneously, there’s been a move towards distributed computing behaviour,
where people expect to be able to use the ubiquity of the Internet (Chapter 2) to create
a transferable environment from machine to machine. If you followed the instruc-
tions in the e-introduction (setting up for e-marketing), you’ve already experienced
cloud computing because it’s the philosophy that underpins Gmail (http://mail.google.
com), Google Reader (reader.google.com), Google Docs (docs.google.com) and Delicious
(http://delicious.com). That said, cloud computing is also slightly antithetical to the
e-introduction’s specific-purpose software list which recommends desktop installations
of file managers, office suites and graphics editors. (There are several attempts to put
graphics editors into the cloud computing framework and none of them are suf-
ficiently stable or usefully implemented to qualify for inclusion in this edition of
the book.)
One side note regarding the writing of this book: although the primary authoring
of each chapter was done on a desktop machine, the file management was conducted
via Dropbox (www.getdropbox.com), which is a cloud computer-networked storage ser-
vice. As the chapters were written and edited, they were seamlessly mirrored across the
Dropbox network so the authors could move between any of their linked machines
and access the same file as their ‘home’ computer. The authors aren’t quite at the point
where they’d attempt an entire book in Google Docs via Blackberries and iPhones just
to put cloud computing through its paces.
Riding the economic collapse

Given that the global financial crisis erupted soon after we started to write the
manuscript, we’ve been mindful of how the shake up of the world economy can, and
will, impact on e-marketing. The inevitable consequence of the reformatting and defrag-
ging of the global economy will be the readjustment in the value of the Internet to
business, society and individuals. At present, whilst there is some talk about the Inter-
net being a universal service akin to water and electricity, it is still a luxury item that
will be forgone in favour of food. The worse case scenarios for the economic conditions
will see a multi-tiered classification of society into the information-have, information-
infrequently have, information-used to have, and information-have nots. There’s still
a place for e-marketing, but it’ll be ultracompetitive and you’ll need to be good at
e-marketing from the start.
Alternatively, (although still less than optimal), the global financial crisis may result
in a massive reprioritization of individual resource allocations. Formerly cash-rich,
time-poor people may find themselves with time and cash plus the opportunity to con-
vert both into ongoing revenue. Similarly, where Internet access can be maintained,
increased levels of time from formerly full-time employed skilled web workers may open
up an array of online services, products and idea distributions that see a shift from the
centralized marketplaces of the Industrial Revolution way back to the niche cottage
industry approaches where the network of networks provides the village green for the
21

e-marketing
home-based workers to trade their wares. Finally, the global financial crisis may be an
extended period of self-correction by the open market which proceeds to reboot and
resemble the previous economic environment with slightly faster lead times and a few
additional lines of code to prevent some of the excesses that caused the last crash. With
all of these scenarios as possible outcomes, the emphasis in the book is on higher time
cost ahead of higher financial cost investments (where there’s a choice, we’ll aim for
the lower of the two costs – there’s no economic sense in spending less money if the
resultant savings are consumed by the time cost of your hourly rate).
} The parameters of the book

The Internet, like any other process, is prone to cycles of boom and bust. The Internet
(along with the world economy) is loitering around the edge of the downward-trending
business cycle and whether Boom 2.0 happens depends a lot on accountants and
economists. (Try not to feel doomed.) Consequently, there are a few safety measures
that we need to take as authors. First, when you’re writing a paper-based version of
an electronic medium, there are certain challenges associated with picking the future.
For one thing, it’s a lot harder to update than a wiki page once the book has hit the
shelves. Secondly, as an author, you have to bet on success of a technology, service
or corporation with the secure knowledge that the only permanency involved is your
record of endorsing a company that may no longer exist. Finally, there’s also the future-
proofing approach of producing a textbook that could survive even the catastrophic loss
of Google (although, if Google sinks, we might be hard pressed to find anything on the
Internet to write about next time). To deal with these problems, the authors have taken a
few liberties and made a few assumptions about how the book will function and the role
the reader will play in helping deal with written history versus contemporary reality.
Liberty City: Population – You

One chapter in and you’ve been drafted to participate in the process already. Here are
the assumptions we’re making about you so you know the sort of role you have to live
up to when reading the book and the liberties we’re taking in assuming you’re reading
this with a desire for the conversational style of writing, a bit of knowledge about your
computer and a love of novelty seeking adventure.
Liberty 1: You, yours and ours

This book is for you. Instead of talking of the mythical marketing manager on the
Clapham omnibus, the text addresses you directly with instructions, comments and
observations. There are two reasons for this approach. First, the Internet is a really good
place for live, hands-on, get-things-done education, and giving instructions gives you
the option to get involved. Secondly, the new model of the Internet and e-marketing
evolving into the 2010 decade is more of a model of conversation than ever before. Say-
ing ‘we did’ and ‘you should try’ is the language of the Web 2.0 conversational market.
22

There’s also this significant piece of marketing theory called ‘customer co-creation of
value’, which is where we (the marketer/producers) provide the platform that you
(the consumer) can use to make something that’s specifically valuable to meet your
personal needs and wants. (Customer co-creation gets a detailed explanation later in
Chapters 5 and 7). We liked the theory so much, we’ve implemented it in practice in
this book.
Liberty 2: You know something about your computer

We’re going to place some faith in your technical prowess with your own computer
(be that a favourite seat in the lab, a laptop or a home machine). e-marketing is a
computer-mediated business practice, and the unavoidable elements of the process
are the words ‘computer’ and ‘practice’. Knowing how to do medium-level complex
tasks with your computer will also assist your sense of self-confidence, self-efficacy and
comfort zone when trialling new ideas on the Internet.
If you’ve never wondered how the pieces of the Internet fit together, you’re proba-
bly not alone. The nature of being around the Internet since 1994 and working in the
e-marketing field has meant looking under the hood of Internet technology, and one of
us usually finds it fascinating even if it is thoroughly beyond our grasp to actually pro-
gram or control. We acknowledge that most e-marketers need to know very little about
the deeply technical issues of Internet protocol addresses, domain name servers and the
ever-present shuffling of information through the TCP/IP protocol. This entire aspect of
the Internet exists at the meta level and is of less importance to marketing (so long as
it’s functioning – as soon as it stops working, it becomes very important, but we don’t
know enough about it to do anything useful to fix it). That said, it’s worth pushing
the boundaries of your own knowledge of the software, systems and code as a devel-
opment exercise for your own competitive advantage over the less curious e-marketers.
Although you may never need to code your own cascading style sheet, fix a buffer over-
flow error or compile your own kernel, knowing what these things are (and more) gives
you a certain level of credibility amongst those who you will need to rely on for the
technical solutions. If nothing else, it’s nice to be able to smile along with ‘There’s no
place like 127.0.0.1’ because it means something to you.
Liberty 3: You’re up for a bit of innovation

The biggest assumption and liberty we’re taking with this book is that you’re ready, will-
ing and able to handle the level of innovation that will come your way in the course
of reading this book. Consumer behaviour theory often discusses innovation-adoption
theory in a very abstract manner, and talks of ideas such as ‘innovation-resistant
consumers’, early adopters and late-majority adoptions in terms of them being some-
thing that happens to other people. This book is going to push a range of new ideas,
new practices, new software and new websites at you in a relatively steady stream of
new things to learn, new behaviours to try and yet another login e-mail and password
to remember. We’re not fans of innovation for the sake of innovation. The book was
23

e-marketing
written in part using Word 2002, on machines running Windows XP. We’re innova-
tion resistant to a certain extent, and we respect that in our readership – you’re not being
asked to do new things just because they’re new. You’re usually being asked to try new
things because e-marketing is an incredibly young field of endeavour which is still in
the rapid growth phase (remember the product lifecycle curve from your introduction
to marketing textbook?). The infrastructure supports a rapid process of development,
and e-market maturity is measured in weeks or months, when the average person is just
hoping it all slows down and settles for a bit so they can catch up. However, until that
happens, you’ll need to be mindful of how your own innovativeness (when it comes to
the Internet) will impact on your willingness and desire to keep up with the new ideas
and exercises in the book. (Chapter 5 has a section on Domain Specific Innovativeness,
which will help.)
Authorial assumptions
Having told you what liberties we’re taking with your role in the book, it’s only fair
that we also explain where we stand on a few key issues that impact on how the
book is written.
Assumption1: You’re going to read something marked ‘READ ME FIRST’

If you’re reading this, we assumed correctly. If you’re not reading this, we don’t have
much to say to you now, do we?
Assumption 2: Safety-first e-marketing

We’re working on an assumption that this text has to back more established tech-
nologies, sites and systems over the exceptionally cool but potentially short-lived
alternatives. This means a certain level of conservative, safety-first marketing which
may not necessarily suit your personal style. More stable options can provide the
basic grounding that allows you to try out the higher-risk option later in proceedings.
To achieve this, the authors have split their respective roles to have one covering the
high-risk options, and signing up to every new thing that they find, whilst the other
author holds back to observe which of the several hundred new options is stable enough
to join the ranks of recommended e-marketing equipment.
We’re also working on the assumption that if Twitter (www.twitter.com), Facebook
(www.facebook.com), Google (www.google.co.uk), Yahoo! (www.yahoo.co.uk) and Deli-
cious (http://delicious.com) all collapse in the global financial crisis, and, if there’s still
an Internet left after these behemoths depart, someone else will step up to the plate
and take over from them. Google replaced Infoseek, which dethroned Lycos, which
succeeded (briefly) where Hotbot failed. Someone in a garage in Basingstoke or Jaipur or
New Orleans is working on a project that could fill the void if Google (or Facebook et al.)
went away. From an e-marketing perspective, the behaviours are the key – people want
to search, communicate and play games whilst looking busy or talking with friends.
Where there’s a market, there’s going to be an entrepreneur with enough venture capital
to look after our needs for free for a while.
24

Assumption 3: Things will go wrong

The book contains a series of strategies that can maximize opportunities, boost chances
and still backfire and fail outright. The beauty of the Internet is that the ‘ready, fire,
aim’ mentality allows for a certain level of improvisation and rapid backpedalling when
the ‘perfect on paper’ plan meets an unfortunate outcome in the reality of the Inter-
net. Be willing and able to react swiftly to replace a broken service, fix a dead link or
completely rethink the strategy when a central cog in the service-delivery platform goes
away. We’re used to it. You should see what happened when one of the technologies
we picked as the next big thing failed (then again, maybe you shouldn’t and we should
maintain the mysterious air of predictive accuracy). Stuff breaks, things change and
marketing rolls on regardless.
Assumption 4: Mistakes will be made

The Internet is both extremely forgiving and thoroughly ruthless. Whilst the technical
nature of the medium would lend itself to the ethereal nature of data going away, his-
tory and practice have demonstrated that data on the Internet has a half-life to rival
nuclear waste (and it’s every bit as toxic when it spills into the environment). As a
gigantic interconnected network of people, the Internet suffers from human error in a
way that hasn’t been fully addressed by society yet. Whilst the strategies of learning by
trying, failing, analysing and having another crack at it are highly endorsed, those early
mistakes will hang around, be archived, show in Google cache or reappear unexpected
off an old backup tape somewhere at some time.
Similarly, as an interconnected series of people, the Internet’s capacity for human
error being spread far and wide is unprecedented. Human error, on the other hand,
has massive precedent, and the standard operating procedures of offline life should be
considered for online conditions. Namely, you will make mistakes and your mistakes
will be known and visible. It’s how you handle the post-mistake recovery, apology and
learning opportunity that determines how badly the mistake will impact on you as an
e-marketer (and online person).
◦ You will make a mistake. Everyone will get it wrong, and depending on how you
cope with error and recovery, you may get it wrong multiple times over the one
issue. Own your error. It’s yours, you made it and you own it. Denying the error,
blaming others or trying to escape the error just highlights the original mistake (and
makes life harder for you to recover).
◦ That mistake isn’t going to go away. The digital world is surprisingly permanent,
searchable and prone to echoing off into the distance. Similarly, the number of peo-
ple willing to copy, save and preserve your mistake will rise in direct response to your
efforts to make those people (and the record of the mistake) go away. Address the
root cause of the mistake, address the mistake and fix the problem in a timely man-
ner. This is where ownership of the problem comes into play – if you step up and
say ‘My mistake, I own it’, you get to keep some control. If you say ‘That mistake
isn’t mine’ and deny ownership, then people will hand it around until they find the
owner (or someone willing to take ownership and step up with a solution).
25

e-marketing
◦ Your correction, service recovery and comeback from the mistake will be around just
as long as the mistake. Handle the inevitable errors with grace, aplomb and have
a service recovery plan that genuinely addresses the error (and tries to prevent the
same mistake recurring). Ultimately, the aim is to make new mistakes when you stuff
it up next rather than repeat classic errors time and time again.
Assumption 5: You’ll be willing to pay what something is worth

If something is core to your business, set aside a budget to pay for it, especially if it’s
available for free. If your plan for fame, fortune and business success depends on someone
else’s free services (e.g. Twitter, Facebook and MySpace) be ready and able to implement
a back-up plan when the price tag changes from free to subscription.
Similarly, if you are relying on a free service as the foundation of your enterprise,
you’ll need to be flexible with your business strategy when the charitable donation
of their service to your fortune goes away (and it probably will). You tend to get the
reliability you’re prepared to pay for – which isn’t much if you aim for low-cost ahead
of high-return investment (Chapter 4). This also applies to the open-source movement.
If you’re planning on turning your fortune on the back of an open-source application,
then you need to budget time to contribute back to the open-source community as part
of your cost base. Paying open-source dues by contributing code back to the project,
promoting the software and adhering to the commercialization agreements in the open
licences (or shifting from an open licence to a paid licence in some cases) are all business
considerations to be factored into paying the true worth of something that’s valuable
to your business project. We believe firmly in the exchange theory through monetary
and non-monetary exchange, and frame our assumptions about business expenditure
on e-marketing services accordingly.
} Conclusion
The Internet is a constantly evolving medium and e-marketing is the most volatile
and rapidly developing sub-discipline in marketing. To be a successful marketer in this
ever-changing environment requires that you not only understand the basic technical
infrastructure of the environment, but also how it got to where it is now and what it’s
likely to do in the future. Similarly, successful e-marketers not only experiment with
the latest tools and techniques, they also have to have a thorough understanding of
fundamental marketing theory and practice.
This chapter has provided an overview of the different ways in which marketing
is being used in electronic environments, the one-to-many-to-one communications
model which underpins successful e-marketing, as well as giving a brief history of the
development of the Internet. Equally importantly we outlined the assumptions we are
working from in writing this text, and the expectations we have of you as a reader if
you are going to get the best possible value out of the book.
In the next chapter we review the fundamentals of contemporary marketing practice
so that everyone reading the strategic and applied chapters on the ‘what’s’ and ‘how
tos’ of e-marketing is starting off from a common base of understanding.
26

} References
Books and journals
Gallagher, D., Gilmore, A., Carson, D. and Henry, S. (2007) ‘E-marketing & SMEs: operational
lessons for the future’, European Business Review, 19(2): 234–47.
Gibson, W. (1984) Neuromancer. New York: Ace Books.
Hoffman, D. and Novak, T. (1996) ‘Marketing in hypermedia computer mediated environments:
conceptual foundations’, Journal of Marketing, 60 (July): 50–68.
Kaye, A. (1991) ‘Learning together apart’. In A. Kaye (ed.) Collaborative Learning Through Computer
Conferencing: The Najaden Papers. Berlin: Springer-Verlag.
Montoya-Weiss, M., Massey, A. and Clapper, D. (1998) ‘On-line focus groups: conceptual issues
and a research tool’, European Journal of Marketing, 32(7/8): 713–23.
Weiber, R. and Kollman, T. (1998) ‘Competitive advantages in virtual markets – perspectives of
“information-based marketing” in cyberspace’, European Journal of Marketing, 32(7/8): 603–15.
Web references
Amazon UK www.amazon.co.uk/
City of Heroes http://eu.cityofheroes.com/en/
Delicious http://delicious.com
Dropbox www.getdropbox.com
eBay www.ebay.co.uk/
EVE Online www.eveonline.com/
Facebook www.facebook.com
Federal Networking Council www.itrd.gov
Flickr www.flickr.com
Gmail http://mail.google.com
Google www.google.co.uk
Google Docs docs.google.com
Google Reader reader.google.com
Internet Explorer www.microsoft.com
Internet Society www.isoc.org/Internet/history
Internet2 www.Internet2.edu
Lulu www.lulu.com
Lynx lynx.browser.org
Mosaic http://www.ncsa.illinois.edu/Projects/mosaic.html
MySpace uk.myspace.com
Netscape browser.netscape.com
Nintendo Wii uk.wii.com
Paypal www.paypal.co.uk
Second Life www.secondlife.com
Sky News news.sky.com
Sony Playstation Home uk.playstation.com/psn/pshome
Sunken Treasure http://stores.lulu.com/wilwheaton
Twitter www.twitter.com
Wikipedia en.wikipedia.org
Wil Wheaton www.wilwheaton.typepad.com
World of Warcraft www.worldofwarcraft.com
World Wide Web Consortium www.w3.org
Xbox Live www.xbox.com/en-GB
Yahoo! www.yahoo.co.uk
YouTube http://uk.youtube.com
Zazzle www.zazzle.com
27

CHAPTER 2}
Foundations of e-marketing
By the end of this chapter, you should be able to:
• outline the business considerations for engaging in e-marketing

• identify the inhibitors and facilitators of e-marketing
• understand the different definitions of marketing
• recognize the unique features of the e-marketing environment.
29

e-marketing
} Introduction
Marketing is an adaptive ‘smart’ technology. As a consumer-orientated approach to
business, it must learn and evolve in response to changes in the environment, and
must constantly adjust its practice, preferences and techniques to maintain its value to
the organization. The rise of consumers’ willingness and ability to communicate with
organizations, suppliers and each other to build a network of shared experience out-
side of traditional market boundaries has driven many of the recent developments in
marketing theory and practice (Kiani, 1998). Interactive communication technologies
have increased the capacity of marketing to reach and communicate with consumers,
and for consumers to communicate with marketers and the marketplace. To meet this
new challenge both marketing theory and practice have undergone significant devel-
opments since the advent of widespread access to the commercialized Internet in the
mid-1990s.
The Internet and the associated e-technologies of distributed information systems,
‘smart’ products and networked technologies have created a massive market for ideas,
information and communication. e-marketing represents one of the business ideas to
arise from the convergence of technology, marketing and the consumer marketplace.
However, e-marketing is not a standalone application, and as such, is dependent on core
marketing principles and frameworks to provide the means, mechanisms and market
understanding to address the consumer.
} Marketing
There is no single universal definition of marketing. Marketing is a living discipline that
adapts and evolves on the strengths, weaknesses and operational foibles of the market-
place. At the same time, marketing is both a business practice and an academic science,
which means that any definition of the discipline is required to be descriptive, compre-
hensive and encompass what marketing looks like in reality and what it should aspire
to become in the future. Some definitions of marketing focus on what marketing can
(or should) do for the organization as a means to set the limits and expectations for the
organization and marketer. Other definitions focus on what marketing is as a discipline,
and what philosophical world view it occupies when compared with accounting, eco-
nomics and other social sciences. Either way, all attempts to define marketing are crucial
to the functionality of the discipline and its application in e-marketing. Whilst it may
seem pedantic to focus on the definition of marketing, it is vital that an agreement as
to the role and purpose of marketing is settled upon before trying to implement it in
practice. This also connects marketing back to itself by using the principles of marketing
practice, such as product definition (Chapter 6) and positioning strategies (Chapter 7)
to establish the core brand for ‘marketing’
Marketing has always had international applications and a global focus with the
export and adaptation of products and business practices to fit with local, cultural
constraints. Different business practices and market expectations have shaped regional
30

understanding of marketing and have led to the rise of region-specific marketing groups
and meanings of marketing. As part of the regionalization of marketing, the American
Marketing Association (AMA) and the Chartered Institute of Marketing (CIM) have each
issued an official definition of marketing to guide their members. The CIM represents
marketing practitioners and academics in the United Kingdom and, to some extent, also
represents some of the European marketing community. The AMA is the chief body for
marketers in the United States and geographically related regions.
Given the interconnections in the world of marketing and the importance of cross-
cultural understanding, both the US and UK definitions of marketing are being used to
guide the structure of this book and direct the operational issues of implementation,
practice and design. The AMA (2007) definition is focused on orientating marketing
to customer needs, whilst the CIM (2005) definition addresses meeting the long-term
survival requirements of the organization. Individually, each definition is a functional
application of marketing. Combined, the definitions represent complementary forms
of the marketing world view of meeting the needs of the market and serving the
organizational goals of profit, stakeholder value and organizational longevity.
Customer focus: the AMA definition of marketing

The AMA (2007) defined marketing as:
The activity, set of institutions and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society
at large.
(Keefe, 2008)
The definition reflects the growing trend of consumers to prioritize intangible experi-
ences over the ownership of physical objects, particularly with regard to new technolo-
gies such as the iPhone and iPod (Lovelock, Patterson and Walker, 2007). Consumers
are more interested in what the product can do for them rather than focusing on a list
of features and component parts – the ability of an iPod to fend off idle conversation
on the London Underground is more valuable in practice than 4GB or 8GB of storage.
As concepts go, the idea of feature versus benefit harks back to the 1920s and a great
quote from Charles Revson saying, ‘Perfume is made in the factory, “hope” is sold in
the store’ (MacInnis and de Mello, 2005). ‘Hope’ is probably now available for down-
load from iTunes (at US$0.99), as online marketing has seen a shift from the promotion
of features (gigabytes of space, RAM, numbers, stuff) to the promotion of benefits (con-
nect with friends, embarrass family members, look busy at work). The rise of services
marketing has helped push the emphasis from physical goods (stuff is bought by you)
to experiential marketing (stuff happens to you).
The rise of the experiential marketplace has also been influenced by the growth
of Internet access and widespread acceptance of the non-physical services provided
across the Internet. Interpersonal exchange brought about by Web 2.0 and the social
media marketplace has also created an awareness of the value of the consumer to con-
sumer connection for marketers, society and the consumer. The key value of Facebook,
31

e-marketing
MySpace and Twitter is the interconnection with other people; it is not the social
software that’s used to make the connection happen. The same outcomes apply for
online communities that can spring up from the worst implemented protocols if a group
of interesting enough people hang out there together for long enough (Chapter 9).
As society increasingly accepts the role of non-physical products in everyday life, rang-
ing from cash-free shopping to digital music collections, the emphasis of marketing
becomes more focused on the value a product or service will provide rather than the
product or service itself.
The AMA (2007) definition addresses the intangible approach to marketing by
viewing the role and purpose of marketing as having three core elements:
◦ activities, processes and institutions

◦ creation, communication, delivery and exchange of offerings of value
◦ exchange between marketers, marketplace and society.
Marketing as a set of activities, processes and institutions

Any organization, website or individual can engage in marketing practice by imple-
menting the philosophy, tools, techniques and methods of marketing practice (Dann
and Dann, 2004). Seeing marketing as an applied process frees it from the require-
ment to have a formal marketing department attached in order to be ‘real marketing’
(although it doesn’t hurt to have a formal recognition). We’re focusing on market-
ing as an activity and process in this book, with activities such as market research
and planning (Chapter 4), using the marketing mix for value creation (Chapter 7),
engaging in relationship marketing (Chapter 8) and measuring the impact of the
activities (Chapter 10).
Marketing creates, communicates, delivers and exchanges offerings

that have value
Value creation is a literal technique of making something useful for someone else so
that everyone involved in the process gains from the experience. It’s a semi-formal pro-
cess of developing an offer and releasing the offer to the market, so the consumer can
use it to solve a problem, fill a need or satisfy an urge (Chapter 6). The phrase ‘offerings
that have value’ is the all-inclusive term for anything (goods, services, ideas or expe-
riences) that an organization is delivering to the marketplace that can be used by the
customer for the customer’s benefit (Dann and Dann, 2007). Communication of value
is the process by which the organization can alert the potential (or actual) customer as
to the existence of the offer and how that offer can benefit them (Chapter 5). Delivery
of value is about making the value offering available where the customer can access it,
and ensuring that the components of the offer (e.g. product features and price) can be
used by the customer (Chapter 6). Exchange of value can be simple and direct trades of
benefit (usually money for something, cheques for free) or exceedingly complex benefit
exchanges such as time, support or loyalty (Chapter 7).
32

Marketing involves exchange between marketer, marketplace and society

The recipients of marketing activities, processes and institutions are divided into
four clusters:
◦ customers
◦ clients
◦ partners
◦ society.
Customers are the targets of the commercial marketing exchange of value and usually
pay cash (or nearest equivalent) as their value exchange with the organization. Cus-
tomers buy things, pay bills, purchase subscriptions and are usually on the paying end
of the words ‘monetize’. Clients are the recipients of the marketing offer from non-
profit, social marketing, political and other non-commercial marketing applications in
that they do not engage in a traditional financial trade. That said, the Internet is putting
non-financial client exchanges firmly in the commercial marketing camp as e-marketers
trade content for viewership to sell adverts, advertorials and other funding arrange-
ments. Customers and clients shouldn’t be considered mutually exclusive categories.
If there’s direct cash, it’s a customer and if it’s indirect (and leads to cash or non-cash
benefit), think in terms of client. For the purpose of this book (and to make life easier),
the term consumer is used where customers and clients are interchangeable. Partners
are those involved in the organization’s marketing activities as employees, suppliers,
distributors or indirect contributors through any other aspect of the marketing process.
This has also been interpreted to incorporate the component elements of the market-
ing organization to ensure that they have a role in the exchange of value (Dann and
Dann, 2007). Society represents the broader community in which the consumer and the
organization exist. This element represents the requirement for marketing to engage in
ethical practice and to consider issues of corporate social responsibility such as sustain-
ability, environmental impacts and the possible social impact of marketing activities.
Since marketing is a cyclical process which involves interactions of consumers,
marketers and society, offerings are constantly updated and refined to meet the chang-
ing needs of the marketplace. Whilst there’s a physical world time lag between product
development and the next generation of iPod hitting the shelves, e-marketing has a
faster idea-to-market cycle (that said, let’s not mention the lag between ideas and deliv-
ery for video game development). e-marketing is well suited to the shared value creation
that comes from marketer, marketplace and society working together for a mutual gain.
Posting to a blog creates value for the author, reader, and if done well, broader society, if
the blog provokes new ideas, thoughts or developments. Similarly, posting your photos
of the weekend trip to Brighton on Flickr (www.flickr.com) under a creative commons
licence aids parents on the other side of the planet who are helping their children with
a primary school project. Flickr benefits by being useful; you gain by using Flickr to store
your photos, and the world gains in general gains from the benefits flowing around the
planet. No money swaps hands, but exchange is present, value is created and the planet
gets that little bit smaller, neater and better off for a day.
33

e-marketing
The CIM definition of marketing

The second definition of marketing we’re using in this book places a greater emphasis
on the organization’s role in the marketing process, and is reflective of the need to
include the long-term goals and objectives of survival as part of the marketing process.
The CIM (2005) defines marketing as:
the management process identifying, anticipating and satisfying customer require-

ments profitably.
The CIM (2005) definition emphasizes the managerial and commercial aspects of the
marketing process and presents a tighter focus than the AMA’s (2007) ‘activities, insti-
tutions and processes’. Abimbola and Kocak (2007) regard the CIM definition as the
connection between innovation, inventiveness and the capacity of the firm to create
an offer of value for the organization whilst maintaining the focus on organizational
outcomes. Similarly, Helgesen (2006) notes that the strength of the CIM definition
is the explicit recognition of the duality of focus inherent in marketing through the
need to satisfy the customer and achieve organizational survival through profit. As with
the AMA definition, the CIM definition of marketing breaks into three sub-elements as
management process, customer-centric checklist and profit prompt.
Marketing is a management process

This element recognizes the role of marketing as a management tool within the organi-
zation and the use of the marketing planning process to guide organizational goals,
objectives and outcomes (Adeyoyin, 2005). For an e-marketer, the definition brings
home the need to keep the company objectives in the frame and to work with the
management structures to make marketing happen through the strategic (Chapter 3)
and operational levels (Chapter 4). It’s a touch different in focus from the AMA’s ‘we’re
all in marketing together’ approach of exchange happening between marketer, market-
place and society. The CIM is slightly more reserved (quelle surprise) in its view of the
role of marketing in the organization than its US counterpart.
Marketing identifies, anticipates and satisfies customer requirements

From an e-marketer perspective, the CIM definition of marketing brings a fantas-
tic three-piece suite of ‘identify, anticipate, satisfy’ as a guiding hand for shaping
e-commerce activity. It’s a fast, light and thoroughly viable way to evaluate any Inter-
net, e-commerce or mobile technology for marketing purposes. For example, if you’re
still wondering why Twitter (www.twitter.com) is in the e-marketing toolkit, think in
terms of ‘Can it be used to identify customer requirements?’, ‘Can it be used to anticipate
customer requirements?’ and ‘Can it be used to satisfy customer requirements?’ If you
can answer yes to any one of those three questions, then the technology can be used
for e-marketing purposes. (If not, then don’t worry about adding it to the toolkit. Not
everything is about marketing.)
34

The CIM framework also does a great job of bringing a holistic view of marketing in
three words – identify, anticipate, satisfy. The identification of customer requirements
is related to market research (Chapter 3), new product development (Chapter 4) and
consumer behaviour analyses (Chapter 3). Anticipation of customer requirements is
connected to the distribution of value insofar as it represents the operational aspects of
having the value offer in a location that can be accessed by the customer (Chapter 7) and
managing the various logistics that ensure peaks in demand can be met successfully and
profitably (Abimbola and Kocak, 2007). It also includes the predictive elements of plan-
ning in emergent markets and understanding consumer needs (Chapter 3) throughout
the product or market lifecycle. Finally, satisfying customer requirements is the value
creation aspect of the AMA (2007) definition (Chapters 4–6) in conjunction with the
implementation of marketing strategy (Chapter 10).
Marketing is profit-driven
The profit orientation of the CIM (2005) definition may seem at odds with client tar-
get market and the non-profit, non-commercial capacity of the AMA (2007) definition.
For the purpose of this book, the profitability element of the CIM definition is seen
as recognition of the need for return on marketing investment (Abimbola and Kocak,
2007). This can be measured either financially as reflected through traditional measure
of cash, profit, revenue and shareholder value, or non-financially in terms of the ‘social
profit’ generated by the organization’s activities.
Non-financial ‘profits’ can be considered a form of return on investment where orga-
nizational goals of social change, community participation or other non-financial costs
are at least covered by the success of the campaign. For example, where a web-based
community relies on active forum participation by members which is facilitated by
staff participation, the participation level of the community would be the return on the
investment of the staff member’s time and salary. ‘Profit’ arises where the benefit gained
from the interaction is greater than the effort spent on the process – an active commu-
nity bulletin board with a healthy range of discussions is a profitable investment of the
time of the moderators. The impact on the bottom line of the organization is indirectly
measured through the success of the brand, the longevity of customer relationships and
the conversion to customer lifetime value created through the community into sales
over time. Although non-financial profit doesn’t pay the bills directly, it is an invest-
ment by the firm and needs to be considered in terms of the influence it has on the
direct revenue streams rather than just being seen as a cost.
} Core concepts refresher

e-marketing is an applied form of marketing and works on the assumption that you’re
conversant with a few basic marketing ideas and activities. This section briefly covers a
few basics of marketing to ensure that author and reader are on the same wavelength
for the rest of the book.
35

e-marketing
Business orientations
There are four classic business orientations that are used to describe ways of thinking
about business: the production; product; selling and marketing orientations. Each of
these represents a particular world view of the respective role of the consumer and the
organization in the development of product offerings for the masses.
Production orientation is based on the belief that there is demand for your product
and that the way to success is to be the cheapest, most efficient producer of the prod-
uct. Production orientation emphasizes the ‘faster, cheaper, more’ approach; that bulk
saturating a market will win against making less of something that’s more expensive
and more targeted. Best summed up by Henry Ford’s assertion that customers can have
the model T Ford in any colour they like as long as it’s black, this approach often is
very successful at the early stages of the product lifecycle when demand for a product
outstrips supply and people are willing to put up with the inconvenience of a less than
perfect match just as long as they have something in that particular product line.
Product orientation is summed up in the catchphrase ‘If you build it, they will come’,
from the ancient film Field of Dreams (back when Kevin Costner was relevant. You may
have to ask your parents.) Those who subscribe to product orientation obsessively focus
on upgrading the product offering for the marketplace on the assumption that more
features, more options and more will lead to the product being more relevant for more
people. This isn’t a bad method, and more than enough of the Internet exists simply
because someone had an idea, built it and it turned out for the best for everyone. That
said, once you’ve started with the product approach, it’s really easy to move over to a
marketing orientation if you want to customize and tweak the product to better suit the
audience who just found you. Neither the product nor the production approach asks the
customer-focused questions of ‘What features does this product need?’, ‘What do con-
sumers want?’ and ‘What don’t we need to cram into the product?’ Both orientations
are evident in Zawinski’s (1995) Law of Software Envelopment, which notes that ‘Every
program attempts to expand until it can read mail. Those programs which cannot so
expand are replaced by ones which can.’
The selling orientation is based on faith in the power of price discounting and heavy
promotion to shift excess product onto the market. This approach tends to talk at cus-
tomers rather than to them and combines the faith in the product with a need to
communicate frequently, loudly and with every integrated marketing communications
(IMC) tool in the kit. As with the previous orientations, the selling approach doesn’t
check in to see if what is being sold is what the customer was hoping to buy. Sadly, the
low cost of information distribution, combined with the relative ease of message broad-
cast, made the Internet the ultimate selling orientation device – with a large enough
market (the Internet) and a saturation-style message offence which cost virtually noth-
ing to implement, it was possible to turn a profit from the bulk mail and the spam
message campaigns. This is also why Google has an active spam filter on Gmail (http://
mail.google.com) and why we rarely see these messages in the really good mail clients
of the modern era (and why e-mail is a dead-end for IMC – Chapters 1 and 7).
The marketing orientation is our show. This is the implementation of the marketing
concept, which balances the needs of the organization (profit, long-term survival, goal
36

achievement) by reviewing the needs of the market and developing offers that satisfy
the marketplace and meet the organization’s goals. The key for the marketing orienta-
tion is that customer and company have to come out ahead – if the customer dominates
and the firm fails, that’s no better than the firm dominating and failing the customer.
The marketing orientation uses the CIM framework (anticipate, identify, satisfy) and
the AMA framework (create, communicate, deliver, exchange) to meet the needs of the
market, create the value and walk away with a profit (or at least a break even that lets
you come back and do this again next time). The marketing orientation can be the start-
ing point for an organization (e.g. market research-driven product development) or it
can be an upgrade from the selling, product or production orientation once the initial
success of those strategies has worn off.
The marketing mix

The marketing mix is the short-hand method of creating a value offer by being able to
address four important factors – price, product, place (or distribution) and promotion –
to make a good offer to the market.
Price is the total sum of what the customer is prepared to give up to get the product.
Price starts with the money – what cash value is placed on the product? Beyond that,
and significantly for the Internet, are the non-financial factors such as time, effort,
pride and social costs. Time costs are a serious consideration as you consider adding yet
another social media site that you would need to update plus the social cost of being
the only person you know on that network (and not on the network with everyone
else you know). There’s also the time needed to be invested in making sense of it all,
customizations and tweaking. Eventually you start pining for the day when it was just
a question of when ‘How much is it?’ was answered with ‘Ten pounds!’
Product is the offer you make to the market, and what you and the market come
up with together that leaves both of you satisfied with the transaction. In less eso-
teric terms, offline, products are usually goods, services and ideas. Online, products
get to be a little more complex (and fun) in that you can sell goods (to be shipped
to the physical world), virtual goods (to be stored on the hard drive), really vir-
tual goods (stuff in a video game server somewhere), ideas (contents of a blog post),
experiences (YouTube video clips, video game experience, music), behaviours (super-
poking in Facebook, conversations in MSN Messenger), services (online banking)
and access to other people (community memberships). The key is not to think of
product equating to physical goods, particularly in e-marketing where physical stuff
(sandwich) makes up a much smaller portion of the business than the virtual stuff
(invisible sandwich).
Place (or distribution) covers the mechanisms for moving the product from the point
of production to the point of consumption. In e-marketing terms this means ‘the Inter-
net’, which is the single largest distribution channel in history but so often completely
misunderstood as a logistics channel. Delivery of value is highlighted in Chapter 6.
The multifaceted role of the Internet as product, distribution and promotional chan-
nel makes more sense when you view value as the outcome of the combination of the
marketing mix, rather than arising from a single element.
37

e-marketing
Promotion covers all forms of audio and visual communication between the marketer
and the marketplace, and handles message distribution to the market, plus engagement
in the new Web 2.0 conversation with the consumer. Promotion is covered in Chapter 7,
which also examines how the integration of marketing communications is also depen-
dent now on how a company performs at all levels (from the legalese in contracts
to the CEO’s personal life) given the hyperconnected world and the ease of compari-
son between the promises in the marketing messages and the actual behaviours of the
organization.
There are two important considerations for using the marketing mix as a mental
checklist for value creation. First, if you can’t answer each of the questions ‘What is it?’
(product), ‘What does it cost?’ (price), ‘Where do I get it?’ (place/distribution) and ‘How
do I explain this to my friends?’ (promotion), you haven’t thought the offer through
clearly enough. Secondly, whilst there is a range of really good criticisms of the market-
ing mix, the purpose of the exercise is as a starting point to figure out the bits that you,
the marketer, have a say over and control before you put the product into the market-
place and let the consumers take over. Value comes from the interaction between the
marketer, marketplace and society. The marketing mix is the identify/anticipate side
of the CIM definition of marketing, and the ‘create, communicate, deliver’ side of the
AMA definition. Without using the mix, the marketer abdicates too much responsibility
for his or her own performance, outcomes and success to the consumers who were only
supposed to be assisting in the first place.
Innovation adoption
Innovation adoption theory is a fundamental framework for understanding how con-
sumers deal with the constant flow of new stuff from the Internet. The short version
of the theory is that every person has a varying level of ability to cope with new ideas,
information, products and activities. The level to which you can cope with new ideas
will influence how quickly you can pick up on new trends, technologies or fashions.
The complication for e-marketing is that innovativeness is an inherent personal char-
acter trait which varies between people, and it’s also related to specific areas of activity.
You’ll find people who are intensely innovative users of the latest websites but who
prefer older mobile phones, and people who crave the most up-to-the-moment new
mobile phone but who still listen to the same bands they heard back in the first year of
high school. Innovative behaviour is specific to certain areas, and we cover this in more
depth in Chapter 5. For now, the key insights to understand are:
◦ not everybody is innovative

◦ relative advantage, which is the extent to which the new thing is better than the old
ways; is the key to success
◦ people can and will say ‘no’ to new things.
Not everybody is innovative

Not everyone will want the newest product. Only 2.5 per cent of a group of people
will be innovators who are interested in new things for the sake of their newness. (The
38

Figure 2.1 Cutting edge

Source: http://xkcd.com/606/
Internet, being a very large place, has a lot of innovators who are into new things.) After
the innovators come the early adopters, who make up 13.5 per cent of the group. Once
you have the most innovative people around all on board with your product, you still
only have a market share of 16 per cent. The next category, the early majority, who
hold back and wait a bit to see if this new thing rates highly amongst their innovative
friends, consists of about 34 per cent of any given group. Whilst innovators and the
early adopter are fun targets for marketing, they’re not always the bill-paying crowd, and
the early majority outweigh them 2 to 1. The late majority (33 per cent) will only adopt
your product once a critical mass of a majority of all potential users have, so as not to be
left out. Meanwhile, 16 per cent of the population, the laggards, will never adopt a spe-
cific product or technology. Keep this in mind when deciding whether or not to develop
a brand new product or a me-too product in a developing market – very few people are
innovative (Figure 2.1).
Relative advantage for the win

There are five consistent features that impact on whether people will like or dislike an
innovation: relative advantage; compatibility; complexity; ease of trial and visibility
(Chapter 5). The relative advantage factor is critical – the new thing must be better than
the current options otherwise there’s no point in giving up the older version. This could
affectionately be called the Microsoft Curse, given the number of times the company’s
most recent operating system release fails to demonstrate a relative advantage over the
currently installed, existing and mostly just-working products the customers already
have available to them.
That said, the other four factors can defeat relative advantage if the new option is
simply incompatible. High-definition DVDs, CDs, Blu-ray discs and every other new
format that doesn’t play on the older technology is asking for a compatibility problem.
The first platform that plays the brand new format and cheerfully accepts older formats
tends to win out in this situation. People who own large DVD libraries, having already
replaced their large collection of VHS video tapes, are far less likely to want to buy yet
another format (and restock the library again).
39

e-marketing
People can and will say ‘no’ to new things

Rejection of new ideas is an acceptable outcome. Not everything new is better than what
it sets out to replace. Similarly, there are going to be times when the relative advantage
battle is decided in favour of the older method you’re more comfortable with using
rather than the new approach which promises great future rewards as a trade-off for
short-term confusion. The only problem you face in e-marketing from an innovation–
adoption perspective is ensuring that you track the innovation acceptance/rejection of
your target audience and prioritize it over your own preferences when it comes to deliv-
ering value. If your audience doesn’t think the Internet is much use, then e-marketing
isn’t the method to reach them. At the same time, if your audience is shifting en masse
to m-commerce, and you’re still using the first mobile you ever bought, you might want
to consider upgrading (or trading markets with someone else).
One of the reasons for having so many new technologies in the e-introduction (set-
ting up for e-marketing) is to give you the self-confidence to say ‘no’ to technology. You
do not need five web browsers for day-to-day operations but you will need access to all
five when you get into product testing just so you can see what, if anything, goes wrong
between the intended design and what the browser does to your blog layout. At best,
most people have a primary browser, a back-up plan and a complete lack of desire to fire
up a third web browser if the website failed to display on the first two attempts (relative
advantage test failed). Similarly, some of the e-marketing technologies you’ll see in this
book won’t appeal to you – no relative advantage, no compatibility, too complex (or
not complex enough) or you get ‘that look’ from your friends whenever you mention
it, and you don’t want them knowing you use it (observable). Rejecting the technologies
on offer in this book is fine. You may need to test-drive a few of them for assessment
purposes or to answer end-of-chapter questions or class exercises (trialability). After the
course is over, it’s okay if you decide not to continue using the accounts.
Using marketing theory for e-marketing practice: Stages

of Change model and Twitter
}
As one of the few recent disruptive innovations, making the decision to use the
Internet, or any given technology available through the Internet, requires users to
adopt certain changes in behaviour. In the social sciences a number of models have
been developed to explain how a person moves from the point of total ignorance
about a behaviour to forming a habit. These same models can be used to effectively
explain how a consumer moves from knowing nothing about an innovation to learn-
ing an entirely new consumption behaviour and making the innovation part of their
everyday life.
One of the best known of these behaviour change models is the ‘Stages of Change’
model proposed by Prochaska and DiClemente (1983). This model is based on the idea
that, rather than jumping in at the deep end and checking it out whenever someone
40

comes across a new behaviour or product, most people will observe and think about
changing before trying it out (unless you are an innovator).
Twitter (www.twitter.com) has been a great success in rapidly getting large numbers
of adopters to commit to their new tweeting behaviour in a very short time. There are a
number of ways of explaining this success, but when it comes to the actual behaviour
change that is involved, the Stages of Change model provides a quick and simple
framework to understanding the phenomenon.
Stage 1: Precontemplation. This occurs before the potential user has even heard of the
product or behaviour. If you don’t know it exists, you can’t use it. For some segments
of the population, Twitter still falls into this category.
Stage 2: Contemplation. At this stage you’ve heard of the product but don’t really
know what it is or what it does. Those people who have started to see Twitter featured
in traditional news reports and magazines are at this stage. They are aware that the
phenomenon exists and are now sufficiently interested in it to find out more.
Stage 3: Preparation. At this point you know it exists, it seems like a good idea and
you want to try it out but, in the case of Twitter, you need to find out how to set
up an account and how to send out a ‘tweet’. Currently there is a massive market of
would-be tweeters who are getting ready to take the plunge.
Stage 4: Action. Action is similar to trialling or sampling. At this point you try the
behaviour for the first time and, in the case of Twitter, send out your first tweet.
Depending on the reaction and effort involved, you may never do it again.
Stage 5: Maintenance. This stage is roughly comparable to the post-purchase

relationship-building activities of commercial firms. Maintenance is when you rein-
force, reward and encourage users to keep using. For consumers to stay with Twitter
it has to offer sufficient perceived benefits to become a permanent fixture in people’s
lives, not just this year’s fad.
Stage 6: Termination. At this stage the behaviour has achieved its objectives and gener-
ally ‘had its day’. This could be because lifestyles have changed and everyone’s moved
on or because a newer, brighter, shinier behaviour has hit the market and superseded
Twitter.
} Features of the e-marketing environment

The unique practices of e-marketing have evolved in light of the environment in which
it operates with computer-mediated communication, mobile technology, electronic
data interchange and other neat network-based technologies. There are ten characteris-
tics of the e-marketing environment that are central to understanding how it functions
in practice (and online). These characteristics are grouped according to their impact on
consumer behaviour, accessibility and product characteristics.
41

e-marketing
Consumer behaviour impact

The three features of the e-marketing environment that impact on the ways in which
consumers behave, both towards the e-marketing organization and to maximize the
benefits of e-marketing to themselves, are:
◦ interactivity
◦ mass customization
◦ the interest-driven nature of the Internet.
Interactivity
Interactivity refers to the degree of two-way communication which occurs between the
organization and its clients (Wang, Xu and Gao, 2005). Traditional marketing commu-
nications allowed for one of two models: communication was either conducted on a
mass level (advertising) with a single, one-way message to many recipients, or as a two-
way, interactive, face-to-face sales presentation. The selling orientation grew out of the
ease of one-way broadcast communication with the rise of radio and TV networks –
standing on the rooftops and shouting loudly was never easier. Computer-mediated
communication over the Internet has changed the balance back in favour of the market-
ing orientation because the conversation between market and marketer is much easier
in the age of integrated interactivity of one-to-many-to-one communication (Hoffman
and Novak, 1996). (See Chapter 3 for the one-to-many-to-one model in detail. And
again in Chapter 7 for its use in practice.)
Hoffman and Novak (1996) identified two main types of Internet-focused
interactivity: person interactivity and machine interactivity. Person interactivity is the
ability of a person using the Internet to communicate with other people. This forms the
central platform for what has been described as the killer application of the Internet –
the capacity to reach out and interact with people (Bray, 2007). Manifestations of per-
son interactivity vary from one-on-one e-mail queries to facilitated online communities
such as Apple Discussions (discussions.apple.com) and social networking sites such as
Facebook (www.facebook.com) and MySpace (uk.myspace.com). Person-to-person com-
munication is also why this book has a consumer behaviour-dominated theme – even
if you’re in the B2B marketplace, it’s you (a person) in communication with another
person at the other company. The basics of human nature still count when it comes to
decision making by people on behalf of their organizations.
The second type of interactivity identified by Hoffman and Novak (1996) is machine
interactivity, or the ability for the individual to be able to access hypermedia content
such as searching through Google (www.google.co.uk) or reading pages in Wikipedia
(en.wikipedia.org). Manifestations of machine interactivity also include any interaction
with automated online functions, such as paying through PayPal (www.paypal.co.uk/
uk), searching online archives via the Wayback Machine (www.archive.org) or using the
online booking facilities at EasyCar (www.easycar.com). Machine interactivity can occa-
sionally give rise to Brogan’s (2009) ‘plastic human problem’, where visitors to an online
community (hint: this may mean you) forget that the avatars on the screen represent
42

real people and interact with those real people as if they were computer-generated
characters. Of course, given the number of genuinely false people on the Internet,
including the NASA Mars robots on twitter (@MarsRover and @MarsPhoenix) and a vari-
ety of twittering cats (@sockington), it’s understandable that people may feel detached
from the sense that it’s a real person on the other side of the monitor.
While interactivity is not a purely Internet-based phenomenon, a special feature of
online interactivity is the ability of the individual to personalize the situation and
control the extent of interaction (Merrilees and Fry, 2003). There are a number of
opportunities available to organizations to facilitate interactivity in the e-marketing
environment, such as the use of feedback systems and self-service functions. Consider,
for example, online seat allocation and check-in at British Airways (www.britishairways.
com), downloadable entertainment content via the BBC’s website (http://bbc.co.uk),
discount vouchers via e-mail from WH Smiths (www.whsmiths.co.uk) and, of course,
reading the hyperbolic rantings of Jason Scott’s cat (@sockington).
Mass customization
In a case of form following function, customization follows on from interaction since
the Internet is capable of producing personalized user experiences. Customization
ranges from simple choices made on an ad-hoc basis to view pages within a website,
such as reading a blog in chronological order or following tags and links of interest, to
the heavy customization of the look and feel of a user interface on social networking
sites. The ability to customize the flow of information from marketers has significantly
increased levels of consumer empowerment in the marketing relationship. However,
it should also be recognized that taking the time and effort to customize a web page
requires a degree of motivation and commitment on the part of the consumer (Wang,
Xu and Gao, 2005). Just because an organization provides the capacity to customize,
it should not be assumed that customers will take advantage of this benefit. All those
sites you signed up to in the e-introduction (setting up for e-marketing) contain cus-
tomization options ranging from uploading icons/photos as avatars to setting privacy
and publicity options. Similarly, even without a Gmail account, Google lets you break
out the customization toolkit (safe search on, safe search off, etc.).
Should you want a really customized experience, sign into your Gmail account
and work over the settings functions. You’ll be able to generate your own unique
G-product form by bundling together a range of feeds, widgets, gadgets and content
from a variety of digitized component parts. For example, iGoogle (www.google.com/
ig) offers a range of preset custom elements such as weather, news, sport, joke of the
day or Flash games. Similarly, Google Reader (reader.google.com) can be used to create
a customized stream of relevant information by tracking RSS syndication feeds from
around the Internet. From the marketer’s perspective, while consumer empowerment
inevitably leads to a loss of control at one level, the incorporation of sophisticated
tracking technologies allows marketers to better understand what choices different con-
sumers are making and what elements of the organization’s communications strategies
are sparking people’s interest.
43

e-marketing
The interest-driven nature of the Internet

A third important consumer behaviour-focused feature of the e-marketing environment
is the fact that consumer interactions with the e-marketing organization are interest
driven (Dann and Dann, 2004). To some extent, all active consumption activity is inter-
est driven – all consumers shopping for products, whether in a traditional or online
retail environment, will be driven by their needs and desires. At the same time they will
be passive recipients of the ambient marketing messages of the media, outdoor adver-
tising or other messages. Although passive media consumption is still an option on the
Internet, it is considerably easier to use the Web as an active media where links are
clicked based on whether they look interesting to the reader. Similarly, Google searches
are active consumption behaviours that are interest driven in that the consumer is using
the search engine to find an answer to a question or to locate more information (or
to do something totally irrelevant to what you’re supposed to be doing – TV Tropes
(http://TVtropes.org) demonstrates that locating more information is interest driven,
and thoroughly counter to any form of productivity.)
Interest-driven consumption of the Internet can be an advantage and disadvantage
to the marketer. Potential consumers actively seeking out information on specific topics
or about particular products are a bonus for the marketer as these motivated consumers
are more likely to interact with the company. On the downside, being interest driven
relies on knowing what you are looking for rather than finding out about a prod-
uct or service by chance. This becomes an issue of broader consumer behaviour with
awareness sets and evoked sets (Chapter 5). That said, the fact that consumers initiate
interactions with marketers significantly increases the level of consumer control and
empowerment. It’s also a promising sign from an engagement and involvement point
of view – active pursuit is active interest, and that usually helps with the sales and
innovation adoption (Chapter 5).
Marketing has three roles to play in an interest-driven environment. First, the
marketers need to have something of interest which relates back to the anticipation and
satisfaction of customer requirements and the creation and exchange of value (CIM,
2005; AMA, 2007, Chapter 6). Secondly, they need to generate sufficient interest and
awareness of the organization to drive traffic to the website via searches, conventional
media advertising, word-of-mouth or link referrals (Evans, 2007; Chapter 7). Finally,
once the consumer reaches the website, the functionality and value of the website
need to be sufficiently attractive to retain interest and deliver on the promised value in
order to maximize repeat purchase, repeat visits and the possibility of word-of-mouth
recommendations (Di Ianni, 2000; Chapters 4–7).
Accessibility
Access is the centre point of the second set of differentiating characteristics of the Inter-
net. Consumers have unprecedented access (whatever surpasses the Internet for global
reach has the Internet as precedent) to information and services against the world’s
largest digital distribution outlet. The impact on marketing and e-marketing falls across
three areas:
44

◦ global access
◦ time independence
◦ ubiquity.
Global access
The world is much smaller than it first appears. The Internet is a global network of net-
works which was designed to interconnect. Sure, there are limits to the practicality of
the interconnection of the people on the Internet – language, cultural and literacy barri-
ers abound. Unlike a traditional marketing environment bounded by geographic reach
through physical locations, shipping or operating hours, the Internet lets you access
your version of it (language, content, culture) from anywhere on the planet. The Inter-
net has created a near-borderless marketplace with instant global access to information,
digital products and services, and real-world goods (although the physical objects still
have shipping times to consider). Consequently, there are attempts from government,
individuals and enterprise to build digital boundaries and borders and to impose barriers
to the free flow of information. The network may be capable of unilateral information
movement, but that’s not to say that the world is ready to handle such radical notions
of global human interconnectivity.
The Internet creates an opportunity for companies to play in the international
arena without having to qualify through the traditional route via local, regional and
national market success. The capacity to buy and sell online using PayPal (www.
paypal.co.uk/uk) for international transactions has meant that it is possible for any
organization to sell nearly anywhere in the world that has an Internet connection
(Melewar and Smith, 2003). Borders in the global marketplace and the limitations of
the global playing field are discussed in Chapter 15. International small-trader market-
places such as eBay (www.ebay.co.uk) facilitate small-scale international transactions
on a level not previously possible – particularly in the provision of niche services
and information-based exchanges. Personal organization sites such as Remember the
Milk (www.rememberthemilk.com/) offer a global product of task-list management that
appeals to a sufficiently broad international market, and which may not have been
able to survive a series of elimination rounds in finding sufficiently viable niches in its
local marketplace.
The impact of the global nature of the Internet on markets extends beyond
e-marketing to emerging business models. It is now feasible, and increasingly common,
for businesses of all sizes to be ‘born global’, necessitating an international approach
to e-marketing from inception (Forsgren and Hagström, 2007). Global access is also
addressing the nature of human interaction, whereby communities are able to form
around shared interests rather than shared geography (Chapters 9 and 10). By lower-
ing the transaction barriers for interpersonal interaction, the Internet has also increased
the geographic diversity of friendships, social networks and consumer alliances. From a
marketing perspective, this also increases the size of the potential stakeholder group
of ‘society’, from those in the local region to active consumers on the Internet.
Being socially irresponsible in a foreign marketplace may now lead to consequences
in the domestic market as consumers communicate across national and international
45

e-marketing
boundaries. In short, Disney had serious prescience when it released It’s a Small World
back in 1964.
Time independence
The Internet is always open, always on, and costing the planet a lot of sleep. One of the
most appealing aspects of the Internet is time independence (Arnott and Bridgewater,
2002). Time independence facilitated by the Internet can mean true 24/7 access through
a combination of online tools and information and the use of international call centres.
Greater time independence is possible in those industries that encourage self-service,
such as online banking (www.lloydstsb.com/) and data purchasing (www.apple.com/
itunes), or which have the capacity to digitize routine operations such as purchasing
(www.amazon.co.uk/), tracking shipments (www.usps.com/) or feedback (www.ebay.co.
uk) (Di Ianni, 2000). The downside is that the Internet does not shut down (nor does it
take kindly to websites that shutdown for the weekend or go offline for a public holiday
maintenance day).
Ubiquity
Access to the e-marketing environment is widespread in the majority of first-world
nations and increasingly available in nations with developing economies. Internet
access through mobile systems equipped with GPRS (general packet radio service), such
as global positioning systems, are allowing for the mobility of a technology previously
tethered to a phone cord and power cable (Chapter 13). Similarly, logistics-tracking tech-
nologies, such as the Radio Frequency Identification (RFID) tag, which was designed as
a warehousing and logistics solution, are rapidly being deployed into everyday life as
part of smartcards and biometric systems. In 2006, the Soccer World Cup used RFID tags
to validate and authenticate tickets and potentially track ticketholder locations (privacy
issues relating to ubiquity are examined in Chapters 14 and 15). Existing commercial
applications of RFID are rapidly being normalized as an integral part of everyday life
(Srivastava, 2007). The false Latin ubiquitous Internetous is likely to be the catchphrase of
the 2020 period once the problems of battery life are overcome or wireless recharging
reaches the mass market.
The second aspect of ubiquity is that the Internet makes it possible for media to cross
geographic boundaries instantly in direct contrast to the regionality of the traditional
channels. The breakdown of traditional international barriers with respect to informa-
tion dissemination has ensured that e-marketing has acquired a ubiquitous point of
presence around the world. Regardless of personal location, if users can access the Inter-
net, they can access their version of it with limited filtration based on their locale (Di
Ianni, 2000). For the most part, accessing Google from any Internet connection in the
world will bring up the Google.com home page. That said, certain countries have var-
ious restrictions on Internet content and block various sites, IP addresses or content
(which usually means a ban on YouTube and filters on Google search results). Some
sites also attempt to be overly helpful and offer customized regional content based on
the user’s IP address. Numerous airlines provide region-specific websites, which can be
46

problematic when trying to book an intra-country flight from outside of that coun-
try. Although perfect ubiquity of access is unlikely, the Internet is less prone (but not
immune) to regionality than other media sources (Dann and Dann, 2004).
Product characteristics
The third cluster of characteristics that define the e-marketing environment and its
impact on marketing practice relate to four specific characteristics that shape the value
offering created by the Internet. These are:
◦ intangibility
◦ mobility
◦ portability
◦ volatility of the Internet as a service product.
Intangibility
e-marketing focuses on the communication and delivery of intangible benefits which
cannot be experienced using the physical senses. As weird as that is, it’s also the
way the world is moving by focusing on the sensory experience of physical goods
and the emotional-experiential outcomes of ‘real’ objects. Similarly, the major benefit
of e-marketing is the intangible value created by providing a combination of conve-
nience and access. Traditionally, intangibility has been the key defining characteristic
of services, with the consequence that there is substantial knowledge in the services
marketing field as to how to overcome the issues associated with the marketing of
an intangible product (Lovelock et al., 2007) and how to make considerable use of
intangibility as a selling point (Vargo and Morgan, 2005). Whilst many of the value
offerings in e-marketing can be classified as services, a majority of e-marketing activ-
ities are focused on digitized information products. Information products differ from
traditional goods and services in that not only are they intangible, but they also have
a number of additional unique characteristics that stem from the fact that regardless
of method of transmission, all are underpinned by a mathematical form which allows
for digitization, replication and the creation of additional copies without depleting the
resources of the original product (Frieden et al., 1998). (Some of these issues came up
in Chapter 1 in the discussion of virtual goods versus virtual services.) Intangibility,
the characteristics of information products and the implications for e-marketing are
discussed in more detail in Chapter 6.
Mobility
Mobility is a rapidly expanding aspect of e-marketing that is evolving and adapting to
new developments in the related technologies of portability, power management and
wireless communications. As e-marketing can be delivered at any time and any place
through multiple distribution networks, it does not need to depend on fixed channels
for message delivery. Improvements in battery technologies, processor sizes and mobile
47

e-marketing
phones have helped to create devices capable of receiving a variety of communications

formats, from simple text messages, multimedia messages, video calls, Internet connec-
tions and GPS signals through to the old-fashioned voice phone call. The combination
of processor power and mobility has radically transformed the e-marketing landscape.
e-marketing mobility covers a broad spectrum of access issues that have arisen from
the use of the mobile phone as the e-marketing platform for television (Ali, 2007) or
as a mobile credit card (Amin, 2007). It also incorporates the liberation of the Internet
from the last tether of geography by removing the need for a device to be connected to a
network of cables to access it. The consequences, opportunities and limitations of engag-
ing in business through m-marketing or e-marketing in a geographically distributed
multipoint communications network are examined in Chapter 14.
Portability
Portability is split between information portability and data portability. Information
portability deals with the nature of digitized information as a product that can be repli-
cated exactly with no theoretical limits to the amount of duplication and without any
degradation to the original data source (Frieden et al., 1998). This provides multiple
ways and means for information to be transferred through various digital channels that
cannot occur with physical products that depend on limited and finite resources (see
Chapter 1’s section on scarcity versus surplus discussion). The opportunity for market-
ing exists in the development of distribution functions that give value to the customers
by letting them access their information products in a variety of ways across a range of
devices. For example, Gmail is available as a web service or on mobile phones via GPRS,
WAP or Internet access, or as a specific application on the iPhone.
Further, as information can be replicated without degrading the source copy, repli-
cated information can be translated into a range of alternative formats. The software
engineering application of this approach to information is known as the API (appli-
cation programming interface), which is a form of source code provided by a website,
or software developer, that allows other developers to create products to interact with
the site. Twitter (www.twitter.com) offers a range of API functions that have been
used by developers to create software that includes desktop clients such as Twitteroo
(www.rareedge.com/twitteroo), dynamic posters (http://twitterposter.com/), world
maps of Twitter usage (www.twittervision.com) and to-do list management through
Remember the Milk (http://twitter.com/rtm). Surplus-driven economic conditions are
addressed in the delivery of value, where value is no longer determined by scarcity
(Chapter 6).
Data portability is the level of ownership that individuals can exert over the data
trail they create in the use of a social media site, including content they have uploaded,
relationships and network connections, plus historical data of instant messages, com-
munications or other notifications (Dataportability, 2008). This issue is increasingly
important in the context of social media systems such as MySpace, Facebook and
Twitter, or social bookmarking sites such as Delicious (www.delicious.com), where users
contribute content and may or may not be able to extract their data to take it to another
site (Chapters 12 and 15).
48

Volatility of the Internet as a service product

The Internet is thoroughly unstable. Its volatility has been absolutely brilliant for the
rapid development and growth side of the equation but completely off-putting for the
large portion of the population that likes a bit of calm and consistency in its technology.
Technological capabilities are still expanding rapidly, with developers aiming for faster,
smaller and more powerful devices despite plateaus in the Moore’s Law prediction of
exponential growth (Srivastava, 2007). Thankfully, as processor capacity stabilizes to a
relatively finite environment (where finite is still massively powerful), programmers can
adapt and adjust their code to maximize what power they can draw from the existing
technology. Nowhere is this better demonstrated than in the difference between the
quality of games developed for the launch of PlayStation 2 and the last generation of
games before the launch of PlayStation 3 ruined everything. As the processor power
of the platform did not change, the developers pushed their insight of the system and
started being able to maximize the capacity of the device. Similar opportunity exists
for the development of software-driven efficiency once a physics hard limit is reached
in areas of processor power, bandwidth and data storage. The reach of information is
still growing, and the ease of data collection, processing and storage is still in the early
growth phase.
One of the hardest aspects of e-marketing from an implementation perspective is the
volatility of the environment. New tools, technologies and expectations are developed
on a daily basis. Keeping up with advances, and sifting for those that are of commercial
use and value, is an ongoing task for e-marketers. Not only is it important to keep
up with technical innovation and decide what to adopt and what to reject, it is also
important to keep up with social innovation and expectations. As many organizations
have discovered to their cost, not all new tools are appropriate for commercial or other
marketing purposes due to the expectations of other users and the emergence of new
e-ethics and standards of behaviour.
Large-scale innovation and significant jumps in technology mean that the imple-
mentation of e-marketing strategies may change rapidly from year to year. At the same
time, the consumer behaviour constructs of innovation adoption and the usual patterns
of diffusion of innovations indicate that there will be a portion of the market who are
content with their ‘old’ technologies and ‘yesterday’s innovations’. The challenge for
the marketer is to determine how best to satisfy the target market. Is it the constant
churn of innovation or the stability of established technology that will create the best
fit between the needs of the market and the capacity of the organization?
} Business considerations for e-marketing

There is only one reason to use e-marketing strategy in business – to create value for
the organization by providing a superior way for the organization and then customer,
client or partner to achieve their goals and objectives. Determining whether the organi-
zation will benefit from going online and being engaged in various online activities is a
matter of balancing the pros and cons, costs and rewards, and coming to a conclusion
49

e-marketing
based on the specifics of the organization, its markets and target consumer. To help in
the decision-making process, six reasons for being online and three critical potential
inhibitors to e-marketing have been identified.
Six reasons to be involved in e-marketing

There are six reasons why it’s worth the time and effort to engage in e-marketing activity.
These are: the financial question of cost reduction; overall improvements in organiza-
tional performance brought about through effectiveness and efficiency; improved access
to the marketplace; promotional and communications options; competitive pressures
and the organization’s corporate image.
Cost reductions and financial considerations

Money is the lifeblood of the organization, and e-marketing as a means for reducing
costs to increase cash flow, bolster profits or improve savings has been a central motiva-
tor for many organizations and industries. Cost saving is an organization-centric focus
that sees the move online as a sound investment in long-term financial goals. Goodman
(2004) outlines several areas of common cost savings in moving to e-marketing:
◦ Perceived savings on promotional materials by moving from print to electronic

brochures
◦ Savings on postage by converting mass mail-outs to database-focused e-mail
campaigns
◦ Reducing the need for staff as consumers move from direct, personal interactions to
online self-service
◦ Reducing market research costs through the use of tracking software to determine
actual rather than reported consumer behaviour
◦ Savings in developing customized products through the user-driven amalgamation
of component digital parts.
Effectiveness and efficiency considerations

The strategic use of online information systems can drive whole-organization changes
to business structures and models leading to greater overall effectiveness and effi-
ciency (Hassan and Tibbits, 2000). Resource allocation in e-marketing, coupled with
the customization of websites and the development of customized marketing mes-
sages and digital products based on screening criteria, means that less time and
resources are wasted on developing unwanted products. Access to large-scale databases
which are constantly being updated and expanded has significantly increased effec-
tive collation of information from multiple sources. This in turn has resulted in
increased efficiency and effectiveness in a range of business activities, from shared
online access to group/company resources such as HR manuals and other internal
policies, to better invoicing and payment systems between organizations and their
clients (Chapter 11).
50

Wider access to clients, customers and partners

The global nature of the Internet makes it intensely attractive to anyone seeking
geographically dispersed audiences or a voice in the global marketplace (Arnott and
Bridgewater, 2002). Search engine optimization, specialist and niche-driven word-of-
mouth recommended products are more likely to find and service their customer base
online than in limited geographic or regional markets. Broad access to national and
international markets through the Internet combined with micro segmentation can
create viable business models from niche offerings of value.
Information and digital experiential products also benefit from the lowering of tradi-
tional export barriers through cost-effective, simple distribution logistics over the Inter-
net and cost-effective, international mail and courier services for smaller shipments of
physical products (Chapter 6). The relative ease with which global commercial activity
can take place via the Internet is particularly attractive to the operations of small-to-
medium-sized businesses which normally would not attempt international expansion.
Promotional value
The Internet offers unprecedented capacity for organizations to showcase and promote
their products, services and ideas through third-party providers and the organization’s
own website. Understandably, this is a dual-edge sword – positive promotional material
travels fast, but nowhere near as fast as negative word of mouth. Documented actions
speak far louder than IMC claims in the contemporary world. Traditional media such as
print, radio and television all have technical limitations which limit the type and length
of message that can be delivered (and all have strengths in that respect as well). Websites
can be tailored to the message structure, giving the Internet the combined benefits of all
three media. Text-based messages can be as simple as 140 characters (www.twitter.com)
or as detailed as complex explanations (multiple posts on a blog, a whole wiki), written
instructions (pdfs, wiki) and video demonstrations (YouTube, http://uk.youtube.com).
Customer-based customization can also assist e-marketing messages in that the reader
of the site can choose to seek more information by clicking on the embedded links, by
accessing video on demand or by simply skimming the content. Putting the control of
message consumption into the hands of the recipient means that the most appropriate
mix of personal preference and message delivery can be simply and effectively delivered
by providing a suite of options for the marketplace to roll out their own solution.
Competitive pressures
One of the main motivators to create an initial online presence was fear of being left
behind (Dann and Dann, 2004). The pressure of not having an online presence once
competitors started to adopt the medium meant that many organizations made early,
and often ineffective, forays into the world of e-marketing. Today, that particular con-
cern is at the forefront of half-hearted or ill-conceived forays into the social media
environment. Consumer expectations of the ubiquity of the Internet are such that most
people now expect to see URLs on product packaging and advertising and at the very
least a basic, static, information-based website or something hosted on MySpace. At the
51

e-marketing
same time, whilst competitive pressure might be an incentive to recon the terrain in the
new social media, it’s no excuse to blindly create an ill-conceived, poorly supported or
half-hearted effort just because someone else was in that marketspace. You’re better off
doing nothing than doing something badly if you’re driving your strategy based on the
actions of your competitors.
Corporate image
There are two aspects to creating a positive image on the Internet. First, early use of new
technologies and e-marketing techniques may present a public image of that company
as being up to date, innovative and at the cutting edge of social and technological
trends. Of course, being annoying or making a serious social media faux pas in an
innovative way will hurt more than it helps. Secondly, e-marketing impacts on the cor-
porate image of the organization. Increased interest in sustainability, green marketing
and corporate social responsibility has been used to justify the movement from tra-
ditional paper-based communications to the online sphere by repositioning the move
in terms of environmental responsibility whilst still reaping the financial benefits of
reduced printing and mailing costs.
Mission-critical inhibitors
Despite the many benefits of creating an online presence, e-marketing has not been
universally adopted and there are still several inhibitors which limit its application in
different business situations. It’s also worth considering these inhibitors when exam-
ining any specific form of e-marketing practice – for example, when deciding if the
organization needs a blog, a MySpace profile, a presence on Facebook or whether or not
to shift the entire client contact database over to Highrise (http://highrisehq.com/).
Financial viability
The counterpoint to the question of cost reduction is the question ‘How much will
this cost?’ e-marketing is not cost-neutral. Free does not mean cost-neutral; it means no
charge for the service. If the service costs time or requires extra staff or investments in
training and development, then you’re looking at a set of costs that need to be equalled
or exceeded by the benefits from the exercise. If the costs outweigh the potential bene-
fits, bail out. If they break even, it’s worth a try to see if efficiency with the technology
will bring profit (with an eye to abandon ship when icebergs appear on the horizon).
Engaging in e-marketing is not recommended on its own merits – you need to have
a reason, a rationale and a purpose for getting involved in the technology. For this
book, most of the reason and rationale is a training exercise for you to learn how to do
e-marketing. Cost-benefit scenario says you’ll learn more by guided trial and discovery
than you’ll learn by not doing anything.
Organizational capacity
Not all products and services are suited to e-marketing nor are all organizations
equipped to implement an e-marketing strategy. If the resources available to the
52

organization (money, skills, technical capacity) are limited then attempting to imple-
ment an e-marketing strategy may be counterproductive. Doing e-marketing well
involves conforming to consumer expectations with respect to services offered online,
frequency of updates and the currency of online information. If the organization cannot
meet these expectations, doing e-marketing badly is worse than having no online pres-
ence. Whilst a lot of people on the Internet will give great and valid reasons for getting
connected, they’re also connected because there was a benefit to them (if nothing else,
then there was the benefit of being able to give the advice to be online). There are plenty
of grounds for you not to commit resources where the expected return on investment
is fairly small. A small business with limited capacity to service more than a small num-
ber of clients, for example, may be able to operate effectively and profitably by simply
relying on traditional word-of-mouth referrals. Alternatively, the cost of implementing
a full e-marketing strategy, including online purchases and ordering, may be prohibitive
if the products being sold have tight profit margins and sell in low volumes, or if adding
the international shipping cost will kill off any chance of competitive pricing.
Customer capacities
Not all target markets will be effectively reached using e-marketing. Before adopting
e-marketing the usual market research on consumer preferences needs to be conducted,
in this case specifically focusing on preferred methods of communication and delivery
of products and services. If the electronic alternative is less attractive to the market than
the traditional market then investment in a complementary or alternative e-marketing
strategy is likely to be wasted. Gilmore et al. (2007) examined barriers for small and
medium enterprises using the Internet and found a significant barrier to e-marketing
existed where the organization was too far in front of the target market or suppliers
when it came to technology adoption. Although the organization could handle the var-
ious online tasks and requirements, its marketers or suppliers were not sufficiently adept
to use the systems, and as such, the organization still needed to use ‘older’ approaches
to deal with these markets.
Level of involvement in e-marketing

The extent to which any given business engages in e-marketing will vary according to
three factors: resources; relevance and requirements.
Resources are the capacity of the company to implement an e-marketing programme
which incorporates planning, HR and IT implications, and the implementation issue of
‘Can we do this with what we’ve got?’. Resource issues are addressed in Chapter 10.
Relevance is the value of e-marketing and is largely dependent on consumer behaviour
considerations (Chapter 5), marketing strategy (Chapter 4) and whether or not you can
deliver value with the technology (Chapter 6). e-marketing is a field full of incredible
devices, amazing technologies and wonderful toys that are meaningless and useless if
the target market isn’t going to want to use them or isn’t even online. e-marketing
has the challenge of creating relevance through identifying, anticipating and satisfying
consumer needs when it comes to the how and why of online interaction (Chapter 5).
53

e-marketing
Requirements are the features of the product or service being sold and how well these
adapt to e-marketing. Information-based products can be delivered directly online,
physical goods ordered for later delivery and services booked in advance. Specialist and
niche products which are sought out by consumers are more suited to e-marketing than
fast-moving consumer goods which are widely available in the offline distribution chan-
nels. Ordering a home delivery of a single Mars bar from Tesco Online (www.tesco.com)
is possible but far less satisfying than picking up the chocolate in the store (even if that
does mean leaving the house to get there). Similarly, whilst reservations for personal
services such as hairdressing can be made online, the customer still needs to be at the
hairdresser’s location for the haircut. (Haircut downloads are a way off into the future,
somewhere after the pizza printer and Coffee Over IP are released.)
} Unique e-marketing issues

e-marketing shares many common issues with other branches of marketing, including
those relating to strategy, segmentation and market research. The specific e-marketing
environment, however, has created a number of new, unique marketing issues which
need to be considered and addressed in developing an e-marketing strategy.
Audience control
Audience control refers to the extent to which marketers are able to identify the con-
sumers of e-marketing communications and restrict viewers of websites to the preferred
target audience. Whilst all mass communication media have a degree of difficulty in
audience control, traditional media vehicles are generally targeted to specific demo-
graphic and lifestyle groups, thus making the placement of marketing materials to reach
a particular audience a relatively straightforward process. In the case of e-marketing,
websites are often visited by individuals who have found the website indirectly via a
search engine whilst looking for specific information. Consequently, it is more diffi-
cult to tailor the messages and language of the site without specific interaction and
input from the consumer via some process of customization. Increasingly organizations
are offering a series of alternative websites accessible from a single homepage based on
user segmentation variables such as member, staff or visitor, in an attempt to address
this issue. Audience control and the consequences of failing to block content, mod-
erate access or prohibit users from seeing certain marketing messages are examined
in Chapter 15.
Information proliferation
The ability of the Internet to transmit large quantities of information cheaply and eas-
ily, combined with the increasing expectations of the market for regularly updated,
quality information, means that managing information for public consumption has
become a major strategic issue. As a general rule, marketers respond positively to the
54

widespread dissemination of information about their products. However, the ease with
which information can be disseminated has a negative impact in the case of errors such
as the inadvertent release of confidential information. Issues of copyright, trademark
protection and the means and mechanisms of distributing protected ideas across the
Internet are examined in further depth in Chapter 15.
Share of voice
Traditional broadcast media have the capacity to be bought out in controlled units
and create the opportunity for a small number of influential players to restrict who
shares in the overall media ‘voice’. In the case of the Internet, the lack of centralized
commercial control has freed up communications with the result that all individu-
als have the capacity to promote themselves and speak freely in the Internet arena
(Dann and Dann, 2004). As far back as 1996, this was seen as the dual-edge sword for
marketing – unlimited voice creates competitive environments for the underdog mar-
keter and prohibits the overdog marketer from raising entry barriers to the marketplace
(Berthon et al., 1996).
Rapid growth in the accessibility and popularity of peer-to-peer networks and social
networking sites has leveraged off this capacity to create an alternative media space in
which competition for share of voice is based on the desirability and attractiveness of
the message rather than the capacity of the individual to purchase media time and space
(Dann and Dann, 2007). Again, widespread access to broadcast tools such as MySpace,
Facebook, blogs and peer-to-peer networks is dual edge in nature – the capacity to speak
to the market is increased at the same time as the sheer volume of signal is also raised as
everyone else has a chance to speak. Marketers have decreased ability to dominate share
of voice and, therefore, become more dependent on creating messages of value rather
than dominating the share of voice (Chapter 7).
Internet time
Unlike traditional media outlets such as newspapers and magazines which have clearly
defined and well-publicized regular deadlines for the submission and printing of infor-
mation, the Internet is constantly open for information distribution. Marketers need
to determine the timing of information release based on criteria such as the urgency
of the information. For example, in a crisis, an early and speedy response is a neces-
sity, whereas generic, press releases that raise corporate image can be flexibly timed and
planned to fit into related marketing and corporate schedules. Internet time also relates
to the speed at which changes can be made to data-based products. Errors in code are
able to be patched, tested and released without requiring the physical recall and reissue
of goods (Chapter 1’s ‘ready, fire, aim’ approach). Similarly, idea patching and brand
repairs can be conducted by fast responses, open communication and quick thinking
by the e-marketer. The impact of Internet time on consumer behaviour is examined in
Chapter 5, and the impact for businesses is covered in Chapter 10.
55

e-marketing
The ‘beta’ factor

The last unique factor in e-marketing is the capacity to ship incomplete products to a
willing marketplace of customers, who assume that the product will improve in quality
over time, version numbers and revisions. As websites can be updated constantly, soft-
ware can patch itself and information can be reissued in updated forms. The online
marketplace is far more tolerant of unfinished goods than the physical world. The ‘beta
release’ candidate used to be the pre-release test version of software that was incomplete
and examined for flaws, failures and ineffective processes. Since the widespread deploy-
ment of a ‘beta’ tag on a range of Web 2.0 sites, and Google virtually championing it as a
means to excuse under-optimized performance, ‘beta’ is almost becoming a brandmark
of quality amongst software, websites and, eventually, offline services. The use of open
beta testing as a form of value creation is explored in Chapter 6.
} Conclusion
e-marketing is an applied form of marketing that operates within the confines and
expanses of the interactive electronic environment. This chapter began with the fun-
damentals of marketing, including the two operational definitions of marketing (CIM,
2005; AMA, 2007) that will form the core marketing principles for this book, followed
by an overview of how these two definitions function as a co-operative unit for shaping
marketing practice. It went on to give an overview of the e-marketing environment,
the factors that make e-marketing a separate sub-discipline of marketing and how
e-marketing interconnects with m-marketing and e-commerce. Finally, the chapter cov-
ered the features and factors of the Internet and e-marketing that form the first vital
business decision – should we engage in e-marketing? Assuming the answer is ‘yes’,
Chapter 3 takes a guided tour through the important processes, activities and institu-
tions that can be adapted for use to enable the e-marketer to identify, anticipate and
satisfy customer requirements in the interactive electronic environments.
} References
Books and journals
Abimbola, T. and Kocak, A. (2007) ‘Brand, organization identity and reputation: SMEs as expres-
sive organizations. A resources-based perspective’, Qualitative Market Research: An International
Journal, 10(4): 416–30.
Adeyoyin, S.O. (2005) ‘Strategic planning for marketing library services’, Library Management 26,
(8/9): 494–507.
Ali, S. (2007) ‘Upwardly mobile: a study into mobile TV use amongst children’, Young Consumers,
8(1): 52–7.
American Marketing Association (2007) ‘Definition of marketing’, http://www.marketingpower.
com (accessed 2 July 2010).
Amin, H. (2007) ‘An analysis of mobile credit card usage intentions’, Information Management and
Computer Security, 15(4): 260–9.
Arnott, D.C. and Bridgewater, S. (2002) ‘Internet, interaction and implications for marketing’,
Marketing Intelligence and Planning, (20)2: 86–95.
56

Berthon, P., Pitt, L. and Watson, R.T. (1996) ‘Marketing communication and the world wide web’,
Business Horizons, Sept–Oct: 24–32.
Bray, T. (2007) ‘The Intimate Internet’, http://www.tbray.org/ongoing/When/200x/2007/10/04/
Intimate-Internet (accessed 2 July 2010).
Brogan, C. (2009) ‘The Plastic Human Problem’, http://www.chrisbrogan.com/the-plastic-human-
problem/ (accessed 2 July 2010).
Chartered Institute of Marketing (2005) ‘Marketing and the 7Ps: A brief summary of market-
ing and how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub (accessed 2 July
2010).
Dann, S. and Dann, S. (2004) Strategic Internet Marketing 2.0. Brisbane: John Wiley & Sons.
Dann, S. and Dann, S. (2007) Competitive Marketing Strategy. French’s Forest, NSW: Pearson
Education.
Dataportability (2008) ‘Dataportability: Connect. Control. Share. Remix, http://www.
dataportability.org/ (accessed 7 July 2010).
Di Ianni, A. (2000) ‘The e-business enterprise and the ‘Web-first’ principle of e-marketing’,
Interactive Marketing, 2(2): 158–70.
Evans, M.P. (2007) ‘Analyzing Google rankings through search engine optimization data’,
InternetResearch, 17(1): 21–37.
Forsgren, M. and Hagström, P. (2007) ‘Ignorant and impatient internationalization? The Uppsala
model and internationalization patterns for Internet-related firms’, Critical Perspectives on
International Business, 3(3): 291–305.
Frieden, J., Goldsmith, R., Takacs, S. and Hofacker, C. (1998) ‘Information as product: not goods,
not services’, Marketing Intelligence and Planning, 16(3): 210–20.
Gilmore, A., Gallagher, D. and Hnery, S. (2007) ‘E-marketing and SMEs: operational lessons for the
future’, European Business Review, 19(3): 234–47.
Goodman, S. (2004) ‘A proposed marketing activity and outcome framework for marketing in the
new economy’, The Internet Business Review, 1, October: 1–20.
Hassan, H. and Tibbits, H. (2000) ‘Strategic management of electronic commerce: an adapta-
tion of the balanced scorecard’, Internet Research: Networking Application and Policy, 10(5):
439–50.
Helgesen, O. (2006) ‘Customer segments based on customer account profitability’, Journal of
Targeting, Measurement and Analysis for Marketing, 14(3): 225–37.
Hoffman, D. and Novak, T. (1996) ‘Marketing in hypermedia computer mediated environments:
Keefe, L.M. (2008) ‘Marketing defined’, Marketing News, January 15, 2008: 28–9.
Kiani, G.Z. (1998) ‘Marketing opportunities in the digital world’, Internet Research: Networking
Application and Policy, 8(2): 185–94.
Lovelock, C., Patterson, P. and Walker, R. (2007) Services Marketing: An Asia-Pacific and Australian
Perspective, 4th edn. French’s Forest, NSW: Pearson Education.
MacInnis, D. and de Mello, G. (2005) ‘The concept of hope and its relevance to product evaluation
and choice’, Journal of Marketing, 69: 1–14.
Melewar, T.C. and Smith, N. (2003) ‘The Internet revolution: some global marketing implications’,
Marketing Intelligence and Planning, 21(6): 363–9.
Merrilees, B. and Fry, M.L. (2003) ‘E-trust: the influence of perceived interactivity on e-retailing
users’, Marketing Intelligence and Planning, 21(2): 123–8.
Prochaska, J. O. and DiClemente, C.C. (1983) ‘Stages and processes of self-change of smoking:
towards an integrative model of change’, Journal of Consulting and Clinical Psychology, 51:
390–5.
Srivastava, L. (2007) ‘Radio frequency identification: ubiquity for humanity’, Info, 9: 4–14.
Vargo, S. and Morgan, F. (2005) ‘Services in society and academic thought: an historical analysis’,
Journal of Macromarketing, 25(1): 42–53.
Wang, T., Xu, Z. and Gao, G. (2005) ‘The model of Internet marketing program considering 2Is’,
Services Systems and Services Management, Proceedings of ICSSSM ‘05, 1: 451–6.
Zawinski, J. (1995) ‘Zawinski’s law’, Jargon Manual, http://www.catb.org/jargon/html/Z/Zawinskis-
Law.html (accessed 2 July 2010).
57

e-marketing
Web references
Amazon UK www.amazon.co.uk/
Apple Discussions discussions.apple.com
Apple iTunes www.apple.com/itunes
BBC bbc.co.uk
British Airways www.britishairways.com
Delicious www.delicious.com
EasyCar www.easycar.com
eBay UK www.ebay.co.uk
England football forum and blog www.englandfootballforum.com
Gmail http://mail.google.com
Google Reader http://reader.google.com
Highrise http://highrisehq.com/
iGoogle www.google.com/ig
Lloyds TSB www.lloydstsb.com/
MSN Messenger messenger.live.com
MySpace uk.myspace.com
PayPal www.paypal.co.uk/uk
Remember the Milk www.rememberthemilk.com/
Tesco Online www.tesco.com
TV Tropes http://TVtropes.org
@MarsRover http://twitter.com/MarsRover
@MarsPhoenix http://twitter.com/Marsphoenix
@sockington http://twitter.com/sockington
@RTM http://twitter.com/rtm
Twitteroo www.rareedge.com/twitteroo
TwitterPoster http://twitterposter.com/
Twittervision www.twittervision.com
United States Postal Service www.usps.com/
Wayback Machine www.archive.org
WH Smith www,whsmith.co.uk
Wikipedia en.wikipedia.org
58

CHAPTER 3}
e-marketing strategies
• understand the connection between strategy and e-marketing success

• identify a selection of offline strategy models that are applicable to
e-marketing
• appreciate the influence of Porter’s Generic Competitive Strategy on
e-marketing
• develop e-marketing objectives using the SMART framework.
59

e-marketing
} Introduction
Strategy makes the difference between success and failure in e-marketing. e-marketing
strategy draws its direction from the firm’s broader marketing approach, which in turn is
based on the overall business strategy objective of the organization. e-marketing strate-
gies are most effective when they integrate the strength of the Internet as a marketing
medium with the existing online and offline activity of the organization.
This chapter covers e-marketing strategy in four sections. First, the chapter links
e-marketing to the bigger picture of corporate development options, with an emphasis
on fitting your online activity in with the end-game of achieving broader organizational
goals. Secondly, the chapter examines the value and necessity of setting clear and realis-
tic objectives in e-marketing strategy so you know where you’re going, what you want to
achieve and can later see if you’ve actually achieved it. The setting of clear objectives at
this point in the process will make your life a lot easier when you come to complete the
metrics and measurement tasks in Chapter 10. Thirdly, the chapter tackles the hardest
task of marketing – working out who is (and definitely who isn’t) your ideal customer
through the strategic use of market segmentation. Even if you want to believe you could
be all things to all people, chances are firmly in favour of you having a group (or several
groups) you really don’t want reading your blog, using your site or hanging out on your
server. This part of the chapter covers the strategic aspects of identifying target mar-
kets, anticipating their needs with site design decisions and satisfying your customers’
needs by meeting (and exceeding) expectations. Finally, the chapter examines the role
of positioning in e-marketing strategy as a key to understanding your own offering to
the market and who your natural competitors and allies will be on the Internet.
} Big picture strategies

There are certain clichés in business, and the ‘bigger picture’ is a favoured expression
amongst management – largely because it started life as a useful metaphor for explain-
ing how the strategy plan works. If you launch Google Calendar (www.google.com/
calendar) you get a brief view of how and why the big picture/small picture becomes
useful. Consider the month (business strategy) view as the big picture that you can break
down into a smaller, weekly picture (marketing strategy) and a daily schedule (market-
ing tactics). With the big picture strategy, you can see the upcoming challenges and
tasks (assessment deadlines, weekends and parties). These can be dealt with by breaking
them down into a weekly schedule of work, study, classes, travel, sleep and recreation.
If you’re then trying to co-ordinate something specific (tactical) you’d normally need
to focus on a narrow section (a Tuesday) and refine the narrow section again (Tuesday
afternoon, around 4pm) to find out if you are free to catch up with your mates.
Business strategy works in basically the same way – the ‘big’ strategic picture is the
organization’s plans for the next few years (or decades); the marketing strategy fits into
the broader business plan and has a shorter time frame, faster goal achievement (and
goal resetting). Within the marketing strategy there are tactical implementation issues
(Chapter 4).
60

Merging online and offline strategy

At the dawn of e-marketing there was a sense that the Internet was somehow differ-
ent and separate from the rest of society. The whole thing operated under a variety
of assumptions regarding the independence of Internet activity from offline activity,
which can be summarized in three famous rules:
◦ The separation of identity from reality, known as the Vegas Rule (What happens in
Vegas stays in Vegas)
◦ The separation of online activity from offline personal reputation, using the Tour
Rule (What happens on tour stays on tour)
◦ The separation of actor from action, with an acknowledgement that you could talk
about the action but not who was involved, by using the Chatham House Rule (Par-
ticipants are free to use the information received but neither the identity nor the
affiliation of the speaker(s) nor that of any other participant may be revealed).
This approach worked for the first few years of e-marketing until the relative ubiquity
of access to the Internet, combined with the widespread plastering of URLs on every-
thing, led to what can only be described as an e-business singularity – what happens on
the Internet impacts on offline brands, and what happens offline is discussed online.
The merger of online and offline is becoming a significant HR issue as employers start
turning their attention to the online activity of their staff – usually for the express pur-
pose of finding something that breaches a policy guideline. The blending of online and
offline is also a growing area of significance, with portable Internet access increasing the
ubiquity of online access in previously offline areas. This can also work to the benefit
of all involved by using mobile phone-readable QR codes on name badges or business
cards to link back to a much more detailed portfolio (Chapter 13).
Previously hard decisions about whether to retain existing branding and position-
ing strategies, whether to try to appeal to the same markets on and offline and how the
online activities of the firm can be used to complement, rather than compete with, exist-
ing marketing functions became relatively moot points. The Internet is no more or less
an integrated part of life than the television, radio or newspaper when it comes to seg-
mentation decisions, targeting and marketing activity. If you’re willing to assume that
you can behave differently on television than you do on the radio since neither radio
listener nor television viewer will find out, feel free to operate an isolated online strat-
egy from your offline activity. Otherwise, stick with an integrated marketing strategy
for online/offline, onTV/offTV, onradio/offradio and inprint/offprint.
Blogging note: anonymous, pseudonymous and

synonymous
}
When setting up a blog, Twitter account or any other social media device, there’s the
question of whether to operate under your own identity, operate anonymously or run
61

e-marketing
with a pseudonym. Each option is balanced in terms of pros and cons for its branding,
tactical and personal impacts.
Synonymous blogging has the advantage of being directly linked to your real-life
identity, and if you’re working to build a personal brand, seeking glory and fortune,
this could be the path for you. At the same time, you have no privacy insofar as what
you say is linked to you. You’re the front and centre person for your brand that can
be read by anyone with Google access. Effectively, you are the same person online
and offline, so you’re operating an integrated strategy where activity in both fields will
contribute to your collective personal reputation.
Pseudonymous blogging is a popular approach. It creates a branded identity that
is used consistently across online interactions and which is kept mostly masked from
your personal life for a variety of reasons, including isolating your work environment
from your blog space (quite often at the behest of the bland corporation that worked
very hard to be faceless and really doesn’t need someone associating your cute kit-
ten photo blog with its soulless corporate identity). Pseudonymous blogging has a
serious downside in that certain synonymous bloggers believe that they have a right
to unmask your pseudonym simply because you’re not using your real name. Also,
as time progresses, it’s increasingly hard to keep both identities isolated – you may
reveal too many identifying details in either space that might unmask you (particu-
larly if you’re running a really high profile or controversial pseudonymous identity.
The urge to brag must be resisted.) There are also serious consequences to be faced
online and offline when the two isolated identities are eventually merged, as many
will feel somehow betrayed that Identity2700 wasn’t actually the offspring of Mrs and
Mr 2700. This is the split strategy, which means you’re doubling your workload as
you maintain two isolated personal brands (and a good pseudonym needs consider-
able brand maintenance), with the advantage that it does allow you to pursue two
independent strategic objectives that could clash horribly if you tried this under a
synonymous brand.
Finally, anonymous blogging is a dual-strand strategy where you’re working to
avoid connecting a consistent set of behaviours (anonymous online activity) with
your offline profile. There’s limited value for marketers in having anonymous online
activity and that’s entirely market research-related. If you’re going to expend effort
in creating, communicating, delivering and exchanging content online, you may as
well go pseudonymous for the brand consistency and reaping the rewards. If you’re
considering anonymity as a strategic option, be advised that the likelihood of being
revealed will operate in direct proportion to the extent you’re blogging anonymously
to do something you wouldn’t sign your name to in the offline world. Whereas
pseudonymous blogging has a level of credibility from authors, musicians, actors and
video gamers, anonymity has distinct problems when it comes to branding (there are
so many anonymous commentators), consistent identity (which anonymous are you?)
and credibility (anonymous comments are usually screened if accepted at all).
On the business side of the agenda, most corporations find themselves either
in synonymous or pseudonymous arrangements, where the author is representing
62

a member of the corporation, as is the case with the Zappos company which has its
CEO twittering as @zappos and the various @zappos_[StaffName] employees (http://
twitter.zappos.com/employees) openly identified with the brand. In contrast, ‘corpo-
rate’ Twitter accounts, such as the one for the Prime Minister’s office, are often staffed
by teams of writers who have a pseudonymous Twitter account (@DowningStreet)
rather than being operated by the Prime Minister.
e-marketing and strategy: growth options

There are three key strategic planning models that are worth revising for e-marketing:
◦ the classic, often misunderstood and sometimes ignored product lifecycle model
◦ Porter’s legendary generic competitive strategies framework
◦ Ansoff’s strategic growth options.
These planning models will be used to demonstrate how e-marketing strategies can be
developed in reference to existing strategic theory, with the consequence that you can
adapt and use any other strategy models you see fit.
A word of caution – all strategy is based on information, evidence and research
rather than guess work, assumptions and wishful thinking. With this in mind, we’re
introducing the broad frameworks first then incorporating advice on analysis, research,
environmental scans and related techniques into Chapter 4. Evidence-based marketing
is a vastly easier form of marketing than the gut-feel, instinctive variants that seem to
propagate through business (for one thing, gut instinct requires training, practice and
a gut). Market research with Google, Twitter searches and half an hour on the Internet
can often produce enough decent marketing information which can be fed into the sys-
tematic ways of thinking about strategy discussed in this chapter. Read this chapter to
pick up the strategic thinking. After picking up the techniques in Chapter 4 (which will
make sense after reading this chapter), come back and have another look at the strategic
models here (then move to Chapter 5). Do not get caught in a recursive loop between
Chapter 4 and Chapter 3.
Product lifecycle model

The most vital concept in e-marketing theory is the product lifecycle model. This is a
conceptual model of how the market works when a new product is introduced to the
world. The product lifecycle model is the business-side view of the marketplace, which is
described from a consumer perspective in Chapter 5 as the innovation-adoption curve.
For the sake of connectivity we’ve included consumer-side statements even though you
haven’t covered that part yet (marketing’s cyclical referencing comes into effect here).
Dann and Dann (2007) outlined the extended cycle as a series of six phases.
Phase 1 is the introduction phase, where the product first hits the market and where
the innovators buy it because it’s new and therefore interesting. It’s a period of low
profits, high prices, cost recovery and innovative customers. Online it’s also known as
63

e-marketing
‘beta’, where the product is (mostly) finished apart from the bits that need to be fixed
after breaking on contact with the consumer. Google has at least ten services sitting in
the Phase 1 beta category under the ‘Google Labs’ tab at any given moment.
Phase 2 is the early growth spike that occurs when the innovators are starting to clear
out in search of the newest new thing and the early adopter opinion leaders (Chapter 4)
start to show up. It is important to note here that many, if not most, product innova-
tions never make it beyond Phase 1 and into Phase 2. For those that do, prices drop,
new features are added based on the experience with the beta, and version numbering
starts (if it wasn’t there before). This is still an era of rapid development in response to
customer needs although some of the emphasis moves from constant changes to the
current offering to the offer of stability (Version 1.0 is much better than Version 0.99a)
with the promise of future iterations. It’s a safe bet to say that the Internet in general
is somewhere between Phase 2 and Phase 3. It’s well established, has hit the very first
version number (Web 2.0) and looks reasonably stable (for a house of cards). Services
such as Twitter are definitely at this point in the process (Plurk, Facebook and others
aren’t quite in the same category).
Phase 3 represents sustained growth, where a broader share of the market of early
majority joins the early adopters in using the product. It’s also where competition for
market share increases – consider if you will that mobile Internet access on the iPhone,
iPad and Blackberry is a competitor alternative to the fixed Internet access at work and
at home. Strategy tends towards the market leaders locking up the marketplace, rais-
ing barriers to entry and generally preparing for the slug fest that happens when the
market matures and stabilizes. Social media services such as Facebook are approaching
the far end of Phase 3 at the time of writing. Facebook is the poster child for ongo-
ing growth with the sinking sense that it’s got to run out of new users sooner rather
than later.
Phase 4 is the late growth spurt, the last gasp, for most products before the curve
flattens out into loyalty based repurchasing. Late growth for the Internet is where people
who left a service because it wasn’t useful come back now it’s reached critical mass
(Facebook, MySpace), or where secondary uses for a product are found (a work blog, a
personal ‘home’ blog and a personal blog for tracking gym training and exercise). Phase
4 is the money phase for most businesses as additional copies of the product are used
or paid versions of free services are acquired to make more use of the features now that
plenty of experience has been gained with the basic model. In technology terms, the
iPod, Xbox360 and PlayStation 3, plus every copy of Microsoft Windows after Windows
2000, sit in this camp. Late growth also ties into the late majority adopter category,
who are belatedly joining the cycle as they see a need to pick up the technology or else
be left behind their friends and family. MySpace is the definitive Phase 4 late-growth
technology, slowly heading into decline as people migrate from the MySpace profiles to
Facebook, Twitter or a self-hosted blog.
Phase 5 is the market maturity stage, which can describe technologies such as the
DVD player, CD audio, MP3 audio and televisions. Attempts will be made to introduce
radical ‘new’ versions of the existing mature product (Blu-ray, HDTV, MP4, Ogg Vorbis).
However, since the market has stabilized and product variations are widespread, the
64

market is saturated with product offerings. It’s a tough ask to break through the mature
market. Realistically, a breakthrough at this stage is just moving people back to a growth
phase without offering anything sufficiently radical to constitute a new product that
would start the process back at Phase 1. Online searching hit a plateau before Google
arrived and knocked MSN Search and Yahoo! out of the competition. Web browsing
sat firmly at maturity after Internet Explorer 6 beat Netscape 6 into oblivion. Then
Firefox, Flock and Chrome arrived, pushing the category back to the highly competitive,
saturated marketplace.
Phase 6 is the decline phase, where the product is retired and shutdown, sufficiently
retrofitted as to move it back into one of the growth phases or farmed off into a mature
market niche to live out its days as a specialist product. Currently, newspapers and
newsprint seem to be doing their level best to move from maturity into decline, despite
the success of a whole array of online services that resemble journalism in varying
degrees. Phase 6 can also spell the end of technology as the organization orders the
cessation of production and support – Windows 2000 was officially ‘Phase Sixed’ when
Microsoft ceased any and all forms of development and support for the platform.
The product lifecycle plays an important role in calming down marketers, strate-
gists and anyone else invested in the traditional business strategy based around the
idea of growth as an indicator of organizational health. Problematically, many business
strategists believe that the rapid growth at the start of a product lifecycle, steady con-
sistent growth during the operation of the product or continuous growth through to
market maturity are the be-all and end-all of strategy. The mindset was summarized
as ‘if you’re not growing, you’re failing’, which was an unquestioned modus operandi
for business prior to the global financial crisis. The product lifecycle puts paid to the
idea of constant growth as a realistic strategy. In reality, continuous growth is not
a sustainable business proposition – neither marketing nor marketing practice indi-
cates that growth can or should continue once market maturity is achieved in the
product lifecycle.
Similarly, traditional e-marketing was predicated around continuous ongoing growth
based on the the Internet moving from the innovators (2.5 per cent) to early adopters
(16 per cent) and into early majority (34 per cent). Rapid growth is possible in these
market conditions since the expansion of the total possible market from 2.5 per cent
to 52.5 per cent of a population is a curve with a sharp upwards incline. That said,
once you’ve crested the wave of early majority, you’ve got a remaining market share
of 34 per cent in the late majority available before you hit the wall of laggard-based
rejection. (If none of this makes sense to you, Chapter 5 has the details on the
innovation-adoption curve.)
Rapid growth can be expected at the start of any product lifecycle but the nature
of maths, curves and marketplaces means it cannot continue unchecked forever under
any set of circumstance known to marketing. From an e-marketing perspective, this also
means that you need to calculate issues of breakeven occurring well before the peak of
any one of the growth curves. Avoid dependence on perpetual growth as a business
model and instead focus on a viable business model that can support sustained activity
in a mature competitive marketspace.
65

e-marketing
Kevin Kelly’s 1000 True Fans model }
There are alternatives to the rampant, in perpetuity growth model. Kevin Kelly, Chief
Editor of Wired (www.wired.com), puts forward a business model that requires the
creator of content (of any form but usually books or music) to find 1000 people who
are classified as ‘true fans’. The True Fan is defined as the customer who will spend a
day’s wage (assumed to be US$100) on your work in a given year. Add 1000 of those
people together, and maintained over a period of time, you’ll be looking at an annual
gross income of US$100,000. The integral part of the True Fan model is that it does
not advocate 1000 fans in Year 1, 1250 in Year 2 or any other form of generic growth
rate. Just acquire, maintain and harvest 1000 True Fans spending US$100 on average
on your product line in a year, and you’re on the way to a sustainable and profitable
operation.
Source: www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php
Porter’s generic competitive strategy

The second useful model for e-marketing is Porter’s (1980) legendary generic competi-
tive strategy kit. Porter’s approach basically outlines the three templates for business.
◦ Product differentiation, which means being different in a useful and valuable way for
the consumer. Product differentiation means that you’re focusing on satisfying the
needs of the market in a way that’s better, faster or more effective for the consumer
than your rivals. Product differentiation is often difficult to achieve because it’s usu-
ally quite visible and relatively easy to copy. Face it, once you’ve built the better
widget, all the competition needs to do is buy your widget and they’ve got your
market-beating technology in their hands. Same deal applies with online services –
sign up to the newcomer’s beta program, note the offer, then go back and build your
own competitive alternative (watch out for patent law on the way).
◦ Cost leadership, which means beating the market in terms of what it costs you to pro-
duce the product offer. Cost leadership is a profit margin-orientated strategy. If your
costs are lower than your opponent’s, you win when you both sell the same number
of units at the same price. There was a mistaken belief that cost leadership meant
some form of price war as the cost leader attempted to undercut the rest of the mar-
ket. This sort of short-term, profit-rejecting behaviour led to the first two dotcom
crashes and should be avoided at all cost. Cost leadership is about efficiency, effec-
tiveness and a sustainable business practice that lets you do what you do best in
an easier, quicker, cheap or more rewarding way than if you were working for the
competitor. Blogging cost leadership should focus on using the author’s strengths to
ensure that the blogging is mutually beneficial for author and reader, so the time
costs are lower than if you’re not having fun whilst you work. Cost leadership also
means making a profit per unit – Xbox and PlayStation 3 units sell at a loss on the
hardware with the assumption of gains in software sales. In contrast, Nintendo turns
66

a profit on every Wii console sold, and, with the largest market share of the console
market, that’s a decent return for the cost-leadership approach.
◦ Niche marketing, which is where you meet the specialist needs of a narrowly defined
group of customers within a small slice of the market. Niche marketing has to
be the blogger’s best friend and the antithesis of the newspaper industry. Pick a
tightly focused segment, offer them something they value and use secondary rev-
enue sources such as affiliate sales or advertising revenue, or make products they’ll
buy at a premium. (The 1000 True Fans model is ultimately a niche strategy with a
market cap – 1000 fans is a niche. 1001 fans involves Dalmatians!) The only prob-
lem with a really good niche strategy is that you move through the product lifecycle
curve that much faster because it’s a smaller marketplace. Once you’re at the far end
of maturity, there’s not a lot of other places to develop and expand the market if it’s
a particularly specialist niche.
Fitting Porter’s strategies into e-marketing requires a bit of thought as to how your
online activity fits in the overall marketing strategy and how to really link the specific
campaign objectives with one of these three strategies. It’s possible to create a cost-
leadership niche strategy based on differentiation although it’s usually easier and more
effective to focus your game plan on one step at a time. If you can dominate the market
as a cost leader, it doesn’t make a lot of strategic sense to disperse your resources by also
trying to be the most differentiated product in the market.
The generic strategies represent a starting point where you pick up a broad set of
options (make something new, make it cheaper, pick a narrow focus) which set the
initial direction. After picking off the top level, the challenge becomes putting these
broad generic plans into personal context and using them as guides to other decisions.
It’s not enough to just declare an intention to ‘become a cost leader’. You have to ensure
that every business decision links back to the generic strategy. If you want to lead on
costs, then you need to review expenditure, efficiency, cost-per-unit and value for every
action. In the process of the review, it’s entirely possible to realize that the organization’s
strengths lie in a different area and that better use could be made of a different strategy.
In which case, switch strategy and play to your strengths, rather than trying to shoehorn
the organization into a framework that doesn’t suit it.
Product differentiation: one-of-a-kind productions

Product differentiation can be achieved with the right application of personalization,
customization and the integration of the one-to-many-to-one features of the Internet
(Chapter 2). The Internet can be used with existing products and services simply by
adding complementary online services. Using the universal benchmark (sliced bread),
if you can produce a website that helps the customer do more interesting things with
bread (www.toast2art.co.uk), you’re on the way to product differentiation. (Yours could
be the truly art-friendly sliced loaf.) Considering that the back of just about any product
sold at Tesco or Sainsbury’s has some URL offering further information, it’s a crowded
space and a competitive market. Consequently, the website needs to offer something
useful, valuable and appealing to the end user to be a differentiating factor. That said,
67

e-marketing
products operating in mature markets can make effective use of online differentiation.
The pasta industry is a little on the old side, yet a well-considered set of online supple-
ments in the form of a recipe website can create differentiation within the market.
Similarly, whole foods, health foods and quasi-niche products such as low allergen
food can augment the physical product with additional online advice, support and the
opportunity to order directly from the wholesaler.
In terms of developing an e-marketing differentiation strategy, you can push for an
objective or subjective differentiator. Objective differentiators are features that are exclu-
sive to the product. For example, exclusive titles for the Xbox or Nintendo console,
exclusive downloadable content (Chapter 14) for a game title (Rockband 2, Guitar Hero
World Tour, GTAIV) or unique capacity found within a product offering – applications for
the iPhone and iPod Touch (Chapter 13). Objective product differentiation is replicable
even when and where protected by patents, licences and other defensive strategies. The
unique nature of the iPod controls are now ubiquitous in MP3 players and the concept
of downloadable content is widespread across the PC, Xbox, PlayStation 3 and Nintendo
platforms. Even the television industry has moved into the DLC (downloadable con-
tent) market, with television series offering exclusive ‘webisodes’ to supplement the
fans in the breaks between the broadcast seasons.
Alternatively, focusing on subjective differentiation allows you to treat the consumer
in a way that provides a unique experience for them in terms of personalization, interac-
tion, emotional connection or image management. By using a combination of product
positioning (later in this chapter), branding (Chapter 7), service delivery (Chapter 6)
and being awesome, a company can produce an uncontestable space in the heart and
mind of the consumer as their differentiating factor. In the online sphere, the Zappos
company dominates the sphere in terms of being caring, providing quality services and
engaging in acts of outright awesome.
Maintaining a successful strategy of differentiation requires the creation of a prod-
uct mix that is not easily replicated by competitors (anticipate and satisfy customer
needs) and one which is valued by current and potential customers (identify needs).
Think in terms of whether you can provide exclusivity of content as your differentiator
(knowledge, entertainment, original art, original materials) or whether you can create
a community experience that can’t be replicated elsewhere. In order to make the prod-
uct differentiation approach work in the online environment, planning needs to be
conducted to answer the question ‘How can you use the unique attributes of the Inter-
net to add value and differentiate your product from your competitors?’ Being able to
answer the question requires the organization to understand the nature of the Internet,
the nature of the product, the needs of the consumer and the nature of the business.
Cost leadership: driving the dollar further

Money has been the major issue for much of the discussion concerning the Internet.
Moving online has often been seen as a cost-cutting measure that ought to result in sig-
nificant savings for an organization. Organizations focusing on cost leadership develop
sustained competitive advantage in the longer term because they maintain greater profit
margins (lower margins, higher profit per equal units of volume) than their direct
68

competitors. It is important to remember that the focus of cost-leadership strategies

is on reducing costs to the organization. While one outcome of these strategies may be
price reductions as a result of passing savings on to the consumers, this should not be
an assumed outcome (which is why the strategy isn’t called price leadership).
In the absence of direct competitive downward pressures on price, the decision
to maintain price levels and operate with increased profit margins can provide the
resources to further develop and differentiate the organization and its products through
strategic internal investment. For example, if the movement of the organization into
online distribution results in cost reduction, a strategic decision is needed as to
whether to:
◦ take the profits

◦ pass on the savings directly to consumers
◦ use the money for longer-term investments in new product technology, or
◦ cross-subsidize other elements of the product and service mix.
Low cost does not have to mean low quality, given the benefits accrued from experi-
ence and economies of scale. A cost-leadership advantage can allow the organization
to position itself as a low-cost, value-for-money player in the online marketplace. The
nature of the digital product and digital distribution has created an environment where
an information product can become an inexhaustible supply which reduces the need
for scarcity-based economic pricing (Raymond, 1999). The single greatest cost-cutting
measure the Internet provides is the share of voice that can be gained by participa-
tion in the social media environments (Chapter 12) and the knowledge that can be
gained for greatly reduced costs with online market research (Chapter 4). Consider
time expenditure to be the financial cost reduction – time invested in communicating
with other people in social media environments can be a greater return on investment
than paid advertising broadcast in exactly the same space. Cost transfers from finan-
cial investment to time investment can also aid the development of the 1000 True Fans
base, where you can acquire, maintain and look after your fanbase through a time-
based rather than a cash-based investment in relationship marketing (Chapter 8). For
example, if you’re selling handcrafted materials on Etsy (www.etsy.com) whilst being
available to answer questions about the products on Twitter (http://twitter.com), pro-
filing each new product on a blog, have a fan page on Facebook (www.facebook.com)
and an e-mail database of previous purchasers who you occasionally update when you
make something similar to what they bought before, you’re committing very limited
cash investment. However, maintaining these networks is time intensive, and that
factor needs to be considered when looking at time cost reduction and time pricing
(Chapter 6).
Niche marketing strategy

To some extent, the Internet was born to be a niche marketing paradise, with its origin
as a network of interconnected networks. The notion of a network of networks that can
69

e-marketing
be reached by searching for specific information is nearly the ideal market conditions
for niche strategies. The interest-driven nature of the Internet (Chapter 2), coupled with
the ease with which the consumer’s search behaviour can be rewarded with finding
useful information (Chapter 5), makes niche marketing a viable option from a promo-
tions angle. Add the global nature of the Internet with international mailing, global
financial brokerage through PayPal and the almost limitless categorization options of
eBay as a distribution channel (when the category ‘Everything Else’ can break into four
sub-categories including ‘Other’, you’re dealing with a really diverse marketspace), it’s
entirely possible to run an esoteric niche and still turn a profit (see Figure 3.1).
Niche marketing has proven to be a popular strategy that allows an organization
to develop a specialized marketing mix under a specific brand name to appeal to a
narrow target market. The nature of the Internet as an interest-driven medium, coupled
with cybercommunities, (Chapter 9) has allowed marketers to develop micromarkets
of common interest, irrespective of geographic barriers (Chapter 6). Unlike mail-order
catalogues (which have to find the consumers), niche marketing online is aided by the
consumers seeking out the niche product through their search behaviours (Chapter 5).
Alternatively, market niches can be serviced through systems such as eBay (www.
ebay.com), where specialist goods can be offered by hosted auctions. Traders of spe-
cialist goods, such as rare collectibles or memorabilia, can make use of these global,
electronic, secondary markets instead of having to establish their own marketplaces
(Arunkundram and Sundararajan, 1998). Similarly, the social media networks now allow
for searchable communities so that the collectors of the rare, esoteric and downright
limited interest can find each other on Facebook, Google Groups, or set up their own
Figure 3.1 A minus minus

70

niche communities on specific-purpose blogs about the things that they thought only
they were interested in collecting (and if there’s one truism of the Internet, it’s that
whatever you thought you were the only person interested in, there’s at least one other
and they’re probably blogging it too).
The process of choosing a generic marketing strategy is similar for companies that
operate predominantly online and in the traditional environment. Larger, more estab-
lished firms are more likely to be able to pursue product differentiation and cost
leadership. Smaller, newer firms tend to take a niche market approach due to resource
restrictions, although strategic use of the Internet for targeted niche marketing can over-
come some of these restrictions. Bloggers starting out are usually advised to focus on
mastering the skills necessary for successful blogging in a single niche before expanding
out into running multiple, small business enterprise blogs.
The Ansoff growth matrix

When you’re setting up for e-marketing, your first major strategic decision will be to
determine your growth strategy from introduction to late growth phase of the prod-
uct lifecycle. One of the most robust business models for strategic growth decision is
the 2 × 2 Ansoff matrix, which focuses on the organization’s markets and products.
It works on the principle of having either an existing product or market or needing a
new product or market. When you combine the four options (new/existing market;
new/existing consumer), you end up with a 2 × 2 matrix (Table 3.1) and a set of
developmental guidelines.
This model proposes that organizations can achieve growth based on one of the
following four strategies.
Market penetration
The first quadrant of the matrix produces a strategy that depends on an existing mar-
ket and an existing product. By definition this is a strategy for the growth or maturity
market, and doesn’t apply to the introduction phase of the product lifecycle. From an
e-business angle, this is the strategy of offering a new tier of paid-for and sponsored
accounts in addition to the free services you’ve been offering since the beta version.
A quick browse of the iTunes applications store will demonstrate the sheer volume of
applications that are sold with a free limited feature to gain marketshare, trial adoption
Table 3.1 Ansoff matrix
Current Products New
Current Markets Market Penetration Product Development

New Markets Market Development Diversification
Source: Reproduced from Watts, G., Cope, J. and Hulme, M. (1998)

‘Ansoff’s Matrix, pain and gain: Growth strategies and adaptive
learning among small food producers’, International Journal of
Entrepreneurial Behavior & Research 4(2):101–11.
71

e-marketing
and create a user base which can be converted with a market penetration strategy of
selling a better version of the product to the existing user. Growth comes from selling
more of the same product or upgraded services to the existing target market, so there’s
a propensity to focus on sales promotion activities such as price discounts and competi-
tions or heavy spending on reminder advertising. If you’re dealing with physical goods
and services, the movement of the customer and sales online raises an expectation that
existing customers can choose to purchase from their usual store or order online (from
the retailer’s or manufacturer’s website).
Market penetration has a solid reputation as a low-risk growth strategy, since you’re
converting the already convinced rather than trying to build a new market or gain new
customers. It also has the advantages of organizational familiarity with the product and
market, and the market’s familiarity with the organization and product (Chapters 5
and 6). However, an alternative viewpoint is that relying too heavily on penetration
increases risk to the company as it is a strategy of ‘putting all the eggs in one basket’.
Google probably represents the pinnacle achievement of the online market penetration
strategies as it gradually expands the number of services that the one Gmail account
can provide to the consumer, and the consumer steadily moves across from competitor
alternatives to the one integrated Google-based online life.
Market development
The market development strategy probably has the greatest value when you’re moving
from the introduction phase and, again, when you’re heading into the late growth
phase as you try to gain new customers from different markets by expanding the
appeal of the current product. This is also where you’re looking at the movement from
innovator to early adopter and, again, from early adopter to early majority as the same
product solution is introduced to a new group of users. From a risk perspective, market
development is considered to be a medium-level risk strategy.
This can be as simple as removing the ‘beta’ from the title of the service or intro-
ducing a new version number (Web 2.0), or as complex as renaming the brand with
a comprehensive repositioning strategy (Microsoft Services Network to Windows Live).
However it’s done, the existing product is released to a new target market either by find-
ing alternative uses for the product so that it appeals to a new market segment (Twitter
as a personal status message rather than a short chat function) or by moving into a new
geographic area (Livejournal in Russian; global shipping to places that aren’t Canada
or Hawaii). Establishing an online presence to coexist with the offline stores is, by def-
inition, market development because the Internet represents a new region. Similarly,
opening your site into a new language is the online equivalent of a new region due to
the ubiquity of the Internet (Chapter 2). The growth of Internet use on a global scale
and efficient international payment systems have significantly reduced the barriers to
entry for smaller firms wishing to enter international markets. The geographically inde-
pendent nature of the Internet has made market development a viable strategy for firms
with specialist products seeking national and international niche markets.
From a blogging perspective, this may be as simple as moving from making extended
status updates and notes in Facebook to hosting the same sort of commentary on
72

WordPress or Blogger. In a similar vein, it may also include the movement from a
WordPress or Blogspot site into your own hosted domain, or the introduction of a
community structure to replace your blog’s comments section (Chapter 9). As long
as the core product (the value offer) remains mostly the same and it’s a new mar-
ket of readers, listeners or viewers that’s being pursued, you’re looking at a market
development strategy.
Product development
The product development strategy is used when you’ve got an existing market and
you’ve identified or anticipated a need within that market that you can solve with a
new product. Like market development, product development is considered a medium-
level risk strategy as you already have a good knowledge of one of the key variables for
growth, in this case the product. Software services are probably the most obvious in this
respect – Adobe started life with a small portfolio of related print design products and
now offers a comprehensive suite of creative tools that cover everything from print,
video, web and audio production. That said, Google and Microsoft also have a solid
stake in the product development camp with their ability to maintain a current audi-
ence through an ever-expanding portfolio of products, services and ideas aimed at the
same marketshare as their present products occupy. There is a downside to this strategy
that Microsoft is most notorious for suffering from in that it has to compete with itself
for its own marketshare. Each version of Windows faces more threat from the previ-
ous version than it does from Linux or Apple. If you like Windows XP, Windows Vista
offered little incentive, and if you didn’t like XP, you were probably already headed for
OS X or Linux.
Whenever an organization wants to retain its existing customer base and achieve
substantial growth by the sale of new products, it can develop products that are either
complementary to existing products, such as podcasts from radio shows (www.bbc.co.
uk/radio/podcasts), or leverage off the brand name of the product (iPod, iMac, iTunes)
or the name of the company itself (GoogleMail, Google Search, GoogleGoogle). Finally,
you can also leverage directly from the understanding of the current market by building
specific-purpose products to serve the ongoing needs of the organization’s identified
target market (the sheer volume of Apple-authorized accessories for iPods). Websites can
either be developed to on-sell these new products or be the new product or offering that
complements the existing product. The online version of the BBC operates as a parallel
product to the broadcast versions, whereas the Apple website provides a new array of
information products which leverage off the company’s existing brand reputation in
the portable music and computing industry.
The flexibility of products and the extent to which product development repre-
sents a cost-effective growth strategy depends on the nature of the product. Digitized
information-based product mixes and online service options are more flexible and
far better suited to product development strategies than traditional physical prod-
ucts. Product development is a common feature in the blogging field when the
blogger produces supplemental products in the form of group training activities such
as Problogger’s 31 Day Challenge (www.problogger.net), physical books such as Wil
73

e-marketing
Wheaton’s Sunken Treasure (http://wilwheaton.typepad.com), podcasts such as Penny

Arcade’s downloadable content (http://feeds.penny-arcade.com/padlc) and physical
merchandise like that offered by Icanhazcheezburger’s Lolmart (www.lolmart.com).
Diversification
Diversification is also known as going back to square one as you need both new mar-
ket and new product. In some cases an organization may wish to set up a totally new
division which draws on neither its existing customer base nor its product lines because
it happens to develop a market offer that just doesn’t fit into the current framework.
Many technology companies end up spinning off sub-divisions that pursue diversifi-
cation projects as they chase the development of a product that doesn’t fit the parent
company line-up.
It’s understandable that diversification is usually considered the highest risk of all
strategic growth options and experiences the same challenges that you’re mostly likely
to encounter in starting up a new blog, new company or new idea. As far as strate-
gies go, this is most appropriate where emerging needs in unrelated markets have been
identified and are not being met by existing companies. Some of the strangest diver-
sification arrangements can be achieved – notably, Microsoft’s sudden and apparently
inconsistent foray into the development of hardware with the Xbox 360 (strictly speak-
ing, despite a successful track record in keyboards, mice and joysticks, producing a fully
fledged hardware solution was a massive movement from a software company).
Picking the best option

If you signed up for the blogging services back in the e-introduction (setting up for
e-marketing), you’ve already experienced diversification in that you’ve developed a new
blog which will need a new audience before it’s viable. The beauty of the online envi-
ronment is that diversification is often that simple – sign-in to a site, upload content
and start work on developing and acquiring your share of the market.
When approaching e-marketing strategy, you need to consider where your
e-marketing will fit into the overall business strategy. Whilst the Internet offers sub-
stantial benefits for diversification with the speed and ease of new positioning and
market development, it can equally support the implementation of any of the strate-
gies outlined above. Existing target markets can be better served by improving channel
selection, and markets can be further developed by making integrated use of the web-
site as both a promotional tool and an online ordering system. Coca-Cola can push
sales promotion campaigns through the physical media to encourage people to visit
coke.com and can offer Coke fans exclusive access to merchandise options that are only
available online (and of interest) to Coke’s True Fans. Market penetration can be used
to increase sales of the Coke brand to the loyal customer, and product development can
be used to sell Coca-Cola-related merchandise and promote regional Coca-Cola sites
(www.coke.co.uk) as additional information channels for region-specific promotions.
Just about the only thing that Coca-Cola can’t deliver over the Internet is the drink
74

itself – and that could be arranged by the appropriate cross-promotional venture with
Tesco’s (www.tesco.com) or Sainsbury’s (www.sainsburys.co.uk) online order systems.
Market development can occur naturally under the existing organizational structure
by explicit targeting of the technologically literate with current services – for exam-
ple, social media sites targeted at the early adopter markets who are looking for a way
to demonstrate their social leadership and technical prowess. Given its global nature,
creating a website automatically exposes the organization to potential new markets,
which pretty much guarantees an organic market development strategy in amongst
any deliberate decisions. That said, acknowledging and formalizing the online market
development as part of the integrated strategic direction of an organization needs to be
carefully managed at all levels to ensure that the right customers are serviced without
placing undue strain on the organization. Minimizing market exposure to undesirable
markets can be achieved with segmentation strategies, positioning and outright techni-
cal solutions that limit other elements of the marketing function such as distribution
and payment systems to specific geographic regions, thus making the site irrelevant to
all but the desired market (frequently known as ‘America’ when you’re dealing with
online shopping carts).
Product development is also readily achieved by moving key functions from offline
service delivery into an integrated online transaction (offering financial advice during
Internet banking sessions) or by providing additional services (mobile banking via an
iPhone application) or information-based products to existing customers (pre-populated
loan applications within Internet banking). Exclusive online products can be devel-
oped and promoted to existing customers as a product development growth strategy
which can be complementary to existing products (new downloadable games for Xbox,
PlayStation, Wii or PC), additional services (video rentals from iTunes), or just detailed
product information, such as technical manuals for offline products.
Alternatively, new products that leverage the brand and existing product line can
be developed, such as Apple’s vast array of software accessories for the iPod Touch and
iPhone which are available on the iTunes software (Chapter 14). The success of an online
product development strategy depends upon the extent to which the existing target
market is already involved with the company on or offline. New product development
can be as simple as developing merchandise through print-on-demand sales via Zazzle
(www.zazzle.com), collecting most popular posts from a blog into a book at Lulu (www.
lulu.com) or starting a supplementary podcast. It would not be an appropriate strategy
for organizations where the majority of the target market is not computer literate and
does not, or cannot, access the Internet.
The beauty of the Porter and Ansoff models lies in their capacity to help marketers to
focus and learn from the experiences of others who’ve been through similar situations
in the on and offline world. Simply being involved in a new playing field such as the
Internet does not negate the strategies used successfully in other environments, par-
ticularly since you’re quite likely to be competing for the attention of people who are
also offline customers. Embedded within each generic strategy is a guide for the devel-
opment of specific objectives and, by applying these models, an integrated marketing
strategy becomes easier to design.
75

e-marketing
} Objectives and goals

The purpose of any marketing strategy is to map out the game plan to move the organi-
zation from Point A to Point B. Objectives are the marker points that indicate whether
you’ve arrived at Point B or if you’re headed the wrong way toward Point C. Without a
decent set of objectives, you can’t tell whether your marketing strategy has succeeded
or failed. The e-marketing element of any business programme must have its own spe-
cific goals and objectives that are integrated into the organization’s broader business
strategy. Focusing on the bigger picture while developing the technical specifics of a
campaign will ensure that you actually support the organization’s goals, which is how
you ‘add value’ to the business.
Setting objectives
The most obvious question for e-marketers then becomes ‘What are appropriate objec-
tives for companies to pursue in relation to their online activities?’, with the most
obvious answer being ‘It depends’. If you’re going to do marketing, and do market-
ing properly, you can’t rely on off-the-shelf solutions or ready-mix goals and objectives.
From developing your own objectives for what you want to achieve with a blog to set-
ting objectives for online marketing within a major corporation, you have to custom
make each objective based on the available resources, desired outcomes and current
market conditions. Thankfully, it’s not all bad news on this front – suitable market-
ing objectives are much like good recipes; there are common elements that can be
used to create the customized solution you need for your own purposes. The following
section explores how to put together a good set of objectives within the recom-
mended parameters that have been tried, tested and refined over time in online and
offline business.
The SMART mantra

One of the favoured approaches to setting objectives is the time-honoured business
mnemonic that ‘All objectives should be SMART’, where SMART breaks down into the
five points of specific, measurable, actionable, realistic and timetabled.
Specific means that any objective needs to state clearly what you’re trying to achieve.
Spell it out in detail and be as precise as possible so that you can design and develop an
implementation plan that matches the strategic objective. The more specific the objec-
tive, the easier the measurement (Chapter 10), and the easier life becomes in the tactical
planning phase (Chapter 4). A little hard work here and now will save considerable time
further down the road.
Measurable means that if you can’t measure it, you can never know if you’ve achieved
it. Every objective needs to be quantified in some way so you can at least tick it off the
to-do list, and so the tracking (Chapter 10) becomes a question of assessing actual results
against a measure of what achieving the objective should look like in practice. The
measurable element of the objectives should tie back in with the information available
or collected through market research and the marketing information system.
76

Actionable means breaking out the verbs for the objective since it needs to indicate
how the outcome is going to happen as much as measurable is needed to indicate what
is going to happen. Action-orientated objectives are a must so they can guide the tactics
and give you some guidance for the implementation (Chapter 10).
Realistic means keeping the corporate ego in check and the objective within the
bounds of reality. Any decent objective walks the fine line between the optimistic, ideal
outcome and the much less fun, reasonable and realistic reality. By emphasizing the
specific and focusing on actions that can be measured, it helps keep the reality check
from bouncing. The key is to ensure that the objective can be achieved with the actions
stated, resources available and time allocated. Unrealistic goals can lead to perceptions
of failure, even when astonishing success has occurred in reality. If you’ve asked your-
self to go from blogging unknown to international superstar, you’ll be disappointed
with national notoriety (which, in itself, is a huge achievement).
Timetabled is the ‘when’ of the previous ‘where, how and what’ statements. If you
can’t say when you want the other parts of the SMART metric achieved, it’s possi-
ble those elements are missing the grounding in reality that’s vital for good strategy.
Timetabling the objectives also encourages honesty in the process, particularly if you’ve
brought a calendar and calculator to the timetabling discussion. Set the due date, calcu-
late the number of work hours required and then do the maths to see if you’ve left any
time for sleep in the agenda.
Packet mix objectives

Although every objective that is set in business is contextual and needs to be related to
the precise circumstance the firm finds itself in, there’s a broader set of generic categories
of objectives that can be used as a starting point for working out what you want to
achieve from being online. For the purpose of this book, several of these packet mix
objectives will be useful for a blog, and others won’t remotely relate to blogging in
the slightest. Your challenge is to determine which of the generic categories works for
you and your desired e-marketing outcomes, and which don’t fit the game plan. It’s also
worth noting that whilst these six objectives are presented from the business perspective
of what to do with the Internet, they’re also revisited in Chapter 5 in terms of how
consumers use the Internet. After all, the whole point of e-marketing either revolves
around the creation, communication, delivery and exchange of offerings of value to
the market or it’s about anticipating, identifying and satisfying customer needs. Either
way, the customer in the target market needs to be the front and centre priority in order
to really make the Internet useful in marketing.
There are six generic objective categories.
Cost-oriented objectives, from an organizational perspective, are the bottom line.
An organization may decide to move some or all of its activities online because there
are genuine savings to be had when offline services can be reduced or replaced by a self-
service website (O’Connor and O’Keefe, 1997). However, those savings only happen if
you retain your customers. If the customers want offline delivery and will quit buying
from you if you deny them the offline sales channel, there’s no saving to be had in
alienating the market. Cost cutting in the organizational sense needs to be presented
77

e-marketing
to the market as ‘easier access for you’ or ‘convenience, security and round-the-clock
access from the comfort of your living room’ when the business criterion is actually
‘cheaper than keeping a store front’.
Sales-oriented objectives use the Internet as a shop front. Sales can come directly as
the Web turns into an oversized Arndale Centre. If you’re using the Internet as a
retail channel and trying to bypass your usual distributions channels by going direct
to the consumer, there are serious logistical and legal issues that have to be addressed
(O’Connor and O’Keefe, 1997). That said, there are some products that are ideally suited
to the Internet and these are covered in greater detail in Chapter 6. For the moment,
if you’re planning on selling your wares on the Internet, pitch it to the customer on
convenience, choice and home shopping whilst you set percentages and sales revenue
targets on your side.
Behavioural change objectives are where you anticipate that the current practice of
your customers needs to change in order for you to continue meeting their needs in a
mutually beneficial manner. This usually means transferring offline sales to online pur-
chasing, phone banking to Internet banking and moving fax-based ordering to e-mail
or website ordering. Recently, behavioural change objectives have aligned themselves
with teaching the end users how to make use of a new service such as Flickr (it’s like
a photo album), Twitter (it’s like a quick chat in passing in the hallway), blogging (be
your own opinion columnist) or Facebook (it’s like being stuck in a meeting at work
but fashionable) or any other online service that requires a change in the way people
behave towards each other.
Information dissemination objectives can be the really boring Web 1.0-end of the busi-
ness with static displays of information or far more dynamic with interactive features,
bells and whistles. However it plays out, the aim of the objective is to move an idea,
knowledge or insight from one person to another. If you’re planning on blogging about
an issue, event or even just your day-to-day life, you probably have an information
dissemination objective in your near future. It also covers the catalogue and display-
type sites that don’t actually allow for any online purchase (see every movie promotion
site ever launched), government, political and social marketing messages. It’s even the
rationale behind whatever learning management site you’re using in this subject.
Promotional objectives are simply based around communication outcomes, where the
promotion activities tend towards the persuasive (get the consumer to do something)
rather than the straight-out informative (teach something). Consequently you’ll tend
to tie promotional objectives to sales or behavioural objectives for maximum effective-
ness (O’Connor and O’Keefe, 1997). Promotional objectives form the cornerstone of the
activities in Chapter 7.
Entertainment-oriented objectives are based around making the Web presence valuable
to the consumer by amusing, entertaining or otherwise keeping them occupied in a
manner designed to encourage repeat visits (including frustration since people persist
in playing the Sudoku games). Entertainment-based objectives tend to split along the
categorization line of whether the function is secondary to the product as an enter-
taining afterthought as part of a promotional package or as the primary purpose of the
operation. When it comes to blogging, entertainment objectives may be viable goals for
a blog, given the success of sites such as Cute Overload (www.cuteoverload.com).
78

Modifying packet mix objectives

Although nothing beats freshly created marketing strategy for flavour and usefulness,
there are some pre-mix options that you can use as the basis for your own strategic
objective setting. For example, Griffith and Krampf (1998) outlined four e-marketing
objectives in terms of enhancing communications, increasing sales, improving cus-
tomer service and increasing market share. These four generic ideas can be upgraded
into useful objectives with the accurate guidance as to exactly what, how and by when
the organization wants to achieve them. In order to be usable, you need to rework them
from their current New Year’s resolution (get fit this year) appearance into the SMART
structure that suits an e-marketing objective. For example:
◦ (improving customer service) Use Twitter search to identify dissatisfied customers

who have tweeted about problems with our products, and respond to them within
24 hours (weekdays) or 48 hours (weekends) to offer specific resolution to these
problems:
• S: Problem solving
• M: Number of problems identified and solved
• A: Searching Twitter, engaging directly with the customer
• R: Allows for weekends
• T: 24–48-hour response.
◦ (increasing sales) Promote the new book release over six weeks on the main blog
using a direct link to the Amazon one-click order button on each blog post that
features an excerpt from the book:
• S: Sales promotion
• M: Sales on Amazon, affiliate link records
• A: Blog post with sales link
• R: Content already written
• T: Six weeks.
This approach can be used to expand any of the existing packet mix objectives out-
lined in the chapter to create a more customized set of objectives for your specific
needs. The key, as with all good marketing, is to take the existing framework as a start-
ing point for your initial ideas and then customize it to suit your desired personal or
corporate outcomes.
Objectives and profit

In the vast majority of cases there is no explicit profit objective tied to the objectives
listed above because these developmental and maintenance elements fit within the
broader marketing strategy. Expecting a website to produce a profit as a generic strategy
is a misleading approach that doesn’t examine the role the website plays in the broader
organizational context. Similarly, you can’t just sign up for Twitter, set up a blog or get
Facebook and await the cash flow. Each of these tools has to play a distinct role in an
79

e-marketing
overall game plan which includes profit from revenue being greater than expenditure.
Twitter may cut financial costs dramatically on the surface until you factor in employee
time costs, and as such, shouldn’t be used as a profit centre. In reverse, you may find
the advertising expenditure on banners, billboards and television commercials could be
sunk into three interns and a community manager for far greater financial return as
they respond to product queries in real time.
As a note of caution, it’s important to remember that the advertising industry has
known for decades that awareness and liking of a product are no substitute for purchase
decision. People may well love the brand and buy elsewhere because the distribution
strategy let them down, or they’re based outside the geographic area or the price was
wrong. Same goes for free users of a website – they may never upgrade to the paid
account because the benefit they’re receiving is worth the price they’re currently paying,
and nothing more. At the same time you may not even want to consider direct financial
return from the online activity because you’re working towards a different goal – market
analysis based on the real-time observation of millions of short messages across a giant
communications network could create a self-sufficient profit centre that allows you to
give away the communication channel for free.
However, the value of any communications medium is in the impact it has on the
primary product. If the website plays a far greater role in developing and maintaining
relationships and disseminating information than it does in generating direct online
sales, it’s still paying its way in the greater scheme of the organization’s objectives.
Some of the objectives listed are investments in long-term gains rather than potential
channels for short-term profit, much in the same way advertising and promotion can
be an investment in the long-term development of a brand identity.
The value of the website and its perceived success should be determined in the light
of these broader functions which are likely to lead indirectly to increased sales. Some
websites will serve the purpose of being online versions of window-shopping, where
potential consumers browse online, compare prices, styles and product information,
and then go to a traditional outlet to actually purchase the product. By doing this con-
sumers believe that they are combining the best of both worlds. Cross-subsidization of
online activities with more traditional elements of the organization is both appropri-
ate and, in many cases, essential. Evaluation of the website’s success can be undertaken
effectively only if it is considered within the context of its role in the overall strategy of
the organization.
} Segmentation
Segmentation is the division of a heterogeneous marketplace into smaller, more
homogenous groups that can be the focus of specific marketing messages, branding
and product customization. It is a complex process combining business strategy, exist-
ing positioning strategies and a good dose of current market research. It’s a strategic
decision that plays a serious role in shaping the whole of the marketing mix from
product through to price and distribution mechanisms, as well as dictating a lot of
the promotional strategy. Putting a good solid segmentation strategy in place at the
80

start of the process reduces the risk of investing time, effort and other resources in the
wrong markets.
Online market segmentation can be focused at the macro level of the Internet popu-
lation, or on the micro-level development of target markets for individual websites. The
value of large-scale segmentation of user types at the macro level is that it studies the
Internet as a population group. Studies such as iVALS ( (www.strategicbusinessinsights.
com) have proven useful for the macro-level studies of the Internet and the devel-
opment and diffusion of the Internet. However, for individual companies, market
segmentation is best conducted with the view to tailoring their site to their market,
rather than an iVALS or equivalent user category. Sarabia (1996) outlined the four
functional tasks for any segmentation strategy as being:
◦ describe the audience

◦ identify the match between market and marketer
◦ select the segment
◦ tailor to the market.
Description
Segmentation starts off by describing the vital statistics of the segment in terms of infor-
mation that can be used for clustering people into homogeneous groups and which can
also be used to identify the user again later when it’s time to tailor the firm’s offerings
to their needs. Sen et al. (1998) set out a categorization approach for identifying specific
segments in an online marketplace based on usage, experience, familiarity, audience
match and technical demography:
◦ Usage patterns relate to any and all online behaviours (Chapter 5), including what’s
being used (Twitter, Web, games, Facebook, bittorrent, etc.), duration of its use com-
pared with average users (light, medium, heavy, excessive) and frequency of use
(hourly, daily, weekly, monthly).
◦ Internet experience is the length of time the user has been online, their depth of expe-
rience with various bits of the Internet and how skilled they feel they are with the
relevant technology you’re planning on making them use. Be cautious with experi-
ence as a segment – just because someone is good with instant messaging doesn’t
mean they’ll automatically be able to cope with a blog, virtual world or even Twitter.
Expertise is category specific to what you’ve learnt to use – although the longer you’ve
been online, the more likely you are to have generic transferable skills and the confi-
dence to trial a new technology that looks roughly similar to something you already
know (Chapter 5).
◦ Familiarity is the level of knowledge with the brand, product, service and the Internet
offering (which is logically related to experience but still a separate item). Familiar-
ity is connected to other marketing concepts such as unprompted recall, product
category knowledge and the ability to mean it when you say ‘I’ve heard of that’.
◦ Audience match is the relative usefulness of your online offering for the end user.
It’s a segmentation variable that’s basic, working on the assumptions you have about
81

e-marketing
what value you think the user will get from your offering. Consequently, it does have
a checkered history in that it can be biased by the company assuming some inherent
merit in its products and overselling the extent to which it’s addressing the needs
of the target user or creating something of value for the target market (Chapter 6).
This is basically the fit between the audience and the product offering, and a better
fit means an increased chance of success in the marketplace (Chapter 4).
◦ Technical demography is where you segment an audience based on its technology. This
is an increasingly useful approach for preparing online content to suit mobile users
(http://m.google.com) versus desktop computer users (www.google.co.uk). Techni-
cal demography includes details of operating systems, web browsers, versions of
Shockwave and Flash and the available processor and memory on the computer.
One of the reasons the e-introduction (setting up for e-marketing) required you
to acquire a set of browsers was to ensure that you have the opportunity to
experience your site from a range of technographic profiles (Safari, Flock, Inter-
net Explorer, Chrome and Firefox users). Computer demographic profiles of the
Internet are often collected by software publishing companies (usually as in-house
data) and can be drawn from website logs (Chapter 10). Valve Software publishes
a set of statistics related to the games distributed across the Steam system, and
includes a mixture of usage data (players per game, etc,) and computer demo-
graphics (http://store.steampowered.com/stats). Similarly, Chapter 14 introduces you
to a range of non web-based technologies that should be considered as possible
segmentation strategies for determining the distribution of a product (the differ-
ence between the Xbox, PlayStation 3, Wii, PC, iPhone and Blackberry makes for
five different marketspaces to consider, even if the same users have access to all
five options).
Having determined this range of information and created uniquely identifiable

homogenous segments, the next step is to compare these sub-sets of the market with
the firm’s requirements.
The audience–market fit

The second part of segmentation involves matching up the needs of the segments with
what the organization can realistically provide to the market. This is an area prone
to optimistic overstatements and attempts to stretch already under-resourced organi-
zations in new directions. Short version: if you have a strength in this area, consider
it. If you could purchase a strength in this area, consider if that money could be better
spent on an area you’re already doing and doing well. If you’re really insistent that you’ll
buy your way into an audience–market fit, double the timeline, quadruple the budget
and see if it still looks like a decent return on investment (because whatever you’ve pre-
dicted won’t be enough. Since this is a new area for you, you’re likely to underestimate
cost and delivery time.) The key to comparing a market segment with your require-
ments is a process where you determine the extent to which you can address the needs
of the marketplace while still holding true to your organizational goals and objectives.
82

It is important not to override the goals and objectives of an organization just to service
a need in the marketplace (that trick never works). Remember, there’s a reason why the
term ‘Winner’s curse’ was invented – if you successfully attract a segment of the market
that will result in a loss, you’re doing it wrong. Attract a profitable market share first,
focus on breakeven markets and have a very clearly spelt-out, step-by-step guide to how
a loss-incurring market will create an eventual return on investment.
A serious risk with the Internet is that unfettered access to the world audience may
lead to a belief that you’re morally obligated to become an export industry. The business
world doesn’t work that way. If a sub-set market segment can better meet the needs of
the firm while having its needs met, there is more profit in a targeted niche market
than untargeted global markets. Comparison of the market segment with the firm’s
requirements, goals and objectives also helps set the positioning strategy by finding the
best match between the market and firm.
Segment selection
If you’re not good with decision making, this is the ideal time to learn (and practice).
Segment selection should be the business equivalent of being a kid in a candy store
(too much choice, so much awesome, can’t possibly end in tears). Picking the primary
market segment is an important decision because it immediately starts narrowing down
the number of tasks, options and possible outcomes. Selecting the most interesting seg-
ment should be a complex decision that’s a balance between the return on investment
from the segment, the fit between marketer and the market, and whether you really
want to spend the next few years making stuff for this group (there’s a point where the
return on investment isn’t worth the grief of dealing with a market segment you don’t
like). Poor organization–market fit will show up very quickly in terms of inauthentic
promotions and a visible lack of understanding of the market’s needs (or an ‘off-the-
record’ comment about how much the CEO really hates the market). Selection of the
segment with the best fit to the organization’s goals is an important decision for the
online marketer as it will determine branding and promotion (Chapter 7) and product
development (Chapter 6).
Tailoring the offer to the market (and the market to the offer)
The final step in segmentation is to use the insight and information from the seg-
ment decision-making process to frame the rest of the organization’s activity. Once
again, the strength of marketing is in the cyclical nature of the business – informa-
tion collected during the decision-making process in step 1 is reused to aid the value
creation (Chapter 6). Similarly, insights into the markets which were an almost-but-not-
quite match to the organization can be used to tailor future development of products
and services to pick up gains in those segments down the track. The marketing mix
decisions based on segmentation are both an implementation phase issue (Chapter 4)
and part of the branding (Chapter 7) and value delivery (Chapter 6) processes
in e-marketing.
83

e-marketing
} Positioning
Positioning is the how and where the market thinks your offer fits into the greater
scheme of things – it’s the business equivalent of shuffling stuff around on a book shelf.
Formally, positioning is the image of the company and its products compared to the
competing brands and companies in the market (Belch and Belch, 2004). Positioning
literally grew out of the retailing sector where it was a question of the physical goods
that sat either side of your product, and the various messages those goods sent about
your products by proximity and perceived affiliation. You can suggest to the market
where you think you should be through the branding and communication techniques
(Chapter 7) although ultimately it comes down to how the market interprets what you
do and who else is similar to you.
Positioning strategies align the company, and the product offering, within the
marketplace in relation to the other competitors and their product in order to demon-
strate to the market where you think you should be placed (and who should be
sitting either side of you). Positioning in blogging is easier than would be expected.
A frequent feature on blogs is the ‘blog roll’, which is a list of competitor–ally
blogs that can be used to indicate where you feel you fit in the broader blogo-
sphere (Chapters 9 and 12). Similarly, some sites offer links to connected or related
content, which seems contrary to conventional business thinking unless viewed
through the lens of positioning (even if they’re not doing it for positioning, and
entirely for other reasons, you can make a business rationale for the behaviour
using positioning). By providing related links, related content and recommendations
of other sites, you can frame where you think you fit into the broader Internet
infrastructure.
While an organization may determine its ideal positioning strategy of where it wants
to be in the market in relation to its competition, the final position that it occupies is
determined, not by objective criteria but by consumer perception. Suffice to say, this is
a subjective process informed by objective measures of product perceptions and market
research. It is impossible to specify every different type of positioning strategy because
each and every one is based on the specific dynamics of the marketplace in which it
will exist and evolve. There is more discussion on positioning options in Chapter 4. The
selection of a positioning strategy also influences the company’s branding decisions,
which is covered in depth in Chapter 7.
In summary, positioning will influence branding and branding will communi-
cate a positioning strategy to the market. Once again, this is a feature of market-
ing – the effort spent at the strategic level in establishing the desired positioning
in the market feeds into the design brief for the communications and branding
(Chapter 7). The results of the branding aid the development of the position, which
in turn attracts the key market segments, and which leads to the product–market
fit being improved (Chapter 4). Given the role brands play in the reduction of
perceived risk and creating, developing and maintaining image associations with
known (or soon-to-be known) brands, they’ll feature repeatedly in the forthcoming
chapters.
84

} Conclusion
This chapter gave an overview of the generic models and strategies which need to be
considered when planning a move into the Internet. Many of the conventional market-
ing strategy models still apply in principle, given that the decision to expand a market
on or offline is still the same decision. By understanding the different types of strategic
growth options available, and determining appropriate objectives, organizations can
determine whether to use the Internet to attract new customers, increase sales from
existing ones or develop an entirely new niche of users. The importance of branding
and segmentation in this context is that it lends itself to allowing the organization to
understand the needs and wants of the customer base it currently has and the one it is
proposing to address with the new online offerings.
} References
Books and journals
Arunkundram, R. and Sundararajan, A. (1998) ‘An economic analysis of electronic secondary mar-
kets: installed base, technology, durability and firm profitability’, Decision Support Systems, 24:
3–16.
Belch, G. and Belch, M. (2004) Advertising and Promotions. Boston: McGraw-Hill Irwin.
Dann, S. and Dann, S. (2007) Competitive Marketing Strategy. Sydney: Pearson.
Griffith, D.A. and Krampf, R.F. (1998) ‘An examination of the web based strategies of the top 100
US retailers’, Journal of Marketing Theory and Practice, Summer: 12–23.
Kelly, K (2008), ‘1000 True Fans’, The Technium, www.kk.org/thetechnium/archives/2008/03/
1000_true_fans.php.
O’Connor, G.C. and O’Keefe, B. (1997). ‘Viewing the Web as a market-place: the case of small
companies’, Decision Support Systems, 21(30): 171–83.
Porter, M. (1980) ‘How competition forces shape strategy’, Harvard Business Review, September–
October: 137–45.
Raymond, E.S. (1999) The Cathedral and the Bazaar. Sebastopol: O’Reilly.
Sen, S., Padmanabhan, B., Tuzhilin, A., White, N.H. and Stein, R. (1998) ‘The identification and sat-
isfaction of consumer analysis-driven information needs of marketers on the WWW’, European
Journal of Marketing, 2(7/8): 688–702.
Sarabia, F.J. (1996) ‘Model for markets segments evaluation and selection’, European Journal of
Marketing, 30(4): 58–74.
Watts, G., Cope, J., Hulme, M. (1998) ‘Ansoff’s Matrix, pain and gain: Growth strategies and adap-
tive learning among small food producers’, International Journal of Entrepreneurial Behavior &
Research 4(2): 101–11.
Web references
BBC Podcast Directory www.bbc.co.uk/radio/podcasts
Chatham House Rule www.chathamhouse.org.uk/about/chathamhouserule/
Coca-Cola UK www.coke.co.uk
Cute Overload www.cuteoverload.com
eBay www.ebay.com
Etsy www.etsy.com
85

e-marketing
Google Calendar www.google.com/calendar
Google Mobile http://m.google.com
iVALS www.strategicbusinessinsights.com
Lolmart www.lolmart.com
Lulu www.lulu.com
Penny Arcade http://feeds.penny-arcade.com/padlc
Plurk www.plurk.com
Problogger Challenge www.problogger.net
Sainsbury’s www.sainsburys.co.uk
Steam Game Play Stats http://store.steampowered.com/stats
Tesco www.tesco.co
Toast 2 Art www.toast2art.co.uk
Wil Wheaton http://wilwheaton.typepad.com
Wired www.wired.com
Zappos Employees twitter.zappos.com/employees
86

CHAPTER 4}
e-marketing planning
• draft a basic e-marketing plan by following the four steps of planning

• convert strategic goals into planned activity
• identify areas for further examination before implementing the plan
• recognize the areas of cross-over between strategy, planning and imple-
mentation.
87

e-marketing
} Introduction
This chapter takes a more hands-on approach than the previous three chapters com-
bined (still, it doesn’t beat the e-introduction (setting up for e-marketing) for practical
exercise content). Planning is an active process that results in a documented plan that’s
put into action (Chapter 10) through various implementation tactics (Chapters 7–11)
which are measured against the strategy objectives (Chapter 3) using various metrics
(Chapter 11) to figure out if expected levels of success or failure happened. Given the
previous sentence’s references, eight of the fifteen chapters in this book (including this
one) present a predictable circular process. Not only that, the conclusion of the plan
outlines the measurement mechanisms that can feed into the data-collection phase of
the next plan. Much like Chapter 3, some of the sections of this chapter become even
more valuable once you’ve read later chapters.
This chapter will outline the processes of research, decision making and direction
setting that you may wish to revise once you start implementing the plan. At the same
time, a good portion of the later chapters won’t make a lot of business and market-
ing sense when presented without the prior context of the marketing planning process
(and if you’re still baffled as to why Twitter is a must-use item, this is one of four big
chapters for that technology. Contextualization helps everything make more sense.)
The chapter starts with an introduction explaining the point, purpose and nature of
planning, followed by a four-step guide as to the what, where, and how of tackling the
planning process. It finishes off with a rough generic plan template that you may adapt
and develop for your own purposes.
} Purpose, nature and point of planning

Planning is a valuable asset in the marketing process and provides a good, solid skill set
to bring to the e-marketing side of the firm. Since planning is a fundamental principle
of marketing, it dovetails into the CIM definition (Chapter 2) as part of the anticipa-
tion and satisfaction of consumer needs (Chapter 5). Planning also plays a vital role
within the organization as a means of communicating the intention and operation of
the marketing division to other aspects of the management structure (Chapter 2) and by
providing an externally observable set of performance indicators that can be used to jus-
tify budgets, expenditure and operational decisions (Chapter 13). Finally, the planning
process itself provides a methodological procedure for reviewing organizational knowl-
edge, which can assist in developing future strategy (Chapter 3), understanding the
strength of the firm and fitting with the market and the areas where you can maximize
your odds of success with a new product or market (Chapter 6).
The purpose of planning

Remember the ‘ready, fire, aim’ part of the e-introduction (setting up for e-marketing)?
The plan and planning process cover the ‘ready’ section, whilst implementation looks
88

after ‘fire’ and the metrics and review sequences guide the ‘aim’. Without the ‘ready’
phase, you can’t fire, and you’ll never know what it was you were supposed to aim
at once you’ve fired. Planning can be an exacting science of flowcharts, permissions,
budgets and PowerPoint presentations given to suits in boardrooms. Or it can be as
basic as a whiteboard of notes, a handful of napkins from the local pub and a deadline
alarm programmed into the iPhone. Most plans lie somewhere between the infamous
back-of-the-napkin plans and the even more infamous room-of-suits product pitches.
This chapter will hopefully set you up to handle either extreme, although the authors
tend towards copious scribbled notes supplemented with an array of Excel files. As an
aside, we planned this book using a mixture of Word documents, a few Excel files for
tracking purposes (Chapter 13), the odd A4 notepad, a couple of whiteboards and some
notes on the back of napkins (we skipped the roomful of suits part as we’ve been one of
those suits in a previous career life).
The planning process

For this book, we’ve gone back to one of our previous marketing planning frameworks,
as laid out in Dann and Dann (2007), and updated it for use in the Marketing Over IP
business (Chapter 1). Figure 4.1 outlines the framework, which is the subject of the next
few sections of this chapter.
There are four broad steps in the planning process, starting (traditionally) at the
‘Where are we now?’ question that’s supported by market research, internal analysis,
environment scans and a range of neat new automated tricks involving Google. Armed
with a sense of where the organization is at (and a sense of what it can do), the next step
(Situation analysis, market research)
Where are we now?
Where should we end up? Where do we want to go?

(Timelines, (Objectives
controls target markets
marketing metrics) positioning strategy)
How do we get there?
(Marketing mix, resources, implementation plan)
Figure 4.1 The planning process
89

e-marketing
is a matter of looking at the existing strategy (Chapter 3) to figure out where to go in a

combination of objectives, markets and firm orders to ‘Bring me that business horizon’.
Once the destination is set, the third step is to map out the journey in terms of how the
organization goes from Point A (Step 1) to Point B (achieving Step 2) without running
out of time and/or money. Step 3 is all about the practical issues of product design
(Chapter 6), branding (Chapter 7), meeting market needs (Chapter 5) and living out the
‘create, communicate, deliver and exchange’ mantra of the AMA (2007) definition of
marketing (Chapter 2).
Input note }
Along the way in the planning process we’re going to flag bits of the chapter with
‘Input’ and ‘Output’ notes, so you can see the link between planning processes, and
where you’d report them in the plan.
} Step 1: Where are we now?

Starting the planning process requires a level of internal analysis that has to be both
accurate and err on the side of caution. Self-reflective benchmarking is a difficult pro-
cess since there’s a natural tendency to either underestimate weaknesses or overstate
strengths, particularly when tackling a new venture with promising rewards. A good
assessment of the ‘Where are we now?’ phase requires two things:
◦ an accurate external analysis, which is where you take stock of the current world
around you, including a recon into current trends and possible future directions to
expect
◦ an honest appraisal or internal analysis of your strengths, weaknesses, resources and
capacities.
Situation analysis
A situation analysis is the means by which you put yourself, your strategic objectives
and your capacity to act on those objectives into the context of the rest of the known
world. You’ll never be operating in a vacuum, so you will need to be able to perform
situation analyses to scan for opportunities in the market and for clear and present busi-
ness threats, and to determine which way the economy, marketplace and Internet seem
to be heading. In classic marketing strategy, the situation analysis is usually covered in
two or three chapters of advice, models and detailed notes. Here, you’ll be getting a
very brief guide to using some of the strategy techniques in conjunction with various
Internet services.
90

Scanning the environments

Scanning the environments in which you operate needs to become second nature for
anyone planning a long-term career in marketing. It’s a learnt skill that results in an
ability to determine what changes, if any, are occurring before attempting to understand
the impact those changes are going to have on what you do and how you do it. This
is one area of on and offline marketing where the Internet makes a major contribution
to the ongoing updating of marketing information systems. Basic marketing strategy
theory suggests a scan over the following six key environments:
◦ political environment
◦ legal environment
◦ sociocultural environment
◦ economic environment
◦ technological environment
◦ physical environment.
Political environment scans include the government’s stated policies, the main politi-
cal parties’ election promises and the sort of pro- or anti-technology statements being
issued by politicians. Scanning the political environment can be as easy as subscribing
to the 10 Downing Street (www.number10.gov.uk) RSS feeds and following the Prime
Minister’s Office on Twitter (@Downingstreet). Or, if you fancy writing a political blog,
this scan could become the backbone of your content.
Legal environment covers the laws that will influence your online activity – consider
issues of intellectual property rights, digital rights management, licensing, defamation
and a host of other legal issues (Chapter 15). It’s also worth a quick note to recognize
that the Internet is far more regulated than any single geographic nation. Although
there’s a propensity to think that the Internet is a temporary autonomous zone (an anar-
chist construct which relates back to the possibly mythic supply island communities
of eighteenth-century piracy) free from government and lawyers, the reality is much
harsher and more restrictive. Every nation has plenty of pre-existing laws that apply
as equally online as they do offline (it’s just that when you’re online, you can leave a
much nicer, cleaner and more easily documented evidence trail). As a side note – the
letters IANAL (I am not a lawyer) indicate that you probably shouldn’t rely heavily on
legal advice found on the Internet (of course, if you are a lawyer, here’s a blog niche).
Sociocultural environments are the trends present in any particular society. This scan
can be done at a macro level of analysis, looking at global trends, or can be broken down
for physical and virtual geographical limits. This is one area where you’re less dependent
on technology for automated discovery and much more likely to need to observe and
learn the local customs of the blogs, communities and virtual areas. In blogging and
online communities, look for commenting policies, acceptable use policies and posts
about acceptable/unacceptable behaviour within that type of blog. Similarly, there’s a
market for sociocultural observation, commentary and social change campaigning in
all directions across the Internet. Just be aware that the nature of the online society is
that it can contain both the most progressive and regressive social movements within
91

e-marketing
the same media platform. For everything you’re firmly against, there’s probably a site
and community dedicated to supporting it (and, thankfully, vice versa if you’re looking
for allies).
Economic environment scans combine the bigger economic picture (in light of the
global financial crisis, it’s hard to describe it in polite terms), smaller economy issues
of market segments and available disposable income, and, as you’ll see in Chapter 6,
the new surge of time and energy budgetary limits as people try to juggle different
aspects of their work, leisure and family commitments. Time economy issues give rise
to an incredible array of time-management blogs and products as people convert their
personal economy scans into saleable and readable content.
Technological environment scanning is the most fun if you’ve got the slightest geek
tendency in you (or a strong innovative streak). Tech blogs are a dime a dozen, with
the top-end bloggers receiving good incomes, press releases and personal invitations to
product launches. At the bottom end, there’s a lot of competition and a lot of people
rehashing the same content. Still, the technology scans are one of the easier areas to
conduct, since ‘tech’ is usually a recognized trend category at the major search sites
(which you’ll examine in a few paragraphs). A subtle trend rising in the technology
community (coupled with the economy) is the notion of retaining last year’s model
(http://lastyearsmodel.org) whilst still being either innovation prone or supportive of
new technology development.
Physical environments are the ‘away from keyboard’ world around you. Physical scans
link to distribution logistics, physical shipping and anything connected to the move-
ment, ownership or storage of atom-based objects (such as this book). That said, it’s well
worth also considering replicating the style of physical environment scan for key virtual
environments of interest (Chapters 1 and 9) to assess stability of servers, uptime for key
services and longevity of a virtual world (particularly when the owner announces server
merges. That’s always a bad sign.)
Input note }
Scan the environment for information useful to your objectives. Randomly learning
things about the world around you is fun but rarely connected to gathering research
for the marketing plan.
Throughput note }
This section links to trend data, SWOT analysis and market segmentation.
Output note }
At this stage, make a note of possible conflicts, opportunities or areas for further
investigation which look useful.
92

Scanning the environment with trend data

One of the key methods for scanning the environment involves observing existing trend
data to look for recognizable patterns or business cycles that can be (relatively) safely
predicted from the methods for looking over existing trends to see which ones present
the best set of opportunities to pursue. An-old school method is used by Faith Popcorn
(1991) to perform ‘trend scanning’, a technique for looking at a range of business and
non-business information sources to identify potential movements in the marketplace
before they’re identified by your competitors, or even by the market itself (Durgee et al.,
1998). Since the Internet produces a very large volume of content that can be aggregated
into trending data, life has become significantly easier for the future predictor. For your
purposes, there are a few different trend aggregator sites to trial:
◦ Twitter. Your personal Twitter stream has an aggregated ‘Trending Topics’ semi-live
dataset published on the side bar which tracks rising trends and threads (http://
twitter.com/timeline/home). Remember, Twitter is the live voice of a few million
early adopters – it’s biased, noisy and profitable to pay attention if you plan to address
that sort of market segment.
◦ Yahoo! Buzz (http://buzz.yahoo.com). Sign in with your Yahoo!ID (which you
acquired to sign up to Flickr back in the Introduction) and not only can you mon-
itor the breaking trends in news, you can also influence the outcome by ‘Buzzing
up’ or ‘Buzzing down’ stories on the main page. You can also see the one-hour delay
search results from the Yahoo!Search engine, and search Buzz in subcategories off
this page.
Plan input }
What market monitoring will you use for your site?
◦ Google Trends (www.google.com/trends) and Google Insights (www.google.com/

insights/search). Both sites provide semi-public access to the popular search terms
running across the Google servers.
◦ BlogPulse (www.blogpulse.com). Run by research heavyweights Nielsen Online (www.
nielsen-online.com), BlogPulse provides an aggregated view of popular searches on
YouTube, trending posts across more than 100 million blogs and highly linked
news stories.
◦ Technorati (www.technorati.com) and Digg (http://digg.com). These social aggregator
services have trend analysis and trend reports on popular topics, posts, links, tags
and keywords. As with Twitter, there are overt biases towards certain topic areas that
make these tools vary in value depending on your target market.
◦ Delicious (www.delicious.com). This social bookmarking site (see Introduction)
displays the most popular bookmarked sites and keyword tags for various recent
time periods.
93

e-marketing
◦ iTunes, Steam and XboxLiveArcade. Most of the software, used as shop-front sys-
tems (Chapter 11), will have some form of popularity ranking mechanism that’s
used to encourage people to buy the ‘hottest’ titles. It’s one part social compliance
mechanism (Chapter 5) and one part market data report (this chapter).
Consequently, it’s entirely possible to maintain and monitor trending data on the Inter-
net through the observation of results from several of these sites. Your challenge is to
convert the trending data (popular posts, hashtags and bookmarks) into useful infor-
mation which can be used to assess the general state of the Internet as part of the
external analysis.
Inputs }
Search keywords related to your product, brand, blog content or rivals. Observe top
trends over a period of time to look for patterns.
Throughput }
This section connects to market research, and these market-monitoring tools can be
reused repeatedly with increasingly focused searches to set up information for market
segmentation, metrics and other sections of the plan.
Outputs }
Note down key trends of interest. If you’re working with an existing brand, see how
it’s already represented in the live marketspace. Write up a short list of areas for future
research to set up the market research.
Online market research

Market research is the lifeblood of informed marketing and sits squarely within ‘iden-
tify’ in the CIM (2005) definition. Without the support of reliable market data and
carefully selected competitor and customer information, marketing becomes a patch-
work of guesses, hunches and product failures. Market research is an incredibly active
aspect of e-marketing – every activity performed online can be turned towards market
research activity. Checking out the latest blog post from an ally or competitor blog is
market research. Monitoring or engaging in conversations on Twitter, Facebook, Plurk
or anywhere else about what you do is also research. Even something as seemingly mun-
dane as a Google search can bring back a wealth of marketing information before you’ve
even left the first page of results for one of the recommended links. It’s one of the most
under-recognized, underrated and totally amazing aspects of engaging in e-marketing –
the constant flow of useable and useful research information. This section of the book
94

will open up an array of new options for discovering the marketing data in the world at
your keyboard.
Plan input }
What market research will you do for your site?
That said, using the Internet for marketing-related research involves both the adoption
and adaptation of traditional market research techniques. Access to global secondary
data sources means that all marketers, not only those who are attempting to develop an
online presence, can change the quality, quantity and type of resources investigated for
marketing purposes. The Internet also provides a wide range of information regarding
competitor and consumer intelligence. From a practical perspective, access to online
annual reports, consolidated industry reports and trend analyses, either free or on a
pay-per-use basis, means that the marketers of today have better and more up-to-date
information on the competitive environment than ever before. With so many options
to choose from in the e-marketing marketspace, you need the old, classic approaches to
provide a good, solid framework to help you avoid information overload (aka drowning
by numbers).
This section puts together some of the old and some of the new of market
research. It outlines a couple of principles of online market research, including a caveat
on the weakness of the Internet for data collection. Emphasis is placed on exploring
the different types of market research that can be used online, and how and where
these different mechanisms are most appropriately applied. This includes an exami-
nation of the process and methods of conducting online market research, including
environment scanning, and the collection of market intelligence data using the Inter-
net. The chapter gives an overview of the value of online market segmentation, both at
the population level and the site-specific level, and reviews a method of conducting seg-
mentation. Finally, issues concerning privacy, ethics and anonymity are raised because
of the prevalence of online market research.
The caveat: the Internet is not a perfect marketplace of data

There are limits and restrictions to the value of primary data collected through the
Internet. Due to the limited and skewed sample that the demographics of Internet users
present (not everyone is online, not everyone online is on Twitter, etc.) you have to
use a modicum of caution when attempting to generalize beyond your target sample
when conducting Internet-based research. That said, if you’re building something for
the market you’re studying, don’t get hung up on generalizability if you can turn a
profit from the members of the unrepresentative, skewed cohort.
Even with the widespread adoption of the Internet, the online population is still
skewed towards innovator, early adopter and cusp early majority markets (Chapter 5),
which means they’re mostly innovative, intelligent and financially secure people. Early
95

e-marketing
adopters like to talk, early majority like to listen and innovators are easily distracted by
new things – which means the loudest voice talking in the space probably represents
15 per cent of the market (not even a Pareto rule). That said, since the early majority
looks to the early adopters for advice, it never hurts to have them onside and to pay
attention to their needs. Just remember – early adopter (15 per cent) versus early major-
ity (34 per cent) and late majority (34 per cent) makes for some interesting segmentation
considerations.
There’s also a caveat to the caveat. If you plan on developing an online service to
address the online needs of an online market of online consumers, don’t bother with
unrepresentative offline research. Apply some segmentation principles to determine
where to look for the customers and the customers’ information, and don’t worry if the
sample is skewed for generalizability if the skewed sample is your primary market niche.
Old-school market research methods

Old-school market research basically means any form of technique that was around
before you read this part of the book (‘new school’ means anything that’s been devel-
oped with the express intent of replacing an old-school method). Old-school market
research comes from an era where data analysis cost time and money and the empha-
sis was on minimizing the amount of data required to generate maximum levels of
useful information. Data, in the old school, was more than just numbers – it was any-
thing that had been collected and hadn’t been analyzed, assessed and written up into a
management-readable format. Information, on the other hand, was the management-
readable format that consisted of answers to questions, advice for decision making and
recommendations (and pie charts and bar graphs because they’re really pretty ways to
be persuasive). With the advent of the desktop computer, data collection and processing
moved from something involving monks, punch cards and machines the size of small
houses into a quick and dirty way of baffling people with Excel, SPSS and asterisk-laden
printouts. The downside to the roll-out of technology was the overemphasis on data
and under representation of information. The authors firmly believe that data is inher-
ently useless unless it’s been put to work in answering a question, guiding a decision
or giving advice. Consequently, the very first step in e-marketing research is to set up
a guiding framework for how to convert the need to find an answer into a step-wise
procedure that can guide data collection, data analysis and information creation.
Eight-step model of marketing research

Forrest (1999) laid out a systematic approach for conducting market research consisting
of eight steps that operate in a mostly linear fashion. As with any marketing model,
it’s an indicative process rather than absolute measure. Once you’ve gained enough
information to answer your question, you can stop, produce the information in a
management-readable format and move onto the next task. At the same time, the model
is only truly sequential on these pages – reality being what it is, you’re more than likely
to need to back-track, skip a step and/or repeat the process for clarification purposes on
the way to the answer. The eight steps in the process are:
96

1. Define the question/problem.

2. Put a research design together.
3. Select the research method.
4. Select the sample population.
5. Collect and input data.
6. Interpret and draw conclusions about the data.
7. Convert the results and data into information, aka write up a report.
8. Follow up the research.
1. Define the question/problem

What do you want to know? As far as a first step goes, this one’s the small step for
marketer and giant leap for useful information creation. To pull this off effectively,
you’ll have to differentiate between the problem and the symptoms of the problem.
Symptoms are issues such as declining sales, drops in website visits or sliding Google
search ranks. What you need to do with a good question is answer a ‘Why?’ rather
than a ‘What?’ (The ‘What?’ questions tend to be answered in the environment scans.)
‘Why?’ questions seek out the motivations, reasons, rationales and really complex bits
that help determine the causation behind an event. Setting good, clear questions will
guide the process (particularly the analysis in Step 6).
2. Put a research design together

Step two assumes you (or a mate) have done market research and paid attention long
enough to be able to put a research plan together. A short version of the research design
is a set of questions such as:
◦ Numbers or words? Do you need quantitative data and statistics, Likert scales and SPSS
analyses or qualitative data, conversations and Leximancer analyses?
◦ Primary or secondary? Can you look up existing information or are you going to have
to DIY the solution? DIY can be customized to specific needs but time consuming
and unnecessary if someone else has done roughly similar useable work.
◦ Samples, instruments and analysis. Although sounding quantitative, it’s also vital to
consider what sort of sample of secondary data you’d use – will you just stick to
web pages (Google Search), peer-review research (Google Scholar), online journalism
(Google News), blogs (Google Blogs) and search engines that aren’t Google (Yahoo!,
MSN Search)?
3. Select the research method

Since this is the Internet, we’ll rule in observational methods, surveys and/or experi-
ments and rule out the other options for the moment for simplicity’s sake. Research
methods will vary according to what type of data is needed and what question needs to
be answered. If you want to make use of the strengths of the Internet, run with obser-
vational methods since most observable Internet conversations are text based, keyword
97

e-marketing
searchable, public and you can be utterly unobtrusive. Your research method is likely to
be one or more of following approaches:
◦ Observational research involves simply observing what the sample is doing and not
directly intervening to determine why the sample is behaving in a certain way. It does
not involve direct questioning of subjects and most would be unaware that they
were part of a research project. Observational research can be done simply by joining
bulletin boards, watching threads, tracking discussions in blogs and a myriad of other
non-intrusive ways.
◦ Survey research involves the direct questioning of subjects via e-mail, web-based ques-
tionnaires or through personal interviews over Skype, Instant Messenger or other
chat systems.
◦ Experimental research involves the manipulation of one or more variables in the envi-
ronment to determine their effect on an overall phenomenon. It is often used where
you give out links to a site to test the effectiveness of a landing page in converting
purchase intention to sales. Online experiments are quite risky if they have radically
different outcomes for the different participants, since people are more than likely
to talk to each other (Twitter, blog, Facebook, e-mail) if they think they’re getting
different responses from the same site.
Side note: Don’t try this at home }
Experiments are risky since Internet users talk to each other, and you’ll want to avoid
doing anything like Amazon.com’s pricing experiment where the company charged
high prices to regular customers who were logged into the site. This was very quickly
discovered by the regular, formerly loyal customers and caused quite a spectacular
breakdown in customer service and loyalty. Other experimental designs are less prone
to failure, such as using different landing pages for different links to test the relative
effectiveness of sales pitches (Chapter 7), customizing page content based on web
browser type and tailoring different content based on prior purchase history.
Given the sheer volume of communities, forums and public conversations, if you need
to ask direct questions of people online, you’re probably looking for something quite
specific. There’s a world of real people talking to other real people about the things they
care about and that’s the sort of live, real and valuable data you need to be analyzing
and understanding to gain insight into the customers (Chapter 5).
4. Select the sample population

Ask the right questions to the right people, read the right content written by the right
authors and scout the right data from the right sources. Sample selection is vital for
98

success – you’ll gain more value from reading your own server logs to understand who’s
showing up at the site and why than you’ll gain from a poorly selected sample for a
survey. That said, if the server log produces more questions than answers, put a survey
on the site to source the answers from the same visitors being detected in the server
logs. Similarly, when you’re doing secondary research, asking the right questions of
the right database is equally vital. Select keywords with the same care you’d select
survey questions. When putting the sample together, think through and answer the
following questions:
◦ Who/what should be sampled?

◦ How many people/pages/articles/objects should be sampled?
◦ How should they be chosen?
◦ How do we collect the data from the sample?
5. Collect and input data

One of the key advantages of the advancement of technology for market researchers has
been the development of instant quantitative data input (and the odd qualitative open-
ended question) through interactive surveys. Options for data collection include:
◦ ultra-basic surveys and form feedback through Google Docs Blog (http://googledocs.
blogspot.com/2008/02/stop-sharing-spreadsheets-start.html)
◦ specific-purpose survey sites (www.surveymonkey.com)
◦ self-hosted survey quantitative software (www.limesurvey.org)
◦ notepads, Word documents and text files on the subject
◦ (Firefox only) in-browser notes through Zotero (www.zotero.org), (although origi-
nally designed for academic research) lets you tag, bookmark and add notes to web
pages whilst retaining as much of the site’s referencing details as the automatic
system can discover.
The only risk for the contemporary e-marketer is that the relative ease of data collection
means that more people are producing more surveys than ever before and there’s a risk
of market burn-out and low response rates. Similarly, whilst Google has several billion
web pages, the odds are remote that you’ll ever need a representative sample from the
total pool and much more in favour of needing to read the first five to ten pages of
search results (and it’s a good marketing habit to get out of relying on just the first page
of results of the search).
6. Interpret and draw conclusions about the data

Data from a survey says nothing useful without analysis. Analysis is the key to answer-
ing the research questions from Step 1. Rather than rehash a market research subject
in a paragraph, consider which statistical techniques you’ll need for indicating signi-
ficant results, the relationships between different types of information and how much
99

e-marketing
information you can create from the more basic end of the statistical analysis con-
tinuum. Don’t forget to make use of Google during the interpretation process –
if you’re stuck on SPSS, Excel or any other tool, search for analysis advice, FAQs
and help documents (more than enough universities keep this information in the
public domain).
7. Convert the results and data into information

If you’ve done market research for yourself, you may be tempted to skip this section
since you’ll feel you know the answer, so it’s time to get on with the rest of the process.
Documenting the answer to your research question, along with the steps you took (sites
used, keywords used and other useful methods noted), is the easiest path to follow at
this point. Fresh from the research process, you’ll be able to write up the report fairly
quickly and avoid the need of having to recall what you did, how you did it and what
you found out when you need to repeat the process at the next marketing planning
phase (the authors assume that you’ll have seen, read and done a lot more interesting
things that’ll be competing for the top of your mind ahead of marketing research infor-
mation). Writing up your notes, results and outcomes will also help when you begin
writing up the marketing plan and will serve as a reference for product development
(Chapter 6), marketing metric analysis (Chapter 10) and possibly even provide content
for a blog post, PDF white paper or saleable e-book, if you’re really good.
8. Follow up the research

Market research is a snapshot of a moving target. By the time you’ve finished the write-
up, things might have changed (if they have significantly, start again, and then write up
the before–after for a blog post). It’s tempting to disregard market research in a dynamic
environment like the Internet, since the situation can change rapidly. That said, market
research snapshots help you piece together a rough map of the terrain, and, if the follow-
up research indicates limited changes, can guide you towards the more stable areas (or
away from them, depending on your preference). Without the snapshots, benchmarks
and baselines, you’ll not be able to appreciate where the stability lies in your business
environment. Some recommended follow-up techniques include:
◦ automated scans through saved Google searches

◦ monitor interesting hashtags through Hashtags.org
◦ e-mailed weekly data reports where available from your own site server stats
◦ setting up a Google Calendar reminder to perform manual monthly (quarterly,
annually, etc.) research updates.
Some of the follow-up research techniques also draw on the metrics set up to review
your progress (Chapter 13). Once again, the cyclical nature of marketing is a fea-
ture – market research undertaken at the start of the process leads into the marketing
activity which, when benchmarked in metrics, can lead back into the market research
information gathering.
100

Automated Google research }
Saved searches, RSS feeds and other neat tricks – Google’s search engine is an inordi-
nately powerful device with a range of bonus features tucked away on the side under
‘Advanced Search’ (Figure 4.2).
Figure 4.2 Advanced search

Source: http://www.google.com.au/advanced_search
Several books have been dedicated to exploring the nuances of the advanced search,
and as such, we’ll just highlight a couple of tactical marketing uses:
◦ File-type lists are useful in two directions: First, you can specify the type of document
and so limit the type of file returned in the search. Try looking for ‘Marketing bud-
get’ using the Microsoft Excel file type (Search term ‘marketing budget filetype:xls’)
to see what can be uncovered from publicly available marketing budgets. Secondly,
file type can be combined with site-specific searches if you’re looking for a PDF, PPT
or other file you know you’ve seen on a site but just can’t find again.
◦ Site-specific searches: ‘Search within a site or domain’ is a great way to find specific
information within a website (and the larger your own site becomes, the more
likely you are to head to this search before manually looking over the content). Try
searching the CIM’s site (www.cim.co.uk/home.aspx) for the definition of marketing
(search term: ‘definition site:http://www.cim.co.uk’).
◦ Under the ‘Date, usage rights, numeric range, and more’ are the ‘Page specific’ tools
which offer competitor scans through ‘Find pages similar to the page’, and a market
ally scan with the ‘Find pages that link to the page’. Again, try this out with the
101

e-marketing
CIM’s homepage (search term: ‘related:http://www.cim.co.uk/’) and (‘link:http://

www.cim.co.uk/’).
With a bit of practice, creativity and time, the advanced search function within Google
can be used for a few different market research techniques. In addition to the incredibly
powerful advanced search options, it’s also possible to establish automatic searches on
keywords, topics or Google Advanced Search terms using Google Alerts (www.google.
com/alerts).
Figure 4.3 Google alerts

Source: http://www.google.com.au/alerts
Google Alerts (Figure 4.3) offers two options: notification by e-mail and notification
by feed. In the first instance, select notification by your Gmail account (you can alter
this later in the ‘Manage your Alerts’ settings if you’re getting swamped with e-mail
notifications). We recommend setting up the following alerts as a default use of
the feature:
◦ Name searches: The set of searches to set up is for your full name, Twitter alias and/
or other online alias, to see where you’re mentioned, how you’re mentioned and if
there’s more than one of you (someone with the same name in the same space).
◦ Blog/site detection: Use the Google instruction ‘link:’ with the name of your blog,
website or other site you want to track to receive automatic updates when Google
detects someone linking to your content.
◦ Brand detection: If you’re maintaining a business profile online, set up an automatic
search for your brand name (or potential brand name if you’re starting up – see if
it’s in use already).
The automation of the data gathering comes with two caveats. First, just because the
data is showing up in the inbox, you still have to put the time and effort into analyzing
102

it for it to be useful. Secondly, the Google Alert system can get bored if there’s no traffic
and start bringing back results from a long way into your Internet history if nothing
recent emerges – if you’ve been online for a while, you’ll get the odd flashback to
something you’d forgotten.
Plan input }
What sites are potential allies?
Listening in on Twitter
Given the Internet is a broadcast medium, and the opinion leaders in the consumer
communities are broadcasting loudly and proudly on Facebook, MySpace, blogs and
Twitter, it’s never been easier to conduct basic market research by simply listening out
for naturally occurring conversations. As far as gathering consumer intelligence goes,
it’s a keyword search and recon mission – the collection of primary data can be done
with Google, Twitter, YouTube and any other searchable or indexed website. Collection
of the primary conversation data via the Internet is relatively cash-cheap (although sift-
ing, sorting, reading and analyzing remain time intensive). One of the most valuable
aspects of Twitter is that the insurmountable volume of conversation between (mostly)
real people means that virtually any topic can be found, tracked and monitored with the
right equipment. Using Twitter for monitoring conversation can be incredibly daunt-
ing without the right software rigs and without appreciating how the different types
of conversation take place on the service. The most common form of Twitter conversa-
tion is the standard 140-character broadcasts that are either statements to the ether or
responses to other people’s statements (to the ether). These are searchable within Twitter
itself (http://search.twitter.com), Google and a few other secondary systems that’ll show
up under a Google search for ‘Twitter search’ (or use ‘site: http://twitter.com’ with the
search term).
The second type of conversation involves the deliberate flagging of the content by
the Twitter user through hashtagging their tweets (ah, jargon – the lifeblood of this
industry). Hashtags are a community-created technique for applying a label to a Twitter
update by placing ‘#’ in front of the keyword. There are several hashtag aggregator sites.
Two things need to be noted about #hashtags. First, they are manual inclusions by the
author, and as such, tend to be used by more experienced users and, therefore, may
not be really that reflective of the broader community activity on Twitter. Secondly,
tags can be set by events, organizations and people as advisory notes – for example,
#sxsw is used to indicate commentary about the South by SouthWest conference (www.
sxsw.com), whereas #FollowFriday is a way of tagging your recommendations of people
who you follow to other people who follow you (traditionally undertaken on a Friday).
A note of caution – the Australian Twitter community has a strangely powerful influence
103

e-marketing
on the #hashtag charts, given both the size of the community and volume of tweets.
For example, Thursday nights in Australia (AEST) will see the #qanda hashtag appear in
the Top 10 trend list in reaction to a TV show on the Australian Government’s ABC net-
work (www.abc.net.au/tv/qanda). That said, it’s worth noting the trending tags to detect
regional-specific events for use in future geographically based market segmentation.
} Step 2: Where do we want to go?

The direction-setting part of the planning process depends on your willingness to make
decisions and stick to them in the implementation. The first critical choice is the pri-
mary, secondary and backup market segments, whereby segmentation will limit the
breadth of whatever market offering you had in mind (Chapter 6) and provide a bit of
focus and direction for the branding (Chapter 7). Understandably, since segmentation
is about the selection of slices of the market to target, there’s a connection between
the segmentation techniques and consumer behaviour (Chapter 5). The second step in
the process is the conversion of the big picture strategy objectives (Chapter 3) into the
smaller, focused and targeted objectives for the plan. Finally, once you know which
market you’re targeting and what this plan covers, it’s time for one more focusing tech-
nique – the positioning statement, which also links to the branding (Chapter 7) and
strategy (Chapter 3).
Plan input }
What is the main objective you want to achieve with this site?
Market segmentation
Target market selection requires you to go through a series of choices and decisions
based on the sort of market data you’ve been able to collect in market research. It’s
quite common to start a segmentation exercise, need additional data and return to the
market research phase to take advantage of the cyclical nature of the process. So long
as you leave segmentation and move into market positioning eventually, it’s better to
have a clearer picture of the target audience by invoking the CIM (2005) identify and
anticipate elements than a fast, but poorly researched, decision based on suboptimal
information. For your purposes, consider the market segmentation as a three-round
process where you gather information about the available segments, set a priority order
and then make a decision about which segments to actually address.
Round 1: Gathering information

Segmentation starts as a set of research questions which can either be answered with
information already known (particularly if it’s an existing market segment you’re used
104

to dealing with already) or with a bit of marketing research information gathering. The
four questions to be able to answer are:
◦ Who are they? Study the segment. Get to know the target and see if they’re going to be
a good fit for you in terms of what you want to offer and what they’re looking for on
the Internet. Draw down on the stuff you know from strategy planning (Chapter 3)
and consumer behaviour (Chapter 5).
◦ Where are they? Can you find the market segment in a specific place? Do they use the
same communities (Chapter 9), join the same types of social media sites (Chapter 12)
or hang out in the same parts of the Internet as each other? Also, will they notice if
you’re not from their tribe if you show up to research, observe or serve the market?
Plan input }
Where else is the audience on the Internet?
◦ What’s going to happen if we go for this market? If it’s looking good so far and there’s
a strong match between you and the segment, the next step is to determine what’s
going to happen if you go ahead and try to meet the needs of this segment. What are
the resources you need? What do you need to acquire? Can you learn the necessary
skills or are you going to need partnerships, staff and alliances?
◦ Do we have a good match with the market? Self-analysis in relation to the segment is
vital. Once you’re confident you’ve spotted a viable segment, it’s time to take a hard
look at yourself, your own capacities and whether you can deliver on what you’re
about to promise. Think shipping, logistics, costs, time, effort, desire to be really
bored with administrative minutiae on the way to global fame and fortune, and any
other factor that might cut into your ability to deliver value (Chapter 6).
Plan input }
What resources do you have available to meet your market?
Round 2: Getting your priorities straight

You cannot address all of the segments you identify and odds are firmly in favour that
you’ll have at least one identifiable segment you don’t want as a customer. Sarabia
(1996) has a neat two-by-two matrix based on the assessment of the immediate return
from a segment (short-term value) versus the potential rewards in the medium and
long term. Table 4.1 names four potential segment types based on Sarabia’s (1996)
selection matrix.
105

e-marketing
Table 4.1 Segmentation matrix
No Long term Long Term
No short-term Quad 1: Dead Weight Quad 3: Slow Fuse

Short-term return Quad 2: Quick Burn Quad 4: Gold Mine
Quadrant 1 Dead Weight: those segments which have no short-term or medium-to-

long-term value to the company. Discard, abandon and avoid as they’ll be a waste of
time, effort and resources (trying to sell iPhone applications to Blackberry users).
Quadrant 2 Quick Burn: covers any segment where there’s short-term profit and no
realistic chance of medium-to-long-term sustainability (innovators might be the cat-
egory du jour here – first to buy, first to leave). Segments such as these may reap
initial dividends but will eventually disappear, leaving the company with a product
and no market. These are good secondary markets to consider for cross funding the
longer-term Quadrant 3 or for quickly recovering investment costs whilst searching for
Quadrant 4. Alternatively, this might be the market that’s easiest to satisfy – with the
downside that once happy with their products, they don’t upgrade for each and every
new edition (#lastyear).
Quadrant 3 Slow Fuse: those segments with no short-term value but with medium-
to-long-term value. This is probably the early majority from the innovation adoption
curve in Chapter 5. Chasing Quadrant 3 requires large cash stockpiles or cross-funding
from profitable products until the marketshare is attained and the segment becomes
valuable. Consequently, this is rarely a primary market segment.
Quadrant 4 Gold Mine: those segments that have short- and long-term value and
form the core customers upon which the majority of the company’s strategies, web-
site designs and IMC messaging should be based. (See also the 1000 True Fans model
from Chapter 3.) For example, Apple would find people with multiple iPods to be its
Quadrant 4 customers for iTunes, and Quadrant 3 customers for future iPods.
Round 3: Picking the target

Once you’ve established a working list of possible market segments consisting of pos-
sible customers who should be relatively homogenous in their reactions to your work
and relatively distinctive (so as to qualify as a separate set of target markets), the final
choice comes down to you based on a few factors:
◦ Where do you have a strong match between what you’re offering and what the
market wants?
Plan input }
Why will this value offering be suited to your audience?
106

◦ Are you going for short-term or short-lifespan projects? Alternatively, are you aim-
ing for the longer term and do you have the resources to support the pursuit of
eventual profit?
◦ Which market fits the organizational goals?
◦ What can you make of the consumer behaviour information in Chapter 5 to help
out with the decision?
Plan input }
Who is the main audience you want to address?
Strategy objectives to planned targets

Once you’ve picked a set of target segments, the next step is acting on the information
by converting those action-orientated objectives you set in Chapter 3 into some tactical
guidelines for the rest of the operations. At this point, revisit SMART guidelines to estab-
lish specific, measurable, achievable, realistic and timetabled micro-level goals, such as
launch dates for the site, an editorial calendar for content provision to the site and a set
of design guides for how to present the site to the world through branding (Chapter 7)
and the product offerings from the site (Chapter 6). You’ll feed these short-term goals
into other parts of the planning process – specifically, the ‘How do we get there?’, which
requires you to spell out the where, how, when and what of actually delivering products
to the marketspace.
Plan input }
What challenges are likely to prevent you from meeting these objectives?
Plan input }
What opportunities exist to make the objective easier to achieve?
Positioning strategy
The last ‘Where do we want to go?’ question to ask yourself involves setting the posi-
tioning strategy. As discussed in Chapter 3, positioning and the positioning strategy
are closely related, but not identical. At this point, you’re setting your corporate-side
107

e-marketing
ambition (positioning strategy) for where the site should site and which sites should be
considered allies, equals or rivals. The actual position the site holds in the minds of the
consumer is up to the consumer’s interpretation of the branding (Chapter 7), product
offerings (Chapter 6), social media activities (Chapter 12) and community perceptions
of the site (Chapter 9). There are seven (and a spare) generic positioning strategies to
consider setting as the organizational goal. These were adapted from Belch and Belch
(2004) by Dann and Dann (2004) for use online, and cover the following options:
1. Attributes and benefits positioning, which is where you position based on features (140-
character messages, unlimited uploads, pleasing taste), that you think are important
to your target market (Chapter 6). Positioning through this approach is an attribute-
based categorization, describing the feature of a site such as LinkedIn (www.linkedin.
com) as a network for socializing which would position it against Facebook (www.
facebook.com) and Orkut (www.orkut.com). Alternatively, you can try positioning
based on the benefits – such as positioning Twitter (www.twitter.com) alongside
‘communicate with friends’, which would position it against e-mail, Facebook mes-
sages and SMS. Or, you could position it as a microblog, which would position it
below the macroblogs of WordPress and Blogger, and alongside FriendFeed (www.
friendfeed.com), Plurk (www.plurk.com) and Tumblr (www.tumblr.com).
2. Use or application positioning, which is what the end user actually does with the prod-
uct (as opposed to the components of the product, which is attribute positioning).
This is the hardest strategic position to declare (Chapter 5) and, notably, it mir-
rors the attributes and benefits position. Application-based positioning is developed
according to how the market is actually the service rather than how you think
it should/would be used (benefits). Online retail stores can be associated with the
weekly shopping tasks (www.sainsburys.co.uk), or a digital product can be associated
with an event (www.thefa.com) or season (www.christmastimeuk.com).
3. Product user positioning is where you line up the site by who is using it rather than
how it’s being used, although the two are logically connected. It depends a bit on
consumer behaviour theory and market segmentation (Chapter 5). Slashdot (www.
slashdot.org) has the most blatant positioning strategy in the corporate tag line
‘Slashdot: news for nerds’, which clearly identifies its position among information
sites by showing its relevance to a select Internet psychographic segment.
4. Price–quality positioning involves using prices associated with the goods and services
to influence the perception of the site. This approach is a little more complicated
online than in traditional environments due to the large array of services that are
available for free, and ‘free’ isn’t held in such low regard as it is offline. Price–quality
positioning often relates to the charges for the premium products or extended ser-
vice features. Positioning by price also requires a clear gap between the paid service
and the free accounts so that higher price gives a sense of quality and value to the
purchaser and the lower-end products don’t compete against their premium-level
companions (Chapter 6).
5. Cultural symbol positioning is the most complex in theory yet reasonably easy in prac-
tice as you align your position in the market through images, icons and wording at
the domain name level with a regional domain (.uk), use a thistle on a Scottish site
108

or add the odd reference to Sainsbury’s, Tesco and Manchester United in a British
e-marketing text. Cultural symbols can also be used to identify your affiliation with
Internet cultural clusters (Chapter 9).
6. Product class positioning is a sort of corporate word association game where you
align yourself against competing offers from products and/or services outside of the
product category. For example, airlines compete against trains, buses and other air-
lines for domestic travel. Online radio stations (www.last.fm) compete against other
online music services such as iTunes, the user’s MP3 collection and YouTube music
videos (uk.youtube.com) plus the usual alternative forms of on and offline entertain-
ment. This would be where you position a website against an iPhone app or a print
magazine, or web-based versus virtual world versus standalone software (Chapter 11).
7. Competitor positioning focuses on a specific competitor and outlines the similarities
or differences between you and them. This is subverted slightly where competitor
positioning is used in blogging to create communities of blogs which are both allies
(share a common theme, cause or movement) and competitors for attention, adver-
tising and sponsorship (Chapter 9). For the most part, competitor positioning online
serves the consumer more than it helps the marketer – although there are good busi-
ness reasons for alliances of mutual convenience. This is one area where you can go
to Google’s ‘related’ site search to see who the search engine lines you up with – even
if it feels a bit like corporate speed dating.
Plan input }
What sites are your direct competitors?
8. Repositioning, which isn’t actually a specific positioning strategy in as much as it’s

an attempt to move from where the market currently sees you (or where Google
related links you) by using one of the other seven options and an orchestrated dose
of branding (Chapter 7).
Once you’ve picked a desired positioning strategy, the next step is to move through
the respective tactical implementation elements of the marketing mix to act on the
creation, communication, delivery and exchange with your desired market.
} Step 3: How do we get there?

Step 3 is where the fun really kicks in. Whilst the last two steps have been about lofty
visions translated into less lofty and more practical goals, this is where we start to get
our hands dirty and make plans for things to happen (Figure 4.4). It’s best to consider
this as the precursor to Chapters 6, 7 and 8 since the objectives put into place here are
converted using the techniques and ideas covered in those three chapters.
109

e-marketing
Figure 4.4 Marketing interview

Marketing objectives (the corporate GPS)

Converting the e-marketing strategy into small, micro-level goals for use in setting tac-
tics relies on a combination of interpretation of the strategic directions in conjunction
with an established set of generic marketing objectives. Referring back to the broad cat-
egories of strategic objectives outlined in Chapter 3, these are able to be contextualized
as follows:
◦ Cost-oriented objectives, which focus on using the Internet to reduce costs and
increase savings for the firm by shifting away from physical media, physi-
cal world distribution or any other use of online technology to save a few
dollars. These objectives are financial in nature and come with a timeline,
expected budget cut and the need to ensure that the financial costs from col-
umn A (physical world spending) are not overshadowed by the per-hourly costs
that come with the increased time commitments when shifting the e-marketing
approaches. There’s no point saving £150K on print costs if you have to hire
a web development team at £200K a year to achieve the same communications
outcomes.
◦ Sales-oriented objectives, where the Internet turns into a sales vehicle that facilitates
indirect purchases through affiliates, offline sales or some other mechanism and/or
the site handles direct sales. Sales objectives are measured in terms of increased vol-
ume, increased value per sale or revenue targets over a set time frame. Direct online
sales objectives will also shape the type and nature of the product offering produced
by the organization (Chapter 6).
◦ Behavioural change objectives, which are where the site’s purpose involves altering the
way in which people behave in either their online or offline lives. It’s probably best
to consider most of the social media sites as having at least one set of behavioural
change objectives that involve moving offline conversations, photo sharing and
110

quick chats with mates or family, into an online framework. These types of objec-
tives can be set in terms of increasing the number of current users, decreasing use
of offline services or improving the proportion of online transactions from specific
users within a set time frame (Chapter 5).
◦ Information dissemination objectives, which use the Web as a channel for distributing
information, ideas or knowledge without necessarily offering something for sale or
requiring behavioural change from the users. Blogging has an inherent bias towards
information-based objectives as do government sites that host forms, information,
FAQs and/or policy statements. Given that the aim of such sites is to maximize
exposure to ideas and information, success indicators would include traffic statistics,
interlinking with other sites, commentary in social media and the general dissem-
ination of the site’s content as broadly as possible. A typical objective of a site
based on information dissemination would be ‘to increase the number of mentions
of the site on Twitter (twitter.com) by 20 per cent over the next three months’ or
‘to double the number of hits to the second level of information pages of the site
within 12 months’.
◦ Promotional objectives, which is where the website is integrated into the promotional
mix as an advertising tool. Many websites currently in existence are based around
promotional or communication objectives (O’Connor and O’Keefe, 1997). There
is some degree of overlap between information orientation and promotional sites
although the promotional sites tend towards the persuasive rather than the straight-
out informative. The effectiveness of a promotions-based website should be measured
by standard promotional objectives, such as recognition and recall, satisfaction or
sales inquiries generated. Sample objectives could include ‘to achieve a response rate
of 25 per cent within one week of mailing out a new product release to our existing
e-mail list’ or ‘to achieve a recognition rate for the URL of 30 per cent among the
target market within six months of launching the site’.
◦ Conversation objectives, which is where the organization sets up shop on various social
media platforms in order to engage the broader online community and its actual (and
potential) customers. Communication objectives are a new aspect of the e-marketing
agenda which is where you recognize that your role online involves listening as
much as speaking and where engagement in conversation with the members of the
community is a serious business priority.
The marketing toolkit

This section of the planning process is where you break out the toolkits and start
applying the whole gamut of your marketing skills to figure out how to develop the
product (Chapter 6), what promotional and branding methods to use (Chapter 7) and
how to combine these factors to create ongoing and long-lasting customer relationships
(Chapter 8). It’s also where you need to consider a whole array of technical issues, such
as the delivery platform for whatever you’re planning on offering to the market – be it
web-based, mobile (Chapter 13) or an off-web e-marketing production (Chapter 14).
As mentioned in Chapter 1, this is where you need to identify your marketplace
and marketspace, and prepare your tactics accordingly. This includes determining the
111

e-marketing
investment in the key resources of time, effort, energy, brand reputation and cash
(Chapter 1).
Plan input }
What steps will you take to create the content required for your site?
There are four different marketing mix toolkits that can be considered at this point
in the planning process: the 4Ps; 7Ps; SIVA and the AMA (2007) definition mix. Each
of these approaches is based around the central platform of modifying company-
side controllable variables in order to meet the needs of the marketplace (even if
SIVA is customer-sided, you don’t get to adjust the settings on external factors such
as customers as easily as you can on company-internal matters). The four mixes are
as follows:
◦ 4Ps – price, product, promotion, place

◦ 7Ps – price, product, promotion, place, people, physical evidence, process
◦ SIVA – solution, information, value and access
◦ AMA (2007) – create, communicate, deliver and exchange.
Four and seven P models

There are two versions of the McCarthy (1960) marketing mix: the classic 4P version
and the extended ‘services’ 7P variant (as a side note, McCarthy proposed 30Ps as the
first model – there has been some consolidation over the last five decades). The Classic
Edition (4Ps) consists of ‘price, product, promotion and place (distribution)’ as the cen-
tral checklist for assessing whether or not you’ve covered all the bases needed to address
the market (Chapter 2).
The Services Marketing Extended Edition (7Ps) added three items to the 4P framework (or
removed just 23 objects from the 30P framework) with the inclusion of people, physical
evidence and process. People refers to any person who interacts with the customers,
predominantly the staff (but sometimes the customers themselves). This is increasingly
important when social media (Chapter 10), community (Chapter 9) and relationship
marketing (Chapter 8) are key elements for success. Physical evidence was originally used
to exclusively describe real-world objects that represented the organization, its brand
and product offering. Given the development of the Internet, ‘physical’ evidence can
also include the virtual evidence of the website, social media presence (Chapter 10)
and any virtual-world presence of the brand (Chapter 11). Finally, process relates to the
way in which the products are delivered and the interaction the organization has with
the customer. It can include discussions in the comments on a blog, interactions in
social media, e-mail and automated self-service systems such as web-based ordering or
112

SMS-based contact. The Chartered Institute of Marketing endorses the 7P model as part
of its professional training and development activity for commercial marketers.
SIVA: a customer-sided marketing mix

The customer-sided ‘SIVA’ model was developed by Dev and Schultz (2005a and
2005b) as an alternate form of the organization-focused marketing mix. SIVA (solution,
information, value and accessibility) examines how the customer views your product
offering. Solution represents the capacity of the offer to meet the consumer’s needs, solve
a problem or otherwise be useful. Information represents the sum total of knowledge the
customer has about the product offer and whether it’s come from external sources (web
searches, word of mouth, marketing communications) or drawn from internal sources
(memory, experience). Value is the cost to the consumer in terms of money, time, effort,
opportunity forgone and any other factor that the consumer feels is a relevant tradeoff
necessary for buying the product. Accessibility is the final element which handles both
the consumers’ capacity to get to the product to buy it (shipping, logistics, channels)
and their ability to actually use the product to provide the solution based on the perfor-
mance requirements of the product (complexity, time investment, additional resources).
SIVA is a useful benchmark to use in conjunction with the 4P, 7P and AMA market-
ing mix models to assess whether the consumer-side elements have been adequately
addressed by the mix.
Plan input }
How does this content address the needs of your audience?
Marketing as an activity mix: AMA 2007

The American Marketing Association introduced a potential contender for a new mar-
keting mix in the form of the processes for generating the ‘offerings that have value’
in its most recent definition of marketing. Creation, communication, delivery and
exchange makes for a useful marketing mix mantra that can assess whether you’re act-
ing in a manner that’s likely to result in something valuable for your target audience
(Dann and Dann, 2007). Creation of value asks if you’re doing something new, different
or enhancing value. For example, simply re-blogging existing information isn’t adding
value, whereas repackaging information in a format that’s more accessible for the cus-
tomer, easier to read or comes with editorial observation can potentially be the creation
of value.
Communication of value is where you are engaged with the audience, and where the
conversation provides something useful to the end user up to and including (hopefully)
the insight that owning your product will bring benefits to their life. The key point is
that communication is a bi-directional process that makes use of the one-to-many-to-
one model (Chapter 2) and the conversational quality of the social media environment
113

e-marketing
(Chapter 12) to enable companies to listen to the market as much as they’ve previously
talked at it.
Delivery of value brings forth the supply lines, distribution issues and the capacity of
the product to actually meet the needs of the consumer. Whilst the creation element
builds the framework (blog, service, idea, physical goods), delivery ensures that when
the consumer uses the framework for customer co-creation, they can achieve their per-
sonal goals/outcomes. (Short version: creation and communication make a promise.
Delivery turns the promise into a reality.)
Exchange of value is the mutual gain experienced by the consumer (sense that the
product did the job) and the marketing organization (Money! Profit! Survival!). Central
to this part of the mix is the appreciation of what value you’ll get back from the trade
(cash, profit, loyalty, subscribers, whuffie, ego, karma) in return for creating and deliv-
ering something valuable to the consumer (who feels what they had to forgo for this
offer was worth it).
All for one, one for all: using the whole of the marketing mix
The greatest strength of all the different marketing mixes comes from the multiplier
effects built into the model when you apply all four core elements at the same time.
Consider a well-designed product sold at the right place, for the price you can afford and
backed up by the right messages to introduce it to the market. How much better will that
perform than a heavily promoted product that lacks a sensible pricing structure or good
set of supply lines? Probably the biggest single trap in marketing is the sense that one of
the four elements of the mix (ahem, promotion/communication/information) should
be considered more important simply because it’s the most visible. Promotion’s role as
the high-profile element of the mix just means it’s doing the job it’s designed to do – get
your attention and keep it focused on the product. At the same time, there’s more than
enough adverts for products you’d really like but just can’t justify the costs (particularly
in the post-global financial crisis). Without a good grasp of price, the best product will
be a footnote in Wikipedia, the greatest campaign will continue as a set of case studies
on YouTube and your distribution channel will become specialist traders on eBay.
Output note }
At this stage, ensure that you’ve directly and overtly addressed all elements of your cho-
sen marketing mix. Line up the gaps in your write-up of your planning notes to ensure
you cover each element and that each aspect of the mix is given equal consideration.
} Where should we end up?

The fourth and final question to be asked at the planning stage is a combination of
setting the results of where we’re headed with the means by which we intend to get
114

there – and producing a list of outcomes that can be used to determine if we’ve met
with success, failure or simply need to keep going to get to the destination. For the
most part, these metrics are covered in more depth in Chapter 13. What’s worth noting
at this point is that you’ll be setting out broad measures that link back to where you’re
planning on going and what you set out in the marketing objectives.
Objectives, goals and metrics

The very first task in this section is to copy and paste the goals and objectives from
your overall strategic marketing planning (Chapters 3 and 4) and start looking at how
these items can be converted into measurements. A good objective will come with a
measurement element built into the framework – for example, the marketing objec-
tives should mention the level of sales volume, profits per unit or cost savings incurred
per activity.
Plan input }
How will you know if you have achieved your objectives?
These automatically move into benchmarks plus yes/no statements (What were our
savings over the stated period? Did we achieve the stated savings target?). If you’re
struggling to determine how to assess the objectives or goals you’ve set, now is the
time to revise and revisit them. Do it before you write up the plan. If you’re struggling
for clarity in the measurement, you’ll struggle for guidance for implementation. Revise,
revisit and repeat the planning process until you’re confident you’ve attained a working
roadmap with due dates, benchmarks and guiding instructions.
} Reporting and documenting: it’s all part of the plan

Once you’ve satisfied yourself that you’ve covered the bases, set goals that you can
achieve and measure, and have mapped out the steps you need to take to achieve those
goals, it’s time for some formal documentation. A marketing plan is a living document
designed to be used to guide the day-to-day activities that work towards achieving your
goals. In some organizations, plans become elevated to the status of relics or artifacts
that are revered objects that sit on shelves as some form of business collector’s item.
Just so we’re clear on this – there’s no secondary eBay market for ‘Mint in Box’, perfect,
untouched marketing plans. If anything, the demand is for the battered, paint-chipped
and battle-scarred plans that have seen a lot of action – and driven a lot of success. The
purpose of documentation is to allow you the breathing space to not have to remem-
ber, memorize and commit the entire game plan to your head whilst trying to act on
the various advice goals and tasks you’ve set yourself. The planning process was about
115

e-marketing
thinking things through and making informed decisions. The plan is about ensuring
you’ve got a copy of that information as a memory jog and guidance tool and also so
that you can bring in other people to the process without needing to have them read
your mind to work with you.
We’ve put together a customized plan framework for this book based on our expe-
rience in strategic marketing, planning and marketing plans. That said, the plan
presented here is one of many possible plan options that you can use and we firmly
recommend looking around the Internet, marketing books and marketing journals for
different examples of plans to find a structure that best suits your particular needs. This
specific plan works on three broad elements:
◦ Marketing infrastructure, which is based on the CIM (2005) ‘identify, anticipate and
satisfy’ framework and includes a communications framework specifically tailored
for e-marketing activity
◦ Technical infrastructure, which looks at the logistics of the online content delivery
including interaction with the communications framework, and a set of website-
specific elements to be considered
◦ Measurement and metrics, which is a preliminary list of what needs to be measured,
documented and benchmarked to ascertain how well the plan is delivering on
the targets.
Each of these elements is presented as a sub-plan. Think of it as a plan within a plan

within a strategy within an organization (the Russian nesting doll of marketing activ-
ity) so that the top layer is the broad picture and each layer within the framework
heading down provides more specific details, until you start generating to-do lists in
your ‘Getting things done system’.
Marketing infrastructure
The first phase of the plan covers the marketing elements and is divided into three
sets of actions based on the CIM (2005) definition of marketing – ‘identify, anticipate
and satisfy’.
Identify
Identify is where you document the strategic objectives and, unlike the previous ele-
ments, you include some contextualizing information as to why these objectives are
important to you personally, professionally or both. You follow up the objectives by
making use of the information that you collected in the market research, internal anal-
ysis, environment scans and other areas to address the challenges that you face in
attempting to achieve these objectives and the opportunities that exist in the environ-
ment around you. This is different to the information you’ve gathered in that you’re
now applying what you’ve learned about your business context to the objectives and
are answering these new questions (so you can’t simply dump the stuff you wrote up in
the market research into the plan).
116

Plan }
Identify:
◦ What is the main objective you want to achieve with this site?
◦ Why is this important to you?
◦ What sort of challenges are likely to prevent you from meeting this objective?
◦ What opportunities exist to make the objective easier to achieve?
Anticipate
Anticipate is where the segmentation information and decisions are reported for pos-
terity to get you thinking through the connections between what you want to achieve
and the market you’re attempting to address. This section forces you to consider the
consumer side of the equation (break out the SIVA framework) so that you’re less
likely to see an inherent merit argument and much more likely to stay customer
focused at the development phase. This section of the report uses a lot of the market
research data you collected during the segmentation work, plus some of the external
analysis materials.
Plan }
Anticipate:
◦ Who is the main audience you want to address?

◦ Why will this site be valuable to your audience?
◦ Where else is the audience on the Internet?
◦ What sites are direct competitors?
◦ What sites are potential allies?
Satisfy
The third step in the plan is where the detail comes into play and where you document
the processes you’re going to use for making the magic happen, so that you have a
product at a price that you can promote and distribute. This links across to the value
creation aspect of the AMA (2007) definition (Chapter 2), promotion (Chapter 7), value
delivery (Chapter 6), relationship management (Chapter 8) and some of the applica-
tions of the Internet (Chapter 14). At this point in the book, you may not be able to put
down detailed answers to these questions (assuming you’re reading it in a linear fash-
ion). However, if you’ve studied any other marketing subjects (such as an Introduction
117

e-marketing
to, or Principles of, Marketing subject) you’ll have enough background to produce a
rough sketch so you can fill in the details later. We’ve left budgeting for later in the
book (Chapters 10 and 11) although even at this early stage it’s worth putting together
rough figures of available cash (none, some, pizza money, etc.) and available time (none,
some, plenty, etc.).
Plan }
Satisfy:
◦ What steps will you take to create the content required for your site?
◦ How does this content address the needs of your audience?
◦ What resources do you have available to meet your content schedule?
◦ What resources will you need to acquire?
◦ What is your available financial budget for the site?
◦ What is your available time budget?
Also at this point in the process it’s worth investigating sites such as Basecamp (www.
basecamphq.com), Remember The Milk (www.rememberthemilk.com) or Zoho Projects
(http://projects.zoho.com) as project management systems to help guide the product
development process, site roll-out and every other task that’s about to mount up as you
turn this project from ‘great idea’ into reality.
Communications framework
We’ve separated out the communications from the rest of the marketing plan for the
moment, since the Internet is a communications platform and because there are lots
of individual elements which you can link together with the strategic objectives, goals,
branding (Chapter 7) and product development (Chapter 6). The plan listed here is also
just a skeleton framework which is fleshed out in Chapter 7. We’ve split the framework
up into five segments which are:
◦ The content pitch. This takes the form of five of the most common ways in which you’ll
need to explain your website to someone, including Twitter posts (140 characters),
the obligatory Twitter bio sentence (one sentence), the elevator pitch (the two-
sentence response to ‘So what do you do online?’), the full-length paragraph for
the ‘About you’ or ‘Biography’ section of social media sites and the extensive
self-descriptive ‘About us’ page for your website or blog (and if you find those
‘Describe yourself in 25 words’ parts of CVs and job applications tough, you’ll
hate this section).
◦ The search engine optimization plan. Search engine traffic is the life blood of the Inter-
net and you’ll have to pay some attention to how it all functions (even if you plan
to use an organic SEO strategy). This section of the plan outlines the keywords you
118

want to associate with your site (and use in the site), any deliberate SEO strategies
you intend to employ (and there’s hundreds of options) plus the human element of
thinking through how your market would normally come to find a site like yours.
Do this by putting yourself into the most convenient spots for them to find you
(which is one part distribution channel, one part promotion – Chapters 6 and 7).
◦ The conventional communications plan. If you’ve done advertising integrated marketing
communication or similar subjects, this is probably the easiest part. That said, this
is the largest part of the communications section since it covers the most options,
broadest bases and picks up the offline communications strategies to reinforce your
online work. This covers online advertising (Google AdWords, adverts, banners,
etc.), offline advertising (the outside world), conventional public relations including
addressing the mainstream media, blogger relations for pitching press releases online
and generating publicity through being interesting. We’ve split off blogger relations
from social media in that conventional communications plans treat bloggers like
online journalists and involve deliberate, targeted messages to entice the blogger to
cover your story on their site. The social media stuff is much more organic (and much
less organized).
◦ The social media plan. Sick of planning yet? The next level ensures that you have
a good plan for how you’ll be using those social media accounts for the forces of
good and how you’ll be turning your copy of Flock (www.flock.com) into a one-
stop conversation portal. The plan covers your intended social networking activity.
This amounts to personal brand development through interpersonal activity (and
not being annoying online), social media participation including limiting which net-
works you use and picking the spots as to where you will have accounts. There’s also
the question of when and how frequently to use the accounts, plus which commu-
nity areas have the best opportunities for mutual gain through community engage-
ment, including how to foster and develop community around your blog or site.
Finally, there are the organic social media options, where you rig out your site to be
easy for other people to share on their preferred social media systems (Digg Buttons,
RT button, post to Facebook, etc.). The central point of the social media plan is also
to be able to sit back and review what you’re planning on doing to see if you’re going
to commit any obvious social media faux pas. There is no way we’re going to endorse
the development of a social media plan that spams accounts or turns Twitter into a
string of links to ‘Earn n+1 dollars from affiliate Internet sales programmes’ (we really
dislike those people and their misuse of the word marketing). Understandably this
plan is going to run across Chapter 7 (where you set objectives) and Chapters 9 and
10 (where you pick the methods and learn to avoid making a nuisance of yourself).
◦ Technical communication issues: This is a short list of marketing plus technology
questions such as ‘What’s the address of the site?’ and ‘Can we communicate the
site’s address on the promotional material?’ It also includes the question of what
to call the site (site title, site brand name) and the branding and communication
issues associated with the site’s address and title (can the site address become the
key brand name?).
119

e-marketing
Technical infrastructure plan

Finally, having laid out a marketing plan, a communications plan and figured out which
of the existing websites and services you’ll be using, the time has come to make a few
decisions about the core technologies you’ll be using for your e-marketing delivery.
Back in the e-introduction (setting up for e-marketing), one of the issues raised was
the divide between privately hosted blogs (increased cost, increased control) and using
blogs hosted by others (cheaper, less control). The technical plan sits near the end of the
process as you need to use the technology to implement your marketing at this point in
the process. That’s not to say that you can’t pick up technology for the express purpose
of figuring out how to use it to meet your market (we’ve got a whole cupboard of high-
tech devices acquired expressly to do that for this book). Instead, what we want you to
focus on at this point in the plan is which technologies will be used in the implemen-
tation (Chapter 10) and application (Chapter 11) of the Internet. Consequently, you’ll
want to look at the following issues:
◦ What type of content management system (CMS) are you using in your e-marketing?
◦ What skills are required to use these systems? And, if you lack these skills can you
acquire them or should you outsource them?
◦ What’s the benefit of using this technology for the customer? It may be necessary
to take a technically inferior platform if that’s where the market is currently located
(Wii’s graphic capacities may be lower than PlayStation 3’s but the Wii has a 5 to 1
marketshare lead over PlayStation 3).
◦ What are the alternative ways to deliver your product to the market?
◦ What technical elements are required on the site? The technical design elements
include various site design issues such as the use of video, Flash, Shockwave, graphics
versus text, font selection and other visual components, and how these are integrated
back into the promotion and delivery parts of the marketing mix.
◦ How does the site deliver on the promises made in the marketing communications?
This element covers the use of online distribution channel elements such as landing
pages, call-to-action sections and whether to use embedded shopping carts and sales
services or sell via an affiliate system.
Metrics plan
Finally, after laying out more details than you’d honestly thought possible for a website,
you’re left with writing up the draft of the metrics section based on the decisions you
made back in the section titled ‘Where should we end up?’ Again, this is a brief section
in this chapter as you’ll cover the metrics in more depth in Chapters 10 and 11. For the
purpose of the exercise, you’ll need to be able to document what waypoints and markers
you’re using to indicate success or failure plus any measurement systems you’ve already
identified for use from previous experience. Finally, you’ll also want to go back to the
market research section and make note of the tracking, scanning and other tools you
were using for proactive market research to see if any of these could be used for reactive
research to track your e-marketing performance.
120

Plan: the metrics list }
◦ How will you know if you have achieved your objectives?

◦ What measurement instruments will you use on the site?
◦ How will you use these instruments to measure your objectives?
◦ What market research will you do for your site?
◦ What market monitoring will you use for your site?
} Conclusion
Plans and the planning process are equally important as long as they’re taken seriously,
backed by conscious effort to put the best information into the models, frameworks and
reports, and put into practice. As noted throughout the chapter, some of the informa-
tion you need for the plan is covered later in the book, so you’ll need to return back to
the plan to add more details once you’ve covered the new sections. At the same time,
some of the information you’ve gathered in the planning process also feeds into the
later chapters, which means you may want to revise the technologies, techniques and
elements in this chapter to adapt them for understanding the customer (Chapter 5),
aiding in developing your branding and positioning (Chapter 7), focusing the product
development on market needs (Chapter 6) or identifying opportunities to participate in
the Internet community (Chapter 9).
} References
Books and journals
American Marketing Association (2007) Definition of Marketing, http://www.marketingpower.
Belch, G., and Belch, M., (2004) Advertising and Promotions. Boston: McGraw-Hill Irwin.
Chartered Institute of Marketing (2005) ‘Marketing and the 7Ps: a brief summary of marketing and
how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub, accessed 10 July 2010.
Dann, S. and Dann, S. (2004) Strategic Internet Marketing 2.0. Milton: Wiley.
Dann, S. and Dann, S. (2007) Competitive Marketing Strategy. Sydney: Pearson.
Dev, S. and Schultz, D. (2005a) ‘A customer-focused approach can bring the current marketing
mix into the 21st century’, Marketing Management, 14(1): 16–22.
Dev, S. and Schultz, D. (2005b) ‘Simply Siva’, Marketing Management, 14(2): 36–42.
Durgee, J., O’Connor, R.G. and Veryzer, R. (1998) ‘Using mini-concepts to identify opportunities
for really new product functions’, Journal of Consumer Marketing, 15(6): 525–43.
Forrest, E. (1999) Internet Marketing Research: Resources and Techniques. Sydney: McGraw-Hill.
McCarthy, E.J. (1960) Basic Marketing, A Managerial Approach. Homewood, IL: Richard D. Irwin.
O’Connor, G.C., and O’Keefe, B. (1997) ‘Viewing the Web as a market-place: the case of small
companies’, Decision Support Systems, 21(3): 171–83.
121

e-marketing
Popcorn, F. (1991) The Popcorn Report: Faith Popcorn on the Future of Your Company, Your World, Your
Life. New York: HarperBusiness.
Sarabia, F.J. (1996) ‘Model for markets segments evaluation and selection’, European Journal of
Marketing, 30(4): 58–74.
Web references
10 Downing Street www.number10.gov.uk
Amazon www.amazon.com
Apple iTunes www.apple.com/itunes
Basecamp www.basecamphq.com
BlogPulse www.blogpulse.com
Chartered Institute of Marketing www.cim.co.uk/home.aspx
Digg http://digg.com
Flock www.flock.com
Google AdWords https://adwords.google.com
Google Alerts www.google.com/alerts
Google Blogs http://blogsearch.google.com
Google Docs Blog http://googledocs.blogspot.com/2008/02/
stop-sharing-spreadsheets-start.html
Google Insights www.google.com/insights/search
Google News http://news.google.com
Google Scholar http://scholar.google.com
Google Search www.google.com/search
Google Trends www.google.com/trends
Hashtags http://hastags.org
Last Year’s Model www.lastyearsmodel.org
LimeSurvey www.limesurvey.org
MSN Search www.live.com
Nielsen Online www.nielsen-online.com
Q and A www.abc.net.au/tv/qanda
Remember The Milk www.rememberthemilk.com
South by SouthWest www.sxsw.com
Steam www.steampowered.com
Survey Monkey www.surveymonkey.com
Technorati www.technorati.com
Twitter Search http://search.twitter.com
Twitter Timeline www.twitter.com/timeline/home
XboxLiveArcade www.xbox.com
Yahoo! Buzz http://buzz.yahoo.com
Yahoo! Search http://search.yahoo.com
YouTube uk.youtube.com
Zoho Projects http://projects.zoho.com
Zotero www.zotero.org
122

CHAPTER 5}
Online consumer behaviour
• marvel at the complexity of human nature

• enhance your market segmentation information with the consumer
behaviour framework
• outline the influence of innovation adoption on marketing activity
• work through the ways and means of consuming the Internet.
123

e-marketing
} Introduction
Consumer behaviour is a central part of virtually all marketing decision making (with
the exception of business to business, and even then, there are people making personal
choices in a business context). This chapter brings together some of the highlights of
the consumer behaviour field that can be applied to e-marketing, the Internet and
the online consumer. The CIM (2005) definition of marketing recognizes consumer
behaviour as identifying consumer needs through consumer insight (Chapter 2) and the
anticipation of needs (Chapter 4) which are satisfied in the value offerings (Chapter 6).
The strength of an e-marketing campaign is dependent on understanding consumer
behaviour both in theory and practice (Chapter 2). Finally, the best part of understand-
ing consumer motives and ways of behaving (and misbehaving) is that it really helps
when you’re trying to turn an idea from something you think will work into the some-
thing that the market really wants to use (besides just the opportunity for profit, it’s a
great sense of achievement to make someone else’s day with a good product).
This chapter is written in three sections – innovation adoption theory, consumer
psychographic characteristics and some of the ways and means in which consumers
actually use the Internet. These three sections are set out to be precursors to product
development (Chapter 6) and link back to some of the generic uses of the Inter-
net from the company’s standpoint (Chapter 3). It’s important to note that this is
the highlight reel of consumer behaviour theory. Neither space nor time permits a
comprehensive view of general consumer behaviour theory (decision-making mod-
els, etc.). We’ve picked up on the areas that recur in social media (Chapter 12),
cybercommunities (Chapter 9) and value creation (Chapter 6) to ensure that you have
a refresher course before tackling these areas. It’s well worth revisiting your consumer
behaviour textbooks and course notes for the broader models and techniques to assist
the e-marketing process.
} Innovation and the Internet

When the Internet is over fifty, and the World Wide Web is pushing thirty, it’s hard to
still think of the Internet as an innovative technology. At the same time, since so much
of the Internet consists of entirely new-to-the-consumer experiences, it takes a special
breed of innovative consumer to cope with the constant flow of novelty. Between the
ultra-new and ever-changing content and the somewhat aged-to-perfection platform,
the Internet serves up a range of consumer behaviour challenges. The Internet is also
a perfect storm of content distribution with content seeking markets. The nature of
the Web as a self-publishing-friendly medium allows for an almost unlimited share of
voice to be distributed to content creators across the globe. Whereas the offline content
generation market has managed to retain some of the high barriers to entry such as
physical delivery costs (Chapter 6), the online marketspace was designed to be an effec-
tive (and/or efficient) mechanism for the distribution of information content, which
now includes the digitized services of music, video, gaming and information delivery.
The Internet is a novelty seeking person’s paradise when you consider the sheer volume
124

of new stuff available on an hourly or daily basis as a result of the massively reduced
barriers to distribution for content. It’s also headache inducing for anyone without a
love of novelty, innovation or a vested interest in being the local opinion leader.
Innovation adoption divides into three connected blocks of ideas, some of which
were first raised in Chapter 2. First, there’s the innovator categories which are forms
of hypothetical market segmentation (and which were also raised in the segmentation
techniques in Chapter 4). Secondly, there’s the detail of the market segments based
on their relative innovativeness (on a sliding scale of ‘very innovative’ to ‘not sure
about this new-fangled fire thing’). Finally, there’s the innovation itself and the interac-
tion between the needs of the innovation adoption market segments and the features
of the product.
Innovation adoption curves

Most innovation adoption curves are mathematically derived models of the perfect
world performance of a product in a theoretical market. Like everything else stolen from
economics by marketing, the models make a lot of assumptions (perfect knowledge,
perfect products, rational decision, etc.) and as such, come with the usual disclaimers of
‘May not apply to reality’ and ‘Do not use whilst operating heavy machinery’. As noted
in Chapter 3, innovation curves should be considered as the partner idea to the product
lifecycle curve – they cover the introduction, spread and eventual decline of a product
in a marketplace. To that end, it’s useful because you’ll be pitching the product in a
different manner depending on where it’s at in the market (innovation versus mature
product) and where it’s at in the product lifecycle curve (Chapter 3). For e-marketing,
there are three useful innovation curves to consider – the smooth growth pattern of the
‘S’ curve for permanently adoptable ideas which take a few waves before hitting critical
mass, the classic (albeit imperfect) fast and sustained growth model and the wonderfully
named ‘contagion’ model of products that go in and out of use in a market.
The ‘S’ curve

The S-curve model of innovation adoption describes the type of innovation which
moves smoothly (and permanently) through a marketplace from innovators at the start,
into the early adopters and then slowly moves through the market until it hits the
tipping point and the entire market gets involved (Gladwell, 2000).
For all the beauty and maths purity of the model, it’s more economics than marketing
in the volume of assumptions necessary to make it fit reality. At the core of this model is
the idea that the innovation cannot be unadopted – that is, once exposed to the idea, it
can’t be unlearned (Figure 5.1). Consequently, it works well for music, television, books
and disposable products that are consumed and repurchased. It’s less useful for tracking
lifetime ownership, since it assumes you won’t give up the product. For example, after
finishing this course (barring serious head trauma) you’ll now always have known about
Twitter, Google and a range of other ideas and behaviours that you can’t discover again
for the first time. This is useful for when you start looking at the type of innovations
(really new versus quite new) although the model needs to be limited to application to
125

e-marketing
Figure 5.1 What’s learned can’t be unlearned – permanent adoption

Source: Kotler, P. and Roberto, E. (1989) Social Marketing: Strategies for Changing Public Behavior.
New York: Free Press
where you’re interested in how widely the idea spread through a segment (mobile phone
ownership), rather than using it to predict likelihood of owning a specific product.
The classic curve

The classic curve model assumes that ideas move into the marketplace in a smooth
curve from the first creation of the idea to its permanent reproduction across each new
generation. It’s a representation of the commonality of ideas in as much as it tracks
ownership or use, and as such, has a real value in projecting the market familiarity
(Chapter 4) with an idea, product concept or service (Figure 5.2).
The classic curve is a reliable, if slightly flawed, view of innovation adoption as a
single smooth transfer of the product from one category to the next, pausing briefly to
shift the relative emphasis on the importance of each feature according to the next cat-
egory’s needs and wants. It’s a solid projection of an innovation that you can’t unadopt
such as inoculations, bad song lyrics and being haunted by the ring tones from those
awful late-night phone adverts. However, it does depend on perpetual growth and the
regeneration of the market with new users who’ve never encountered the product before
in order not to reach a perfect market saturation point. It shares the same flaw as the
S-curve model in that it can’t factor in declining adoption rates – as far as the model is
concerned, the market is a perpetual motion machine where the far end of the curve
Exposure to the market
Time since the innovation was created
Figure 5.2 The companion cube of innovation theory

126

keeps going without ever quite reaching 100 per cent (but never diving off the stage and
crowd surfing back to 20 per cent).
As the world post-global financial crisis has demonstrated, the marketplace really
doesn’t have perpetual growth in it, and as such, this isn’t the best model for describing
the movement of ideas, services and goods through the Internet. However, both S-curve
and rapid curve are necessary precursors to explain the contagion diffusion model and
how it attempts to replicate the real world in describing the movement of innovations
in a market.
The contagion diffusion model

The contagion diffusion model has an ancestry somewhere inside the biosciences
research field, where scientists attempted to explain the movement of an actual con-
tagious disease (swine flu, bird flu, Ponzi schemes) through a social system. As part of
their approach to modelling the diffusion of the disease, the scientists assumed two
additional factors – first, that you could get better (quit using the disease) and, sec-
ondly, that you could be re-infected (fall off the wagon). With this in mind, a handful
of behaviour-centric marketers in social marketing borrowed the model to describe the
movement of compliance to social marketing activities in a society (Kotler and Roberto,
1989). The model in Figure 5.3 also comes with an acceptance that whilst you can
attempt to predict peaks and troughs, and should plan for them, it’s unlikely you’ll be
that accurate with the forecasting models. It should be noted that Twitter, Facebook,
MySpace, Second Life and eBay have all received declarations (usually by newspapers)
that foretell of their end simply because the dip in the contagion diffusion curve has
arrived (just after users have left).
Social contagion is at the root of viral marketing campaigns and behaviour-driven
products such as cybercommunities and social media. Although viral marketing doesn’t
work (tell ten of your friends) in that you can’t deliberately create a socially trans-
mittable idea with any real success (and anyone who says they can is pitching for a
consultancy), it’s a good example of how people can leave and return to ideas, goods
and services. Think about the portfolio of sites you signed up for in the e-introduction
Predicted Actual
Figure 5.3 Contagion diffusion: the ‘if you get it, share it’ approach
127

e-marketing
(setting up for e-marketing) and how many of these sites are going to be a regular part
of your online social life once the subject is over.
Now, if two years later, you meet a group of new people (workmates, perhaps) who are
all members of the one site (Facebook, probably), the dormant account suddenly gains
a lot more value and you’re far more likely to reuse the site because of the network of
other people who are present. In short, the contagion effect of other people’s use of the
site leads you back to reusing (curve goes up) whereas you’d dropped out because of
the lack of value (curve goes down). Hence adoption and use rates can rise and fall as
sites, ideas and behaviours move in and out of fashion and relative importance to the
individual. It’s also worth noting that this approach to diffusion ties up with the product
lifecycle model in that you can get out of decline/late maturity by reinvigorating the
product or market (make it innovative, find new value for it) which can lead to the near
end-of-lifecycle spikes.
Whilst Martin (2009) makes the case that 60 per cent of registered Twitter uses
quit after the first month, what it neglects to discuss is whether those Twitter quit-
ters leave by permanently deleting the account or leave the account in place so that
they can return if there’s a sudden upswing in activity. It’s worth considering this as
one of the authors has an absolutely hot and cold relationship with Flickr (www.flickr.
com) that could easily be mapped by the contagion diffusion model. Similarly, sites
that were previously less valuable shift in value as they improve their product offering
(Chapter 6), become available in new channels (Chapter 14) or re-emerge on a mobile
device (Chapter 13). Similarly, there are going to be peaks and troughs in the popularity
and usage levels of all online services – for example, during the election season in the
US and UK, political blogs and activism sites rise in popularity and use then fade away
after the results are declared (and the recount has been blogged).
What lies within: the consumers in the curves

Online behaviour tends to be dominated by innovation-adoption theory simply because
the opportunity for novelty discovery in an interactive, interest-driven environment
is a lot easier than finding undiscovered territory in your local neighbourhood (with-
out requiring trespassing). The adoption of innovations is a standard issue element of
consumer behaviour with a back catalogue of theory and practice extending for over
sixty years. In effect, the same mental circuits that brought fire from the domain of
the (slightly burned) innovative caveperson to widespread use are the same processes
we use for selecting new television shows, buying new games or following the latest
fashions. The upside for marketing is a nice, stable set of ideas that describe the market
segments associated with innovation adoption based on the time elapsed between the
discovery and use of a new idea. The model in Figure 5.4 represents the standardized set
of reference points for discussing the different innovation adopter categories.
In summary, a new idea starts with a small group of hardcore risk takers (innovators)
who try the idea just because it’s new. The success or failure of the innovators in find-
ing practical value for the new idea is observed by a second group (the early adopters)
who look to the use of the innovation as a way to differentiate themselves from the
crowd. If this approach works and they gain some point of differentiation, the early
128

Fast diffusion
Early Late
Early Slow diffusion majority majority
majority Late
majority Early
adopters
Early Laggards
adopters
Laggards Innovators
Innovators
2.5 13.5 34 34 16 2.5 13.5 34 34 16

Time(%) Time(%)
Figure 5.4 Categories of innovations

Source: Quester, P., Neal, C., Pettigrew, S., Grimmer, M., Davis, T. and Hawkins, D. (2007)
Consumer Behavior, enhanced 5th edn. Roseville NSW: McGraw Hill
adopters’ role as social leaders will provide a level of approval, credibility and societal
endorsement of the idea. With that information publicly available, the more delib-
erately minded people and people who are aware of social pressure (early majority)
will take their cue from the fashion leaders (early adopters) as an attempt to be trendy
and replicate the appropriate social behaviour. At this point there’s a constant conflict
between the early adopter wanting differentiation and the early majority copying the
behaviour of the early adopters. The constant pressure of unlike/alike drives changes
in fashion, technology and trends. This is followed by a grudging level of compliance
from the relatively conservative members of the market who don’t want to appear out
of touch yet have no desire to be at the cutting edge of fashions, new technologies
or new behaviours. Finally, the new idea runs into the last category, the non-adopters
(laggards), who are unimpressed by the current state of the product, see no inherent
value in it, don’t care for the social compliance aspect or simply don’t have the resources
(time, money, effort, etc.) to pick up the product.
Table 5.1 outlines the five categories of adopters, their one-word defining character-
istic and a sense of where they are in terms of what’s new to them (even if it’s not really
Table 5.1 Characteristics, categories and innovations
Name Characteristic Current ‘innovation’ Percentage
Innovators Venturesome Mobile Internet 2.5

Early adopters Respectable Social media 13.5
Early majority Deliberate Amazon, e-banking, eBay 34.0
Late majority Skeptical e-mail using ALL CAPS 34.0
Laggards Traditional Letters using postage stamps 16.0
Source: adapted from Rogers, 1995; Dann and Dann, 2004.
129

e-marketing
new to the world), plus a rough estimate of the portion of any given market represented
by each group.
Innovators: venturesome (Give it a go)

Innovators like to try new things and are often characterized by a seemingly unquench-
able thirst for novelty. They’re the type of mate who’s got the latest ring tone, the newest
phone and an MP3 player full of bands you’re not likely to hear on Radio 1 until next
year, if ever. They’ve been classified over time as having four recognizable traits:
◦ Venturesomeness, which is an almost obsessive desire for the hazardous, risky and
avant garde ideas (Rogers, 1995). This can get them into trouble, particularly with
their tendency to try first and only ask for permission if someone notices what they’re
up to in the corner cubicle. They’ll have a massive stream of content flowing through
the Google Reader (assuming they’ve not moved to the new RSS reader), a semi-
permanent Bittorrent connection running in order to source new content and will
read at least one (probably five) gadget blogs.
◦ Substantial financial resources or a willingness to over commit themselves in one area
(music, games, fashion) and make sacrifices elsewhere (a constant diet of instant noo-
dles to afford the newest things). There’s also a tendency to over commit time budgets
to the pursuit of the new (which can be leveraged back into blogging content if you
can keep your attention span on track long enough to write up the experiences).
◦ A willingness to suffer setbacks and see the setback itself as a feature rather than
a bug. Innovators like novelty, looking for solutions and generally messing around
with the product – if it breaks, then there’s the new experience of repairing it (unless
the magic smoke escapes from the box).
◦ An ability to understand and apply complex technological knowledge. Since they’re
going to be the first to try something out, they’ll usually have to make it up as they
go along. Despite a love of complexity, they’ll never be caught openly reading an
instruction manual, and will figure that if they can’t find a feature they probably
don’t need it anyway. The love of complexity and novelty, and a willingness to suffer
setbacks, means they’ll also open every menu and sub-menu, and press every button,
to see what happens next (and if the magic smoke can escape from the box again).
These are the people who run alpha-level release software, participate in product devel-
opment and customer co-creation and quite often know more about the product than
the developers. Risk taking happens because risks lead to payoffs (good and bad), and if
you’re in need of new challenges, new adventures and new experiences to keep yourself
amused, you’ll bore easily with standard off-the-shelf solutions. There’s also a tendency
to pursue complex solutions for relatively simple problems, since the complexity is part
of the pleasure of the problem solving (Figure 5.5).
The money and time aspects are major barriers between the innovation intent and
the innovation adopter – which is why the laggard class needs to be respected since it’s
often disposal income that separates laggards from their desired new toys. It’s also worth
noting that you shouldn’t rely on the innovators for anything more than influencing
130

Figure 5.5 Complexity (aka I’m an idiot)

the early adopters. Innovators are fickle by nature – they need the novelty, and whilst
your product might still be just fine, they’ll be trying out something new simply because
they’re in the mood for change.
Early adopters: respectable (Leader of the pack. Vroom Vroom)

The early adopters are the fashion leaders of the innovation-adoption circuit. They pay
close attention to the prevailing trends in the market and keep a close eye on what the
innovators are doing (even if fashion dictates that they must scoff at the very technol-
ogy they’re coveting) so the early adopters can maintain their place at the top of the
social order. By nature, these are the stately and refined, with impeccable tastes, right
café scenes (and the perfect mix of accessorized iPod and iPhone and just the right touch
of world music alongside their mainstream Top 40 tastes). To the rebellious, devil-may-
care, risk-taking innovators, these people are the reason to abandon a technology and
move elsewhere – the fun’s over when the fashionable arrive (note: the fashionable have
their own exit reasons). The paradox of the early adopters is that while they are seen
as the respectable opinion-formers of society, they take their lead from the successes of
the wild-child innovators.
Early adopters have some classic traits.
◦ Above-average intelligence, education and understanding of complex innovations.

In their own fields of leadership they are the razor-sharp connoisseurs of the market.
If you need product advice in this area, they’re your go-to people because they’ve
committed themselves to excelling in this particular facet of their life.
◦ Respectability, which comes from being the perceived leaders of the pack (vroom,
vroom). Once established in this role they also want to stay there and they put serious
effort into maintaining their reputations and social position. Careful selection of
131

e-marketing
success stories from the innovators allows them to hold a position at the cutting
edge whilst ushering in the social credibility for their chosen innovations.
◦ Opinion leadership through endorsement by use (see the Introduction) as early
adopters lend mainstream credibility to a new idea and, once in use by this group,
the idea becomes something for the later groups to copy and mimic.
◦ Social connections, since these are the connected people who have multiple circles
of friends, numerous social network structures on and offline and a fairly busy social
calendar. They need these networks in part to endorse their social status, and, equally,
to track and monitor the trends in fashions in the group around them.
It’s no coincidence that the arrival of the early majority to the Internet also ushered in
the era of social media (Chapter 9). Nothing screams ‘early adopter’ louder than social
networking sites such as Facebook (status updates), blogging (opinion broadcasting)
and Twitter (existence broadcasting). In fact, Twitter could be the perfect early adopter
protocol – short messages that indicate the current status of the user, broadcast to a
wide net of followers who can either be followed or ignored as appropriate. Plus, it’s an
established technology that was in use by the innovator crowd (who are all grumbling
that it’s gone downhill and are headed off to something newer). The only significant
downside to the early adopter crowd is the small size of the market they represent
(12.5 per cent) and their need to differentiate themselves from the masses. In short, if
Twitter breaks into the mass market mainstream, the early adopters will be off elsewhere
to stand out from the Twitter-using majority.
Early majority (What’s in it for me? Deliberate and calculated decisions)

The early majority represent the point where the new idea isn’t quite that new anymore,
which means it’s time for the mass-market approaches of multiple segments, product
variations and a range of competitors. It’s worth noting that despite their financial value
and sheer volume (double the size of the previous two markets combined), the early
majority mistakenly tend not to be considered as a market for innovations. This is partly
because most innovation adoption researchers and consultants are innovators (or cusp
early adopters) and are long since bored with ‘that old idea’. Similarly, some of the
strategies for addressing this group, such as market penetration, also depend on the
market’s familiarity with the organization and its product (Chapter 3).
However, if you look at the marketing strategy guides for the early majority market
from the corporate side you’ll find the advice in market maturity is to use innovations
as new ways to sell the existing idea to the market. To that end, the early majority are
actually a surprisingly innovative marketplace – just as long as you’re only talking about
modifications and variations to an existing product. Members of the early majority can
be recognized by a few distinct characteristics.
◦ Risk aversion, which is both a precursor and a result of other factors in this list. Unlike
the innovators, the early majority don’t have the resources or desire to take chances,
and they’ll want security over uncertainty.
132

◦ Calculated decision-making processes which are based on finding a very good set of
arguments in favour of the product on the balance of a whole range of pros, cons,
costs and benefits.
◦ Slower deliberations against a greater set of options,. The calculated nature of their
thought processes, combined with the need to sift through a wider array of informa-
tion sources found in the mature markets (Chapter 3), means longer delays between
opportunity identification and decision making.
◦ Opinion seeking behaviour, which explains the how and why of the early adopters
broadcasting their preferences to the early majority. Opinion seeking is used to reduce
the risk of adoption by seeing what worked for the people around them and the
fashion leaders.
◦ Listening through aggregated information channels, which is the preference for mod-
erated, edited or endorsed knowledge (Chapter 4). Early majority users read the
editorial columns of newspapers, listen to the movie reviewers and take guidance
from these endorsements as a means to reduce their risk. Public measures of pop-
ularity are useful for this group since the popularity ranking mechanisms of Top
10 lists and ‘101 movies you must see before you die’ help with their pursuit of
social compliance (Chapter 4). Popularity means security by numbers and volume of
market consensus.
◦ Sheer volume of the market. There’s a lot of them – they’re everywhere – and when
you’ve arrived in this mainstream mass market, you’ll know all about it. Since the
early majority outnumber the innovator and early adopter you’ll be hearing those
category members complaining of the product, brand or company ‘selling out’.
◦ Simplicity and functionality dominate their needs since they’re not in this for the
novelty and, whilst they want to be like their fashionable friends, they’ve got a
really strong pragmatic streak that stands between them and frivolous activity. Plus,
risk aversion means that the innovation has to be a useful application of their
limited resources.
This category of the market thinks hard about their decisions, since they’re usually deal-
ing with a wider choice of options and a more limited set of resources than innovators or
early adopters. The movement of the early majority into a market completely rewrites
the social dynamics of the product’s user based simply on sheer weight of numbers.
Access and functions will become tailored for ease of use rather than technical com-
plexity. Optional customization functions will be moved from the front of the software
to the ubiquitous ‘advanced features’ heading, and there’s a disquieting sense that what-
ever the idea was originally, it’s now in the ‘Grown Up’, settled down and looking to
buy a summer home in Sussex phase (compared with the innovator products sharing a
bed-sit squat in inner Manchester and the early adopter product doing up that terraced
house in Camden, London).
Late majority (If we must)

Late majority users are the last of the adopter groups to arrive at the product and they’ve
usually been dragged here grumbling and muttering under their breath (kicking and
133

e-marketing
screaming is more an innovator behaviour). For the most part, the reason people are
in the late majority is due to the product and not the person. For whatever reason,
the product didn’t capture their attention and certainly didn’t have the perceived merit
that saw it picked up by innovators and early adopters. To that end, the late and early
majority share a few points in common, namely that both are looking very carefully
at their decisions. Whilst the early majority found a good match for their needs, the
late majority didn’t find a compelling reason to change – until their alternatives were
dragged away from them by changes in the marketplace. This group is characterized by
several features.
◦ Justifiable resentment towards the product since they usually only adopt this newer
alternative because their older model broke, was replaced or phased out.
◦ Scepticism of the technology, with a begrudging concession to its necessity rather
than any particular desire for the product. These are the people who liked going into
the banks to talk to the tellers and couldn’t see the point of the ATM since you didn’t
get the features and benefits of the personal contact from the machine.
◦ The sound of inevitability, since this market is the hallmark indicator that the
product lifecycle has peaked, and if managed well, will sit in the maturity phase
indefinitely. It’s worth noting that quite often the late majority are the best indicators
of whether a product is entering late maturity and going into decline.
◦ Perceptions that the product has ‘jumped the shark’ (www.jumptheshark.com),
which is to say that the attempts to make the product fit for the later parts of the
early majority category and the first part of the late majority category resulted in
some bad decisions, alienation of the core fan base or inexplicable events leading to
the user base moving onto a new idea. (Note: ‘Nuking the fridge’ is where a good
but ageing franchise makes a bad tactical decision in a comeback. Jumping the shark
happens whilst the franchise is still in the original run.)
Late majority members often don’t want to be here, don’t want this product and are
frustrated that the world has changed and moved on without them. They’re conserva-
tive in nature and it’s this conservatism that forces them into a situation of buying into
the good, service or idea that has mainstream support (add a little more radical spirit and
your late majority member will turn into a laggard as they hold out against prevailing
trends in the marketplace). They’re often resource poor in the primary category that the
product needs for adoption and have put off the purchase until they feel that they can’t
afford to be without it. Whilst this is often considered in terms of money (mass market
discounts, end of product run-out discounts) it’s also worth noting that by the time a
product hits the late majority, it should be at its peak of energy efficiency and time effec-
tiveness, and be able to be easily taught or learnt by the time poor end of the market.
Laggards: (Want not, adopt not and/or tried and it failed)

Laggards are the most complex of the categories and are only really defined by a single,
unifying characteristic – they haven’t adopted your idea and they’re not about to adopt
it either. Technically, everyone starts in the laggard category, and your membership of
134

another group (early adopter, etc.) is related to the speed at which you go from ‘Do not
want’ to ‘Mine’ when encountering the idea, good or service. Laggards range from
being extremely radical groups (leaving the innovators well behind in the risk-taking
stakes) as they reject the widespread trends in the market to plot their own course, to
being extremely cautious and fussy, waiting for the product to reach their exacting stan-
dards. Basically, beyond non-adoption, there’s not much else that binds the group into
a cohesive unit. The result is a large number of laggard sub-groups, some of which are:
◦ Traditionalists, who previously formed the classic view of the laggard. These are the
strictly conservative, often extremely religious type of people, who are set in their
ways and not about to change. Whilst they exist, their reasons for rejecting your
idea are usually based on a lack of compatibility between the idea and their lifestyle
and beliefs. Consequently, if the product is altered enough to be compatible, they’ll
leave the laggard spot. The Amish view of technology is probably the best example of
this approach – they don’t view technology as having an inherent merit (eliminating
them from innovators) and don’t believe that products should be used to create dif-
ferences in the community (early adopter out). If anything, they’re the prototypical
perfect early majority group with their carefully calculated decision making. If the
product is compatible, they’ll adopt it. If not, then the lack of compatibility, not the
conservative nature of the group, is the point of failure.
◦ Chronic Know-Nothings, who aren’t so much laggards by choice but laggards by
default since they’re not aware of your offer to the market. They may not be your
market and may never have heard of you, and that’s why they’re not buying into
the product. People often fall into the laggards category when there’s a gap between
the release of a new product and news of the product reaching a market segment
(of course, if the market segment responds immediately, they jump from laggard
to innovator).
◦ Conscious Choice Rejecters are well informed, well educated, extremely well aware
of the benefits and costs of your idea, product or activity and have declined your
offer anyway. This is possibly the most hated of the laggard groups because they’ve
gone through all of the same decision-making steps as the people who adopted the
product but they said ‘no’ rather than ‘yes’. Respect that and let them go (if you need
them that badly for survival, you should get a better business model). These are the
rebellious late adopters who didn’t buckle to social pressure or the deliberate early
majority who found no merit in your product.
◦ Cautious Super Adopters are the supremely late adopters by action despite being
up there with the innovator class for discovering the concept. They’ve been sit-
ting back and waiting for the idea to reach the feature-rich, cost-reduced version
that’s almost (if not actually) fully functional. They’re best considered as non-risk-
taking innovators.
If you consider the innovation adoption categories as a soccer team, the innovators are
the goal keepers, the early adopters play up front in the forward line as wingers and
strikers, the early majority look after the defence, and the late majority bang the ball
around in the midfield. In this metaphor, the laggards are the reserves bench, including
135

e-marketing
the players who train in the squad and don’t make the reserves – mostly invisible, not
terribly glamorous and utterly vital for the functioning of the whole side. Within the
laggards category, the bench players are those who are laggards by choice because the
product is insufficiently advanced, doesn’t do the job yet or lacks a key feature; they
will come off the bench as soon as that feature is available. Other laggards won’t ever
want the product, and as such, make up the groups noted in the market segmentation
as people who you don’t want using the product (Chapter 3).
Interconnecting adopter attitude and innovation characteristics

Innovation adoption involves two elements: the adopter and the innovation. The devel-
opment of an offering of value to satisfy the needs of the consumer needs to be
measured against two innovation concepts: Rogers’s (1995) innovation characteristics
list and the relative novelty of the idea.
Rogers’s (1995) innovations characteristics list

The most vital aspect of determining the speed at which someone moves from non-
adopter (proto-laggard) into one of the adopter categories is the nature of the offering of
value and whether it successfully anticipated and satisfied the customer’s needs. Rogers
(1995) outlined five characteristics which make the critical difference in the mind
of the consumer when they’re assessing a new product against their existing options
(Chapter 6). These are:
◦ relative advantage, which is the way in which your new idea, product or service beats
its predecessor in head-to-head competition. Twitter beats blogging in broadcasting
to listening audiences for speed and brevity. E-mail beats physical mail for speed.
Physical mail beats Twitter and e-mail for delivering boxes of real stuff and so forth.
Relative advantage gives the consumer a reason to have a go at the product. Failure
to attain relative advantage (do something better than how it’s already being done)
is usually the main killer of new products.
◦ compatibility, which is the extent to which whatever you’re offering links into the
rest of the lifestyle of the customer. It also includes the extent to which the customer
has to mess around with their lifestyle, daily routines and/or learn new behaviours to
make the product work for them. Typewriters begat computer use for word processing
which, when used for letter writing made e-mail seem just a logical step from ‘print’
to ‘post’. Once comfortable with e-mail, other approaches that sent what you wrote
on screen out into the Internet were fairly compatible with the idea of using the
computer for communication.
◦ complexity, which is the relative difficulty of using and understanding the innovation.
This is a dual-edge sword – intensely complex products sell to markets seeking com-
plexity but, simultaneously, there’s a massive push away from complexity towards
streamlined products that are ‘easy’ to use. Twitter took off in part due to the
low complexity (say what you’re doing in 140 characters). At the same time, peo-
ple insist on playing Sudoku for fun, so complexity still sells in the marketplace
136

(seriously, it’s the same sets of maths puzzles we hated at primary school now sold as
nostalgic difficulty).
◦ trialability, which is the ‘give it a go’ factor that lets people try the product out
without committing themselves to it wholeheartedly. More trialability means greater
immediate uptakes as people use the trial to figure out the compatibility, com-
plexity and relative advantage. Trial can take the form of beta testing, invite-only
accounts or free accounts where there are paid upgrade options (Flickr, Remember
The Milk, Livejournal).
◦ observability, which is the level of visibility of the use of the product to other members
of the adopter’s social group. This ranges from near anonymity and just-under-the-
radar activity online to the incredible visibility of joining your friends on a social
media site. Gregor and Jones (1999) found that the Internet was generally regarded
as a low-visibility product which relied on word-of-mouth communications for its
visibility (which is why the social media networks are crammed full of early adopters
who love to broadcast word of mouth, and why the Internet is a lot more visible
these days).
Table 5.2 provides a brief summary of how the innovation adoption characteristics inter-
act with the innovator categories and, as a result, require different offerings of value for
each of the marketing segments (Chapter 6).
Table 5.2 Innovation characteristics by innovation adoption category
Relative
advantage Compatibility Complexity Trial Observable
Innovator Novelty Limited Maximum In the alpha Noticeable if

and beta test it works
Early Trend- Leadership Status symbol In the Used to
adopter setting invite-only promote their
beta test own visibility
Early Followership Fashionability Moderate Upgraded Important to
majority from a free be seen to be
account fashionable
Late Compliance Forced Simplicity Free account Complains it’s
majority everywhere
Laggard No Not Too complex Signed up, Noticeable by
advantage compatible couldn’t see their absence
the point, left
Relative novelty of the idea

Thankfully, not all innovations are equal, and there’s a sliding scale of ‘really new’,
‘quite new’, ‘not that new’ and ‘neither new nor improved’. These four categories are
137

e-marketing
based on a combination of the relative compatibility of the product to other ideas (con-
temporary and historical), the audience’s familiarity with the idea (Chapter 3) and their
experience with other products in the same area.
◦ Really new products – RNP (discontinuous innovations). These are the game break-
ers that redefine an industry or marketplace. This type of idea creates new markets,
defines new product categories, causes the consumer to form new behaviours and is
difficult to associate with a single existing product. Really new products are exceed-
ingly rare and very hard to move past the innovators in their first entry to the market
because they bring about such a radical shift in behaviour. They threaten existing
social structures (and that doesn’t appeal to the socially conscious early adopter or
more conservative later groups). There’s also a lot of risk associated with really new
products. They’re usually quite complex (the bit with the learning what it is, what it
does and how to create the new behaviours) and invariably highly visible (and not
always in a positive way). As such, most organizations prefer to refine and revise the
really new product prototype to create something more compatible, recognizable and
easier to introduce to the mainstream markets.
◦ Quite new products – QNP (dynamically continuous innovations). These are the sec-
ond generation of really new products and are the radical shifts or upgrades within
a product category. They are significant shifts in technology, behaviour or applica-
tion, with a family tree and heritage that can be traced back to a previous idea or
technology. Computers track back to typewriters that follow a family tree back to
the moveable type of the Gutenberg printing press (as compared to the Glutenberg
sandwich press). These days, most of the leading-edge and cutting-edge develop-
ments of technology on the Internet have a ‘quite new product’ level of innovation
as they replicate something else from offline, online or in between, in a new for-
mat. Same goes for a lot of the work on the mobile technologies (Chapter 13).
Because these products have a heritage to them, they’re easier to communicate
to the market and can be explained in terms of relative advantage and compat-
ibility. Quite new products are often the less complex successors to the really
new products.
◦ Improved products – IP (continuous innovations). These are the products of the mature
markets, where the main changes to the product are driven by reactions in the mar-
ket, competition or improvements in technology and manufacturing, or by an effort
to stave off the decline phase by seeking to use innovations. It’s also important to
note that a product cannot be new and improved. It can be new (QNP or RNP), which
is where no product like it existed, or it can be improved, where it is an update to
an existing product. Improved products are sold on relative advantage and are often
competing against their predecessors for new sales and marketshare.
◦ Continuing product – CP (neither ‘new’ nor ‘improved’). This is not strictly an inno-
vation class but represents the ‘me-too’ products that enter an existing product
category, copy the market leader and provide no new features, benefits, relative
advantage or other distinguishing factor. The closest part to innovation for the
product is that it may be new to the company, but it’s so well established in the
marketplace it can’t be considered innovative or novel.
138

Table 5.3 Category versus class
Really new Quite new Improved Continuing

products (RNP) products (QNP) products (IP) products (UP)
Innovator Strong Medium Limited None

Early adopter Limited Strong Medium Limited
Early majority None Limited Strong Medium
Late majority None Limited Medium Strong
It’s worth noting that the four different categories of product are fairly subjective and
largely based on the market’s opinion. Basically, if the market’s seen it all before (or
it’s been done before) it doesn’t matter if the organization thinks the product is the
newest thing ever – it’s an improved or unimproved product to the market. At the
same time, far too many marketers overlook the novelty of one of their old products
when it arrives in a new market segment. Just because it’s old hat to the firm doesn’t
mean it can’t be sold as an innovation to the people who are seeing it for the first
time (and, equally, doesn’t mean you’ll be going straight to the early majority if this is
a new product to this market). Table 5.3 outlines the match up of the four categories
of product novelty (RNP, QNP, IP, CP) with the four innovation adopter groups (we’ve
dropped the rejection-orientated laggards. They’re just not that into you.)
} Consumer psychographic characteristics of the Internet

People are complicated. The bundles of experience, opportunity, personality and
resources that constitute the average person have a range of impacts on the way we
conduct ourselves on and offline. Hence, there’s an entire field of study (that borrows
heavily from psychology) dedicated to examining the impacts of psychographic charac-
teristics on the marketplace, purchase decisions and behaviours. From an e-marketing
perspective, there’s a select group of personality traits that play an important role in
how the consumer copes with the online world (and approaches e-marketing offers of
value). These areas are:
◦ innovativeness, which is the speed at which you adjust to new ideas and integrate
them into your life. There are two sub-components: temporal innovativeness and
domain-specific innovativeness
◦ novelty seeking, which is the level to which you need new stuff to keep you amused,
entertained or just stave off boredom
◦ attention to social pressures, which is the extent to which you’re prone to pay-
ing attention to social cues from the people around you (or you’re the one issuing
the cues).
139

e-marketing
Innovativeness
Life is the pursuit of novelty. Due to linear time, we’re constantly exposed to new expe-
riences and it’s our innate capacity to cope with these changes that’s reflected in our
innovativeness personality traits. Innovation is the degree to which you cope with new
ideas and are willing to try out something different in terms of products, behaviours,
ideas or activities. It’s predicated on your speed of response (temporal innovativeness)
and whether this is your area of interest (domain-specific innovativeness). It’s also
a learnt behaviour that can be aided by positive experiences with innovation (risks
turning to rewards) or diminished by negative results (product failures, set-backs,
social embarrassment). As such, it’s partly an innate characteristic and partly a taught
behaviour. It’s also part of the generic transferable skill of having the confidence to try
new technology – which we’ve been trying to instil in you since the Introduction (hence
the gauntlet run through the browser, software services and other innovations).
Innovativeness and blogging: putting the theory into

practice
}
When you’re developing a blog, the type of reader you’re planning on attracting will
shape how you approach the content of your blog. If you’re looking for the highly
innovative and novelty prone blog reader, your content needs to be high turnover,
short and sharp, and include fresh takes on new ideas. Consider your role models to
be Engadget, Boing Boing or IO9 in terms of speed of production and the short, sharp
posting styles.
If you’re looking at an audience who still have innovative tendencies, and are more
prone to some degree of restraint for social conformity and novelty, you’ll be well
suited to reading the high turnover blogs and picking out your favourite articles for
discussion and commentary. By taking the innovative content as your input and apply-
ing your own discussion, research and opinion, you’ll be providing the sort of social
endorsement sought by large portions of the market.
Finally, if you’re looking at the far end of the scale for novelty seeking, low
innovativeness and high social approval in your audience, then you’ll be blogging
Top 10 lists, ‘Best of the Internet’, link blogs or reviews and commentaries on clas-
sic television series that have been released on DVD. The Onion is probably the best
example of the low innovativeness readership market, although these types of readers
are becoming increasingly present in the market and well worth considering because
they usually account for about 30 per cent or more of a given population.
Temporal innovativeness (innovation reaction time)

The dominant measure of innovativeness is the speed between you encountering the
innovation and your purchase and use of the product. There’s a bit of debate between
140

measuring innovativeness in terms of product release date (speed from market entry)
or product encounter date (internal innovativeness measure). Either way, it’s based on
reacting quickly to the new idea. Faster response times move you from proto-laggard
into innovator (fastest), early adopter (faster), early majority (slow) or late majority
(really slow). The biggest flaw with externally measured temporal innovativeness is
that it tries to ignore factors such as financial resources which are often the barrier
between desire and action. If you’ve seen something new, wanted it instantly but had
to wait until the money came together to buy it, you’re still displaying all the important
temporal innovativeness indicators.
Domain-specific innovativeness
Domain-specific innovativeness is the consumer’s relative innovativeness within a spe-
cific product class (Goldsmith and Hofacker, 1991; Goldsmith and Flynn, 1992). This
explains the apparent paradox of people who can be incredibly innovative in one aspect
of life and exceedingly conservative in other areas. Someone who is forever trying out
new software on their computer could be content with a veritable antique of a mobile
phone. Similarly, a voracious appetite for the latest Flash or Shockwave game title can
be paired with a music library that’s still played on a CD player that’s not built into
a computer. Domain-specific innovativeness respects the complexity of modern life
and doesn’t require innovativeness to be a universal personal trait that must apply
to all parts of life to apply to one aspect (‘one for all and all for one’ only applies to
the Musketeers).
External factors
There are a few consumer-centric elements, such as availability of the innovation, pur-
chase price (with subscription fees, etc.) and loyalty to pre-existing products, that can
take the edge off the actual adoption of an innovation even with a strong desire for
the newest, latest and/or greatest devices. One of the advantages of the Internet in
this respect is the diversity of low cost, low involvement novelty that exists within
sites such as Shockwave (www.shockwave.com), YouTube (http://uk.youtube.com) and
Facebook (www.facebook.com). The interest-driven nature of the Internet allows for
the novelty prone to load up on new content through tools such as Google Reader
(google.com/reader) that can be set to draw down new blog content as it happens.
However, the innovativeness of the consumer is only one part of new product adoption
and the part where marketing has the least say in the matter.
Novelty seeking
Novelty seeking is where the consumer prefers the new, interesting and different over
the established, repeated and conventional. This is a sliding scale between a craving for
newness and a preference for the established. Preferences for the established are the cen-
tral selling feature for most cable television and the reason behind increased DVD sales
for popular television series after they’ve finished their free-to-air television run. Whilst
141

e-marketing
the Internet provides a constant stream of new content, television and Amazon.com
cater for the less novelty prone consumer – consider the longevity of Seinfeld, Friends
and ∗ M ∗ A∗ S∗ H re-runs on both cable and free-to-air television as a tribute to the finan-
cial clout of the non-novelty seeking market. A key point here is that novelty seeking
behaviour is relative to the situation – buying a copy of any Greatest Hits album through
iTunes could be novelty seeking if you’ve only just found out about the band or it
could be the conservative reacquisition of tried and tested music. Marketers have a ten-
dency to favour the novelty seeking approach (hence product changes are ‘new’ and
‘improved’ rather than ‘restored to older backup’). That said, there’s a very good market
for nostalgia which is accentuated when a range of new music and video technologies
(DVD, CD, Blu-ray, MP3, psidrops) arrive on the market causing people to repurchase
their classic albums on the new format.
Attention to social pressures

Social pressure works in a cyclical fashion as innovative adopters tend not to pay atten-
tion to peer pressure and are free to act on their interest in the new thing without
stopping to consider what their mates think about the idea. In contrast, if you’re prone
to needing peer approval, you’ll be waiting until after those peers have tried out the
innovation and passed their judgement so you can follow their lead. It’s a perfect Catch-
22 scenario for a social group with strong intra-group influence – no one can make a
move to try out the new product until they know their peer group’s opinion and no one
has an opinion because they’re all waiting for each other. As a marketer, you can short
circuit this loop with word-of-mouth advertising (Chapter 7), celebrity endorsements
and the ‘every-person’ peer equivalents in the advert copy. Social influence is a tricky
aspect because it also links up with three of the primary adopter categories. The short-
hand note is that innovators don’t care about peer approval – the early adopters are the
peers who do the approving and the early majority waits to find out which products are
approved by the early adopters.
} Consuming the Internet – consumer behaviour

applications of the Internet
Tracking the behaviours of consumers on the Internet is increasingly more complex as
the market expands, fragments and becomes more adept at making the best use of the
technologies to suit its own needs. This section of the chapter covers:
◦ customer co-creation of value

◦ product use positioning using actual types of consumption of the Internet
◦ generic site visitor types which can be used for market segmentation
◦ the connection between strategic and consumer use of the Internet.
142

Customer co-creation of value

Co-creation of value is a process by which the maximum value from an idea, behaviour,
good or service comes from combining the features and benefits of the offer with the
consumer’s willing participation in the consumption process (Chapter 8). The idea has
its ancestry in services marketing as a key determinant of the usefulness of certain
types of services (namely, where if you don’t participate, the provider can’t give you
the best advice, assistance or support). In the last decade, the trend in commercial
marketing has been to expand the co-creation idea away from just services and into
physical goods through the idea of embedded services (Chapter 8). Vargo and Lusch
(2004) suggested that the true nature of physical goods wasn’t the atoms and circuits –
instead, they argued that the real use of a physical object is what you can do with it
from a problem-solving, need-meeting perspective (physical goods with embedded ser-
vices then effectively become just a form self-service). Whilst it can be very weird at
times to ask ‘What’s the embedded service of a Aero bar?’ it’s useful to consider these
ideas in the context of online service delivery.
Co-creation of services has four factors in e-marketing. First, every aspect of online
behaviour that introduces user-generated content is based on the co-creation prin-
ciple. Facebook (www.facebook.com), YouTube (http://uk.youtube.com), Flickr (www.
flickr.com) and Twitter (www.twitter.com) are just empty spaces without user-provided
content, whether it is generated through participation in hosted objects or created off-
site and uploaded. Similarly, the virtual space of Second Life (www.secondlife.com),
World of Warcraft (www.worldofwarcraft.com) and the Halo servers are all functions of
co-creation (Chapters 9 and 14). Wikipedia (http://en.wikipedia.org) is dependent on
the co-creation of value by the user-contributors who edit, add and (mostly) enhance
the encyclopedia’s content.
Secondly, unlike physical objects, most software doesn’t acquire any inherent merit
or value simply by existing. Having unused copies of Flock, Halo, Photoshop, Tetris or
Open Office installed on your machine isn’t the same as having a vast bookshelf of
unread books. People rarely open the applications and programs menus to see what
you’ve got loaded on your computer when they come to visit. The same can’t be said
for those visitors and your unwatched DVDs and unread books on display.
Thirdly, if you look at the Introduction shopping list of parts, sites and supplies, you’ll
find that most of them require your active participation before you unlock the inherent
merit (let alone get to the advanced benefits level). Take the case of the Greasemonkey
plug-in for the Firefox browser (Introduction). Greasemonkey is only as useful as you
make it through customization, tinkering and using the scripts to enhance your use of
other people’s sites. The humble web browser is only as useful as the sites you’re loading,
and the word processor only becomes valuable when you’re in the process of writ-
ing. e-marketing’s high level of embedded services make it an ideal place for customer
co-creation of value to co-exist with the service dominant logic view of marketing.
Finally, customers aren’t always looking for co-creation opportunities. There’s a quiet
movement of resistance in the marketplace to having to pay the bill for the product
and do most of the work. Co-creation of value is a variable trait that depends on cus-
tomer values, willingness to participate and – depending on the visibility of the creation
143

e-marketing
process – the customer’s willingness to take social risks. Unsurprisingly, co-creation is

much more likely to appear at the innovator and early adopter phases and slightly less
likely to be present around the early and late majority phases. Keep in mind that the
notion of use innovation, which is the process of coming up with new ways to use an
old product, is a form of co-creation, so it’s not the exclusive domain of the innovative.
It’s also worth considering the extent to which the co-creation behaviour can be ritual-
ized, observed and easily mimicked to enable the consumers with higher levels of social
awareness to co-create value in the ‘proper’ manner. Co-production is a factor to con-
sider when designing the value offer (Chapter 6), setting the position of the product in
the marketplace in the minds of the consumer (Chapter 7) and engaging the customer
in ongoing relationships (Chapter 8).
Generic site visitor types

While each marketing segmentation strategy can draw from the existing literature and
findings, the final strategy will be based on a unique set of variables determined by the
product and the organizational goals. The market typology presented here, developed
by Lewis and Lewis (1997, in Breitenbach and van Doren, 1998), is an illustration of the
types of market segments that can be developed to outline broad market needs, which
ties into strategy (Chapter 3), tactics (Chapter 4) and product development (Chapter 6).
The five generic visitor types include:
1. Directed information seekers: people who search for timely, relevant and accurate infor-
mation on a specific topic or set of topics. Wikipedia, Google, the International
Movie Database and Amazon are their home grounds.
2. Undirected information seekers: the classic ‘web surfer’ model of the users who follow a
random interest-driven path, clicking on links of interest and information that looks
new, interesting or different. These are the people who power social bookmarking
services such as StumbleUpon and Delicious, and who love any site that has ‘Link of
the Day’-style content.
3. Bargain hunters: who are there for the shopping, discounts and cheapest options.
In addition to searching for discounts, giveaways and free samples, they are most
likely to be the downloaders of shareware or freeware programs. They’ve got Google
alerts on ‘brand name’ plus discount, subscribe to newsletters offering sales and deals,
and probably have automatic searches saved at eBay as well. They’ll be members of
one or more coupon-trading sites.
4. Entertainment seekers: who are in this for the fun and tend to see the Internet as a very
large toy box (whilst having a small number of sites they heavily frequent). You’ll
know this type if you’ve friended them on Facebook – you’ll be getting invitations to
play various Facebook games, and whilst they seem to be starting a new game every
week, they’re probably playing all the old games as well (we don’t know where they
find the time either). Also in this category are online gamers, YouTube fans, movie
trailer downloaders, online radio listeners and anyone else in pursuit of a hedonistic
outcome from their Internet experience.
144

5. Directed buyers: who are the hard-core shoppers of the online world. They’re not
in this for the pleasure of the hunt that drives the bargain hunters, rather, they’re
consumers on a mission, and once they’ve hit the target, that’s it. They are online
to find the product they want to buy, rather than to research it, play with it or
take home a sample version of it. They’re much more likely to buy direct from the
manufacturer, although they can be found on Amazon as well as eBay.
Product use positioning

Back in Chapter 4, one of the available positioning strategy techniques involved focus-
ing on the way the product was used by a specific market segment. The following section
outlines a set of uses of the Internet, common user behaviours and ways of using a
website that can be considered as segmentation and positioning variables.
This is the ‘behaviour’ end of consumer behaviour. Dann and Dann (2004) outlined
a collection of different reasons for using the Internet as a prototype usage behaviour
segmentation strategy for the Internet. The behaviours on this list aren’t mutually exclu-
sive – anyone may be motivated by one or more of these approaches as they make use
of the technology at their disposal. In addition, we’ve also connected the consumer-side
behaviours here back to the organizational objectives for using the Internet (Chapter 3).
The list includes:
◦ Using the Internet to learn, which includes searching for items of interest, learning new
ideas and old ideas, and tracking down points of trivia (such as lyrics to songs, actors
in movies and whether that childhood memory of a cartoon about a blue–green
environmentalist was actually real). The Internet has the near-perfect framework for
text-based information search and the idea of the semantic web is an attempt to
develop a text index of images, sounds, video and experiences. Sites that support
and encourage information seeking include the Internet Movie Database (www.imdb.
com), Wikipedia (www.wikipedia.org), blogs, Flickr and others.
• Related business objective: information dissemination, promotion

◦ Using the Internet to search, which is an applied form of learning based on either
answering a specific question or hunting down additional information for problem-
solving purposes. Searching has a couple of interesting side issues in that it relies
heavily on the consumer’s ability to conceptualize keywords that describe their prob-
lem, top-of-mind awareness (Chapter 7) and unprompted recall (or semi-prompted
recall if you’re getting Google to provide you with auto-completed search terms).
• Related business objective: information dissemination, promotion

◦ Using the Internet to communicate, which is the use of the Internet for conversa-
tional purposes and to maintain contact over distance (or proximity if you’ve ever
twittered to the person at the end of the dinner table). This is facilitated through
voice over IP (www.skype.com), e-mail (Gmail), various embedded chat systems
(Facebook), IRC channels, social media messaging (FlickrMail), instant messenger
145

e-marketing
(Live Messenger), Twitter (twitter.com), Plurk (www.plurk.com) and SMS/MMS for

the mobile inclined (Chapter 13).
• Related business objective: promotion
◦ Using the Internet for convenience, which is the motivation when the Internet provides
a relative advantage over any offline or combined online/offline activity. The greatest
benefit of the digitization of knowledge, communications and commerce has been
the massive reduction in barriers for a whole array of previous inconvenient activity.
This picks up on several of the technical aspects of the Internet – the 24/7 ‘always
on’ nature of the platform (Chapter 1), globalization (Chapter 11) and self-service
delivery (Chapter 8).
• Related business objective: cost saving, cost cutting, behaviour change
◦ Using the Internet to be part of a community, which is using your Internet access as a
facilitator of intra- and inter-group activity within virtual geographic regions such as
cybercommunities (Chapter 9), the virtual world (Chapter 14) or specific membership
websites as a means to augment offline community. Community structures (offline
and online) have strengthened with the advent of the Internet as it’s become a lot
easier to organize, communicate and continue offline conversations with other com-
munity members. For example, the local Twitter Underground Brigade can organize
a get-together through Facebook Events, comment on it on Twitter during the event
(for those who couldn’t be there to feel like they’re still part of it), post during-the-
event photos to Twitpic (www.twitpic.com) and after-event photos to Flickr (www.
flickr.com). Being able to find like-minded people with shared interests is a lot easier
online than it’s ever been offline and with massive reductions in the costs associated
with distance and access to community (Chapter 9).
• Related business objective: behaviour change, entertainment provision
◦ Using the Internet to be anonymous, which has a few pros and cons, but basically
accepts that in the privacy of your computer screen, you’re free of certain social
signifiers that are attached to your physical body (height, weight, gender, race,
voice). That said, a decade of experience with the anonymous online world indi-
cates that the loss of physical cues tended to produce environments where everyone
assumed everyone else was a white, middle-class, young male. Understandably, that’s
hardly liberating for anyone. Further, developments in tracking tools, including web
browser cookies, revealed that the perceived anonymity of the Internet was over-
stated. Certain characteristic traits carry even in the lean media landscapes of text
communications – regional slang, coded meaning and the perennial dispute over
the number of vowels in the word colour/color. Similarly, rapid advances in tech-
nology have effectively removed the reality of privacy and anonymity from a large
portion of the Internet whilst still giving the perception that since it all happens
in your computer monitor, nobody else can see you. (Chapter 15 will put paid to
that assumption.)
146

• Related business objective: behaviour change

◦ Using the Internet for escapism, which is enabled by the sense and feeling of anony-
mous access to the world. It’s a lot easier to find an online pirate community (virtual
world, community, or other space) and get your fill of swashbuckling online if you’re
uncomfortable with the thought of parrots, eye patches and buckled swashes in
the physical world (www.talklikeapirateday.org). Escapism can be facilitated through
online video gaming services (www.steampowered.com), massive multi-player online
gaming (World of Warcraft, City of Heroes), massive multi-person online loitering
spaces (Second Life), virtual world for chat (Habbo Hotel) and other communities
and virtual geographies that enable escapist behaviours (Chapter 1).
• Related business objective: entertainment provision

◦ Using the Internet for recreation, which really shouldn’t need explaining, but with
the excessive levels of e-marketing content pushing business as the sole domain
of the Internet, there’s a tendency for people to forget that online activity can be
a leisure pursuit. The Internet is fun, and there’s plenty of entertainment to be
found and pleasure to be had from things both complex and simple. Most impor-
tantly, it’s also worth remembering that anytime you see someone getting worked
up about the Internet as a serious place for serious business, it’s also the same
medium that contains lolcats (www.icanhazcheezburgers.com) and Graph Jam (www.
graphjam.com).
• Related business objective: entertainment provision

◦ Using the Internet to keep up with the Joneses, which is using the Internet to see what
the fuss is all about, or trying out the latest fashionable device, community or site.
Whilst you may think it’s more early and late majority, innovators still have to ensure
they’re a step ahead (and that’s frequently a lockstep ahead of the early adopter).
Sometimes you can also use the Internet to read up on the offline stuff you’ll need to
be conversationally adept at feigning interest in when discussed at work breaks (try
Wikipedia for summaries of television shows and the International Movie Database
for movie coverage).
• Related business objective: information dissemination, sales, behaviour change

◦ Using the Internet because it’s inherently awesome, which is the use of the Internet for
no reason that can be explained without waving your arms, uttering the words ‘Awe-
some’ or ‘Because’ and a period of silence with waving of arms as you completely
fail to form coherent sentences. This is experiencing inherent merit, and when it
happens, it’s a great consumer-side experience. Just don’t rely on it as your primary
sales mechanism.
• Related business objective: behaviour change

◦ Using the Internet as a vending machine, which is using the amazing array of
software vending machines such as iTunes (www.apple.com/itunes) and Steam
147

e-marketing
(www.steampowered.com) which provide automated purchasing and product deliv-

ery across the Internet (Chapter 14).
• Related business objective: sales, cost saving, cost cutting

◦ Using the Internet as an ATM, which is electronic banking, share trading and online
transactions (bill paying with PayPal). Any form of e-commerce where the consumer
is engaged in self-service behaviour (e.g. online ticket sales or electronic banking)
counts for this type of behaviour positioning.
• Related business objective: sales, cost saving, cost cutting

◦ Using the Internet for self-expression, which can be self-publication (websites), user-
generated content (uploaded video, audio or photo) or blogging, microblogging and
related activity. This includes the re-creation of an online version of yourself through
your online self-identity as expressed in self-publication or through your involve-
ment in computer-mediated environments, and your selection of avatars, icons,
usernames and URLs to perpetuate your ‘self’ brand (Chapter 7).
• Related business objective: information dissemination
Rejection as a legitimate form of consumer behaviour

Finally, marketing has to learn to accept the judge’s decision. Some people will never
adopt your product. They are not fools, idiots or laggards. They do understand the
merits associated with your invention. It’s just that they have tried it, found they don’t
like it and engaged in rational consumer behaviour and rejected it. Now they are seeking
an alternative means of satisfying their needs, just like they did when they sought your
product out in the first place. They are sane, logical, rational people who will not use the
Internet no matter how hard we try to convince them or what degree of condescending,
abusive or coercive techniques we apply.
Rejection of an innovation is a legitimate part of the innovation adoption cycle,
and in any given distribution of a product, approximately 16 per cent of the popula-
tion will not adopt it for a number of reasons (Rogers, 1995). Add to that the people
engaged in extended trial who later reject the product (Kingsley and Anderson, 1998)
and those who find an innovation which meets their needs more satisfactorily than
the Internet currently does, and you’ll find a substantial proportion of society will be
offline. Accept this as a given factor in your market – your customers may not want
to be online and may resent being forced to go online just because you decided that it
would be better for your business for your customers to be online. Let the customers
come to you online, but do not force people into a potentially costly and difficult inno-
vation adoption process just to gain access to a product they previously had available
to them offline. Remember, even if 84 per cent of the population is eventually online,
there will be a 16 per cent offline niche market looking for someone to supply equiv-
alent offline services to them. That is a viable economic niche for an online or offline
marketer to pursue.
148

} Conclusion
This chapter is the forerunner to the product development, branding, relationship mar-
keting community and social media sections. Consequently, many of the ideas, parts
and pieces covered here will be referred to in later sections and will become progres-
sively more useful over time. On your next pass through the chapter, concentrate on
the types of consumers and the way these groups differ in their use of the Internet so
you can use any subsequent read through to focus on specific cross-referenced concepts
can be applied to the later ideas.
} References
Books and journals
Breitenbach, C.S. and van Doren, D.C. (1998) ‘Value-added marketing in the digital domain:
enhancing the utility of the Internet’, Journal of Consumer Marketing, 15(6): 558–75.
how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub, accessed 3 July 2010.
Dann, S. and Dann, S. (2004) Strategic Internet Marketing 2.0. Brisbane: John Wiley & Sons.
Gladwell, M. (2000) The Tipping Point: How Little Things Can Make a Big Difference. New York: Little
Brown.
Goldsmith, R.E. and Flynn, L.R. (1992) ‘Identifying innovators in consumer product markets’,
European Journal of Marketing, 26(12): 42–55.
Goldsmith, R.E. and Hofacker, C.S. (1991) ‘Measuring consumer innovativeness’, Journal of
Academy of Marketing Science, 19(3): 209–21.
Gregor, S. and Jones, K. (1999) ‘Beef producers online: diffusion theory applied’, Information
Technology and People , 12(1): 71–85.
Kingsley, P. and Anderson, T. (1998) ‘Facing life without the Internet’, Internet Research: Electronic
Networking Applications and Policy, 8(4): 303–12.
Kotler, P. and Roberto, E. (1989) Social Marketing: Strategies for Changing Public Behavior. New York:
Free Press.
Martin, D. (2009) ‘Twitter quitters post roadblock to long-term growth’, Nielsen Wire, http://blog.
nielsen.com/nielsenwire/online_mobile/twitter-quitters-post-roadblock-to-long-term-growth
(accessed 6 July 2010).
Quester, P., Neal, C., Pettigrew, S., Grimmer, M., Davis, T. and Hawkins, D. (2007). Consumer
Behavior. enhanced 5th edn. Roseville NSW: McGraw Hill.
Rogers, M.R. (1995) Diffusion of Innovations, 2nd edn. London: MacMillan.
Vargo, S. and Lusch, R. (2004) ‘Evolving to a new dominant logic for marketing’, Journal of
Marketing, 68: 1–17.
Web references
Amazon www.amazon.com
Bittorrent www.bittorrent.com
Boing Boing www.boingboing.net
City of Heroes www.cityofheroes.com
eBay www.ebay.co.uk
Engadget www.engadget.com
149

e-marketing
Facebook Events www.facebook.com/apps/application.php?id=2344061033

FlickrMail www.flickr.com/mail/
Flock www.flock.com
Gmail www.google.com/mail
Google www.google.com
Google Alerts www.google.com/alerts
Google Reader www.google.com/reader
Graph Jam www.graphjam.com
Greasemonkey www.greasespot.net
Habbo Hotel www.habbo.co.uk
Halo halo.xbox.com
Internet Movie Database www.imdb.com
IO9 www.io9.com
iTunes www.apple.com/itunes
Jumped the Shark www.jumptheshark.com
Live Messenger www.live.com
Livejournal www.livejournal.com
MySpace www.myspace.co.uk
Open Office www.openoffice.org
PayPal www.paypal.co.uk
Photoshop www.adobe.com/uk/products/photoshop
Plurk www.plurk.com
Shockwave www.shockwave.com
Skype www.skype.com
Steam Games www.steampowered.com
StumbleUpon www.stumbleupon.com
Talk Like a Pirate Day www.talklikeapirateday.org
Tetris www.tetris.com
The Onion www.theonion.com
Twitpic www.twitpic.com
Wikipedia www.wikipedia.org
YouTube uk.youtube.com
150

SECTION 2}
Principles of e-marketing
S
ection 2 of the text covers five chapters which move through a sequence of
e-marketing principles, from the basic concept of the product offering to the
complexity of building a community of support around the e-marketer and their
products. Chapter 6 examines three elements of the marketing mix: product, price and
distribution. These are the first steps in creating a value offering for the e-marketing
marketplace. Chapter 7 continues with the marketing mix as it brings in promotion
and branding while building on the ideas around the product concept. Chapter 8 intro-
duces the extended marketing mix of person, process and physical evidence through
an examination of services marketing in the e-marketing context, where every trans-
action, action and activity conducted online can be thought of as a form of service
delivery. Chapter 8 also focuses on relationship marketing as the foundations for the
development of ongoing commitments to service delivery to the customer and the cus-
tomer’s ongoing commitment of loyalty to the e-marketer. This links into Chapter 9
which examines the advanced form of relationship marketing that surrounds the devel-
opment, maintenance and engagement with the social community structures that arise
through computer-mediated networks. Finally, Chapter 10 brings together the imple-
mentation process from start to finish, ending with a range of measurement and
review techniques.

CHAPTER 6}
Creation, delivery and exchange
of value offerings
By the end of this chapter, you should be:
• on the verge of not coping with information overload

• conversant with the complexity of value creation
• familiar with the price, product and distribution elements of value creation
• able to think about a value offering from the perspective of the marketer
and the marketplace
• wishing we’d taken two chapters to give you the information in this section
instead of one.
153

e-marketing
} Introduction
Chapter 6 opens the principles and practice section of this book. This chapter focuses
on the development of the value offering through three of the four marketing mix ele-
ments (price, product and place). From the outset it’s important to realize that the point
of referring to the outcome of this process as ‘value offering’ or ‘offerings that have
value’ isn’t just to propagate buzzwords and keep industry critics gainfully employed.
Marketing has a distinct technical language that describes in precise terms what you’re
doing, why you’re doing it and how you’re going to bring together what the customer
buys and cheerfully recommends to their friends. In this chapter, we refer to the ‘value
offer’ because it reflects the fact that e-marketing combines product (features, bene-
fits, what it is and what it does) with price (financial cost, non-financial issues) and
the place of purchase (online, download, shipping) in a single integrated exchange.
If you’re working in the offline marketplace, you can focus on either price or product
if you’re confident that the distribution side is handled by the customer showing up in
the store anyway. From our perspective, we can’t assume that the customer will show
up on the Internet (remember m-commerce?) and we certainly can’t rely on them to
browse past our website on the way to checking their e-mail. Consequently, we’ve got
a harder task, and we’re going to have to tackle this using the advanced options in the
marketing mix menu – namely techniques such as product intangibility, price as value
indicator and economies of abundance pricing. The chapter outlines product, price and
place in a single block by highlighting the mission critical elements of these three ele-
ments of the mix as they apply to the creation of an offering of value that’s intended to
meet the customer’s requirements. The next chapter brings in promotion and branding
to draw it all together. We’re also working on the assumption that if you’re lost on the
basic building blocks, you can pick up additional details in any good Introduction to
Marketing text.
} Value offers and customer requirements

Throughout this chapter, we’ll alternate between the AMA (2007) and the CIM (2005)
terms for the product-price-place bundle. The CIM (2005) uses the term ‘customer
requirements’ which focuses on meeting known and established market needs through
market research (Chapter 3) and customer insight into consumer behaviour (Chapter 5).
In the same vein, the AMA (2007) refers to ‘offerings that have value’ which brings in
some of the more recent developments on customer co-creation (Chapter 8). The value
offer consists of five parts:
◦ a viable product that meets the target customer’s needs, wants, desires and require-
ments (and doesn’t necessarily address anyone else’s interests);
◦ which is available to the market through appropriate distribution outlets and choices
(and not necessarily available to those outside the target market); and
154

Delivering value
◦ which is priced affordably for the target market (and not necessarily affordable to
anyone else); and
◦ which is positioned in a way that increases its desirability for that market
(Chapter 7); and
◦ which is promoted in a way that appeals to the target market without being
inappropriate, offensive or aggravating to other markets (Chapter 7).
The tricky part about how this all operates is the split between the consumer’s side of the
equation (needs, wants, requirements) and the organization’s side. We control the fea-
tures, prices, promotional campaigns and distribution outlets. The consumer controls
the interpretation of our marketing mix by converting features to benefits (products
become offers), positioning (in the mind of the consumer) and affordability (consumer’s
perceptions of the value of the offer versus their discretionary budget). About the only
aspect we really control is the distribution channel, and that’s subject to as much inter-
pretation as promotion when it comes to the consumer’s opinion of your offer (think of
a product that’s exclusively distributed through Tesco versus one with exclusive distri-
bution in Harrods). Since we can’t manipulate variables in the consumer directly (and
don’t even start to figure out how to do that either), the only aspects we can adjust,
control and alter are the marketing mix elements at our disposal (Chapter 2). The chal-
lenge in this chapter and the next is to consider how the decisions you make are going
to be interpreted by the customer you’re targeting.
The changed market conditions of the Internet

The nature of the Internet changes the way marketing can and should operate. There
are two areas where the environment, technical conditions and prevailing social mores
of the Internet have fundamentally changed the nature of business. These relate to
the scarcity and abundance issues of physical versus digital products and the global
coverage of the Internet which implicitly shifts everyone into unplanned exporters of
ideas, products or services.
Abundance economics
If you thought it was a challenge dealing with the offline world, at least it has the
distinct advantage of product scarcity when it comes to the offers of value. Scarcity of
resources gives certainty over whether something is finite – if there’s only going to be
10,000 David Beckham remote control action dolls this Christmas, there’s only 10,000
units to ship, sell, store and resell at exorbitant rates on eBay. In contrast, a website
offering a ‘My Little Beckham’ virtual doll which offers all the same functionality in a
remotely controlled avatar (without terrorizing household pets) doesn’t have a technical
replication limit since it is digital.
The lack of finite resources is a significant factor for pricing on the Internet – you
can’t really have a one-of-a-kind digital product, or even a realistically limited edition
(only 10,000 PDF files commissioned for this product). As mentioned in Chapters 1
155

e-marketing
and 2, the near-perfect replication of information changes the physical world model
of scarcity-based pricing to the digital world of abundance pricing. Abundance pricing
is where you charge based on the value gained from the use of common and shared
resources rather than charge for restricted access to limited supply. Scarcity pricing still
has a role in e-marketing – scarcity exists in terms of exclusivity of access based on
time (pay more, go first), priority (pay more, get more), features (pay anything at all,
get more) and social recognition (finite membership lists with associated social status
of being the ‘in-crowd’). Whilst scarcity isn’t dead, it’s becoming appropriately scarce
in the abundance economies of the Internet. Meanwhile, abundance economics has
definitely only just come to the forefront of online pricing (and is still relatively scarce
as a price tactic).
Everyone’s an exporter
Secondly, the Internet is a genuinely global marketplace where the rest of the world
can access your website. Passing comments on the US election on your blog will have
American commentators show up and argue with you. You rarely have someone drop
by for a quick backslap and virtual cup of tea. There’s the usual pros and cons argument
to be had here about globalization, cultural hegemonies and other not-quite-completely
marketing related issues when the entire world can (technically) access any other part
of the Internet (filters, firewalls and government censorship not withstanding). Just
because you’re in front of it, it doesn’t mean the people who run the firewall can’t
see you.
Marketing has taken to the globalization of information and digital experiential
products with much enthusiasm (and the occasional lawyer’s nightmare) as the dras-
tically lowered entry barriers into export markets means any website can operate on
the international stage. Of course, this doesn’t mean that the Internet is free from
import/export duties, taxes and local customs officials when the physical goods do
arrive on the doorstep. Whilst the primary barriers to export have dropped through
cost-effective, simple distribution logistics over the Internet, and cost-effective interna-
tional mail and courier services for smaller shipments of physical products, it doesn’t
necessarily mean that some of the more complex aspects of international shipping have
gone away (Chapter 2). At the same time, whilst the world is at your disposal, your for-
merly geographically defendable target market is also available to everyone else with
business intentions towards your customers. Competition rises in direct proportion to
the lowering of access barriers to the outside world (Chapter 5).
Specific goal-oriented objectives should be developed to take advantage of the
strengths of the Internet when it comes to the global marketspace. The most efficient
use is to adapt those existing activities within the firm which best fit the strengths
of the Web and organizational objectives. For example, if you’re in the business of
selling information that’s reasonably transferable between countries (business advice,
fashion, music criticism) then the Internet is well suited for information export. At the
same time, if you’re in the heavily regionalized information marketplace (tax law,
regional insurance, local government) there’s no real need to develop global distribution
channels if your value offering is only relevant to the local market.
156

Delivering value
} Marketing mix for value creation

Building something of value for somebody else is the foundation of business and com-
bines art, science and little bit more than that. The fundamentals of value creation are
grounded in understanding consumer behaviour at the technical level (know the mod-
els, mechanisms and frameworks – Chapter 5) and understanding the specifics of how
‘your’ consumer is likely to behave. When we discuss target markets in this chapter,
we’ll occasionally refer to them as ‘your’ customers, since they’re the group you are try-
ing to address in your marketing activity. You don’t own them per se, and competition
says they’re free to swap and choose their own solutions to meet their requirements.
It’s just easier for us to consider a basic market segmentation of ‘yours’ being the ones
you’re targeting, ‘theirs’ as the ones you’re targeting who are with your competitors,
and ‘not thine’ as the target markets you neither need nor want.
Segmentation is absolutely critical in guiding marketing mix decisions. You cannot
make a universal product which is priced at the universal reference point and delivered
through universal distribution (Chapter 3). What you can do through segmentation is
make very precise decisions about the marketing mix aimed at triggering very specific
responses from part of the market. Whilst we’ll talk about generic decisions in the mod-
els in the rest of the chapter, you will need to make these decisions based on what you
know about your current customers, potential customers and non-customers.
The marketing mix framework requires an upfront declaration – this section is about
your product, your pricing strategy, your choice of distribution and your plans for
promotion. Whilst the whole point of the exercise is to create a value offer for the
marketplace, you’ll be focused on what you can do with the resources at your disposal.
It’s vital to remember that the purpose of marketing is to meet customer needs prof-
itably, which means retaining the balance between what the market wants (everything,
free) and what you can provide (virtually nothing, expensively priced) so that you both
win (something of value, reasonably priced for profit). Remember that the marketing
orientation is customer centric, not customer dominated. With these caveats in mind,
the remainder of this chapter is divided into the first three elements of the marketing
mix: product, place and price.
} Product theory
A physical product is the total bundle of features and benefits that the seller offers
the consumer. It includes the visible tangible product, any intangible benefits such as
status and prestige, lifestyle benefits such as convenience, and ancillary services such
as warranties and helplines (McColl-Kennedy and Kiel, 2000). The digital product is a
similar proposition – a bundle of benefits that the seller offers the consumer (which exist
in an electronic medium such as a computer, console or handheld device) that offer a
series of intangible benefits based on their ownership and use by the consumer along
with any ancillary services that augment the intangible digital product. Consumers buy
the benefits they believe they will receive from the functionality, ownership and use of
157

e-marketing
a product (Fojt, 1996). Rather than buying ¼ inch drills or ¼ inch holes, they buy the
capacity to create ¼ inch holes when the mood takes them. Marketers, on the other
hand, tend to sell the features of the drill, the range of drill bits and the variety of holes
that could be made available in a wide range of substances as they look for the message
that matches the need in the market with the product on offer. The trick is to find out
whether the market wants a set of holes with precision (and thus requires your drill) or
just wants a way to sink a boat (which opens up a range of other options). The more
flexible you can be in presenting the feature set which you control to the market, the
more likely the market is to figure out how your product can meet its requirements for
drilling holes in things. This chapter introduces a suite of product theories to help you
understand what it is that you’re offering to your customers and what the customers
are looking for from you.
The extended product model

Kotler and Roberto (1989) developed an extended model of products to encompass
the variations on products that assist social change. In their model the marketer has
to consider which of the three elements (an idea, a behaviour or a product) should
be the focal point of the change campaign. We’ve borrowed their initial concept and
exported it across to the Internet where online products are faced with the option of
being about an idea (content, belief, attitudes, values), a type of activity (one-off or
recurring behaviours), can involve some object (physical or virtual, nothing at all) or be
a combination of all three (see Figure 6.1).
In this model, ‘idea’ is the conceptual framework associated with the product
experience and consists of:
◦ beliefs, which are the consumer’s understanding of the facts, knowledge and infor-
mation associated with the product, and which can be generated by the product
itself
◦ attitudes, which are cognitive interpretations of positive and negative reactions to
the product and which may incorporate emotional responses of liking or disliking
a product
◦ values, which represent the compatibility (Chapter 5) of the product with the con-
sumer’s personal view of the world in terms of ethics, morality and the sense of social
appropriate conduct.
‘Behaviour’ divides into two categories based on one-off immediate actions and recur-
ring activity. One-off behaviour covers a few different options such as the product being
offline dominant so that the one-time event is the purchase for shipping and the rest
of the associated behaviours are offline. Alternatively, the one-off behaviour can be the
initial registration and set-up behaviour as experienced in the Introduction, where you
registered for a range of services. The gap between one-off and recurring behaviour
explains why a poorly considered recruitment campaign can result in massive num-
bers of people signing up to a service (Twitter) but failing to actually use the service
158

Delivering value
Belief
Idea Attitude
t
en Values
nt
Co
One off
Experiences
Product services Behaviour
Recurring
Vi
rtua
lg
oo
ds No goods
Object Virtual goods
Physical goods
Figure 6.1 Branching diagram of the product components

Source: adapted from Kotler, P. and Roberto, E. (1989) Social Marketing: Strategies for Changing Public
Behavior. New York: Free Press
(60 per cent of accounts remain inactive – Martin, 2009). Providing the answer to the
‘Okay, now what?’ question is a case of supporting an ongoing behaviour. You probably
experienced a set of these ‘Okay, now what?’ moments during the Introduction set-up-
athon, and from this point, we can start demonstrating the behaviours that support
the use of the services (some of you may have found inherent merit in the services,
or worked out your own uses). Ongoing is the extent to which the product is either a
facilitator of an activity or represents an ongoing set of behaviours in order to make the
product valuable to you or your consumers. If you consider the phone for a moment –
the one-off acquisition of a mobile phone is a ‘Now what?’ scenario. Using the phone to
call friends and family is the ongoing behaviour, and the true value of the phone comes
from the convenience it delivers through being used.
‘Object’ splits into three categories: absence of anything, a virtual object and/or a
physical object. It’s usually hard to combine the absence and presence of an object – tea
and no tea being the rare exception noted by Adams and Meretzky (1984) – so for the
purpose of Figure 6.1 either there is no object (virtual or physical) or there is some form
of object which can exist as being physical and/or virtual.
The model can also be used as a way of considering how a product can reach the
market by answering the following questions:
◦ What ideas do the consumers need to have to use the product?

• What facts do they need to know to use the product?
• How do we increase positive evaluation of the product and address any nega-
tive evaluations?
• Does this product contravene any ethical, moral or value positions in the world
view of the target market?
159

e-marketing
◦ What behaviours does the product require for use?

• Are we asking for a non-recurring behaviour initially?
• Do we require recurring behaviours to get the most out of the product?
◦ What is the substantive nature of the product?
• Is this a physical product to be acquired online and supplied offline?
• Is this a virtual product that resides on the consumer’s computer?
• Is this a non-corporeal virtual product that doesn’t stay on the consumer’s
computer when they’ve finished with it?
e-marketing product types

In Chapter 1, the virtual product diagram (repeated here as Figure 6.2) briefly intro-
duced the concept of different forms of Internet-friendly products such as service,
virtual goods, content and experiences (Figure 6.2). It’s also worth remembering that
these four product types are not ‘real’ in the sense of being tangible goods. How-
ever, they’re real to the consumer in the sense of emotions experienced, money spent,
knowledge gained or files acquired. Although home-based computers are fairly recent
inventions, society has quickly transferred ideas of property and ownership from the
physical world. Although the contents of an iPod are completely intangible, you want
to ensure that if you replace the physical object, you also include the data con-
tent on the new device. From your perspective, you’re most likely to be delivering
either content (blogs, YouTube videos, whatever you put on MySpace) or virtual goods
(audio, video or other files) for downloading at this point in your e-marketing career.
This is a relatively easy starting point since a range of services exist to facilitate file
Computer-based Stored Semi-permanent
Virtual goods
Files (eg MP3s, PDF, PPT)
downloads
installed software
virtual world assets
Services
Absorbed
Content
Search
Used
Ideas,
chat, e-mail
knowledge
calendar
thoughts
file hosting
Experiences
Conversations
emotions
interpersonal interaction
interactivity
Temporary Felt Person-based
Figure 6.2 The virtual product portfolio

Source: Chapter 1, Figure 1.4
160

Delivering value
delivery such as Slideshare (www.slideshare.net), Scribed (www.scribed.com), and Lulu

(www.lulu.com).
Virtual goods
Virtual goods are files that require virtual logistics to move from the point of production
(the server) to the point of consumer (you) whilst being semi-tangible in that they
take up storage space on your computer (or iPhone, iPod, Kindle, etc.). Virtual goods
vary a bit in type and nature – whilst there’s an argument to be made that a YouTube
video can be a virtual good, we’d rather put the temporary cached files like streaming
audio and video in the services category. Virtual goods can fill up a hard drive whereas
virtual world goods fill up that virtual world’s storage locker equivalent. For example,
in an massive multiplayer game such as World of Warcraft there’s a finite upper limit
to the actual number of items an individual character can store within the game world.
Consequently, the virtual goods occupy the nearest equivalent of physical space in that
environment (Chapter 14).
Content delivery
This is part service, part virtual good as you experience cognitive reactions to expo-
sure to content online. It ranges from gaining new ideas (or reinforcing old ones)
through reading content, active learning, passive learning and second-hand learning
(new knowledge gained from mere exposure to the Internet – osmosis has never been
so searchable) to thoughts had in reaction to online content (including ‘When will
I learn not to click links from that friend?’). As this is an internalized process, there’s a
need for customer co-production in that you have to play an active role in consuming
the content (you can download a copy of the Matrix, you just can’t learn Kung-Fu by
installing it on your iPod). Content delivery can be relayed by virtual goods (podcasts,
DOC, PPT files, the Introduction’s PDF) although the emphasis is usually on content
delivery through web pages, e-mail and other online content.
Experiences
Experiences are different from content delivery in that these are the emotion reactions
to the content you experience. These are the experiential elements of video gaming and
the hedonic reactions to videos, music and online interaction. Experiences are person-
alized and internal, and subsequently require a bit of customer co-creation. As with the
content delivery, these can be administered through virtual goods, although it’s less
likely that someone’s going to get emotional over a WMV file versus getting emotional
over the content of the film. Never underestimate the value of simple stimulus-response
experiences that provide a constant stream of rewards and challenges (Figure 6.3).
Virtual services
These are your interactions with some form of automated process on a server somewhere
on the Internet and range from checking your e-mail, updating your Facebook status or
161

e-marketing
Figure 6.3 Flash games

adding dates to online calendars through to online banking, money transfers on PayPal,
and more recently, cloud computing. Cloud computing is a remix of the ancient art of
time sharing with contemporary Internet technologies such as file sharing, software as
service and remote computer access. We’ve classified streaming audio, streaming video
and online conversations as part of the services cluster which puts YouTube, Facebook
and Twitter into the service delivery camp.
Tangible to intangible
In terms of their suitability for online activities, products should be evaluated on the
basis of a continuum from tangible to intangible. Few products are considered to be
purely tangible (physical product) or purely intangible (pure service). Certain product
categories, with their mix of tangible and intangible features, are particularly suited
to online development and delivery. As mentioned in Chapter 2, a chief feature of
information-based products is their ability to be sold and delivered through the Inter-
net versus the physical goods which can be sold online and then delivered through
conventional physical channels. Figure 6.4 highlights the typical relevant online con-
tent for a variety of product types. From this continuum it can be seen that while all
product categories and organizations could potentially benefit from online activity, the
relative importance of the online element varies considerably.
One area where the online–offline continuum is inverted from the standard is where
the primary purpose of the site is to sell physical objects (for example, eBay: www.
ebay.co.uk) versus a site which sells physical objects that are the result of virtual pro-
cesses (for example, Zazzle: www.zazzle.com). The most remarkable of these processes
is the avatar printing industry such as Fabjectory (http://www.fabjectory.com/), and
Figureprints (www.figureprints.com) who create physical world copies of creations ini-
tially developed for entirely virtual environments. There are 3D-scanning firms that can
reverse the process and put a copy of something real back into the virtual world. Funda-
mentally, the divide between the physical and the virtual creates two distinct end points
162

Delivering value
World of
warcraft
Twitter Threadless
Banking
Offline
dominant
Online
dominant
Amazon Pepsi/
Coca-Cola British rail
Figure 6.4 Online to offline

Source: adapted from Dann, S. and Dann, S. (2004) Strategic Internet Marketing 2.0.
Brisbane: Wiley and Sons
on the marketing continuum: products that require a traditional distribution system to

operate in conjunction with online activities (physical products) and products that do
not require a complementary physical distribution system (digitized products).
Offline dominant: physical products and the Internet

Given the nature of the Internet, the main interactions between physical objects and
the Internet are covered by pricing or distribution. Physical objects that interact with
the Internet in their own right (consoles, phones, children’s toys) are generally divided
into m-commerce (Chapter 13) and ‘beyond the Web’ (Chapter 14). For the most part,
the more physical the product, the less likely you are to need an e-commerce product
mix compared with the distribution mix.
Intangible goods and digital rights management

If you’re dealing with virtual goods, digital goods and anything that takes up perma-
nent memory space on a hard drive (USB, iPod, DVD, etc.), you’re going to need to
balance out the customer’s sense of ownership with any digital rights management
system you plan on implementing as part of a digital rental scheme. One of the com-
plexities of the abundance economy is that the ease of replication of data alters the
consumer’s and the marketer’s perspective of its value compared with physical objects.
Whilst renting a physical disc which you return at the end of the period has the hall-
marks of temporary ownership (acquisition and return), having a software package that
time expires feels different. It’s still taking up space on the hard drive, it’s there in the
Programs menu and just doesn’t work until you pay the next round of rental fees. Dig-
ital products have a semi-permanent state even when rented, and whilst those iTunes
movies evaporate at the end of the rental period, they’re still taking up hard drive space
during the 30-day waiting period. Downloading a video rental from iTunes feels no
different from downloading a permanently owned file from Gmail (time to download
not withstanding).
163

e-marketing
One of the problems of the digital rights management (DRM) era has been the effort
expended to reduce the ways and means by which digital goods can be owned by the
consumer. When it comes to movies, music, data, images and other files, most users
feel as if they own the data product with the same sense of ‘real ownership’ as they do
for the DVD in its case on the bookshelf. If real ownership is a feature sought out by
the market, sell it to them. DRM should be used by the e-marketer to favour the paying
customer as a means for creating additional value over the lifetime of a customer, and
could play a useful functional role in relationship marketing (Chapter 8). One of the
benefits of DRM systems is the ability to track ownership of a digital good over the
lifetime of a user account. This results in the compilation of a long history of purchases,
cross-recommendations and direct sales from your database of product ownership and
preference information. If your DRM system knows the customer bought the last three
albums from a band, it should also be up to recommending the solo albums from the
artistes and the new ‘Best of’ hits compilation. Not only that, but there’s the capacity
of DRM systems to work as digital product insurance that covers the end user against
hard drive loss. Companies such as Valve have used DRM systems to create a form of
insurance whereby the ownership of the right to download and install the software is
tracked over the lifetime of the account – once you’ve bought it, you’re assumed to be
legitimately entitled to download and use it on any PC where you can install and run
the Steam client. Whilst there are significant privacy issues to be addressed (Chapter 15),
there’s also market value to be created by treating the legitimate owner as the legitimate
owner of their data. This contrasts with the current tendency of DRM systems to treat
the paying user with suspicion and hostility as a temporary (and untrustworthy) lease
holder of the digital goods.
The problem for e-marketing is that the use of DRM in its most restrictive manner
limits the value and use of purchased goods (maximum numbers of reinstalls, limited
numbers of re-downloads of the software). Whilst the business model of hitting the
customer for multiple purchases of the data might fly with the accountants, it’s poorly
received with the general public and a very poor fit with the satisfaction of customer
requirements. Few customers appreciate having to pay repeatedly for something they
feel they already own. Having learnt the value of ownership from physical goods, there’s
an expectation of ownership in the virtual domain. Where DRM is used to restrict own-
ership through repeated verification, you also create an ongoing distribution cost for
your operation. If the customer must validate their products on use each time, you’re
going to have to run validation servers and bear the costs of these being permanently
available. As far as costs go, a second dissuading factor should be the need to maintain
these DRM legacy systems to support older purchased DRM products or face class action
lawsuits if you decide to revoke the ownerships of legitimately purchased goods because
the validation systems cost you too much to run. Don’t expect positive word of mouth
and good brand outcomes if you decide to strip the consumer of their ownership of
something they believed is their property. It doesn’t matter how clearly you stated it
was borrowed time in the End User License Agreement (EULA), these are rarely enforce-
able in the court of public opinion for your company’s reputation. You may think of the
data products as long-term leases, but if the consumer thinks they own it, be prepared
to cop the fallout if you try to confiscate it from them later.
164

Delivering value
Information as product
The product category for which the Internet is most suited, and for which it was
designed, is information. Frieden et al. (1998) argue that information as a product
has sufficient unique characteristics to differentiate it from both physical goods and
services. They identify the characteristics of the information product as follows:
◦ Information has a mathematical form (mode) regardless of the medium of transmis-

sion. In other words, information has the capacity to be digitized without any loss
of content.
◦ The mode of information refers to how the information exists symbolically as words,
pictures, numbers or sounds.
◦ The medium refers to the physical means by which information is delivered to users
(i.e. print, broadcast, digital or visual media).
◦ Information may be uniformly consumed by more than one person at different loca-
tions at the same time. While information is the same for all customers, individuals
may choose to interpret and use it differently.
◦ There is no theoretical limit to the supply of information from any single producer.
◦ The consumption of information does not deplete or distort it.
The marketing implications of treating the information product as a separate category

help to focus on its suitability in the online environment. Three elements are important
here: the nature of information, the fact it is an inexhaustible resource and the ratio
between production and replication costs.
1. The flexible nature of information, coupled with the ease of its distribution, removes
many of the economies of scale issues for smaller producers. Conversely, some scal-
ing issues exist when the demand for an information product exceeds the capacity
of the server (reverse economies of scale).
2. Information can be replicated indefinitely without distortion and can be consumed
simultaneously at multiple locations without being extinguished. This has resulted
in the inversion of scarcity-based economic models.
3. Information is comparatively more expensive to create compared with the cost of
replication. This places the product cost centre further back down the value chain
into the hands of the creator rather than the distributor (again with economic
consequences).
Customer co-creation of value and product

Customer co-creation of value takes the benefits–features continuum and tilts the work-
load towards the customer because they’re expected to put their own take on the
product during the consumption process. With that in mind, it’s often useful to offer
the customer a modular framework (or open sandbox) in which they can make their
own set of benefits, in preference to proscribing what you can (and can’t) get out of the
product with a long feature list.
165

e-marketing
Customer co-creation of value is a significant contributor to e-marketing cus-

tomer satisfaction (Chapter 5) and the development of ongoing relationships between
consumers and the marketplace (Chapter 8).
Customer co-creation has a significant impact on the extent to which you can
produce self-service technologies within an e-marketing environment and entrust the
customer with their own outcomes (Chapter 8). It’s particularly noticeable in the Blank
White Server (www.blankwhiteserver.com) concept, where the product is a digital shed
with some basic tools and a squad of enthusiastic developers (BYO people). Similarly,
games such as City of Heroes, World of Warcraft, EVEOnline and others have events,
guilds and infrastructure that are generated by the players who are paying members of
the game’s community. NCSoft has taken this platform even further with the City of
Heroes/City of Villains franchises which have player-created quests and tasks – an area
previously reserved for exclusive use by the game’s creator. This may or may not be the
best way of handling such tasks. The system has been quite heavily exploited by the
player base for maximum gain for minimum effort. This is a form of value maximiza-
tion in the value creation process but not necessarily the form the creators had in mind
when they built the system. From the e-marketing perspective, co-creation can arise at
any point in the core, actual and augmented product as the consumer figures out how
to make use of the offering to suit their own needs.
Three levels of product (core, actual and augmented)

Finally, after considering a range of ways of dividing products into the sub-categories
of services, ideas, digital goods and physical goods, it’s important to at last consider
the consumer’s view of the product in terms of what needs it meets (core product),
what features it has (actual product) and what else it offers to them (extended product).
Core products are the benefits that the product will provide to the customer. These
may vary significantly from individual to individual. Use your market segmentation
from Chapter 4, and the motives list from Chapter 5, to develop higher-level generic
core products for your target market. However, be aware that the core product is the
co-created outcome of combining the actual product with an actual consumer in real
life as they use it for their own purposes. As a marketer, you must cede control of the core
product to the end user for them to feel that it’s truly their solution to their problem.
If you’re Google and someone converts their Gmail account into a Getting Things Done
system using the functionality you’d set aside for sending and receiving e-mail, shrug
and move on with business (or hire them and open up a Getting Things Done service).
Actual product refers to the features, functions, style, branding, positioning and orga-
nization side of the product. Defining the actual product is a lot easier than determining
value since it’s your decisions that result in these elements featuring in the virtual good,
tangible good, service or idea. You need to have a clear view of what the customer needs
the actual product to have in the way of features to let them create their desired core
product – and which of those features are central to the value offering that customers
perceive. On the e-marketing front, it’s the actual product that’s often the most easily
communicated – even Gmail focuses more on the storage space than the ‘convenient
communications’ element.
166

Delivering value
Finally, the augmented product is the bonus level of the product which com-
bines consumer-side elements such as perceived social prestige, word-of-mouth-based
communications about the product and product positioning with the corporate side
elements such as money-back guarantees, insurance and after-market service (tech
support, roadside assistance). Since augmented products include the social messages
associated with the product and brand, you can reposition the same actual product
in the minds of the consumers to provide the rebellious option for the innovator and
social compliance for the late majority. Augmentation of the product is driven through
branding, promotion and online word of mouth (Chapter 7). An augmented prod-
uct also depends on the availability of the product offer to provide add-on features
such as convenience, which are governed more by distribution than the core or actual
product itself.
} Distribution
The art of distribution is as old as the art of war itself. Careful management of supply
lines between secured territories and advance portions of armies made the difference
between success and failure for many military campaigns. In the battle for the consumer
dollar, the management of supply lines is every bit as vital. The advent of the Internet
as a legitimate and popular distribution channel for ideas, services and virtual products
brings another supply line into consideration for marketers.
The Internet is a big place. The advantage of the Internet is that it can be accessed
from just about anywhere without the need to physically relocate to it, through it or
around it as is the case with interactions with places and spaces in the offline world.
The disadvantage of the Internet is that the real world still exists alongside it in a linear,
analogue and eminently physical format. Consequently, when the time comes for the
results of Internet activity to arrive courtesy of the offline world, all the lessons learned
over hundreds of years of shipping goods in the physical world can be applied. The true
value of e-marketing is only really appreciated when you consider (and subsequently
attempt to control for) dependence on the various delivery technologies Chapter 2).
This includes adjusting your online e-marketing activity to maximize your search engine
optimization plan in order to better adapt to the virtual supply lines that connect your
content to the major search engines (Chapter 4).
There’s also the sense that the search engines themselves become one part retail shop
front for idea brokering and one part wholesaler of Internet content. Similarly, virtual
geographies (Chapter 1) become locations for virtual retail shop fronts or supply lines
for e-marketing distribution to make your product available in the same place as the cus-
tomer (Chapter 2). Just to add complexity to the already complex – the management
of virtual supply lines also needs to consider the mobile (Chapter 13) and non-Web
(Chapter 14) marketspaces alongside (or instead of) mainstream web-based distribution
outlets. Finally, the whole point of the operationalization of supply lines, virtual ship-
ping, real world atom movements and distribution is to act on the AMA (2007) ‘delivery
and exchange of offerings that have value’ and the CIM’s (2005) ‘satisfying customer
requirements profitably’.
167

e-marketing
Distribution overview
Distribution, often seen as the least glamorous part of the marketing mix, has hit the
spotlight in e-marketing. Fundamentally all Internet activity is underpinned by the
massive automated distribution processes of the Internet with the result that whilst
the Internet is the best at what it does (and what it does ain’t always pretty), most
e-marketers take the distribution channel for granted since the product is usually ‘just
there’ and it ‘just works’. Distribution is only truly visible when something goes wrong.
Distribution is old news

The marketspace technologies of distribution are old news in offline marketing with
them having been the fundamental core of marketing as far back as 1937 (Dann and
Dann, 2007). Distribution in the modern logistics management environment is heav-
ily automated, data driven and technologically sophisticated. Supply line management
technologies created entirely new genres of physical goods management such as just-
in-time shipping. The speed of data exchanges between store and producer is getting to
the point where you’re practically using the retailer as a 3D world for interacting with
the manufacturer (it’s not quite that bad, and not quite that good at the same time).
It’s feasible that you could create a virtual grocery store that bundled together your gro-
ceries and shipped them to your doorstep – if it wasn’t for the experience of retailers
that the last mile of the delivery channel is the hardest mile. One hard learnt lesson of
the DotCom1.0 era was the underestimation of the cost of last-mile delivery (shipping
to the home) and how useful the consumer is when they cover those costs for you by
popping down the shop for the pint of milk and packet of crisps at their own expense.
Co-location and service delivery

Services still require co-location even in the era of the Internet. You have to be logged
in at Gmail to send mail (although just like the Royal Mail, it arrives even if you’re
not there). Any online service that you have signed up for requires you to be at their
website (or using their software, or third party software) in order to co-produce the ser-
vice experience. Similarly, when you look at virtual worlds (Chapter 14), social media
(Chapter 12) and cybercommunities (Chapter 9), the co-creation of these environments
draws heavily on services marketing theory (Chapter 8), co-location and co-creation
(Chapter 5). It’s worth stating, and restating, the need for the customer to be at the
point of service when considering your online product development. The level of disin-
termediation surrounding the Internet occasionally causes both customer and provider
to forget they have to interact somewhere and somehow to make a service work for the
both of them.
Idea distribution
The distribution of an idea can also be the promotion of an idea, depending on where
the idea is distributed and which arm of the mix claims the credit. Social marketing
168

Delivering value
writers have long recognized that separating the distribution and promotion of an idea
is largely arbitrary (Fine, 1990; Kotler and Roberto, 1989). Marketing information prod-
ucts that are dependent on the acceptance, use and sale of ideas also create a similar
problem in determining where the online promotion of an idea ends and where the
distribution begins. This raises the question of whether the content of a website counts
as an idea product or a promotional message. To what extent does the movement of an
idea from the mind of the originator into the mind of the recipient owe the journey
to promotional techniques or idea distribution tools? For the most part, these ques-
tions are academic in nature, unless a practitioner wishes to take greater control over
the movement and diffusion of their ideas. Determining the dividing line between
promotional technique and marketspace distribution technique will become increas-
ingly difficult as more ideas are promoted and distributed across the Internet. Chapter 7
examines some of the elements of merging promotion and idea products into the same
delivery platform.
Marketspace
Marketspace operates as a parallel to the physical world marketplace. It is the con-
junction between ideas and exchange, where goods, services, ideas and money can
be exchanged as items of value. The marketspace–marketplace continuum addresses
how the value chains of product services, procurement, distribution and production
can be developed and used in both the on and offline environments. Marketspace is
the digital twin of the physical marketplace, where virtual value chains and virtual
logistics are engaged to move intangible goods and ideas across data networks, with
little or no recourse to physical environments. Marketspaces are an artificial, intangi-
ble market for information (Weiber and Kollman, 1998). A marketspace is defined by
three parameters:
◦ content: the idea or information being traded. It’s no overstatement to describe con-
tent as the lifeblood of the Internet given that the only actual value of the Internet
infrastructure is its capacity to bring content from creator to consumer (Chapter 1).
Content also forms the backbone of the idea product framework and can be gener-
ated from within the Internet (data from indexes, website traffic reports) or provided
by external parties (uploading videos, writing blog posts and web pages, interacting
in virtual worlds).
◦ context: which is the location in cyberspace where exchanges take place between
producer and consumer and vary from a PayPal transaction on the Web (www.
paypal.com), mobile phone screen (Chapter 13), Xbox console (Chapter 14),
cybercommunity structure (Chapter 9), a vendor in a virtual world (Chapter 14),
deal on eBay to payment through Twitter (www.tipjoy.com).
◦ infrastructure: which is usually the Internet, although it can be any data network
(mobile phone coverage, 3G) or proprietary network of shared information (Rayport
and Sviokla, 1994; Pattinson and Brown, 1996; Weiber and Kollman, 1998).
169

e-marketing
The role and value of the Internet as a mediator of marketspace is based on the nature
of the information product and the ability of the Internet to facilitate fast and effective
movements of data. Information as a product is not subject to the lead times and
shipping problems of physical goods. Multiple replications do not reduce or extinguish
the original source and it can be instantly transported to any point in the production
value chain (Mason-Jones and Towill, 1997; Jones and Vijayasarthy, 1998).
Distribution for the virtual consumer in the marketspace

The Internet exists at two distinct levels. The first level is the physical representation
of the network through computers, wires, cables and the second level consists of the
human users of the system. Computers that use the Internet independently of human
users are mostly employed by search engine companies and tend not to be engaged in
online commerce. For the most part, computers have not yet been given authority to
approve their own purchases over the Internet due to security considerations (and the
general lack of enthusiasm towards letting computers buy parts for themselves. It never
ends well.). We increasingly rely on sophisticated algorithms and arcane data-processing
methods to determine Google Page Rank and other associated search engine constructs.
Consequently, search engines are slowly becoming a distinctive market segment to
address alongside your primary human market.
Annoyingly, Google’s search engine robots (and their computer minders) use approx-
imately 200 different variables to determine their ranking and weighting of the webpage
and where it should sit in the search engine results. Not only is this uncomfortably sim-
ilar to consumer behaviour theory, it also presents some logistical considerations for the
e-marketing distribution of ideas. On the one hand, the more information that can be
added to the Google, Yahoo! and Microsoft search engines, the easier it is to be found on
the Internet. On the other hand, if the promotion of an idea is also the distribution of
the idea, the first few lines of a Google, Bing or Yahoo! search result might be enough to
answer your question without needing to load the original searched-for site. In this case,
the information product in the search engine’s cache effectively created, communicated
and delivered value without any form of reciprocal exchange. It’s the one advantage of
the physical world over the search engine-based Internet environment – merely seeing
the snacks cached in the fridge in a Boots store remains point of sales promotion rather
than actual consumption of the product.
How to set up a physical goods channel

Distribution channels online tend to assume that the customer will tolerate any form
of distribution if the price is cheap enough and the product good enough. This assump-
tion hasn’t always been the fast track to success hoped for by many e-marketing
managers. Satisfying customer needs includes questions of when, where and how
the customer can access the product through the distribution channels. Thankfully,
there’s a fairly straightforward strategy outlined by Mols (1998) which covers three
steps for identifying, anticipating and satisfying customer requirements for delivery.
These steps are:
170

Delivering value
◦ ask the customer first

◦ assess if the customer’s answer is feasible
◦ work out the charges and price accordingly.
Ask first
Put the question into the market research, talk to the customers and listen to requests
on Twitter, Facebook or e-mail. Ask if the buyer is willing to trade price for speed (slower
shipping at cheaper rates) rather than assuming anyone outside the country wants the
product within 24 hours at triple the cost of the actual product. Use segmentation
(Chapter 4), market research (Chapter 5) and competitor analysis (Chapter 3) to assess
what expectations the customers have and if any reference prices exist for shipping (as
they do for products). Always provide the maximum number of shipping options that
the accounting department can handle if the customer is the one paying the bill for the
postage and handling.
Assess how to provide the distribution

Practicality and pragmatism need to be the dominant considerations for a market-
ing manager when arranging distribution channels based on market demand. It’s also
incredibly important to set reasonable expectations for delivery. The single most impor-
tant facet in all of delivery is reliability. If you promise a reasonable time frame and
deliver faster than expected, the customer will be happier than if you promise unreal-
istic deadlines and deliver later than promised. Be consistent, be reasonable and have
some faith in the market being smart enough to realize that the laws of physics apply
to the shipping of physical goods. You can’t move objects as fast as you can move data
(and even data has hard limits on how fast it can go). Provide the customer with a range
of options that lets them trade speed for price and they’ll feel more satisfied with the
shipping as they exert greater control over their choices.
Plus postage and handling

Work out how much this will cost and who’s picking up the tab. ‘Free’ shipping isn’t free
(even data has download costs). The shipping cost comes out of someone’s budget and
the question is whether the customer pays for it openly at the end of the transaction or
if it’s a hidden charge bundled into the total costing calculations. Giving the customer
options based on trading speed for price provides transparency, increases trust and gives
you a sense of control in that you feel more satisfied with electing for either speed or cost
savings. Providing a single, expensive shipping option that doubles or triples the price
of the product takes away from the consumer’s sense of empowerment and harms the
potential transaction between customer and company. Understanding this is vital when
you’re dealing with physical goods distribution facilitated by Internet shopping. If you
offer multiple shipping options in your domestic market, the international customers
will feel ripped off if you offer a single high-priced ‘choice’. Cross-check the total cost
of shipping smaller units of physical goods to see whether or not you’re pricing your
lower-end products out of the market with excessive postage and handling costs.
171

e-marketing
} Pricing theory
Price has been variously defined by economists and marketers. In its simplest terms
price is ‘something of value that is exchanged for something else’ (McColl-Kennedy
and Kiel, 2000). Price is usually divided into money and ‘other’. Monetary costs are
all direct financial aspects such as the purchase price, ongoing subscription charges,
rent, interest rates and repayments. The other ‘costs’ that the consumer perceives to be
involved in the transaction are intangible, difficult to measure and must be managed
in conjunction with the financial components. Consumer-oriented research will assist
in determining what non-financial aspects of the exchange are important in different
purchasing situations. It then becomes the role of the marketer to understand how all
these forces interact so that strategies to minimize these non-financial costs in the eyes
of the consumer can be developed. Ultimately, what consumers are looking for is value
and it is the value perception of the overall product that will determine the financial
price that the buyer is willing to pay and the seller willing to accept.
One of the ongoing debates in e-commerce revolves around the issue of price. What
is an appropriate price for an online product or service? How can it be determined? Will
consumers actually pay it? In marketing, price refers to what people are prepared to give
up, or sacrifice, in order to own a particular product or use a service. The price that con-
sumers are willing to pay for a product represents what they are prepared to exchange
for it. Given that the medium of exchange in developed economies is money, most pric-
ing discussions focus exclusively on financial components. We’re taking a broader view
of price with a discussion of the total price concept, which includes a lot of the factors
we’ve raised in consumer behaviour theory about risk, social prestige, pride and frus-
tration with complex products. We’re also focusing on the strategic issues surrounding
price as part of value creation rather than looking at economic approaches or putting
together computational guides to setting explicit prices. This is about fitting pricing
strategy into the overall value offer to support and complement the organization’s
strategic marketing position.
Determining what aspects of price are most important to different market segments
requires detailed market research and the determination of specific pricing strategies to
meet the unique needs of each group. Once again, it’s useful to head to the generic
guidelines to shape the focus of your market research. Pricing strategy serves to support
the overall marketing mix and positioning strategy of the organization and to assist in
achieving the organization’s financial and non-financial objectives. It’s the nexus point
for the value exchange model put forward by the AMA (2007) and the functional area
that lets marketing put the profit into the CIM’s (2005) structure (Chapter 2).
Total price concept

The total price concept recognizes that, from the consumer’s perspective, money is only
one component of the perceived cost of purchase. The total price concept represents
both the financial amount paid plus the sum of all other ‘social’ prices. From this per-
spective, money is not the sole or even the most important element of price, rather
the model brings the different non-financial components into focus so that they can be
172

Delivering value
addressed as part of the overall pricing strategy. Fine (1990) identified four key categories
of social prices: time, effort, lifestyle and psyche.
Time
Time expended on a particular consumption activity represents benefits or opportuni-
ties forgone. If purchasing online means waiting two weeks for physical delivery rather
than acquiring the product immediately from a store, you’ve lost the benefit of owning
that particular item during that waiting period. Similarly, cybercommunity (Chapter 9),
social media sites (Chapter 12) and virtual worlds (Chapter 14) all require time com-
mitments that result in the reallocation of disposable time away from other aspects of
life. Time costs can also become sunk costs for the end user – World of Warcraft players
are unlikely to want to abandon the time sunk into the development of their avatars to
reinvest similar volumes of time in a new gaming environment. Facebook, Livejournal
and Twitter may gain an inertial advantage over their competitors as the sunk time
cost of finding and establishing friendship networks may outweigh any specific benefits
from new features of rival communities (Chapter 3). Don’t depend on sunk time cost as
an exit barrier to retain users ahead of actually meeting market needs and building gen-
uine loyalty (Chapter 8). Time links to Rogers (1983) relative advantage concept, since
you’re far more willing to commit time to something you’d rather be doing than the
alternatives. It’s worth connecting time costs in the product design stage when you’re
looking at the behavioural element of your product – one-off actions are time-cheap
compared with ongoing behaviours.
Effort
Personal effort or input into the exchange represents a bartering of individual services
for the final product. Effort is the price tag associated with the co-creation of value
(Chapters 4 and 8) which you traded off in return for increased control over the final
outcome. Never trade increased effort for less control – it’s a poor exchange. In the
e-marketing context, co-creation effort includes self-service roles (Chapter 8): becoming
a ‘partial employee’ as you fill in your own order forms, pass on financial and personal
information or carry out the DIY aspects of becoming your own engineer (installing
anything in a command line under Linux). Social media sites, blank white servers and
community structures frequently have higher effort and time costs than financial outlay
(Chapter 12). The greater the effort (and usually this will also involve increased time
costs as part of the transaction), the greater the total price of the item will be in the
eyes of the consumer. Consumers are entitled to expect a larger set of benefits in return.
Effort crosses over into relative advantage and complexity in the Rogers (1983) product
innovation feature set. Effort was a major facet in the Introduction when you were
required to download numerous software packages, install various items, sign up to
different sites and put in considerable effort for uncertain returns. It’s important to
note that effort can also be a selling point in the design of a product – complexity and
effort can lead to higher levels of satisfaction due to the increased challenge, sense of
control and ownership of the process.
173

e-marketing
Lifestyle
Lifestyle costs occur when the purchase of a product involves a significant change
to some aspect of the individual’s personal habits or lifestyle. These are behavioural
costs and sit alongside time and effort expenditure in the calculations. Even apparently
minor aspects such as switching from snail mail to e-mail have lifestyle trade-off in
terms of the loss of the visceral pleasure of handwritten notes. Lifestyle price links
back to the ‘quite new product’, ‘really new product’ and the adoption of innova-
tions (Chapter 4). The compatibility aspect of Rogers’s (1983) five features is directly
tied to the lifestyle price tag – higher levels of compatibility mean lower lifestyle costs
and a greater chance of adoption. Lifestyle is also integral to two specific areas of the
product – idea and behaviour. Within the idea element of the product is the impor-
tance of compatibility with the values of the individual. If the product doesn’t suit their
lifestyle, there’s a mismatch of the values. In terms of the behaviour aspect, the ongo-
ing behaviours required to use the product effectively need to fit into the consumer’s
lifestyle. This will sometimes mean displacing another aspect of lifestyle due to time
constraints. Television was the first major trade-off area for Internet users, followed by
sleep (Figure 6.5) and reading printed newspapers as the Internet took over different
aspects of the individual’s lifestyle.
Psyche
The psyche costs (also known as psychic costs) relate to the fears, doubts, sense of dread,
perceived risk, loss of privacy, mortal wounding of your pride and everything else that
runs through your head at the thought that this product purchase might go wrong.
Psyche costs are one of the leading barriers for Internet adoption, from that sense of
Figure 6.5 Sleep becomes optional

174

Delivering value
‘But what if I break it?’ to the ‘What if I say something embarrassing?’ for social media
and the old social media classic ‘But what if my parents read my blog?’ Worry less
about that and more about your parents blogging about you – they’ve probably got
your baby photos on Flickr by now. Also, pity the children who find themselves with
Facebook accounts with ultrasound photos as their profile picture before they’re even
born. Basically, if any aspect of the product purchase is going to adversely impact on
your self-esteem, it’s a psyche price that the marketer will have to overcome with some
other more valuable benefit for you. It’s cross-linked to the Rogers (1983) observability
(Can I be seen doing this?), trialability (Can I abandon this if it’s all going wrong?)
and compatibility (Is this too new? Do I know how this fits with the rest of my life?)
It complicates the product because psyche is a major aspect of the idea of the product –
for example, you’ll hold beliefs about what it does, and whether you’re the right market
for the product (if you’ve ever felt too old for a product, that’s psyche cost talking).
You’ll also have the psyche costs of changing initial attitudes towards the products (aka
‘This Twitter thing is stupid’ to ‘This Twitter thing just helped me get a job’ or vice versa
‘Twitter is awesome’ ‘I lost my job because of Twitter’), as well as the psyche costs of the
alignment of your personal values with the new technologies (‘I’m a private introvert’
versus discussing ‘what you are doing now’ with the world).
Financial price
Financial pricing on the Internet is probably doing some amazingly horrible things to
accountants and accounting theory at the moment. It’s probably safest to consider a
sliding scale of financial price from no financial outlay (zero point, n = 0 pounds) to
specified financial outlay (n + 1 pounds) with a range of price points that can involve
bartering and variable pricing in between, such as:
◦ free, as in beer (gratis), which is where the product is genuinely financially price
free and given to the world as a contribution to the gift economy (Chapter 15).
Not to be confused with free as in speech (libre), which is where the product is
available through less restrictive licence agreements that can involve financial costs.
Wikipedia has a good summary of the distinctions between gratis and libre (which is
not surprising since it operates on a twinned platform of gratis and libre).
◦ freemium (a portmanteau of ‘Free’ and ‘Premium’) is a common form of online busi-
ness model where the service provides a functional service for nil financial costs and a
premium service with more features for an annual flat fee or monthly service charge
(Lukin, 2006 in Wilson, 2006). Flickr (www.flickr.com) operates on the freemium
model with the basic account service and an annual flat fee for additional features
(metrics, storage space and extra functionality).
◦ adware, which is sponsored software or services that are financially free to the con-
sumer, and have part or all of the costs covered by the advertising space sold in
the product. This model predates the Internet and is the core platform for the free
afternoon or evening newspaper, as well as a range of online services and software
products. All the Google accounts use the adware model, with the Google Adwords
appearing alongside your e-mail in Gmail, YouTube and other places.
175

e-marketing
◦ shareware, which is a time-limited (or feature-reduced) version of a software product

that offers sufficient functionality to allow the user to try it out before requiring
a financial price commitment to continue using the service or software. There are
several novelty flavours of shareware, such as postcardware (send a postcard to the
author) or catware (pet a cat). These are usually classified as non-financial price costs
(unless you have to buy a cat to comply with the licence agreement).
◦ trialpay, which is a variation on the shareware concept. By introducing a barter
system to the shareware model, you can exchange access to participating software
products by taking up offers from other companies brokered by the TrialPay (www.
trialpay.com) company.
◦ donation-based pricing, which has been an established aspect of the shareware sec-
tor prior to its high-profile use by the band Radiohead (www.radiohead.com) in
its decision to release In Rainbows with an open-end price – users could down-
load the album for free or pay a financial price of their choosing through the
site. This model has been replicated numerous times elsewhere before and since
the Radiohead experiment although few have received quite the industry attention
and speculation.
◦ auction-based pricing, which is where the sellers set a reserve price and the buyers
bid to determine the financial price. Although most classically associated with eBay
(www.ebay.co.uk), standard and reverse auctions have been used to set prices for
contracting, domain name sales and a range of business-to-business activity.
◦ fixed financial pricing, which rounds out the far end of financial pricing through
the use of set prices including sales, discounts and rebates (www.amazon.co.uk),
volume pricing (www.zazzle.com) or structured costs depending on service levels
(www.lulu.com).
It’s important to separate licencing arrangements (libre) such as Creative Commons,

Copyleft and Open Source from pricing strategies (Chapter 15). Although certain finan-
cial obligations may be imposed by various libre agreements (non-commercial use or
the requirement to share-alike), libre agreements may also support financial pricing
structures (Gnu Public License) whilst placing certain conditions on the product (code
can be viewed, modified and modified versions redistributed). Similarly, setting a nil
financial price (gratis) does not automatically invoke the libre status – financially free
software may still have restrictive licence arrangements, copyright enforcement and
closed source code.
Price strategy and tactics

Pricing objectives are what you want to achieve strategically through the setting of a
specific price level. Successful marketing practice dictates that these objectives should
be consistent with the overall strategic, financial and positioning objectives of the
organization. In other words, set your prices to support the overall positioning strat-
egy (Chapter 7), marketing strategy (Chapter 3) and other tactical considerations
(Chapter 4). The good thing about pricing objectives is their consistency – if you’re
online, offline or somewhere in between, you still can apply the same pricing formulae.
176

Delivering value
Rather than repeat the formulae here, we’re going to focus on four e-marketing uses for
pricing objectives. These are:
◦ making money, which brings the CIM (2005) definition’s ‘profitably’ aspect to life
◦ market share, which is how price will be used for gaining and defending your territory
◦ reference pricing, which is the pricing equivalent of a positioning strategy
◦ mindshare, which is how price can be used for achieving certain psychological
objectives through using price as a means to communicate with the consumer.
Making money
Financial objectives are split into cost-based objectives and profit-oriented objectives.
Cost-based financial objectives are literally the approach where you make enough
money to pay the bills. As long as you’ve covered the immediate costs of produc-
tion (and have a bit left over for unforeseen expenses), you’re achieving your desired
outcomes. Most e-marketing startups look to the cost-based model for their first few
years of operation. Admittedly, more than a few blogs will be running cross-subsidized
losses where the day job pays for the evening and weekend blogging operations. Most
of the cost-based objectives either focus on unit-cost-plus-some pricing, where costs
are covered and a percentage or a fixed dollar amount is added to each unit of out-
put. Online intermediaries such as Cafepress (www.cafepress.com) provide fixed base
prices for their custom-printed merchandise which you can raise either across the board
on a fixed percentage or per individual item for the cost-recovery margin. Strictly,
any gap between cost and revenue is profit. If you’re cost-recovering, the gap isn’t
profiteering in nature.
Despite the conceptual simplicity, implementing a cost-plus objective has a number
of limitations. First and foremost is the evaluation of your time costs. Many bloggers
feel that they shouldn’t charge for their services or feel that the time they commit to
the blog isn’t ‘proper’ work if they happen to enjoy their blogging. That’s a bit like
handing back part of the weekly pay cheque to the boss because you enjoyed being at
work. It’s vital to properly cost the actual expenditures such as domain registration fees,
server rental space, Internet access (even if you’re not thinking of it as a workspace)
and any expenditure such as buying advertising space on other systems. Consider the
non-financial aspects listed above in terms of non-financial costs of production (effort,
psyche, lifestyle, time) when calculating your operating costs for cost recovery.
Cost price marketers are also faced with trying to predict an accurate measure of the
final cost of individual items in advance – a difficult job given the flexibility of costs of
individual components combined with the difficulty in attributing joint costs to spe-
cific items (Baker et al., 1998). Even where it is possible to accurately determine and
allocate costs, further limitations of this approach include the fact that it ignores con-
sumer demand, the influence of competitors, economies of scale as production increases
and does not distinguish between variable and sunk costs (Winker, 1991). Attributing
specific costs to intangible products is more difficult than attributing such costs to tan-
gible products (Lovelock et al., 2007). Given that a large proportion of Internet-based
products are services or information products, this limitation is of particular relevance.
177

e-marketing
The ease with which services and information can be delivered online frequently leads
to an underestimation of the true costs associated with the development, production
and delivery of such services. The cost of intellectual property invested into online ser-
vices and products is frequently overlooked in that an idea can be seen as low cost to
produce although in reality it may have taken hundreds of person hours to develop into
a workable application.
Profit-oriented objectives are either an intention to achieve a specific target return
on investment or about maximizing overall profits from the product. Both of these
approaches require marketers to be confident about the assumptions they make regard-
ing consumer and competitor behaviour. Return on investment objectives require the
price setters to decide how long it should take to recoup investment costs before
generating a clear profit. The skill lies in balancing the short-term needs of the orga-
nization and the long-term strategic benefits of bearing a loss for a longer period in
anticipation of a greater profit later (Brassington and Pettitt, 1997). Profit maximiza-
tion differs in that rather than seeking a set return or profit it aims to make the
most money possible. Despite popular perception, this does not necessarily involve
setting a high price. The final price set will depend on a combination of elasticity of
demand for the product, availability of substitutes and consumer preferences (McCarthy
et al., 1997).
Market share
Market share objectives focus on gaining significant market share in a relatively short
time period or maintaining market share in a competitive environment by pricing the
offer low enough to survive but high enough to pay the rent. At least, that’s the princi-
ple. Most dotcoms forgot to set prices which cover basic expenses and instead assumed
that they could tweak the price back up to sustainable levels once they’d locked in an
enormous army of brand-loyal customers by being the first mover in the market. The
reality was far harsher – the market share by below-cost strategy was matched by the
second, third and fourth movers, with the consequence that everyone ran low on cash
whilst the customer jumped from one below-cost and free offer to another. Loyalty takes
more than pricing (Chapter 8).
Many e-marketers face a price–market share problem in that their services require a
critical mass of users in order to be sufficiently valuable to warrant charging an annual
fee. In the first instance, most companies can cover the costs of the free accounts as
infrastructure investment whilst trying to recruit paying customers with an offer of a
premium account arrangement. This is commonly referenced as the ‘freemium’ model,
which is a multi-level pricing structure that pursues market share as free accounts (with
restricted capacities), mixed market share and revenue objectives (with advertising-
sponsored accounts; advertising in exchange for more features) and the market
share–profit objectives (with fully featured paid accounts which are usually free of adver-
tising). Flickr (www.flickr.com), Livejournal (www.livejournal.com), Wordpress.com
(www.wordpress.com) and Remember The Milk (www.rememberthemilk.com) are high-
profile examples of the basic free account which can be upgraded to a premium
subscription model.
178

Delivering value
One flaw in the freemium model occurs when you fail to calculate the value that the
free account holder provides for the paid users of the service. For example, the value
of Livejournal for a paid user is the access to their friends and communities, some of
whom will be free account holders. If you remove the free accounts (particularly shared
community spaces which are usually free), you’re reducing the total value of the service
to the paid user by removing some of the features they were purchasing (community
access, free account-holding friends). The mistake made by Livejournal in 2008 was to
reduce the overall value of the service for the paid account holders by removing the free
account system. Even though free accounts were restored, it damaged the trust between
the paying user base and Livejournal’s owners (Chapter 8). This in turn lowered the
barriers for paying users to leave the service (which was completely contrary to how the
business plan probably spelt it out as ‘Remove free users. Increase profit’).
Reference pricing
Reference pricing is a logical extension of the marketing orientation which requires you
to set a price that the consumer feels is ‘fair’ or appropriate for the service. Where it
gets confusing is that the consumer has a reference price in their mind as to what they
believe a product or service is worth. They use this as the basis of determining whether
or not to go ahead with a trial purchase whilst simultaneously using the price as a means
to determine the quality of the product offer. The reference price serves as a central
point of consumer decision-making and evaluation activities where the mental price tag
becomes the benchmark for the value of the service (Monger and Feinberg, 1997). If you
have a reference price of US$1.99 for an iPhone application, you’ll feel it’s a bargain at
US$1.69 and an unconscionable price at US$2.29 for exactly the same functionality.
Bizarrely, an item for which you’re charged US$150 will feel like the best deal in the
world if you thought you’d be paying US$200, irrespective of whether it costs the firm
US$50 or US$5 to produce. Reference prices are determined on the basis of consumer
experience with identical or at least similar products. Where there are a number of close
substitutes, it is relatively easy for consumers to develop appropriate reference prices.
In highly competitive situations it is common for organizations to simply meet market
price rather than try to work within the expectations of the consumers. This links up to
the compatibility issues of Rogers (1983) and the perception–expectation theory which
shows up in Chapter 8.
Mindshare and psychological objectives

Thus far, most of the pricing objectives have either had strong objective bases in some
formula (profit, return on investment, market share) or prior experience (reference
prices). Psychological pricing objectives leave objectivity and experience out of the
equation and focus on using price as a means to persuade, communicate and address
the consumer’s internal motivations. As mentioned in Chapter 4, there is a strong con-
nection between the price of a product and its perceived value. Commonly known as
prestige pricing, this is where you put a price tag on the product that indicates clearly
to the consumer that the product has to be high quality because it’s so expensive. The
179

e-marketing
consumer will work with you on this front because once they’ve committed to the
higher price, they’ll try to translate the rest of the experience as being indicative of a
high-quality product.
It’s noteworthy that prestige pricing depends heavily on continuity for success. This
isn’t the short-term, price-skimming approach to maximize the cost recovery from the
innovator markets. It’s a long-term strategy designed to support a position in the market
of quality and scarcity, based entirely on being too expensive for most people to afford,
but just expensive enough for people to really want to own. Prestige-oriented pricing
in e-marketing is only really effective when direct comparisons between the quality of
your offer and any rival offers are quite difficult. Hence, you’ll frequently see the prestige
price approach used on selling wealth seminars, SEO training and ‘Make Money From
Google’ kits.
Picking the price tag

The first step in setting a price for your e-marketing offering is to review the economic
and environmental scans you undertook back in Chapter 4 to provide a context for
the consumer’s decision and your own price-positioning strategy. Secondly, consider
the nature of the consumer (innovator, early majority, etc.) and the competition in the
market according to the product lifecycle curve (Chapter 2). Finally, review whatever
market research you have to hand on the consumer, their needs and wants, and the
augmented product features they’re seeking, such as prestige, bargain hunting or good
economic value. From this point, you can elect to pick one of three positions (above,
below or equal to the average) for your financial price and your non-financial price.
For the sake of simplicity, we’ve reduced the non-financial price into the single item
rather than the four sub-components. When setting your price, adjust the time, effort,
psyche and lifestyle costs independently according to the needs, wants and desires of
the market. Table 6.1 outlines the nine options for price positioning.
In deciding on the ‘correct’ pricing strategy it is important to remember that, as is the
case with all strategic decisions, there is no clear formula that will decide what the ‘best’
approach is. It is this strategic aspect of marketing management that requires flexibility
and judgement based on the information available. Within the context of a book such
as this it is possible only to discuss alternatives for pricing options – it is not possible
to be prescriptive. As long as the final pricing strategy and pricing mix used achieve the
two functions highlighted above, it can be seen as appropriate. The determination of
final price levels is influenced by the cost of producing the actual product or service in
question. Once basic costs have been covered, the price charged to consumers will be a
reflection of a combination of the firm’s positioning strategy and the other elements of
the marketing mix. While the role of the marketing mix is to support the positioning
strategy, each element adds to the overall costs that must be covered by the price.
Just to add an extra layer of complexity to the pricing decision, there are also the
uniquely Internet-based problems that come from the apparent ease of price compar-
ison, the nature of the product being priced, the total cost of the product (including
postage, handling, shipping, taxes and random surcharges), hidden costs, international
currency transactions and the impact of different payment systems, including various
180

Delivering value
Table 6.1 Price position
Below average Average Above average

non-financial price non-financial price non-financial price
Below Financially cheaper and Cheaper but similar Financially cheaper with
average lower social costs social cost (the a social stigma or risk
financial (better, faster, cheaper) plain-wrap or attached (the Junk Shop
price home-brand version) or knock-off product)
Average Same financial cost with Equal market average Same financial price with
financial a lower set of social costs (me-too product) a negative social
price (superior features for the message (last season’s
same price) fashion)
Above Higher price to purchase More expensive with Financially and socially
average the superior feature set similar social cost expensive (possibly an
financial that reduces the social (declining luxury RNP market entry)
price cost (luxury brand) brand)
taxation issues. Price searching and price sensitivity have increased with the availabil-
ity of price-specific online search systems such as Froogle (www.google.com/products),
allowing for fast (albeit occasionally useless) price comparisons between online and
offline retailers. At the same time, it’s also been easier for less-than-scrupulous retailers
to hide costs in the shipping and transaction fees to produce false comparisons (see
any major eBay auction category for the US$1 product with the US$149 shipping fee).
Added to the hidden financial price issues are the opportunity costs of the physical ship-
ping time delay versus the immediacy – it’s quite likely that you’ll find yourself seriously
considering a US$9.99 DVD with US$49.99 expedited shipping when you’d pick up the
same product for US$29.99 at HMV. The barrier for HMV is if your reference price for
the DVD is below US$20 and your internal reference price hasn’t been calibrated to add
shipping costs to the total. In your head, it looks like 9.99 (online) versus 29.99 (offline)
when the reality is US$59.98 to US$29.99. Hidden costs are aptly named for this very
reason. Similar problems arise when factoring in exchange rates, currency conversion
fees and other charges for dealing in multiple currencies.
Total cost to the consumer

Related to the previous point is the need to consider not only what the online price
is, but also what the total cost to the consumer will be. Comparison shopping tends to
reflect only the online cash price offered and none of the supporting costs. Where the
product is not based on information, the total cost of the product to the consumer will
also include a handling and postage charge, plus costs incurred by shipping times. What
may seem a bargain for the consumer on the surface could end up costing substantially
more than it would from a trip to the local retail outlet. From the marketer’s perspective
181

e-marketing
this raises an interesting pricing issue which also, to a certain extent, has ethical implica-
tions for the company’s marketing practice. Should retailers advertise the price of their
product online as an ‘item alone’ to which packaging and delivery are added? Alterna-
tively, should they give a single price which covers the total cost? Is it possible to antic-
ipate all potential cost factors on shipping to establish an anticipated price? Advertising
the cost of the product without on-costs will almost always give the impression that it
is cheaper to purchase online. The problem for the retailer is that if the reality is very
different, the consumer usually has strong cognitive dissonance and often generates
feelings of being ‘ripped off’ or cheated by the website. Online marketers should con-
sider taking a total cost approach and bundling the distribution costs with the product
cost as a way of improving customer relations and avoiding dissatisfaction among users.
} Conclusion
This is the first of five chapters which address marketing principles in e-marketing. Start-
ing with product issues, the chapter focused on the first three elements of the marketing
mix: product, place and price. Whilst the fundamentals of product strategy remain the
same – that is create an offering of value to the market which simultaneously helps the
organization achieve its objectives – the way in which this is achieved in the online
environment requires some modifications to existing theories. Key to product decisions
in e-marketing are issues such as the extent to which the product is a good, service or
information, the role of customer co-creation and the role of digital rights management.
How the product is conceived and developed has a significant impact on the next two
elements of the marketing mix: distribution and pricing. Distribution online varies from
the direct download of information-based products to standardized business-to-business
logistics for physical goods, and everything in between. Regardless of the distribution
method used, there will be a cost imposed either on the seller or on the final con-
sumer. Distribution, therefore, has a flow-on effect to pricing strategy. The Internet has
provided a range of new pricing practices which, overall, have contributed to consumer
empowerment and raised consumer expectations. The ability to quickly and easily cross-
reference financial prices means that success for many e-marketers has to depend on
more intangible perceptions of value. The extent to which the positioning of a value
offering sold online can support the pricecharged to the consumers depends in turn on
how the product, organization and value are promoted. Promotion and branding form
the basis of the next chapter.
} References
Books and journals
Adams, D. and Meretzky, S. (1984) Hitchhiker’s Guide to the Galaxy Infocom Adventure, Infocom,
http://www.douglasadams.com/creations/infocomjava.html (accessed 6 July 2010).
American Marketing Association (2007) Definition of Marketing, http://www.marketingpower.
182

Delivering value
Baker, M.J., Graham, P.G., Harker, D. and Harker, M. (1998) Marketing: Managerial Foundations.
Melbourne: Macmillan Education.
Brassington, F. and Pettitt, S. (1997) Principles of Marketing. Melbourne: Pitman Publishing.
how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub (accessed 6 July 2010).
Dann, S. and Dann, S. (2004) Strategic Internet Marketing 2.0, Brisbane: John Wiley & Sons.
Dann, S. and Dann, S. (2007) Competitive Marketing Strategy. French’s Forest, NSW: Pearson
Education.
Fine, S.H. (1990) Social Marketing: Promoting the Causes of Public and Non-profit Agencies. Boston:
Allyn & Bacon.
Fojt, M. (1996) ‘Virtual frontiers’, Internet Research: Electronic Networking Applications and Policy,
6(2/3): 82–4.
Frieden, J., Goldsmith, R., Takacs, S. and Hofacker, C. (1998) ‘Information as product: not goods,
not services’, Marketing Intelligence and Planning, 16(3): 210–20.
Jones, J.M. and Vijayasarthy, L.R. (1998) ‘Internet consumer catalogue shopping: findings from
an exploratory study and directions for future research’, Internet Research: Electronic Networking
Applications and Policy, 8(4): 322–30.
Macmillan.
Lovelock, C., Patterson, P. and Walker, R. (2007) Services Marketing: An Asia-Pacific and Australian
Perspective, 4th edn. French’s Forest NSW: Pearson Education.
Martin, D. (2009) ‘Twitter quitters post roadblock to long-term growth’, Nielsen Wire, http://blog.
nielsen.com/nielsenwire/online_mobile/twitter-quitters-post-roadblock-to-long-term-growth
Mason-Jones, R. and Towill, D.R. (1997) ‘Information enrichment: designing the supply chain for
competitive advantage’, Supply Chain Management, 2(4): 137–48.
McCarthy, E.J., Perreault, W.D. and Quester, P.G. (1997) Basic Marketing: A Managerial Approach.
Sydney: Irwin.
McColl-Kennedy, J.R. and Kiel, G.C. (2000) Marketing: A Strategic Approach. Melbourne: Nelson ITP.
Mols, N.P. (1998) ‘The Internet and the banks’ strategic distribution channel decisions’, Internet
Research: Electronic Networking Applications and Policy, 8(4): 331–7.
Monger, J.E. and Feinberg. R.A. (1997) ‘Mode of payment and formation of reference prices’, Pricing
Strategy and Practice, 5(4): 142–7.
Pattinson, H. and Brown, L. (1996) ‘Chameleons in marketspace: industry transformation in the
new electronic marketing environment’, Internet Research: Electronic Networking Applications and
Policy, 6(2/3): 31–40.
Rayport, J.F. and Sviokla, J.J. (1994) ‘Managing in the marketspace’, Harvard Business Review, 72(6):
141–50.
Rogers, M.R. (1995) Diffusion of Innovations, 4th edn. London: Macmillan.
Weiber, R. and Kollman, T. (1998) ‘Competitive advantages in virtual markets – perspectives of
“information-based marketing” in cyberspace’, European Journal of Marketing, 32(7/8): 603–15.
Wilson, F. (2006) The Freemium Business Model, A C: Musings of a VC in NYC, http://www.avc.
com/a_vc/2006/03/the_freemium_bu.html (accessed 6 July 2010).
Winker, J. (1991) ‘Pricing’. In M.J. Baker (ed.), The Marketing Book, 2nd edn. Oxford: Butterworth-
Heinemann.
Web references
Amazon www.amazon.co.uk
Blank White Server www.blankwhiteserver.com
Cafepress www.cafepress.com
City of Heroes www.cityofheroes.com
eBay www.ebay.co.uk
EVE Online www.eveonline.com
Fabjectory www.fabjectory.com
183

e-marketing
Figureprints www.figureprints.com
Froogle www.google.com/products
Gmail www.google.com/mail
Google Adwords adwords.google.com
Google Sketchup sketchup.google.com
Lulu www.lulu.com
MySpace www.myspace.co.uk
NCSoft www.ncsoft.com
PayPal www.paypal.com
Radiohead www.radiohead.com
Scribed www.scribed.com
Slideshare www.slideshare.net
Tipjoy www.tipjoy.com
TrialPay www.trialpay.com
Wikipedia en.wikipedia.org/wiki/Gratis_versus_Libre
Wordpress.com www.wordpress.com
XKCD: Duty Calls xkcd.com/386
XKCD: Flash Games xkcd.com/484
YouTube www.youtube.com
184

CHAPTER 7}
Branding and promotion
• draft a basic e-marketing communication plan

• understand the use of integrated marketing communications for positioning
and repositioning
• use branding and promotion to assist online service delivery
• understand the means and mechanisms of online promotion
• appreciate the value of genuine word-of-mouth communication for online
promotion.
185

e-marketing
} Introduction
Promotion is one area of marketing that is so frequently misunderstood that you can
feel justifiably annoyed when someone outside of the business says ‘advertising’ when
they mean ‘promotion’. The promotional mix consists of six techniques designed to
raise awareness and influence attitudes towards products, brands and the organization
through personal and impersonal media. When the Internet arrived on the scene it put
in a strong bid for the seventh spot in the promotional mix, up until the time we all
noticed that the promotional mix could be applied to the Internet just as much as the
Internet could be part of the mix. Consequently, we look at the Internet as the host of
various promotional activities where certain styles of activity (word of mouth, publicity,
mass media) can be tailored to make best use of the unique features of the Internet.
This chapter divides promotion on the Internet into five distinct areas. First, the
chapter continues the discussion of the crossover between the creation, distribution
and promotion of an idea or product with ‘communications of value’ as a framework.
Secondly, we look at the classic promotional mix including branding, repositioning and
a range of traditional broadcast message strategies that can be applied to the Internet
by e-marketers. Thirdly, we examine how the classic promotional mix, and a few new
elements, operate in the e-marketing context. Fourthly, we pick up on broader princi-
ples of promotion, including the use of conversations in marketing when engaging in
social media marketing for promotional purposes. Finally, the whole package is drawn
together with the e-marketing communication checklist.
Communications of value
Marketing communications is a difficult area. On one side, the ease of access to the
Internet, copious share of voice and limited filters between mind and marketplace make
communication with the rest of the world very easy to achieve. On the other side,
making that communication effective, efficient or somewhere above just plain embar-
rassing requires more effort. With e-mail, Google AdWords and Facebook advertising
being straightforward in the technical sense, just about everyone with an Internet con-
nection can run an ad campaign (and some days when you’re clearing the spam filter, it
feels like just about everyone has tried their hand at it). Marketing communications use
the same tools and techniques (e-mail, Twitter, Facebook, celebrity endorsement) as the
rest of the world, with the added bonus of using the rest of the marketing toolkit, such
as market research (Chapter 3), marketing plans (Chapter 4) and an understanding of
the consumer (Chapter 5). We’re still capable of getting it wrong, but we’ve got better
odds of getting it right.
In this book, the process of ‘getting it right’ is where we provide communications that
have value (shortened to ‘communications of value’). When you’re in the market for a
new laptop, mobile contract, package holiday to Ibiza or local pizza delivery operation,
you rely on the communications output of the appropriate marketing team to let you
know what the product is, what it can do for you, how much it is and where to go (or
if they’ll come to you) so you can buy it. As a marketer, your task is to talk to the mar-
ketplace in a two-step process: the listening stage from market research (Chapter 4) and
186

social media (Chapter 12), and the information stage where you relate how your product
fits the market’s needs. Put it together in the right combination of timeliness, accuracy
and useful product, and you’ve got the exchange of an offer of value on your hands.
This chapter is going to focus on communication as a process for alerting the customer
to the whole of the offer (product, brand, outcomes and conversation opportunity) and
how that offer could benefit the customer (Chapter 2).
Communications models
There are a few elements of communications theory that need to be briefly covered
to ensure we’re all on the same page. The first of these is the classic Shannon (1948)
and Weaver and Shannon (1963) model of communications, which explains how the
process of communication works (and is currently working as we write the book and you
read it). The classic communications model works for any form of communication by
stepping through a five-stage linear and circular model (Figure 7.1). The five stages are:
◦ source, which is the person or organization who originates the concept to be com-
munication. Usually this is a marketer, but can also be a blogger, Facebook or Twitter
user. Anyone who has a thought they want to communicate is the source.
◦ encoding, which is the process of taking the thought from inside your head and
putting it into symbols or words on screen, paper or saying it out loud. This phase
is where you have to adhere to the conventions of the chosen communication
channel – 160 characters for SMS, 140 characters for Twitter, and so forth. It’s also
where your own experiences, knowledge and cues will be used to shape the message
(and pick the channel. Some may tweet first, post blogs second. Others will call, then
e-mail, then write letters).
◦ channel message, which is what is tweeted, posted, said, written and exchanged with
the market. The overlap in message is hopefully where the experiences of mes-
sage sender and recipient overlap. Where they don’t you’ll find yourself consciously
cringing at the words that are misused and the terms that are misunderstood, and
Sender’s Receiver’s
field of field of
experience experience
Source/ Encoding Channel Decoding Receiver

sender message
Response
k
Feedbac
Noise
Figure 7.1 Communications model

Source: Belch and Belch (2007)
187

e-marketing
you’ll want to post about how bad the communicator is on your blag or wobsite
(Figure 7.2)!
◦ decoding, which is where the customer interprets the channel message against what
they know, understand and already have learned about your brand, product and
previous messages (Chapter 5). Decoding is where a message will go right or wrong
based on how well you’ve understood your recipient. Just as a side note: when you
do miscommunicate because of a decoding issue, what you have to appreciate is that
whilst you did not intend that message, the message that was decoded is the reality
for that recipient. Apologize first, improve message encoding second and understand
the market third. Don’t disregard the recipient’s complaint because that’s ‘not what
you meant to say’ – if you didn’t mean to say it, accept responsibility for the message
and don’t keep saying the very thing you’re trying to avoid by continuing with the
faulty message.
◦ receiver, which is the customer, viewer and anyone who encounters the communica-
tion message, who may or may not be your target market.
Connecting all these elements is feedback and noise. Feedback is the reaction of the mar-
ket. Hopefully, as a result of a successful decoding process, it will be what you intended
in the marketing strategy and manifest itself in improved brand image, better sales or
increased site visits. To complicate matters, not all messages get through to the recipi-
ent as easily as the plan anticipates. Throughout the process both sender and receiver
can encounter ‘noise’. Noise is any process or activity that interrupts the flow of com-
munication. It can be physical (server downtime) or it can be intangible (distractions).
The results can be either missing the message altogether or misinterpretation leading to
unexpected decoding or unanticipated feedback (Figure 7.2).
Figure 7.2 Mispronouncing words

188

Idea products versus promotion

In the previous chapter, we introduced the concept of idea, behaviour and object as
being three parts of the total product. The tricky part of the marketing mix is that
the communications arm also involves the product. It communicates the idea of the
product, provides information to form beliefs and shapes values and attitudes through
persuasive message approaches. In addition, communication also impacts on the aug-
mented product concept through the development of the brand and the social messages
associated with the use and non use of the product. Finally, just to add a little more
complexity into the mix, the promotion of an idea product is also its distribution, con-
sumption and co-creation (Fine, 1990; Kotler and Roberto, 1989). Confused yet? When
you read this page, you’re receiving an idea product embedded in a physical good, the
value of which (idea and book) comes almost entirely from what you do with it in
this course, your daily life or your workplace. Since the mix is interconnected, we will
bring in the idea element of the product because it fits into promotion, branding and
positioning across the chapter.
Similarly, since drawing the line between the promotion and distribution of an idea
may not be possible in the e-marketing context, it’s worth cross checking your pro-
motional campaign against promotional and distribution theory to see which models
will be the most useful for the given circumstances. That’s the beauty of marketing
theory – not only is it circular, it’s also very modular. The modularity of marketing is
well suited to the blurred boundaries of the Internet. It doesn’t matter if the Internet is
a promotional medium, distribution channel or actual product at the end of the day.
What matters is how you can use it to satisfy your customer’s needs. Consequently,
the Internet can be product, service, place and advertisement all rolled up into a single
interactive package.
} Communications of offerings that have value

This section of the chapter steps back from the Internet as the Swiss army knife of
marketing and focuses on using the interactive medium as the message platform. For
the next few pages, we’ll concentrate on the Internet as a communications tool which
can be used to generate awareness, interest, desire, and activity (AIDA). The AIDA model
is a standard issue marketing promotion framework that posits the four roles of any
communication message are to create one of the following:
◦ awareness, which is where you help the consumer become aware of your product,
help them form attitudes towards the product and trigger problem recognition by
providing an initial understanding of what the product is and what it can do for
them. This is where the PR elements of being discussed on Twitter, profiled on blogs
or being the banner advertising at the side of the Facebook page come into play.
◦ interest, which is where you’re getting the consumer to form beliefs, feel a need
for the product and generally move from ‘I’ve heard of that’ to ‘I wouldn’t mind
trying one’. Whereas awareness can be a dry, information-based, rational form of
189

e-marketing
communication, interest-focused approaches are more persuasive and try to build a

momentum towards eventual purchase. Interest is the click-through moment where
you follow up on something you’ve heard of by searching Google and Bing for more
information, checking blogs for reviews or following links from Twitter. This phase
has the specific purpose of generating sufficient interest and awareness of the orga-
nization to drive traffic to the website via searches, conventional media advertising,
word of mouth or link referrals (Evans, 2007).
◦ desire, which is the peak match of problem recognition, evaluation, solution and
outright willingness to acquire a product. This phase is persuasion heavy as you’re
trying to communicate a positive message to overcome any last remaining barriers
between intention to purchase and parting with cash. Desire works well with the
core product as you’re trying to pitch the case to the consumer that this is something
they need and want and can afford. Desire is predominantly internal, although with
Twitter, blogs and online conversations, it’s increasingly common to externalize the
product desire process. If you’re looking to purchase from an online store with high
shipping rates, you’re quite likely to want to externalize the desire to see if anyone
else wants to split the shipping costs with you.
◦ action, which is the final step of this process and where you focus on communicating
the last-mile information such as purchase location, augmented product, distribution
and pricing. Action on the Internet can be the purchase decision, hitting ‘Buy it now’,
placing a bid on eBay, signing up to a new social media site, pressing ‘Download’ or
hitting ‘Reply’ on an e-mail. Action is the endgame state where communication sup-
ports the decision to act, and starts to counteract the growing cognitive dissonance
experienced after making a decision (Chapter 5).
The principle of integrated marketing communication

Integrated marketing communication (IMC) represents a marketing promotions
approach that attempts to activate the value of a comprehensive plan of image and
message strategies to present a co-ordinated message across a range of communications
methods and to provide consistency and clarity to maximize effectiveness (Belch and
Belch, 2007). Roughly translated, IMC is the notion of presenting a unified image in any
publicly displayed message from a corporation, organization or individual. Integration
of the Internet into IMC extends beyond the simple matching of logos and imagery
from offline promotion to the website. It means tightening up the message strategies
across the board so that the website, paid advertising and any public comment by the
organization all promote the same message. With that in mind, IMC can pose as a seri-
ous barrier to the use of social media websites where you’re acting as the spokesperson
from the brand, engaging with real people in conversations and you have neither time
nor real inclination to cross-check every utterance against the corporate style manual.
Marketers need to evaluate which option provides the best set of solutions for their
communications approach – the strictly integrated and controlled, classic, IMC or the
more relaxed, less controlled, voice required to integrate social media conversations into
conventional online promotional tactics. At the core of its functionality, IMC consists
of message consistency and message clarity.
190

Message consistency
Message consistency refers to everything the company says intentionally to the world
and ensuring everything it portrays through action, deed or reaction to misdeed is
aligned with the corporate message. This is far harder than it looks. First, you’ll need
to ensure every formal message broadcast is consistent with the internal strategy. This
becomes increasingly difficult as communications turn into conversations. Real con-
versations don’t have prescriptive talking points (despite the rise of talkback radio)
and real conversations are held between two people (only one of which works for
the firm).
Secondly, the actions of the firm need to align with the message – this is the usual
breaking point for a company IMC strategy. Recently a number of corporations have
been caught out on inconsistencies between corporate actions and corporate commu-
nications with respect to environmental issues. Commonly known as ‘greenwash’, IMC
strategy is blown out of the proverbial recycled water when video of the CEO cutting
down forest that is home to endangered species is uploaded to YouTube. At the same
time, the nature of social media lends itself to ambush marketing by the opposing
voices, as was the case when Starbucks attempted a Twitter-based hashtag campaign
(#top3percent) in 2009 that was brandjacked by a critic of Starbuck’s anti-union stance.
As usual, the easiest solution to not being brandjacked is to have consistency between
message and action (which could be solved by being honest if you’re not going to be
well behaved).
Thirdly, message consistency comes through the integration of design strategies
across the promotional mix, including the Internet, to produce a consistent look.
As noted in the Introduction, you’ll be facing the message consistency issue for yourself
as you decide to synchronize images across your social media portfolio or segment the
strategy by site. Visual message consistency includes using the same logos, slogans and
corporate colours across the Internet (which periodically hits problems with getting the
right registered shade of blue).
Message clarity
Message clarity is also enhanced through the use of IMC, whereby the corporation
attempts to deliver a single message to its client market. The danger inherent in all
segmentation-based IMC programmes is that the image the corporation wishes to por-
tray to one target group may be inconsistent with the messages being sent to other
target markets. The same deal applies when you’re running a multiple social media
site presence – you can’t get away with being radically different on Twitter, YouTube,
Facebook and MySpace without someone noticing, commenting and blogging about
it. Similarly, where you speak is also going to impact on what you can say and how
you say it – there’s a big difference between the 140-character message replies on
Twitter and the depth of a blog post or a website dedicated to answering a ques-
tion. IMC requires you to consider the overall consistency of the message when
you’re delivering content, no matter what the size of the message or the nature of
the platform.
191

e-marketing
Brand
Brands are identifiable attributes, symbols, physical marks, words and visual cues that
are used to convey a promise of quality, experience or satisfaction to the consumer.
This is usually done by the association of the brand’s logo with positive previous mem-
ories either with this product or something similar. If you’ve had reasonable success
with Google’s search engine, you’ll look favourably on Google’s e-mail and document
options. Similarly, even if you’ve had no experience with Microsoft’s search engine
(Bing.com), you’ll be able to draw on your experience with other Microsoft brands
(Word, Excel, Internet Explorer) to help frame your expectations.
You can use branding to identify a cluster of product attributes which connect to the
idea of the product in Figure 6.1 as well as the functional characteristics in the actual
product and augmented product – such as quality, speed or accuracy – that you want
to use to build your reputation (Chapter 6). Brands can also acquire reputations based
on the performance of the actual product. Experience-based brand reputations are more
potent than anything created by a marketer. Unlike other aspects of marketing commu-
nications both brand and positioning are more heavily influenced by the consumer’s
experience than the marketer’s message. Branding is heavily co-created by your interac-
tion with the product (Chapter 8) and your interaction with other users of the brand
(Chapter 9). It’s quite common to draw conclusions on the nature of a brand based
on the experience of other users of the product as much as the product itself. This is
why segmentation includes a discussion of who you want, and who you don’t want,
associating with your product (Chapter 4).
Another use of branding is the concept of ‘brand personality’, which is how you react
to the brand in terms of its traits as if it was another person. Aaker (1997) put forward
the case that we use the same methods for categorizing brands and products as we do
for dealing with the people in our lives and, as such, we’ll give brands a set of default
human attributes to make it easier on our thought processes. Aaker (1997) and Okazaki
(2006) pulled together a set of common brand character traits based on the following
categories:
◦ Competence, which is where the brand gives the impression of having its act together
and being good at what it’s promising to do
◦ Excitement, which is where you get the impression that this brand is up for
adventure, a bit of fun and can hold its own in a conversation that’s worth
eavesdropping on
◦ Sophistication, which is the air of class, prestige, exclusivity and the sense that there’s
a red velvet cord and a doorman blocking access to the really good bits of the site
◦ Popularity, which is a split between the unique nature of the crowd who hangs out
at the site and the mass appeal
◦ Affection, which is the extent to which you can really get to like a site and feel some
sort of emotional commitment
◦ Sincerity, which represents either the finer arts of faking it, or the honesty of the site.
This includes things such as the readability of the terms and conditions (if you did
actually read them) and whether the site does anything particularly trust breaking by
changing its privacy rules or ownership of your photos
192

◦ Ruggedness, which is the sort of macho, solid and outdoorsy approach to the world –
more robust, less downtime and more fault tolerant of errors and input problems.
There are websites that attempt to be rugged, outdoors-type of sites despite being
best accessible on a desktop PC.
Whilst brand personality was originally described in terms of goods and services, the
nature of online interactions and how you present yourself on the Internet means that
brand personality techniques are available for your use to present your blog, Facebook
page, Twitter account and various avatars to the world. Since brands are a marketing
communications promise from you to your customer, it’s worth considering the whole
gamut of brand options when it comes to your own online activity. For example, you
may wish to manage a portfolio of brands and separate a corporate profile from a per-
sonal account. Alternatively, you may want to develop a single-branded approach to
your entire online existence – including online gaming, blogs, Twitter and the whole
array in between. Finally, since brands can convey the personalities of products, services
or ideas as much as they can represent features and attitudes, they’re closely connected
to both IMC and the beliefs and attitudes towards the idea element of the product
(Chapter 6). This means that when you’re developing your brand, you’ll also need to
review the value offering to ensure that what you’ve delivered matches what you’ve
promised and that the two approaches complement each other.
Applied branding online

Branding occurs everywhere on the Internet. It starts with the username you’ve chosen
for each and every account, your e-mail address and the URL of your domain name.
These simple text statements are the first steps of developing an online brand – for
example, the choice of e-mail addresses is significant.
Every interaction on the Internet is an opportunity to build or harm the personal
brand associated with your account, user icon and user name (Table 7.1). That said, one
of the key elements of marketing theory is the notion of segmentation. This applies
equally to branding – you have to know who you want to appeal to with your brand
Table 7.1 E-mail as branding
E-mail Template Statement
Firstname.surname@corporationname.co.uk Corporate address

Firstname@firstnamesurname.net Personal domain with semi formal attitude
me@firstnamesurname.net Personal domain with informal attitude
Firstname.surname@firstnamesurname.net Personal domain with very formal attitude
Firstname.surname@gmail.com Early adopter of Gmail
Firstname.surname1973@gmail.com Late adopter of Gmail
baneofazeroth@gmail.com Too much time in World of Warcraft
Asdfast345dsafgasdf@gmail.com Spammer.
193

e-marketing
and accept the consequences that by defining a market that you want to address you
will create markets that are not going to like you or your brand. Segmentation provides
the much-needed focus for you to be able to say ‘This is who my audience is, and this
is how my brand relates to them’ whilst also excluding a section of the market who
you don’t want to address (Chapters 3 and 4). That said there’s no excuse for using
segmentation strategy as a cover for being offensive – see the Introduction regarding
ownership of mistakes, errors and when you’ll get it wrong. The pursuit of a market
niche may result in you needing to understand that what is acceptable in one market
may be unacceptable in others and how to deal with that scenario.
Personal branding
Personal branding is a developing area that predated the Internet. The concept can be
traced back (in writing) to Peters (1997) describing personal branding without putting
much detail down as to what it meant for marketing. Personal brands are the combina-
tion of reputation, endorsement and a bit of typecasting to achieve a specific reputation
for your job, expertise or career (Hughes, 2007). Effectively, it’s an attempt to present
a consistent self-image to the world that proclaims expertise, builds the confidence of
those around you in your ability to deliver and is a quick way of distinguishing yourself
from other people. Given the number of people on Twitter is up in the double figures
of millions, your personal branding strategy has its work cut out for it. However, with
the self-publishing options available online, it’s actually much easier to do the basics of
self-branding online than it is in the offline sphere. Self-branding is fairly straightfor-
ward – define your brand name and then develop a consistent visual theme to support
the brand.
Decide on the brand name you wish to develop and focus your user identities around
this name. If you’ve got a relatively common name, you may want to take the Screen
Actor’s Guild approach of allocating yourself a stage name, pseudonym or avatar. (See
Chapter 3 for the comments on being synonymous versus pseudonymous online.) Pick
what sets of letters will represent you online and be aware that whenever you’re logged
in as that identity, that’s the brand you’ll be representing. This becomes an issue when
you move from the more open web spaces into closed worlds of virtual communities –
when you’re playing World of Warcraft, you’re unlikely to want to use your real name as
your character name. Similarly, when you’re playing network games, having the same
on- and off-game identity can be challenging (it can also get you discounted or inflated
prices at the local netcafé if you’ve met the owner in-game).
The second step is to develop a visual brandmark to accompany your brand name.
Virtually all of the online sites you’ll ever join will offer the option to upload a user
picture, and most encourage you to use a photo of yourself to establish that you’re
human (if you are) and to let other people have a sense of dealing with a real person (it’s
an attempt to reduce the Brogan (2009) ‘plastic human problem’– Chapter 2). Photos
present a few problems – not least of which is the Facebook photo gallery which your
friends can use to upload and tag photos of you from that party. From a purely technical
standpoint, photos have a few problems.
194

1. Scaling issues. What looks great as a 250px mugshot may look terrible as a 100px
icon. Similarly, the Flickr ‘Show All Sizes’ effect can demonstrate how small photos
that look great may be awfully blurred and grainy at the original size.
2. Orientation. User photos on websites tend towards square 1:1 aspect ratios whilst
photos tend towards 4:3 aspect ratios. If you’re used to cropping, framing and photo
editing, this probably isn’t a problem.
3. Technicalities. You start thinking in terms of aspect ratios, dots per inch, jpg quality
measures and other issues that get between you and the snapshot.
4. Age. Photos tend not to age, change or vary, whilst you do. You can update your
photo easily enough, but each update changes the visual representation of your
brand, and is in effect, a rebranding exercise.
Whilst you can avoid most of the age-related issues with a line art logo, picture or
avatar, you will trade the human element of the photo for the consistency of the
artwork. The upside for drawn logos is the ability to easily generate promotional mer-
chandise for your online brand through Zazzle (www.zazzle.com) and Cafepress (www.
cafepress.com) so you can wear your avatar on your sleeve, lapel or t-shirt. It’s worth
investing some time to read through the design advice at Zazzle and Cafepress, and
spend time in Photoshop (www.photoshop.com), GIMP (www.gimp.org), Artweaver
(www.artweaver.de) or Inkscape (www.inkscape.org) to develop merchandising designs
around your personal brandmark to get a practical feel for how different contexts
(online, offline, in between) require different technical requirements and how well
(or badly) various designs translate from the screen to the physical world (and
vice versa).
Avatar creation also allows you a chance to consciously focus on how you want to
present to the world and to make deliberate, calculated positioning and segmentation
decisions using the brand personality traits in the development of your visual repre-
sentation of your own brand (Chapter 5). It’s also quite enjoyable to idle away the
odd phone call, lecture and travel time on the Tube sketching out variations of your
personal logo, as well as being good practice for your commercial marketing career.
Consider the part where you consciously generate your own personal brand identity
including logo, positioning and segmentation strategy as a practice for your products,
services and business. There’s also a wealth of expertise to be found in art design tuto-
rials, colour matching and other design-training information online, particularly if you
look for tutorials on related areas such as visual design, architecture, comic book colour-
ing and other art forms that you can adapt into the design of your brand. YouTube
usually has a dozen or more visual tutorials on logo design, colouring and the use of
the various graphics packages available to you.
Positioning
Positioning is the counterpoint to branding as it’s your efforts to place your brand,
product, reputation or ideas in a specific location in the mind of the consumer which
gives them something similar to compare you with. Positioning is a complex technique
195

e-marketing
that combines market research to understand the consumer and their current thinking
about a product or service, and the use of IMC to communicate a message that your
product is like or not like an existing one. It’s partly related to innovation adoption
theory in that the easier it is to position a product based on its familiarity, the more
likely it is that the product is targeted to early or late majority and is in the later stages
of the product lifecycle. This is also a technique that’s heavily geared towards customer
co-creation on one side (Chapter 8) and the anticipation side of the CIM’s definition of
marketing (Chapter 2) on the other. With a strong reliance on co-creation, positioning
is also an awkward area to evaluate as you can only put the requisite visual cues, product
experience and information into the marketspace. You don’t have the final say on how
the customer interprets your offering (Chapter 4).
Five forms of positioning

There are five forms of positioning of interest to the online marketer. We’ve chosen to
use the Kotler and Lee (2008) positioning frameworks from social marketing for their
compatibility with the positioning ideas and behaviours.
◦ Behaviour-focused positioning, which is where you position yourself, your product

and the rest of the operation by emphasizing the behaviour you want the end user to
undertake. If you’re starting up a search engine, emphasize the use of the technology
for specific types of behaviours – finding the best holiday deals or searching for a
celebrity photo.
◦ Benefit-focused positioning, which is where you position your product based on the
specific benefits it will provide the potential user. In other words, the communica-
tions focus on the ‘What’s in it for you message’. These benefits are usually associated
with the core product and focus on the intangibles such as safety, convenience or
time saving.
◦ Barriers-focused positioning, which focuses on setting yourself up as being similar to
some other part of your customer’s life. This way, adopting your product or using
your website won’t be perceived as too hard, too challenging or too complex to
use. Barrier-focused positioning is a slightly misleading label as the strategy actu-
ally focuses on identifying and then reducing barriers to adoption. Once you know
what’s stopping people from using your product, you can place yourself in the cor-
rect context for their lives – if people aren’t using your message service because
they feel they’ve got nothing to say, position the service as a way to listen to their
friends talk.
◦ Competition-focused positioning, which allows you to position your site, service,
idea or product in relation to your key identified competitors. This is a comparison-
based strategy where the main communications focus on the ‘We’re just like
Competitor X only faster/cheaper/cleaner/nicer’ and so on. This strategy is usually
underpinned by an overall market share expansion approach and is of most value in
the highly competitive maturity phase of the product lifecycle.
◦ Repositioning strategies, which are about trying to move from where you currently
fit to somewhere else in the market. Repositioning may be desirable for any one of
196

a number of reasons. In some cases, a solid positioning strategy that has delivered
success in the past needs to be revitalized to reflect new market realities. In other
cases, the communications mix failed to deliver on the desired strategy with the
result that the market saw you in a very different light to the one you saw yourself
in. Brands which last the distance undertake regular brand audits to make sure that
they are still where they want to be in the mind of the marketplace and that the
marketplace still values what organizations in that position have to offer.
The strategic elements of positioning

Positioning is the underpinning foundation of marketing success. The marketing mix
exists to support the product’s position so, without a clear idea of what that position
is, the marketing mix will lack direction and inevitably will become inconsistent and
ineffective. From a strategic perspective, the key point to remember at all times is that
the desired positioning strategy developed in the organization is not necessarily the
position that the product or firm holds in the marketplace. To differentiate between
the two remember that the positioning strategy outlines the planned way that you
wish your product, service, idea or organization to be understood by the target market
relative to other players in the market. Your actual position is how the market interprets
your messages, brands, products and services and how they evaluate you relative to the
competing offers in the market.
As well as acknowledging the difference between a positioning strategy and a mar-
ket position, it’s also important to recognize that there are two core characteristics of
positioning. First, positioning is a relative concept. A market position and a position-
ing strategy are both based on the notion of being faster, stronger, cheaper and so
on. In other words, the description of your positioning strategy will be in compara-
tive rather than absolute terms. Secondly, positioning is subjective not objective. Many
better mousetraps have failed in the market because they assumed that the objective
improvements would be understood and appreciated by the market. The ‘better’ product
as far as the market is concerned is the one they perceive offers them the best outcomes
on a particular criterion. It doesn’t matter how often you demonstrate to Coke drinkers
in blind taste tests that they actually like (and often prefer) Pepsi, they’re still going to
buy the product they want – which is Coke.
Understanding your market position requires a degree of detachment from the emo-
tional investment you’ve made in your brand combined with some solid and objective
market research. You may think that your product is a prestige-priced, sophisticated
alternative to the everyday options – the market may see you as pretentious and over-
priced. If gaps appear between how you see yourself and how others see you, the
challenge is to change that perception. In some cases the discrepancies could be due to
objective issues that can be relatively easily changed such as additions to product fea-
tures or modifications to the distribution network. More often, however, the problem
arises because of the failure to fully integrate the communications mix with the mar-
keting mix. Ensuring that the market-perceived position of the product is the same as
the marketer’s desired position relies heavily on developing an appropriate and effective
branding strategy, which in turn is supported by a quality IMC strategy.
197

e-marketing
} Communicating online using the promotional mix

Promotion is one element of the marketing mix that can be expanded into a
complex subset of elements, each with certain advantages and disadvantages for mess-
age delivery.
The promotional mix

The contemporary promotional mix consists of eight different forms of marketing
communications that work well within the overall framework of e-marketing. These are:
1. advertising
2. direct marketing
3. personal selling
4. point-of-sale/point-of-purchase displays
5. publicity
6. public relations
7. sales promotions
8. user-generated content
Advertising
Advertising is any form of mass communication paid for by an identified, or identifiable
sponsor, that is non-personal and targeted towards persuading members of a particular
market segment. Advertising has the advantage of being able to create images and sym-
bols, making the demonstration of how a website works, or what the Internet is, partic-
ularly well suited to the advertising genre. It also has the advantage of control. What the
message says, how it is sent and where it is available are all controlled by the marketer as
a result of the payment process. The disadvantages to advertising are that it is the broad
brush of communications and, as such, lacks the interactivity or targeted finesse of per-
sonal selling or direct marketing combined with a relative lack of credibility (if you’re
paying to broadcast the message you wrote, inevitably the message will be positive).
Banner advertising
Banner advertising is the most common, most accepted and probably most blocked
form of paid advertising on the Internet. The purpose behind banner advertising is to
create small advertising placements, using the same techniques as offline promotion,
which are live pointers to another point on the Internet (website, blog, Twitter profile).
Unlike offline advertising, the live pointer aspect can take a consumer straight to the
website with only one click of a mouse. The disadvantage to the advertiser is the rel-
atively low rate of click-throughs associated with banner advertising with few, if any,
advertisements gaining double-figure response rates. This is partly because of burnout
from the market, and partly due to lousy advertising. In addition, the banner adver-
tisement has spawned a range of related genres of interactive advertising, all of which
198

rate below it in terms of popularity. The culture of the Internet is still predominantly
opposed to advertising that:
◦ does not create value in that it lacks relevance to the conversation, website or your
current activity. The usual online consumer metric is that a good advert is a reason
to visit a site and a really bad advert is a reason to consider installing ad-blocking
software
◦ is not relevant – a major problem for automatic keyword-generated adverts that
display advertising based on a single word rather than a contextual statement.
A child-free advocacy site, for example, is likely to end up with childminding adverts
based on the keyword ‘child’
◦ creates a nuisance so that the advert interferes with the operation of the website. For
example, ‘Subscribe to our e-mail newsletter’ boxes that block the whole page, aggres-
sive mouse-over adverts that play sound, video or worse when the mouse moves
remotely near them and the constant annoyance of the excessively blinking anima-
tion (You are the n+1th visitor to the site). Throw in some pop-up and pop-under
adverts, and you’ll find the what’s what of online advertising misdeeds.
The important thing concerning banner advertising and its kindred promotional spir-
its is that they are tiny replications of traditional outdoor advertising media. Banner
adverts are fraught with technical problems not found in the majority of other advertis-
ing media, including a ludicrous range of sizes and styles necessitating in a considerable
volume of copy development. That’s backed up by limitations of file size (dimension,
weight in kb), file type (first preference for jpg, png and gif. Flash not accepted) and the
realization that you’re trying to communicate within the limits of your IMC policy with
a postage stamp. Just by way of illustration, Figure 7.3 illustrates a blank template map
of the different banner advert sizes.
88 × 31
120 × 90
125 × 125
120 × 240
120 × 60
110 × 80
234 × 60
392 × 72
468 × 60
Figure 7.3 Banner advertising shapes
199

e-marketing
The range of available advertising sizes is more limited than even the classified section
of a newspaper. Some providers such as Facebook allow for additional text beneath their
advertising, although Facebook has a narrow choice of size. While the acceptance (or,
more accurately, active rejection) level of banner advertising has been changing with
the evolution of the Internet market, the change drifts back and forth between the ‘end
of days for banner adverts’ and their role as the saviour of free social networks. Despite
over a decade of presence online, the banner advert has achieved neither dominance
nor destruction and appears to be a fairly stable constant feature of the online terrain.
Text-only advertising
The strangest development of advertising on the Internet has been the rise of ‘retro’-
styled text-only advertising. The best-known version of the system is Google AdWords,
which started life as short text advertisements next to the Google search results and
spread across to Google-owned services such as Gmail and Blogger. After establishing
that AdWords didn’t bring the downfall of blogging society, they’ve spread to a range
of websites and can be easily added to blogs, websites and other areas.
Google AdWords act like a cross between a haiku and a note passed in class – they
appear on the right-hand side of the page of results for a standard Google search, along
with the Google Premium Sponsorships (which appear at the top of the page). In many
senses, the Google AdWord restrictions require more poetry than marketing to develop
key copy points – with an effective maximum of two lines (or a single sentence) per
advert and no visual element, clarity and conciseness are vital. Similarly, the Premium
Sponsorship Advertising simply places the URL and a short phrase at the top of the
search results for the page.
Critical to the operation of Google’s advertising system is purchasing keywords.
Google AdWords works on the principle of purchasing a keyword which then triggers
the display of the advert when a user searches for that keyword. If the user clicks on the
AdWord banner, Google bills the advertiser. If, however, the advertising doesn’t draw
attention, the advertiser isn’t billed for the space. While this means paying only for
what works, Google’s system gives you a (not very large) maximum number of searches
to perform at a reasonable rate before suspending your advertising and requesting that
you rework the message. As mentioned above, keyword purchasing has problems galore
due to the Google system having no concept of nuance, context or subtlety. If you’re
running a pro-marriage website with Google AdWords, you could find an ambitious
divorce lawyer’s advert showing up beside the wedding cakes and prenuptial template
files. Many activist websites covering topics such as politics, race, gender and other
issues have found their site content triggering inappropriate auto-generated AdWord
content. Consequently, whilst Google AdWords has its role, it’s a developmental system
despite having launched back in 2000 (the dark ages of the Internet).
Offline advertising (the outside world)

The beauty of the Internet is that it provides an unlimited supply of paradoxes. Name a
virtue of the Internet and it’s just as likely to be a vice. That same open landscape which
lets you speak freely is a boundless, seamless digital environment of shared voices of
200

all those other marketers speaking freely. Your voice is competing with a lot of other
voices, and some of those have some serious offline clout to back them up (@bbc,
@aplusk, @oprah). Attracting people to your part of the Internet, be it Twitter, a blog,
your Facebook page or website, is a specialist skill. The role of the promotional mix, in
this context, is not to deliver customers to the site, but to deliver the address of the
website to customers in a timely and useful way. The problem with offline promotion
of the URL is that the offline world is a dead pointer (Dieberger, 1997). Dead pointer is a
charming term which refers to any time a URL is displayed in a medium where it cannot
be accessed by clicking or immediately interfacing with that medium. The dead pointer
is the predominant form of media in the real world. Any website address seen in an
offline context needs to be transferred into the online world. In order to make the jump
from billboard to web browser, offline promotion of Internet addresses needs excep-
tionally high unaided recall or some form of supplementary media in terms of print or
direct mail. Systems such as the QR code partially alleviate the dead pointer issue by
transferring the consumption of the offline advert into an immediate experience on a
handheld device (assuming the phone has the appropriate Internet access available).
Direct marketing
Direct marketing refers to activities by which products and services are offered to mar-
ket segments in one or more media at a personalized level. Usually, direct marketing is
conducted by phone or mail with the attempt to either solicit immediate response (cata-
logue buying, phone shopping) or deliver promotional materials. It has an unsurpassed
ability to be used by marketers for narrowly defined targeted marketing in that mes-
sages can be customized and mailed directly to the target recipient. The disadvantage
of direct mail is a lower market profile in that mail-out campaigns do not get incidental
viewing by non-targeted members of the audience. In addition, the propensity of direct
mail to be used for unsolicited mail-outs has led to the medium gaining a reputation
for being junk mail rather than a value-added service. For the moment, consider direct
e-mail marketing to be an off-limit zone for standard advertising activity and restricted
to only dealing with established customers who have requested updates from you as
part of their ongoing relationship with your organization (Chapter 9).
Why e-mail is not direct mail

E-mail is not a direct-mail channel, no matter how nice it would be if Internet users
would accept the same level of digital junk mail as they do paper mail. Since the costs of
e-mail are picked up by the receiver and the carrier networks, unsolicited mail is treated
with the appropriate level of hostility as befits any form of resource leech. No matter
how tempting a mass unsolicited mail-out may seem in terms of dollars per customer
annoyed, the damage to the branding and image of the company will far outweigh any
potential benefit. Similarly, there is no real point to purchasing an e-mail database list
from a list reseller since users cannot tell the difference between unsolicited spam and
resold mailing list spam. The Internet has ushered in an age of relationship-based direct
marketing where the consumer has become empowered to invite direct marketers to
201

e-marketing
become part of their lives and reject those who show up uninvited. Use e-mail once the
transaction has been initiated by the customer and your e-mail message will be a valued
part of the customer’s inbox (Chapter 2).
Personal selling
Personal selling is the hand-to-hand combat of marketing promotion, where personal
communications techniques are used to sell a product to an individual in a personalized,
face-to-face environment. Personal selling offers an unparalleled level of customization,
interactivity, flexibility and feedback in a very specific and localized transaction. The
disadvantage of personal selling is that it is one-to-one, rather than one-to-many, and is
a very labour-intensive method of promotion. This in turn makes it very expensive per
target reached. Personal selling is not usually associated with overt website promotions
since it’s a personal contact between sales and buyer, and usually conducted out of sight
of the main market through VOIP, e-mail and direct messaging.
Point-of-sale/point-of-purchase displays
Point of sale/point of purchase refers to in-store displays such as posters, signs, sam-
pling and materials designed to influence the consumer’s brand choice at the point of
purchase. The advantage to promoting websites and the Internet is that the consumer
gets given the direct relationship between the website and the product at the point of
purchase, which can be valuable, particularly for post-purchase follow-up. Even for fast-
moving consumer goods which are consumed immediately, traffic can be driven to the
site via point-of-purchase promotions through the use of competitions based on regis-
tration of initial purchase. The downside to in-store promotions is that the customer
leaves the website address behind as they leave the store, either with or without the
product which the website was designed to promote.
Online point of sales can be the nemesis of a quick and pain-free transaction as you
try to navigate your way through three or four pages of ‘Special offers exclusively for you
right now’ text with the ‘Skip to checkout’ button hidden in the smallest font at the base
of the page. This approach by the e-commerce industry to make the purchase button
hard to find is the physical world equivalent of placing an obstacle course between the
shopping and the checkout counter. Other online point-of-sales options occur within
the website or shopping cart with the recommendations systems, such as Amazon’s
habit of advising you of what other products people bought to go with your current
product and iTunes’s recommendations based on your previous music purchases. The
more accurate and less intrusive the recommendation, the more valuable it’ll be seen
by your customer and be perceived as a genuine ‘Hey, if you liked that, you might want
this as well’ rather than an aggressive upsize-selling technique.
Publicity
Publicity is any form of non-personal mass promotional activity that is not paid for by
the organization. Most frequently this refers to news articles or editorial comments, but
it can also be seen as incidental placements in films, video or television footage where
202

the product or organization is an incidental, rather than paid, part of the background.
The obvious advantage of this method is the low cost associated with the genuine pub-
licity events that occur through media reviews of the website, or incidental featuring of
the website in media coverage. The downside to publicity is the lack of control exerted
over the use of the URL and the potential for incomplete or inaccurate reporting of
the address and website. Advertising of URLs at sporting stadiums has the advantage
of the incidental news coverage during the sports reports, although it is more common
to see only half the address, or to have the address obscured by the sporting event it
was sponsoring. Publicity also flows from the organic discussions on the Internet that
spring up around events, news articles, or flow through from high-profile acts that gen-
erate conversation. Zappos.com rose from obscurity to having a fairly high Internet
profile quite quickly simply through a conversation about how a single staff member
being flexible and acting with a bit of compassion turned a potentially bad situation
(customer late with their return shipping due to family tragedy) into an act of kindness
(waiving late fees, sending flowers). The publicity generated from one genuine act of
kindness multiplied quickly as it was blogged, tweeted and discussed as a genuine topic
of conversation.
Public relations
Public relations refers to the deliberate, planned and sustained effort to institute and
maintain an understanding between an organization and any group with which the
company needs to communicate, such as the government, citizen groups or the media.
PR campaigns concerning websites are usually based around developing a stated corpo-
rate position on an issue and directing further inquiries to the website where greater
depth of information can be made available. The advantage of this approach is that
depth and clarity of information on a subject can be more readily accessed by the gen-
eral public or media than through press conferences or other PR tools. Public relations
has traditionally been seen as a subordinate support function in marketing although it
is being used as a corporate positioning tool.
Public relations is having a fair degree of trouble adapting to the new rules of the
Internet where bloggers aren’t journalists, don’t have fax machines and don’t tend to
have the established partnerships with PR companies. To some extent, this is a good sign
for the PR industry as it has moved from a carefully crafted message to a targeted market
into a mass broadcast model as technical capacity outstripped strategic thinking. If you
want to engage in PR campaigns that involve bloggers, there are a few simple rules:
1. Be interesting. First, and foremost, understand that your role as the PR agency is to
provide something of value to the blogger so they’ve got something they can write
up on their blog. Do them a favour by being novel, topical and interesting and they’ll
reciprocate by doing you a favour in promoting your work to their readership. Public
relations is the creation, delivery and exchange of communications that have value.
Think idea product, think market needs and really think about what you can offer
the writer to solve their problem (need for copy) before you attempt contact.
203

e-marketing
2. Do the market research. Read the targeted blog’s current posts and as far back into
the archive as you can find. Eliminate blogs that have negatively reacted to similar
ideas to the one you’re about to pitch. Check for conflicts of interest, histories of
conflicts with the company and the type of audience to expect at the blog.
3. Segment. Use the same degree of care and consideration for targeting blogs, news
outlets and other commentators that you would use for picking your target market.
Your objective is return on time invested, with an emphasis on smaller numbers of
higher quality contacts rather than a string of ‘Dear Blogger’ posts that will hit the
spam filter (at best) or receive negative coverage (at worst).
4. Contact. Look for cues on the blogger’s site about their preference for unsolicited
comments. Some high-profile blogs have very specific instructions for making con-
tact to suggest content – BoingBoing.net uses a specific web page and structure for
content suggestions (http://www.boingboing.net/suggest.html). This is a relation-
ship between you and the blog author, so start with a positive impression by taking
the time to know their preferences.
5. Communicate. Build the relationship with the blogger by talking to them, cultivat-
ing them as a contact and generally treating them as you would a paying customer.
They’re making money for you indirectly by cutting your promotion costs and
hopefully generating credible endorsements and conversation starters.
6. Disclaim and own the message. Transparency is a critical issue with bloggers and
sponsored messages. Openness, honesty and transparent conduct will increase the
likelihood of repeat message business as the blogger and their audience are less
likely to react negatively towards the presence of a commercial message in their
community space if it’s handled appropriately. Late 2009 saw the US Federal Trade
Commission release a series of guidelines for sponsored blog posts, payola content
and other disclosure requirements. Pay attention to the spirit as well as the letter of
the laws that govern disclosure.
7. Don’t Astroturf. If you can’t build a genuine grassroots movement through honest
contact, don’t try to fake a string of blogs, blog comments and message board partic-
ipation to push your message. You will get caught, you will be exposed and you’ll be
a topic of conversation that will feature the hashtag #fail quite prominently as your
brand is associated with low-quality campaigning, dishonest behaviour and every
other negative piece of publicity the Internet can muster. What little gain you could
make from the deception won’t be worth the brand damage to your company, and
future campaigns from the same agency. Besides, if you’re getting no traction with
the public relations, it’s probably a safe bet you’re not moving products, so some-
thing’s gone wrong at the core of the operation. Less cheating, more revision, and
you’ll do better next time.
Search engine optimization: PR for computers

Search engine optimization (SEO) is an applied form of PR campaign with a very spe-
cific target audience consisting of the search engine ranking algorithm at one or more
of the major search engines. As a specific and highly targeted form of communication,
it comes with a couple of problems that need to be highlighted. First, for a variety of
204

reasons, both legal and technical, Google (www.google.co.uk), Bing (www.bing.com),

Yahoo!Search (search.yahoo.com) and the other thirty or so search engines will all use
a different mechanism for ranking and rating your website. SEO strategies need to be
targeted towards the search engine used by your primary market since if you’ve got an
amazing search rating at a site your customers don’t use, it’s a waste of effort. Secondly,
search engine optimization is an evolving art form that has to update and react to
changes in the way in which search engines manage their indexes, ranking and priority
ordering. For the most part, relevance, accuracy and value tend to win out over keyword
stuffing backlinks and referral tricks at the end of the day. That said, because the search
engine business is a very young industry, there’s a lot of change and upheaval forthcom-
ing as the major engines continue to research and develop new ways of handling the
massive data set that is the Internet. The broad advice for search engine optimization
for your campaign is fairly straightforward in that most search engines respect content
over technique and prioritize their results accordingly. Make something of value for
your customers and the odds are firmly in favour of that process providing a decent
organic SEO score. Also, it’s vital to remember that the point of being highly ranked
in a search engine is to engage the human customer who comes to your website to see
your offering of value.
Sales promotions
Sales promotions are marketing activities conducted to stimulate short-term growth in
sales through techniques such as coupons, prize promotions, competitions and free
samples. The advantage to the sales promotion is that it encourages goodwill among
consumers and tends to stimulate immediate sales. Offers such as ‘buy two, get one
free’ encourage brand switching and immediate sales spikes. The major disadvantage
of these elements is that the consumer market is becoming exceptionally sensitive
to sales promotions and is willing to engage in brand switching to track the promo-
tional offers. This is particularly rampant where switching costs are low, for example,
websites, where the use of sales promotions to encourage visits to a website will not
necessarily guarantee loyalty. It is far more likely a customer will track through the
different sales promotions online and collect a range of offers from different websites.
Sales promotions offer features in the non-Web world with discounted package deals,
console or system-exclusive content, free demonstration downloads (within game links
to purchase) or expansions through downloadable content (DLC) and in-world game
items (Chapter 14).
User-generated content
User-generated content is the point where marketing, co-creation and easy access to
high-end authoring tools collide in a complex tangle of legality and authenticity. On the
one hand, there’s nothing more persuasive than a customer who’s so keen on your work
that they’ll build their own advertising campaign to promote your stuff on your behalf.
On the other hand, there’s nothing more terrifying for an integrated marketing com-
munication campaign than interlopers who don’t have a grasp of the strategy, tactics
205

e-marketing
and component style guides. It’s a tough balance that currently is erring in favour of
legal challenges, lawyers and copyright enforcement.
User-generated content versus lawyers }
From a marketing perspective a serious problem now arising is that the type of user
who’ll take the time out to make something on your behalf will be quite vocal when
your lawyers show up with the cease and desist letters. The gap between the accep-
tance of user-generated content and the use of lawyers was most pronounced during
the competition between the Star Trek: The Next Generation and the Babylon 5 tele-
vision shows back in the early days of the Web (1995 to 1997). Paramount Studios
(Star Trek) would send carefully worded legal threats from their lawyers to shut down
fan sites that were dedicated to spreading support for the Star Trek show. At the same
time, the fledgling Warner Bros sci-fi series Babylon 5 contacted the creators of the fan
sites and offered them access to ‘official’ sanctioned fansite kits that allowed the site
owners to continue promoting the new series as a semi-sanctioned operation. The
result was the development of an active Babylon 5 fanbase that was spending signif-
icant effort on promoting the show through word of mouth, whereas the Star Trek
fans were periodically dedicating more effort to generating negative publicity over yet
another heavy-handed shutdown of a site attempting to sell Paramount’s show to the
rest of the Internet.
User-generated content is an off-shoot of the word-of-mouth styles of publicity and pro-

motion that simply arise because the user of a product tries to encourage those around
them to share the experience. User-generated content is how fan clubs, user groups,
reading groups and movie-watching events have all spawned around a core group of
enthusiastic fans who use a combination of word of mouth and self-created content to
connect with other fans to form a community (Chapter 9) and encourage non-fans to
try the product.
Word-of-mouth advertising has also seen a major revamp having been recently
repackaged as ‘viral marketing’, so named because the marketing message is spread
through the community in a fashion not dissimilar to that of an infectious virus. While
a more charming metaphor probably does exist, viral marketing has several elements
that make it extremely valuable for the promotion of websites. Promotion by word of
mouth and word of mouse is recommended where the site contains a medium to high
level of complexity and engages in services that can be used as a topic of conversation
or for which users would seek the opinions of their friends and family. From a market-
ing perspective, word of mouth is valuable at the point that the market is influenced
by social pressures in terms of either needing to communicate their social leadership
status (early adopter) or to conform to the conversation surrounding them (early and
late majority) (Chapter 5). The rise of social media communication platforms has actu-
ally improved the quality, quantity and capacity of organic word-of-mouth campaigns
206

as genuine experiences that can be relayed through a social group with limited or no
loss of details. One blog post from a happy customer posted to Twitter can be re-tweeted
rapidly with any number of endorsements.
Certain aspects of social media systems also provide opportunities for assisted word-
of-mouth activities. These are predominately organic developments from the customers
which are gently assisted by marketers. Back in the Introduction when you signed up
for the social bookmarking site Delicious (www.delicious.com), you would have noticed
the links to the hot topics and trending conversations. These are social cues that can
form the basis for the first trigger to start a word-of-mouth conversation around a site,
service, product or event. Similarly, Twitter provides an index of popular topics, tags and
words that the general public are tweeting in a given period (www.twitter.com), which
provides another set of social cues as to topics of possible online conservation for the
early majority (Chapter 5). Finally, aggregator sites such as Slashdot (www.slashdot.org),
Digg (www.digg.com) and Metafilter (www.metafilter.com) create environments where
word of mouth can be generated from genuine (and slightly forced) conversations about
sites, brands and products that appear in the popular trends charts.
} Principles and tactics

Once the general trend of your promotional campaign has been determined, next comes
the details of what to say and how. Writing text-based copy for a website is significantly
different to writing copy for traditional media. Similarly, decisions need to be made
about the extent to which messages are fixed or fluid.
Dimensions of a promotional message

The objective of all elements of the promotional mix is to say the right thing to the right
person at the right time and have them receive, perceive and interpret the message in
the right way (Kiani, 1998). In order to achieve this outcome, there are three main
dimensions that a promotional message needs to balance:
1. message, which is the meaning to be transferred from the advertiser to the audience
2. format, which refers to the attributes of the advertisement that attract the audience’s
attention, such as relevance, timeliness and usefulness
3. context, which is the media platform used by the promotional message.
Context offers the message certain opportunities for audience attraction and message
interaction through static (outside world), dynamic (reactive advertising such as red but-
tons on cable television) or interactive (conversations in social media) options. A good
promotional message needs to balance its strength in each of the dimensions so that
the message is supported by an appropriate format and the best use of the opportuni-
ties available in that context. The major contexts for promotion consist of online and
offline locations where you can point someone at your online content (or somewhere
else through your online activity).
207

e-marketing
Static advertising
Static advertising includes the outside-world strategies of everything beyond the front
door in the physical world such as sky writing (difficult but achievable), bus sidings,
billboards, bus shelters and postcards stuck to phone booths. It also incorporates indoor
advertising such as television, cinema, radio, direct mail, magazines and other printed
or broadcast advertising materials consumed inside a private home or at work (or on
the Tube, etc.). Sales promotion and point-of-sale advertising are also covered under the
indoor advertising banner. If you can’t click on the URL and get a response, it’s a static
advert. It may also include the product dot.com category where the URL is printed on
the product, packaging or instructional materials.
Dynamic advertising
Dynamic advertising occurs when clicking on the URL has some outcome that includes
another page loading, a call to action, a purchase opportunity or related online activ-
ity. This is often conducted by contextual placement such as Google AdWords, banner
advertising and the annoying advertising overlay on YouTube videos. It’s also incor-
porating the calling-card approach, where the author of an e-mail, blog comment or
bulletin board post casually includes the URL to their site as part of their signature file
contact details.
Interactive advertising
Interactive advertising is where you move from the computer-generated dynamic inter-
action and bring the communications to the interpersonal level. The rise of social
media has created a duality where automated systems (web content, dynamic deliv-
ery) can create opportunities to escalate the promotional message to conversations
between real people. This incorporates the classic one-to-one models of personal selling,
direct e-mail exchanges, messenger chats and Facebook comments with the one-to-
many-to-one dynamics of a conversation on Twitter or in blog comments. Interactive
advertising requires people to be talking to people in order to incorporate word-of-
mouth communications models, personalized responses in the communication and
the sociable side of social media sites (Chapter 12). It’s also the IMC nightmare sce-
nario as consumer conversations are customized, interactive, fast and likely to be totally
‘off script’.
Six tenets of promotion

Aitchison and French-Blake (1999) argue that the best use of the promotional mix comes
through an understanding of creativity as a subjective experience. This involves an
understanding that no objective ‘truth’ exists in a trade that works in the realm of
persuasion and that the role of good promotion is to reach the highest, not the lowest,
common denominator with the target market. These statements can be translated into
a six-point framework to guide the creation of effective promotion:
208

1. Promotion should be about empowerment. Positive promotions offer you informa-

tion on how a product, idea, service or website will improve your life. Persuade
through benefits rather than features.
2. Promotion can signpost social change. Promotion and the mass media promotion
of Internet sites produce a constant stream of encouraging messages for the general
public to experience the online world. Same rule applies for subsystems of the online
world – celebrity, media and advertising use of Facebook, MySpace and Twitter raises
their level of acceptance and adoption in the wider community.
3. Promotion can support and encourage. A good promotional campaign doesn’t just
add value through new recruits, it also reaffirms the brand loyalty of existing cus-
tomers. Promotional campaigns based on relationship marketing – from online
advertising to sending a thank-you e-mail to a recent user of the website – can go
a long way towards the long-term success of a Web presence (Chapter 8).
4. Promotion should send news. It’s okay to take time to spread a message rather
than constantly be persuading a targeted audience member to perform an action.
Sometimes, just raise awareness or increase likeability and let those two elements
handle the call to action. Less rush, more consumer empowerment, and greater
rewards await.
5. Promotion can be used to share experiences. ‘If you get it, share it’ is the mantra
of social media. Promotion can be used to communicate shared meaning in a
community. Honesty, humanity and emotional connections are central to the
success of social media (Chapter 12), cybercommunity (Chapter 9) and ongoing
relationships (Chapter 8). If your website is a shared experience for people just
like the target adopter, it increases the sense of relevance, aids recall (Chapter 5)
and improves the likelihood of the site breaking through the clutter to reach the
targeted recipient.
6. Promotion can be used to answer a dream. The core business of marketing is to
identify, anticipate and satisfy customer requirements. What if you went beyond
core requirements and knew the customer well enough to tap into their dreams,
needs and wants? You’d be delivering a higher level of product, gaining a greater
level of recall, motivation and desire to access the site, and generally having a better
time of it as you provide the customer with something they really want. If you do
it in a sustainable way by making a profit, you’ll ensure that you’re still there next
time they need you. This happens more than a few times in the social media and
community orientated sites, and should be a required element of a user-generated
content site (Chapter 6).
Conversations and the share of voice

In Chapter 2 we mentioned the concept of the one-to-many-to-one model of inter-
active, hypermediated communication as the major game changer for interactive
marketing when compared with the offline world. When Hoffman and Novak (1996)
put this idea forward it was at the dawn of the era of connectivity, so their emphasis
was on the ability of the consumer to e-mail a response to the marketer who could
209

e-marketing
reply back quickly and directly, and how the speed of the interaction opened a new
avenue for communications. Fast forward to the Web 2.0 era and the development of a
myriad of direct and indirect communication platforms, and the Hoffman and Novak
(1996) model has become more important than ever in the e-marketing portfolio. Ease
of access to self-publishing, microblogging and Facebook activities are rapidly becoming
conversation starters for consumers who are dissatisfied (usually) or incredibly satis-
fied (unusually) with a company’s service, products or advertising. Although Facebook
status profile changes are virtually impossible to track under current privacy settings
(Chapter 15), Facebook groups are relatively easy to follow and pretty straightforward
as to whether the members are happy (fans of a product) or really unhappy (members
of ‘This Products Sucks’ community).
There are three distinct aspects to the marketing conversation. First and foremost is
the requirement for active listening to the market through market research, tracking and
simply paying attention when there’s a conversation happening around you. Secondly,
is the need for direct, open and actual two-way communication in order to become part
of the conversation rather than just being the topic of the conversation. Thirdly, and
usually overlooked, is that the conversation has a purpose, point or reason to it. Your
responsibility is to act on what you have heard, deliver on any promise you’ve made
and generally avoid paying lip service where actual service will suffice.
Listening
The Web provides a fairly level playing field – everyone has equal access opportunities
and there is a much greater share of voice (Watson et al., 1998). Share of voice refers
to the ability of all users in the Internet arena to be able to promote themselves and
speak freely without one or more players being able to buy the ‘voice’, as can occur in
restricted broadcast media such as television or radio. The inability of the Web to have
a central management committee, or to be able to be controlled from a central hub, has
created a free open market of voice where competition is based on message desirability
rather than capacity to purchase media time and space. That said, there are a few good
points on the Internet map to use for listening to the conversation, and these include
(but obviously aren’t limited to) the following:
◦ Twitter. Twitter is the perfect starting point for a conversation about good or bad com-
mercial experiences since it’s short, sharp and available on most mobile phones (3G
or SMS to Twitter). The advantage to listening on Twitter is the ability to reply to the
original message almost immediately (assuming the original tweet was in the publicly
searchable timeline). Services such as Twitscoop (www.twitscoop.com) allow you to
log in under your Twitter account, search active conversations and reply directly to
the people talking about your site, product or brand.
◦ Microsoft Bing. Bing’s search engine has an xRank function (www.bing.com/xrank)
that provides ranked data on various keywords. Whilst it’s probably more useful for
celebrity fantasy football, it does provide a sense of trending data and movements in
conversations.
210

◦ Google Search and Google Alerts. Raised back in the market research chapter, this is
the best way to track long conversations inside the blog communities. Set the Google
alert on your brand, company name or other keywords to deliver ‘as it happens’
updates and keep your e-mail account open as you work. When something’s said,
you’ll know around the same time Google does and that’s a good time to drop into
the conversation and engage with the original poster and their commentators.
Talking with, not at, the customer

The second step of the process is to consider the relationship marketing (Chapter 8)
elements of the conversation and avoid the ‘plastic human’ syndrome at all costs
(Chapter 2). There’s often a problem responding to criticism on the Internet with
attempts to prove your critic wrong, particularly where there’s a big budget campaign on
the line. From your side, these are words on a screen, and sometimes, problematic words
that might be harmful to your expensively crafted IMC campaign. From the customer’s
side of the screen, it’s their life experience, their reality and their view of the world.
You’ll need to actually provide the human touch in this interaction and potentially
deviate slightly from the IMC script to ensure that you produce a genuine response to
the felt needs of the writer. Many companies still talk at the customer with boilerplate
answers, template e-mails, cease and desist letters or pointless non-communications
that do little more than further antagonize an already annoyed consumer. Given that
they’re already unhappy, and publicly broadcasting this unhappiness, try not to provide
additional fodder for them to use to continue being unhappy with you in a loud and
reader-attracting way.
On the other hand, if positive words are being said about your work, brand and
product, don’t forget to take the time out for a quick and quiet thank-you note. Twitter
allows for @ reply messages to go to accounts that you’re not following (direct messages
require you to be a follower, and it’s probably unnerving to suddenly be followed by
the corporate you just mentioned). Blogs have comments if you want to say something
public to the author and usually have a contact e-mail address if you’d like to keep
it quiet. Above all, letting the person who’s speaking about your brand know you’re
listening, and you’re willing to engage with them, goes a long way towards devel-
oping the trust, commitment and reciprocity frameworks that underpin relationship
marketing (Chapter 8) and building a sense of community between consumers and the
brand (Chapter 9).
Reacting
The final step in the process is the most overlooked because it’s not strictly an IMC
or communications element. If you’ve been listening to the conversation, and there are
complaints about service, quality, advertising content or any other aspect of what you’re
doing, there’s no point engaging in a conversation on how you could do better next
time if you have no intention of changing. One of the most frustrating aspects of being
spoken at by a company, brand or person is the sense that you’ve been acknowledged
without any comprehension of the point you were trying to make. This becomes even
211

e-marketing
more important if you’ve said you’ll change, do something different or correct an error
in a process once you’ve engaged in service recovery (Chapter 8). If a second failure
occurs it is far more devastating to the consumer’s confidence in your abilities than the
first mistake. It’s also leverage that they can use in follow-up conversations that will
continue to harm your brand as you burn away trust and goodwill by failing to follow
through on your commitments. The thing about the shared voice of the Internet is
that you can and will be caught out if you attempt to placate a critic by misleading
them. That’s also the sort of conversation that carries and turns what should have been
a minor blip on the brand’s radar into a David and Goliath story of underdog consumer
against deceitful big brand.
Five-step model for e-marketing promotions

Your best case scenario for marketing promotion involves developing a level of pre-
existing interest in a product and translating this interest into a site visit. We’ve
provided a five-step model from the dawn of the Internet which outlines how to capi-
talize on the interest-driven nature of e-marketing consumption (Chapter 4). These five
steps – awareness, attraction, first contact, call to action and repeat performance – are
taken from Kiani (1998) and Kierzkawski (1996, in Kiani, 1998). The application of these
steps has been updated to include more recent developments in online life.
Awareness
Awareness is the simple acknowledgement of your existence by the consumer. Given the
size and scope of the Internet, this basic activity turns out to be a little more complex
than previously anticipated. From your perspective, the usual forms of awareness to
work towards are site awareness, which is where your market knows your URL (or has it
bookmarked) and topical awareness, where your market knows that there’s something
out there on the subject matter and puts the right combination of keywords into Google
to find you.
Awareness is also the precondition for discovery. In consumer behaviour, problem
recognition is the first phase of the decision process as the consumer becomes aware
of the gap between what they have and what they want. Same goes for the Internet –
search engines are blank spaces for the consumer to perform their own magic for find-
ing solutions. Google is both an unprompted recall exercise as you try to figure out
your search terms, and a prompted recall exercise should you activate the Google auto-
complete recommendations (Chapter 5). This is where the consumer behaviour theory
of awareness becomes valuable, since it’s not vital for someone to remember the full URL
of a site if they can remember enough of the title to put it into the search box. In fact, if
you type an incomplete address or keyword into the browser address bar, Chrome and
Firefox load Google results for the keyword, Flock loads the Yahoo!Search for the term,
and Internet Explorer and Safari take their best guess and load the first page to match
the keyword. With this in mind, recall of incomplete or partial addresses is enough to
be a starting point for awareness in e-marketing.
212

Attraction
Simply being aware of a product is just the first step. Once awareness exists, the next
step is to generate some sense of attraction, likeability or curiosity so that you’ll want
to visit the website, read the blog, follow the tweets or join the community. The site
needs to have some relative advantage over other options (which can be as basic as ‘on
the first page of Google results’) and a touch of compatibility (loads in the browser,
makes sense to the reader) to provide the initial level of attractiveness for the consumer.
This could be expressed through convenience (first search result returned), timeliness
(Google AdWord on a keyword search), serendipity (banner advert on Facebook) or QR
codes on a physical world advert (Chapter 13).
First contact
First contact is the translation of awareness and attraction into the motivation to actu-
ally load the site. This is where the other half of the innovation features from Chapter 5
come into play. Complexity is an issue once the site loads, particularly if it’s one of
those ‘trying to be clever’ Flash animation extravaganzas or the site design makes it
hard for you to find what you’re looking for in the maze of graphics, links and but-
tons. (Hint: CLICK TO BUY NOW is a great high-visibility call to action.) Trialability
is partly administered back at the Google and Yahoo! Search results with their short
summaries of the sites and partially at the site. Needing to sign up, log in and generally
hand over a packet of personal details to get the basic information from a site raises
the trialability barrier. Make it easier for people to see what you’ve got on offer and use
the registration process as a call to action leading to purchase. Finally, visibility plays a
minor role – namely, websites should be seen and not randomly heard. Automatically
playing video and audio raises the visibility of a website which can be a real nuisance
to the customer (particularly if they’re looking at it during work time. Autoplaying loud
adverts are a great way to lose friends.) First contact is also the exchange element of the
AMA (2007) definition and comes into effect as the website takes on various roles of
salesperson, self-service vending machine (Chapter 8), information kit and community
hub (Chapter 9). It’s also worth remembering that effectiveness is the key to the first
contact. You’re better off with a small number of visitors resulting in the completion of
desired transactions (purchase/download/subscription) rather than a massive wave of
rejections from non-interested parties.
Call to action
The primary call to action in offline marketing is the product purchase. On the Internet,
the call to action can be any one of a number of activities, including:
◦ product purchase using links to ‘Buy it now’, ‘Add to cart’, ‘Purchase’ or similar means
of exchanging value between customer and website
◦ subscribing to the RSS feed in Google Reader or to any other feed reader
◦ subscribing to an e-mail newsletter
◦ joining a community by filling out the site registration details
213

e-marketing
◦ following someone on Twitter

◦ clicking a link on a page.
The call to action is a precise message aimed at encouraging a specific action or

behaviour from the consumer. Promotion’s role in the call to action is to inform and
persuade to complement the benefits of the product and to reduce the perceived cost
of adoption (price). If you’re used to reading blogs in Google Reader, clicking on one
more RSS feed to add to the mix of daily updates isn’t a huge price to pay. If, however,
clicking on the RSS link means setting up a feed reader (e.g. signing up at Google from
scratch), subscribing to the blog might seem to be more time expended than simply
checking back every few days.
Repeat activity
The last step is the role of promotion in developing repeat purchase, repeat visits, loyalty
and ongoing participation. Communication strategies such as message customization,
frequency of content updates and freshness of site content are vital considerations. Post-
purchase promotion can be tailored to reduce the cognitive dissonance which occurs
when the user feels less satisfied with a purchase decision immediately following the
decision but before fully experiencing the product. This period of doubt can be reduced
by affirmative communication strategies that reassure consumers that they made the
right purchase decision.
Placing online promotion in purchase context

The online promotional mix is dependent on its relationship to the product and the sale
of the product. There are three different promotional roles in the sales process where an
online presence can provide useful content for the customer.
◦ Pre-purchase, where you actively encourage the purchase through persuasion or the
provision of product information. Pre-purchase online presence emphasizes the pro-
vision of direct links to the product purchase page, extended product information
sites or online product demonstrations (www.willitblend.com). For the record, if your
Twitter account is a long stream of shortened URL links to product purchase pages,
you’re on the way to be banned from the site as you’ll be flagged as spam. Don’t
bother wasting brand reputation with such an activity.
◦ Purchase and point of purchase promotions happen when you take the communi-
cations opportunity to inform the consumer about sales, shipping, total costs of the
product and any bonus offers either at or on the way to the checkout. It’s also a last
chance to sell product bundles or bulk purchase discounts.
◦ Post-purchase, where the website operates as a support site or aids in post-product
reinforcement of the purchase decision. This is particularly valuable where the
product is likely to generate high levels of cognitive dissonance.
214

} The communication checklist

The communication checklist presented in this chapter is a guide to the types of social
media, conventional and Internet-based promotional message strategies that you’ll
need to put the theory of this chapter into practice.
Background materials
The first step in a good communications plan is to gather the background information
from other areas of the marketing work you’ve undertaken so far. Back in Chapter 4,
you set communications objectives as part of the broader marketing plan – this is the
point to retrieve those objectives (and the notes used in the process of developing the
objectives). Similarly, all the information gathered for the decision making surrounding
the segmentation comes in handy around now as well – even if you didn’t document it
in the plan, it’ll help now. For any promotional plan to work it has to be fully integrated
into the broader marketing and business plans and vice versa.
The second set of background information you need to collect relates to the other
elements of the marketing mix. Each design element of the marketing mix needs to
be complementary to generate a unified message for the consumer, and this requires
your communications tactics to fit with the rest of the decisions on product quality,
price positioning and retail outlets. Remember that the purpose of all four elements
combined is to support the strategically determined and desired positioning strategy
within the overall marketing plan. Review the type and nature of the product (idea,
goods, service) to determine if you can explain, display or distribute the core idea of the
product in the message. Cross-check the augmented product design to see if the product
relies on strong branding to create its value or whether it has a central value offer that
can become the hook for the message. Compare the price of your product against the
competitors to determine a price position strategy of value (cheaper), quality (more
expensive) or parity (same price). Use the price quality indicator to frame the type and
style of the message – loud and garish for discount versus refined and discrete for the
higher price. Finally, review the distribution outlets that have been chosen in terms of
the type and nature of advertising, branding and positioning they have undertaken.
It is worth reviewing the graphical style of a website you plan to sponsor to ensure your
message has a visual congruency with the site as well as a match with the content.
Finally, understanding the role of the Internet within the broader marketing cam-
paign is essential for developing the marketing plan. If the company plans organic
discovery through traditional media reviews leading to website search, then you’ll be
developing an SEO-orientated web campaign to assist your site ranking in the various
search engines. In contrast, if you’re tasked with being the sales outlet for the company,
you’ll want more direct ‘BUY NOW’ statements and overt calls to action through affil-
iates, sales and direct advertising. Finally, if the ultimate object of the site is traffic via
word of mouth, then you’ll need to work with the product engineers to ensure the site
does something noteworthy, impressive and conversation starting (product) with easy
cues to linking out to the amazing thing through social media, e-mail, MMS or other
215

e-marketing
means (promotion). Knowing your role in the larger operation makes the micro-level
decision that much easier.
The checklists
The aim of the checklists is to give you a sense of the different ways you can communi-
cate with the market and the sort of answers you’ll need to be able to generate to make
best use of the promotional opportunities online.
The content pitch checklist

The content pitch is the toughest in the communications plan. Brevity requires focus.
Being able to deliver your central message, idea or product value in a single sentence
takes practice and is a great way to determine if you really know your product well
enough to take it to the market. Inside the content pitches, we’ve set up the require-
ments for some of the more common places you’ll need to have a short, fast and mostly
consistent response.
140 characters (tweet)

Even if you’re not a fan of the Twitter approach to life, chances are someone in your
marketplace is going to want to tell their followers about your product. Essentially, this
is the concentrated version of who you are, what your product offers the market and
what’s in it for them. You’ll need two or three Twitter responses that are shorter than
140 characters so you can fit the @ username into the reply to the question ‘So what
does it do?’ Although brevity counts with Twitter, stay true to the personality of the
brand – luxury goods tend not to talk in SMS text speech. If you’re asking other people
to re-tweet your product launch, sales or call to arms don’t forget to include #hashtags
in the message so you can track the participants and reward them accordingly.
One sentence (Twitter BioPitch)

The one-sentence pitch is the hardest sales pitch on the Internet but surprisingly com-
mon for something so complicated. We’ve nicknamed it the TwitterBio pitch since
they’re a leading offender when it comes to asking for a one-sentence summary of who
you are, what you do and what you have to offer to the world. That said, it’s a lot like
branding, positioning and good slogans – knowing yourself well enough to describe
who you are in a sentence is a good skill to develop. It also expands quite nicely into
the elevator pitch.
Two sentences (elevator pitch)

The elevator pitch draws its name from the time you have between two floors in an
elevator ride to explain what it is that you do, sell, have to offer or want from someone.
The key to a successful elevator pitch is knowing the audience – if you’re explaining
to a prospective customer why they should give you money, then you’ll need to talk
216

about the benefits from their perspective. Your elevator pitch to the CEO, your manager
or your boss’s boss will be based on a variation of how your project is helping achieve
the company’s goals (i.e. profit, cost reduction, be awesome). As with the one liner,
it’s a great starting point to get into the bigger bio pitches that are needed in longer
conversations (two, three or ten floors) and to fill out the ‘about you’ section of those
websites we signed you up to back in the Introduction.
Paragraph (website bio pitch)

The paragraph bio pitch is an exercise in self-promotion, self-description and market-
ing chicanery. The challenge for a bio pitch is that you have to discuss yourself (if it’s
a personal bio) and most people find that to be an incredibly challenging combina-
tion of self-reflection, embarrassment and self-aggrandizement. Thankfully this is where
the marketing tricks come into play. First, head back to the product (core, actual, aug-
mented) model to ascertain what you want to present in the bio pitch. Secondly, view
this as an exercise in consumer-centric thinking – what do you think you’d like to know
as a customer that would give you confidence in the company? Focus on mapping your-
self against core product (Who am I to this customer?), actual products (What can I do
for you?) and augmented products (What would you like to know about what I’ve done
previously to build your confidence in me?) and you’re on the way to the first draft of
the bio. The paragraph bio pitch can be expanded up to any length required to fill out
the ‘About me’ details on most websites, blogs and social media websites.
The SEO plan

The problem with search engine optimization in general is that it’s an inexact art and
still a while away from being an inexact science when it grows up. Google has over
2 million hits for the letters SEO and goes thoroughly over the top with the search
for ‘search engine optimization’ with 85 million hits. Much has been speculated, writ-
ten and generated about the arcane art of Google wrangling, Bing stacking and Yahoo!
stuffing without a lot of clear and certain outcomes.
Search engine marketing (SEM) and SEO both target the software infrastructure that
underpins the various search engines. To that end, there’s a whole array of complex
tricks that will only be briefly appreciated by the search engine’s software until Google,
Microsoft and Yahoo! change the equations driving the rank order again. For the most
part, the following aspects have been fairly clear-cut and consistent – SEO is a means,
not the ends for marketing, and marketers who focus on customer needs in the devel-
opment of a website are likely to score reasonably well on Google as the higher-quality
content on the site also encourages word of mouth, links, referrals and happy customers.
There are two areas where e-marketing and the SEO tactics do combine. First, key-
words are a central part of the SEO, SEM and e-marketing experience as these are the
means by which your customers (current and potential) will seek out your website.
Consequently, you’ll need to ensure that the common words, phrases and language
that your customers would use to describe your products, brands and sites are present
somewhere on the website. With brands, this is strangely straightforward – you’ll usually
217

e-marketing
mention the product’s name, serial number and brand phrases at various points in the
site. So long as the customer knows your brand, they’ll probably be able to find you.
However, it’s also worth thinking about the solutions you provide with your products
(Chapter 6) and how your customers would describe the problem they’re trying to solve
(‘How do I?’) as well as other aspects such as distribution (‘Where would I find?’, ‘Where
can I buy?’) and pricing (‘How much is?’, ‘What’s the best price?’). Natural language
queries are an opportunity for the copy of your website to talk to the customer about
potential benefits, their needs and solutions rather than focusing simply on the actual
product and its feature set.
The best method to use is to think in terms of how your site can be described in a
single word or set of short phrases and then make sure that you incorporate those terms
into the content on the site (even if it’s just in the bio statements). You’ll probably have
noticed brevity is the soul of e-marketing, with 140-character statements and single-
word searches. If you can’t break the site into a single word, try one-word pitches for
each of the key blog posts, sections or products. Once you’ve settled on a few terms,
try out the different search engines to see where your content comes up, who you’re up
against and how you can position yourself against those competitors.
The social media plan

The social media plan is fairly straightforward and is focused on determining where,
when and how you’ll start interacting with your customer base. The aim of the social
media plan is to budget time costs into any promotional activity that will require com-
munity involvement (Chapter 9), community management and extensive engagement
in real-time conversation with real-life customers on social media sites (Chapter 12).
At this point in the book, the key considerations are as follows:
◦ Where will you conduct your social networking activity?

◦ Which sites, services and communities will you use, when will you sign up and how
will you schedule the use of these systems into your daily life?
◦ What approach will you take? Is this account about listening to the customer,
engaging in conversation, shouting press releases in caps and shortened URLs or
personal selling?
} Conclusion
As the most visible elements of the marketing mix, promotions and branding form
the basis of the organization’s interactions with its current and potential customer
base. Although the medium of the Internet has changed the channels through which
marketers can communicate with the public, the basic concepts of communication
remain the same. Before deciding on the specifics of the promotional plan in terms
of activities, it is essential to revise what the organization is trying to achieve and
use only those methods which will help achieve the organization’s goals. Despite the
temptation to try everything new, unless it adds value – both to the customer and the
218

organization – it doesn’t have to be part of the overall mix. The biggest change that has
occurred with respect to promotion as a result of the wide spread adoption of the Inter-
net is the lack of control that marketers now have over the messages being promoted
about their brand or product. Rather than try to suppress spontaneous discussion, suc-
cessful e-marketing needs to constantly keep on top of what is being said and who is
saying it, so that the company can respond appropriately and effectively in a way that
the market reacts to.
} References
Books and journals
Aaker, J. (1997) ‘Dimensions of brand personality’, Journal of Marketing Research, 34(3): 347–56.
Aitchison, J. and French-Blake, N. (1999) Cutting Edge Advertising: How to Create the World’s Best
Print Ads for Brands in the 21st Century. Sydney: Prentice Hall.
American Marketing Association (2007) Definition of marketing, http://www.marketingpower.
Belch, G., and Belch, M. (2007) Advertising and Promotions. Boston: McGraw-Hill Irwin.
Brogan, C. (2009) The Plastic Human Problem, http://www.chrisbrogan.com/the-plastic-human-
problem/ (accessed 6 July 2010).
Dieberger, A. (1997) ‘Supporting social navigation on the world wide web’, International Journal of
Human–Computer Studies, 46: 805–25.
Evans, M.P. (2007) ‘Analyzing Google rankings through search engine optimization data’,
InternetResearch, 17(1): 21–37.
Fine, S.H. (1990) Social Marketing: Promoting the Causes of Public and Non-profit Agencies. Boston:
Allyn & Bacon.
Hoffman, D. and Novak, T. (1996) ‘Marketing in hypermedia computer-mediated environments:
conceptual foundations’, Journal of Marketing, 60, July: 50–68.
Hughes, A. (2007) Personal Brands: An Exploratory Analysis of Personal Brands in Australian Political
Marketing. ANZMAC.
Kiani, G.Z. (1998) ‘Marketing opportunities in the digital world’, Internet Research: Networking
Application and Policy, 8(2): 185–94.
Kotler, P. and Roberto, E. (1989) Social Marketing: Strategies for Changing Public Behavior, New York:
Free Press.
Kotler, P. and Lee, N. (2008) Social Marketing: Influencing Behaviors for Good, Sydney: Sage.
Okazaki, S. (2006) ‘Excitement or sophistication? A preliminary exploration of online brand
personality’, International Marketing Review, 23(3): 279–303.
Peters (1997) ‘The brand called you’, Fast Company, Issue 10. Available online at http://www.
fastcompany.com/magazine/10/brandyou.html (accessed 6 July 2010).
Shannon, C. (1948) ‘A mathematical theory of communication’, Bell System Technical Journal,
27(July): 379–423).
Shannon, C. (1948). ‘A mathematical theory of communication’, Bell System Technical Journal, 27
(October): 623–56.
Watson, R.T., Akselsen, S. and Pitt, L.F. (1998) ‘Attractors: Building mountains in the flat landscape
of the Internet’, California Management Review, 40(2): 36–56.
Weaver, W. and Shannon, C. (1963) The Mathematical Theory of Communication. University of
Illinois Press.
Web references
Artweaver www.artweaver.de
Bing www.bing.com
219

e-marketing
Bing xRank ww.bing.com/xrank

BoingBoing.net www.boingboing.net/suggest.html
Cafepress www.cafepress.com
Digg www.digg.com
GIMP www.gimp.org
Inkscape www.inkscape.org
Metafilter ww.metafilter.com
Photoshop www.photoshop.com
Slashdot www.slashdot.org
Twitscoop ww.twitscoop.com
@cnn www.twitter.com/cnn
@aplusk www.twitter.com/aplusk
@oprah www.twitter.com/oprah
Will it Blend? www.willitblend.com
Yahoo! Search search.yahoo.com
220

CHAPTER 8}
Services and relationship marketing
• describe the way in which the Internet operates as a service

• use services marketing theory and models to map out your approach to
online service delivery
• understand how to build, maintain and assess online customer relationships
• appreciate the value of relationship marketing in e-commerce.
221

e-marketing
} Introduction
Services and relationship marketing provide an intertwined pairing of theory and prac-
tice which covers a large portion of online marketing activity. Any website that has a
recurring interaction with the customer will be building a relationship with its users
(even if site operator and site user aren’t currently aware of relationship marketing).
If your e-marketing is about delivering consumer interactions through applications, file
storage or data access, you’re in the service delivery business. There’s a strong argu-
ment to say that the entirety of e-marketing is services marketing (except the bit where
it’s about physical goods). e-marketing service products covered in this chapter are those
sold and/or distributed via the Internet. While you can accompany them with an offline
activity, we’re interested in the Internet-delivered options. Online banking is a service
that’s attached to offline activity (banks, physical money) while Google Calendar (www.
google.com/calendar) handles the documentation and co-ordination of offline activity
(classes, parties). The online element is of interest here rather than the offline activity to
which it is anchored – Google Calendar doesn’t actually attend the party (even if you’re
carrying a Nexus One).
This chapter covers the basic principles of services marketing in relation to the Inter-
net and service offerings based around e-commerce. (If you’ve not taken a services
marketing course, it’s worth picking up the full semester of study since services are vital
to the global economy. Plus it’s fun, and helps if you want a career in consultancy.) The
discussion of services marketing is followed by a review of the principles of relationship
marketing, which itself arose out of services marketing research in the mid 1990s and
examines how the ongoing use of a site or web service can develop into a mutually
beneficial relationship.
} Services marketing
To appreciate the benefits of shifting service delivery online, it is necessary to have
a detailed understanding of the differences between goods and service product deliv-
ery, and the components of the traditional service product. Online services marketing
has an advantage over the offline counterparts since time dependency and one-on-one
interpersonal interactions between service staff and customers are significantly reduced
or completely eliminated through technology.
The e-service product

The e-service product requires a variation of the product model from Chapter 6
(Figure 6.1) because services tend towards a combination of three approaches: services
to people, services involving people and services involving goods (Figure 8.1).
‘Services to people’ products result in temporary person-based experiences
(Figure 1.4, Chapter 1) that cover entertainment (www.shockwave.com), educational
videos (www.youtube.com) and instructional materials (www.instructables.com). ‘Ser-
vices involving people’ products require interactions between individuals and cover
222

Belief
Idea Attitude
e
o pl
pe Values
t o
vice
r
Se
One off participation
Service involoving
Product people Behaviour
Se Recurring participation
rv
ice
to
ob Service performed on goods
jec
ts
Object Goods as evidence of service
Figure 8.1 Service product model
a large amount of social media activity (Chapter 12), person-to-person e-commerce

(www.ebay.co.uk) and using the Internet as a brokerage medium for direct interactions
with other people. Finally, ‘services to objects’ products involve those products where
the purpose of the service is to modify something (physical or virtual) in some way
with the assistance of the service provider. This broad and vague definition lets us put
Zazzle’s (www.zazzle.com) product customization in the same category as e-banking
(www.lloydstsb.com), augmented reality applications (Chapter 13) and downloadable
PDF reports from Dopplr (www.dopplr.com). In short, if the service gives you a docu-
ment, file or physical item at the end to prove that something happened (this doesn’t
include the receipt) then it’s ‘a service to objects, with physical goods as evidence’
whereas if you’re manipulating (or hiring someone else to manipulate) an object, then
it’s ‘a service performed on objects’. The distinction is real and important as it deter-
mines whether the physical objects are secondary proof of service (augmented product)
or the central element of the process (core product). For the purpose of the Figure 8.1
diagram, objects and goods includes virtual products, physical goods, electronic content
and other stuff covered by Figure 1.4 (Chapter 1).
Defining the service product involves understanding elements of observable con-
sumer behaviour and linking these to the underlying motivations which spur a
consumer into action. This is because service products put a lot more responsibility
on the customer to contribute to the final outcome compared with physical products
which are usually purchased ready made and assembled. The inseparability charac-
teristic of services means that, for most, the quality of the overall outcome from the
customer’s perspective is due to a combination of the skill of the service provider and
the information provided by the customer. For example, if a client books a hairdress-
ing appointment online and asks for a haircut, they may come away from the salon
thrilled or furious depending on what the hairdresser does to their head. If, however,
the client takes the time to talk to the hairdresser about their motivation for getting a
new style (going for a job interview) they are far more likely to come out with a haircut
that they like and which is appropriate to their circumstances. This process is referred
223

e-marketing
to as customer co-creation and is a key feature of the services sector and one which has
expanded significantly in importance with the development and adoption of Web 2.0
and social media technologies.
Whilst the same principles which underpin physical product models can be used to
understand the service value offering, it’s a little more complex when the service process
is intangible. That said, it’s quite rare to find an offline service that’s a ‘pure’ service
without any tangible elements. All products exist on a continuum, with the majority of
products combining elements of the physical (e.g. a computer) with the service product
(e.g. helplines and repair warranties). Similarly, it’s always worth considering that whilst
the e-marketing services of cloud computing, data storage, online banking or Google are
intangible, they’re accessed through physical objects, and those objects can influence
how people think about the online service.
Distinguishing between goods-orientated and service-orientated products

On the Internet the distinction between goods and services is more difficult, given
that the Internet itself is intangible. Most e-commerce is related to the provision of
a service or retailing event rather than the transference of a physical good. However,
Langford and Cosenza (1998) proposed that a service/good analysis should focus on
determining the extent to which each element of a service process can be seen as being
more like a tangible product as opposed to an intangible one. Their method uses a
holistic approach to examine product and associated strategies to determine whether
services theory or tangible goods theory is best suited to each step. This is illustrated
in Figure 8.2.
The process of analysis begins with establishing the product benefits that the cus-
tomer buys and how these product benefits are perceived. These benefits are then
classified using the four traditional points of differentiation between goods and services
to distinguish those which are primarily service elements and those which are goods
Intangible Inseparable Heterogenous Perishable

(exam ⊗) (prod. = cons.) (performance) (storage ⊗)
Service
elements
Marketing Marketing
Benefits Product
research strategy
Goods
elements
Tangible Separable Homogeneous Not perishable

(exam) (prod. ≠ cons.) (quality control) (storage)
Figure 8.2 Service/goods analysis

Source: from Journal of Marketing Theory and Practice, 6/1 (Winter 1998), pp. 16–26. Copyright © 1998 by
M.E. Sharpe, Inc. Reprinted with permission. All Rights Reserved. Not for Reproduction
224

elements. For example, conventional wisdom would see online ordering and using a
remote-hosting service as being a pure service which has the product benefits of:
◦ hosting on a remote computer rather than the customer’s own computer

◦ 24/7 access to the website for the general public (rather than access relying on the
owner of the site being online)
◦ economies of scale, whereby a series of sites can share a larger and more powerful sin-
gle computer and connection than each could afford separately (Reedy et al., 2000).
Defining the service product

As is the case for all marketing strategy, the key to developing and communicating a
position in the market is having an intimate knowledge of the ‘product’ that you are
offering. Differentiating between the core and augmented product, and understanding
how each is interpreted and used by different market segments, is critical to the design
of a services e-marketing plan.
Core product
Core service products involve the transfer of knowledge and temporary access to skills
rather than the acquisition of any physical object. Consequently, services do not result
in the ownership of anything. In most cases, for example medical services or legal
advice, service purchases involve the right to use or access a service or service per-
sonnel for a specified period. With respect to online services, again, purchase doesn’t
result in ownership but rather the right to certain provider attributes. Features such as
security, convenience, access and portability often form the core of the pure Internet
services developed as part of the Web 2.0 economy. Web 2.0 systems are based around
the development of multiple core product offerings which are differentially interpreted
and valued by different target markets. For example, Flickr is simultaneously a photo
library, a keyword-searchable image database and a personal photo album. For each
user of the site, the core product will depend on their particular needs at a given point
in time. Extended families can share photos with each other around the world (conve-
nience), local interest groups can form around collections of photos from documenting
a common event (community) and visitors to the site can find key images (database).
Significant challenges arise for services marketing as a result of the co-creation of
products which occurs due to the input of customers into the service process. From the
perspective of the company, co-creation can lead to the existence of multiple unplanned
service products as individual consumers customize their experiences. Unless the orga-
nization stays in constant two-way communication with its customers, it won’t have a
full appreciation of the interpretation of its core product from the market’s perspective.
Augmented product
Internet-based services have been fitted into the augmented service product by an
increasing number of physical goods and services marketers. Given the surprisingly
large number of products with websites and community and social media engagement,
225

e-marketing
producing a website that can enhance the end-user experience by providing a ser-
vice element is a commonplace technique. The secret to effectively using a website
or social media presence as an augmented service involves providing a value-adding
service rather than simply using this as an advertising add-on. Putting together a
web presence (site and social media) that offers something genuinely useful can cre-
ate and maintain a good relationship with the consumer. Examples of value-adding
services include sites which provide product assistance (www.kelloggs.com/recipes),
regular updates on progress made (developer diaries) or news of forthcoming releases
(Steam, Team Fortress 2). Other uses of online services as part of the augmented service
product are to provide:
◦ a venue for entertainment in a bid to create and sustain brand loyalty by giving
the end users a chance to engage with each other – for example, Pop Cap Games’s
one-minute Bejeweled game (apps.facebook.com/bejeweledblitz) provides a compet-
itive community environment for Facebook users and a platform for Pop Cap to
be able to talk to its fans about new product releases that would suit enthusiastic
Bejeweled players
◦ reinforcement of the decision to purchase from the organization in an attempt to
reduce post-purchase cognitive dissonance which can be seen through the fan pages
on Facebook, or through the membership of community forums
◦ additional services which complement existing products, such as the iTunes site and
its ability to create an ongoing value for the iPhone and iPod (www.apple.com/
itunes). Other functions such as ongoing updates and patches for registered software
owners (windowsupdate.microsoft.com), extended downloadable content (Xbox360)
or the use of search facilities for online versions of back issues of magazines (www.
wired.com).
Four pillars of services marketing

There are four classic points of differentiation between a service and physical good:
intangibility, inseparability, inconsistency and perishability. Intangibility is where the
service products are performances that have none of the physical characteristics of
goods in that they cannot be touched, tasted, seen, heard or observed before perfor-
mance occurs (Langford and Cosenza, 1998). Intangibility is a defining point for the
Internet (since the Internet isn’t real), which means there’s opportunity for service
theory to assist e-marketing.
Inseparability is the simultaneous consumption and production of the services that
require the consumer/recipient and the service delivery mechanism to be in close prox-
imity during the service (Bateson, 1996). Inseparability works for the e-marketer as you
tend to need to be present at the computer for your Internet service experience. (Cir-
cumstances such as automated downloading or similar advanced systems allow the user
to leave to eat or sleep while the computer handles the transaction at which point
it becomes inseparable from the service transaction.) Services such as Dropbox (www.
dropbox.com) have elements of inseparability – you, the computer, the Internet and
the Dropbox server all need to be linked for it to really work (offsite backups are only
226

as useful as the timeliness with which they get you out of trouble for losing the current
working copy of a document).
Inconsistency relates to the way in which no two services encounters will be identi-
cal due to the human influence of the service, and the high level of variability between
consumer, service provider and service environment (Woodruffe, 1995). A common crit-
icism of both service and the Internet has been the tacit acceptance of inconsistency as
an excuse for poor standards. Inconsistency is a factor that needs to be addressed, either
through service roles or through service design, rather than used as an excuse for poor
delivery. On the Internet, inconsistency occurs in a range of areas, including website
design, changes in site navigation, variable access speeds to popular sites and changes
to addresses of popular sites.
Perishability is the way in which services cannot be stored, stockpiled or used once
the service opportunity has passed (McGuire, 1999). It is not possible to send a client
back to last Thursday to use the spare seat on an aeroplane or take advantage of the
empty hotel room. (Resolving service perishability will be one of the first major com-
mercial applications of time travel. Extensions to deadlines for university assignments
will be the second.) Services marketers needs to address the issues of load sharing,
managing demand and levelling out peaks and troughs in demand.
Taking each of these traditional services elements in turn, it is clear that the Internet
has had a significant impact on not only the delivery of services, but also on the way in
which services marketers can use the unique characteristics of the Internet to overcome
many of the problems which persist in face-to-face service encounters. This is not to say,
however, that the Internet has solved all of the problems of services marketing. There
are still grey areas of intangibility which will always be open to consumer interpretation.
Intangibility
The nature of service products is that they’re intangible, can’t be directly evaluated using
any of the physical senses and lack a physical object as the central part of the deal. That
said, intangibility is not entirely clear-cut since the extended product model indicates
that there’s significant overlap between the tangible and intangible elements of a prod-
uct. Core products tend towards the intangible (satisfaction of a need), actual products
have more physicality present (hence the ‘actual’ rather than virtual) and you’re back at
intangible when dealing with the extended product (brands, warranties, social prestige).
From a consumer perspective, intangibility makes it difficult to objectively evaluate one
service relative to another. Unlike physical goods which can be compared on the basis of
size, colour, material, durability and so on, services have no clear, externally observable
points of comparison. Problems associated with intangibility include added difficulties
in defining and communicating the service product, particularly in terms of quality.
To overcome this issue, services marketers rely heavily on tangible cues associated with
the positioning of the service and its delivery.
Inseparability
A second key feature of services is that for all personal and many other services,
production and consumption occur simultaneously. For example, a haircut cannot take
227

e-marketing
place if the client and hairdresser are not in the same place at the same time. The higher
the level of inseparability based on the interaction between the customer and the skills
of the service provider, the less likely it is that the service can be delivered across the
Internet (within reason). This means that the method of service production is as impor-
tant to the consumer as its delivery because the producer is present when the service is
used (McGuire, 1999).
Most consumers have little interest in the personality, working conditions or general
demeanour of the factory worker who produced their computer (despite Dell’s chirpy
advertising campaigns). The personal characteristics of the service creator become much
more vital when you’re the consumer who’s present as the service is produced, and
even more important when that interpersonal service can be stored in data and passed
around the Internet for all to see. The inseparability criterion derives from the impor-
tance of people in the services marketing mix (McColl-Kennedy and Kiel, 2000). The
people performing the service are, to the consumer, an integral part of the product.
In many cases they are the product or, at least, the human face of the organization
they represent. In e-commerce, the website replaces the person as the first impression.
Most people are not concerned about the EDI systems that support the transfer of their
money from their bank account to the store’s account during an EFTPOS transaction,
but in an online banking transaction, the look and feel of the site become an important
aspect of the transaction.
Inseparability also adds to the perceived risk experienced by consumers. Instead of
the usual evaluate–purchase–consume sequence of consumer buying behaviour, services
require a purchase–consume–evaluate approach. The higher the service is in terms of
intangibility and inseparability, the lower it is in search characteristics such as size, style
and weight, which can be objectively compared prior to purchase. Because services are
essentially experiences, it is not possible to evaluate a service until after it has been both
purchased and consumed (Lovelock et al., 2010).
Inconsistency (heterogeneity)
Due in part to inseparability and the person-to-person interactions characteristic of ser-
vices, it is difficult to guarantee consistent service from one delivery to the next even
with high technology (or especially with cutting-edge technology). Variations in the
performance of the service provider, changed expectations of the customer, the mood
of the client, or the performance of the bandwidth renders no two e-service interactions
identical (Zeithaml and Bitner, 1996). Online service delivery is subject to the vagaries
of the Internet, including Internet-wide congestion (sometimes referred to as ‘Inter-
net weather’), site-specific traffic loads (Slashdot effects) or congestion at the local ISP,
capped Internet connections, poor 3G coverage and the ambient capacity of the com-
puter. Internet services are vulnerable to inconsistency due to factors well beyond the
control of the e-marketer, just as extraneous factors impact on real-world service deliv-
ery. Perceived service quality is largely based on service providers consistently meeting
the expectations of customers over time rather than any specific objective measures.
Internet-based services offer the opportunity to provide heavily scripted features
and functions while giving the illusion of variability and interaction. Intelligent
systems which are programmed to respond to ‘if–then’ statements concerning consumer
228

questions will consistently produce the same path if the same answers are given. This
increases consistency although occasionally this can be at the expense of accuracy – the
site can consistently offer the wrong answer. While this may be appropriate for mass-
consumption services such as fast food, certain types of retailing and routine financial
transactions, the variability or inconsistency of service delivery between customers is
one of the major strengths of key service industries.
Customization is both expected and demanded for services such as legal advice, psy-
chological counselling and complex financial advice (Woodruffe, 1995). Inconsistency
in the services marketing strategy is both its greatest strength and potentially its greatest
weakness. Achieving the optimal balance between customization and consistent service
quality is one of the major challenges facing service managers. Cybercommunity struc-
tures offer the greatest opportunity to develop inconsistency as a saleable point for
services which require a large amount of human interaction (Chapter 9). The important
factor to remember in determining the extent to use the Internet to attempt to eliminate
inconsistency is the extent to which this inconsistency is a part of the benefits sought
by the consumer in terms of personal service, customization and human interaction.
Perishability (storage capacity)

Services are time dependent and cannot be manufactured, stored off-site and dropped
into place once required, even with the increased digitization of the world. This is partic-
ularly true of personal services and entertainment. Once the opportunity to experience
a show, football game or other event has passed, it is lost forever (Fisk et al., 2000). Sim-
ilarly, it is not possible to store all the spare rooms a hotel may have on a quiet night for
use at a later date when bookings exceed the number of rooms available. Internet sites
which suffer from fluctuating demand cannot transfer the demand curve backwards in
time to use the stockpiled bandwidth from last week.
From a managerial perspective, the major implication of this time dependency is the
need to manage demand through pricing and promotional activities to ensure the effec-
tive use of resources within the organization. If demand is not managed adequately,
two problems arise. First, the fixed costs of equipment, staffing and facilities become
disproportionately large in relation to overall costs, with the result that total capacity
is underutilized. Secondly, customers who are either unable to experience the service
during peak times or are given substandard service due to resource constraints are likely
to become dissatisfied with the service provider and switch to an alternative supplier
(Lovelock et al., 2010).
While the differences between physical goods and services impact significantly on
the way in which services-oriented marketers develop and implement strategies, it is
important to recognize that most products combine elements of both of them. An effec-
tive goods–service analysis in which similarities and differences are explicitly identified
is essential if optimal strategies are to be developed (Langford and Cosenza, 1998).
e-service advantages
The online environment is well suited to the delivery of quality e-service products since
they’re essentially intangible and information based. Service delivery technology has
229

e-marketing
minimized certain problems stemming from the unique characteristics of the service
product. Specific areas where online services can be perceived as ‘superior’ to traditional
delivery include the following:
◦ Reduced time dependence: 24/7 access to websites allows the consumer to make first
contact (Web/e-mail) at their leisure, rather than within a set time frame (9–5) for
phone or direct contact (Brindley, 1999). Add customer co-creation, self-service and
self-sufficiency to the 24/7 access to the Internet, and the customer can have their
shopping experience when they’re free rather than when your store is open (www.
amazon.co.uk)
◦ Consistent service delivery: using websites and automated systems for service deliv-
ery provides consistency of performance in the transaction. Even something as
simple as a pizza order gains from the consistency of pop-up menus, customization
options, pre-saved delivery addresses and a countdown timer indicating the time
remaining until you’ve got to find the last stash of coins for the correct change (www.
dominos.co.uk)
◦ Consistent imagery and branding: careful selection of site design helps deliver consis-
tent branding and operates as the equivalent of a servicescape for delivering tangible
service cues (www.marksandspencer.com)
◦ Customer-led customization: the consumer can arrange elements of a website and
select those with most value and significance to their own interests
◦ Consumer empowerment: the range of choice for service delivery across the Internet
and, in effect, across the world has given rise to consumer empowerment. Services
which have traditionally been regionally based, such as radio stations, are available
to a global audience, for example, All India Radio (www.allindiaradio.net) or BBC
World News (www.bbcworldnews.com)
◦ Effective separation of production and consumption: the producer of the service can
upload a divisible information product or service that can be consumed in their
absence (www.number10.gov.uk).
The three most significant benefits for services marketers moving online are improved
consistency, greater consumer empowerment and the move away from time and
place dependency.
Improved consistency
Consistency is key for consumers in their evaluation of service quality. Online services
can easily be set up to deliver the same consistent service over time and between con-
sumers. The impersonal technological interface gives consumers the freedom to make
mistakes without being judged or to get advice without feeling self-conscious. Health
advice and information on what are often perceived as socially embarrassing issues,
such as domestic violence or contraception (www.contraception.net), can be accessed
through anonymous online services. No one need ever know the personal concerns of
the individuals involved. In addition, the information given via such services will not
change over time. If a consumer forgets how to conduct a transaction or what specific
230

actions to take in a given situation, accessing the same site with the same request will
result in consistent outcomes. This is rarely achievable in traditional service delivery, as
providers often forget the details given in the previous encounter.
Customer empowerment
The process of service delivery has been seen as a struggle for control between the
organization, service workers and the customer. The nature of the Internet is such
that services are sought at the discretion of the individual consumer rather than
being pushed at them. Pressure to purchase is minimized due to the anonymous
interface between service provider and user. This allows consumers to terminate the
service encounter without any of the social restrictions that usually arise during a
face-to-face encounter. Consumers are further empowered by their ability to customize
the services they use according to their needs. The search capacities of the Internet
make comparisons of different service offerings, prices and so on easier. Numerous
websites exist which compare different service offerings on the key choice criteria
identified by consumers to help them make the most appropriate choices. For exam-
ple, instead of relying on a combination of company brochures and sales staff advice,
people seeking health insurance can go to a comparison site such as Insurancewide
(www.insurancewide.com) to help them sort through the multitude of offerings on
the market.
For marketers, this shift in the balance of power in favour of consumers has resulted
in changed approaches to conducting business. When the power lies with the con-
sumer, the marketing focus is less on persuasion at the point of purchase and more on
transparency of information and the provision of value. The higher the quality and the
more convenient the information the company provides on its website, the more likely
a consumer is to pursue that company’s products rather than those of the competition.
If online marketers make it difficult for the potential customer to get the informa-
tion they need to make a decision – call us for a quote versus an automated quote
indicator – the more likely that potential customer is to go to the company which
requires the least effort. In an information-rich environment which is being driven by
customer needs, successful companies focus on what consumers want and on generat-
ing an effective pull strategy from final users rather than pushing their products onto
the market.
Time and place independence

A third major benefit of online service delivery is that it represents a move away from
time and place dependency. This in turn helps to overcome many of the problems
associated with inseparability and perishability. Given the remote delivery inherent in
the production of online services, there is no need for direct real-time interaction to
take place. The process and method of service production becomes less important as
the consumer is no longer required to be physically present in the service factory at the
time of production (Bateson, 1996). Consequently, it is possible for service providers to
be located anywhere in the world and still meet customer needs.
231

e-marketing
Similarly, the separation of production and consumption in online services means

that they can be available at any time. Service providers can either automate responses
to allow for 24/7 service delivery or for complex customized services work in joint
ventures with partners across time zones to allow for 24/7 access to expertise or pro-
duction. Automated services and the information they provide can be stored online,
unlike traditional services which cannot be stored. The difficulties of managing demand
and excess capacity are less of a problem for online services marketers, although some
difficulties still arise when the technology is incapable of supporting surges in demand
during a Slashdot effect, power outage or server downtime. As technology improves
and the bandwidth problem is solved, the issue of excess demand for capacity should
be fully resolved for online service delivery. As stated before, services are difficult to
define and communicate not only because of their intangibility, but also because most
service products form part of a larger product package.
Service consumer behaviours

One of the consumer benefits of shopping for and using services online is that Internet
interactions are still primarily text-based. The move to online service delivery, however,
has forced a change in the marketing and definition of service products and benefits
from implication to explicit statement. In other words, an online services marketer
needs to clearly, verbally state the nature of the service offering and the benefits to
the consumer. This in turn makes it easier for direct comparisons to be made between
the products of various service firms. As the nature and complexity of the service prod-
uct varies considerably across industries, so too does the consumer behaviour associated
with pre-purchase information gathering (Venkatraman and Dholakia, 1997).
As services have traditionally been regarded as an experience, the main focus of ser-
vices marketing has been to get clients to try the service so that they can then evaluate
and compare it with similar offerings. The intangibility of the service offering means
that both marketers and consumers have accepted relatively vague pre-purchase expla-
nations of service benefits as the norm. Quality, outcomes and service benefits are often
implied through visual cues such as the environment in which the service is conducted
and pricing schedules, rather than being explicitly stated. Consequently, comparisons
between service offerings have traditionally been extremely difficult. From the con-
sumer’s perspective, the service product can be defined not only in terms of the benefits
accrued from using it, but also as a function of the behaviours involved that lead to the
decision to purchase. Using a consumer behaviour-oriented approach to service product
definition, services can be more effectively marketed if strategies are designed around a
fuller understanding of the consumer’s pre-purchase behaviours. In other words, know-
ing what the customer wants, and how they go about finding something to meet that
want, is the key to good services marketing.
One useful classification system is based on service product attributes. The way in
which consumers seek information, choose services and evaluate their effectiveness
depends on the characteristics of the service–product combination in question. Prod-
ucts can be classified according to whether they are dominated by search, experience or
credence attributes.
232

Search attribute products

Products high in search attributes are those that have some clearly defined criteria based
on which different offerings can be easily compared across a range of providers. Tra-
ditionally, physical goods have been described as high in search attributes, given the
ease with which two brands of washing machine or car can be compared. In terms of
consumer behaviour, search attribute products:
◦ have relatively low levels of perceived risk

◦ can be evaluated prior to purchase
◦ involve relatively low search times
◦ tend to focus on persuasion through mass media such as advertising.
Increasing the degree of tangibility of the service product in the online environment
has moved many Internet-based services into the category of search attribute product.
Due to increasing standardization, various web-based service provisions can be assessed
simultaneously or through comparative shopper websites (www.kelkoo.co.uk). Online
accommodation providers, for example, can be compared on direct search attribute
characteristics such as the number of rooms, amount of information about venues, the
existence and level of booking fees (www.wotif.com).
Experience attribute products

Traditionally, services have been described as experience-based products, as a full
evaluation of the quality and outcomes of the service cannot be made prior to pur-
chase. Rather, the service must be first experienced and then evaluated and compared
with similar services experienced in the past. Much of the content of the Inter-
net is experience based, from information services such as the BBC website (www.
bbc.co.uk) to entertainment sites (www.youtube.com) or movie recommendations
(www.flixster.com).
Credence attribute products

Credence attribute products, like experience attribute products, cannot be effectively
evaluated and compared prior to purchase. Where credence attribute products differ,
however, is that, due to the limited expertise and knowledge of the consumer, it is
difficult to evaluate service quality even after consumption. Products falling within
this range are any high-level professional services, health advice (www.surgerydoor.co.
uk) or legal advice (www.legalservices.gov.uk). In the online environment the range of
complex services that people regularly access but can’t effectively evaluate, even after
purchase and consumption, include the many diagnostic programs and sites designed
to help individuals solve their own software-related computing problems.
In the marketing and consumer behaviour literature, it is generally accepted that
services are perceived by consumers to be a high-risk purchase. Different levels of risk
are associated with different service types, with credence-based products regarded as
significantly higher in risk when compared with search- or experience-based products
233

e-marketing
(Hofacker, 2000; Mitra et al., 1999). Accordingly, consumers aim to minimize risk prior
to purchase, primarily through the collection and evaluation of quality pre-purchase
information about the service and service provider (Knowles-Mathur et al., 1998). Ser-
vice providers of perceived high-risk services are advised to establish in-depth sites
which can step the user through the processes of the service and the likely outcomes.
This is accomplished by informing the potential client and reducing the psychic costs
associated with high-risk products. Another way that perceived risk has been reduced in
the delivery of online services has been through the increased involvement of customers
in the service process.
The fifth P: people and customer involvement

People, both employees and customers, are vital to the overall service experience. Due
to the inseparability factor, the behaviour of customers is integral to the success and
quality of the service experience. This factor presents considerable problems for the
traditional services marketer in ensuring consistency and quality in the service offer-
ing and, from an employee perspective, is virtually eliminated when the service moves
online. From a consumer perspective, however, the people element of e-marketing has
expanded exponentially into the areas of co-production and the co-creation of services
across a range of industries.
Customer co-production
Consumers are constantly trained and rewarded by service organizations for their
part in the service interaction using both visible (financial rewards for assessing ser-
vices) and invisible methods (removal of service alternatives by closing bank branches).
Co-production is also heavily linked with the behaviour-change-objectives (Chapters 4
and 10). The effectiveness and perceived quality of a service interaction is directly
related to the extent to which the consumer is familiar with the organization’s expec-
tations of their behaviour, and the way in which they interact with both the service
provider and the environment in which the service is offered (Brindley, 1999).
Co-production occurs most often where service processes can be standardized and
modularized so that customers can engage in self-service rather than relying on orga-
nizational employees. The Internet can reduce itself down to being a very large (and
oddly stocked) vending machine, where customer self-service is the order of the day par-
ticularly with the desktop software vending machine approaches of iTunes and Steam
(Chapter 14). The extent to which a service can be delegated to the customer will depend
on the extent to which it conforms to the following key features of self-service tech-
nologies (SSTs) as outlined by Lee and Allaway (2002). To be effective and to facilitate
customer co-production, a self-service technology should be:
◦ predictable, in that the user can work out what an SST is designed to do and the SST
will do what it’s supposed to do. You don’t want to use an SST to book a train from
Manchester to London, only to find your ticket sending you to Paris (not that there’s
anything wrong with Paris – it’s just taking the scenic route to work a bit too far)
234

◦ customizable, in that the user can set their own level of use of the service: some
people may find the system to be a superior alternative and want to use it all the
time; others may keep it in reserve as a backup when alternatives fail
◦ trialable, in so far as the customer can experiment with the use of the system and
‘get the hang of it’ without having to commit to purchase, use or extended use. This
is a factor of the innovation adoption required to shift from using a person-based
service to an SST – the trialability is part of Rogers’s (1995) requirement for successful
innovation adoption
◦ useful, which is the extent to which the customer can quickly understand that using
an SST is to their benefit, and isn’t just another attempt by the company to cut costs.
Of course, this only applies when the service is actually useful to the customer and is
not just the result of ‘automation to save costs’ management strategies.
In effect, the rise of co-creation in the online environment has led to an unsupervised,
unpaid, informal workforce in many organizations. Banking transactions, for example,
used to rely solely on paid employees (tellers) who were directly controlled by the orga-
nization. Online banking shifts the burden of responsibility for key transactions onto
the consumer. As users of the online service, these customers are engaging in the same
work roles as the tellers, however, they do so without the supervision and training
afforded to paid employees.
The success of the transaction, and consequently the perceived quality of both the
service and service provider, relies on the ability of the customer to do the job cor-
rectly. Whilst consumers are not paid directly for the work they contribute to online
service organizations, often they are indirectly rewarded. For example, in the banking
sector, instead of paying people to conduct their own online banking activities, most
banks will charge reduced or no fees for simple online transactions whilst charging sig-
nificant fees to those who choose to go into a branch and get a teller to perform the
same tasks.
In the context of the Internet, users are increasingly expected to use self-service
systems to construct their own entertainment, educational or informational expe-
rience. Customization-oriented news websites effectively end up making the con-
sumer the editor, forcing them to develop their own look, feel and content pref-
erences. The inclusion of blogs and feedback mechanisms in many media outlets
is increasingly providing the consumer with the capacity to directly contribute to
news stories, with readers’ comments from one day often forming the basis of
a formal story in the following day’s newspaper. Cybercommunities-oriented news
sites such as Slashdot (www.slashdot.org), Digg (www.digg.com) and Delicious (www.
delicious.com) rely heavily on the submission of articles, stories and links to the
editorial team, and place an emphasis on the customer-driven interactive discus-
sion forums.
Customer co-creation
Customer co-creation of services takes the co-production one step further. Co-creation
of services occurs when the consumer has a direct input into the quality and content of
235

e-marketing
the final service provided. This involves more than following instructions to implement
existing systems. It also involves the use of discretion on the part of the consumer to
determine what elements of a service they require and provides the opportunity for indi-
viduals to customize their service experience in ways not necessarily thought of by the
service providers. One of the highest-profile co-creation scenarios involves the amount
of effort, commitment and engagement the users provide to their virtual worlds, virtual
communities and online interactions (Chapters 9 and 14). Depending on the product
type involved and the organizational culture of the service provider, co-creation can
also serve as a useful conduit for market research and product development.
Co-creation of value is an integral part of successful online business models and
impacts on most elements of the marketing strategy. Whilst not unique to the online
environment, the capacity of the Internet to engage consumers outside of traditional
restrictions of time and space has meant that it has facilitated a greater level of
co-creation. The concept has previously been discussed in relation to branding and posi-
tioning (Chapter 7). In service delivery, there’s also the co-creation aspects that involve
the consumer’s self-creation of the idea (belief, attitude, value) and their participation
in the behaviours (one-off, recurring) which will determine the effectiveness of the ser-
vice product (Figure 8.1). For consumers to effectively engage in co-creation of services,
which in turn leads to co-creation of value for both customer and organization, they
must feel confident and empowered to direct their own service outcomes.
The benefits of co-creation are a more focused and customized solution, and a sense
of faith in the end user by the creators of the product (Chapter 6). One of the hall-
marks of Twitter is that the service is flexible enough to support a diverse set of uses,
from politics (@Number10gov), through timekeeping (@big_ben_clock) to news head-
lines (@bbcnews), as well as the conversational structure it was intentionally designed
to support. Co-creation also links back into the use–innovation theories, and strangely
enough, right into the Ansoff matrix as a means to extend an existing market of users
as they find new and different ways to engage with your products.
Co-creation is also at the heart of the production–consumption experiences that
underpin blogging, social media consumption and anything that’s relying on user-
generated content. As noted in Chapter 5, it’s also a feature for a limited slice of the
marketplace – innovators and early adopters (and some of the early majority) will cheer-
fully engage in the creation–construction behaviours that mean they get to set the tone,
lead the pack and provide the content that the later adopters can follow.
Training the customer to be a co-producer

Many consumers have resisted making online purchases because of the perceived risk
of feeling exposed when they are faced with a new learning situation. For those who
are not computer literate, the stress involved in learning these new tasks can represent
a social and psychological cost great enough to prevent use of online services, regard-
less of the potential benefits. Using current technologies, Internet-based services are
available only to those who feel confident in the use of computers, have a reasonable
degree of literacy and are able to effectively use search engines. All of these skills must
be learned just in order to access online services, let alone actually use them. While
236

computer-literate and Internet-savvy consumers may have learned the general approach
for using sites, the specific actions needed to get maximum benefit from a particular ser-
vice site will vary considerably between organizations. For all consumers, the price of
co-production and co-creation is the time and effort involved in the process of learning.
Ultimately, the success of online services will depend on marketers remembering
that technology is a tool. It should be recognized for what it is – a means to the end,
not the end in itself. With increasingly complex software available at affordable prices,
it is tempting to focus on competitor sites and try to outdo them in creativity and
interactivity. In the end, however, website effectiveness and the value of online services
will be determined according to the extent to which the organization meets the needs
of its customers and meets or exceeds their expectations of service delivery. Exceeding
expectation of service delivery does not mean exceeding needed service capacity, nor
does it give site designers a licence to engage in creeping featurism.
The constant over-evolution of web search systems is becoming the running battle-
ground between the needs of the consumer and the desire of the search sites to become
one-stop Internet shops. Yahoo.com has expanded the initial directory service to pro-
vide everything from a shopping mall to free e-mail, websites and a customizable news
service. Several other search sites have chosen to pursue the Yahoo.com model and have
increasingly moved away from the search functionality into providing portal services.
The problem for consumers is that those who relied on the streamlined function
of a site which has ‘evolved’ into an array of services find themselves swamped with
‘features’ that they neither need nor want . Technological developments are outstrip-
ping market needs, and the finite limit of how many people actually need horoscopes,
weather and stock market reports, along with a filtered news wire service, free e-mail,
website recommendations and a ‘Coffee recipe of the day’ service in a search engine,
will have to be reached sooner rather than later (see also Zawinski’s Law of Software
Envelopment: ‘Every program attempts to expand until it can read mail. Those programs
which cannot so expand are replaced by ones which can.’)
Customer technology interface

Co-production, co-creation and perceived quality of the online service experience all
depend on the customer technology interface. Fisk et al. (2000) identified six weak links
in the customer technology interface which can seriously undermine the quality of the
organization’s online service outputs. These are:
1. automated idiocy: in the rush to automate and standardize services, many organiza-
tions use systems which lead to illogical outcomes
2. time sink: the time involved in conducting a service transaction using the new
technology can in fact be greater than that involved in using existing technologies
3. ‘law of the hammer’: based on the idea that a child with a hammer sees every other
object as a nail, this law serves to remind creators of the technological interface that
design should focus on customer needs, not the needs of the designer
4. technology lock: one of the biggest problems in the customer technology interface
is the fact that designs often persist long after their functional value has gone
237

e-marketing
5. the last inch: most problems for service delivery online occur at the point where the
customer and the Internet make contact. Often in the ‘last inch’ of service delivery
breakdowns occur due to the lack of training or knowledge on the part of customers,
design faults or incompatible systems
6. high-tech versus high-touch: sometimes a problem cannot be solved simply by
accessing information and databases online. Other problems are complex and
require person-to-person interaction.
To ensure that the move from face-to-face to Internet service delivery is smooth and
effective, the following steps are recommended (Fisk et al., 2000):
◦ Provide marketer input into the technology of customer interface design.

◦ Stay customer focused, not machine focused.
◦ Make services technology invisible to the customer – customers are interested only
in the service outcomes, not how they got there, what they did on the way, or how
fundamentally clever the programmer was for developing the process.
◦ Insist on a design that delivers service flexibility which adequately meets the needs
of the consumer without excessive complexity.
Given that a large portion of services marketing is based on the interaction between
customer and company, the second half of this chapter examines the marketing mech-
anisms that can be used to strengthen, maintain or create ongoing relationships with
e-marketing consumers.
} Relationship marketing
Relationship marketing is a process of understanding customers, their needs and their
motivations so you can work towards developing customized programs which increase
the value of the customer to the organization, and the value of the organization to the
customer (Chapter 2). Usually, this takes the form of loyalty schemes, proactively con-
tacting customers to ensure satisfaction or developing special offers available to only
certain categories of customers, all of which are focused on increasing the value of the
customer to the organization. Although sounding cynical on the surface, the purpose of
relationship marketing is to generate a win-win situation for customers and companies
through careful management of expectations and outcomes (Chapter 4). As the cus-
tomer becomes increasingly more satisfied with the product offer (Chapter 6), they’re
much more likely to be loyal to the firm, and want to hang around, spread the news
about the product to their friends (Chapter 7) and generally continue to be part of a
process of mutual benefit.
Relationship marketing is defined by Grönross (1994) as a means to ‘identify and
establish, maintain and enhance and when necessary, also to terminate relationships
with customers and other stakeholders, at a profit, so that the objectives of all par-
ties are met, and that this is done by a mutual exchange and fulfillment of promises’.
The Grönross definition is closely aligned with the CIM (2005) broader marketing
238

definition: both recognize that the satisfaction of customer requirements is mutually

compatible with organizational profit and that mutual fulfillment of customer and cor-
porate needs is the prerequisite for effective marketing. Mutual benefit can only tolerate
limited periods of imbalance towards customer or firm before it causes the relationship
to fail for being customer or company dominated.
One risk with relationship marketing in theory and in practice is being consumer
dominated on price to the point that you fail to secure sustainable profitability whilst
in the pursuit of long-term customer loyalty. In addition, Grönross recognizes the need
of the organization to be able to terminate the relationship where necessary, which
supports this text’s established principle of targeted marketing, and the underpinning
notion that not every customer is the right customer.
Relationship marketing is about developing an ongoing product relationship that
places emphasis on retaining and improving business relations with the customer.
The idea operates in contrast to the traditional approach of marketing which empha-
sizes gaining new customers and larger market share as the key determinants to
successful business. Rather than pursuing each customer and transaction as a new
event, the relationship marketer will attempt to develop an ongoing series of trans-
actions with the consumer to increase customer loyalty and reduce the need to acquire
new customers.
This places a value on the lifetime worth of a customer to the firm ahead of the
individual transactional costs, with the assumption that longevity and loyalty lead to
better returns on investment in the consumer. As customers stay with the relationship,
they will increase their value to the organization, increase their rate of purchase and
spread positive word of mouth to encourage new customers to join. If you’re dealing
with a relatively complex product, or a product with a community centered around
it, you’ll also gain benefits from the veteran community members answering common
problems experienced by the new adopters.
Similarly, customer loyalty becomes the cornerstone of relationship marketing, as
the theory assumes that the development of trust, commitment and responsiveness
will result in the customer feeling a reciprocal loyalty to the organization, and will not
simply encourage the consumer to play off one company against another to maximize
their personal gain.
Loyal customers are those individuals who exhibit both behavioural and psychologi-
cal commitment to the organization. Behavioural commitment is exhibited through:
◦ buying repeatedly from the one supplier when alternatives exist: online, this can
occur through repeat visits to a website (www.facebook.com), preferred use of a social
media site (Twitter versus Plurk: www.plurk.com), search engine loyalty (www.google.
com) or continued use and contribution to a user-generated content service (www.
flickr.com). Behavioural commitment is not simply sunk time cost as an exit barrier
or continued exploitation of a low price product (Chapter 6)
◦ increasing the amount of transactions with that supplier, either by purchasing more
or making more frequent visits to the website, and increased interaction with the
firm through different media channels (becoming a fan on Facebook, mentions on
Twitter and in blog posts)
239

e-marketing
◦ providing constructive feedback, participating in beta tests and making suggestions

or giving advice, for instance, about new products. It can include the development
of user-generated content and fan content for the product, brand or company, the
use of innovations and much higher levels of customer co-creation.
Taken to the logical extension, many loyal customers of software products will produce
materials, patches and other associated materials for the company. The enthusiasm and
loyalty that can be exhibited online is occasionally unsettling for companies (partic-
ularly with trigger-happy lawyers) that are not used to the user-generated responses.
Valve Corporation (owners of Steam, Half Life, Team Fortress and other games) capital-
ize on the user-generated content that comes from loyal customers by releasing tools
and equipment (software development kits, level editors) for their games. They work on
the assumption that working with a loyal customer base (rather than suing them) can
build incredibly strong loyalty to the organization.
Principles of relationship marketing

Relationship marketing operates on the foundation of three principles: trust, commit-
ment and reciprocity. Trust is the willingness to rely on an exchange partner in whom
one has confidence, and this includes a belief in the trustworthiness of the partner and
a reliance on the other partner to perform (Moorman et al., 1993; Grönross, 1994).
Commitment is the perceived need to maintain the relationship, either because of the
inherent value of staying, or because of the costs associated with leaving the exchange
(Geyskens et al. 1996, in Wetzels et al., 1998). Reciprocity is basically the notion of
equality, mutual obligation and Bagozzi’s (1975) exchange theory.
Trust
Developing trust is a major issue facing the online marketer. Trust is a particularly
interesting aspect of the Internet – social media requires trust (without or without ver-
ification), and ease of access to unverified account generation creates a fertile market
for fake accounts, impersonators and imposters. At the same time, the nature of social
media as a communication platform between real people tends to force the fakes into
the background as they’re either revealed due to errors, old friends or being hunted
down by zealous media types. In marketing terms, trust is one of those multifaceted
issues where there’s the human language version (faith in others) and the commer-
cial language variation (willingness to rely on others who you believe will deliver). For
the most part, even when the commercial language version of trust is in place, there’s
usually more to be gained through honesty, humanity and emotional connections for
successful, ongoing relationships than merely sticking to the letter of the legal definition
of trust (Chapter 7).
The commercialized version of trust comes with instructions on modifying levels of
trust up and down (pushing trust downwards is a form of demarketing that can be used
to interfere with a rival product idea). Downplaying trust is also a tactical decision that
may be used to remove certain categories of users (innovators) because their demands
240

on the service (high-end use, complex requests) may exceed their value (small number
of heavy users). Every couple of years, Livejournal (www.livejournal.com) provides a
working example of breaches of trust as a means to lower the barriers for paying users
to leave the service (Chapter 6) through its propensity to forget that the paying cus-
tomers stick around to interact with the people on the free accounts. When the service
provider breaches the trust of the free account holders, it also has an impact on the paid
account holders’ view of the firm, so caution must be exercised with trust reduction as
a demarketing tool.
Doney and Cannon (1997, in Jevons and Gabbott, 2000) outlined five processes to
form trust in business relationships. These are:
1. calculative processes, which is where you try to second-guess the value of cheating
or defrauding the relationship. This theory is derived from economics and comes
complete with a set of complex mathematical equations (and the assumption of
impossibly rational behaviour) that indicates that if the benefits of cheating do not
outweigh the costs of being caught, then the parties to the transaction will be honest.
It also says a lot about economics that this form of ‘What’s in it for me to betray you?’
behaviour is even considered to be a type of trust.
2. prediction of future intent based on past behaviour, is where you trust based on
verification of the other person’s past trustworthy activity. It’s one part economics
(risk calculation based on history) and one part precognition as you try to guess if
you’ll be the one ripped off (if they decide to go to the Dark Side this time). There’s
some difficultly with this method online where no transaction history exists, but
it can be a very positive method where transaction histories can be accessed. eBay
(www.ebay.co.uk) offers access to transaction histories of bidders/sellers through rat-
ings systems, and offers the opportunity to contact participants of past transactions
(Arunkundram and Sundararajan, 1998). Searching Twitter or checking Google’s
Blog Search (http://blogsearch.google.com) will provide some history to transactions
where you think something is suspect.
3. credibility, which is where trust is derived from the capability and capacity of the
other party to deliver on its promises. Websites which offer sample downloads, trial
products, peer reviews and user ratings all provide indications of the credibility of
the organization to deliver on its promise. Plus, there’s a certain level of effort that
indicates the economic costs of cutting and running on your £5 purchase just isn’t
worth the apparent set-up costs (economic motive).
4. motive assessment, which is based on interpreting the motives of the transaction
partner. This assumes that the exploitative party will be obviously exploitative, will
look like trouble and will be recognized for not having the transaction partner’s
interest at heart. This is a difficult method of trust, since the operation of any
commercial exchange should have an equal split between offering the customer
what they want (consumer’s interest) and gaining the best deal for the company
(self-interest).
5. transference process, which works on the principle of word of mouth, third-party
referral and trust by recommendation. Word of mouth on Twitter, positive blog
posts, large numbers of people indicating they ‘like this’ company on Facebook
241

e-marketing
and other indicators are usually positive signs that the company is worth the
transaction cost.
Trust in the online environment is particularly important before an initial transaction

occurs, not only as a part of developing an ongoing relationship. Although trust alone
does not gain the sale (more mundane issues of the marketing mix such as price cover
that avenue), it is a major factor in getting to the point of consideration for purchase.
If the price is right, but the person does not trust the company, then the sale will not
go ahead (Jevons and Gabbott, 2000).
Commitment
Commitment is almost the end-game state in relationship marketing. Whilst trust is a
key element in the formation and continuity of the relationship, commitment is more
towards the operationalization of the contractual obligations. Once a relationship is
formed, commitment is dependent on service and product quality, which influences
the purchaser’s desire to stay within the relationship, and satisfaction, which is the
degree to which the relationship continues to meet the needs of the organizations
involved. As with the rest of relationship marketing, commitment has multiple con-
flicting definitions. Morgan and Hunt (1994) suggest commitment is an affective event
based on liking, emotional attachment and a sense of bonding with the other party. The
less romantic view is the calculative approach (spawned from economics) which takes
commitment as being a balance sheet of costs, benefits, gains, losses, rewards and pun-
ishments that is constantly tallied, and all the time the ledger remains in the positive,
commitment will be maintained. Somewhere in between the two extremes of romance
and maths lies the middle ground of actual application of relationship management.
The two types of commitment have an impact on the following areas:
◦ intention to stay in the relationship

◦ desire to stay in the relationship
◦ performance of the relationship
◦ willingness to invest in the relationship
◦ development of alternatives
◦ opportunistic behaviour (Wetzels et al., 1998).
Affective commitment has a positive impact on the first four influences and a negative
impact on the last two, as the more the individual is committed to the relationship, the
less desire they have to engage in opportunism or to seek alternative arrangements.
Calculative commitment is more likely to be prone to seeking alternatives and look-
ing for opportunistic outcomes to alter the balance sheet. There is an evident bias in
the literature towards preferring the affective side of commitment for long-term rela-
tionships. In reality, performance of the relationship is every bit as influenced by the
profit and loss calculations of calculative commitment as it is by the sensitive ‘touchy-
feely’ approach of affective commitment. For online marketers, the lesson to learn
from commitment is to not only continue to balance the profit and loss sheets of the
242

relationship, but also to trust instinctive desires to maintain commitment. Online rela-
tionship marketers need to have a longer-term focus, rather than simply using Internet
relationships as short-term opportunistic events.
Reciprocity
Reciprocity is the basic function of exchange in that it simply represents ‘the mutual
exchange and fulfillment of promise’ (Grönross, 1994). If this looks familiar, it is because
Bagozzi (1975) proposed the ideal generic law of marketing in exchange theory (see any
decent introduction to marketing text for details). The key to reciprocity is that the
totality of the exchanges must balance over the course of the relationship. Individual
exchanges can favour one partner or the other providing that the overall outcomes
remain equal. In addition, the basis for reciprocity can move beyond simple financial
exchange to include such functions as:
◦ increasing stability by reducing risk and uncertainty

◦ establishing legitimacy
◦ increasing effective and efficient use of resources
◦ accessing resources not currently available to the organization.
In addition to the three core principles of trust, commitment and reciprocity outlined
above, there is a range of influencing factors that help form (or dissolve) relationships
in both business-to-business and consumer markets. However, for the purpose of this
book, we have restricted the review of relationship marketing concepts to just these
three elements.
Trust, commitment, reciprocity and spy videos }
In 2009, Valve Corporation staff mistakenly released a draft video for a Team Fortress
update too early. This draft content was seized on by the over-eager community and
rapidly redistributed amongst the fan sites. Valve’s response was an indicative case of
relationship marketing in practice. Valve made a point of owning up to the mistake and
making fun of itself in its community by awarding itself an ‘unlockable achievement’
similar in style to those given out to game players (see Day 5 of the Sniper/Spy update -
http://www.teamfortress.com/sniper_vs_spy/day05_english.htm).
The humanity of the response, including Valve’s good humour and self-depreciating
admission of its own error, maintained and enhanced trust with its community (the
final full version of the leaked video contained the note ‘Act surprised’ as a reference
to the early release). Given that the Team Fortress branding has an irreverent and
comical game style, which had previously included mocking players for cheating,
243

e-marketing
Valve’s consistency of message (Chapter 7) enhanced the relationship between com-

pany and playing customers. Since Valve had previously relied on the same fan
communities who leaked the video for positive PR and media, Valve’s (notable) lack
of hostility to these groups also increased the commitment between all parties.
Psychological commitment to an organization is based around the mental processes

associated with the development of a successful relationship. Consumers have estab-
lished psychological commitment when they:
◦ would not consider terminating the relationship or using an alternative supplier

◦ engage in positive word-of-mouth referral
◦ hold a positive attitude towards the supplier and the relationship, and are experienc-
ing beneficial outcomes from the exchange.
Although these are the strongest indicators, the development of strong relationships
between consumer and supplier can be exhibited through alternative methods. One
interesting problem that can arise from a strong consumer relationship with an orga-
nization is a very negative reaction to a corporate takeover that merges the preferred
brand into the new venture. Purchasing an organization with strong customer rela-
tionships requires the purchaser to maintain the elements that have formed the strong
bond, rather than assume the relationship loyalty can be transferred to the new
group identity.
Three levels of relationship marketing

The application of relationship marketing is based around one of three functions: as
a tactic, a strategic direction or a corporate relationship marketing philosophy. Tactics
operate from the ground level straight to the end client and are usually short term in
focus and nature. Strategic direction aims to provide a more cohesive medium-term
approach to engaging consumers and locking them into longer-term relationships.
Finally, relationship marketing philosophy is applied as the core focus and direc-
tion of the corporation and underpins key functions such as strategic direction and
planning processes.
Tactics
Tactical-level application of relationship marketing is aimed at the initial recruitment
and development of the relationship whereby incentives are offered to the consumer for
their initial involvement with the company (ninety-day free trials, short-term bonus
features, in-game special items, different colour user icons).These are not designed to
develop trust or enhance credibility, and they are not presented as tools of commitment
and reciprocity. They are incentive schemes which are designed to get the user from
244

pre-purchase to purchase, or to shift from their current relationship to the new provider.
Effectively, these are little more than sales promotion tools that linger after the initial
transaction has been finalized.
Strategic direction
Strategic direction provides the organization with a series of medium- to long-
term objectives involving the recruitment, selection and development of business-
to-consumer or business-to-business relationships. The distinguishing point between
strategic and tactical direction is that the strategic direction of a business-to-business
relationship would be to develop mutually dependent, just-in-time supply systems,
whereas the tactical direction is the implementation of the supply systems.
Corporate relationship marketing philosophy

The relationship marketing triangle is the relationship marketing philosophy, which is
basically the marketing concept aimed at long-term relationships rather than one-off
transactions. Developing a focus on relationship marketing requires the organization to
adopt a philosophy of seeing the customer as a partial employee of the organization,
and including the needs of this employee–customer in the long-term development of
the organization.
The value of creating relationships online lies not only in developing viable com-
mercial exchanges (which should be the number one priority of the relationship), but
also in augmenting existing relationships through new channels. Business-to-business
users who would be dependent on developing proprietary electronic data interchange
(EDI) systems can make use of intranets, secured websites and e-mail. Small-to-medium-
sized providers of business-to-business services can also develop ongoing relationships
with organizations through the Internet as they can deliver services in the same man-
ner as their larger rivals. Even retail outlets can make use of the Internet’s interactive
functions to establish ongoing relationships with clients, including repeat orders (www.
thinkgeek.com), that can be modified online. Additional value can be derived by the
business or consumer engaged in an offline relationship by moving the relationship
online because it provides an opportunity for a lower-risk entry into the market. Issues
of trust, commitment and reciprocity within the existing relationship can be confirmed
and maintained with the movement to online delivery. Positive experiences within an
existing relationship can be used to reinforce other business-to-business relationships
with online providers.
Trust and the e-commerce experience

The list of where trust is not needed in online commerce is much shorter than the
list for where it is. For the most part, wherever an offline merchant exchange would
incur the need for trust (i.e. every time), then it could be reasonably expected that trust
would be an issue online. However, Ratnasingham (1998) outlined the following list
245

e-marketing
as a selection of the more common areas where trust is a heightened issue in online
commercial exchanges:
◦ a sending/seller/merchant trading partner to a receiving/buyer/customer trading

partner (which describes most commercial transactions), specifically those trading
for the first time with each other
◦ a customer and a bank, where trust is derived from faith in the bank’s systems per-
forming the tasks in a secure manner, and that transactions such as bill payment
conducted online will be validated appropriately
◦ a bank and a merchant, such as the relationship of trust between credit card verifica-
tion systems and banks, so that the merchant can fulfill an order with the confidence
that the credit card has been validated
◦ a merchant and a customer, which is the conviction that all parties are operating
in good faith, so the merchant may assume the customer is of good credit, and the
customer may believe the merchant will deliver the goods or services as promised
◦ a trusted third party or other trading parties such as eBay (www.ebay.co.uk), or other
auction houses, where the seller and buyer place trust in the third-party auction
systems to deliver the promised service and to validate the appropriate bids.
Barriers to trust
Developing trust in this new environment remains problematic for a number of reasons.
Beyond the financial risk component of ensuring secure transactions, trust develop-
ment is inhibited by a number of factors which are exacerbated by the unique features
of the Internet. Trust, under normal circumstances, is enhanced by face-to-face interac-
tions, social activity and shared experience. The lean media environment of the Internet
neatly removes these enhancements and creates its own set of barriers to make the pro-
cess of trust formation more difficult. The specific barriers inhibiting trust development
between Internet-based partners include the lack of:
◦ co-presence in time and space: the nature of the internet which allows for 24/7 global
access is also makes it a problem for customers wanting to experience the same direct
face-to-face (or one-to-one) transaction that they can receive in a real-world store
◦ the entire human bandwidth (sight, hearing, smell, touch and taste): trust has to be
placed in substitute features such as sound files, images and virtual environments, all
of which lack external validation by the recipient
◦ capacity for interruption, feedback and learning, (also known as interactivity):
despite the interactive nature of the Internet, immediacy of interruption and
communication are limited to voice transmissions only
◦ prior familiarity with one another: what began life as anonymity, post-modern con-
sumption and the capacity to be a dog on the Internet (New Yorker, 1993) has
turned into a disadvantage for building trust. What if your client is a dog? With-
out the prior familiarity or external third-party verification, there are few methods
of reaching any reasonable level of confidence in the identity of the opposite party
(Ratnasingham, 1998).
246

Figure 8.3 Relationship mapping

Despite the existence of these barriers, however, an alternative viewpoint sees the
Internet and associated technologies as being a positive, rather than a negative, influ-
ence on the development of long-term relationships (Figure 8.3). This viewpoint is based
on the idea that information about a consumer leads to better service, which in turn
leads to loyalty, trust and commitment. Trust in e-commerce is also influenced by the
relative experiences of the individual user, and those who have had a negative trust
experience, either directly or vicariously, will be less inclined to develop trust online.
(Oddly enough, many people develop their distrust of the Internet as a medium by
trusting the reports presented in the news or print media.)
In online relationship marketing, the major point of value for marketers to generate
is the nebulous concept of ‘trust’. As with offline relationship marketing, trust needs to
be present to form the basis of the relationship. However, online marketing presents a
range of problems with trust creation when compared with the offline world. A large
portion of the relationship marketing literature concentrates on the physical aspects
of trust generation, and the absence of physical cues on the Internet has required a
range of new methods to take their place. Papadopoulou et al. (2001) identified the
e-servicescape of the transaction as the determining factor in the development of trust
over the Internet (Table 8.1).
The model works on the principle that the person entering the relationship has a
propensity towards trusting the transaction based on their initial trusting beliefs (based
on cultural and personal traits), institution-based trust (based on the perceived propriety
of the conditions) and their disposition to trust the organization as a result of informa-
tion from third parties (reviews, word of mouth). For the most part, these are issues out-
side of the control of the marketer as they are internal processes unique to the consumer.
From this core of internal traits, the trust process is developed by the interaction
between the organization and the consumer in the e-servicescape. This follows through
six steps.
◦ The organization offers goods and services for sale (make the promise).
◦ The customer decides to buy a product through the site (trusting intention).
◦ The website has a shopping cart or secure transaction form (enable the promise).
247

e-marketing
◦ The customer enters their credit card or other payment details (trusting behaviour).
◦ The organization ships the goods and services, and bills the correct amount, and the
customer’s credit card details are kept secure (keep the promise).
◦ The customer feels satisfied with the organization and increases their trusting beliefs
towards the specific site they’ve just shopped at, and e-commerce generally.
Improved communications are at the core of this approach. Undoubtedly the Internet
has increased the capacity of organizations to communicate and interact with their
customers on an individual level. The interactivity and customization possible through
Internet transactions means that a greater level of information transfer is possible and
in many cases is occurring. Whether the capacity of the Internet to create customized
Table 8.1 Determinants in trust development on the Internet
Stage Strategic guidelines Operational objective Web mechanism
(1) Identify Start with customers Compile information on what Incentivised online
Exploit unique properties of an individual purchases or may questionnaire
Internet technology want
Create a profile of the customer
(2) Improve Exploit unique properties of Improve aspects of the service Customised online
Internet technology that are not meeting or questionnaire
Build relationships with exceeding the expectation of E-mails
customers customers
(3) Inform Exploit unique properties of Increase the knowledge of Direct e-mailing
Internet technology customers about the hotels and Electronic newsletters
Build relationships with the loyalty scheme to enhance Online noticeboards and
customers brand loyalty updates
Leverage existing business Online information centre
(4) Tempt Exploit unique properties of Persuade customers to try new Direct e-mailing
Internet technology service, product or sector Special electronic
Build relationships with Persuade customers to promotion leaflets
customers purchase more through Automated cross-selling
Leverage existing business personalised contact
Build a service, not a Web site
(5) Retain Exploit unique properties of Develop new loyalty building Exclusive Web site and
Internet technology schemes aimed at retaining and services for loyalty scheme
Build relationships with reinforcing the link with members
customers customers Online members’
Leverage existing business magazines
Build a service, not a Web site Online members-only
Think radically customer services
Source: Gilbert, D.C., Powell-Perry, J. and Widijoso, S. (1999) ‘Approaches by hotels to the use of the Internet as a
relationship marketing tool’, Journal of Marketing Practice: Applied Marketing Science, 5(1): 21–38.
248

strategies translates into a corresponding increase in trust, which in turn leads to better
relationship development, remains to be seen.
Should you be thinking transaction or relationship marketing?

Gilbert et al. (1999) established six points to determine when the relationship marketing
paradigm is most suited for application.
1. The customer has an ongoing or periodic desire for the service.

2. The customer controls the selection of the service supplier.
3. An alternative choice of suppliers exists and the alternative suppliers offer similar
enough products to make switching viable.
4. Brand switching is a common phenomenon since it’s feasible for the customer to
move from one provider to another.
5. Word of mouth counts as a valuable form of communication about a product.
6. You can cross-sell products.
One of the most important factors to consider in electronic customer relationship man-
agement (eCRM) is that relationship marketing is an optional extra on the transaction
and is not the transaction itself.
As Feinberg and Kadam (2002) point out rather bluntly, consumers consume stuff,
not eCRM. Many relationship marketing experts have lost the plot in this regard and
often place the value of customer relationship management and relationship marketing
over that of the actual transaction. If the buyer wants to purchase and leave (transac-
tional), holding them to ransom and refusing to release them until they have a business
relationship with you is ludicrous. If the aim of the relationship is to give the customer
what they want, then perhaps the relationship marketers might want to consider giv-
ing the customer their freedom. Not every person will want eCRM, and some will be
actively opposed to having to form a complicated relationship with a website just so
they can make a one-off purchase.
} Conclusion
The defining characteristic of services is that they are intangible. Not only are Internet-
based products predominantly intangible, many of the commercial products available
online are themselves services. Consequently, there is a significant overlap between the
issues that need to be addressed by both e-marketers and services marketers. Core to
the success of online services marketing is a thorough understanding of the ‘product’,
or in other words, the benefit that your online presence is providing for the consuming
public. Is the online presence the prime focus of the organization or a value-added extra
for a more traditional marketing campaign?
Whilst the dual intangibility of services and online marketing make this a more
difficult proposition than occurs in traditional goods-based marketing, without this
understanding, effective marketing is not possible. Related to, and emerging from,
249

e-marketing
the services marketing movement is relationship marketing. Relationship marketing

is streamlined and made easier in the online environment due to the ease with which
individuals can be tracked and marketing communications to them can be customized.
One thing that all marketers need to keep in mind at all times is the idea that just
because you can provide an online relationship approach to your marketing, it doesn’t
necessarily mean that you should. The decision to provide online services or to develop
a relationship with consumers has to be made in light of what will actually provide
value to your customers in the marketplace.
} References
Books and journals
Arunkundram, R. and Sundararajan, A. (1998), ‘An economic analysis of electronic secondary
markets: installed base, technology, durability and firm profitability’, Decision Support Systems,
24: 3–16.
Bagozzi, R. (1975) ‘Marketing as exchange’, Journal of Marketing, 39 (October): 32–9.
Bateson, J. (1996) Managing Services Marketing: Text and Readings, 3rd edn. Fort Worth: Dryden
Press.
Brindley, C. (1999) ‘The marketing of gambling on the Internet’, Internet Research: Electronic
Chartered Institute of Marketing (2005) ‘Marketing and the 7Ps: A brief summary of marketing and
how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub (accessed 7 July 2010)
Feinberg, R. and Kadam, R. (2002) ‘E-CRM web service attributes as determinants of customer
satisfaction with retail web sites’, International Journal of Service Industry Management, 13(5):
432–51.
Fisk, R., Grove, S. and John, J. (2000) Interactive Services Marketing. Boston: Houghton Mifflin.
Gilbert, D.C., Powell-Perry, J. and Widijoso, S. (1999) ‘Approaches by hotels to the use of the
Internet as a relationship marketing tool’, Journal of Marketing Practice: Applied Marketing Science,
5(1): 21–38.
Grönross, C. (1994) ‘From marketing mix to relationship marketing: towards a paradigm shift in
marketing’, Management Decision, 32(2): 4–20.
Hofacker, C.F. (2000) Internet Marketing, 3rd edn. New York: John Wiley.
Jevons, C. and Gabbott, M. (2000) ‘Trust, brand equity and brand reality in Internet business
relationships: an interdisciplinary approach’, Journal of Marketing Management, 16: 619–34.
Knowles-Mathur, L., Mathur, I. and Gleason, K. (1998) ‘Service advertising and providing services
on the Internet’, Journal of Services Marketing, 12(5): 334–47.
Langford, B. and Cosenza, R. (1998), ‘What is service/good analysis?’, Journal of Marketing Theory
and Practice, Winter: 16–26.
Lee, J. and Allaway, A. (2002) ‘Effects of personal control on adoption of self-service technology
innovations’, Journal of Services Marketing, 16(6): 553–72.
Lovelock, C. H., Patterson, P. and Wirtz J. (2010) Services Marketing: An Asia-Pacific and Australian
Perspective, 5th edn. Prentice Hall.
McColl-Kennedy, J.R. and Kiel, G.C. (2000) Marketing: A Strategic Approach. Melbourne: Nelson ITP.
McGuire, L. (1999) Australian Services: Marketing and Management. Melbourne: Macmillan.
Mitra, K., Reiss, M. and Capella, L. (1999) ‘An examination of perceived risk, information search
and behavioural intentions in search, experience and credence services’, Journal of Services
Marketing, 13(3): 208–28.
Moorman, C., Deshpande, R. and Zaltman, G. (1993) ‘Factors affecting trust in market research
relationship’, Journal of Marketing, 57, January: 81–101.
Morgan, R.M. and Hunt, S.D. (1994) ‘The commitment–trust theory of relationship marketing’,
Journal of Marketing, 58, July: 20–38.
250

Papadopoulou, P., Andreou, A., Kanellis, P. and Martakos, D. (2001) ‘Trust and relationship
building in electronic commerce’, Internet Research: Electronic Networking Applications and
Policy, 11(4): 322–32.
Ratnasingham, P. (1998) ‘The importance of trust in electronic commerce’, Internet Research, 8(4):
313–21.
Reedy, J., Schullo, S. and Zimmerman, K. (2000) Electronic Marketing: Integrating Electronic Resources
into the Marketing Process. Fort Worth: Dryden Press.
Venkatraman, M. and Dholakia, R. (1997) ‘Searching for information in marketspace: Does the
form – product or service – matter?’, Journal of Services Marketing, 11(5): 301–16.
Wetzels, M., de Ruyter, K. and van Birgelen, M. (1998) ‘Marketing service relationships: the role of
commitment’, Journal of Business and Industrial Marketing, 13(4/5): 406–23.
Woodruffe, H. (1995) Services Marketing. London: Pitman.
Zeithaml, V. and Bitner, M. (1996) Services Marketing. New York: McGraw-Hill.
Web references
All India Radio www.allindiaradio.net
Amazon UK www.amazon.co.uk
BBC www.bbc.co.uk
BBC World News www.bbcworldnews.com
Bejeweled game apps.facebook.com/bejeweledblitz
Contraception www.contraception.net
Digg www.digg.com
Domino’s Pizza Delivery www.dominos.co.uk
Dopplr www.dopplr.com
Downing Street www.number10.gov.uk
Dropbox www.dropbox.com
Flixster www.flixster.com
Google Blog Search http://blogsearch.google.com
Google Calendar www.google.com/calendar
Instructables www.instructables.com
Insurancewide www.insurancewide.com
Kelkoo Shopping UK www.kelkoo.co.uk
Kelloggs www.kelloggs.com/recipes
Legal Aid www.legalservices.gov.uk
Lloyds TSB www.lloydstsb.com
Marks and Spencer www.marksandspencer.com
Plurk www.plurk.com
Pop Cap www.popcap.com
Surgery Door www.surgerydoor.co.uk
Team Fortress 2 www.teamfortress.com
Team Fortress 2 Update www.teamfortress.com/sniper_vs_spy/day05_english.htm
251

e-marketing
Thinkgeek www.thinkgeek.com
@bbcnews http://twitter.com/bbcnews
@big_ben_clock http://twitter.com/big_ben_clock
@Number10gov http://twitter.com/Number10gov
Windows Update windowsupdate.microsoft.com
Wired www.wired.com
Wotif www.wotif.com
XKCD www.xkcd.com/523/
Zawinski’s Law www.catb.org/∼esr/jargon/html/Z/Zawinskis-Law.html
252

CHAPTER 9}
Community and networks
• explain the role and value of cybercommunities

• understand the fundamental principles of community development
• discuss how communications operate in an online community environment
• appreciate acceptable behavioural norms and standards in online commu-
nity engagement
• understand how online communities and social networks interface with the
firm’s marketing activities.
253

e-marketing
} Introduction
Community has always held a significant place on the Internet. From its inception, and
its precursor bulletin board systems, the Internet has had a history of using the com-
munication capacity of networked computers to gather like-minded people together in
virtual spaces. Whilst the Web began life as a complex footnoting system for a thesis,
the success of e-mail, USENET and IRC grew out of the recognition that the true value
of the Internet lay in its capacity to connect people with similar ideas and mindsets
into communities of thought even if physically they were widely dispersed across the
world. The rise of social networking sites and the development of a community infras-
tructure on the web is a public recognition that the best application of the Internet is its
ability to facilitate access to other people (Bray, 2007). Whilst Internet use can still be a
solo sport, it’s increasingly being used for group participation through Facebook (www.
facebook.com), Twitter (www.twitter.com), Google Sidewiki (www.google.com/sidewiki)
and a host of other social media and social networking services.
Chapter 9 focuses on the consumer behaviour and marketing aspects of social media
through the cybercommunity structure, whilst Chapter 12 looks at the technicalities of
different sites. This chapter is about how people form community, groups and shared
understanding around social systems and the roles that these communities can play in
e-marketing. Cybercommunity is where communications theory, consumer behaviour,
personal identity and technology combine to create an environment that is both entic-
ing and threatening to the online marketer. Communities online are subject to less
physical restrictions than their offline counterparts. Whilst most of the rules of the
community including laws of libel, fraud and misconduct exist in both environments,
there’s a sense of liberation from certain traditional community infrastructure require-
ments when the community develops online. Whilst traditional communities rely on
proximity and need for physical co-location before social bonds can develop, a key
feature of online communities is that they are free of these physical constraints.
Online marketing has made brave, sometimes misguided and occasionally successful
forays into the online community environment. In order to fully understand the benefit
of the cybercommunity to marketing, it is first necessary to understand the concept of
the cybercommunity. This chapter overviews the foundations of the cybercommunity
concept and the construction and use of identity in the community environment before
examining the role and value of natural and artificial communities to online marketers.
} Cybercommunity
Cybercommunity structures can generate environments, social norms and practices
far removed from what is possible in the real world. To some extent, the virtual
community is a movement towards niche segmentation based on self-interest, where
you’re represented as how you see yourself rather than how marketers see you based
on measurements on psychographic and demographic profiles. The relevance of the
cybercommunity, and the reconstruction of self-image in the online worlds, is that
it represents a new level of market segmentation which goes beyond psychographics.
254

Traditional market segmentation breaks users into strictly defined categories based on
who you are, what you earn and what the aggregate of those scores means for your
postcode area. Psychographics and lifestyle segmentation group people according to
what they do and how they live relative to others. Cybercommunity allows for an envi-
ronment where individuals act out their self-images and for segmentation based on
self-representation; that is, how people see themselves rather than how marketers see
them based on the application of key market research variables and scales.
Background to community
Although there’s a slew of anti-Internet articles written in any given year proclaiming
the death of community, society and friendship (as we know it) because we’re talking to
strangers over the Internet instead of shunning strangers in the street, every social media
mechanism (from USENET to Twitter) has spawned numerous meet-ups, social events
and face-to-face activities. In effect, the Internet provides a time and space independent
mechanism for the StreetCar Named Desire model of community – friends/followers
are just strangers you haven’t met yet. Cybercommunities arise where a group of indi-
viduals engaged in computer-mediated communication move beyond basic exchange
of information into the formation of a community structure based on the exchange of
shared goods of value (Dann and Dann, 1999).
Dichotomies are the foundation of most good typologies, and cybercommunity
typologies are no different in this respect. Cybercommunities take one of two basic
forms: natural communities and constructed communities. Natural communities arise
from human interaction where the exchange of emotional support augments pure
information transactions. Constructed communities are created with the purpose of
facilitating emotional support transactions. The purpose of the distinction is largely
arbitrary – for a community to succeed, it needs the presence of the same factors
whether it evolved from people swapping notes on science experiments or from an
intention to establish a cancer survivors’ support network. Either way, the importance
of the dichotomy is to recognize that evolution and construction are two methods of
establishing a community.
Recent developments in social media community platforms have delivered a new
measure for community structures as being either symmetrical or asymmetrical com-
munities. Symmetrical communities occur where the structure requires a mutual recog-
nition of the membership of a group. Facebook’s requirement that you acknowledge the
friend request from someone before they become part of your community structure is
a common example of a symmetrical community in action. Asymmetrical communi-
ties such as Twitter, World of Warcraft or blogging allow for non-reciprocal community
structures and unilateral ‘friendships’ where you follow someone who doesn’t follow
you (also known as being a fan when it’s done offline).
Just to add to the fun, there’s also the question of transient–permanent fixtures for
the cybercommunity. Transient communities are those cybergroups whose presence is
only noticeable when the group is active, such as members of an IRC channel or e-mail
chat list, participants on a game server, people at a concert or attendees at a conference.
Permanent fixtures are those cybercommunities which use dedicated Internet locations,
255

e-marketing
such as virtual worlds (Chapter 14), Facebook groups (Chapter 12), web forums and
social media sites such as Orkut, Facebook, Twitter and MySpace. It’s worth noting that
the only reason to consider permanency and transiency as features of a community is
to understand where the consumer is likely to be found – the infrastructure is of far
less value than the individuals and marketers who can be easily caught up with the
prettiness of a venue (on and offline).
None of the three dichotomies (artificial–natural, symmetrical–asymmetrical,
permanent–transient) has inherent merit or inherent negative connotations. Nor are
they unique to the Internet. The decision as to which type of fixture to select for the
cybercommunity depends largely on available resources, which format best suits the
needs of the community and what already exists on the Internet. What distinguishes
cybercommunities from other elements of the Internet is that the cybercommunity
combines elements of content and communication into a value-added function
(Barnatt, 1998). Websites usually offer a choice between communications interaction
or content and, even where the two elements are found in conjunction, it is often
generated by the objective of forming the basis of a transaction rather than a com-
munity. Cybercommunities offer the opportunity to turn the Internet consumption
experience away from solo existence into a shared experience between geographically
diverse people.
To explain the cybercommunity phenomenon, it is necessary to first examine the
three elements that distinguish it from other Internet functions. First, the nature of
communications on the Internet is reviewed to demonstrate how it has led to the
formation of the cybercommunity. Secondly, the concept and construction of com-
munity is overviewed to outline the key characteristics of the process. Finally, the
consumption of the cybercommunity experience through the use of avatars and the
reconstruction of identity is examined in relation to the notion of community as a
value-added experience.
Communications
Online communication happens at three levels: the individual level, group one-to-many
level, and group one-to-many-to-one level (Hoffman and Novak, 1996). Individual-
level communications relate to the exchange of information through mediated or
unmediated communications between two individuals (MSN, Facebook chat, e-mail,
SMS, Twitter direct message). Communications at the one-to-many level describe the
publishing–broadcast paradigm where a single message is sent to multiple recipients
(mailing lists, Facebook status update, Twitter comment, blog post). Communication
at the one-to-many-to-one level on the Internet occurs where interactivity, publication
broadcast and mediated communication merge to create a new range of communica-
tions options (Twitter replies, Facebook comments, blog comments, Google Sidewiki).
All three models are discussed in further detail in this chapter, however, it is important
to recognize that they are a series of indicative models rather than absolute descriptions
of how communications function on the Internet. Other models not covered in this
book can be equally valid when describing the Internet communications function and
communications models.
256

Individual level-mediated communications

Mediated communication has been occurring since humans determined how to encode
messages into a storable format (cave walls are much like early hard drives in that
they’re reliable, still hold the data and there’s no modern way to read them accu-
rately). Figure 9.1 illustrates the basic message communications technology that
describes everything from medieval messengers and carrier pigeons to the (less than)
contemporary telephone.
The mediated communications model is applicable at any point at which the mes-
sage communicated is carried by a third party (device, person, pigeon) rather than
received through direct face-to-face contact (this includes voice over IP, telephones and
videophones). It’s robust, reliable and functional.
Expanding on this basic paradigm is the concept of computer-mediated communica-
tions, which represent a specific method of communications technology. Kaye (1991)
defines computer-mediated communications (CMC) as the use of computers as com-
munication tools by people who are collaborating with each other to achieve a shared
goal which does not require the physical presence or co-location of participants and
which can provide a forum for continuous communication free of time constraints.
The message is the message, and the medium is the home computer. Usefully, CMC
predates the mass popularity of the Web 2.0 movement, and much of the developmen-
tal work on the idea was at the core of the foundation of the Internet in the 1950s
since computer-facilitated communication was valuable for multipoint communica-
tions between university, military and government institutions. It’s also an accepted
aspect of society that is remarkable from a technical level, yet wholly unremarkable
from the public’s point of view. General use of the computer as another form of letter
writing, an alternative to phone calls and a means for group collaboration is part of uni-
versity, school, corporate and home life as CMC has proved to have a relative advantage
over each of the competitor options.
Following on from the basic level of computer-mediated communication is the more
complex form known as hypermediated communications. Hypermediated communica-
tions (HMC) are communications transactions that are conducted through the medium
of the Web. Where CMC has a greater sophistication than basic mediated commu-
nication, HMC introduces newer elements related to the hypermedia environment.
Due to the more complex nature of the hypermedia systems, HMC recognizes that
it is even possible to exit the environment without actually having completed the
Communications technology
Sender Receiver
Figure 9.1 Mediated communications model

Source: Hoffman, D. and Novak, T. (1996) ‘Marketing in hypermedia computer-mediated environments:
conceptual foundations’, Journal of Marketing, 60(3), July: 50–68
257

e-marketing
Exit Exit
Increase challenge/decrease skill Boredom
Decrease challenge/decrease skill Anxiety

Control characteristics:
S>C
Skills S<C
Perceived congruence of skills and challenge
Challenges Increased
learning
S=C
Perceived
behavioural
Content characteristics: control
Interactivity Flow
Network Exploratory
Enter mindset
navigation
Vividness Attract
attention
Positive
Motivational characteristics: Telepresence Yes subjective
Extrinsic experience
motivation
Finished
(instrumental) Focused No
Involvement Exit Exit
attention
Intrinsic
motivation
No Not
(ritualized) finished
Figure 9.2 Hypermediated communications

communications transaction. Figure 9.2 illustrates the flow chart of hypermediated

communications.
At the very core of the HMC model is the need for navigation within a hypermedia
environment. CMC relies on basic front-end software for e-mail, chat or other com-
munications functions, which are relatively straightforward communications devices.
In contrast, HMC requires users to first enter the network (Web) and engage in nav-
igation behaviour before they start their communications. A traditional phone-based
corollary of this is the idea that before you can consider making a call you first have to
find your way to the phone through a maze.
Some users may choose to abandon the navigation before they get to the point of
using the communications software. To use a web-based chat forum, the user has to
go to the site, log in to the forum, and then navigate to the front of the message
queue to send a new message. Mobile phone access to Twitter often requires you to
find the mobile site page (m.twitter.com), log in using the alphanumeric keypad (and
predictive text doesn’t support passwords), add a password (and hope you didn’t use
mixed case), then type in the message. Alternatively, you could just skip the update
and try to remember to mention it when you get to a real keyboard. Similar prob-
lems exist where you have dedicated software which requires extensive customization
and tweaking before it’s useful (see the Introduction for a slight case of customizable
software requirements).
The complexity of hypermediated communications is due to the three com-
munications models discussed being cumulative. The combined models represent
258

the communications equivalent of Russian nesting dolls. Mediated communication

is nested within computer-mediated communication, which in turn is nested in
hypermediated communication. The full communications benefits of the Internet for
marketers are realized through the effective use of a combination of all three mod-
els. However, to achieve this, marketers have to recognize that the consumer needs to
graduate through the use of each of the models before they can effectively and con-
fidently use hypermediated communications. This may mean guiding the consumer
through each step rather than standing at the top of the stairs waiting for them to
appear. The sequential process of interacting with a company online begins with visit-
ing the website, maybe sending a query by e-mail or an @message on Twitter and then
building towards joining a Facebook group or signing up at a forum, with the final des-
tination being the use of the company-provided cybercommunity. Each sequential step
builds on a set of learned skills from the previous communications innovation adoption
(Chapter 5), and each step has to have compatibility, relative advantage and appropriate
levels (or lack) of complexity just like any other innovation adoption sequence.
Group level-mediated communications: mass media (one-to-many)

The traditional model of communications in the mass media world consists of a message
or transmission broadcast from a single point, through a medium, to a range of receivers
who decode the message based on their knowledge and experience. Figure 9.3 illustrates
the one-to-many broadcast model.
Consumers and marketers alike are comfortable with this model as it forms the basis
of traditional advertising and publicity. Due to the lack of interaction between sender
and receiver which occurs in this model, cybercommunity structures are impossible to
develop in this form of mediated environment. The broadcast model’s greatest strength
is its ability to deliver a single message to a mass audience at a relatively low cost per
F Content Medium C
Figure 9.3 One-to-many

259

e-marketing
C C
C C
F Content Medium 1 C Medium 2 C
C C
C C
Figure 9.4 One-to-many to many-to-one

Source: adapted from Hoffman, D. and Novak, T. (1996) ‘Marketing in hypermedia computer-mediated
environments: conceptual foundations’, Journal of Marketing, 60(3), July: 50–68
person reached. The main disadvantage of the model is that it does not allow for direct
feedback from the recipients. This weakness is amplified when the audience can use
an alternative medium for their feedback. Twitter tends to be the real-time response
channel for television audiences to comment, re-tweet and pass judgement on the
viewing offerings. This effectively creates a new model of one-to-many-to-many-to-one,
where the original message sender is left out of the communications loop that emerges
between the people consuming and discussing the original message.
This structure provides opportunity for communities (artificial and natural) to build
around mass media events, discussion threads on blogs about The X Factor, Facebook
groups which lie dormant until the opening credits of Great British Menu start, and
television-specific community forums that light up with each screening of new (or
old) episodes. The problem for the marketer in this situation is that the community
is well beyond their control and is an event that’s not there for the capturing as a
commercial opportunity (historically, attempts to commercialize the organic venues of
cybercommunities usually result in the discussion disappearing at the same speed as
work chat disappears when the boss sits at the lunch table). From a marketing per-
spective, these natural communities either need to be observe-only situations, where
you watch the commentary and take the feedback to the organization, or thoroughly
ignored if the community is talking about you rather than trying to talk to you.
If they’re talking to you (or posting open questions), then that’s your cue to engage
and to close the feedback loop (Figure 9.4).
Group level-mediated communications: computer-mediated one-to-one

The major development between broadcast models and CMC was the capacity for
interaction between sender and recipient. The new mediated environment allows for
immediate and/or delayed reaction to the transmitted content. Figure 9.5 illustrates the
machinations of computer-mediated communications.
260

C Content
Medium
Content C
Figure 9.5 Computer-mediated communications

In this model the sender–receiver dichotomy is a temporary rather than permanent

state as is the case in broadcast models. Content is generated by the sender–receiver,
transmitted through the medium, received and acted upon by the receiver–sender and
returned through the medium to the originator. A customer sends an @comment to a
store on Twitter to ask about the price of a product, the store owner responds with
an @ or direct message with the correct price. This potential for interaction is the
basic building block of the cybercommunity as it represents the capacity for interac-
tion and exchange. Community does not exist in isolated communications between
two individuals. In order to develop a cybercommunity, the third level of mediated
group communication needs to be present.
Group level-mediated communications: computer-mediated

one-to-many-to-one
Computer-mediated communication was designed to take a single message to a
single recipient. This basic concept was subsequently upgraded into the computer-
mediated one-to-many-to-one system. Group level-mediated communications merge
the CMC time-independent personalized message with broadcast’s multiple recipi-
ents and includes the capacity for direct interaction or indirect broadcasted responses.
Figure 9.6 illustrates the operation of the one-to-many-to-one model.
One-to-many-to-one is the dominant communication style of the cybercommunity
as it allows several people interested in a single topic to view the original post, comment
or tweet, and to respond to that and other responses. The users play an integral role in
the medium, and the message exchange can be categorized in any one of four ways:
1. original broadcaster
2. receiver–broadcaster
3. receiver–sender
4. receiver.
Original broadcasters can send messages in a one-to-many style to the medium. Unlike
traditional broadcast models, other users of the medium can respond, either directly
as receiver–senders or indirectly as receiver–broadcasters. Receiver–senders apply the
CMC one-to-one model in that their messages return to the originator rather than
the broadcast medium. Receiver–broadcasters send their messages to the medium as a
261

e-marketing
F
F
Content
F
C Content Medium Content F
Content
C
C
Figure 9.6 One-to-many-to-one

broadcast style, despite the fact the message may be specifically tailored in response
to another member of the medium. With a Facebook status update, you play the
role of the original broadcaster (I’m off to lunch) to which people can reply to
the comment (Where’s lunch?) as receiver–broadcasters or to the direct message as
receiver–senders (Facebook chat, Facebook message) or just know you’re out of the
office so they can focus on Bejeweled Blitz for a while (receiver). Same processes
apply in Twitter, Plurk and other places around the Internet – putting an origi-
nal post into the environment (tweet) is broadcast, replying in the same medium
is receiver–broadcaster (@message), using a different private direct message approach
(SMS, e-mail) covers receiver–sender, and just ignoring it or reading it is receiver. The
one-to-many-to-one model allows for the easiest facilitation of the cybercommunity
structure as the quasi-broadcast of tailored personal responses creates an environment
where shared values and communal structures are likely to form. In order to under-
stand how these structures evolve from one-to-many-to-one communications, it is
first necessary to examine the nature of community, community formation and the
cybercommunity structure.
Community
Community takes three forms: real, virtual and cybercommunity. Real community
is used to describe communities that are time and place dependent as they form
around a geographic region, feature or social clustering. Virtual communities are groups
262

which share a common bond that is not dependent on physical interaction or com-
mon geography. Cybercommunities are virtual communities within computer-mediated
environments. Virtual communities can exist outside the digital world where the bonds
of common interest shared by supporters of a football team can constitute such a com-
munity. The virtual community of shared experience and common value (football team
support) is not dependent on physical location but can be aided and encouraged by
physical and temporal convergence (football match). Whilst cybercommunities are less
prone to requiring physical convergence (although they can and do hold face-to-face
meetings), community is often aided by a sense of teleconvergence where multiple
members of the cybercommunity are online at the same time to exchange information
in near real-time transactions.
Concepts of community 1: Real people, real lives, cybercommunities

Cybercommunities are collectives of humans. It may be a computer-mediated environ-
ment, but the computers are merely the tools for the humans to express themselves.
What people get up to in their cybercommunities can often be of interest to marketing
and market researchers. Any cybercommunity hosted on a commercial product ven-
dor website gives rise to a self-selected group of strongly brand-loyal individuals with
varying passions for the product, who probably make a pretty useful test bed for new
products, beta releases and feedback. Community members who share a common pas-
sion for the product or brand in question quite often share a range of other common
interests and lifestyles which can provide the market researcher with the opportunity
to observe and collate opinions on related issues. These in turn may impact on the mar-
keting and use of the product. These are the users most likely to discover product use
innovations, give detailed explanations of their personal experiences with the products
and to have encountered the sorts of problems faced by fellow users. They can form
self-selecting focus groups, giving out product feature wish lists for free as part of their
discussions in their cybercommunities. Just remember the Brogan (2009) Plastic People
Rule applies here in reverse – these are real people you’re observing, not a complex game
of ‘The Sims Real Life’.
Concepts of community 2: Shared goods of value

Communities are established when individuals identify with ‘collective goods of value’.
Collective goods of value represent the common points that bind the community
together and was promoted by Rheingold (1993) as the point of identification for a com-
munity structure. A group which has one or more goods of value is far more likely to
form a community than a group without these elements. These collective goods include:
◦ a common or unifying interest, which is the strongest point of entry for

cybercommunities. Due to the Internet being an interest-driven environment,
cybercommunities of common interest are easy to identify and join.
◦ shared suffering, experience or belief, which gives a point of common understand-
ing and experience. This is particularly strong in self-help or support communities
263

e-marketing
where the shared pain is the initial point of bonding. Facebook provides an array of
ways and means to identify shared experience, belief or interest through Fan pages,
communities and groups.
◦ participation and involvement in the community, which is aid in the development
of the community. The greater the involvement with a group, the more likely it is a
member will feel a sense of belonging. Active participation may be either through
ordinary membership and use, or by taking on informal roles such as commu-
nity advocate, instigator or leader (Cothrel and Williams, 1999). Advocates lead by
example in the use of the community and often are the most prolific members of the
group. Instigators handle the responsibility of engaging debates, asking questions
and starting topics of conversation. Leaders are usually the more senior, experienced
or knowledgeable members of the group who tend to guide the general direction of
the group and handle dispute resolution. The three levels can often act as a hierarchi-
cal structure of transition whereby advocates can become instigators, who turn into
leaders over the passage of time.
◦ sense of belonging, or ‘sense of community’, which is one of the strongest indica-
tions of a community. As cybercommunities are extremely nebulous structures at
the best of times, a sense of membership and belonging is important for the success
and survival of the group. Information exchanges where people simply swap knowl-
edge without feeling any association with the group may meet several of the other
community criteria, but lack the critical element of belonging which is necessary to
form a community. The strength of belonging also assists the follow through from
cybercommunity to virtual community as online groups meet up offline for events
and social functions.
◦ social network capital, which is the experience and collective history of the
group. Once members of the group begin to develop stronger intra-group ties
between one another, the social network capital increases as people invest time and
emotion in the group structure. Conflict and resolution are also important aspects
of social network capital as the longer a group exists, and the more diverse the
membership base becomes, the more likely it is that conflict will occur. This is an
essential part of group dynamics as groups which do not have points of disagree-
ment, conflict and resolution tend not to last as long as those groups with active ‘hot
spots’ of conflict and debate. This is not to say that conflict must be present, simply
that heterogeneous groups often develop greater levels of social network capital than
homogenous groups.
◦ shared knowledge base, which is the final component and occurs when the group
has access to a combined knowledge of the points of interest, the group history
and, for groups clustered by interest, the subject of the group. This is not to say
that shared knowledge represents a groupthink mentality. Some of the most fiercely
volatile groups in Usenet have a well-established shared knowledge base of the points
of interest, historical events and structures, but the members rarely agree on any
given subject. However, a shared knowledge base may also be held as a result of an
information exchange where the collective wisdom is stored and accessed without a
sense of ownership of the knowledge.
264

Concepts of community 3: Cybercommunity as digital village living

Cybercommunities are formed on the basis of one-to-many-to-one CMC informa-
tion exchanges. These exchanges develop the shared goods of value around which
a community structure forms, is identified and used as a basis for self-identification
and membership. Translated, it means that where people gather together to talk and
exchange ideas and information, it is highly likely that friendships will form and that
members of the exchange will come to think of themselves as a group and identify
with their exchanges as a community. One of the things about the cybercommunity
that also differentiates it from the virtual community is the use of cyberenvironments
which create electronic versions of the shared geography of real communities.
The cyberenvironment can take one of two forms: a structured artificial world or an
electronic social sphere. Structured artificial worlds exist, with varying degrees of accu-
racy, as digital representations of the real world. One common approach is the virtual
world such as World of Warcraft, which is structured into a series of environments where
communication is limited to only those within the virtual room. At the other end of the
scale is the electronic social sphere which exists in Twitter where the social interaction
forms the bounds of the community and there’s no discernable virtual location. The
difference between the structured and unstructured environments is that the structured
environment exists independently of the human members, whereas the social sphere
exists only during the interaction between the members. Somewhere between the two
ends are the web-based forums, FriendsFeed rooms and other places where a fixed loca-
tion exists (i.e. has a permanent URL) but which is dependent on human interaction for
it to have substance and meaning as a community space. Flickr represents the cyberenvi-
ronment where it’s possible to form community and have the community engagement
within each posted photo, yet most photos don’t spark conversations and community
structures. It is the interaction between people that makes the cybercommunity, and
this interaction is known collectively as cybercommuning.
Concepts of community 4: Cybercommuning

Cybercommuning is defined as the seamless integration of communications technology
with social interaction between members of a cybercommunity (Dann and Dann, 1999).
It exists as a behaviour where the function of intra-group communication surpasses
pure information exchange to become a social support network. The importance of
cybercommuning as a behaviour becomes apparent in the context of similar consumer
behaviours such as clanning. Cybercommuning represents a deliberate and conscious
behaviour designed to integrate Internet-based activities into a collective structure and
to seek membership of a collective structure in the computer-mediated environment.
Concepts of community 5: The nature and structure of the cybercommunity

Cybercommunities are constructed worlds designed to meet the needs, wants and
communication exchanges of their membership. In the development of such an
265

e-marketing
environment, community access is based on the communications ability of the mem-

bership and their access to the tools of communication. Access using communications
skills creates a literacy barrier that will inevitably exclude some people from being able
to fully access the community. Although some multi-user environments are experiment-
ing with bilingual systems, it would still require users who interact within the bilingual
environment to be able to converse in multiple languages to interact with other
bilingual speakers.
Despite the language barriers, cybercommunity structures which predominantly
depend upon word-based communication also bring about a unique socialization
process where the human body is effectively discarded in the first instance, and
members are represented as collections of ideas and written expressions. The phys-
ical body, and the social cues associated with it, are removed and replaced by the
perception of the individual as a transmitter of ideas, feelings and communications
(Coyne, 1998). Part of the effect of the conversion of humanity into the written iden-
tity has been the lowering of many cultural and physical barriers resulting from physical
cue-based stereotypes.
Cybercommunities exist through the strength of their members and the resulting
social network capital that’s generated by a cohesive group of shared interests, social
support and other goods of collective value with a critical mass of members to sup-
port and share it. All communities share the economies of increasing returns in that
the community needs a critical mass for value to occur. In addition, for the most
part the marginal returns improve for all members, as more members join, to a point
of critical overflow, where diminishing returns occur as the community becomes too
big to manage.
Cybercommunities take time to establish, grow and strengthen, although fast burn,
single issue or limited lifespan communities can and do exist (and can be huge fun).
Communities have a propensity to develop in a natural cycle of birth, growth, matu-
rity and decline (and look suspiciously like product lifecycle curves). For commercial
operators seeking to engage in the support and the development of cybercommunities,
this long-term focus in an apparently short-term environment frequently leads to diffi-
culties in reconciling short-term goals with the community’s potential long-term value.
Many operators attempt to take short-term gains by implementing access fees, subscrip-
tion rates or other charges in order to make a short-term profit with the result that,
unless there’s some extremely compelling value in the community, members leave to
find low-cost/no-cost alternatives that meet their needs.
Concepts of community 6: Communities of self-expression

Since 1999, the term blog has become synonymous with self-published online journals,
which are effectively public diary systems for individual writers. (The terms ‘blog’ and
‘webjournal’ are used interchangeably – ‘blog’ is the shortened version of weblog; web-
journal is more encompassing of the diary-style online journals). While the concept
of an online diary may not seem to automatically top the list of methods of com-
munity creation, these webjournal structures have resulted in a new form of online
community – the community of self-expression.
266

} Fitting community into e-marketing and e-marketing

into communities
The existence of spontaneous gatherings of target market members in a shared space
of mutual value is a dream for marketers seeking to reach key market segments. Suc-
cessful engagement of members within online communities, however, remains rare.
The failure of commercial marketers to effectively penetrate online communities is
based on a fundamental misunderstanding of both the role and value of the com-
munity to its members and a lack of appreciation of the protocols and etiquette of
online engagement.
Protocols for engagement

The widespread access to the Web 2.0 style of communication has developed a con-
sumer class of active communicators who expect and demand interaction with the
companies they buy from over a range of issues. The demand for conversation and
conversational engagement can be daunting for marketers who are more comfortable
with the monodirectional broadcast model or the bi-directional e-mail exchange. The
one-to-many-to-one-to infinity of a good social media debacle is also enough to have
the company’s lawyers wanting to vet every single exchange and place the most bland
statements into the very space the consumer wants a decent conversation. While basic
principles of marketing and communication are the same online and in traditional
settings, the manifestation of these into appropriate behaviour varies considerably.
Rules of engagement 1: Conversation and community are not the same

Community does not equal conversation, and conversation does not equal commu-
nity. (Neither are strictly marketing activities in their own right either.) Merely talking
to (or at) a group of customers is not the same as those customers forming bonds
of community with each other. Community is what the consumer makes from the
shared goods of value, the sense of belonging and the rest of the factors, and may or
may not involve marketers at all. Conversations and conversational marketing is more
relationship marketing (Chapter 8) through social media (Chapter 12), and the two
shouldn’t be mistaken. If you’re only having bi-directional conversations with indi-
vidual users, and the users aren’t interacting with each other, then you don’t have
a community.
Rules of engagement 2: It’s not your community

The hardest aspect of using a cybercommunity for most marketers and companies is let-
ting go of control since the community approach to communication is in direct conflict
with the principles of integrated marketing communication (IMC). IMC dictates con-
trol over the message by a limited number of voices who speak in unison to establish
and maintain a consistent brand. Community operates by a range of diverse voices ram-
bling on about whatever the community finds interesting, and may or may not reflect
267

e-marketing
the carefully researched and implemented IMC plan (Chapter 4). For the community to
be effective, it has to be an organic creation that the users of the community build by
their participation rather than a marketing office-directed event.
Rules of engagement 3: Engage, observe or ignore

If you wouldn’t burst into a conversation at the local pub to sell your products, then
don’t wander into a community and start trying to set up shop. The consistent single
failing of marketers in cybercommunities is an assumption that they have some inher-
ent value to the community because they’re selling a product (and not even considering
if the community cares about that product either). Knowing when to engage, when to
observe, and when to knock off early and ignore the crowds is vital for marketers who
intend to engage real people in large groups.
Figure 9.7 Internet argument

268

Remember the Plastic People Rule (Brogan, 2009) and the Internet as Access to Other
People (Bray, 2007) as the guiding principles – engage if you’re going to be a real person
to these other people, observe if you want to see what they’re up to when left to their
own devices, and ignore this whole idea if you think of people on the Internet as some
form of sales simulation game (Figure 9.7). Those lines of text on a screen came from
another sentient creature (up to and including some of the servers at Google we suspect,
but that’s possibly just a rumour started by the servers at Amazon).
} Planning for community

Remember the social media plan back in Chapter 7? This is half of the game plan
in terms of looking at large groups of people clustered around their own view of
interesting ideas and shared goods of value. This section outlines two approaches:
the DIY homegrown community (with planning) and the organic community. If you
plan to go through the foster–nurture path, you can skip over the community infras-
tructure section (although it’s probably worth looking at where your community has
evolved from and what sort of infrastructure underpins its operation). Having deter-
mined the value and purpose of the organization’s cybercommunity, there are three
issues to consider:
◦ location: does the community need a defined structure, transient structure or

multiple spaces?
◦ community: what makes a community tick? What people are needed to populate a
community? What structures need to be in place?
◦ destination marketing for cybercommunities: how can cybercommunities use
tourism marketing techniques to entice users and encourage repeat visits?
Community infrastructure: location

The question of permanent cybercommunity structures such as virtual worlds, locations
in Second Life (Chapter 14), dedicated web forums, Facebook groups and the like should
be considered against the flexibility of transient locations such as mailing lists, Twitter
conversations and IRC channels. Questions to ask include:
◦ Does the company want to set up a permanent location to be accessed easily?

◦ Can the user find the transient cybervenues easily enough?
◦ Should the community be moderated by the marketer?
◦ Is an organic space (e.g. fan-based conversation on Facebook) or a constructed space
(Ning, community) the most appropriate forum for the conversations?
Transient communities are harder to maintain and host in terms of having a set venue,
time and space although that flexibility is most of their charm. Conversations on Twitter
under the same hashtag can count as a transient community (#zombies, #medieval-
bumperstickers) when @replies are thrown into the mix alongside original statements.
269

e-marketing
Permanent community environments can also play host to transient communities such
as gaming servers (Xbox Live, World of Warcraft, Second Life, City of Heroes) holding
specific theme night events such as a Halloween contest, ‘Meet the Developer’ or similar.
Although IRC is an older platform, it’s worth considering the value of a web-based or
classic IRC channel as a means for real-time group conversation environments without
the physicality or graphics requirement of a virtual world. IRC has experienced a resur-
gence in popularity as a common ground or community hall approach for political
groups, voluntary organizations and others looking for a live venue. It has the bonus of
being text based so conversations can be archived for later access, analysis or publica-
tion. The nature of the chat is such that it’s a good venue for social interactions offering
immediate gratification to users but can become unwieldy and difficult to read where
large groups are engaged in conversation. The IRC channel is similar to a party in that
multiple conversations can coexist in the room, but it takes a skilled user to handle the
conversational traffic and follow the separate threads of conversation. Alternative real-
time environments in virtual worlds are discussed in Chapter 14. Using a virtual world
gives a sense of physicality to the event, whether it’s a conversation hosted on a Halo
map or a chat in Second Life, the virtual world provides objects, rooms and location-
based interactions. Using a virtual-world space allows users to experience proximity
and separability and interact with a level of proximity in a quasi-realistic environment
(depending on your environment).
Web-based communities can exist at the macro level (Facebook, Plurk, MySpace,
Orkut and Livejournal) at the mid level (Facebook groups and Livejournal communi-
ties) or somewhere in between (FriendFeed rooms, Twitter friends’ feeds and related
aggregated community conversations). They can also function at the micro level of indi-
vidual posts, blogs, pages or discussion threads. Each of these aspects functions around
a similar physicality of a specific location where the community members can be found
in discussion with each other. The mechanisms are less interesting in the context of
cybercommunity because the dynamics of the human interaction are the determining
feature of whether a community exists. That said, the mechanisms of these approaches
are outlined in Chapter 12 if you’re planning on building the physical foundations for
a cybercommunity.
Community infrastructure: community

A cybercommunity needs to have a sense of community before it will be more than
a series of well-published good intentions. While the other elements of the Rheingold
checklist are important, it is essential that the feeling of belonging exists, otherwise
a community will not succeed. To create the community environment, the organiza-
tion must understand that the community itself is the point of the exercise and the
creation of the community is going to be an investment cost in the long-term future
of the organization.
One of the most important things to appreciate when creating and establishing a
cybercommunity is that it is a long-term process. A cyberRome cannot be installed in a
day. The community structures are a process of evolution and development, meaning
in blunt terms, long-term costs and investments for long-term gains. Companies need
270

to focus on the big picture of the gains that community can bring rather than the
narrow view of the costs that it incurs. Every aspect of establishing and maintaining
a cybercommunity will cost either time or money – usually both. Twitter’s ‘overnight’
success occurred three years after launch and Facebook’s position as a dominant social
gateway to communities has taken at least a decade to establish as it began life as an
exclusive community for US college students and grew outwards.
It also has to be recognized that the community must give benefit to the user mean-
ing that the organization will have to give something before it can expect to receive.
To access most communities the user has to give away a range of demographic and psy-
chographic data, so having already incurred the cost, they expect a reciprocal benefit.
Aiding and abetting a community

If you build it, the search spiders will come. If you want people rather than search
arachnids as the dominant users of the site, you’ll need to provide some assistance and
support in a few critical areas. First, take the pressure off the community to be a direct
revenue source. People have come to this environment to interact with each other, not
to click on your Google Adwords or whatever advertising funding model you think will
work. If you can’t afford to run it, then don’t set it up in the first place. Community is a
long-term investment in people, their satisfaction, interaction and eventual use of your
products, because your products are what got them chatting with each other in the first
place. Many commercial communities wind up too quickly as part of cost-cutting mea-
sures before any return on investment is remotely calculable or possible. Communities
which are accessed for free do not preclude the organization from charging for premium
value-added services that extend upon the free service offering. Flickr successfully con-
verted from a free community to a structure of free and paid accounts. Livejournal
periodically attempts to remove the unpaid accounts without considering their value to
the paid users, which usually leads to the organization apologizing and reinstating the
part of the site the paid users thought was most useful – access to other people.
Getting out of the way

The community exists for the benefit of members of the community. This has to be
logged and noted in any and all aspects of the community’s planning phase, implemen-
tation and review. If at any point you’re going to balk at the community not being for
your benefit, don’t set up a community. It’s possible to benefit from a community, but
it’s only going to happen if the community members are getting something out of the
bargain in the first instance. Focus on the community members first and the inciden-
tal benefits for the organization (market research, product information) will flow from
there. Alternatively, if you can’t take this approach, look for the organic communities
that are relevant for your operations and engage with them.
Remember, a community is not a focus group nor is it a controlled laboratory envi-
ronment. Communities need to be given free reign to develop and create their own
environment, leaders and structures. Companies which give freedom to their commu-
nity structures while focusing on providing for some of their needs have greater success
271

e-marketing
than those who feel a desire to treat the community like a lab experiment. The natural
environment of the cybercommunity is also an important aspect that needs to be care-
fully observed and maintained by commercial hosts. In any group of people natural
leaders will emerge and social dynamics will take place to create factions, allegiances
and similar psychological groupings within the community. Support should be given to
the leaders of the communities and to those members who provide value-added services
to the community. In many cases, recognition and a note of thanks can be sufficient
reward for a community member providing services that would otherwise have been
the responsibility of the company hosting the community. The company needs to sup-
port or at least passively ignore any spread of the community beyond the boundaries of
the hosted cybercommunity.
One of the key mistakes that can be made with a cybercommunity is to try to force
it to stay within a company’s allocated domain so that it can be probed, measured
and watched by corporate members. If a community is growing to the point of natu-
ral expansion beyond the limits provided by the host organization, it is a sign of an
extremely successful community and should be encouraged, or at least not actively dis-
couraged. Tacit approval for unofficial sites that support official functions can also lower
the costs to the organization. If a community member sets up a website to support your
commercial cybercommunity, that is a maintenance and development cost that is being
provided free in return for the benefit the user has gained from being a member of your
community. It is a display of brand and community loyalty that promotes a positive
image for the company hosting the cybercommunity.
Another major issue in hosting a community is to remember that for a community
to survive it needs to be monitored and supported. A good healthy cybercommunity
will be self-supporting and (hopefully) self-generating sufficient content to keep the
members interested. However, they are not perpetual motion machines, and as with all
human gatherings, there will be peaks and lows and points at which the communities
are no longer of value. Cybercommunities which have exceeded their useful lifespan
should not be propped up simply to meet a preset budget line expenditure or web-
site design charter. Similarly, communities that are thriving should not be terminated
because their six-month time frame has expired. Their value is in that they are living
environments which need to be reviewed and monitored over time.
Caveat: moderation
Cybercommunity structures require moderation in the form of active participation by
one or more teams of community managers. Community management a combina-
tion of the grounds maintenance, building security and emergency clean up crews
insofar as they need to have authority and responsibility to maintain the order and
functionality of the host community site. This includes removing the inevitable spam
content, enforcing community standards, setting the norms for respectful behaviour,
and removing users who persist in breaching the site’s terms of use or codes of conducts.
Unmoderated hosting venues tend to fall victim to automated spamming systems, nox-
ious behaviours and are counterproductive to the purpose of developing relationships
with the customers.
272

Destination marketing: cyberspaces as tourist places

There is more to having people clicking down a path to your website than building
a better mouse trap. Cybercommunities are not self-evident benefits to most users,
and certainly in the crowded market of the Internet, many users will never get to
see more than a fraction of the virtual worlds on offer. If this sounds vaguely famil-
iar then it is because it is the permanent dilemma of tourism marketing. Tourism
marketing deals with how to get people to leave their homes for a brief virtual com-
munity stay at a tourist destination. Many of the problems, issues and solutions
that tourism marketing has used over the years are applicable to the issues faced
by cybercommunities.
In order to apply tourism marketing to the cybercommunity structure, one key
assumption must be made – to conceptualize cyberspace as a place. This philosophi-
cal assumption has been variously mentioned explicitly or implicitly throughout both
this chapter and other aspects of this book. The key to treating cyberspace as a location
is to recognize the terminology used to describe behaviour within the environment.
People conceptualize cyberspace as a location, due in part to the influence of authors
such as Gibson (1984) on the terminology used to describe the Web. The importance
of recognizing the assumption of locality and physicality in cyberspace is that it is a
conceptual environment. There are no physical boundaries in the Internet and nothing
physical exists within this environment. So, why then do we adopt the assumption of
physicality in a cybercommunity?
Cybercommunities can be places within the Internet and recognized as such by their
boundaries. For example, virtual worlds exist only on their home servers or by means of
their websites. Facebook exists predominantly at www.facebook.com, whereas Twitter
is housed at Twitter.com and is extremely accessible from a range of third-party sites
such as Socialoomph (www. socialoomph.com), software such as TweetDeck (www.
tweetdeck.com) and mobile phone interfaces such as Twitberry (www.orangatame.
com/products/twitterberry). Whilst you can access Facebook via a mobile phone and
through Tweetdeck, it’s not the full Facebook experience of applications (including stray
farmyard animals and random mafia war announcements), other people and the full
feature set.
People constitute communities, whether they are real, virtual or cybercommunities.
Gibson’s (1984) ‘consensual hallucination’ clause in the description of the fictional
cyberspace matrix indicates it only ever exists as a place because the users agreed that
it is a place. Similarly, the idea of virtual goods, virtual products and virtual services in
Chapter 1 and Chapter 6 depends in part on the acceptance of a string of binary as a real
‘thing’ whether it’s a sword in World of Warcraft, an MP3 on an iPod, or a PPT file from
the class. The ‘real’ nature of the products is based entirely on our agreed acceptance of
them as real.
Using destination marketing for the cybercommunity

Destination marketing is the amalgamation of tourism products under the brand name
of a location and which offers an integrated experience to consumers (Buhalis, 2000).
273

e-marketing
Cyberdestination marketing takes the amalgamation of the cyberenvironment and the

services, community, community members and experiences which are offered under
the banner of the cybercommunity name, location or brand. As part of destination
marketing, Buhalis (2000) outlined six key factors (the six As) for bringing people
to a location:
1. attractions
2. accessibility
3. amenities
4. available packages
5. activities
6. ancillary services.
Cybercommunity attractions
Attractions refer to the reasons for going to a region, be it a natural environment, a
heritage location, a purpose-built venue or a special event. Usually the attraction is
closely associated with the region and recognized as the primary draw card for the area.
In the cybercommunity, the attractions are the people (hence people as the killer app –
Bray, 2007). However, virtual worlds offer other aspects as well – World of Warcraft is
a gaming environment with specific quests, puzzles and challenges for the players as
well as interaction with other people. YouTube has videos, Flickr has photos, Facebook
has games and MySpace has glittery graphics. Each of the communities brings some
attraction that draws people to that location in the first instance for the formation of
the community.
Cybercommunity accessibility
Accessibility in the real world depends on available transportation system (roads, rail,
air, sea) to access a specific location (beach) combined with the capacity to move around
within that environment (on foot or on a horse). Online, it is related to the degree to
which the community can be reached by the ordinary user without the need for special
software downloads (Introduction), the convenience of having the cybercommunity
located at an obvious access point and the access to the service on a specific device
(Twitter on the Xbox, mobile or PC). World of Warcraft, Xbox Live, City of Heroes
and similar spaces usually require monthly access fees and specific hardware require-
ments. Within certain environments such as Steam, games which rely on specific servers
located somewhere in the Internet tend to function like tourist bureaux by providing
easy access to the desired location.
Accessibility also covers issues of technical skill (software operation), literacy (text-
based environments), alternative access (transcripts for videos, descriptions of photos
for vision impairment), physical access (geographic limits on broadband, time zone
differences), and whether the community constitutes a safety space for the individual
(inclusiveness, non-exclusionary language, non-triggering content).
274

Cybercommunity amenities
Amenities for tourism destinations represent the physical facilities of accommodation,
catering, retailing and ancillary tourist services. Cybercommunity amenities are features
and functions of the environment such as direct chat, URL posting, image uploading,
video hosting or file sharing for web-based environments. Virtual world video games
have a recruitment stage where you learn the basics of the game coupled with various
checkpoint locations that operate various in-game services (mail, banking or shopping).
For transient groups such as IRC, amenities include functional elements such as ‘ops’,
which represent a set of key powers to change topic, exclude or remove users and
provide ‘ops’ to fellow users. Other functions such as the Facebook and Twitter list,
or YouTube playlists, would count towards the amenities. Basically, amenities cover
anything that makes life easier but isn’t the core feature that would be listed under
cybercommunity attractions.
Cybercommunity available packages

Available packages in destination marketing tend to be controlled by tour media-
tors such as travel agents or airlines offering pre-arranged packages and conditions.
Cybercommunities can offer levels of membership, ranging from the basic level of use to
levels associated with control, management and, often, the capacity to create and mod-
ify elements of the environment. Subscriber-based cybercommunities may include free
systems with low levels of access and varying levels of access depending on subscription
fees. Livejournal offers four access levels: permanent accounts with full features, paid
accounts with enhanced features for annual subscribers, advertising-sponsored accounts
with a limited group of sponsored-enhanced features and the basic free accounts with
just the core feature set.
Cybercommunity activities
Activities incorporate all events, activities and related services that will be consumed as
part of the tourism experience by a visitor to the destination. Some of these functions
are beyond the control of the travel agency and local tourist board and others are estab-
lished for the express purpose of attracting tourists, for example, festivals and special
events. Cybercommunity activity can include regular conversation events (open threads
to discuss Top Chef ), date-specific activities (Halloween events in virtual worlds), expan-
sion packs (World of Warcraft), downloadable content (Grand Theft Auto), web previews
and reviews (Flashforward) and various contests. Cybercommunities also involve var-
ious activities, some official, some unofficial, as attractors to the group. Successful
cybercommunities tend to have activities that extend beyond the core community
structure into other venues, such as face-to-face meetings or involvement in other
group-oriented projects. Some communities will enter teams into online competitions
or gaming environments as part of the community group activities. This is particularly
prevalent where there is a strong set of shared interests which form part of the shared
goods of value.
275

e-marketing
Cybercommunity ancillary services

Ancillary services for offline destinations relate to the services used by tourists –
services such as banks, post offices and similar services. Cybercommunities can offer
second-stage services, such as e-mail addresses, basic web hosting or environment-
specific systems such as chat channels, applications (Facebook), auction houses (World
of Warcraft), direct messages (Twitter), or event scheduling and shared calendars
(Xbox Live).
Not all principles of destination marketing can be applied to each type of
cybercommunity structure. Most of the functions outlined are primarily focused
towards the more permanent structures, although the use of support websites can give
permanence for transient mailing list-based groups. Overall, these six functions rep-
resent additional services that can be implemented by group members, or the host
organization, at minimal additional cost to the host.
} Conclusion
The Internet provides marketers with a previously unheard of level of access to
consumers. In particular, marketers have the potential to observe and interact with
their consumer base through their engagement with online communities. Despite
the potential for mutual benefit for both marketers and users, the effectiveness of
community-based engagement to date by commercial marketers has been less than spec-
tacular. Partly this is due to the conflict between the need for marketers to demonstrate
short-term gains and returns on investment to the company, and the reality that com-
munity creation and development takes time. If marketers are to take full advantage of
the potential of the Internet for consumer engagement they need to understand three
things. First, marketers need to understand the development and use of contemporary
models of communication, in particular hypermediated communications, and appreci-
ate how these vary from traditional broadcast or personal interaction models. Secondly,
marketers need to understand the different types of community which exist online and
how the activities of different communities can add different levels and types of value
to the organization. Finally, there needs to be an appreciation of the appropriate use
of community, including an understanding of the cultural dimensions of community
development and engagement. Unless these are understood, any attempts to create and
engage online communities for commercial benefit will be doomed to failure (or at least
suboptimal results).
} References
Books and journals
Barnatt, C. (1998) ‘Virtual communities and financial services – online business potential and
strategic choice’, International Journal of Bank Marketing, 16(4): 161–9.
Bray, T. (2007) ‘The Intimate Internet’, http://www.tbray.org/ongoing/When/200x/2007/10/04/
Intimate-Internet (accessed 8 July 2010).
276

Brogan, C. (2009) ‘The Plastic Human Problem’, http://www.chrisbrogan.com/the-plastic-human-

problem/ (accessed 8 July 2010)
Buhalis, D. (2000) ‘Marketing the competitive destination of the future’, Tourism Management,
21: 97–116.
Cothrel, J. and Williams, R.L. (1999) ‘Online communities: ‘helping them form and grow’, Journal
of Knowledge Management, 3(1): 54–60.
Coyne, R. (1998) ‘Cyberspace and Heidegger’s pragmatics’, Information Technology and People, 11(4):
338–50.
Dann, S. and Dann, S. (1999) ‘Cybercommuning: global village halls’, Advances in Consumer
Research, 70(25).
Gibson, W. (1984) Neuromancer. New York: Ace Books.
conceptual foundations’, Journal of Marketing, 60(3), July: 50–68.
Kaye, A. (1991) ‘Learning together apart’. In A. Kaye (ed.) Collaborative Learning Through Computer
Conferencing: The Najaden Papers. Berlin: Springer-Verlag.
Rheingold, H. (1993) The Virtual Community: Homesteading on the Electronic Frontier. New York:
Harper-Collins.
Web references
Google Sidewiki www.google.com/sidewiki
Socialoomph www. socialoomph.com
TweetDeck www.tweetdeck.com
Twitberry www.orangatame.com/products/twitterberry
Twitter (mobile site) m.twitter.com
XKCD.com www.xkcd.com/438/
277

CHAPTER 10}
Implementation
• explain the importance of a good implementation plan

• discuss the issues that need to be considered before implementing a
marketing plan
• understand how objectives link with implementation
• define the product–market fit
• apply appropriate marketing metrics to demonstrate the success or other-
wise of the marketing plan.
279

e-marketing
} Introduction
Chapter 10 covers the often glossed over sections of e-marketing – implementing the
ideas in practice and putting the e-marketing out into the marketplace. To do this, we’re
going to draw on elements from the previous chapters, link them together and develop
a set of checkpoints on the road from objectives to implementation. The problem with
marketing (and business generally) is the sheer volume of options available in any given
scenario based on the combinations and permutations of markets, consumer needs,
company resources and competitors. This means there’s no real hard and fast specifics
that can be given that will prove equally effective in all situations. That said, all it
means for you as a marketer is that the models we’re presenting are the starting point,
and not the end in themselves. Merely being able to fill out a chart, a 2×2 matrix or a
spreadsheet doesn’t mean you’ve implemented marketing – it does, however, mean that
if you’ve covered all of the parts in this chapter, you’ve thought about the wide range
of issues you need to address when the time comes to turn the plan into reality.
} Implementation
Implementation involves combining the objectives, plans and strategies with the hard
yards of actually doing the work listed in the tactics to-do lists. There are two key tasks
to undertake before embarking on the final implementation of your product strategy or
plan. First of all you need to go back and revise where you started from and where you
want to go to. You will need to ask how the e-marketing elements of your plan fit into
the broader business objectives of the whole of the organization (and if they don’t, start
revising your plans or look for a new organization). This involves a final assessment of
the objectives to ensure that they are measurable and that the marketing metrics will be
in place to actually collect the data necessary to demonstrate success or failure.
The second area that needs to be examined prior to going ahead with the implemen-
tation of the plan is the extent to which you have correctly interpreted and gauged the
product–market fit. This will involve an examination of how the total product is inter-
preted by the market along with the necessary modifications needed before developing
a relevant and effective positioning strategy.
Packet mix objectives (Chapter 3)

Back in Chapter 3 we introduced the generic packet mix objectives, which make
their encore performance in the implementation phase. Essentially, as you’re imple-
menting each aspect of the e-marketing strategy, you need to ask yourself ‘How
does this particular activity link back to achieving the overall marketing plan and
corporate objectives?’
Cost-oriented objectives
The aim of e-marketing in cost oriented objectives is to produce the same bang for
less bucks (pounds, euros, dollars, yen). This means paying greater attention to the
280

Implementation
documentation of the implementation process, better timekeeping records and a much

greater focus on the dollars per hour metrics for time spent in social media activity.
◦ Does this e-marketing approach lower overheads for the organization?

◦ Are the resources you’re redirecting into this e-marketing effort producing higher
levels of effectiveness and/or efficiency and/or return on investment than they are
where they are currently deployed?
◦ Are the savings in print costs equal to or greater than the time costs of employed
social media workers?
◦ Are the customers benefiting (or at least not suffering noticeably) from the cost
saving changes?
Sales-oriented objectives
This is a single minded, single focus approach to e-marketing that examines every action
against sales data. Update a blog, post a Twitter status or do anything much more than
check your e-mail and you’ll be checking the sales figures to see if it had an impact.
The key here is to focus on making it easier for the customer to make the purchase,
for the website to close the sale and to reduce the shopping cart abandonment rate.
This is the scientific end of marketing, and it’s all about the pre-test (old sales figure),
intervention (site update, content release, sales promotion, fresh cup of tea) and post-
test (new sales figure).
◦ Does this activity lead to a direct sale? Is there a difference in response between
offering a 20 per cent discount using a specific coupon code on Twitter versus a
direct link in an e-mail to subscribers? Are people claiming cashback offers? Did they
use the coupon code?
◦ Does this activity lead to indirect sales? Is there a detectable pattern between non-
sales activity (responding to customer feedback) and later sales spikes?
◦ Are there obvious roadblocks appearing in the customer purchases? Sales cart aban-
donment at the shipping page indicates something’s going wrong with the distribu-
tion channel. Abandonment at the payment options means you’re not offering the
right means for the customer to give you their money. (It’s PayPal, Visa, Mastercard,
Bartercard, direct debit, SMS credits, cash-in-an-envelope, livestock and international
bank cheque in that order of ease of sending for the customer.)
◦ Can you draw a path from your e-marketing activity to a sales outcome? Don’t for-
get lead times and lag between interventions and outcomes. Scour the historical
data for patterns, reaction times and impact information and don’t always expect
an immediate response from the market.
Behavioural change objectives

These are the really fun parts of the business where you’re able to demonstrate success
based on people showing up and taking part in a specific behaviour. It’s clear cut – either
281

e-marketing
people are using the new system you want them to use or they’re still using the old
system that you’re trying to change.
◦ Does this e-marketing activity induce behaviour change by being more convenient,
reliable, compatible, accessible and/or valuable in the eyes of the customer? (Obvi-
ously it does something useful for you, or you’d not be keen on converting people
from less-beneficial to more-beneficial.)
◦ What’s the relative advantage for the customer?
◦ Is this a complementing or competing alternative for the market? Look at cur-
rent usage data for your customers to see if your proffered alternative is an actual
alternative or a complementary use for the customer.
◦ Have you cut off the other options the customer could use so they’ve got no real
choice if they want to stay? If yes, have your customers started defecting to the com-
petitors en masse because you’re doing it wrong? If no, how much longer can you
persuade accounting not to give a free kick to the competition? Microsoft periodically
announces the cancellation of support for an operating system, and equally periodi-
cally announces a cancellation of the cancellation policy as sales figures indicate that
the market still wants and pays for that older option.
Information dissemination objectives

These are measured from the perspective of getting the word out amongst the audience
and have a sliding scale from ‘frequency and reach’, which means ‘We spoke’, to recall,
which means ‘They listened’.
◦ Will this e-marketing activity help your content to show up on Google, Bing, Yahoo!
and that other search engine? (Yes, there are other search engines beyond the big
three. Google ‘search engine’ to find them.)
◦ Will this e-marketing activity encourage people to visit your site, view the content,
download the files, share the link and blog about it themselves? How easy is it for
people to talk about you to their friends?
◦ Are you using a third-party content aggregator such as Flickr (www.flickr.com)
Slideshare (www.slideshare.net), Scribd (www.scribd.com), YouTube (www.youtube.
com) or Jamendo (www.jamendo.com) as distribution channels? These sites provide
a range of metrics about downloads, tweets, re-tweets and link sharing.
◦ Are you releasing free files (preferably under a creative commons licence) through
the major Bit Torrent sites? If so, how are they performing for downloads and seed-
ing? A good indicator of the strength of your free content is the amount of people
seeding the file to share it with others (particularly if you’ve licensed it for sharing
and encouraged it to be passed around).
◦ If you’re directing traffic to a specific web page, have you registered it with the major
URL shortening services such as Bit.ly (www.bit.ly) or Is Gd (www.is.gd)? Bit.ly is
particularly valuable for tracking metrics on the short URL (registration required to
access the metrics).
282

Implementation
Promotional objectives
These are the companions to sales and/or information dissemination objectives insofar
as promotion either persuades (buy this product) or informs (here’s a new product).
Promotional objectives tend towards the straightforward supply side, asking questions
such as:
◦ Will this activity generate conversations for the right reasons? If yes, then go ahead
and be ready to chat with the consumer base. Conversations don’t always lead to
sales, but they can lead to opportunities to get to know the market, gain some cred-
ibility and generally upgrade your standing in the social media circles if you engage
honestly and openly.
◦ Will it generate the wrong type of conversation? If yes, then stop immediately and
order the master copies of the work be destroyed. Brand damage lingers on the
Internet as bad information about a company has a habit of resurfacing in direct
proportion to the amount of legal resources deployed to stop it. Do a keyword search
based on your brand plus the words ‘suck’ and ‘fail’ to see how badly the market is
receiving your latest offering.
◦ Will this activity drive useful web traffic to the appropriate point on the website?
There’s a difference between large traffic and good traffic. E-marketers should prior-
itize lower levels of higher-quality traffic (potential customers, people with money)
over higher volumes of lower-level traffic (tourists, drive by traffic, vocal opponents).
Getting the servers smashed into oblivion and getting hit with excess bandwidth
charges without making sales is a costly exercise in wrong traffic.
◦ Is the PR effort going to hurt more than it helps? If you’re planning on pitching press
releases and publicity material to bloggers, there’s a massive amount of work to be
done in blogger relationship management before it’s a useful promotional tool. Think
through the time cost versus the limited traffic pull for each blog before committing
to this path. Those blogs that are already on your side probably read your content
anyway (or have you friended on a social media site) so unless it’s a thank you note, or
exclusive content for them, restrict the pitching activity around blogs. In contrast, if
you want quick and easy mockery and brand damage, there’s always a mass mail-out
headed ‘Dear Blogger’ to achieve that harm maximization outcome.
Entertainment-oriented objectives
These are impossibly complex to predict for those who take their Internet (too) seri-
ously, and consist largely of ensuring that consumer, company and casual passer-by are
enjoying the stay at the site. Entertainment-based sites aren’t for everyone and need
to be carefully managed to ensure the right content is available for the right market
(LOLSpiders is far more niche than Lolcats).
Questions to ask are:
◦ Is this e-activity going to result in someone else having a good time? One of the
death knells of the entertainment objective is when you start asking questions about
return on investment and considering product placement and branding before you
283

e-marketing
ascertain if the customer is going to care about the entertainment long enough to get
to the sponsor’s message in the opening credits (forget about the closing credits).
◦ Can this activity become community centric? Will people want to talk about it, brag
about high scores, challenge friends to battle and post updates to their Facebook page
about random farm animals?
◦ Will user-generated content be accepted and acceptable as part of the entertainment?
◦ Who’s looking after the moderation of the content, community and work-flow
of materials?
◦ What is that cat doing in that photo and how do we caption it for maximum hilarity?
◦ Are we having fun yet?
Measuring the objectives

Once you’ve refocused your objective(s) in your mind (and the implementation plans),
the next step is to start making notes on the metrics you’ll need. Metrics are much eas-
ier to establish at the start of the process when you’re setting up than trying to find
some proof after the plan is well on its way to completion. Measure what you’re doing,
do what you plan on measuring and do the other bits that are neither measured nor
planned but will ultimately help achieve the final outcome. Just because you can mea-
sure something doesn’t make it worth doing and just because it’s worth doing doesn’t
mean it’s measurable. Get things done and measured in appropriate doses to satisfy
the needs of the market (sales!) and the organization (accountability!) for maximum
traction within the organization.
Consider what existing benchmarks exist, have been measured and were highlighted
during the internal analysis of the organization (Chapter 3). Working with the internal
analysis benchmarks (unless you’re starting from scratch) helps you to identify varia-
tions from previous metrics, benchmarks and plans, and to draw conclusions about the
impact of your marketing activity. It’s also useful for seeing what the organization values
interms of corporate knowledge – if the prior figures are financial (expenditure v return
on investment), it’s a safe bet the accountants will want more of the same data next
time. Table 10.1 outlines a couple of sample metrics for each of the previous objectives.
Table 10.1 Metrics for objectives
Objective Sample metric 1 Sample metric 2
Cost-oriented Internal accounting balance sheets After-sales revenue

Sales-oriented Sales Payments to affiliates
Behavioural change Increases in desired behaviour Decreases in old behaviour
Information dissemination Ranking in Google on keywords for Traffic data (hits, downloads,
the content views)
Promotional Sales coupons redeemed Conversations on Twitter
Entertainment-oriented LPC (LOL per click) Are we having fun yet?
284

Implementation
Business model: expenditure to revenue

The second part of implementation is the money. Money is one of the problematic
areas of business as most cultures tend towards regarding the open discussion of price,
income, revenue and the rest of the pay-cheque generating activities as socially inap-
propriate. Artistes who disclose revenue from sales, merchandising and concert tours
are deemed to have ‘sold out’ despite usually having sold very little. Movies are more
likely to brag about costs (‘the most expensive flop ever made’), books have nothing to
write home about and bloggers periodically need to post ‘Donations wanted’. Money
changes everything insofar as if you’ve got money, you’ll be encouraged to spend it, if
you’re spending it, you’ll be encouraged to cut back, and if you’re focused purely on
cutting back, you’re in danger of forgetting that I in ROI stands for investment. You’ve
got to spend something (time, money, effort) to make returns (money, time, reward).
Budgeting
Budget allocations for Internet-based marketing activities are frequently regarded as dif-
ficult to predict and can be subsumed into the overall marketing budget. A dedicated
Internet marketing budget helps managers to evaluate what the total investment in this
activity is, and what sort of returns they are getting. There are a number of different
methods for determining a budget for online marketing. They include:
◦ last year’s budget plus an allowance for cost increases and new activities (valid only
where the activity existed last year)
◦ a percentage of company sales (assumes a sales orientation for the activity to continue
providing its own revenue stream for survival)
◦ a percentage of the overall marketing budget (integrated element of the mix)
◦ a reallocation of the existing marketing budget (assuming that the increase in
Internet activity will lead to a decrease in offline marketing activities)
◦ competitor budgets and activities (reading the competitions’ annual reports from
their websites to determine their budget allocations)
◦ needs for creating an effective e-marketing presence (investment cost plus running
costs) and/or
◦ graduated plan linked to results (more success, more money).
In e-marketing, there are the legends of the industry who can apparently raise venture
capital at will with no readily visible or discernable business models or revenue stream
(Facebook, MySpace). Others clearly have something up their metaphorical sleeve, since
they’re raising money selectively and not cashing in on reasonable to ludicrous buy-
out offers (Twitter), or have hit the magic formulae in their secret mountain lairs
(Google). Unless you’re confident of being able to clean out a legitimate National Lot-
tery or National Credit Union on command, it’s much more viable to sort out how your
e-marketing activity will spend money (and thus be paid for by something else), raise
some money (and still be paid for by something else) or turn a profit (and pay for itself).
285

e-marketing
Revenue 0: expenditure item

Revenue 0 is where the e-marketing activity will never raise revenue by design. This dif-
fers radically from failing to secure funding (Revenue 1 to 3) in that the e-marketing
activities represent a series of costs to be covered from a non e-marketing revenue
stream. Sales-orientation sites are expected to be revenue generating, although it’s
entirely possible to have a portion of the e-marketing activity dedicated to high sales
volume (e.g. widespread adoption, downloads) as a loss-leader strategy. Adobe Acro-
bat was introduced as a free PDF reader to establish a saturation level of coverage
in the marketplace for PDF readers. Adobe made its money back by charging for
the PDF creation suites and for a more sophisticated, professional version of Acrobat
Reader. That said, any sales-oriented objective which is not expected to be revenue
positive must be paired with another revenue source or a paid premium services
offering (freemium).
Cost-oriented objectives are usually revenue positive by design, although there are
grounds where the efficiency/effectiveness of an e-marketing activity saves time or
effort, or reduces another non-financial cost which contributes to the overall success
of the organization without a directly attributable financial return (aka things work out
for the best). Behavioural change approaches begin life as loss leaders, where the cus-
tomer is encouraged to use the e-marketing services because they’re fee-free, cheaper
or otherwise priced as a better offer than the alternative (e.g. phone banking with
high access charges, over the counter fees etc.). Entertainment objectives tend towards
the Revenue 0 model where they exist to cross-promote another product or service –
for example, Flashbang Studios (www.flashbangstudios.com) gives away access to the
online version of Off-Road Velociraptor Safari (www.raptorsafari.com) as a means to
showcase the capacity of its software and so encourage sales of the downloadable ver-
sions (PC, Mac and iPhone). Promotion and information dissemination are often (but
not exclusively) seen as Revenue 0 since the objective is widespread dissemination of the
content either to inform or persuade the customer (and usually, hopefully, to encour-
age sales at a later date). The options for Revenue 0 and business objectives are outlined
in Table 10.2.
In terms of cost recovery, there are a series of recommendations regarding the best
ways to source the money to maintain your e-marketing expenditure.
Table 10.2 Revenue 0 business objectives
Objective Revenue 0 Rationale
Cost-oriented Unlikely Efficiency/effectiveness

Sales-oriented Not entirely recommended Loss-leader pricing; freemium
Behavioural change Feasible Loss leader
Entertainment-oriented Viable Technology demonstration,
Free as in beer
Information dissemination Most likely Free as in speech
Promotional Highly likely Advertising
286

Implementation
◦ Freemium, which is where Revenue 0 activities are used to develop a core user base for
the site. These users can then be encouraged to either pay for a premium membership
or provide sufficient value for other site users to encourage them to pay memberships.
◦ Subsidized (promotional budget), which usually covers the bills through sales at a
later date or as part of the broader organizational promotion budgets.
◦ Cross-funded (third party, full-time job), which is the standard approach for most
bloggers, cartoonists and individual online entrepreneurs. The e-marketing costs are
picked up from the pay cheque at a different job.
◦ Cross-funded (third party, part-time job), which is the standard transitional approach
where Revenue 0 is still the objective for the site (e.g. information sharing objec-
tives for a political blog) although a secondary revenue stream has developed that is
starting to pay the bills (consultancy, book sales, donations).
◦ Cross-subsidized (promotional budget plus revenue), which is where the site is part
of a portfolio of e-marketing activity and the bills are paid by another element.
e-marketing activities here can be a legacy project where old technology, previous
versions or older products are maintained online by the sales of the new offerings.
Revenue 1: uncertain returns

Revenue 1 is the first level of financial investment and involves third-party funding for
the site with limited to no expectation of a return on investment beyond personal satis-
faction (Table 10.3). This approach assumes that the e-marketing offering has potential
to be a revenue source, however, it needs time in the market place to be finalized, move
out of beta and build a useful support base in the community before it can be upgraded
into a genuinely consistent source of revenue. To some extent, this is the model for the
beta and version 1.0 offerings of services and goods.
Sales-oriented goals in this approach have a primary aim of attracting innovators
who in turn should entice the early adopter crowd. While the organization can attempt
a profit (or near equivalent in cost recovery) at this stage, the product lifecycle model
shows that this is unlikely. Cost-orientation and behaviour change objectives are field
experiments to test if the theory (things go better online) will hold up in practice and
deliver satisfactory performance for the customer and firm. Entertainment objectives are
more about cross-funding the ongoing pursuit of a non-financial objective (becoming
the fourth best band in Hull) by seeking donations whilst raising profile. Information
Sales-oriented Uncommon Test market, beta test

Cost-oriented Not recommended Experimental implementation
Behavioural change Quite common Experimental implementation
Entertainment-oriented Standard issue Non-financial outcomes
Information dissemination Standard issue Spreading the message
Promotional Standard issue Profile raising, persuasion
287

e-marketing
dissemination objectives assume that the people being informed by the content will be
willing to chip in to cover the costs through donations, while promotional sites offer the
opportunity to throw funding towards a project which is in the awareness-information
stage of the AIDA (awareness, information, desire, action) model.
Revenue 1 is designed around three types of funding arrangement, each of which
assumes that the people providing the money don’t necessarily expect to see it again,
or have non-financial return on investment of warm fuzzy feelings, or just simply want
to see the continuation of the e-marketing service. These three categories are:
◦ venture capital funding, which is possibly an uncharitable view of the mod-

ern financing arrangements where the investors bet on a pool of roughly a 100
investments with the knowledge that ninety will fail to break even, nine will cover
the costs of the others and one will be the profit centre to perpetuate the cycle.
◦ donations, which are a trade arrangement of funding for continuation of the
e-marketing activity, and can be associated with some unrelated bonus content, prod-
uct or object. For example, donors who contributed to funding the ProWrestlingX
(www.prowrestlingx.com) game get a small recognition in the game, along with the
satisfaction of helping out an independent developer.
◦ charity, which is where money goes to the operation of the site with no strings
attached and no reciprocity expected. Charity is separated from donations in that
donations usually result in recognition or some form of reciprocal benefit (e.g. bonus
product), whereas charity is strictly one-way traffic. Charity is rare for a reason.
Revenue 2: indirect returns

Revenue 2 is the first point where a return on investment is expected but is hard to mea-
sure using the usual discrete financial ‘money-goes-in, more-money comes out’ metrics
(Table 10.4). This is probably the most common element of e-marketing revenue rais-
ing, from the first commercialized website to the present, as e-marketers struggle to join
the dots between money spent, e-marketing activity and money recouped. That said,
this is also the same complaint levelled at traditional promotional objectives such as
brand recognition, goodwill, and any other form of persuasion exercise. Cost-oriented
activities frequently end up in the indirect return category as you can’t quite account for
whether everything is less costly once you do the maths on the time versus money spent
on the ‘cheaper’ activity. Similarly, behavioural change and sales-orientation objects
shuffle about in this category nervously because they’re supposed to be in the direct
revenue camp, but either the measures can’t capture the right data to prove it works
(or doesn’t), or it’s still too early to tell if there’s a real positive impact (or an impres-
sive array of false positives). Usually, these three categories represent a slight case of
keeping up with the Joneses by ensuring that the company is at least seen to be in the
twenty-first century with the new technology even if you can’t quite prove how, why
or if it’s working. The flipside to this approach is the propensity of entertainment objec-
tives to provide unexpected levels of revenue and for information objectives to have
secondary targets of selling reports, consultancy and skill-based services off the back
of the data-collection process. Finally, promotional objectives live and breathe indirect
288

Implementation
Cost-oriented Unusual Keeping up with the Joneses

Sales-oriented Too common Can’t prove or disprove
Behavioural change Reasonably common Corporate fashion
Entertainment-oriented All too frequent Brought to you by . . .
Information dissemination Underutilized Paid for by . . .
Promotional (communicate) The definite article It’s how it works
returns in the offline sector, and operate in much the same way for e-marketing – half
of the advertising is probably wasted, but nobody can prove which half (it’s the second
and fourth quarters).
The two most common approaches to indirect revenue are sponsorship and adver-
tising, and here’s where it gets confusing. When you sponsor a product or advertise
on a site, you’re providing a direct revenue source to that site (and that’s why these
two recur in the next section). When you’re using sponsorship and advertising as a
promotional tool, you’re doing this with an objective of recovering the money from
the activity through an indirect path of increased sales or revenue. Indirect revenue
approaches include:
◦ providing the sponsorship, which is where the money spent is invested in generating
goodwill, raising awareness, producing image transfer between the sponsored and the
sponsor or endorsing an event to increase the sales of products elsewhere
◦ paying for the advertising, which is where the aim is to create awareness or drive
sales through traditional advertising methods in the e-marketing spectrum
◦ barter, trade and exchange, which occurs when you pay for something using some-
thing other than cash and expect a similar non-cash return. Bartered goods don’t
fit into the direct return metric, but definitely contribute to the organization’s
bottom line.
Revenue 3: direct return outcomes

Revenue 3 is all about the money, and there’s no subtle way to approach this other than
to expect cash in the hand, through PayPal or another financial distribution channel
(Table 10.5). This is the part that makes an accountant’s heart sing – direct lines between
action and financial outcomes are expected here, and the aim is to get back more
money than you put into the process. If the idea of profit is discomforting, consider
that the direct revenue outcomes are the partner processes to the Revenue 0 categories
that require cross-funding to pay the bills. As marketers, the key to all of the direct
revenue outcomes is providing a value offering that’s valued and valuable to your cus-
tomers so they’re happy about swapping money for access to the products. (There’s also
a consequence that you want to be able to repeat the process so the happy customer
can stay being happy by continuing to be a customer. Do not let the happy customer
run out of happy.)
289

e-marketing
Entertainment-oriented Selling out for profit 1000 True Fans model

Behavioural change Profit maximizing Cheaper profits
Information dissemination Quantifying the service Paid insight
Cost-oriented The definitive article Less cost to more profit
Sales-oriented Best case scenario More sales, more profit
Promotional (sales) The A-Game Sell more products
All six objectives can result in profits and should be considered as means and mecha-
nisms for raising revenue. Although entertainment objectives have to begin and end
with the question ‘Are we having fun?’, World of Warcraft proves that fun comes
at a price that millions of players are willing to pay on a monthly instalment basis.
Behavioural change elements can include moving people from high-cost to reduced-
cost services, charging cost-neutral fees, or shifting behaviour from free to freemium or
premium pricing models. Information dissemination objectives bring the professional-
ism of selling knowledge through books, subscriptions, consultancies or other services
where insight is billed in six-minute increments (legal practice standards). Finally, cost,
sales and promotional (sales) objectives are all in their home ground advantages in this
section as they’re designed to influence direct revenue. Cost-cutting is designed from
scratch to decrease expenditure with the parallel impact of raising revenue. Sales objec-
tives are about selling goods, services, ideas and experiences to the customer at a profit,
with sales promotion being designed to aid and abet the selling process.
There are a number of sources of revenue in the Revenue 3 category, including:
◦ angel investment/venture capital, which is where high-risk ventures are funded at

the outset on the understanding that later rounds of investment will buy out the
initial stake and return a larger payment later. (It’s like a massive interest loan where
someone else pays for the interest charges.) Angel investment is a high-risk strat-
egy that requires deep pockets, but which comes with the ability to own shares in
Google (or the next Google) when it starts and to sell them later when they’re worth
considerably more than the paper they were printed on.
◦ merchandising, which is where the revenue comes from secondary sources such as
physical goods (branded shirts and mouse mats), DVDs or related material such as
printed frames of cartoons, books or just about anything Zazzle can print (www.
zazzle.com).
◦ direct product sales, which is where the purpose of the site, e-marketing activity
and all the rest is to sell goods, services or experiences. These are the products sold
on iTunes (apps, music or movies), Amazon (books, socks, CDs) or any other direct
pay-to-download or purchase site.
◦ service sales, which are connected to direct product sales and require the time of the
personnel attached to the e-marketing product. This is basically using e-marketing to
arrange consultancies such as taxation advice, bookkeeping or similar services that
290

Implementation
can be delivered online (booking a haircut online doesn’t count unless your printer
does the cutting and dyeing).
◦ subscriptions, which is a regular recurring payment system designed for access
to unique content in the forms of virtual worlds such as World of Warcraft or
Xbox Live (Chapter 14), gated communities such as Problogger (www.problogger.
com), freemium services such as Flickr Pro (www.flickr.com) or mobile access to
RemembertheMilk.com (m.rememberthemilk.com).
◦ brokerage, which is where the revenue comes from being the shopkeeper or
distribution channel (iTunes, eBay, Steam).
◦ affiliate/commission, which is revenue received from the sale of a product you’ve
promoted on your site.
◦ being sponsored, which is where you enter a commercial arrangement to provide
specific endorsement rights to your e-marketing activity to another organization
in exchange for cash while the sponsor receives a combination of tangible benefits
(audience access) and intangible rewards (affiliation, message and image matching)
for the sponsor.
◦ selling advertising, which is where you provide access for a specific message to a
specific type of audience through your e-marketing activity for another business (or
whoever paid Google for the AdWords space this week).
A note on cost cutting versus return on investment

Blank (2009) discusses how the difference between free soda and discounted soda can
make or break a fledgling startup company. The story is usually told in terms of a ‘new’
chief financial officer who joins the firm, discovers the money spent on free food and
drinks for the employees, and then declares that these are costs that can be cut to make
the firm more profitable. Because costs are bad and cutting costs is good, everyone agrees
at the boardroom, and people depart from the staff room because the culture of the
firm is irreparably damaged. The marketing moral of the story relates to the perception
of the expenditure – as free food and drink for the staff is seen as a cost, it’s assumed
that cutting a cost will improve organizational performance. As the story indicates,
cutting the free items led to a loss of staff – which meant that the ‘cost’ was actually
an investment with returns in HR, corporate culture and probably unpaid overtime.
Marketers have to avoid being labelled as costs, since it’s a managerial mental model
that costs must be lowered (ever read a business textbook that suggests increasing costs
and decreasing investment?). Consequently, marketers need to ensure that they can
demonstrate tracking and outcomes from their expenditure to argue their case for being
treated as an investment.
} e-marketing management technology:

the product–market fit
Marketing’s core task is to match the needs of a market with the objectives of an organi-
zation, and for both parties to come out of the process having benefited – the customer
291

e-marketing
Table 10.6 The product–market fit
Question The task
What is the fit between my product (idea, object, behaviour) Define the product–market fit
and what the target adopter group is looking for?
What makes a good fit? Designing the fit
How do I bring this fit to my target adopter group? Delivering the fit
How do I sustain or change the fit to defend it against Defending the fit
premature market decline?
has a product they need or want, and the organization has a profit. This section of
the chapter explains a specific marketing technology known as the ‘product–market fit’
model that was developed by Kotler and Roberto (1989) for use in social marketing (mar-
keting for social change). In a twist not entirely dissimilar to irony, social marketing’s
process of adapting commercial marketing for social change is reversed as we adapt this
social change model for commercial outcomes. There are two parts to the process. First,
the product needs to be clearly identified in all of its component elements (Chapter 7).
Secondly, four distinct questions related to the product that you’re presenting to the
marketplace need to be answered. These are outlined in Table 10.6.
The aim of the product–market fit model is to ensure that the consumer stays front
and centre during the implementation process, so that whilst we’re setting prices,
adjusting products, picking distribution channels and designing promotional messages,
we’re doing it all with an eye on how this will best match our market.
} Task 1: Define the product–market fit

The first task facing any marketer implementing a strategy is to determine the status
of what they’re offering to the market. The product–market fit offers two choices as to
the fundamental nature of the product offering: a better solution to a problem than
is provided by the alternatives in the market (improved product); or a means to fulfill
a need/want better than any of the existing options (new product). The split between
new and improved is significant as it determines the type of consumer needed for the
product (innovator v. early majority), the location of the market in the product lifecycle
(Chapter 3) and level of competition likely to exist in the marketplace. It also triggers
the opportunity to break out the Ansoff growth matrix (Table 10.7).
Table 10.7 Modified Ansoff 2×2 matrix
New product Improved product
New market Diversification (boldly go) Market development

(surpass a competitor)
Old market Product development Market penetration
(meet a different need) (surpass a previous offer)
292

Implementation
Implementation involves considering how to go from picking a square in Table 10.7

to making an offer in the market. Market development (new market, improved product)
is about expanding the horizons of the firm through promotional or sales objec-
tives, which involves meeting new customers and persuading them to join your site,
buy your product or subscribe to your newsletter (it’s also the movement through
the innovation adoption curve after you’ve acquired the innovators). Market pene-
tration (old market, improved product) is about retaining existing customers through
upgrades, new models or the behavioural change objective of moving people from
free to freemium to premium subscription options. Diversification is all about sales,
promotion and behavioural change by taking the innovators away from their current
shiny distraction to your new bright shiny offering long enough to build up a market
development approach to capture the early majority. Finally, product development is
about reputation, leverage and broadening existing relationships in a market by offer-
ing an additional good, service, idea or experience to the market where you’re already
providing something of value.
Product–market definition and the product model

Marketing’s strength comes from its ability to combine different existing models into
relatively ugly and powerful matrices that can function as idea generation and con-
cept screening systems. If you combined the known consumer motives for Internet use
(Chapter 5) with the components of the product (Chapter 6), you automatically cre-
ate a grid of 91 areas that can be explored for new solution development or where an
improved product can compete against an existing offering.
Table 10.8 demonstrates that there is a wide range of options for the e-marketer look-
ing for an area to develop a new product or better solution (and clearly shows that the
complexity of the marketplace warrants those disclaimers about marketing models not
having perfect answers). The table functions as a preliminary way of viewing the poten-
tial product–market fit. For example, this book can be matched against the Physical
Good (PG) and the learning objective (Le) to create the LePG option. If we wanted to
change the offer we could digitize it to create a virtual good with the same consumer
objective (LeVG), or we could use the existing product for a different motive (IAPG).
The grid of 91 options assumes no overlap between motives, product elements and
a single target market. Before this causes nosebleeds and migraines from the complex-
ity, it’s also worth noting that the point of a chart like this is to provide a structured
framework for thinking through your offer to the market. The table can be used
for determining where we should focus efforts on a product-by-product basis. For
example, an application using the iPhone’s camera, GPS and capacity for augmented
reality (Chapter 14) could be combined with a Great British Heritage Pass (www.
britishheritagepass.com) that allowed visitors to tourist locations in the UK to pull up
language-specific (German, French, American) information about the historic locations.
Table 10.9 offers a possible set of options to consider for the broad marketing (pricing,
promotion, place and product value offer) of such a product.
This reduces the ninety-one options down to ten areas to consider and track through
market research, consumer behaviour and field trials in open beta tests. Using this
293

e-marketing
Table 10.8 Definitive options: Be new or improved in one or more category product
Idea Behaviour Object
Belief Value Attitude One Recurring Virtual Physical

Consumer motives (B) (V) (A) off (O) (R) good (VG) goods (PG)
Learn (Le) LeB LeV LeA LeO LeR LeVG LePG

Search (S) SB SV SA SO SR SVG SPG
Communicate (Cm) CmB CmV CmA CmO CmR CmVG CmPG
Convenience (Cn) CnB CnV CnA CnO CnR CnVG CnPG
Community (Co) CoB CoV CoA CoO CoR CoVG CoPG
Anonymity/pseudonymity (An) AnB AnV AnA AnO AnR AnVG AnPG
Escapism (E) EsB EsV EsA EsO EsR EsVG EsPG
Recreation (R) ReB ReV ReA ReO ReR ReVG RePG
Social pressure (SP) SPB SPV SPA SPO SPR SPVG SPPG
Inherent awesomeness (IA) IAB IAV IAA IAO IAR IAVG IAPG
Vending (Ve) VeB VeV VeA VeO VeR VeVG VePG
ATM (A) AB AV AA AO AR AVG APG
Self-expression (SE) SEB SEV SEA SEO SER SEVG SEPG
Table 10.9 The augmented history tourist application
Idea Behaviour Object
Belief Value Attitude One Recurring Virtual Physical

Consumer motives (B) (V) (A) off (O) (R) good (VG) goods (PG)
Learn (Le) LeB LeV LeA LeO LeR LeVG LePG

Search (S) SB SV SA SO SR SVG SPG
Communicate (Cm) CmB CmV CmA CmO CmR CmVG CmPG
Convenience (Cn) CnB CnV CnA CnO CnR CnVG CnPG
Community (Co) CoB CoV CoA CoO CoR CoVG CoPG
Anonymity/pseudonymity (An) AnB AnV AnA AnO AnR AnVG AnPG
Escapism (E) EsB EsV EsA EsO EsR EsVG EsPG
Recreation (R) ReB ReV ReA ReO ReR ReVG RePG
Social pressure (SP) SPB SPV SPA SPO SPR SPVG SPPG
Inherent awesomeness (IA) IAB IAV IAA IAO IAR IAVG IAPG
Vending (Ve) VeB VeV VeA VeO VeR VeVG VePG
ATM (A) AB AV AA AO AR AVG APG
Self-expression (SE) SEB SEV SEA SEO SER SEVG SEPG
294

Implementation
approach focuses your attention on matching consumer motives with product elements
to create the conditions necessary to either anticipate and satisfy the market (CIM) or
present an offering that has value (AMA).
} Task 2: Design the fit

The second task in the product–market fit model is the business end of the process
where the ideas, notes and plans from the background market research (Chapters 3
and 4) are combined with the marketing mix elements (Chapters 6 and 7) to create
Dressing up
the social
idea
• Branding
• Symbolic
packaging
Idea
positioning Dressing up
the tangible
product
Target
Product adopter group
• Branding
• Physical
packaging
Tangible
product
positioning
Image designing
of the
product
Dressing up the
product
• Branding
• Symbolic
packaging
Product Target
Product adopter group
positioning
Image designing
of the product
Figure 10.1 Designing the fit for physical and non-physical products
295

e-marketing
an offer that’s going out to the marketplace. Designing the fit is alluded to in the CIM
definition of marketing as the anticipation and satisfaction of customer requirements
(Chapter 2), and relies heavily on both the substantive features of the actual product
(capacity to solve a problem and/or meet a need) plus the position this product offer
occupies in the mind of the consumer (Chapter 4). The aim in phase 2 is to design
an approach that communicates the features of the product definition (phase 1) in a
way that fits with the expectation of the market and the capacity of the organization
to deliver.
Designing the fit involves three steps: positioning the product (Chapter 7) in the mar-
ketplace and mind of the consumer; ‘dressing up’ the product offering so that the IMC,
user experience and other elements of the product are consistent with the positioning
strategy and designing the overall image including the use of pricing, distribution and
product features to communicate to the market (Figure 10.1).
Positioning
Positioning consists of the consumer’s interpretation of your product, price and
branding efforts as you attempt to place your brand, product, reputation or ideas into
a specific location in their mind (product is more like X, less like Y and not A). This
means that it’s one part customer generated and one part marketer created, and once
more there are no hard and fast sure-fire success strategies (Chapter 7). e-marketing is at
the more complex end of the positioning strategy, with the mix of intangible products
(services, ideas, experiences), virtual goods and the occasional collection of real-world
objects. Consequently, we’re using both the single and split product models here – single
product is where there’s no physical product, and split product has both ideas and goods
to be positioned, dressed up and addressed to the end user. There are five positioning
strategies that integrate into the design of the product–market fit.
1. Price-based positioning. Table 6.1 introduced a nine-item grid of relative market

prices (under, over and equal non-financial and financial costs) that can be revisited
for selecting the appropriate market position based on price (or price based on
market position).
2. Behaviour-focused positioning coincides with the organization’s behavioural objec-
tives as the offer is positioned based on the behaviour you want the end user
to undertake. This links into the idea of the product being either a one off or a
recurring activity.
3. Benefit-focused positioning tends to ally with the organization’s promotion and
information dissemination objectives in that position of the product is based on
the specific benefits it will provide the potential user. This draws on the idea side of
the product, and places an emphasis on creating strong belief and attitudes on the
part of the consumer.
4. Barrier-focused positioning ties into behavioural change and promotional objectives
where the aim is to show the compatibility of the product with some other aspect
of the customer’s life. This usually draws on the belief, value and the recurring
behaviour elements of the product model.
296

Implementation
5. Competition-based positioning is used where sales, price and direct head-to-head

contrasts are needed to position the product offer in relation to your key identified
competitors and rivals. This can feature comparison of objects (physical and virtual)
through lists of features, although it’s best achieved with idea positioning of attitudes
and belief associated with your product vis as vis the opposition.
Repositioning is excluded since once you’ve decided to reposition, you’ll be using

one of the five positioning strategies for the new position. Table 10.10 summarizes
the connection between the positioning strategy, organizational objective and the
product model.
Positioning and innovativeness

The Internet is the single largest new product development activity in existence. Every
tweet, blog post and piece of content can be graded on the sliding scale of innovation
from the really new ideas, products or content to quite new or well established.
New products are arranged across a three-point scale ranging from really new prod-
ucts (discontinuous innovation), quite new products (dynamically continuous) and
less-than-new (continuous products). Really new product (RNP) is a term used by
Aggarwal et al. (1998) to describe an innovation that is ground shaking, revolution-
ary and extremely likely to fail to be adopted. RNPs usually require a significant shift in
consumer behaviour and an effort on the part of the consumer as they learn what the
innovation is, how it might benefit them and how to actually use it. Since most PR firms
don’t have a solid grounding in innovation adoption theory, they like to present every-
thing they’re pitching as the most revolutionary of developments without considering
whether that position is supported by the broader marketing activity, the desires of the
consumers or reality.
Table 10.10 Links between positioning strategy, objectives and product
Positioning strategy Objective Product
Price Cost-oriented Belief

Sales-oriented Attitude
Behaviour Behavioural change One off
Recurring
Benefit Information dissemination Belief
Promotional Attitude
Value
Barriers Promotional Belief
Behavioural change Attitude
Competition Sales-oriented Belief
Promotional Physical goods
Virtual goods
297

e-marketing
The sequel to the RNP is the quite new product (QNP), which builds on an exist-
ing set of products and behaviours. Whilst the RNP sets the benchmark for a whole
new way of solving a problem, the QNP is developed with the second-mover advan-
tage of being able to respond to the market’s newly recognized needs. The RNP
sets the initial standards and the QNP follows up on the marketplace reaction to
those standards. Consequently, the QNP is much closer to the needs of the market
and is the more successful as it starts from an established base of people knowing
roughly what it does (it’s a phone that takes pictures, it’s a camera that makes phone
calls), and can focus developing a relative advantage (clear photos, cheaper calls)
over the RNP.
Following up the field is the less than new product (LNP), which is the staple of
most businesses and the lifeblood of any developed marketplace. These are the minor
customizations, tweaks and variations that proliferate during the growth to maturity
phase of the product lifecycle. The LNP comes with a trifold advantage – economies
of scale from market experience, greater exposure to the market with the subsequent
ability to recognize and adapt to the needs of different segments and access to the early
and late majority market places (70 per cent of any given market). This is why Call of
Duty 6 is a sure bet, along with iPod Touch Generation 3 and Windows 8 – less-than-
new additions to the existing product stable offer that not-quite-so-innovative certainty
to the early and late majority marketplace.
Twitter provides a compact case study in the continuous innovation factory approach
to online life. Original tweets are usually new ideas, content or concepts (and even if
it’s a statement of breakfast consumed, it’s not something you knew before the tweet).
Replies to existing comments are quite new products since there’s an existing context
for the commentary (QNP), and a re-tweet is a continuous idea (LTN) since it’s repeat-
ing an existing tweet entirely. Depending on your personal innovation style, you may
find the constant flow of new content to be a bug rather than a feature (laggard).
Alternatively, you may follow opinion leaders who re-tweet and recommend existing
ideas (early majority) or you could be the chatty one who’s providing all of the new
content (early adopter) instead of the person who reads about celebrity tweets in the
newspaper the following day (late majority).
Value consideration from a consumer-centric view focuses on whether to develop
new product offerings (RNP), upgrade existing versions (QNP) or offer minor repack-
aging of an older concept (LNP). In part, this can be determined by the type and
nature of the target market and where they fit into the innovation adoption frame-
work (Chapter 5) and Rogers’s (1995) innovation features list. Rogers’s (1995) five-point
checklist asks:
1. What’s the relative advantage of this offer over the competition?

2. Is the value offer compatible with everything else the customer does?
3. How complex is the value offering? Is complexity a positive feature or does it raise
the time and effort price?
4. Can you try the product out without having to commit to it?
5. Is it obvious if you’re using this product? Is the observability of product use a cost to
minimize or a feature to sell?
298

Implementation
Table 10.11 Innovation characteristics, innovation adoption category, and strategy
Relative
Innovator Novelty Limited Maximum In the alpha and Noticeable if it

(diversify) beta test works
Early adopter Trend setting Leadership Status symbol In the invite-only Used to promote
(diversify, market beta test their own visibility
penetration)
Early majority Followership Fashionable Moderate Upgraded from Important to be
(market penetration) a free account seen to be
fashionable
Late majority Compliance Forced Simplicity Free account Complains it’s
(market development) everywhere
Laggard No advantage Not compatible Too complex Signed up, Noticeable by
(ahem) couldn’t see the their absence
point, left
Sample answers to these questions across the five different types of innovation adopters
produce Table 10.11 as a starting point for considering your positioning strategy based
on innovativeness.
Dressing up
Dressing up the product is the implementation of a positioning strategy through the
performance of the marketing mix elements. There are three essential elements that the
e-marketer can influence in designing the product–market fit at this point:
1. Branding (actual product, promotion), which was introduced in Chapters 6 and 7

as part of the product the consumer purchases, the consumer’s experience with the
product’s performance and marketing communication activities.
2. Package (core product, delivery), which includes the site design consisting of the
user interface and user experience, and which represents the nexus between the core
product (what benefit it gives) and the way the actual product performs in the hands
of the consumer (actual product). User experience (UX) is a specialist skill set which
incorporates art design, human interface, psychology, a touch of marketing and a lot
of prototype testing.
3. Symbolic (augmented product, price, delivery), which includes the various mean-
ings that the product has for the consumer (Chapter 5), the market (Chapter 7), and
how these cues all tie together to constitute the augmented product. It also incorpo-
rates the impression created by the price of the product (luxury, standard, economy)
and the availability of the product through various distribution channels (exclusive,
selective, common).
299

e-marketing
Image design
Image design is the holistic approach of integrated marketing communications that
addresses the communication of the proposed positioning strategy to the marketplace.
It incorporates the classical elements of the promotional mix (Chapter 7) with the con-
temporary elements of social media (Chapter 12), visual design, organizational voice
and communication style choices such as one to many, one to one, one to many to
one. Image design is criticized as a spin-doctor approach and whilst it can be misused,
the purpose of the activity is to ensure that the means and methods of communication
meet the needs of the market every bit as much as the product does. As image design is
partially responsible for the creation of the consumer’s expectations, it plays a vital role
in the product–market fit.
} Deliver the fit

This is the mission critical payload for e-marketing implementation. Delivering the fit
is the art of bringing distribution to life through one of four possible generic scenarios.
As usual, the ‘one size fits one size’ disclaimer applies to this framework, and it should
be considered the start of the distribution planning instead of the end game. The four
scenarios are tied to the extent to which there’s a need for a person in the process and
whether there’s a tangible good involved somewhere (Table 10.12).
To understand the flow of these delivery situations, it is first necessary to understand
each of the nine components. These are:
1. diffusion object, which is the idea, service or product that is being offered to the
market for use
2. communication message and execution, which is the content of what you want to
say to the market to encourage the adoption and use of your product offering
3. communication media, which is the method of getting the message to the market
using interpersonal, mass or online communications methods or a combination of
all three
4. generating availability/placement, which refers to how the product, service or idea is
placed in the market so that it can be seen and accessed by the potential consumer
5. outlet field force, which represents the direct interactions between consumer and
organization in the process of ‘selling’ the product for adoption and use
6. availability outlets/venues, which refer to the ease with which potential users can
access the product or service
7. adoption triggering, which are those elements of the marketing mix and positioning
strategy which strike a chord with the target market and move them along the inno-
vation adoption process, from awareness to interest, desire and, ultimately, action
and satisfaction
8. personal presentation, which represents the one-to-one communications between
consumer and organization that can be either face to face or via personal responses
to online questioning
9. target group, who are the people you are trying to reach.
300

Implementation
Table 10.12 Delivering the fit: four possible delivery scenarios
No tangible/no No tangible/personal Tangible/no Tangible/personal

presentation presentation presentation presentation
Diffusion object Diffusion object Diffusion object Diffusion object

Communication message Communication Communication Communication message
and execution message and execution message and execution and execution
Communication media Communication media Communication media Communication media
Establishing availability Availability outlets/ Generating availability/
outlets/venues venues placement
Outlet field force Outlet field force
Generating availability/ Availability outlets/venues
placement
Adoption triggering Adoption triggering Adoption triggering Adoption triggering
Personal presentation
Target group Target group Target group Target group
e-marketing elements
Self-service website Cybercommunity Online shipping, export YouTube videos

Virtual world
Idea/experience Services Virtual goods Services
Experience Physical goods Virtual goods
Idea Physical goods
How these different elements are combined most effectively will depend on the nature
of the product or service being offered and whether the organization chooses to use
personalized or mass communications to reach the market. This will also determine
the extent to which different e-marketing elements are used to complement or replace
more traditional marketing and communications efforts. The four key scenarios are
represented in Figure 10.2.
Service blueprinting for delivering the fit

One tool that is particularly useful in the design of implementation strategies is the
blueprint. Just as any successful physical construction requires a detailed design plan
and blueprint, online activities require similar techniques. The electronic marketing
blueprint is a tool that helps bring together the organization’s requirements for online
and offline marketing activities and integrates these into the overall strategic direction
of the organization.
Blueprints allow managers across the functional areas of an organization to deter-
mine the extent and level to which each section will be affected by the decision to
adopt an Internet-based marketing strategy. It is important to remember that market-
ing as a strategic function is cross-disciplinary and its effects are not confined to the
301

302
e-marketing
The diffusion object’s delivery
Requires a personal presentation and Does not require a personal presentation and
demonstration to the adopter demonstration to the adopter
Situation 1 Situation 2
October 28, 2010 13:21

Communication Communication
Communication Communication
message and message and
media media
execution execution
Personal
presentation/
Diffusion Adoption demonstration Target Diffusion Adoption Target
object triggering of the diffu- group object triggering group
sion object
delivery
Generating Availability/ Availability/ Generating
Outlet Outlet
MAC/DANN
availability/ placement placement availability/
Has a tangible product base

field force field force
placement outlets outlets placement
Situation 3 Situation 4
Page-302
The diffusion object
Communication
Communication
message and
media
execution
Communication
Diffusion Adoption Target Diffusion Communication Adoption Target
message and
object triggering group object media triggering group
execution
Establishing
availability
Has no tangible product base

outlets/venues
9780230_203969_11_cha10
Figure 10.2 Delivery situation options
Source: Kotler, P. and Roberto, E. (1989) Social Marketing: Strategies for Changing Public Behavior. New York: Free Press
Implementation
marketing section alone. Choosing a marketing strategy that turns the organization
from a regional retailer to a global sporadic exporter will have an impact across the
whole organization, and will require a holistic approach from the organization for it to
succeed. Blueprinting decisions need the support and involvement of management in
the development process because:
◦ blueprint decisions are critical to overall organizational success. Full management

support for the movement to an Internet-based marketing process is needed as
changes to products for distribution online or from online ordering need to be
addressed by logistics management.
◦ they can cut across several product lines or divisional boundaries. Developing a web-
site involves the co-ordination of IT divisions and marketing divisions. If the site
development also requires the redevelopment of the product for digital distribution
then engineering and production departments will also need to become involved in
the blueprint.
◦ they frequently require the resolution of cross-functional conflict. One of the advan-
tages of blueprinting is that it maps out areas of potential inter-divisional conflict
before the production (and conflict) commences. Once products are expected to be
shipped, and customer orders have been taken, it is usually too late to decide who
really should have been responsible for what function in the online marketing and
distribution processes (Kalakota and Robinson, 1999).
The success or failure of internal marketing efforts to gain support for external market-
ing plans involving Internet activities will arise from how effectively the blueprinting
process is supported by management. It requires leadership and co-ordination from
the top as it is a dynamic process in which the organization’s list of active projects is
constantly updated and revised, projects are evaluated and, if selected, prioritized, and
have impact on budget allocations. For an online marketing blueprint to be success-
ful, it needs the involvement and support of the management from the start to the
completion of the process.
Delivering on schedule
Timelines are both critical to implementation metrics and planning. That said, they’re
also exceptionally variable in nature based on the task, resources to hand, people
working on it and the vulnerability of the project to conservation of Ninjustu (TV
Tropes, 2009). Many aspects of startup e-marketing scale about as well as ninjas do –
one team member per task is effective, two is slightly less effective, three is adequate
and four is the upper ceiling of team competence. Any number beyond four seems to
be asking for the time to increase as the number of people added to a task increases the
likelihood of delays.
Marketing has a series of lead time issues that need to be factored into the timelines
(Figure 10.3). There’s an instant and immediate reaction to a campaign when the
target customer goes from awareness to action, and as such, the shopping cart and
order forms need to be there waiting now. Editors at the meta-blog Boing Boing
303

e-marketing
Figure 10.3 Translating timelines

(www.boingboing.net) observed a distinct difference in the sales from books linked

from their blog that were pre-order only versus immediately available for sale. Similarly,
delays in production of the product can increase the vulnerability of the organization to
an early peak (high interest, high desire, no option for action) that builds momentum
for competitors.
Issues in implementing e-distribution

Van den Poel and Leunis (1999) identified three distribution roles in marketing as
the non-store information channel, non-store reservation channel with offline ship-
ping, and online store purchase with online distribution and shipping. In very general
terms, the capacity required for each of the three types of channels listed above should
increase from ‘non-store information channel’ (just the data) to ‘non-store purchase
and delivery channel’ (which is when it’s a good idea to break out the Amazon
S3 server farm). In order to meet these roles, Kostopoulos (1998) outlined a useful
set of technical factors to consider in e-marketing – network access, server capacity
and compatibility.
Network access
Network access is the capacity to access the Internet (and includes m-marketing chan-
nels). It should not need to be said that the value of a website to a customer is only as
good as the customer’s ability to access the site, but it has to be said. Just because you
can make a site inaccessible through Flash animations, video, high-resolution graphics
and complex coding doesn’t mean there’s any economic justification for your excess.
304

Implementation
If the aim of the site is to sell products, make the purchase process simple, painless
and obvious.
Server capacity
Server capacity is the ability of the technology to deliver the web presence and web
delivery channel to the end user (and related to Chapter 1’s Figure 1.2). Twitter peri-
odically illustrates server capacity overloads (with the legendary Fail Whale graphic)
that come from excesses of popularity. A chief problem for online distribution chan-
nels is balancing capacity reserve against wasted excess in that whilst excess capacity
on the server is preferred to customers being unable to access the site, it’s still a cost to
cover. That said, in contrast to the physical world of the marketplace, capacity errors
online result in people looking for an alternative method of satisfying their needs. You
can turn fans away from a sporting event and have them queue up again next time. Turn
people away from your website, and they will find another site to meet their needs –
witness the number of people who update their Facebook status to comment on the
Twitter service being down.
Technical compatibility
Compatibility includes browser compatibility (IE, Firefox, Flock, Safari) and a broadened
sense of technological compatibility with the end-user devices (mobiles, desktop, Xbox,
fridge, iPods) in their various appropriate formats (Kostopoulos, 1998). Compatibility
issues also cover how the digital information will be presented to the user (in terms of
control, choice and how dependent the distribution channel is on proprietary software).
This also extends to the provision of PDF, DOC, PPT and the nefarious DOCX file format
of Office 2007 (a much maligned shift in format to decrease the interoperability of
Microsoft’s newer products with their older counterparts). There are five general rules
for establishing compatibility to the widest market:
1. Use the widest accepted protocol. Security is through obscurity, compatibility is

through open and widespread acceptance.
2. Remember the other formats – Windows, Macintosh, Linux and Unix users may
also like to see your products as much as your primary market pick (Apple has a
slew of Mac-only software. iPhones dominate but they’re not the only mobile com-
puting market.) Don’t forget multiple browser compatibility as well – the whole
reason we had you acquire the major browsers back in the Introduction was to
give you the option to cross-check the performance of your site against the differ-
ent alternatives. Also, be aware that Safari is the iPod Touch/iPhone default browser
format, so if you’re incompatible there, you’re closing out the large iPhone mobile
market (Chapter 13).
3. Forgo bleeding edge/cutting edge if you can use established protocols. The newest
greatest thing is likely to have the narrowest part of the market (innovators) who are
probably working for you in the design studio. The widest part of the user base is
still using the older version of the software. Set it up for them, and you’ll gain wider
305

e-marketing
marketshare at the start. If you can work with an existing format, that’s one less cost
for you and the end user.
4. Use Mols’s (1998) guidelines for establishing a distribution format if there is no read-
ily visible market standard. If a standard exists, use it. It’s cheaper and easier than
reinventing another wheel.
5. If you must establish your own protocol, give away the reader/viewer, hand out a
functional but feature-sparse free encoder and charge heavily for the high-end cor-
porate encoding software that does the really powerful stuff – corporations will both
have the desire and the budget for the serious equipment.
There are other considerations for creating distribution channels that are compatible
with the target market of the product. Most important of all is to understand that while
technology is a major facet in making a successful digital delivery, it is the people behind
the technology that determine the success or failure of the product.
} Defend the fit (metric)

The penultimate stage is the justification of the product–market fit, where you need to
demonstrate how the e-element fits into the marketing strategy but also how they help
achieve the organization’s overall corporate objectives. If e-marketing is perceived as a
cost rather than an investment then it becomes particularly vulnerable to cut backs in
times of economic and financial stress.
Assessing the market fit and justifying why you have taken this particular series of
actions is done in three steps:
1. Research the impact – ensure that your objectives are not only measurable, but
also that they are measured. Conduct pre- and post-intervention research to see
what, if any, impact your strategy has had on the target market and ensure that
the research and objectives include measures that focus on both the tangible and
intangible outcomes.
2. Use the research regardless of the outcomes (positive, negative or neutral). Knowing
how the good, the bad and the mediocre occurs helps determine what to do next
time. Unexpectedly positive results should be investigated as thoroughly as unex-
pectedly negative ones, since high short-term sales may represent a one-off peak
from novelty-seeking consumers or the start of sustained business growth. Without
knowing the reasons behind the success or failure, incorrect assumptions can be
made which have a flow-on effect to the next measurement period.
3. Make the changes – if the market doesn’t understand your subtle and witty cam-
paign, change it. Research is only as valuable as the actions it motivates. After using
the research to identify trigger points for action and/or inaction, adjust the market-
ing mix elements and re-measure to see if you have actually addressed the core of
the problem.
306

Implementation
The metrics plan

Knowing what to measure and how to measure it is central to the metric plan. If you
can’t keep track of how far along the road to achieving your objectives you are then
you’re likely to run into the classic implementation problems of overspending in areas
that are tracking well, underspending in those that need a boost and letting potential
time bombs accumulate under the corporate radar. To develop an effective e-marketing
metrics plan you need to be able to answer the following questions:
◦ How will you know if you have achieved your objective?

◦ What measurement instruments will you use?
◦ How will you use these instruments to measure your objectives?
◦ What market research will you do for your site?
◦ What market monitoring will you use for your site?
How will you know if you have achieved your objective?

The answer to this question goes back to the initial objectives formulation process.
If your objectives are vague, multi-step and are not linked to benchmarks, the simple
answer is that you won’t know. An objective such as ‘become an industry leader in
online sales through improved company image’ is virtually impossible to achieve as
there is nothing to measure it against. On the other hand, if you had a clear objec-
tive of increasing sales by 5 per cent within six weeks of the initial launch of the
campaign you have a start date (pre campaign), stop date (six weeks), initial sales bench-
mark and sales outcomes. It is easy to see in this case whether or not the objective has
been met.
What measurement instruments will you use?

Given the current tracking technologies available, combined with the trend in market
research towards measuring tangible behaviours rather than intangible intentions or
attitudes, it is tempting to rely predominantly on built-in systems to measure what
people do when they get to your site. Whilst these technologies have many advantages,
including improved accuracy, and they track actual rather than perceived behaviours,
they are only useful in this context if they link to objectives and if those objectives add
to the achievement of the overall corporate mission. Site visits are a popular metric as
they are easy to measure and record. Similarly, online sales can be differentiated from
traditional outlet sales, and the use of different parts of the site can be monitored, as
well as the points of drop out. In addition to those metrics which can be collected
and analyzed without the customer realizing that they are being observed, it is useful
to include formal feedback forms onsite which address the less-observable elements of
your objectives, such as asking where the customer found out about the site/company,
which in turn can help determine the effectiveness of the traffic driving elements of the
e-marketing strategy.
307

e-marketing
How will you use these instruments to measure your objectives?

While there are many ways of collecting data and data is increasingly easy and cheap
to collect, not all data provides valuable information. Downloads and installation of
iPhone applications are not a measure of their use – and whilst you can track down-
loads, you’re harder pressed to track customer satisfaction (plus iTunes only prompts a
quality star rank when you remove the program). The value of any given data set to
e-marketing outcomes is not always apparent. If the purpose of your e-marketing strat-
egy is to shift printing costs for instruction manuals from the company to the consumer,
then tracking how many manuals are downloaded is a useful metric. If, however, the
objective of the e-marketing strategy is to improve the company’s image or to increase
sales, site visit metrics alone are of limited value. Whilst visiting the site is a prerequisite
to achieving a variety of outcomes, simply visiting the site does not guarantee these
outcomes. At this point it is worth reviewing not only your objectives, but also the data
you intend collecting from site visits to determine which parts are needed, which are
desirable and which are simply superfluous and don’t need to be collected at all.
What market research will you do for your site?

In addition to tracking, monitoring and asking a few simple questions of consumers
at the time of registration on your site, it’s necessary to conduct additional, more
traditional market research if you are going to effectively measure your e-marketing out-
comes. The people who visit the site represent those who have moved from awareness
through to action. In between are those who are still stuck in the ‘interest’ or ‘desire’
phases and who may or may not take the final step of actually visiting your site. Whilst
the e-marketing strategy is designed to activate certain behaviours online, the pro-
cessing of the information by the individual happens offline. If you are focused on
achieving objectives such as raising awareness, building brand, reputation management
and so on, the e-marketing element is only part of the overall strategy.
At this point it is also critical to remind you that whatever market research and track-
ing you undertake to measure the outcomes, must be matched by an equivalent process
prior to the implementation of the e-marketing program. If you forget to pre-measure
then you won’t know if the seven out of ten approval rating achieved after the cam-
paign is good, bad or indifferent. You may have doubled your scores or dropped by
10 per cent. Without a benchmark to measure outcomes against, claims of ‘success’ are
without any real foundation.
What market monitoring will you use for your site?

Market research and monitoring which is focused on the consumer is the focus of most
marketing metrics, however, to understand whether or not the e-marketing strategy
has been a success or failure a broader perspective is needed. If sales drop by 10 per
cent in the quarter following the implementation of a new e-marketing campaign, is
this a success or a failure? The answer is not always straightforward. If, for example,
while your sales drop by 10 per cent your key competitors’ sales rise by 20 per cent
then clearly there’s something wrong somewhere. If, however, your sales drop by 10 per
308

Implementation
cent and your key competitors’ sales drop by 20 per cent then you’re clearly doing
something right.
The impact of external factors (Chapter 4) and the broader economic and social envi-
ronments in which businesses operate can have a far greater effect on outcomes than
any given planned strategy. Those organizations that have an effective marketing infor-
mation system in place which feeds data and information from the broader operating
environment into the marketing system are more likely to spot potential trouble spots
and proactively take appropriate action than those that are too focused on their internal
metrics and not enough on the context in which they operate.
} Effective and ineffective e-marketing application

The Internet has evolved into being a new space and a new form of market. Much
of what has been learnt about moving from relatively safe, existing domestic markets
into the more complex international environment is equally applicable to companies
moving from the safe offline environment to the less predictable online environment.
While there are no hard and fast rules in marketing as to what will succeed in the
online environment, Samiee (1998) outlines six ideas that underpin effective use of the
Internet for export marketing, and which are also applied more broadly to the modern
e-marketing use of the platform.
1. Sustainable competitive advantage cannot be solely derived from access to the Inter-
net. Just because you’re on the Internet doesn’t mean you’ve finished the work and
success will download itself.
2. Non-exporting companies cannot expect to become exporters overnight by virtue of
having a website that can enable international transactions. Putting up a transaction
site doesn’t equate to making sales, and the forum software you installed won’t grow
its own community (and if it does, check for signs of it turning into Skynet).
3. The level of overall consumer spending is not affected by Internet penetration and
use. See the bit about merely being online as not being the golden meal ticket.
4. Security of communications and data is of paramount importance in the develop-
ment of Internet-based activity. Perceived security is great, but actual security is
even more important. Insist on decent passwords, have backups, and have disaster
recovery plans for when (not if) the worst case scenario comes into effect.
5. The Internet can assist in the minimization or removal of certain structural imped-
iments to commerce. The operative word here is ‘assist’ since a good website won’t
compensate for a bad product.
6. Companies on the Internet can be broadly classified according to whether their pri-
mary target market is the end user, other channel members or manufacturers. Know
who you serve, and ensure that you’re serving that market.
Despite the exponential growth of e-marketing, the increasing familiarity with the
medium and the numerous books, papers and case studies on what (not) to do, organi-
zations continue to make errors when working in the online environment. Simmonds
309

e-marketing
(1999) has identified seven common traps which firms fall into when moving from a
relatively safe domestic strategy to pursuing international objectives. Again, if we con-
sider the Internet a place, we can adapt these to help understand the problems which
face companies when they implement e-marketing, particularly in the early stages.
1. Ranking markets on the basis of the size or growth of demand for the firm’s product
rather than on the basis of potential penetration that the firm’s strategy will bring.
It’s not potential if you can’t activate it, act on it or deliver to a level to meet the
market’s needs. There are 17 million people on Facebook in the UK, but if you’re a
local store in Eastbourne, there’s only 7000 people possibly interested in your wares
(and not all of them will be willing to wander into the Arndale Centre to find you).
With the Eastbourne Objective, a Facebook profile is less effective than a letterbox
drop of pamphlets or an ad in the local paper, unless you’re specifically targeting a
group you know are online.
2. Underestimating competitors. Don’t forget the offline competition as well as the
local and global competitors. While being online opens up new markets it also
opens up new competition while you’re still trying to grapple with your existing
competitors. You can win on financial price when you decide to sell direct but can
lose out on overall cost when the shipping time is factored into the equation.
3. Variable customer motivations. Customer attitudes vary across segmentation, niches
and time. What was the flavour of the month (MySpace) can soon become the
next arcane relic of a bygone era (Geocities). Good market research needs to stay
current and update the organization on the changing wants and needs of potential
consumers in each target market.
4. Inappropriate pricing. Transparency is king when it comes to pricing and the Inter-
net. Don’t think that a pricing trick tried somewhere won’t be uncovered – if you’re
overcharging, you’ll be found out, and if you’re undercharging, you’ll be hit for the
discounted object, and only the discounted object.
5. Misunderstanding over the stage of the target market’s development. The Stages of
Change model (Chapter 2) is a good way of viewing how differently each market
could react based on where they’re at in the process of pre-contemplation to action.
Any generic strategy assuming equal development is likely to fail since you’re much
more likely to need a range of strategies from stimulating primary demand to brand-
building and differentiation strategies.
6. Inappropriate choice of partners. There is still a need for quality relationships to
be developed between e-marketers, online affiliates, word of mouth endorsements,
various trade agents and distributors.
7. Mismanaging the brand by failing to adequately protect that overall brand image as
it moves into the e-marketing arena through either a lack of brand positioning, or
through inconsistency between the brand message and the actions of the company.
Whilst inconsistent behaviour between positioning strategy and corporate activity
used to be a low-risk option, it’s a lot easier to reveal that the ‘green, eco-friendly’
company is engaged in environmental destruction. YouTube, blogs, Twitter and the
love of a good bit of gossip make for a really great incentive to be consistent in action
as well as IMC.
310

Implementation
} Conclusion
Implementing the e-marketing plan is as complex as developing it in the first place.
Not only do you have to come up with appropriate ideas and strategies, this is where
the organization finds out whether or not the ideas which sound great in theory are
actually going to work in practice. Critical to the success of the implementation process
is the original objective-setting process. Objectives guide actions and so if the objectives
are unclear, the actions will be unfocused and potentially unproductive. Throughout
the chapter a variety of models and tables have been presented which demonstrate
how each element of the marketing plan links with the others to achieve the desired
outcomes. The extreme complexity of the marketing environment and the number of
variables in the marketing strategy mean that you will never be starved for choice when
it comes to determining a specific implementation approach. What is important is that
you measure and research at all stages so you know when you’re on track, when you’re
not, why you’re not and take action to make sure that you get back on track.
} References
Books and journals
Aggarwal, P., Cha, T. and Wilemon, D. (1998) ‘Barriers to the adoption of really-new products and
the role of surrogate buyers’, Journal of Consumer Marketing, 15(4): 358–71.
Blank, S. (2009) ‘Can a single bottle of soda decimate your company? Absolutely,’
Entrepreneur Corner, http://entrepreneur.venturebeat.com/2009/12/22/can-a-single-bottle-of-
soda-decimate-your-company-absolutely/ (accessed 11 July 2010).
Kalakota, R. and Robinson, M. (1999) e-Business: Roadmap for Success. Sydney: Addison-Wesley.
Kostopoulos, G.K. (1998) ‘Global delivery of education via the Internet’, Internet Research: Electronic
Free Press.
Mols, N.P. (1998) ‘The Internet and the banks’ strategic distribution channel decisions’, Internet
Research: Electronic Networking Applications and Policy, 8(4): 331–7.
Samiee, S. (1998) ‘Exporting and the Internet: A conceptual perspective’, International Marketing
Review, 15(5): 413–26.
Simmonds, K. (1999) ‘International marketing – avoiding the seven deadly traps’, Journal of
International Marketing, 7(2): 51–62.
TV Tropes (2009) ‘Conservation of Ninjutsu’, TV Tropes, http://tvtropes.org/pmwiki/pmwiki.php/
Main/ConservationOfNinjutsu (accessed 10 July 2010).
Van den Poel, D. and Leunis, J. (1999) ‘Consumer acceptance of the Internet as a channel of
distribution’, Journal of Business Research, 45: 249–56.
Web references
Adobe Acrobat Reader http://get.adobe.com/reader
Bit.ly www.bit.ly
Boing Boing www.boingboing.net
eBay www.ebay.co.uk
311

e-marketing
Flashbang Studios www.flashbangstudios.com

Flickr Pro www.flickr.com
Great British Heritage Pass www.britishheritagepass.com
Is Gd www.is.gd
iTunes www.apple.com/uk/itunes
Jamendo www.jamendo.com
MySpace www.myspace.com
Off-Road Velociraptor Safari www.raptorsafari.com
Problogger www.problogger.com
ProWrestlingX www.prowrestlingx.com
RemembertheMilk.com m.rememberthemilk.com
Scribd www.scribd.com
Xbox Live www.xbox.com/en-GB
312

SECTION 3}
Applications
T
he third section of this book looks at the practical applications of a range of dif-
ferent Internet technologies and their suggested use for e-marketing. Chapter 11
covers the broad spectrum of ‘things to do with technology, marketing and
you’ and looks at the different ways in which e-marketing has been used in busi-
ness, non-profit organizations and society. Chapter 12 focuses on the applications and
implications of using social media in e-marketing, including the need to engage in
conversations with some types of customers (and not be quite so chatty with a few
other types). Chapter 13 looks at m-marketing approaches, including the challenges
of mobile marketing and the implications of Internet access that travels with the cus-
tomer. Chapter 14 explores the options beyond the Web when it comes to e-marketing,
with a specific interest in gaming consoles, virtual worlds and other defined e-marketing
friendly (or hostile) spaces that use the Internet as their platform. Finally, the book con-
cludes with a view of the impact of the Internet on society, the issues of culture, law,
technology and innovation, and the current crisis of faith in intellectual property laws
reflecting reality and how these shape the environment for e-marketers.

CHAPTER 11}
Applications of e-marketing
• quietly surprised at the diversity of content on the Internet

• aware of the different principles in application when designing site-specific
applications for e-marketing
• baffled as to how anyone ever has the time to visit such a wide spectrum
of content
• aware of the different strategic approaches to matching the strength of the
Internet with the opportunities and results you’re seeking from e-marketing.
315

e-marketing
} Introduction
This chapter looks at uses of the Internet across three different approaches. First, are
the general principles for classifying, categorizing and generally sorting what you can
do with e-marketing into little self-contained boxes on a chart. Secondly, the chapter
looks at the role of the Internet in international marketing and gives an overview of
how the global nature of a medium means e-marketers have the option to target the
local community, specific regions or the whole Internet-connected planet. Finally, the
chapter ends with a set of checklists and strategies for putting the Internet to good use
in any e-marketing context.
} Principles in application: frameworks for classifying

the Internet
If there’s one thing marketing loves more than a two-by-two matrix, it’s a checklist
of categories for assigning a wide range of diverse content on the Internet into neat
little boxes. It’s like market segmentation in that narrowing the world into a series of
parameters becomes a means for focusing marketing activity. The trick is to remember
that categories are just models and that these models help with figuring the world out
insofar as they let you compare like with like but don’t reflect reality as a whole. The
Internet is a big, complex and weird place and any simple ‘N+1 list’ category scheme
won’t necessarily capture the essence of everything (even the ones with the ‘other’ and
‘everything else’ boxes at the end).
Using the lists

There are five reasons to break open the bullet points on Word and start making
categorical lists of websites, and clustering different parts of the Internet into boxes.
1. Segmentation, including general market segmentation and more specific use seg-
mentation approaches (Chapter 4). Knowing the types of sites your customers will
be visiting aids expectation management for when they’re at your place and gives a
good idea of what sorts of features, benefits and outcomes they’ll be expecting.
2. Positioning strategies and the research needed to be able to explain your own Inter-
net product as a ‘cross between SiteX and ServiceY’ (Chapter 6). Although final
market position is in the mind of the consumer, it never hurts to be able to make
suggestions such as ‘Brand X is the Twitter of canned tuna’ or ‘Product Y: it’s like
Google for your best friends’ to help align your desired position in the market with
the user’s actual perceptions.
3. Product features, including the market research end of ensuring that your relative
advantage is actually an advantage (Chapter 6) rather than just another standard fea-
ture on the competitor sites. Offering e-mail with your search engine isn’t a relative
advantage in the age of Google. Similarly, if you’ve promised compatibility with
316

various other services, it’s worth creating a category of services where the promises
come true, plus handy lists of the non-compatible sites.
4. Promotion, including cross-promotion, site alliances, collaborative ventures – and
for the business model inclined – the types of advertising that appear on similar types
of websites (Chapter 10). Blog rolls, alliances, web rings and other collaborative–
competitive approaches require you to classify friends (and foes) into useful and
publishable lists.
5. Identifying friendly community structures, including organic communities which
discuss your service, product and brand and unfriendly ones that do more than just
discuss the product. Community identification and classification (Chapter 9) also fits
into the listening aspect of market research (Chapter 4) and the conversational end
of social media (Chapter 12).
Lists and classifications can be useful when applied to answer a question, solve a prob-
lem or create a new view of existing information (Figure 11.1). The question for you as
a marketer is not just when to use the lists, but also when to publish the lists you’ve
used as a part of the site’s content. One of the unexpected cultural phenomena of the
early Web 1.0 website was the list of related links that provided a convenient exit from
the site and directed traffic to other people’s content. There’s still value in the Web 2.0
Figure 11.1 The inter-blag

317

e-marketing
era in pointing people away from your site – either because you don’t want to deliver
what they’re asking for in a product (audience selection) or because you’ve already met
their primary need and you’ve developed an alliance with another provider to meet
the secondary needs (hardware manufacturers linking to the software providers, movie
information sites linking to DVD stores, blogs linking to Amazon for affiliate sales).
Publishing and promoting your classifications can be useful as a form of promotional
tool, PR source or public whitepaper document that can bring traffic and attention to
your site.
Classification 1: Types of online attractions

The principle of the online attractor list is to create the same sense in designing and
developing an online product that you’d take in setting up a store, theme park or major
public attraction (Watson et al., 1998). Attractors are designed to be sites with the most
potential to interact with the greatest number of visitors from the target market and
offer interactions that are specific to the objectives of the firm. This makes attractor
sites something that meet a set need in the market and difficult for competitors to
replicate (Watson et al., 1998). Attractors consist of two levels of design: the content
level, which is the substantive part of the product (soccer content for FA Cup site), and
the node level, which is the navigation and user-interface level (buttons, links, graphics
and interactive elements).
The attractor approach is based on the service marketing principles for the design of a
good service (Chapter 8) and uses distinctive differentiation involving hard-to-replicate
value offerings that meet the needs of the target market by being integral to the product
experience offered by the company. The twelve attractor types outlined below are based
on the works of Watson et al. (1998), Wen et al. (2001) and the authors spending far too
much time online playing with the Internet:
1. Entertainment parks
2. Content archives
3. Exclusive sponsorships
4. Town halls
5. Clubs
6. Gift shops
7. Retail outlets
8. Service sector
9. Freeway intersections
10. Customer service centres
11. Journals and blogs
12. Single-purpose sites.
Entertainment parks
These are sites, services and products designed primarily to entertain through high levels
of interactivity, contests, prizes and other rewards. They include gaming websites such
318

as Shockwave (www.shockwave.com) and World of Warcraft (www.worldofwarcraft.

com), most of the content for the Xbox and just about everything sold through Steam
(www.steampowered.com). This type of offer relies heavily on telepresence and flow
states, and makes heavy use of interactive elements to provide a near-constant state of
challenge-stimulus-reward for the consumer.
At the web level, entertainment parks tend to be sponsored by advertising and com-
mercialization is based on free demonstration versions that plug the full registered
commercial option or paid features such as no advertising or extra content. Services
such as World of Warcraft, Xbox Live content and iPhone applications tend towards the
fully paid with either one-off purchase or recurring charges (or both). The purpose of the
sites is to encourage repeat visits either to win recurring prizes or to continue playing
with the digital toys on display. These sites are the digital Disneyland of the Internet,
where fun and play have priority over information and sales pitches. Of course, having
moved the visitor into a positive mind-set, the website may also try to sell a product or
two on the way to recoup the cost of investment (usually through a gift shop set-up,
see below). Design features include the use of easy-to-follow paths and predetermined
event areas such as games, puzzles and contests. Node-level interactions feature a large
number of interactive elements, most of which will take a certain period of time (up
to five minutes) to load. The waiting time is frequently used to explain the rules or
instructions of the game, or to promote the content sponsor’s message.
Content archives
Content archives are the online equivalent of libraries, video stores and museums in
that they contain large amounts of special interest information around various top-
ics. These sites focus on providing massive volumes of information in audio (www.
jamendo.com), video (www.youtube.com), pictures (www.flickr.com), text (www.scribd.
com), PowerPoint (www.slideshare.net) or some other format (www.legaltorrents.com)
to provide users with historical information (www.waybackmachine.com) or other
content (www.archive.org). Content design emphasizes logical structures based on
hierarchy, topic category, timelines or tag clouds. Node-level design places a strong
focus on interlinking related topics and information, forming a giant interactive
database of interrelated content (www.imdb.com), cross-references (www.tvtropes.org)
or taxonomical structures (www.wikipedia.org).
Exclusive sponsorships
The purpose of these sites is to either showcase corporate involvement in an event or
generate traffic for the sponsor’s core business, with the consequence that the prod-
uct design is purpose built to redirect interest from the application, site or content to
the main game (e.g. the organization sponsoring the event or the movie being pro-
moted). The content is short term in nature and tends to either disappear into the
digital ether after the event or be left as the technical equivalent of an archeological dig.
Typically, sponsorship sites tend to be dedicated to the promotion of specific events,
such as sports events, concerts and movies, software demonstrations or download
319

e-marketing
sites. Exclusive sponsorship sites often integrate a range of features to reinforce the
corporation’s involvement with the event and might, for example, include free appli-
cations for the iPhone that promote one-off events such as movies, sports events and
demonstration software for video games.
Town halls
These types of website content and service represent the venues, meeting spaces and
public forums of the Internet and are typified by their ability to allow share of voice to
an individual through either registration or anonymous participation. Twitter fits into
the town hall model as a space for conversation where the conversation is not guided by
the site owners. This type of content can also be part of the infrastructure for a specific
site or service. Examples include moderated forums – where invited guests are available
for semi-public debate on topical issues – digital talk shows and even YouTube with its
ability to post replies via text and video to other content. Town hall structures may also
split their functionality between the live action areas and an archive of previous events.
There is a strong degree of crossover between the node design of the archive and the
site-level interactivity orientation of the entertainment park in town hall designs.
Clubs
Club-style e-marketing content differs from the town hall insofar as the club is designed
for membership and mingling, while the town hall is designed for broadcast and debate.
These types of services are typically larger sites that are dedicated to supporting and
hosting cybercommunities (Chapter 9) or smaller club-style arrangements of blogs that
allow registered membership for frequent contributors and commenters. Facebook is the
pinnacle example of a club-based site where the membership is more important than the
broadcast and the purpose of the site is the connection between the users rather than
the users’ ability to promote content to a wider audience (Facebook can be used for that,
it’s just not as good at blogging as it is at poking friends). Cybercommunity structures
exist either as the focus for the site (www.slashdot.org) or as an integrated element of
an entertainment park. The distinguishing factor of the club site is the strong emphasis
on either room-based groups or dedicated themed areas such as the Facebook fan pages.
Gift shops
Gift shops are the free-content providers of the Internet and focus on the efficient and
effective distribution of downloadable content and digital products. Gift shops differ
from content archives in that they are set up to provide files to the user through a
retail experience minus the cash register, whereas content archives prefer the ‘look,
don’t download’ approach. Gift shops can be found in operation inside the retail shop
fronts of sites such as iTunes, Steam and Xbox Live. If you’re able to download the
product for free, you’re in the gift shop, whereas if you have to hand over credit card
or Paypal information, it’s a retail outlet. Gift shops share similar design concerns with
retail outlets and are frequently built alongside a retail outlet function.
320

Retail outlets
Retail outlets are the revenue generators of e-marketing and offer physical goods, virtual
goods, virtual services and payments for everything in between. This is a broad category
which incorporates any site with a shopping cart, product categories and a range of
online shipping choices from direct download to physical mail shipping. The highest-
profile web-based retailers are Amazon (www.amazon.co.uk) and eBay (ebay.co.uk),
with Steam, iTunes and the Xbox Live Arcade offering similar non-web retail functions
(Chapter 14).
Content design is based around a central catalogue of products, offers or services
functions, and a shopping cart function for the transactions. It’s quite common to find
a relatively complex taxonomical structure that mimics the content archive design ele-
ments as a means for sorting, classifying and categorizing the products into digital aisles
and shelves akin to the supermarket. Digital retail outlets frequently use the ‘Top 10’,
‘Best Selling’ and ‘Most Popular’ sub-categories to encourage sales based on perceived
peer approval (Chapter 5) and the ‘Recently Released’ category to appeal directly to the
innovators. Retail outlets and gift shops are often built in parallel to provide free sam-
ples, bonus content and other reasons for the consumer to revisit the combined store
front as part of a relationship-building approach (Chapter 8), and as a means to provide
a specific advantage to this retail outlet (exclusive content, free offers) ahead of other
online or offline outlets.
Service sector
In addition to gift shops and retail outlets are the service sector elements of the Internet.
Service sector element include the shopping carts built into the previous two offer-
ings and represent aspects of the site design that allow consumers to either engage
in a specific service exchange such as e-banking (www.lloydstsb.com), bill payment,
subscription renewal, or customized membership options. The difference between the
service sector and retail outlet is basically the outcome of the transaction – if the result
is a physical or virtual good, it’s a retail outlet; if it’s a service, experience or intangible
outcome, then it’s a service. It’s worth noting that these elements are frequently built
into other attractor components. For example, the community site that has a range of
subscription settings (e-mail notification, avatar customization) is offering a self-service
control panel that enhances the community experience through a service sector ele-
ment. Design issues for the service sector elements tend to involve complex back-end
components that support large amounts of customer-focused customization of the site
offering, plus a hefty dose of security since problems with virtual services are incredibly
hard to undo (even compared with digital products).
Freeway intersections
Freeway intersections are the portals, search engines and content indexes that exist
to redirect you to somewhere else within the site (Yahoo! or MSNLive) or allow you
to select bits of the rest of the Internet (Google, Bing). Portals are designed to offer
gateways into specific content such as news-related services or a gateway to the rest of
321

e-marketing
the product offerings. Portals can include a range of customizable information services
such as news reports, weather forecasts and horoscopes, or can be a form of overview of
the total services available (iTunes, Steam). These sites borrow heavily from the printed
media design school by deliberately trying to replicate the look and feel of newspapers,
or alternatively, are laid out like an electronic bento box.
Search engines are designed to search the whole of the Internet, a specific sub section
(site-specific search) or a specific device (iPhone). These can either be simple search-only
approaches or diet portals. Diet portals are search oriented sections that have added
layers of portal-style content so that various common functions, features or searches
can be accessed from the search page. Search-only systems are the exact opposite with
sparse-looking input boxes and ‘Search’ buttons. Although Google was the past master
of the simple search (one input box, two buttons), it’s much more of a diet portal these
days with the fifteen or so options available from the front page.
Customer service centres

Customer service centres are content elements that are established for the purpose of
providing after-sales support, updates, downloadable content or product-use informa-
tion. These elements are commonly attached to retail and gift shop systems as the
after-sales service areas. They can also be standalone after-sales service websites for phys-
ical goods or part of a corporate website which offers electronic versions of instruction
manuals, help guides, product-use videos, information on warranties and helplines. The
design of a customer service system may resemble the content archive or retail outlet as
it tends to require complex taxonomies of products, product-related information and
software. Functionality may also include elements such as the search engine, gift shop
and even the community as a means of providing frameworks to find information,
updates and support.
Journals and blogs

Journal elements are collective online diary systems such as Livejournal (www.
livejournal.com), Dreamwidth (www.dreamwidth.org) and Open Diary (www.
opendiary.com). Journals represent the more personalized approach that deals with
the writer’s day-to-day life (Figure 11.2). Blog systems are more attuned to annotation
of the user’s web experiences and commentary on events, websites and issues, such
as Vox (www.vox.com), WordPress (www.wordpress.com) and Blogger (www.blogger.
com). That said, a webjournal and a blog can be used for either purpose. The distinction
between them may seem an arbitrary categorization, although it’s worth noting that
the inherent community orientation of Dreamwidth and Livejournal loans itself more
to collective socializing than can be found through the WordPress and Blogger sites.
Similarly, the blogs tend to feel more like standalone publications and tend towards a
different style of engagement with the reader-commentator-author dynamics. The blog
can be used as a broadcast and community element of the site, whereby the corpora-
tion is the provider of the content and the blog is the conversation and communication
outlet. Alternatively, blogs and journals can be offered as features of the broader product
322

Figure 11.2 Bored with the Internet

offering, as is the case with the journal and notes function in Facebook or Windows
Live’s blog function that you acquire by default when you sign up for Windows Live
Messenger (the artist formerly known as MSN Messenger).
Single-purpose sites
Kottke (2008) identified the phenomena of ‘single serving sites’ which are task-specific
websites described by domain names such as Is it Christmas? (www.isitchristmas.com),
which has one day of saying ‘Yes’, and the rest of the year saying ‘No’. These sites
can also include countdown timers to certain events such as New Year’s Eve, product
launches or elections. Single-serving sites are often set up for jokes, parodies or political
commentary rather than for serious use in e-marketing.
323

e-marketing
Using online attractors

Each of these elements is stackable and can be combined in a range of different
approaches to create a total product offer of physical, virtual and digital goods, services
and experiences (Chapter 6). For example, the Xbox360 console offers a series of service
sector elements (Xbox Live renewal) alongside the Xbox Live Arcade (retail/gift) and
the semi-permanent worlds of the Xbox Live-hosted game servers (clubs, town halls).
iTunes offers a combination of gift-shop, service sector, content archive and retail out-
let but currently (at the time of writing) lacks an iTunes-hosted community structure.
Meanwhile, Google seems to have an ambition to offer one of everything on this list
(and then start expanding the list into a whole new array of objects).
Classification 2: Types of content

The second classification structure is derived from an examination of various content
elements within a product and can be considered the ingredients list on the back of
a website, a software package or an online experience. These classifications are based
on Dholakia and Rego’s (1998) typology of web page content, which illustrated the
different purposes for which individual elements of a website could be used. It’s worth
noting that these elements are related to the online attractors, as the attractors focus on
top-level design issues with the types of content being the component parts in the main
design. By way of metaphor, a chicken tikka masala is expected to consist of chicken and
the various spices in the tikka masala, so the presence of the site-level element (chicken)
in the components list is both welcome and expected. Similarly, when you’ve decided
to build a community structure, you’d expect to find community elements within the
site contents as well as just the top-level design. There are ten broad types of content
that can be found within an online attractor, including:
1. advocacy content, which is tailored to promote a position on an issue, such as

human rights, political issues or ideological positions
2. brands and branding content, which includes classic promotional elements,
branding, logos and other classic advertising elements
3. comparative information, which can be head-to-head comparisons between prod-
ucts or brands, such as a consumer choice guide, direct comparison advertising
series or even a list of features similar to Table 11.1
4. corporate information, which promotes the organization, organizational goals and
objectives (the dull legalese statements, copyright attributions and unflattering end-
user licence agreements are included here)
5. direct response elements, which initiate communications or feedback to the
company, server or other interactive elements. These can range from surveys,
customizable music selections, high score tables and e-mail forms, or functions
such as bookmarking a page through Delicious (www.delicious.com), to sending
a shortened URL through a Twitter client (www.is.gd)
6. index pages, which provide the navigational components for sites such as content
archives, retail outlets or gift shops. These pages are often detailed elements within
a larger page or structure
324

7. political and lobbying content, which can range from the support for votes, causes,
candidates and campaigns to requests to vote in online popularity contests such as
the Webby awards
8. public service components, which are set up to support worthy causes or social
campaigns rather than to encourage the reader to support the creator’s point of
view (advocacy or political)
9. Retail/sales pages, which are the order forms, price guides and related elements that
are necessary for running a gift shop or retail outlet attractor
10. blogs/microblogs/life streaming elements that are the component parts of the
journal and blog sites, and are the content from the individual diaries and journals.
General application for the Internet

The Internet has four main applications: accessing other people (communication and
community); accessing other information (knowledge, experiences, entertainment);
being accessed by other people (markets) and mediated exchange (transaction, con-
versation, delivery). From an e-marketing perspective, the main value occurs in the
people, markets and delivery, with information being an added bonus. For the average
consumer, it’s people, information and communication with marketplaces as the bonus
element. Consequently, what we (marketers) see as the killer application (markets) is
not what the customer necessarily cares about when they’re online. This means that
when we think of marketing applications for the Internet, we shift some focus away
from the consumer orientation back across to the organizational goals.
At the forefront, the most obvious applications of the Internet are aspects we’ve
mentioned previously such as:
◦ market research into relevant markets and on competitors (Chapter 4)

◦ promotional activities (Chapter 7)
◦ conversations and communication (Chapters 9 and 12)
◦ the websites, web presence and every other aspect of ‘being online’ (Chapter 14)
◦ taking orders, sales and marketspaces.
In terms of generic applications, it’s worth considering the use of the Inter-
net from a company perspective as fitting into ‘enhanced business process’, ‘cost
centre/investment’ or ‘generating revenue’. If you spend all day on Facebook talking to
customers, participating in groups and monitoring brand perceptions (yours and your
competitors’) then it’s an enhanced business process (market research). The use of the
Internet to improve business processes occurs through the facilitation or automation of
specific functions. These can include inventory management, purchasing, project man-
agement, shipment tracking and inter-office communications. Thirty minutes on eBay
and a half day on Wednesdays for auction management is ‘generating revenue’. Alter-
natively, Internet applications can be more strongly located within revenue generation
through direct sales, sponsorships, advertising, subscriptions and affiliate sales. Finally,
buying PDF files, data sets and advertising space on YouTube can be classified as ‘cost
centre’ or ‘investment’ but generally falls into the camp of ‘spending money’. Knowing
325

e-marketing
which category to fit the Internet behaviour into is vital so that the firm knows whether
to expect direct revenue, reduced costs or outright expenditure.
} International and export marketing: putting ‘world wide’

into the Web
This section examines some of the issues associated with the global nature of the
Internet, that is the fact that each and every element of the Internet is potentially
accessible from anywhere on the Internet-connected planet. Rather than just assum-
ing that global access = desire for export marketing, we outline the choices of being
global, glocal or locally focused, and the key issues involved in going into the export
e-marketing business.
Going global, glocal or local?

By its very nature the Internet is international and global in its reach with the con-
sequence that any marketing undertaken on the Internet could default into being
international marketing. In reality though, there’s a range of reasons such as product
type, distribution issues and (in)ability to supply a global market that means choos-
ing local or global as a focus of the e-marketing strategy makes more sense. This
section covers the potential intentional applications of e-marketing with a bias towards
export-oriented e-marketing.
When considering an international e-marketing strategy, there are four considera-
tions to keep in mind.
1. The Internet is not a level playing field. Larger firms still have greater resources and,
although everyone can access a website, it does not necessarily follow that everyone
can deliver goods. Share of voice is infinite on the Internet, so it’s a crowded market
with big players from around the globe contesting for your market.
2. Physical products still need to be delivered which means logistics still count in the
real world, even if they can be surmounted in digital world(s). Economies of scale in
shipping may require regional agents, or the shipping costs could kill off the value
of the product to the end user (Chapter 6).
3. Some smaller local markets are more valuable than larger international target mar-
kets. Just because mass communications on a global scale are possible, it does not
necessarily mean that marketing to all countries is the most effective and suitable
approach.
4. Attractiveness of international markets is determined by national characteristics such
as access to technology, economic power, political stability, digital capabilities and
freedom of expression.
All these characteristics need to be evaluated before a specific market can be considered
sufficiently attractive to invest in through an Internet-based approach to international
marketing. For example, Australia has just about everything a British marketer would
326

want in terms of technology, economic power, political stability – apart from the
continued tyranny of distance for physical and electronic shipping (Australia’s distance
from the UK is such that the physics of a data exchange automatically induces lag
between server and client).
Is all Internet marketing a form of international marketing?

Despite the global reach of the Internet, not all web-based marketing can realistically
be classified as international. While anyone, anywhere, can access the promotional
and information materials on a given website, actually accessing the full range of ser-
vices and products offered by the company running the website may be limited by
geographical or other constraints. As is the case with all aspects of the Internet, some
companies choose to take full advantage of the range of benefits offered by the medium
while others choose a more limited role. That said, the distinction between e-marketing
and international marketing (marketing for export/import) is becoming increasingly
tenuous with the ‘Think local, download global’ mindset of the consumer.
Facebook is nominally an American corporation, set up under US regulations, sub-
ject to US laws and with a population of 19,750,940 residents in the UK (being a
US site, it doesn’t understand there’s a difference between England, Northern Ireland,
Wales, and Scotland). Facebook is thoroughly confusing from the classic export/import
approach. Content is hosted through the United States from various non-American
regions, and Facebook feels like a local operation to the average user (particularly with
the language options for Cymraeg, Gaeilge and UK English). By careful use of IP block
identification, Facebook can also detect where you are in the world and offer local-
ized language offerings (which must get very annoying for anyone backpacking across
Europe with a laptop).
If you’ve elected to sell through Facebook advertising, you can be selective and
regional in your approach. If you’re delivering services through Facebook via appli-
cations, it’s a little less selective (still possible, but usually ill-will generating when you
lock out certain regions). One of the dual-edge benefits of the Facebook user’s global/
international network of friendships is their tendency to want to share certain applica-
tions and games (such as ones based on Scrabble) with others, and the users have a ten-
dency to not want to have to put up with seemingly artificial barriers based on regions.
International orientation
e-marketing content can be classified in terms of commitment to internationalization
versus localization according to the following classifications:
◦ Domestic orientation: which is where the content, goods and/or services are intended
for the local area (this is a local website for local people). Availability can be IP locked
to region-specific domains (‘This video is not available in your region’) or unable
to be ordered without a credit card from the appropriate geographic region. Domes-
tic only may be a deliberate strategy based on limited capacity to supply a market,
ideological commitment to reduced carbon footprint, technical limitations (power
supplies, left-hand drive cars) or problems with licences, patents and trade embargos.
327

e-marketing
◦ International by default: these websites do not actively seek international clients but
will provide goods and services to anyone with a live Internet connection. They tend
to exist in the specialist product market which accepts that their niche market will
be based just about anywhere and has a consumer base that is willing to pay extra
for shipping for specific objects.
◦ International by design: these websites have a full international orientation, actively
seek external markets for their goods and services, and develop regionalized site
variations such as prices in different currencies.
◦ Regional franchise: which is where the site is owned by an international group and
uses a domestic supporting infrastructure such as a local domain (www.yahoo.co.
uk), local shipping and warehousing (www.amazon.co.uk) and provides specific local
content (www.google.co.uk/maps).
Distinguishing features of the four categories are outlined in Table 11.1 below. It’s
worth noting that the decision to have a local orientation, regional franchises or an
international approach should be based on the e-marketing strategy (Chapter 3) and the
extent to which the organization can deliver on the value offer across the distribution
challenges posed by international shipping (Chapter 6).
Some Internet marketing commentary has argued that everyone must be internation-
ally focused all of the time since the Internet means you can access the globe. Whilst
it’s true that you can reach out and ping someone in just about every nation, putting
a hyperglobal orientation onto the firm by thinking you’ve got something of value to
everyone everywhere is counter to the marketing ethos of customer segmentation and
developing specific value offers for specific markets. Rugman (2001) illustrates the dan-
gers of thinking the world is your monolith single segment stage by illustrating several
‘myths’ of globalization, such as:
◦ ‘the single world market’, which tends to assume that everyone is just like the
domestic market and that there are no significant differences such as currency, legal
regulations or language. It’s one site, one size, one shipping option and one single
universal market. Such sites often graduate from being local only through implemen-
tation of a ‘one world order form’ by upgrading their shopping cart software to accept
US and UK addresses.
◦ ‘the global strategy’, which assumes that a ‘one size fits all’ approach can be used
in a particular market niche around the world. This strategy tends to be adopted by
‘international by default’ marketers who haven’t considered how to finesse the global
reach of their site by offering different shipping options or letting the user change
the default pricing on the site.
◦ ‘free trade and free market access’, which are the sites that set up with an interna-
tional by design approach with an optimistic assumption that the significant legal
issues of government regulation, taxation and tariffs don’t exist in the ‘free’ market
of the Internet. These sites tend to end up prohibiting sales to certain regions after
a large number of their shipments are confiscated by Customs or the customers find
themselves with significant importation tax bills to pay on top of the quite extensive
shipping, handling and currency exchange charges.
328

Table 11.1 Characteristics of different international orientations
International by International by Regional

Characteristic Domestic default design franchise
Language Local Local/English Multilingual Customized to

the region
International Nil Market Product Market
strategy development development, penetration
market
development
Payment Offline option, Online, credit card, Online, credit Online, credit
bank transfer, PayPal (paypal.com) card, PayPal card,
cheque, domestic regionalized
credit card PayPal
(paypal.co.uk),
Currency Pounds Sterling Pounds Sterling, Pounds Sterling, Localized
Euro Euro, US Dollar, currency
Yen, Australia
Dollar
International None E-mail, shopping Shopping cart Shopping cart
ordering cart with US centric with specific with country,
states list countries states, cities
and regions
International None Courier/Royal Mail Multiple shipping Royal Mail
shipping options
Distribution Local pickup; One-off for Networks of Networks of
courier, postal. international orders; distributors in distributors in
No international heavy use of post select countries; different
options office and couriers; multiple shipping countries;
expensive per order alternatives; economies of
reasonable cost scale
Copes with Yes No Maybe Yes
UK postcodes
Domain .co.uk .com UK subdomain .co.uk
Thankfully, Rugman (2001) also provides three basic rules for international trade.
1. Think local, act regional.

2. Pay attention to government regulations.
3. Recognize world trade blocs and regions and segment accordingly.
329

e-marketing
Think local, act regional

Limit the geographic focus of a website or distribution strategy. Although the Internet
can reach out to anywhere on the globe (including the International Space Station),
acting regionally allows marketers to reap the benefits of the Internet while working
within a confined territory. Whilst you can get eBay in space, the postage charged by
NASA is astronomical.
Pay attention to government regulations

Rugman’s (2001) identification of the myth ‘because it’s the Internet, governments
don’t apply’ can inform Internet marketers as to how to minimize their exposure to
international court cases. Extradition laws can and do apply, and prohibited activity in
one nation is going to remain prohibited even when you’re providing the component
parts from another geographic region. Minor issues such as the differences in local rat-
ings for film, television and games can have serious consequences – Australia doesn’t
have the equivalent R18 rating for video games which means games in the adult clas-
sification which are on the shelf legally in the UK can’t be sold into Australia by direct
mail or digital download.
Zugelder et al. (2000) offer practical solutions to minimize exposure to legal risks in
various countries by either stating the limited trading area (e.g. ‘Products from this site
are available to UK and European Union countries only’) or actively rejecting trade from
selected regions (e.g. ‘Products not available for shipping to Antarctica’). Sites which
engage in global trading can establish ‘choice of forum’ legal clauses in their sales
contracts that indicate which nation’s legal system will be used to settle any dispute.
Overall, if you’re going to go for the global market, be smart about it, and look at the
legal risks associated with the countries where you expect to find your major markets.
Recognize the world trade blocs, regional limits and

other geographic segments
Observe trading blocs for the express purpose of dealing with regional trading areas
rather than perceiving the world as a single marketplace. If nothing else, breaking the
world down according to the DVD region codes means identifying which areas have
machines that can read particular DVDs (and if a region 0 DVD strategy is the best for
you). Similarly, regional variances in basic elements such as electrical voltage means
thinking through whether your product needs an adaptor, different power plugs or dif-
ferent transformers in the main device. Right hand side and left hand side of the road
driving can influence the design issues for GPS mounts, hands-free car kits and other
devices (including the way the mapping software is going to be thinking through which
lane is needed for turning). Other variations between regions include religious observa-
tion, strength of individualism versus collective orientation (sell as ‘buy one and be
unique’ or ‘buy one and fit in’) and the role of innovation as a menace or advantage
to society. Thinking in terms of trade regions in the first instance will also assist in
330

developing the right mind set for developing the appropriate segmentation strategies
within each bloc, region, country, geographic region or market cluster. Remember, you
sell to individuals (customers) not to conglomerates of national averages (nations).
Pragmatics of international e-marketing

If you’ve decided that your e-marketing strategy (Chapter 4) should incorporate an
export element, then the next section is definitely for you (if not, you possibly could
skip a few pages if you’re confident exporting won’t be in the exam). When considering
international e-marketing, your strategy will vary depending on the type of exporter
you want to become. This in turn will influence the type of entry mode and in turn,
the respective barriers to exporting that can be influenced through the use of various
aspects of e-marketing.
Pick your exporter type

There are two main types of exporters based on the organization’s commitment to
internationalization and the effort invested in the process: regular exporters and spo-
radic exporters. Regular e-marketing exporters fit the mould of the traditional, offline
exporter in that they have a clear commitment to developing an international orien-
tation and are prepared to put in the resources to develop an international marketing
programme. For these organizations export activity is core to their business, not just
an add-on. To take a clear international orientation requires the firm to develop safe,
secure, online ordering and payment systems. There must also be, for all physical
goods, an adequate and appropriate method of delivery. Such systems require signifi-
cant investments of financial and human resources and, in many cases, will also involve
the development of strategic alliances with local partners. This would not only ensure
delivery of goods, but would also assist in complying with local regulations.
Sporadic exporters are the ‘international by default’ class of e-marketers who have
benefited from the online environment providing opportunities for a reactive approach
to their international marketing orientation. Often small or niche businesses, these
organizations respond to international inquiries and, where possible orders, but do
not have the same investment in export infrastructure that is apparent with regular
exporters. Their international activities tend to be opportunistic rather than part of an
integrated strategy. Sporadic exporters are not always as planned as regular exporters
and yet can can still be very profitable. Further, it is not uncommon for sporadic export
to be a precursor to the development of an integrated, regular export orientation.
For many firms, the commitment and risk involved in developing a regular export
orientation in the first instance is too great. Sporadic export activity provides an oppor-
tunity to develop an international orientation with relatively low risk. This is consistent
with traditional stage-based or evolutionary views of the development of international
marketing activities (Andersen, 1993). One of the key benefits of the gradual devel-
opment of international markets is the experiential learning that occurs within the
organization prior to a major investment in export or other international marketing
331

e-marketing
activities. This evolutionary approach allows the organization to develop a sound

foundation of skills on which to base its future development (Bennett, 1997).
Entry mode
Entry mode is the means by which the product makes its way into the export market
and is best summarized as ‘What’s the most effective way of getting what we make to the
people who want to buy it?’ Entry mode options include the following approaches:
◦ Exporting direct by selling some of what the company produces to overseas markets
(international by default, international by design)
◦ Licensing the right to use the company’s process, trademark or patent to another firm
in another country for a fee or royalty (regional franchise)
◦ Contract manufacturing, where you hand control of the manufacturing of the goods
over to a local entity while retaining control of the marketing function (international
by design, regional franchise). Similarly, management contracting provides the top-
level approach where the seller provides management skills while others own the
production and distribution facilities within each region (regional franchise)
◦ Joint venturing, an international marketing arrangement whereby a domestic com-
pany and an overseas company enter into a long-term relationship (regional
franchise)
◦ Wholly owned subsidiaries, which occur when a separate business operation is set up
by the original company in the international market of choice (regional franchise)
◦ Multinational corporations, which are companies with a direct investment in several
countries (regional franchise, international by design).
If your e-marketing strategy is either regional franchise or international by design, then

the individualized approach will soon give way to the economies of scale provided
by the more established entry modes of international export marketing. The value of
e-marketing shifts into relationship management and the B2B marketing arena once
certain economies of scale start taking effect and the e-marketing presence is a front-
end brokerage for a range of other firms who handle order fulfilment, product creation
and shipping. Decisions as to how to enter the market are still important, particularly
for larger firms and firms that already have an international marketing focus.
The Internet with its global reach has allowed firms to slip into an export orien-
tation without necessarily planning to become an international firm. The decision to
export a proportion of the firm’s product used to be made largely on the basis of a
surplus in the domestic market combined with recognition of an opportunity in an
external market. The export company was often a local success that sought to repli-
cate its achievements in a new market once the major opportunities in the domestic
market had been exhausted. These days the success of the product may drive interna-
tional customers to the local producer and result in a demand-based export approach.
E-marketers need to consider the entry modes to access their new international mar-
kets and what forms of barriers to expect once they’ve elected to become sporadic or
ongoing exporters.
332

e-marketing and the barriers to exporting

Barriers to exporting are serious threats to both the ongoing and sporadic exporter
if they’re not identified and addressed as part of the marketing strategy. Issues of
distribution, market needs, customizations, regionalization and other aspects of clas-
sic market development need to be considered as part of the challenge of moving your
product onto the global stage. e-marketing can play a significant role in breaking down
some of Hamill and Gregory’s (1997) traditional export barriers, including:
◦ psychological barriers, such as perceptions of high costs, excessive risk, issues of eth-
nocentrism and the problems associated with ‘psychic distance’. Word of mouth
through Facebook, Twitter and other social media can reduce perceived risk in
international purchases. Product demonstrations on YouTube can provide the vicar-
ious adoption experience that lowers psychic distance and perceived risk (www.
willitblend.com).
◦ operational barriers, which include day-to-day issues such as excessive paperwork,
delays in payment, transportation problems and distribution difficulties. Even some-
thing as basic as the services provided through Gmail, Google Documents and Google
Wave can reduce the amount of physical document movement required for com-
merce. PayPal can accelerate the speed of international financial transactions which
are notoriously slow and high priced in the banking sector.
◦ organizational barriers, which arise due to the lack of human and financial resources
within the organization available to deal with the extra demands of international
marketing activity. They also arise due to lack of knowledge about, and experience
in, foreign markets. Outsourcing, local sourcing and crowd sourcing can provide local
knowledge, skilled workers and on-the-ground allies in HR, finance and other areas
of expertise.
◦ product/market barriers, which refer to the specific issues of product modifica-
tion and export restrictions that impede international trade. Some of these prob-
lems can be anticipated in advance through online research, accessing interna-
tional patent office registries and through the old-fashioned method of talking
to people in the target market about their needs, wants and known government-
imposed limits.
As a medium, the Internet is best designed to both seek and send information. In the
early stages of deciding whether to broaden the company’s base to include the inter-
national market, relevant information is invaluable. Many of the problems which
traditionally face new firms seeking to export, in terms of finding out about suppliers
or local regulations, can be significantly reduced through a few hours on Google, Bing
and import/export websites in the target markets (Bennett, 1997). Access to information
combined with a common international Internet protocol and culture assists in reduc-
ing some of the psychic distance often felt between countries. Given the global spread of
Facebook, Twitter, MySpace, Google and other companies, there’s a certain pre-existing
shared frame of reference between you and your international target market based on
shared use of similar services.
333

e-marketing
} Applications of the Internet

The third part of this chapter discusses the application of various aspects and elements
of the Internet to marketing activity. Once again, we break out the lists, charts and
tables to create a few different ways to think through how to use the Internet for fun
and profit.
Ten techniques
When looking at implementation it is critical that both strategic and tactical issues are
considered. While there are no hard and fast rules or simple templates to be applied for
setting strategic directions, Bayne (2000) identifies ten key strategy areas which need to
be considered before going online.
1. View the e-marketing as an adjunct.

2. Use communications strategically.
3. Cross-pollinate.
4. Provide extra value.
5. Analyse content and its use.
6. Re-purpose material.
7. Design with online in mind.
8. Plan frequent revisions.
9. Manage for the long term.
10. Set reasonable goals.
View the e-marketing as an adjunct

e-marketing is one option in the broader field of marketing. Unless you’re planning a
purely online venture with the majority of your work in the electronic sphere, there’s
plenty of offline opportunity to be developed by remembering that the end user you’re
targeting lives in the physical world (even if they’re online a lot). e-marketing is one part
of a continuum of operations and the degree to which you’re predominantly online or
offline will dictate to what extent e-marketing is central or peripheral to daily opera-
tions. The good news is that online and offline marketing activities are synergistic (yes,
that’s a legitimate word to use). Full integration of both sides will have greatest suc-
cess as you can work to the respective strengths of each (it’s called leverage, another
misunderstood term in marketing). Simply setting up all of the accounts featured in
the Introduction is not enough to be an online marketer. Your online presence is not
a direct, immediate substitute for existing activities such as direct mail, research and
development, customer relationship management and a range of other complementary
existing offline activities.
Use communications strategically

Think before you speak has always been a useful mantra, and thinking before you
communicate is central to effective online communications. E-mail has its place as
334

a valued and valuable communication tool between marketer and customer once
you’ve already established a relationship, as long as you use that established connec-
tion carefully. Online communication can occur through Twitter, Facebook, e-mail,
blog posts and community announcements, instant messaging and SMS. This means
it’s worth considering each of the communication channels you have, how the cus-
tomer would use them in their day-to-day life and whether what you’re about to
say as a commercial entity would be useful, relevant and meaningful or a serious
faux pas. If the channel is personal and private, then a commercial message basically
interrupts the conversation and is most unwelcome. Whatever happens, don’t assume
that your message has any inherent merit just because you’re sending it – it’s far too
easy for a marketer to get caught up in their product and think any opportunity to
talk about it is a good opportunity. Be judicious in the application of e-marketing
communications and know when and where to talk to the customer based on the
customer’s preferences.
Cross-pollinate
One of the best forms of promotion for online activities is offline, with mobile com-
munications of online content being seen as increasingly viable and valuable. People
still leave their keyboards to encounter the outside world, and the majority of cus-
tomers meet their marketing information, promotions and advertising offline via radio,
billboards, newspapers, magazines and so on. Incorporate your web or e-mail address
into all offline promotional activities to prompt visits by potential and current users.
If you’re going with m-marketing in the physical world, options such as SMS, Bluetooth
and QR codes mean that the consumer can interact with your static message and move
the marketing from where they encountered it (bus shelter, train station, newsagent) on
their own terms to the mobile devices (Chapter 13).
Provide extra value

In Chapter 5, relative advantage was highlighted as a vital part of the innovation adop-
tion process and that’s the principle at work in providing extra value through the
e-marketing efforts. Give people a reason to use your site, visit your web pages, read
your blog, follow you on Twitter or subscribe to your newsletter. As obvious as this may
sound it is not always done, and it’s not always done from the consumer’s perspective.
Remember, just because you’re on the Internet it doesn’t mean that you’re valuable
to the consumer. Similarly, the communication channels you feel provide the ‘extra
value’ may be just the default expectation of your customer base. Think through (and
market research) the sort of benefits the market wants from your product, website and
online interactions as well as those that are expected as a minimum. Does the market
want a gift shop, a retail outlet or an entertainment park? Can you offer extra infor-
mation not available elsewhere? Cheaper distribution alternatives? Better aftermarket
support or exclusive additional services? Meet the basics and build from there to provide
the extra value.
335

e-marketing
Analyse your content and its use

The best part of e-marketing is the sheer volume of raw data that comes with the use
of products and the ability to see what changes should, could or would benefit the
customer based on how they’re using the offering. Steam provides one of the most
visually illustrative examples of understanding customer use with the openly available
Steam statistics (http://store.steampowered.com/stats), and particularly the publication
of game play statistics surrounding the Team Fortress 2 flagship product. Valve cap-
tures data on how the game is played, what proportion of the player base has qualified
for which achievements, win-loss ratios on various maps and a series of heat maps
indicating the most common places for character death on the game maps (www.
steampowered.com/status/tf2/tf2_stats.php) All of this data is collected and processed
automatically as part of the game server’s standard operations. Whilst the initial mar-
keting value isn’t readily apparent, when Steam publishes this knowledge to the gaming
community, it gives the player base a way to learn about the game from a strategic level,
such as when it’s time to be on Red (Payload Map, Hoodoo, last round), and which class
has the worst life expectancy (Scout or Pyro). Valve also uses the Steam download client
to run periodic opt-in surveys of the user’s hardware so it can inform its business part-
ners as to the type and nature of the machines used by their shared customer. Accurate
market information assists the program developers in creating software compatible for
their target market, which gives both Steam and the programmers a better chance of
delivering a satisfactory game to their shared audience.
Product design will influence how a product is used and the value repeat customers
derive from it. Websites can be tracked and measured using basic analytical tools from
Google (Chapter 10) and site logs can be analysed to see which parts of the site are
drawing traffic and which are being ignored. If you set up a complex cybercommunity
and virtual world and both are empty after several months of operation, you can be
confident that these weren’t the killer applications for the customer. Similarly, if one or
two blog posts draw enormous traffic in contrast to the rest of the content, you can be
safe in assuming that you hit an interesting combination of ideas that the market wants
to hear about again.
Re-purpose material
Re-purposing means to take content from one medium and reuse it on another. While
a purely online brochure approach is to be avoided, much of the information and text
already designed for offline purposes can be used online. One of the advantages to a
limited amount of re-purposing is that it assists in creating consistency of image for
the organization across media platforms. In the Introduction you were instructed to
develop a sequence of bio statements that could be used and reused at various websites,
communities and other places around the Internet. Blog posts can be collected, edited
and re-purposed as books for sale (www.lulupress.com) and classic images, comics or
visual content can be redone for printing on mugs, shirts and other merchandise
(www.zazzle.com).
If customers contact you directly with a similar series of questions, can you pro-
vide generic answers on the Web? Re-purposing their questions into cues for FAQs can
336

increase the value of the site and decrease the drain on resources which occurs when
answering the same standard question time and time again. Such questions might also
highlight an aspect of your design that could benefit from revision at the next upgrade –
if you’re constantly asked ‘Where’s the on switch?’ you can be certain that the on-switch
needs a higher profile on the next design iteration.
Finally, one of the more interesting aspects of the data collection and documentation
you’ve undertaken at various points in this book is the option to re-purpose the material
as blog content, white papers and other documentation either for sale or to promote
your Internet presence through the gift economy (Chapter 15). A reworked PowerPoint
presentation for the shareholders can find new life online (www.slideshare.net) as a
promotional tool for your company.
Design with online in mind

Not all materials from traditional media translate effectively into the online environ-
ment and vice versa. The impact of online advertising and promotion needs to be felt
in a single frame. Offline promotions can use techniques such as double-page spreads,
consecutive pages, teaser campaigns and so on can be used to create an impact – and
look terrible if applied straight into the web page. Scrolling down a two column lay-
out in a PDF is not a pleasant task. Online design can include features not available
offline such as animations, direct links and staggered levels of information. Offline has
virtually no load time, limited compatibility errors and vastly superior resolution and
frame rates. The key to successful design in creating content that fits both website and
printed page is to create designs which have elements consistent with the strengths of
each medium/platform and the IMC requirements for a unified tone and style.
Plan frequent revisions

Customer expectations of immediacy means there’s a limited window for a website to
be out of date compared with print media. If anything, offline gives greater gravitas to
the older content (Rolling Stones, Beatles) versus the new (The Beatles:Rockband). The
days of having a static site are increasingly limited, in part because Twitter, Facebook,
WordPress and the rest of the technology have improved the ability to make frequent
short updates and the market is more accepting of constant changes to content (that,
and someone has to pick up the daily word count if newspapers become extinct). A static
site has its value, although that value is probably archival, historical or a site full of
content that benefits from stasis. In most cases, letting the site become dated is a bad
look for the site and a worse look for the organization. Frequency of revision is deter-
mined by the type and nature of the product – a currency exchange site (www.xe.net/
ucc) that offers less than up-to-the-minute currency conversions will be perceived to
be out of date faster than a site archiving a past event. The most important factor in
content design and frequency of revision is the need to keep the positioning strategy
and corporate image of the site as the determinant of revision speed. Any website still
promoting an event as current after the event has happened will permanently damage
the company’s reputation for speed and efficiency.
337

338
Table 11.2 Combining behaviour, objectives, content, attractor types and the marketing mix
Behaviour Objective Content type Attraction type Mix element Sites/services

e-marketing
Learn ◦ Information ◦ Content archives ◦ Advocacy Product ◦ Wikipedia

◦ Journals and blogs ◦ Comparative information ◦ TV Tropes
◦ Single-purpose sites ◦ Corporate information
◦ Index
◦ Blog
October 28, 2010 12:53

Search ◦ Information ◦ Service sector ◦ Direct response Promotion ◦ Google
◦ Promotion ◦ Freeway intersections ◦ Bing
Communicate ◦ Promotion ◦ Exclusive sponsorships ◦ Advocacy Promotion ◦ IRC

◦ Engagement ◦ Town halls ◦ Brands/branding ◦ MSN Chat
◦ Market research ◦ Clubs ◦ Direct response ◦ Gmail
◦ Customer service centres ◦ Twitter
Journals and blogs
MAC/DANN
◦
Convenience ◦ Cost saving ◦ Content archives ◦ Brands/branding Price ◦ Amazon
◦ Cost cutting ◦ Gift shops ◦ Comparative information ◦ eBay
◦ Behaviour change ◦ Retail outlets ◦ Direct response ◦ iTunes
◦ Service sector ◦ Index ◦ Cloud computing
Page-338
◦ Customer service centres ◦ Retail/sales
Community ◦ Engagement ◦ Entertainment parks ◦ Direct response Distribution ◦ Facrbook

◦ Market research ◦ Town halls ◦ Blog ◦ Orkut
◦ Brand loyalty ◦ Clubs ◦ Twitter
◦ Journals and blogs
Anonymity/ ◦ Retail ◦ Gift shops ◦ Index Distribution ◦ Blogger
pseudonymity ◦ Sales ◦ Retail outlets ◦ Public service ◦ Online banking
◦ Information ◦ Service sector ◦ Retail/sales ◦ Retailing
◦ Customer service ◦ P2P
Escapism ◦ Entertainment ◦ Entertainment parks ◦ Direct response Product ◦ World of Warcraft
9780230_203969_12_cha11
◦ Content archives ◦ Index ◦ Shockwave
◦ Clubs ◦ Retail/sales ◦ XboxLive
◦ Single-purpose sites
Recreation ◦ Entertainment ◦ Entertainment parks ◦ Brands/branding Distribution ◦ Steam-powered
◦ Information ◦ Content archives ◦ Direct response games
◦ Clubs ◦ Index ◦ YouTube
◦ Gift shops ◦ Retail/sales ◦ TVTropes
◦ Journals and blogs ◦ Blog/Life stream
◦ Single-purpose sites
Social pressure ◦ Information ◦ Exclusive sponsorships ◦ Advocacy Price ◦ The Internet
October 28, 2010 12:53

◦ Sales ◦ Town halls ◦ Direct response
◦ Behaviour change ◦ Service sector ◦ Index
◦ Customer service centres ◦ Public service
◦ Retail/sales
Inherent ◦ Rocking out ◦ Entertainment parks ◦ Advocacy Product ◦ Google Goggles

awesomeness ◦ Sales ◦ Exclusive sponsorships ◦ Brands/branding
New product Journals and blogs Direct response
MAC/DANN
◦ ◦ ◦
development ◦ Blog
Vending ◦ Sales ◦ Content archives ◦ Brands/branding Distribution ◦ Amazon
◦ Cost saving ◦ Gift shops ◦ Comparative information ◦ iTunes
◦ Cost cutting ◦ Retail outlets ◦ Direct response ◦ Steam
Page-339
◦ Service sector ◦ Index ◦ Netflix
◦ Customer service centres ◦ Retail/sales
ATM ◦ Sales ◦ Service sector ◦ Direct response Price ◦ Banking

◦ Cost saving ◦ Customer service centres ◦ Index ◦ m-banking
◦ Cost cutting ◦ Public service
◦ Service delivery ◦ Retail/sales
Self-expression ◦ Self-publishing ◦ Town halls ◦ Advocacy Distribution ◦ Flickr

◦ Inherent merit ◦ Clubs ◦ Brands/branding ◦ YouTube
◦ Self-promotion ◦ Journals and blogs ◦ Direct response ◦ Blogger
◦ Self-distribution ◦ Single-purpose sites ◦ Political/lobbying ◦ WordPress
9780230_203969_12_cha11
◦ Public service ◦ Livejournal
◦ Blog/Life stream ◦ Twitter
◦ Zazzle
◦ Cafepress
339
e-marketing
Manage for the long term

Online marketing activities will not necessarily return immediate, measurable, finan-
cial gains. Neither will building a new factory (think of the capital sunk into that
which could have been used for sales), hiring a new accountant or many other activ-
ities in the Porter Value Chain. The key to success is marrying up the metrics of
the online activity with the sales data of the organization to demonstrate where the
online meshes with the offline activity to create overall company benefits over time. Set
longer time frames for achieving goals whilst focusing on the shorter-term tactics and
implementation timelines.
Set reasonable goals

Use SMART objectives (Chapter 3) and set up realistic expectations for the technology.
Some companies can point to quick Internet successes, immediate Facebook success
and instant failure on Twitter. Most will achieve more modest goals over longer time
frames – even failure takes time in the modern era. Realistic objective setting means
thinking of e-marketing as a method of achieving the ends of the organization. It is
not the end in itself. Social media is one tool in the e-marketing kit, alongside digital
distribution, m-commerce, community development and the marketing mix. Knowing
what works, where it works and how you’ll be using it to meet your goals is much more
valuable than any SEO, keyword optimization or social media strategy in isolation.
Matching business and consumer applications of the Internet

In Chapter 5, thirteen behaviours were outlined as a sampler set for the ways and means
by which an average member of your target market could make use of the various fea-
tures of the Internet. Table 11.2 combines the behaviours from Chapter 5 with business
objectives (Chapter 4), content and attractor types (this chapter), the marketing mix
(Chapters 6 and 7) and a set of exemplar sites and technologies.
} Conclusion
This chapter is the first of the applications chapters which take the concepts and ideas
from the front end of the book and start putting the various models and ideas to work
in practice. This chapter has focused on international applications and the purpose of
different websites from a consumer perspective. Whilst the Internet is an international
medium that can facilitate marketing and commerce on the international stage, not all
e-marketing can or should be considered international marketing. As is the case with
any marketing approach, the strategic implications of moving into international com-
merce need to be taken into consideration before making the decision to engage outside
of the local area. Similarly, barriers to effective international engagement such as differ-
ing international product standards are as applicable to the online business as they are
to the traditional exporter. In relation to the purpose and use of the website from a
340

consumer perspective, determining what your site is designed to achieve – be it enter-

tainment, advocacy or sales – is essential before any marketing strategy is developed.
Inconsistencies between what the company wants the site to achieve and the way in
which consumers use the site can lead to false perceptions of failure. Success in the
online marketing environment, like success in traditional environments, is based on
developing realistic and achievable objectives which play to the strengths of both the
company and the medium.
} References
Books and journals
Andersen, O. (1993) ‘On the internationalisation process of firms: a critical analysis’, Journal of
International Business Studies, 24(2): 209–31.
Bayne, K.M. (2000) The Internet Marketing Plan, 2nd edn. New York: John Wiley.
Bennett, R. (1997) ‘Export marketing and the Internet: experiences of web site use and perceptions
of export barriers among UK businesses’, International Marketing Review, 14(5): 324–44.
Dholakia, U.M. and Rego, L.L. (1998) ‘What makes commercial web pages popular? An empirical
investigation of web page effectiveness’, European Journal of Marketing, 32(7/8): 724–36.
Hamill, J. and Gregory, K. (1997) ‘Internet marketing in the internationalisation of UK SMEs’,
Journal of Marketing Management. In J. Hamill (ed.), Special Edition on Internationalisation,
13(1/3): January/April.
Kottke, J. (2008) ‘Single Serving Sites’, http://kottke.org/08/02/single-serving-sites (accessed
11 July 2010).
Rugman, A.M. (2001) ‘The myth of global strategy’, International Marketing Review, 18(6): 583–88.
Watson, R.T., Akselsen, S. and Pitt, L.F. (1998) ‘Attractors: Building mountains in the flat landscape
of the Internet’, California Management Review, 40(2): 36–56.
Wen, H.J., Chen, H.G. and Hwang, H-G. (2001) ‘E-commerce web site design: strategies and
models’, Information Management & Computer Security, 9(1): 5–12.
Zugelder, M.T., Flaherty, T.B. and Johnson, J.P. (2000) ‘Legal issues associated with international
Internet marketing’, International Marketing Review, 17(3): 253–71.
Web references
Blogger www.blogger.com
Dreamwidth www.dreamwidth.org
Google Maps www.google.co.uk/maps
Internet Archive www.archive.org
Internet Movie Database www.imdb.com
Is it Christmas? www.isitchristmas.com
is.Gd www.is.gd
Jamendo www.jamendo.com
Legaltorrents www.legaltorrents.com
Lloyds www.lloydstsb.com
Lulu www.lulupress.com
Open Diary www.opendiary.com
341

e-marketing
Scribd www.scribd.com
Steam Games Play Stats http://store.steampowered.com/stats
Team Fortress 2 Stats www.steampowered.com/status/tf2/tf2_stats.php
TV Tropes www.tvtropes.org
Vox www.vox.com
Wayback Machine www.waybackmachine.com
Wikipedia www.wikipedia.org
Will it Blend? www.willitblend.com
WordPress.com www.wordpress.com
XE – Universal Currency Converter www.xe.net/ucc
XKCD: Bored with the Internet www.xkcd.com/77
XKCD: The Inter-blag www.xkcd.com/181
Yahoo! www.yahoo.co.uk
342

CHAPTER 12}
Social media
• be able to integrate a social media campaign into your e-marketing strategy

• be conversant with several of the major social media sites
• appreciate the different roles that social media can play to achieve organi-
zational objectives
• understand why you had to sign up to some of the services featured in the
e-introduction (setting up for e-marketing) and how they fit into the bigger
picture of e-marketing.
343

e-marketing
} Introduction
Before trying to integrate social media into an overall interactive marketing campaign,
it is first necessary to understand the general principles and technical requirements that
set social media apart from the rest of the Internet. After outlining these principles, this
chapter moves into a discussion on the compatibility of the innovator categories with
the general premise of social media activity before stating what is required in a social
media plan. The chapter concludes with a run through some of the more high-profile
social media sites. We’ve taken the view that social media is an adjunct to e-marketing
and can work alongside any aspect of the marketing mix. Consequently, there’s more
background briefing required to see how the market fits with the technology before
trying to put together a game plan to make best use of the social media options for your
e-marketing. In other words, the social media element needs to take into consideration
not only what you as the marketer thinks is great, but also what your customers will
respond to.
Disclaimer: anti-social media }
This chapter comes with a warning – social media is about social interaction with
other people. If you’re not the sociable type, then social media is a nightmare of awk-
ward moments, fumbled conversations and wishing the Earth (or Internet) would open
beneath your feet and let you disappear. On the other hand, if you like other people
and enjoy talking to them, writing e-mails and engaging in conversation for the sake of
conversation, then social media is particularly enjoyable. Just because this technology
exists doesn’t mean that you’ll have the personality traits to enjoy it simply by setting
up the accounts in the e-introduction. (It should be noted that one of the authors is
quite the chatterer and the other misses the silence you get from the delay between
writing a letter and getting a reply.)
} Social media
Social media is about interconnection between content, users and communication tech-
nologies. It can be focused around a specific website (Facebook), online service (Twitter)
or the broader Internet at large (Google Sidewiki). The principle underpinning the rise
of social media as the current modus operandi for the Internet is an inherent belief in the
value of connecting with other people. This approach to the online world focuses on
virtual presence and virtual geography (Chapter 1), whereby the geography plays the
intermediary role that connects consumers with each other (and occasionally connects
them to companies). This approach also moves the products provided by social media
services into the realm of the experimental with an emphasis on the value of facilitating
consumer-to-consumer connections for marketers, society and individuals.
344

Social media
Defining characteristics
Social media is characterized by three complementary and interconnected elements of
communications media, content and social interaction.
1. Communications media is the virtual infrastructure that allows social interaction

and content to co-exist in real time and to share the same virtual space. This links
back to Figure 1.2 (Chapter 1), the network of networks and virtual geography.
Facebook, YouTube, Flickr and the other social media sites are distinct spaces within
the overall experience of the Internet, and they have their own virtual geographies
without actually being virtual worlds.
2. Content is the draw that brings the individual to the site in the first instance –
photos (www.flickr.com), music (www.myspace.com), news of high school friends
(www.facebook.com) or videos of cats (www.youtube.com). Content links back to
the virtual product (Figure 1.4, Chapter 1) and to product components (Figure 6.1,
Chapter 6). The content may form the initial base for the shared goods of value
(Chapter 9) that lead to community, and tends towards being the actual or
augmented product sought from the social media service (Chapter 6).
3. Social interaction is the interconnection of the user with others directly through
the site (Facebook news feeds), third-party applications (Tweetdeck.com) or other
means of time-independent interpersonal engagement (connectivity through blog
posts and commentary). Time independence allows for the social interaction and
interconnection to be removed from the need for physical and temporal proximity.
All three elements must be present for a social media system to be in place online.
(Technically the Glastonbury Festival could qualify as social media, but we’re stick-
ing with online social media only for this e-marketing text). Figure 12.1 illustrates the
Traditional media
Newspapers, Books,
Films, Lectures
Content Communication
media
Social
media
Telephones,
Conversations e-mail, mail
Games, Tutorials
Social interaction
SMS, IRC
Figure 12.1 Social media components
345

e-marketing
overlap between communications media, content and social interaction and the related
categories of content interaction that underpin the user’s experience of social media.
The overlap between the three elements of social media provides some additional
benefits from a consumer behaviour perspective as social media can be a quite new
to less-than-new experience if positioned correctly. (If you’re desperately seeking the
innovators, pretend there’s no overlap that created the mythical Isle of Social Media.)
Borrowing Table 10.11 briefly, we’ve collected the sort of behaviours that the Rogers
(1995) adopter categories would associate with social media activity (Table 12.1).
There are two important issues connected to the social media technologies, social
media users and the state of the Internet as it moves towards maturity in the product
lifecycle (Chapter 3). First, Web 1.0 was the era of the innovator, when you needed the
personality traits of adventure seeking, tolerance for technical failures and a bucket load
of diverse technical skills for accessing the Internet in the first instance. Web 2.0 is the
age of the early adopter and it’s seen the parallel rise in the sort of activity that early
adopters love most – talking about what they’re doing and providing a leadership role.
As the Internet develops, the shift in social media will move from ease of publication,
communication and conversational broadcast towards a Web 3.0 medium where ease of
listening, aggregated content and followership will be commonplace as Internet growth
starts to peak into the late majority/market maturity phase.
Table 12.1 Innovation characteristics and social media
Relative
Innovator Loads of new Disposable Customization Beta tests Yes. Low

(diversify) sites to try accounts and options account ID
identity number
Early adopter Broadcast Conversations, Applications, In the High follower
(diversify, platform for proclamations customizations invite-only counts/friends
market leadership and followers and fashion beta test scores
penetration) setting
Early Can follow Tracking the Reduced as Joins to follow Meme
majority early adopters fashions simplified or a celebrity. participation/
(market from the ‘lite’ version Stays for the overt
penetration) fashionable emerges gossip re-tweeting
Late majority Can watch, Offline friends Only uses basic Someone else Complains it’s
(market listen and not and online functions sets up the everywhere
development) participate family account
Laggard (Why None if you’re Compatible Pleasantries, It certainly Noticeable by
me?) not sociable with awkward social etiquettes feels that way their absence
high-school and good form
experiences
346

Social media
Secondly, the innovators and early adopters will not be the bulk of the audience
who will use the Internet despite them being the bulk of the people who will pro-
duce the user-generated content. This is a feature of the social systems that aggregate
towards peer affirmation, group-wide endorsement, adoption through imitation and all
of the other social norms that have served humanity so well from the advent of fire
to m-marketing and beyond. Nielsen (2006) talks about the concept of ‘participation
inequality’, which is where 90 per cent of users of a site such as Wikipedia are readers,
9 per cent are irregular contributors and 1 per cent actively generates content. There’s
some debatable maths that underpins the equation as these estimations are based on
the whole of online populations versus contributors to specific sites and assume that
everyone uses a specific site such as Wikipedia. (Not even Google has everyone, and
Google doesn’t accept user-generated content that often.) Despite the weakness in mak-
ing predictions about the overall numbers, the principle underpinning the idea is solid.
Limited numbers of contributors providing content to large numbers of observers is a
consistent theme in the online and offline worlds even if the exact ratios are hard to
calculate. Consequently, any given population will be dominated by the early and late
majority’s followership preferences.
Content creation requires innovation tolerance at two levels. First, it’s new content
that you’re creating and if you’re not inclined towards liking new things, you’re prob-
ably not going to like your own work or want to add to the volume of novelty in
the world. Secondly, acceptance of risk is par for the course for innovators, and the
social risk of content creation is an acceptable part of fashion leadership in the early
majority (and by acceptable, it’s also assumed that this risk is moderated by copying
the innovators). Opinion leadership and new content creation places the early adopter
and innovator in the driver’s seat for social media activity. That said, the features of
those market segments tend to decline as the adoption curve moves further along and
the emphasis shifts to the opinion followership and social compliance of the majority
adopters. Social media is the Internet’s equivalent of audience participation and it takes
a certain set of personal traits to be a professional on-stage performer and enthusiastic
audience participant compared with those who prefer to applaud politely as the limit
of their involvement. Respecting the boundaries and traits of your audience is vital to
social media success – not everyone needs to participate, not everyone wants to par-
ticipate, and they’ll be thankful if you let them sit quietly in the audience rather than
appear on the stage.
The social media revolution

‘Revolution’ is an overused word in the realms of Internet marketing and seldom is it
used in its meaning of ‘spinning around in circles, getting nowhere’. Rather it tends to
be used in its alternate meaning as heralding the ‘next big thing’. Taking both meanings
together, the ‘big thing’ in e-marketing is the return of human contact which looks
remarkably like the very thing that the Internet was supposed to have wiped out last
century. (It was generally feared that the Internet was going to put the human touch
and the intermediary into permanent retirement.) The current reinvention of the wheel
repositions the human being as a key point of differentiation for e-marketers through
347

e-marketing
the use of social media, conversations and the inconsistency of people being a feature
(not a bug).
Reintroducing the human touch into offline services is usually an obvious step
backwards from the point where organizational drive for efficiency overstepped the
customer’s desire to talk to machines (press 2 to be told to press 3 to continue). Simi-
larly, the online drive to automation came from demand in the marketplace to get away
from people (to a certain extent) and to make use of interactive technologies where the
market (customers and providers) felt that the role of the person was secondary to the
task at hand. Social media is the balance between the two extremes – an expectation
of the presence of people (social interaction) and automation (communication media)
connected to a particular virtual good, service or experience (content).
} Social media planning process

The social media planning process is loosely based on the marketing planning process
covered in Chapter 4. This time around, there are five steps in the process with two pre-
conditions (which means it’s probably actually seven steps). The social media plan starts
by inheriting a range of information, objectives, knowledge and pre-existing conditions
from the broader organization. This feeds into the process of converting objectives into
tactics based on the available resources for e-marketing (time, budgets, current position-
ing strategy) followed by a review of current communication strategies. This leads to the
final two stages – picking the target market and their preferred social media for engaging
in the conversation, and tracking the impact of this engagement on the organization
through metrics, information flows and knowledge management (Figure 12.2).
The aim of the social media planning process is to view the role of social media within
the context of the e-marketing plan and the broader context of the organization’s busi-
ness objectives. Many of the key decisions for the social media plan are pre-existing
From organization
1. What do we
want to achieve?
(objectives)
To organization
2. How do we achieve
5. What impact will this have? those objectives?
(metrics, decision making (tactics, positioning,
knowledge management) budgets, time frames)
4. Where is the conversation? 3. How are we communicating?

(target market, social media sites) (market research, market feedback
promotional plans, frontline staff)
Figure 12.2 Social media planning process
348

Social media
inclusions from other plans and planning processes, and as such, you can expect back-
referencing and cross-referencing to other activities to achieve maximum outcomes
from the e-marketing inputs. Similarly, having engaged the consumers directly in con-
versation, the social media planning process feeds back into the organization as a new
source of marketing observation (Chapters 3 and 4), product development (Chapter 6),
positioning assessment (Chapter 7) and metrics (Chapter 10). The planning process also
relies on the central assumptions that social media should not be seen as a dedicated
promotional tool, distribution channel or market research platform. (If you think mar-
keting means promotion, you may want to refresh your knowledge of the rest of the
marketing mix.)
Step 1: What do we want to achieve?

Step 1 in the planning process assumes that there’s an existing product somewhere in
the organization’s game plan and that the role of the social media activity is somewhere
in the ‘identify, anticipate and satisfy’ framework of the Chartered Institute of Market-
ing’s definition of marketing (CIM, 2005) and the ‘create, communicate, deliver and
exchange’ focus of the American Marketing Association’s definition (AMA, 2007). This
separates the professional use of social media from personal use insofar as personal use
of social media doesn’t require objectives, pre-existing value offers and the rest of the
marketing framework. You can actually just use social media for fun if you’re not doing
it for an e-marketing outcome. You’re still allowed to have fun in e-marketing just not
at the expense of achieving the objectives. All play and no work makes for a dull global
financial crisis sequel.
Objectives
The first business decision regarding social media is based on the organizational goals
for the current e-marketing activity. For the purpose of this section, we’ve addressed the
generic packet mix objectives (Chapter 4) with regard to social media. As you write your
own plans, you’ll have specific objectives that will need to be reviewed and recast into
goals for social media activity.
◦ Cost-oriented objectives involve reducing overheads from an organizational perspec-

tive and view the use of social media as low or lower cost channels to reach the
customer. It’s tempting at times to see YouTube as the world’s cheapest television
channel whilst ignoring that some of the expensive bits of the television commercial
production will still be needed if you’re going to upload something worth watching.
Time commitments (cost per hour, employee time, HR requirements, overtime and
weekend rates) for operating in a social media environment can’t be overlooked when
assessing if Facebook, Twitter or a blog would be a cheaper channel than outdoors or
print media.
◦ Sales-oriented objectives will be considerably more risky in social media since conver-
sations are part of the selling process, and selling isn’t necessarily why people get
together for a chat. The acceptable level of selling will vary according to the choice
349

e-marketing
of social media site, with Twitter fairly lowly ranked for its tolerance of ‘Click to buy
now’ when compared with Facebook advertising, affiliate links in blogs or YouTube
videos with links to sales sites. Don’t interrupt a conversation BUY NOW FROM
THIS AMAZING SITE and expect to be CHEAPEST PRICE FOR CHEAP THINGS EVER
rewarded for your tactlessness.
◦ Behavioural change objectives are at the core of much of the social media marketing
underway at the moment, where people are trying to encourage their customers to
connect to them on Facebook (which is unsettling when your kebab maker wants to
friend you), follow them on Twitter (real estate agencies aren’t that exciting), sub-
scribe to their blogs or be part of their community (Sainsbury’s Community Forum:
www2.sainsburys.co.uk/yourideas/homepage.aspx). Beyond that, social media has
been used to encourage social change, voting in elections, donations to relief efforts
and encourage weight change (up or down).
◦ Information dissemination objectives tend towards the use of headlines and links to
other content. During emergencies and other crises, Twitter has been invaluable
for putting out short alerts. These objectives are usually about getting information
around the social networks in a timely (and quasi-viral) manner through re-tweeting,
mutual status updating on Facebook, blog posts and the detailed information you can
muster in ten minutes of YouTube video.
◦ Promotional objectives are as controversial as sales-oriented objectives in social media
sites that are dominated by interpersonal communication. If you wouldn’t interrupt
a conversation on a bus or in a pub, then don’t interrupt a similar chat when you’re
online. Promotion in social media is similar to information dissemination in that
you’re trying to transmit a specific idea but with more persuasion than education in
mind. Facebook, YouTube and blogs do a better job, although there’s something to be
said for the power of a great bargain (better value per pound spent) to be comment-
worthy fodder for a Twitter update.
◦ Entertainment-oriented objectives in social media can range from just planning to be
interesting (www.cuteoverload.com), running an entertaining web application (pho-
tos of cats on Facebook), being a cat in a captioned photo (www.icanhazcheezburger.
com), being a cat in a video (Maru on YouTube) or just being a cat (@sockington).
Alternatively, your social media presence could be less feline centric (Figure 12.3) as
long as it’s about using the platform to provide entertainment to others (@stephenfry,
www.stephenfry.com, www.youtube.com/user/officialstephenfry). Stage 1 is effectively
inheriting the plans from e-marketing and the main organizational game plan, review-
ing them (and the spare information that you generated back around Chapter 3 and 4)
in order to be able to answer the next question.
Step 2: How do we achieve those objectives?

Step 2 is about answering some of the hardest questions in marketing planning such as
‘How do we do that?’, ‘Then what?’ and ‘Can we afford it?’ The question of affording
social media may seem at odds with the perception that social media sites are usually
free (or low cost freemium). However, since we’re in the marketing business, we need
350

Social media
Figure 12.3 Feline the social media momentum

to look at all of the costs involved in an e-marketing promotion including the hourly
budget of staff time, wages and so forth associated with the content creation needed to
fuel the social media campaigns. There are four broad areas to cover in Step 2:
1. setting tactics
2. adhering to the current (or proposed) positioning strategy
3. setting (and staying within) budgets
4. allocating timelines.
Tactics
Setting the tactics first and pick the platform second is a method designed to ensure that
the social media site stays firmly in the ‘means’ rather than ‘ends’ camp. There’s going
to be an initial desire to pick a platform (Facebook) and try to retrofit the campaign
into the features of the site. This approach of considering the tactics first and matching
tactics to markets and social media sites also keeps the social media as an integrated
part of a larger holistic marketing campaign approach. Table 12.2 lists a set of sample
objectives, tactics and ways to implement them in social media.
The aim of the tactics section is to think through what you need to achieve in
order to meet the broad objectives. This is where it’s well worth revisiting the previous
plans for their tactics, game plans and implementation suggestions. It’s also where you
need to break out the marketing mix to consider how the objectives translate across
the different elements of it, and how the whole of the mix can be brought to the
351

e-marketing
Table 12.2 Sample tactics
Objective Sample tactic Likely social media site
Cost-oriented Reduce advertising spent Set up accounts with YouTube

(youtube.com), Vimeo (vimeo.com)
and other video-sharing sites
Sales-oriented Create affiliate links Have easy-to-use affiliate sales HTML
code for inserting into Blogger and
WordPress blogs
Behavioural Build and maintain a support Set up a Facebook group and
change group for participants encourage people to ‘Become a Fan’
of the project
Information Set up an emergency response Use a Twitter keyword related to the
dissemination donation account through PayPal disaster and a Bit.ly link to the
donation page
Promotional Hold a ‘Products in use’ photo Require photos to be tagged with a
contest with prizes for creative specific keyword on Flickr or Twitpic
product use
Entertainment- Produce a Flash or Shockwave Facebook. There’s nowhere else
oriented game based on criminal activity, on the Internet that brings such
farming, manual labour, hospitality inordinate love for washing up virtual
industry or cleaning fish tanks dishes while the real ones are ignored
social media. There’s always a risk in e-marketing that the nature of the Internet as
a communication device will focus thinking on promotion and distribution. This risk
is further amplified when the e-marketing is conducted on a media platform known
for its one-to-many-to-one broadcast capacity. Table 12.3 is a breakdown of the types
of uses of social media according marketing mix elements for each of the major packet
mix objectives.
The re-introduction of people into e-marketing is an interesting combination of exist-
ing technologies (e-mail, direct messaging, real time chat) with newer systems of social
media sites (community structures), along with the odd bit of voice and video technolo-
gies. As part of social media tactics, it’s also the point where you need to consider what
technologies and tools you’ll use to manage the social media (e-introduction: setting up
for e-marketing). These break down into three categories:
1. Direct management through the social media website: Using the site directly will give you
the same or similar end-user experience as the standard adopter of a social media site.
Plus, certain aspects such as Facebook’s advertising controls or Flickr’s metrics can’t
be accessed outside of the site itself. Whilst this usually is an optimal operation for
most social media sites, it does mean leaving the Flock web browser open all day at
work versus using task-specific software for campaign management.
352

Social media
2. Desktop software: Running the social media campaign from a desktop client comes
with a set of advantages insofar as software interfaces to the major social media sites
usually allow for multiple account management, or come with a range of additional
features that can be beneficial for the marketing. The downside to the software comes
from it being a third-party access and thus not being able to access all of the social
media site’s features. TweetDeck (www.tweetdeck.com) allows for posting content to
Twitter, Facebook and several other sites, but it can’t view these sites (and therefore
is mostly immune to the lure of Facebook’s games).
3. Mobile access: This involves using the site through a specific purposed application
on the iPad, iPhone, HT Desire or Blackberry. Whilst most social media sites can
be accessed through any web-enabled mobile phone browser, it’s not worth con-
sidering mobile marketing access to social media if you’re not running a dedicated
smart phone. You’ll want the processing power and easy keyboard access to make it
worthwhile both financially and practically.
In addition to working through the nitty gritty of the resources, technical issues and tac-
tics, you also have to ensure that what you plan on the social media front complements
and supports the rest of the e-marketing game plan.
Table 12.3 Objective, marketing mix and social media
Marketing
Objective mix Tactic Social media activity
Cost-oriented Price Higher margins per unit Positioning as a luxury brand

through social media exclusivity
Product Reduce production costs Accept user content submissions
with user-generated content through Flickr, Facebook or
MySpace
Promotion User-assisted automated Automatically post application
promotion use to Facebook status
Place Affiliate re-broadcast Shareable media, viral messages
Person Community advocates Endorse fan-created social
media groups
Process Use social media to talk Track hashtags on Twitter,
directly to users keywords on blogs, join
Facebook fan pages and engage
in conversation
Physical Support fan art, fan content Endorse quality fan-created
evidence virtual products
Sales-oriented Price Promotional discounts Exclusive codes through Twitter
Product Exclusive content for social Registering with a Facebook app
media users gains access to in-game special
items
353

e-marketing
Table 12.3 (Continued)
Marketing
Objective mix Tactic Social media activity
Promotion Promotional codes Re-tweet with #hashtag for a

special discount code for
15% off
Place Discounted shipping for Followers of a Twitter account
social media affiliates receive 5% discount on shipping
People Affiliate sales Facebook referrals
Process Social media-linked custom Print Flickr photos onto mugs,
products mouse pads or business
cards
Physical Discounts for product-in-use YouTube videos and Flickr
evidence content photos available for use receive
loyalty points or discounted
merchandise
Behavioural Price Twitter hashtags Reduce social risk by
change demonstrating mass adoption of
the idea
Product Regular instructions on Daily Twitter updates with links
maintaining ongoing to blog or YouTube video of
behaviours behaviour
Promotion Hashtags and bookmarks Conversations on Twitter
marked with #hashtag
Place Face-to-face meet ups by city Facebook events
People Twitter accounts Official staff accounts
Process Progress blog Description of the behavioural
changes document on a
regularly updated blog
Physical Badges for blogs HTML code and image for
evidence inserting into blog posts to
show progress
Information Price Visual guides to information Graphical guides posted to Flickr
dissemination
Product Detailed instructions YouTube step-by-step videos
Promotion Submission of content to Links on Delicious (www.
meta filters delicious.com), Reddit (www.
reddit.com) and Digg (www.
digg.com)
Place Creative commons licensed Easy linked or re-uploaded
content content to be shared through
blog posts
354

Social media
People ‘Ask the Expert’ chat Facebook chats

sessions
Process Social media outreach Answering questions and
responding to feedback through
Twitter
Physical Branded applications and Branded Facebook content
evidence content included information
applications
Promotional Price Temporary price 24-hour online sales with
reduction/special deals for bonuses for purchasing through
affiliate sales affiliate links
Product Product reviews Free products sent to review
blogs
Promotion Internet-only advertising, YouTube-exclusive trailers for
product previews movies, games and products
Place Social media sharing ‘Post to Twitter’, ‘Post to
buttons Facebook’ short cuts attached to
content
People Identified social media Official spokesperson account
staff
Process Official social media Verified Twitter account
accounts
Physical Branded social media Icons and images used on social
evidence media sites represent the brand
Entertainment- Price Freemium games Purchased with cash upgrades
oriented for Facebook games
Product Games Facebook applications involving
cows, mafia, vampires and
baked goods
Promotion Film trailers Embeddable content for blogs,
YouTube uploads
Place Dedicated social network Exclusive company-run network
for ‘insiders’
People Celebrity bloggers Paid for/sponsored tweets by
celebrity figures
Process Interactive YouTube video games, Facebook
demonstrations applications
Physical Icons, avatars and Twitter backgrounds, Facebook
evidence branded content profile pictures, Livejournal
icons and event-specific
sponsored themes for Blogger
and WordPress
355

e-marketing
Positioning
Positioning in social media is based on a combination of matching the right voice for
the organization in the way it communicates through a social media site with the right
style of site. MySpace, Facebook, Google Sidewiki and Blogger each have distinctive
tones, flavours and styles that can be determined by observation, experience and some
slogging through Google looking at where your competitors are running their social
media. Looking back at the generic positioning strategies from Chapter 4, social media
can be used as part of the overall IMC approach to placing the company into a specific
slot in the consumer’s mind in some of the following ways:
◦ Use or application positioning, which is what the end user actually does with the
product. Use positioning in social media lends itself to YouTube (product demonstra-
tion), Facebook (liking brands, products and activities), Delicious (tagged website)
and Flickr groups for types of photography.
◦ Product user positioning, which is based on who uses your product rather than how
it’s being used. This is a little more awkward in many respects as finding the people
who use your product may actually breach privacy laws or just make good customers
feel uncomfortable that you’re tracking them. Using some common politeness and
a sense of distance can be useful (just owning something doesn’t mean you want
to friend the manufacturer). It’s also worth developing affiliation markers (such as
graphic icons or badges for blogs) that you put on your own site to allow users to
self-identify with your company. Facebook pages for products and brands are the
most overt of the user-positioning activities.
◦ Attributes and benefits positioning, which involves basing your positioning strategy on
features and elements and means looking for keywords on Twitter, tags in Delicious
and using Google’s Blog Search. This positioning strategy is possibly the least effective
since social media is more about people than product features.
◦ Price quality positioning, which involves using prices associated with the goods and
services to influence perceptions. As such it will rely on careful selection of social
media content to maintain the appropriate look and feel. Prestige pricing doesn’t
work well with MySpace, and generic priced goods wouldn’t have their own exclusive
social media network.
◦ Cultural symbol positioning, which aligns your position in the market through images,
icons and wording which makes it near perfect for tapping into sectional interests
in social media. This is where Facebook groups, Livejournal communities and niche
blogs are viable means for social media positioning for your products. It’s also worth
using Delicious and other tagging services to see how people identify and cluster your
content in their own words.
◦ Product class positioning, which is the corporate word association game where you
align yourself against offers from outside of your own product category. Facebook
offers a means by which you can purchase advertising related to keywords in the
user’s profile, so if you’re looking for product class positioning, you can make
use of the customer’s self-proclaimed metadata where they identify their interests
356

Social media
(Xbox360) to pitch a product with product class positioning (It’s the Xbox360
of phones).
◦ Competitor positioning, which is done by focusing on a specific competitor and outlin-
ing the similarities or differences between you and them. This simply means being
on the same social media services as your nearest and dearest rivals just so you’re
not noticed by your absence. It’s probably the worst positioning strategy to take in
social media because you’ll inevitably start to show signs of not wanting to be on the
service if you’re only doing it to keep up with the Joneses.
The aim of the social media positioning strategies is to ensure compatibility with the
larger IMC agenda within the organization, which in turn ensures consistency between
your operations and the main company activity. Discrepancies between what you say
in social media and what your organization does elsewhere tend to inflict high levels of
brand damage in a relatively short space of time.
Budgets and time allocations

Costing social media campaigns requires an assessment of financial spend on con-
tent (including re-purposing existing content from other areas), HR spend on staff and
staffing numbers, and the time cost of assigning a staff member to the social media
project. Time costs are variable based on levels of success and the peak demand periods
for your social media teams. There’s also an HR issue in that the peak discussion period
for your product (particularly television shows) may be outside of regular office hours
and may result in overtime or the need for flexible work schedules. This could also
prove highly beneficial from a PR/publicity perspective if your organization is willing
to engage in creative and flexible HR practices to ensure staff are available during peak
social media demand.
Financial implications in social media are linked directly to the revenue to expendi-
ture approaches listed in Chapter 10. For the most part, social media activity starts out
as an outreach exercise in community engagement (Revenue 0), promotional activity
and brand building (Revenue 1) before becoming subject to the return on investment
requirements (which it should have from the first instance if you’re doing your mar-
keting plans properly). The type of revenue strategy is also heavily dependent on the
social media site and the prevailing culture of the system – you’re far more likely to
bank direct revenue (Revenue 3) through Facebook if you make an entertaining game
(entertainment objective) that can be enhanced through real-world cash payments via
PayPal. At the same time, if you try to push direct sales links through Twitter, you’re
likely to fail (and be marked for spam or blocked) unless you’re running a deal of
the day arrangement with once-per-24 hour updates. Flickr is usually, if not exclu-
sively, Revenue 0 centric, Google Sidewiki isn’t conducive to direct or indirect sales
and Livejournal is more community than marketplace with more value from unpaid
and unprompted product testimonials. Just be certain to include your stated revenue
expectations. If you’re relying on Revenue 0, where is the money to support it coming
357

e-marketing
from? Whose Revenue 3 are you using to cross-fund the activity? And what returns can
the organization expect for its investment in this activity?
Step 3: How are we communicating now?

Step 3 is another benchmarking process that encourages a critical review of the current
operations of the organization before embarking on the social media activity. There are
four areas to be considered.
1. Market research. How are you engaging with the marketplace directly to antici-
pate and identify their needs? What approaches are being used for monitoring,
observation and carrying out other research? (Chapters 3 and 4).
2. Market feedback. Is the market addressing the firm directly through unsolicited feed-
back? Are you receiving e-mail testimonials, @mentions on Twitter, direct messages,
snail mail, feedback on websites or nothing at all?
3. Promotional plans. What are you currently doing in the way of promotional activ-
ity? (Chapter 7). Are you talking at the market through one-to-many broadcast-style
communications (Chapter 6) or are you talking to the market through one-to-many-
to-one techniques? Are you engaged with the existing communities associated with
your products or similar products? (Chapter 9). The aim here is to document the
existing communication approaches to see where you can augment and enhance
the current IMC strategy and to avoid overlap or cannibalization of the markets.
4. Frontline staff. Who is currently talking to the customer on a regular basis? Services
marketing theory identified the boundary spanner staff member as the gateway point
between the organization and the customer. If you’re using a mixture of offline and
online means to engage the market, should you be allowing your frontline staff to
use social media accounts as part of their day jobs?
5. Knowledge management: What systems are in place to track user feedback, customer
requests and other key information about the way in which your organization talks
to, at and with customers?
One issue with regard to the boundary spanner staff is the extent to which you intend
owning their personal social media presence. There have been cases where newspaper
journalists have been required to have work profiles on social media networks and have
been prohibited by contract from owning or operating a personal profile on the same
network to avoid ‘brand confusion’. Sports stars have been instructed either not to have
public profiles on Facebook or to have their management run the profiles to main-
tain appropriate behaviour befitting a sponsor-owned sports media property. Knowing
how you’re currently communicating will also reduce the risk of a strategic blunder of
radically altering how you conduct yourself online – if you’ve personally been updat-
ing your own blog, Facebook page and Twitter account, you’ll need to explain why
you’re suddenly transitioning across to an editorial team staffed with ghost Twitterers,
bloggers and lawyers. If you do need to change style and voice, it’s effectively a rebrand-
ing and repositioning exercise (Chapter 6), and should be conducted with similar levels
of planning and market monitoring.
358

Social media
Step 4: Where is the conversation?

The fourth step is the first point where you shift focus from internal operations and
start examining where you’re going to set up operations in the social media field. There
are two approaches to consider when selecting your social media site. The first is to view
where your type of customer can be found through target marketing. The second is to
assess whether the social media site you’d like to use will be conducive to the sort of
activity you’d like to encourage amongst your target markets.
Target markets
Once again, this section of the plan draws on pre-existing decisions from the e-market-
ing and broader marketing plans to identify your priority markets, and where the
members of these markets can be found in social media. Key questions to consider are:
◦ Who are you currently addressing with your marketing communications?

◦ Who do you want to address?
◦ Do you want them to have the capacity to talk back to you?
◦ Why would they want to talk to you?
◦ Do you really need to be their friend?
◦ What value are you to them?
Simply being able to provide feedback and input into the firm isn’t a value proposition.
Whilst a portion of the social media early adopter crowd will expect to be involved in
co-designing products, and seek out the co-production opportunities, you’ll also have a
large slice of early and late majority audiences who believe their role in the process stops
at the purchase decision. Know your target market before heading into social media so
you know if you’re up for a conversation with the highly chatty innovator/early adopter,
or just doing FYI announcements for the early/late majority.
Social media sites

Picking a social media site should be done on the basis of whether the site is con-
ducive for marketing activity (and permits it to take place), whether the target market
is already there (or could be persuaded to join) and whether the organization is pre-
pared to take this seriously and do the hard work required for this activity to be done
properly (Figure 12.4).
In the e-introduction (setting up for e-marketing), we recommended a series of social
media sites for you to join, explore and generally poke around with in the settings
menus in order to familiarize yourself with the way the systems worked. (Those of you
who didn’t, go back to the e-introduction and set up shop. Come back when you’re
ready, we’ll wait for you.) The idea behind exploring, playing and tweaking around
with your personal accounts on social media sites is to gain an understanding of how
you can use them for your own personal gain (fun, time wasting, life streaming, virtual
racketeering, etc.). At this point, you’ll want to return to these sites to look at them
from a marketing perspective in terms of how the different mechanisms can be used for
achieving your organizational objectives. Table 12.4 outlines several of the sites listed
359

e-marketing
No. delete account and find

Does the social media site If no
a new service that permits
allow commercial activity?
commercial engagement
If yes
Set new objectives as

Is your target audience If no ‘behavioural change’ to
already here? encourage use of the social
media site
If yes
Is the organization prepared to If no No? What’s the point?

commit time, effort, money, staff
No commitment, no project
and content to the project?
If yes
Start social media project
Figure 12.4 Social media flow chart
in the e-introduction, together with sample purposes, objectives and strategies (there’s
more detail on each social media site later in this chapter).
Whilst it’s tempting to sign up to every social media site you can find (and one of
the authors did), it’s also unrealistic to think that you’ll benefit from a login at every
spot on the planet (Figure 12.5). Channel exclusivity is an effective strategy for social
media marketing and you’re better off with one or two complementary systems that
you maintain well rather than a dozen poorly updated sites.
Table 12.4 Short list of recommended sites
Site Purpose Objective Tactic
Blogger/ Social Conversational Reply to posts about the product,

WordPress commentary company or advertising
Delicious Self-organization Metrics Assess tags as positioning strategy metric
Facebook Social identity Promotional Fan pages
Flickr Photo sharing Information Sharing product-in-use photos
Google Yellow sticky Market See what people say about competitor
Sidewiki labels research sites
Livejournal Self-documentary Conversational Monitor for problems with the product
Twitter Life streaming Conversation Keyword monitoring
YouTube Sharing video Behavioural Instructional video
360

Social media
Figure 12.5 You don’t need to join every social media site
Source: XKCD (http://xkcd.com/146/)
Step 5: What impact will this have?

There’s no value in any marketing activity that doesn’t have an impact on the organi-
zation, its competitors and the marketplace. One of the areas of frustration espoused
by end users and social media commentators is the propensity of organizations to still
view the conversation between customer and company as a one-sided affair. If you’re
going to talk to customers because you think it’s worth listening to them, you’ll need
to specify how what you hear from the market is translated into some form of actual
outcome in the firm. There’s a line of thought that argues you’re better off not asking
for feedback if you don’t intend to act on it than you are to invite engagement and snub
the contributions. There are three areas that the social media campaign needs to feed
back into the broader organization:
1. Metrics. Your campaign needs measurements, the measurement needs to take place
and you’ve got to actually reach the goals that were set by the objectives and mea-
sured by the metrics. If you’ve come to social media to sell products and you’re not
seeing an increased number of sales or revenue, then the metrics indicate you’re
not succeeding. Social media is not a fluffy area where there are no measurable out-
comes. (Don’t mistake failure to achieve goals as a case of ‘We couldn’t measure
success therefore we succeeded in an immeasurable way.’)
2. Organizational decision making. There’s no point asking for audience participation if
you’re not going to let the audience participate. Accepting user input into the pro-
cess is the hardest part of the co-creation, co-production and relationship marketing
aspect of social media activity. If the organization’s decision-making structures are
not going to want to listen to the input from the market, don’t engage in conversa-
tions that won’t lead to outcomes. Promising to change a product, deliver a better
outcome or solve a problem with customer service in social media is a written obli-
gation that the customer can easily repeat around the Internet en masse if you can’t
actually deliver on that promise.
3. Knowledge management. This is probably the hardest aspect to implement as
most marketing operations consider market research and promotion to be almost
unrelated fields of activity (and if you’re outsourcing, you’re probably paying
for two separate firms). Social media marketing will result in market knowledge,
informal market research and other organizational knowledge that needs to be
captured, managed and fed back into the design, production and planning processes
(Chapters 4, 6 and 10).
361

e-marketing
Social media stakeholders versus non customers

Whilst many marketers have heard of the mantra ‘The customer is always right’, it’s
not actually true. Marketing requires the selection and rejection of certain markets
(segmentation, target marketing) for the purpose of seeking the optimal fit between the
needs of the customer and the organization’s capacity to meet those needs profitably.
Some customers are a poor fit since what the organization is offering doesn’t fit their
needs, others aren’t willing to pay the organization’s asking price (or even the cost plus
operating margin price) and others don’t fit the organization’s user-based positioning
strategy. This applies to the social media environment as well as the rest of marketing –
asking the wrong customer for feedback won’t be as helpful as targeting the right type
of social media user (your customer).
Before dismissing a market segment involved in social media, it’s worth reviewing
the stakeholder analysis frameworks from marketing strategy. Social media is a form of
media, and treating social media participants as stakeholders in the broader marketing
process is a valuable element for ongoing business survival. Remember that the purpose
of marketing under the AMA (2007) definition is to create, communicate, deliver and
exchange offerings that have value to customers, clients, partners and society at large,
and marketing is vital for social media survival. Society at large is an influential field
where media (print, television, social) impact is still a significant risk factor to mitigate.
There’s good publicity and bad publicity, and anyone arguing that all publicity is good
publicity never lost a lawsuit, had regulations changed or received an angry mob on
the doorstep.
Social media plan

The final step in the social media planning process is the documentation that creates
a social media plan. Plans are important as they’re distillations of the planning process
that you can use for metrics, benchmarks and the basis of the next planning phase.
They’re also artifacts as much as road maps since your average plan doesn’t last that
long once marketing operations hit reality. The five steps of the social media plan-
ning process could be done around a laptop and a whiteboard in the space of a few
hours, and once the web browser closes and the whiteboard is cleaned, the details
of the implementation of the plan could easily be forgotten. (Note: digital cameras
and whiteboards are great allies. Shots of whiteboards are surprisingly good docu-
mentation systems during the planning phase.) To ensure that the plan is useful, it’s
necessary to turn some of the decisions into written commitments. This has three
key purposes.
1. Clarification of details. Writing down an idea ensures that everyone in the room actu-
ally agrees to it, and that the fuzzy bits we gloss over in our minds are converted into
concrete steps towards achieving the plan.
2. Documentation for justifying budget allocations. When you’re going to ask for time,
money or staff, you want to be able to step people through your reasons for investing
company resources in your project.
362

Social media
Table 12.5 Convert the planning process to a documented outcome
Section Detail Step
Background History, details and notes on prior goals, Step 0, e-marketing plan
objectives or social media campaigns and marketing plan
Existing benchmarks (if any) Current metrics including sales levels, revenue Previous plan/metrics
and related figures
Campaign objectives Statements of objectives Step 1
Timeline for objectives
Details of objective
Overall tactics Marketing mix Step 2
Positioning statement
Budget allocations
Social media activity (N) to Target market selection Step 4
Social media activity (N+1) Social media site justification
as necessary Tactics for this site
Marketing mix for this market
Metrics for this site
Projected outcomes Results (desired metrics by timeline by objective) Step 1 and 5
Planned metrics Metrics Step 5
Impacts on firm
3. Professionalization of the process. Written benchmarks with written metrics, timelines

and deadlines add a necessary level of gravitas to the operation. It’s easy to consider
social media as an optional extra or a time waster if there’s no plan, no goals or no
idea if you’re achieving anything solid. Put it in writing and it’s as serious as the
spreadsheets, legal contracts and engineering documents in the other divisions.
Table 12.5 is a generic documentation guide for the planning process. It’s worth noting
that Step 3 in the planning process isn’t reported in this model plan document. Whilst
it’s vital to know where you’re currently engaged with the market when you’re planning
social media activity, it’s less relevant to the documentation. Step 3 produces content
for the decisions in Step 4, and the outcomes of those decisions are reported directly
within the plan document.
} Social media sites

In the e-introduction, you were sent off to sign up to a range of social media sites as
part of the e-marketing equipment list. This time around, we’re looking more at the
application of the sites to marketing activity. Given this is a printed book, and these are
still developing sites with a reasonable risk of changing, we’re not going to focus on the
individual buttons, settings and options you’d need to use in each site. The aim here
363

e-marketing
Table 12.6 The social media shopping list
Site Address Function Content
Blogger www.blogger.com Commentary Hosted blogging

Delicious www.delicious.com Social bookmark Meta tags, content discovery
Facebook www.facebook.com Social network Groups, advertising,
applications
Flickr www.flickr.com Image hosting Images, tags, content
discovery
Google Sidewiki www.google.com/ Meta Tags and social commentary
sidewiki commentary
Livejournal www.livejournal.com Life streaming Personal experience
Twitter www.twitter.com Life streaming Short messaging system
YouTube www.youtube.com Video hosting Video (strangely enough)
is to look at a site, assess the purposes that your customers could be using it for, that
you could use it for, and what (if any) goods, services or ideas you could bring to the
marketplace through it. Social media can be used for the whole of the mix, and should
not be considered an adjunct to the promotional mix (Chapter 6). The recommended
social media site shopping list is outlined in Table 12.6
Blogging is counted as social media despite predating the whole Web 2.0 upgrade.
There are authors (bloggers, ‘pressers, Twitterers) who will vehemently disagree with
the inclusion of, Blogger, WordPress and Livejournal in the social media/Web 2.0 cate-
gory for a variety of fair and valid reasons. Our rationale for their inclusion is that the
corporate behaviour surrounding the use of Twitter, YouTube and Facebook for com-
mercial activity can be adapted for the older blogging and journalling sites and, as such,
the elements of voice, interaction with community and not being a nuisance are useful
lessons for those environments as well as the classically identified Web 2.0 sites. Sim-
ilarly, YouTube (videos), Flickr (photos) and Delicious (bookmarks) are all reasonably
limited behaviours which have specific purposes that are much narrower than those of
Facebook (talk to friends) and Twitter (talk to strangers). Each of the following sections
is broken down into a brief overview of the service and what can be done with it (since
you’ve encountered them all previously in the e-introduction), a summary of how each
service interrelates with the social media objectives, and how each site relates to the
content-communication media – social interaction framework (Figure 12.3).
Blogger
Related sites: WordPress.com, Vox and TypePad
Blogger was established in 1999 and bought out and amalgamated by Google in 2007.
It operates as a combination of standalone and hosted blog services. Being part of the
Google product suite means Blogger has a solid level of integration with a range of
Google tools such as Google AdWords, Google Analytics and Gmail. It also provides an
364

Social media
established and verified identity to use when commenting on other blogs running on
the Blogger platform. Sites on the Blogspot network are usually (but not exclusively)
hosted by individuals and independent bloggers, which gives a grassroots feel to many
of the sites. Since the network is backed by Google, there’s a high level of commer-
cialization possible within the system, starting with the hosting of Google AdWords
advertising on site (Revenue 2) and support for affiliate sales programmes through
Amazon (Revenue 3).
Blogger social media objectives

Blogger fits neatly into entertainment, sales, behaviour change and information dis-
semination objectives with the business orientation, commercialization-friendly and
metric-heavy approach offered by the site (Table 12.7). Blogger has a ‘Monetize’ tab
within the basic settings of the blog and has preset options for using Adsense and
Amazon Affiliate sales.
It’s worth noting that promotional blogs are less successful when hosted as third-
party operations and tend to be more viable as self-hosted blogs. Similarly, whilst there’s
an opportunity to reduce costs through Blogger sites, it’s not been a highly ranked
priority use of the site.
In-house metrics: Blogger doesn’t provide direct metrics within the main blogging
platform. Instead, as part of the Google family, it has access to the Google Analytics
frameworks (www.google.com/analytics).
Alternate metrics: Raw numbers of comment counts are less important than engage-
ment, conversation and involvement with the right target markets. Numbers of blog
posts, and the blog posts being picked up or back-referenced at larger sites, is a good
measure of reaching the right audiences directly (and indirectly).
Table 12.7 Objectives on Blogger
Objective Sample tactic Use of the site
Cost-oriented Reduced-cost digital Press releases, new content and media

distribution release
Sales-oriented Catalogue-style updates, direct Sales announcements, affiliate links,
affiliate links, advertising Google AdWords and direct sales links
keywords
Behavioural Ongoing encouragement Regular content updates to support
change challenges faced in behavioural change
Information Content dissemination Regular updates of key information, links to
dissemination off-site content on Slideshare or YouTube
Promotional Press releases, PR and ad copy Self-promotional content
Entertainment- Entertaining content Short stories, serialized content, captioned
oriented photos
365

e-marketing
Social media triad

A Blogger-hosted site without comments enabled is little more than a frequently
updated website, and doesn’t qualify as a social media platform. It’s not a conversation
if you don’t let the audience speak at the point where you’re making your statements
(which is why this book is a monologue rather than a dialogue). Blogs operate within
the social media framework in the following manner:
◦ Content: written content, some images and a limited array of embedded links. Can
be used for cross-promoting other content and linking out to other social media sites
◦ Social interaction: direct interaction through comments sections on individual posts
and indirect interaction by linking to related posts via track-backs, links or related
techniques
◦ Communications media: third-party hosted sites.
Delicious
Related sites: Digg, Reddit
Delicious is a social bookmarking site that allows for community tagging, organiza-
tion and recommendation of specific sites and pages (Table 12.8). Social bookmarking is
a relatively advanced user behaviour requiring both membership of the Delicious com-
munity and habitual bookmarking behaviour (Ctrl-D). There are two ways to use the
site for social media marketing: as a discovery mechanism for developing content for
your own products and as a tracking mechanism for existing web-based activity.
Discovery approaches to Delicious rely on the ‘popular bookmarks’ and ‘explore tags’
which can be used to either directly access the site or to see a list of other users who
have bookmarked the site and the keywords that they’ve used to describe it. Popular
content is displayed in a range of sections – popular keyword tags, most popular and
most recent bookmarks, as well as an exploration option to find highly bookmarked
archival content.
Table 12.8 Objectives on Delicious
Cost-oriented Nil Research

Sales-oriented Limited Research other successful
sales offers
Behavioural change Find related content Post bookmarks related to
behavioural goals
Information Create notable content Benchmark number of
dissemination bookmarks per content item
Promotional Notable content, viral adverts Sharing viral-capable
advertising
Entertainment-oriented Alternate Reality Librarian Game Prizes for content tagging
366

Social media
Tracking through Delicious can be done for individual pages and sites to assess the
positioning strategy of the content in the eyes of the Delicious community mem-
bers. The shared community nature of the tags is a useful market research tool for
seeing the positioning that individual users have given a site in their own minds.
For example, an article on logo design has the obvious common English tags of
‘logos, design, logo’ and the less obvious keywords of ‘inspiration, creativity’ (plus
a range of non-English tags for those sites that want to expand into multilingual
content positioning).
The site tends to be Revenue 0 focused as either an investment in raw materials
(links of interest for blog posts) or as a metrics system where it’s the quality and quan-
tity of time invested in benchmarking and reviewing trends. From a Revenue 1 to 3
option, it’s worth searching the tags for keywords of sale, discount and your specific
product to see which offers and adverts caught the attention of the community (and
were bookmark worthy).
Social media objectives

Delicious is suited to information dissemination above all other objectives, although
behavioural change and promotion can sneak into the line-up if the product-
content you generate is sufficiently interesting for someone to want to save for
later reading. Promotional materials that are standalone in nature (great adverts
on YouTube) and which have a tendency towards viral re-distribution are likely to
emerge on Delicious as bookmarked items. Social bookmarking is ill-suited to sales,
cost and entertainment objectives (unless you’re running an augmented reality game
for librarians).
In-house metrics: Each bookmark on Delicious has a broad scope of the tags used
to describe it, the number of members who have bookmarked the content, and
the individual tags each member has personally used to provide a positioning and
popularity benchmark.
Social media triad

Social bookmarking can exist as a non-social media platform if there’s no conversation
or engagement with the other users (which is entirely possible). The site does have an
integrated social network function under the ‘People’ button, whereby you can align
yourself to other users (become a fan) or have other users attached to you (gain a fan).
Mutual fan recognition creates a quasi-private network of shared bookmarks (useful
for group assignments) that can be sent to each member in the network. For example,
when bookmarking a specific site, you can nominate to send the link to a member of
the network operating within the social media framework.
◦ Content: annotated links to external content

◦ Social interaction: access to self-created network of shared links, direct access to
network member’s bookmarks
◦ Communications media: third-party hosted site.
367

e-marketing
Facebook
Related sites: Orkut, Bebo, MySpace
Facebook is the largest, most robust and most populated social media site that you’ll
deal with in e-marketing and social media (Table 12.9). Originally designed as an inter-
active yearbook system for US college students, the site has developed into an almost
standalone island in the broader context of the Internet. Changes in privacy settings
and a change of strategic corporate direction, from the walled garden of the early 2000s
to an open-by-default site, is altering the level to which individual users will feel ‘safe’
in their social network activity. As a closed system, where content defaulted to only
being available to friends and members of the user’s network, there was a user tendency
towards greater social disclosure than would be found in open-by-default sites such as
Flickr or YouTube. This is in a steady process of change as Facebook pursues more open-
ness and exposure to drive its advertising revenue, and users become less comfortable
with the level of exposure to their personal photos, friend networks and status updates.
Facebook has four functional levels of operation that are available to each user as part
of the default account. These are:
◦ straight consumption, which covers the classic Facebook consumption behaviour of

playing games, chatting and generally interacting with your network of friends
◦ meta collection, which is where Facebook acts as a clearing and sorting house for other
social media activity by allowing users to post from YouTube, Delicious, Flickr and
other sites to their Facebook profiles. This also includes the use Facebook logins to
comment on blogs (and a link in the Facebook timeline to the posted comment)
◦ user-generated content, which is through photo and video uploads, blog-style notes
and the lower end of Facebook Groups and Pages
◦ commercial content, which is through Facebook Pages, Facebook Groups and Facebook
Advertising, Applications and Developer communities.
The breadth of options on Facebook allow for Revenue 0 to Revenue 3 activity across the
site. Facebook applications present the easiest path to income by providing an accepted
Table 12.9 Objectives on Facebook
Cost-oriented Niche promotional messages Pay-per-click keyword targeted advertising

Sales-oriented Direct sales of virtual goods Applications with paid bonus content, items
or points
Behavioural change Support groups Facebook page and Facebook support group
Information dissemination Information page Fan page of the information
Promotional Viral message and promotion Facebook advertising and an ‘Update your
status message to pass this idea
along’ campaign
Entertainment-oriented Facebook applications Something involving fish, mafia, farming,
vampires and Bejeweled
368

Social media
platform for running an application (usually a game) that allows users to purchase addi-
tional in-game items, credit or points in cash (Revenue 3) or through engaging in deals
with sponsors (Revenue 2). Similarly, Facebook Advertising offers indirect awareness-
raising options for Facebook Groups or Pages (Revenue 1), ads for Facebook applications
(Revenue 2) or direct links to sales pages (Revenue 3).

Facebook is a central nexus for social media activity and as such facilitates most of the
social media objectives with varying levels of fit. Given the near ubiquity of the service
amongst social media marketers (and that you were sent off to sign up for an account if
you didn’t already have one), there are a few uses for cost-oriented objectives that focus
on the relative low cost for highly specified targeted advertising, community infrastruc-
ture and communications options. Sales-oriented options are one of the strengths of
the site, particularly if you’re able to develop an application as your virtual product
offer (particularly one with add-ons and accessories for sale) or through direct-to-sale
advertising. Behavioural change is probably at the weaker end of proceedings although
moving people into Facebook to engage directly with the company and its represen-
tatives is probably the most likely use of the site. Information dissemination can be
achieved through Facebook Pages and through the ability of the site to draw together
external links to Delicious, YouTube and other places.
Promotional objectives are incredibly well suited to Facebook through the direct
advertising mechanisms that allow for narrowly focused campaigns based on geogra-
phy, keywords and other demographic elements. There’s also a strong word-of-mouth
community element through Facebook status updates, viral memes and the Facebook
timeline indicating when a friend has liked a specific page or is using a specific appli-
cation. Finally, entertainment-oriented objectives can easily be achieved through the
applications and groups functionality of Facebook.
In-house metrics: Facebook accounts have basic metrics on the Profile page of the
numbers of Facebook friends and a track record of user activity on the site including
inter-account engagement (posting on walls, commenting on statuses). The advertising
section offers detailed metrics of click through rates, views per click and other display
metrics. Similarly detailed data options are available for the applications.
Alternate metrics: Engagement within the community, including numbers of fans of
the product page, members of the groups and group activity. Raw numbers are less
valuable although more easily available than measuring changes in attitude from direct
engagement in the community.
Social media triad

Facebook is the definitive social media structure through evolution and design and since
it began life as a social network service, it operates as a definitive role model for the social
media framework.
◦ Content: Facebook content ranges from the presence of other people, photo gal-
leries and video content to a wide array of applications, discussion forums and
communications systems
369

e-marketing
◦ Social interaction: social interaction is either private through the internal message
and internal chat system or public in status update comments, wall-to-wall posts or
groups postings and discussion.
◦ Communications media: third-party hosted site. Applications, including external
applications and mobile content.
Flickr
Related sites: Picasaweb, Photobucket, Imageshack
Flickr is the peak social media photography and image-sharing site (Table 12.10).
Established as an independent operation in 2004, it was purchased soon after by Yahoo!.
Although it still operates as a distinct brand, users are required to be part of Yahoo!’s net-
work to access the services, and increasing levels of Yahoo! branding are appearing in
the site. Flickr offers a series of social media functions including a discussion thread
per photo (and with approximately 4 billion photos logged at October 2009, that’s a
lot of places to talk), user set discussion groups and Web 2.0 tag clouds. The service
operates on user-generated content, with each account holder providing photos into
the mix under a range of different copyright options from ‘full rights reserved’ to less
restrictive ‘creative commons’ options, and a commercial licence option for images to
be sold through Getty Images (www.flickr.com/gettyimages). Each photo can be tagged
with specific keywords to make it findable by search engines and other users, and clus-
tered into content groups by the Flickr servers. The site also permits external linking,
hot linking and image hosting of Flickr content, which allows for the photos to be
embedded in blog posts and Facebook or linked directly through Twitter. The site oper-
ates under a freemium policy of free accounts and paid service options which include
metrics, larger quotes and increased functionality. Flickr is predominantly a Revenue 0
or Revenue 1 style of site for the users (and Revenue 3 for Yahoo!) since it’s a free (or
low cost) photo-hosting server with a massive archival gallery of content.

Given the purpose of the site as a photo display and sharing service, Flickr is ideally
suited to cost-oriented objectives for visual products as it can display images of just
Table 12.10 Objectives on Flickr
Cost-oriented Photo hosting Real-world printing services that draw

directly from Flickr files
Sales-oriented Limited –
Behavioural change Visual instructions Photo illustrations of step-by-step guides
Information Visual content Maps, illustrations, diagrams
dissemination
Promotional Product-in-use gallery Photos of products in use by real users
Entertainment-oriented Acquire photo of cats, place caption Caption Cat Photo Community
370

Social media
about any size that can be linked either to a range of services that produce physical
goods, such as Moo Card (www.moo.com), or directly from Flickr through Snapfish
(www.snapfish.com). Flickr doesn’t currently allow for the direct sales approach of
selecting images and using them to create desired products, so sales objectives are less
viable. Behavioural change, information dissemination and promotional objectives that
require visual cues, instructions or personal demonstrations of information (Chapter 10)
can make use of the photo-hosting approach. Flickr’s also been valuable for camera man-
ufacturers because the site can be searched by the metadata each digital camera stores
in a photograph. As a result, users can see what types of photos are possible by camera,
and the most popular cameras on the site. Finally, entertainment-oriented objectives
that rely on visual elements (such as captioned photos) have both an archival resource
to draw from and a hosting service to display their content.
In-house metrics: Paid users have access to a reasonably sophisticated array of account-
level metrics including referrer information, top photos of the day by number of
viewings, view counts and graphs of trends in viewing data. Each photo also has
individual statistics of view counts, referrer information and tag information.
Alternate metrics: Activity on each photo can be monitored with Flickr being able to
be set to notify you if there’s a discussion on your image.
Social media triad

Flickr was developed to host conversations around individual images and community
clusters of shared goods of interest (Chapter 9). The site also provides a mailbox system
for direct private exchanges and public networks of contacts:
◦ Content: images, community, 10-second videos

◦ Social interaction: comments per photo, inter-user mail inbox, community discussions
◦ Communications media: third-party hosted site, application.
Google Sidewiki
Related sites: Wikipedia, StumbleUpon
Google Sidewiki is the strangest addition to the social media line up as Google
attempts to bring the power of yellow sticky label annotation to the entire Internet
(Table 12.11). Sidewiki doesn’t exist as a separate site like the other social media services
listed in this chapter. Instead, the content is accessed through any web browser that
has the Google Toolbar installed (which didn’t include Google Chrome due to irony
and technical reasons). Launched in 2009, Sidewiki provides the capacity to annotate
any web page (or section of a web page) with user commentary or discussions between
Sidewiki users.

Sidewiki has limited functionality as anything other than an information dissemina-
tion tool and a market research device. As an extremely new technology, and a novel
form of interaction with the Internet, use of the site is limited and mostly dominated by
371

e-marketing
Table 12.11 Objectives on Sidewiki
Cost-oriented Limited use –

Sales-oriented No use –
Behavioural change User experience Encourage Sidewiki participation
to discuss or endorse site content
Information dissemination Add meta commentary to Add additional information or
related sites endorsement to allied content
Promotional Alternate Reality Gaming Clues in the Sidewiki to other sites
Entertainment-oriented Alternate Reality Gaming ARG Player commentary on clues
and meanings of site content
innovators. However, opportunities exist for using Sidewiki for promotional and enter-
tainment objectives as it could be integrated into a web-based alternative reality gaming
program (Chapter 14). It’s not worth using Sidewiki for redirecting users away from a
site with cheap sales tactics because Google does monitor the content and will rank
down or ban users who misuse the annotations.
In-house metrics: All Sidewiki comments are associated with a Google account and any
related account such as Blogger. All Sidewiki comments are compiled onto a user profile
page to allow other users to verify and validate the user’s impartiality (or biases).
Social media triad

Sidewiki is an experimental form of social media at the time of writing, with interactive
communication between users being possible but less than common as the system is
slowly developing. Consequently, Sidewiki sits within the social media framework in
the following manner:
◦ Content: Sidewiki content has two elements: the site being annotated and the
annotation, which can be manually ranked as useful/not useful or reported for abuse
◦ Social interaction: Conversation can take place between users, and the individual
Sidewiki remarks can be shared with Facebook, Twitter or e-mail
◦ Communications media: In browser, Google Toolbar specific access.
Livejournal
Related sites: Dreamwidth
Livejournal began life when the original developer decided to share the website upda-
ting mechanism with his friends and, as a result, created a community structure around
frequent site updates amongst interconnected individuals. Livejournal is a server-
based system, where the journals are all housed inside a single server network (www.
livejournal.com) and which emphasizes the community network of the system. Updates
372

Social media
to Livejournal operate through two mechanisms: external clients and the web page
update mechanism. Since Livejournal is also a community structure, it has a series of
easy mechanisms to interlink journals with a dedicated ‘friends’ network where indi-
vidual members can list other Livejournals that they consider to be worth reading to be
displayed on their friends lists.
Livejournal has been bought and sold several times since its inception and has suf-
fered major losses of community support through corporate-level decisions that failed to
identify and respect the community’s relationship with the service. It spans the bound-
ary between the cybercommunity (how the site is used by individual members) and
the social media platform (how the site is used commercially) and, as such, comes
with a limited array of objectives that it can support compared with more commer-
cial sites. For the most part Livejournal tends to be a Revenue 0 or Revenue 1 type of
arrangement where the site is used to maintain engagement with a community of fol-
lowers by individual artists, writers, performers or small groups. Journalling sites tend
towards the personal and interpersonal rather than the commercial and, as such, should
be respected as places where people, community and conversations take precedence
over commercial activity. Livejournal has a specific community structure that allows
collectives of users to share posts and content. These groups form around a shared
frame of reference based on shared consumption of the same goods, services or even
ideas. That said, it’s incredibly easy to create an anti-brand sentiment if you mistreat
the community since Livejournal users tend to share experiences rather than product
functions/features.

As a predominantly personal space, Livejournal is surprisingly well suited to informa-
tion, behavioural and entertainment objectives (Table 12.12). The diary-style format
lends itself to a personalized blogging style that can include serialized content from
novels and frequently updated additional materials (concept art for movies). As an
opt-in community, individual users of the site can also use it for sales-oriented objec-
tives if they’ve otherwise provided something valuable to their readers/followers. For
example, authors and musicians frequently announce the release of new material on
their Livejournal accounts without problems (problems will arise when you attempt to
ambush someone else’s journal by engaging in sales-oriented behaviour in the com-
ments section). That said, the site is a poor substitute for a blog or WordPress account
for cost-oriented objectives since it’s a community and requires a high level of time
invested in building interpersonal relationships in order to succeed.
Livejournal also offers a range of promotional opportunities for on-site advertis-
ing through DoubleClick (www.livejournalinc.com/sales.php) and site-specific promo-
tional opportunities such as sponsored themes or Livejournal Gift Accounts. These
are less driven by engagement than Facebook Advertising and a poor substitute for
interpersonal relationship marketing by being an active community member.
In-house metrics: Livejournal provides basic metrics in terms of numbers of mutual
friends, friends. The site provides page view statistics, guest views (non-logged in users),
statistics on commentary and trends in friend acquisition/loss.
373

e-marketing
Table 12.12 Objectives on Livejournal
Cost-oriented Limited
Sales-oriented Announcing new products Links to personal site, sales site
or Etsy sales page
Behavioural change Diary of change Updates on progression of
change of behaviour
Information dissemination Sequential/serialized content Diary-style information releases
Promotional Livejournal gifts Event-specific gifts
Entertainment-oriented Serialized content Daily commentary on the
world, amusing stories, being
interesting
Alternate metrics: The aim of Livejournal is to develop a community and the focus
should be on the quality of the conversations (volume of comments to posts seeking
comment, number of times you comment on other posts where appropriate). A smaller
number of useful relationships beats a large number of relative strangers.
Social media triad

As one of the precursors to the social media movement, Livejournal started with the
key defining features of Web 2.0 engagement, particularly with regards to social inter-
action being a primary function of the site design. It operates within the social media
framework in the following manner:
◦ Content: other people, other diaries and communities

◦ Social interaction: comments on posts, participation in community and direct mes-
sages within the site
Twitter
Related sites: Plurk
Twitter is one of the poster children of the shift from static web content to the
dynamic interpersonal updates of social media sites (Table 12.13). Formed around the
idea of sending SMS-style messages to a group or individual with equal ease, the com-
pany was established in 2006 and rose to more mainstream prominence around 2008
with the involvement of Twitter accounts in several of the major elections of the period.
Twitter runs on an open application programming interface (API) design that allows
the core function (broadcasting of short messages) to be used through a range of
sites, services and software packages. Whilst smaller in nature and user numbers than
Facebook, it does a specific set of tasks sufficiently well for Facebook to have mimicked
374

Social media
Table 12.13 Objectives on Twitter
Cost-oriented Create targeted list of Providing useful, timely or valuable

influential followers information for re-tweeting by others
Sales-oriented Announcing limited time Re-tweet sales offers and discount
discount codes codes
Behavioural change Specific #hashtag Encourage participants to use a
#hashtag for announcing their
involvement in the behaviour change
Information Time-sensitive updates Announcements of delays in services
dissemination or event start times
Promotional Links to external content Short link to new blog posts
Entertainment-oriented Being entertaining One liners, jokes and entertaining
interaction
the short message update in 2009. Twitter operates across the Revenue spectrum as a
personal account (Revenue 0), sales advertising medium (Revenue 2) or direct sales link
approach (Revenue 3). The strength of the system is based on the interactivity and ease
of re-transmission of interesting information plus the open community and conversa-
tion nature. Overt commercialization is tolerated to being openly disliked, and spam
accounts are deleted relatively efficiently by the Twitter management systems. Twitter
has been previously recommended in other chapters as a source of market research and
market information, and as a feedback mechanism for real-time market monitoring.

As a social media channel, the primary objective of a Twitter account should be engage-
ment with other individuals rather than using it as a wire service, a fax machine,
or for headline summaries. Due to the flexibility of the service, it covers all of the
objectives with varying levels of success in that you can switch to Twitter as a distri-
bution outlet for ideas as part of cost objectives, whereby you can also reduce time
to market for ideas, feedback and responses by operating in real time. Sales-oriented
objectives are possible, although it’s recommended that the hard sell be left off the net-
work and that content other than repeated linking to a sales page shows up in your
timeline lest you be deemed a spam account. Behavioural change objectives are easily
supported, first by encouraging users onto the Twitter service as a means of fast com-
munication with your marketers, and secondly, using #hashtags to track activity such
as fitness, New Year’s resolutions or charity donations. Information dissemination and
promotional objectives both rely on Twitter as a broadcast mechanism for short links
(Bit.ly links) to larger information, or quick updates and knowledge patches. Public
transport networks around the world have taken to using Twitter as an information
channel for announcing delays to their services. Finally, 140 characters is an amazing
375

e-marketing
amount of space for an entertainment-oriented objective if you’re backed by good writ-

ers, distinctive characters and a sense of style. Several television shows, videogames and
web comics have taken to providing Twitter accounts for their characters and having
ongoing ‘off-screen’ conversations between the fictional characters as part of an overall
entertainment package.
In-house metrics: Twitter provides a set of basic internal metrics in terms of following
(those you follow), followers (those who follow you) and listed (number of lists fea-
turing your account) scores that are a semi-relevant metric of popularity. The site also
alerts you to mentions of your account (twitter.com/#replies), the lists you’re featured
on (twitter.com/[username]/lists/memberships) and which of your tweets have recently
between repeated on the site (www.twitter.com/#retweeted_of_mine).
Alternate metrics: Sites such as Twitter Analyzer (www.twitteranalyzer.com) provide
analysis of the use of your account which can be used to benchmark use of the ser-
vice against proposed timelines and schedules. Other systems exist to measure the
influence of your account (www.twinfluence.com), its reach (www.tweetreach.com) and
the frequency of re-tweeting and being re-tweeted (wwww.tweetstats.com). Twitter is
also measured in terms of how you intend to use it. For example, using it as a small
communications hub would require low friend/follower counts and good relationship
marketing. Using it as a metafilter (low follower, high following) versus mass broadcast
(high follower, low following) requires radically different approaches and metrics.
Social media triad

As with Facebook, Twitter is one of the defining sites of the social media movement and
is well represented in the social media:
◦ Content: other people, short messages, third-party content

◦ Social interaction: direct messages, indirect observation (timelines), replies (@replies)
and re-tweets (RT)
◦ Communications media: third-party hosted site, applications and mobile devices.
YouTube
Related sites: Vimeo, Dailymotion
YouTube is the second highest profile of the social media sites after Facebook
(Table 12.14). Set up in 2005 and bought out by Google in 2006, YouTube has been the
battleground for content owners, content creators and copyright lawyers since it started
accepting user-submitted video content. YouTube’s democratization of video content
distribution has been a remarkable bonus for e-marketing in general, and the provision
of commentary systems per film clip has provided a discussion forum for users. Unfor-
tunately, YouTube’s commentaries are universally recognized as some of the worst on
the Internet, with an amazing array of awful grammar, worse punctuation and straight-
out offensiveness. This is a significant downside to using YouTube as a social media
portal – you’ll have to read, filter and clean up the mess that will accompany your
videos once people start posting replies to them. Installing YouTube Comment Snob
as recommended in the Introduction only saves you from other videos. You still have
376

Social media
Table 12.14 Objectives on YouTube
Cost-oriented Global reach Distributing content via YouTube

Sales-oriented Direct sales links in video Click to buy on iTunes
Behavioural change Demonstrations Video of the desired behaviour
Information dissemination Instructional materials Videos illustrating ideas or teaching
new concepts
Promotional Advertising TVC on YouTube
Entertainment-oriented Comedy, short sketches Muppets covering Bohemian Rhapsody
to read the comments on your own videos if you’re going to monitor and clean up
the community.
It’s worth noting that YouTube briefly introduced the suggestion in Figure 12.6 as
a feature (http://blog.xkcd.com/2008/10/08/youtube-audio-preview). Unfortunately, it
failed to have the dramatic behaviour-adjusting effect hoped for in the comic and
whether it remains in widespread use is unclear.
Figure 12.6 YouTube comments

377

e-marketing
With regard to copyright issues, YouTube relies on the inexact science of automated
filters and a variety of scanning techniques to attempt to block, filter or resell advertis-
ing space on copyrighted content. Certain copyright holders have negotiated a deal with
YouTube that results in videos with copyrighted audio content (fan films) automatically
having a link to iTunes to purchase the track inserted into the film clip. This converts
a copyright breach into an advertising opportunity and a direct sales mechanism (Rev-
enue 2 and 3). YouTube videos can also be annotated with links to other sites and videos
as well as captions and other text content. Theoretically, you could set up a video with
direct links to purchase items featured in the clip (although the amount of clutter on
the screen would really kill off the point of the video).

As the leading storage space for video content, YouTube has a natural fit with a lot
of promotional objectives along with cost, behaviour and entertainment. Uploading
an advert to YouTube is usually seen as a method of cost reduction for global distri-
bution – however, it’s vital to check that the copyright clearances and actor release
forms cover global rather than local distribution. It’s also worth having your head
office in the other countries alerted to your advert (and ad content) going online
to ensure that it doesn’t conflict with their IMC, or isn’t about to spark a storm of
controversy for being offensive. Behavioural change and information dissemination
objectives are aligned to the content of the videos and can turn YouTube into one of
the singularly largest help desks and libraries in the world (if you’re a visual learner,
search YouTube for advice). Entertainment-oriented objectives are obviously related
again to the content of the videos, but also to the capacity of the site to do some
amazing tricks, with linked videos being able to be used as an animated choose-your-
own adventure.
In-house metrics: YouTube’s membership in the Google franchise provides a solid set
of metrics to assess the state of the video and who’s watching it from what part of
the world. Each video has ‘insight statistics’ that provide comprehensive details on the
performance of the film, including on how the film was discovered (direct link, external
link, recommended by YouTube).
Social media triad

YouTube can function as a non-social media framework and simply act as a video
distribution server for content embedded into other sites. However, there are also
opportunities to create a greater level of community engagement by accepting (and
sending) video replies, commenting on videos and responding to user comments:
YouTube sites within the social media framework in the following manner:
◦ Content: video
◦ Social interaction: direct private conversations through onsite mail, comments on
videos and video replies
378

Social media
} Conclusion
Social media is an emerging weapon in the marketer’s armory but before getting carried
away with the fabulous new things it can do, it’s essential to step back and remember
what marketing is all about: responding to customers’ needs. Social media is based on
personal interactions so it makes sense that those people who value personal interac-
tions will value social media applications. Having said that, it’s equally important to
recognize that there are large groups within the community who are either fundamen-
tally unsociable or who have their social needs met outside of the Internet environment.
Before including social media marketing in your e-marketing plan, review your cus-
tomer base and determine what, if any, social media activities are going to enhance
your relationship with your current and potential customers.
Having done that, the next step is to work out how the social media is going to inte-
grate with the broader objectives of the organization and other marketing and related
activities. If social media plans are to be effective, they need to be embedded rather than
standalone. As is the case with all elements and sub-elements of marketing planning, the
key to success is determining your objectives before jumping into a series of activities
and then trying to retro justify them. This is particularly tempting in the world of social
media where a desire to show your connectedness by putting a ‘Follow us on Twitter’
link on your website may add no value to customers or achieve any of your marketing
objectives but instead simply increase time and wages costs for the organization.
The chapter gives a comprehensive overview of the key social media sites and shows
how each can be used to achieve specific organizational objectives. The tables will help
you to decide which site is right for you and your audience and to avoid many of the
pitfalls of rushing into the next-big-thing technology without due consideration of the
actual (rather than desired) impact it’s likely to have.
} References
Books and journals
American Marketing Association (2007) Definition of marketing, http://www.marketingpower.
Chartered Institute of Marketing (2005) ‘Marketing and the 7Ps: A brief summary of marketing and
how it works’, Knowledge Hub, http://www.cim.co.uk/KnowledgeHub (accessed 6 July 2010).
Nielsen, J. (2006) ‘Participation inequality: encouraging more users to contribute’, Alertbox,
October 9, 2006, http://www.useit.com/alertbox/participation_inequality.html (accessed 6 July
2010).
Rogers, M.R. (1995) Diffusion of Innovations, 2nd edn. London: Macmillan.
Web references
Bebo www.bebo.com
Bit.ly www.bit.ly
Blogger www.blogger.com
Cute Overload www.cuteoverload.com
Dailymotion www.dailymotion.com
379

e-marketing
Digg www.digg.com
DoubleClick www.livejournalinc.com/sales.php
Dreamwidth www.dreamwidth.org
Getty Images www.flickr.com/gettyimages
Google Analytics www.google.com/analytics
Google Sidewiki www.google.com/sidewiki
Imageshack www.imageshack.com
LOLCats ‘n’ Funny Pictures of Cats www.icanhazcheezburger.com
Maru www.youtube.com/user/mugumogu
Moo Card www.moo.com
MySpace www.myspace.com
Orkut www.orkut.com
Photobucket www.photobucket.com
Picasa http://picasaweb.google.com
Plurk www.plurk.com
Reddit www.reddit.com
Sainsbury’s Community Forum www2.sainsburys.co.uk/yourideas/homepage.aspx
Snapfish www.snapfish.com
Stephen Fry www.stephenfry.com
Stephen Fry on YouTube www.youtube.com/user/officialstephenfry
StumbleUpon www.stumbleupon.com
Tweetdeck www.tweetdeck.com
TweetReach www.tweetreach.com
Tweet Stats wwww.tweetstats.com
@sockington www.twitter.com/sockington
@stephenfry www.twitter.com/stephenfry
Twitter Analyzer www.twitteranalyzer.com
Twitter Influence www.twinfluence.com
Twitter List Membership www.twitter.com/[username]/lists/memberships
Twitter Retweets www.twitter.com/#retweeted_of_mine)
TypePad www.typepad.com
Vimeo www.vimeo.com
Vox www.vox.com
Wikipedia www.wikipedia.com
Wordpress.com www.wordpress.com
YouTube Audio Preview blog.xkcd.com/2008/10/08/youtube-audio-preview
380

CHAPTER 13}
m-commerce
• recognize the multiple types of distribution channels created by the range

of features on handheld mobile devices
• outline where and when m-marketing fits into the e-marketing strategy and
tactics
• marvel at the wonder of mobile phones that just make phone calls
• appreciate the increasing convergence between mobile phone, mobile
Internet and other services.
381

e-marketing
} Introduction
This chapter looks at m-marketing (or mobile marketing), including the challenges and
the implications of Internet access that travels with the customer. It views m-marketing
as an adjunct to the e-marketing process (after all, this is an e-marketing text) which has
the potential to be more than just the Internet in your pocket. m-commerce is discussed
in relation to three interwoven areas: m-marketing as a theory, m-marketing in practice
and the role for m-marketing in business. Mobile marketing theory is largely devoted
to identifying what makes this particular approach stand apart from e-marketing as
a whole (hint: it’s the devices). Mobile marketing practice examines the alliteratively
named mobile marketing marketspace (a phrase a lot of lecturers aren’t looking forward
to pronouncing repeatedly in class), while the marketspace is divided into the function-
ality of the devices, the capacity of the networks and the capacity of the consumers to
make use (and sense) of it all. Finally, the chapter examines how businesses can make
best use of m-marketing by drawing on the theory to use it in practice to achieve their
overall e-marketing objectives.
} m-commerce
m-commerce is a broad domain that covers all aspects of the commercialization of the
mobile computing, mobile phone and e-device market. Since we’re in the marketing
business, we’ve narrowed the focus to the marketing implications of mobile phones
and devices. From the outset, as marketers, there needs to be a balance between the
interests of the consumers (market focus), the capacity of the devices (technical limita-
tions) and the business objectives of the organization (marketing plans). Given that the
cutting-edge developments in mobile phone technology are best categorized as quite
new products (QNP) rather than really new products (RNP) there’s some degree of exist-
ing knowledge to be leveraged by market and marketer alike. The initial market for
mobile phones began with individuals and businesses transferring from CB radios and
fixed landlines, and the basic level of behaviour associated with using a mobile to stay
in touch with the office is a well-worn path.
The use of technology to communicate and maintain contact over distance (or prox-
imity), even with the most sophisticated handheld computers which deign to make
phone calls, is a behaviour common to e-marketing and mobile marketing (Chapter 5).
Consequently, there’s a fair degree of shared ground between m-marketing, e-marketing
and the rest of the marketing portfolio. However, there are a few unique factors
for m-marketers to consider, including determining where (and increasingly, if) the
boundary between the Internet and the mobile phone exists and the technical capac-
ity of m-marketing (alongside the consumer’s capacity to cope with another form of
marketer-to-consumer interaction).
Definition of mobile marketing

Mobile marketing (m-marketing) was defined in Chapter 1 as a sub-set of e-marketing
which focuses on the mobile phone as the technology platform for the marketing
382

m-commerce
interaction. Classic m-marketing relies on the distinctive mobile technologies of short

messaging systems (SMS), multimedia messaging (MMS), Bluetooth, wireless access
protocol (WAP) and downloadable content. As convergence brings wireless broad-
band Internet to the mobile phone, and the mobile itself becomes a wireless modem
for the travelling laptop computer, there’s a constant blurring between Internet and
telecommunications.
Since many mobile technologies can access the Internet through wireless connec-
tions, m-marketing is distinguished by the use of the mobile phone network as the
delivery platform rather than the Internet. This allows us to cordon off the fixed line
telephones (telemarketing) and the plugged-into-a-power-socket laptops, desktops and
other devices as e-marketing. However, any definition of mobile marketing also needs to
recognize the integration of the Web with mobile communications in both directions –
mobile content can be activated or purchased from a variety of websites, and websites
can be accessed and used from mobile devices. In short, the focal point of m-marketing
is increasingly around the device as the distribution channel and the mobile platform
as it relates to the user’s experience of the goods and services on offer.
What counts as a mobile marketing platform?

M-marketing’s focus on the distribution platform of the mobile device leads to a need
to distinguish between the types of devices involved. These classifications are based on
a set of criteria that distinguish between the consumer’s primary purpose for the device,
the core functionality built in to the equipment and the device’s preferred network
for data access. Figure 13.1 represents a diagram of requirements, types and models to
indicate the way in which the mobile market can be initially segmented.
Works like a computer

Fixed
Laptop computer iPad (3G)

Netbooks
iPad (wireless)
Nintendo DSi
Apple iPod Touch Apple iPhone
Can pretend to be a phone
Wireless 3G
B&N Nook
Amazon Kindle
Nokia N65
RIM blackberry
Google nexus
Sold as a phone Mobile phones
Works like a phone Portable
Figure 13.1 Identifying the mobile marketing platform
383

e-marketing
The three dividing lines break down the technologies as follows:
◦ Works like a computer versus works like a phone: The extent to which the device’s core
functionality (actual product) and the desired function (core product) is a mobile
phone or a handheld computer. This is partly a function of what the phone can do
in terms of features combined with which sets of features the phone’s user is prepared
to use.
◦ Fixed/tethered versus portable: The extent to which the device was designed for mobil-
ity. Fixed devices need to be attached to a network, power supply or other system.
This limits the flexibility of where and when they can be used and contrasts with
portability which represents both the length of time the device can be expected to
function whilst mobile and where it can operate to its desired capacity.
◦ Wireless versus 3G: This refers to the device’s preference for sourcing data to operate
its core feature set. Mobile phones prefer 3G and cellular networks, whereas e-readers,
netbooks and the iPod Touch need wireless Internet access for full functionality.
These three elements are all components of the actual rather than the core prod-
uct in that they focus on the technical implications and applications of the device.
As consumer-centric marketers, it’s important to recognize that whilst the actual prod-
uct influences what the consumer can do, it’s the core product that covers what they’ll
actually want to do with the phone. Although ultimately the m-marketing strategy will
depend on the willingness of consumers to engage, when considering the m-marketing
platform from the perspective of developing a distribution platform for virtual goods,
ideas, services, promotion and mobile price, it’s vital to be aware of the physical and
technical limits of the channel.
Platforms and protocols

m-commerce has stricter hardware requirements than e-marketing insofar as if the
technology needed for the service isn’t present on the phone handset, then the con-
sumer simply can’t access the product, service or promotion. It’s a distribution issue
for m-marketers to manage effectively by understanding their target market, the likely
technology in the market’s hands and the market’s willingness to actually use all the
features and sub-sets of their devices. The following section outlines consumer-oriented
m-marketing devices which can easily double as m-business equipment, and which
should be considered as the capital expenditure (and treated as capital for return on
investment purposes) necessary for test marketing your products, campaigns and ideas.
Mobile devices are divided into five categories based on their primary recognized
purposes from the hardware’s perspective:
◦ Mobile phones, which are devices where the original intent is to make phone calls,
SMS/MMS and use Bluetooth
◦ Mobile phone plus, which are the slightly more sophisticated devices that haven’t
incorporated keyboards but certainly aim to do more than just communicate with
other people
384

m-commerce
◦ Smart phones, which are the handheld computers that masquerade as telephones,
and which have the innate technological ability to access the Internet (amongst
providing other services including phone calls)
◦ Too clever by half phones (TCBH), which are the sequels and successors to the contem-
porary market of smart phones. This is a semi-precognitive look at the developing
feature set that needs a little more capacity before it’s really a viable phone option
◦ Smart devices, such as MP3 players, netbooks, e-book readers and anything else that
can access the Internet or mobile phone networks whilst not actually being a laptop
computer or a mobile phone.
Mobile phones
The mobile phone is the lynchpin of the m-marketing movement for two reasons. First,
it’s the dominant personal communications device of the twenty-first century with
mobile phone accounts expected to steadily replace land lines and conventional tele-
phone arrangements. Secondly, it’s the ubiquitous communications technology that the
Internet hopes to grow up to become one day. M-marketing technology breaks down
into five application areas.
◦ Phone calls are a strangely overlooked aspect of most m-marketing game plans. Mobile
phones usually broadcast their phone number to the receiving device, which means
the right combination of business telecommunications arrangement will allow the
incoming call to be recognized by a booking computer or other database system.
At the rawest level, this form of database marketing can be a useful first step in
building an opt-in relationship marketing campaign where regular details (delivery
or pick up addresses for cabs, pizza preferences, preferred hairdresser) can be stored
and recalled to improve customer service.
◦ SMS (short message services) which, at 160 characters, is a bit like Twitter without the
audience (since Twitter was designed as an SMS for an audience). SMS on a classic
mobile phone keypad has problems with dividing the alphabet between eleven keys
and a predictive text dictionary. As a relatively well-established technology, it’s been
used by businesses for the routinely dull purpose of sending SMS advertising and
for the slightly more interesting applications of sending reminder notices and book-
ing confirmations. There have also been some interesting applications of SMS as a
payment mechanism for parking fees, order forms for pizza (www.dominos.co.uk/
smsexplained.aspx) and for charity donations. SMS payment turns the basic mobile
phone into an e-wallet at the thumbing of a few buttons.
◦ MMS (multimedia messaging services) is the transport platform for photographs, video
and audio files. As with the SMS protocol, MMS has suffered at the hands of under-
creative advertising campaigns that simply send a logo or graphic over the same stock
standard text offer of a discount (which usually can only be activated by calling
someone). For some odd reason, the Apple iPhone was stuck on MMS as the only
short message format it could send during the early phase of its roll-out (perhaps an
admission that it was easier to take a photo of a scribbled note for a friend than type
on the early touch screens).
385

e-marketing
◦ Bluetooth is the relatively obscure technology that’s in the options menu that most
people never use unless they install a hands-free unit for the car or wear one of those
earpiece headsets. Bluetooth was the next big thing in the late 1990s as shops were
supposed to have location-specific Bluetooth messaging services that would offer
coupons, vouchers and discounts. It failed to transpire when it was realized that the
range of Bluetooth meant that the consumer would most likely be in the store before
their phone noticed the incoming signal (printed store signs and A5 flyers proved to
be more useful than location-specific messaging systems). Bluetooth has been used
by cinemas to offer promotional content, snack bar discounts and other contextual
content that’s useful to receive when standing in a line in a cinema lobby.
◦ Cameras that can make calls sums up the evolutionary destination of the handheld
mobile phone. In the basic mobile phone, the camera provides the capacity to send
MMS content to other users and to store a limited number of images on the phone.
Mobile phone plus

Mobile phone plus features the same base-level technologies as the standard mobile
phone. The mobile phone plus is a more sophisticated device that was either bought a
few years ago as a cutting-edge technology (older early adopter technology) or acquired
more recently as a basic model to fit in with the neighbours (early majority). This type
of phone is usually outfitted with:
◦ sophisticated cameras that have increasingly high resolution, zoom, flash and a set of
other tricks such as video recording or basic in-phone editing features
◦ video calls, which are the supposed hallmark of the science fiction future and which
still haven’t figured out how to have people looking straight into the camera and the
monitor at the same time (If there’s a commercial use for video telephony, we haven’t
found it yet no matter what Apple thinks of FaceTime.)
◦ GPS maps and the option to purchase additional GPS services as part of a monthly fee
for service, map content and updates. The pay-per-use GPS with monthly or annual
contracts is a relatively competitive area where the in-car GPS provides superior driv-
ing support which has the bonus of being legal to use when driving, and in the car
in convenient locations and the GPS for walking around works until you encounter
a building, roof, awning or anything else between you and the GPS satellite
◦ basic web over 3G access at slow speeds and expensive data rates which allow the user
to look at basic sites or content hosted by the service provider. Most of the phones
have a web browser that’s viewed on a screen the size of a credit card with the quality
of a late 1990s web browser. It’s not a killer application
◦ basic applications such as to-do lists, calendars that can synch with a computer, and
some primitive (and really hard to use) note-taking or document-reading capacity.
Once you start being able to modify the application content with downloads, you’re
straying towards smart phones
◦ customization options, which include polyphonic ringtones, wallpapers, SMS tones
and downloadable games that question the intelligence of your friends and/or their
sobriety. That said, this is a financial gold mine with the ability to sell highly visible,
386

m-commerce
socially acceptable (and unacceptable) content for people who feel the need to keep
up with the times by having Top 40 songs as ringtones.
With the exception of content customization, most of the rest of the mobile phone plus
isn’t that useful for marketing purposes. Targeting users with these phones is going to be
a question of SMS/MMS, downloadable wallpapers, ringtones and technically primitive
mobile gaming options. That said, the technically primitive platforms are useful for
their ability to revive previously ‘classic’ content games onto the very small screen – a
move which has repackaged Sonic, Mario, Frogger, Tetris, Pacman and the rest of the
1980’s video cabinet into a QNP (if you were born in the 1990s) or an LNP option if you
have nostalgic memories of childhood gaming.
Smart phones
We’re differentiating between the smart phones that run sophisticated data applica-
tions, dedicated operating systems or which have their own stores (iTunes, Blackberry
World) from phones which have a few additional features under the hood (mobile
phone plus). Smart phones are the generation of mobile phones that were crossbred
with the personal digital assistant handheld devices of the mid 1990s (Apple Newtown,
Palm Pilot, A6 spiral bound notepad), and represent the first significant point of
convergence between telephony and computing.
This is a generational shift in technology as these are physical objects that interact
with the Internet in their own right for their own purposes (Chapter 6). The level of
convergence between the personal digital assistant and the telephone has also resulted
in a significant break from the ‘Star Trek’ future that resulted in the development of the
original mobile phone – Kirk had a personal digital assistant (tricorder) and a separate
mobile phone (communicator).
Smart phones pack the features of the previous generation’s technologies alongside a
series of intentional design decisions that integrate the component parts of the phone
(camera, GPS, internal memory) into other applications. These include:
◦ storage space that is either several gigs of internal hard drive or microSD card slots for
expandable storage space. Either way, the smart phone assumes you’re going to need
to carry a toolkit of virtual goods and a large amount of data
◦ operating systems, which is the give-away that these are computers-in-waiting insofar
as they carry a base set of operating code and commands that can used by pro-
grammers to build applications for the sophisticated use of the phone as a mobile
computer platform
◦ applications, which are the hallmarks of the movement from the ‘call people’ to the
‘use for stuff’ evolution of the handheld device from phone to something else (Figure
13.2). Applications range from web browsers, media players, e-mail clients and office
technologies to games and other features. This is a marketing gold mine of paid prod-
ucts and embedded service delivery, and is examined in part in Chapter 14 as well
◦ application stores that are accessible on the mobile device (Blackberry App World)
and/or through the computer (iTunes). It’s interesting to remember that iTunes
387

e-marketing
Figure 13.2 iPhone or Droid?

started life as a command and control mechanism for loading/unloading iPods but
has since transformed into a major e-marketing and m-marketing retail outlet
◦ custom-built phone-based web browsers that were designed for sophisticated websites
and heavy-duty web content. Apple’s iPhone iPad and iPod Touch series use a cut-
down version of Apple’s Safari web browser (which doesn’t run Flash or Shockwave,
thus sparing its users from Facebook games) and Opera Mini (www.opera.com/mini)
as a cross-platform smart phone web browser
◦ integrated camera functionality that links the camera to other applications of the phone
and which can be used for augmented reality applications, geotagged photography
and Quick Response (QR) codes. Without anthropomorphizing the phone too much,
the camera becomes the eye of the phone’s operating system and can provide a range
of data inputs to the rest of the phone – for example, with the QR codes, the camera
can relay the visual information to the QR translation software which can react to
the embedded information (e.g. loading a website)
◦ location awareness through GPS (or a similar related technique) which is where
the phone knows where it is geographically and can use this information in con-
junction with onboard applications to record the location (Foursquare), access
location-specific information (e.g. querying Google Maps for nearby coffee stores)
or provide reference data to others (Apple’s iPhone and iPad location information for
weather applications)
This generation of technology represents a state of convergence between m-

marketing and e-marketing and, as such, it’s a question of where the emphasis is placed
on practical issues such as designating a specific-purpose mobile site (http://m.facebook.
com) versus the Internet site (www.facebook.com), or trusting the phone’s browser to
be able to deal with a single site. There’s also a need to remember that this is a list of
actual and augmented product features rather than a list of what your target consumer
might actually do with their phone. There are a large number of iPhone users who own
the leading-edge fashion in mobile technology but use fewer of the features than you’d
find on a basic mobile device. At the end of the day, it’s still about the market’s use of
the device more than the device itself (unless you’re running behavioural change objec-
tives). Having massively complex channels available won’t encourage the early and late
majority to use them (and you’ll be hard pressed to keep the innovators out of the
obscure ends of the options menu on any device).
388

m-commerce
Too clever by half phones (TCBH)

The next generation of smart phone is described affectionately as the ‘Too clever by half’
phone. These phones will be building on the current smart platforms that already see
fully integrated mobile communications, Internet and a functional suite of Word, Excel,
PDF Reader and other office staples in the handheld devices. There are three distinct
elements that are emerging in the next generation of phones (and related devices) that
show significant potential for wide spread consumer adoption.
◦ Sophisticated augmented reality applications take the ability of the smart phone’s loca-
tion awareness, camera, motion sensor and so on to create a device that can add
contextual information about the world around it with minimal user input. Augmen-
tation techniques such as contextual searching by pointing the camera at a barcode,
QR code or physical object will present a wide array of marketing opportunities –
not least of which will be in the services sector that will need to underpin the data
acquisition, review and publication of augmented reality content.
◦ Mobile cloud-based computing will see the combination of the cloud computing that
underpins the netbook devices such as Google Docs, Zohoto and other platforms
available by design in the mobile telephone networks. Currently, cloud-computing
platforms can be accessed through phones in areas such as Gmail or DropBox on the
iPhone and iPad (www.dropbox.com).
◦ Peer-to-peer telephony (BitTorrent for phones) is where mobile devices can form ad
hoc devices to meet their own needs for bandwidth, signal augmentation and
other networked functionality. There are a few technical and business issues to
address before it’s a widespread phenomenon, but there’s no reason not to have
the mobile phones that are currently outfitted with Bluetooth, Wireless and 3G sig-
nals able to create ad hoc network structures that extend the range of mobile
phone towers.
Although these technologies aren’t in place at the time of writing, we’ve included them
as a future set of channels and challenges for m-marketing. If the technology and market
acceptance of sophisticated levels of augmented reality take off to the extent that basic
augmentation has already been accepted (being able to communicate with anyone from
anywhere you and your phone are standing is a basic augmentation of reality), then the
marketplace for augmented reality content, service delivery and promotion should be
quite profitable. If a mobile device can be used to overlay an additional layer of data
onto the world, then the options for libraries (reviews on books), book stores (recom-
mended reading lists), fashion (sizing options, colour choices), and food retailing (QR
codes beside fresh ingredients that automatically generate shopping lists and cooking
instructions) are extensive.
Smart devices
The last category to consider is the increasingly diverse kit of smart devices that have
thus far resisted the temptation to become mobile phones. For the most part, these
389

e-marketing
devices rely on wireless network access and are technically part of the e-marketing port-
folio. However, they’re sufficiently mobile to count towards the m-marketing end of the
activity rather than the computer-centric e-marketing side of things. There are seven
broad device types.
◦ Standard issue MP3 players. The Sony Walkman cassette deck was the original aug-
mented reality device that allowed the user to overlay their own personal soundtrack
on the world. As technology has upgraded, the non-wireless music device still
remains a means to augment reality to by placing a layer of audio data over the
real world, such as self-paced audio walking tours (www.walki-talki.com).
◦ Wireless-enabled MP3 players. These can access various Internet hotspots to function
as a phoneless iPhone (aka the iPod Touch and the wireless iPad), read e-mail, browse
the Web and still remember to play music.
◦ Netbook computers. These are a return to the early days of Internet access that relied
on underpowered terminals linked to a powerful mainframe. These days it’s under-
strength laptop computers hooked into the cloud via wireless or 3G Internet access
that present the cyclical nature of contemporary technology (a return to the good
old days of the future).
◦ Handheld games. This is an emerging area that could use both creative marketing
thinking and product development to tap into the increasingly large number of
portable gaming devices that have wireless capacity and the ability to form ad hoc
networks. Devices such as the Nintendo DSi and Sony PSP are being touted as poten-
tial distribution platforms for digital comic books and magazines, in addition to
game content.
◦ The next big thing. This will be most probably something built by Apple, copied ade-
quately by Google and almost copied (but just not quite right) by Microsoft that’s
touch screen, wireless, data oriented and doesn’t cannibalize the MP3 player mar-
ket whilst undercutting the e-book and wireless gaming device market (and isn’t the
iPad) that will feel strangely familiar (Figure 13.3).
◦ E-readers, e-books and e-magazines. These include the Barnes & Noble Nook, Amazon
Kindle, anything using e-ink and other devices which focus on the delivery of
digital books and magazines as the primary platforms. These are distribution chan-
nels that the consumer buys outright before purchasing actual content to go with
the device.
Figure 13.3 A familiar technology

390

m-commerce
◦ Descendants of the iPad: including the upgrades, updates and changes to the iPad that
spawn from software development, Flash for iPad, and the OS5.0 release. Odds are
in favour of the iPad2 acquiring cameras, and almost-but-not quite telecommuni-
cations capacity to ensure that the iPhone retains a level of difference from its A4
shaped sibling.
Whilst each of these devices is interesting in its own right, and could produce a
viable niche marketplace, they’re outside the scope of the chapter as they predomi-
nantly depend on wireless access for their content, and that places them closer to the
e-marketing end of the spectrum than the mobile phones.
} The m-marketing marketspace

Marketspace was first raised in Chapter 1 as the independent network of business
connections, information and data flows that encompasses the entire electronic net-
work commercial world. As the parallel universe for business connectivity, virtual value
chains and virtual logistics are central to the success of the intangible goods and services
network that makes up most of m-marketing and mobile telephony. The phone itself is
physical, and most of the rest of the product ranges from the transmission of ideas as
voice data across networks to virtual goods that reside within the phone’s memory.
Mobile marketing’s marketspace is represented at different levels of abstraction based
on where the exchange of value takes place and who is the primary set of beneficiaries
between consumers, content providers and the network owners:
◦ Consumer to consumer, which refers to communications, SMS and generally using a

phone to reach out and touch someone
◦ Consumers to content providers, which is the exchange between the customer and
marketers in the form of content for the phone (SMS, ringtone, m-service, appli-
cation, streaming video)
◦ Consumer to networks, where the customer accesses the mobile phone network
through a relationship with Orange, BT, Virgin Mobile or a similar phone provider.
Whilst there’s a lot of interesting marketing to be done in this space, it’s not the focus
of the m-marketing chapter
◦ Networks to content providers, which are the logistics and distribution functions that
underpin the provision of content to mobile phones through phone provider-
branded portals (e.g. Virgin Mobile content), dealing with the Apple iTunes AppStore
policies or any other gatekeeper role the phone carriers play in the provision of
content to consumers
◦ Networks to networks, which is the business-to-business engagement that allows for
mobile phone carriers to communicate with each other and for calls from one phone
provider to go through to another. (As with consumer to networks, this is another
area beyond the scope of this chapter.)
The chapter will focus on the ‘consumer to content provider’, and to a lesser extent,
the distribution network issues of ‘networks to content providers’ when looking at
391

e-marketing
the structural issues associated with the m-marketing marketspace. As mentioned in

Chapter 6, the marketspace operates across three parameters:
◦ Infrastructure: which are the data network (mobile phone coverage, 3G) and seg-
mentation issues of the consumer marketplace such as technical demography, usage
patterns and the audience match (Chapter 3)
◦ Context: which is the location where exchanges take place between producer and
consumer
◦ Content: the idea or information being traded, which includes everything from SMS
to application data, web pages, phone calls and embedded services.
Infrastructure
The infrastructure of the mobile marketspace consists of the physical networks of mobile
coverage including factors such as BT’s wireless mesh that covers most of London, the
3G networks and the various mobile phone contract providers. From our perspective
there are two areas of infrastructure that are largely out of the reach of the m-marketing
approach: mobile networks and mobile carriers. The third aspect of infrastructure is
the end-user market of mobile phone owners and their approach to the use of their
phones. Mobile networks and mobile providers are best considered as adjuncts to the
m-marketing campaign, retail outlets for distribution of content or services marketing
case studies. The type of m-marketing that Virgin Mobile (www.virginmobile.com), BT
(www.bt.com), Orange (www.orange.co.uk) or other telecoms providers can do with
their own networks falls into relationship marketing, product provision and service
delivery categories.
Two issues apply to the infrastructure requirements of the mobile network – first, the
use and charging for data rates influences the ways and means in which the marketer
can provide content to the end users and secondly, whether data is a primary feature
of the package or a secondary consideration. The majority of smart phone packages
operate with data as a core feature of the monthly service fee (with a range of responses
to exceeding the data use quota in overrun charges or shaping) whereas the majority of
mobile or mobile plus phone packages will have a limited data rate plan with expensive
surcharges for excess content consumption. If you plan to provide significant volumes
of content as an m-marketing product offer, it’s worth checking with the target market
as to what their plans and data limits are. You may need to negotiate with the service
providers rather than end users for content to be included as part of the network’s
core service rather than as an add-on particularly if you plan to stream video such as
short television commercial style serialized content. The phone providers probably need
content for their own portals and there could be a more useful indirect market approach
than going straight to the consumer on a pay-per-use basis.
The second critical aspect of the mobile networks is the mobile phone user and their
preferences for the core, actual and augmented use of their mobile devices. As with
social media, and most of the rest of this book, the first port of call is to look at the influ-
ence of the innovation adoption characteristics on the mobile phones and what this
means for the marketspace. Mobile phones have been a popular topic for innovation
392

m-commerce
adoption researchers over the years because they’re a surprisingly high visibility product
(particularly if you’ve got a very loud ringtone at a very embarrassing time) and there’s
an odd social propensity to lay mobile phones on tables when dining, holding meet-
ings or generally sitting down at a desk (as this chapter is being written, the authors’
mobile phones are sitting beside the computers as if to supervise the process). Table 13.1
outlines the match up between the innovation characteristics, types of devices and
innovation adoption category.
From a marketing perspective, the mobile phone sector has one of the singularly
shortest half-lives of any technical device (and a positively slow decay compared with
cinematic movie releases) as the product lifecycle per phone leaps from introduction to
decline in a period of months. This has the consequence of placing devices that are well
suited to innovators into the hands of the late majority simply because of the speed
at which a fashion (namely the iPhone) sweeps through the marketplace and people
upgrade rapidly to avoid being seen with last year’s phone. With that in mind, it’s
Table 13.1 Innovation characteristics by innovation adoption category
Relative
Device advantage Compatibility Complexity Trial Observable
Innovator Smart phones Novelty. The less the Maximum. Buying off Noticeable
TCBH phones Cutting-edge better They’re writing eBay and for constantly
technology applications for unlocking playing
their own with it
devices
Early Smart phones Trendsetting Leadership. Fashion and Pre-ordering Used to
adopter Integrated social message promote their
fashion symbol. Used at own visibility
statements (e.g. least five of the
iPhone, iMac, Top 10 apps
iPod and latte)
Early Mobile Followership Fashionability. Minimum use of Queuing for Ringtone set
majority phones plus Owns an complex midnight to overly loud
Smart phones iPhone because features. Sends releases
Smart devices they’re popular SMS and MMS
using shrtn wrds
Late Mobile Compliance Acquired by Basic use of End-of- Complains
majority phones family wanting features. Might contract about being
to stay in touch send an SMS upgrades sent SMS
once a year
Laggard Landlines Landlines Likes voicemail Just wants voice Work- Almost
can be left at on landlines calls provided invisible
home mobile
393

e-marketing
worth then looking at the features of the phone in relation to the innovator categories,
since m-marketing relies on people being able to use their phones as much as it relies
on the phone having certain mission critical features (Table 13.2).
One of the key elements to consider is that whilst the physical device is highly
visible, the actual use of the content on the device is mostly personal and invisible
(even when you’re sending an SMS, people can’t always tell what you’re sending,
Table 13.2 Features versus users
Early Early Late

Innovator adopter majority majority Laggard
Application Submitting Shops for items Buys from the Resents needing Not installed
stores user-generated of interest Top 10 list to install it
content to the
store
Applications Writes their Relatively short Large number of Only the default Puts numbers
own/picks new lifespan unused apps apps into the
contacts list
Basic Forgotten Downloaded Downloaded Still trying to Uses the
applications novelty games use the calendar calculator
applications
Bluetooth On, enabled Headsets and Off by default Nervous about Factory
and useful accessories since hearing bad breaking the default setting
stories from the phone if they
news media change a setting
Camera Augmented Uploads to Photos of friends, Caller ID photos Accidental
reality, QR Facebook, family and pets photos of the
codes and Flickr, MySpace on camera inside of
lifestreaming and MMS handbags and
pockets
Ringtones Personally Favourite Top 40 hits Chosen from Default
created artiste’s track factory defaults ringtone
tones/silent
Wallpapers Personally Own photo Photo of partner/ Children, Factory
created children/pet partner or pet default
Other Jail break Ringtones and Back catalogue of Games selected Nil
downloaded software, MP3s no longer by friends or
content experimental popular family
code ringtones
GPS Geo-tagging Google Maps and Argues with Still uses a
Latitude navigation the map’s printed map
instructions
394

m-commerce
Location Mayor of On and used Used to read Says no when Isn’t a

awareness somewhere on for finding new reviews of new asked by apps feature on
Foursquare places places their phone
MMS Uploads to the Sends to friends Sends to family Sends by Can’t receive
Internet instead accident on their
phone
Phone calls Stopped making Talks through Programmed Some pre- Still types in
them the free quota speed dial programmed numbers by
allowance numbers hand
SMS Sends if the Exceeds free Mixes txt spk and Uses txt spk Misses the
Internet access is quota full sentences time before
down they were
invented
Storage Replaceable Nearing Been meaning to Phone is still Won’t ever
space capacity buy empty need
Web Extensive Social media Social media Tries and the site Sits at a
browsing sites times out computer
using or if it’s an SMS or a Google query). It’s possible to be an innovator in

one aspect of the mobile device’s technology (SMS) and a laggard in another area
(mobile photography). There’s a discrepancy as well between the value-in-ownership
of a socially popular device (compliance by appearance) and the value-in-use of
the same device (disliked intensely for its complexity). It’s also worth reviewing
briefly the sort of functional motives that were considered for Internet use with
regards to mobile devices. Revising the motives from Chapter 5 with the techni-
cal device categories from earlier in the chapter, Table 13.3 demonstrates the array
Table 13.3 Motives versus devices
Consumer Mobile Smart

motives Mobile phone plus phones TCBH Smart devices
Anonymity Knows where Mostly Shares Knows where you Anonymous to

the nearest cell location location and your friends location aware and
tower is located unaware awareness are headed location broadcasting
ATM SMS purchase SMS purchase SMS purchase, E-wallet E-books, iTunes
banking apps downloads
Communicate Primary Primary Secondary Primary function No
function function function
Community Limited Can send SMS Can link to Phone has its own Shared use of devices,
to groups social media friends network of aka the iPod earbud
devices nod
395

e-marketing
Table 13.3 (Continued)
Consumer Mobile phone Smart

motives Mobile plus phones TCBH Smart devices
Convenience Calls Communication Applications Augmented reality Augmented reality

Escapism Trackdownism No Mixed Probably Definitely
Inherent
awesomeness Back in the day No Yes Wow Yes
Learn No No Maybe Possibly Yes
Recreation No Limited games Games, videos Probably E-books, mobile
games
Search No Vaguely Google on Visual search Maybe
demand
Self-expression The phone Ringtones Applications Augmented reality iPods for
tagging self-image
Social pressure Extremely high Extremely high Puts social Can exert social Variable (useful for
pressure on pressure other ignoring others)
your friends mobile devices
Vending Limited to SMS SMS orders for Buying Buying offline Purchasing
subscriptions applications, content content with the e-books,
ringtones and directly on the device downloaded
wallpapers device games and other
content
of options for products and services which combine the audience’s needs with the
device’s capacity.
The purpose of examining the motives for using mobile devices, the features
of the devices and the competence and comfort zones of the users is to gener-
ate a segmentation strategy to guide your m-marketing. To that end, we’ve revis-
ited the e-marketing segmentation variables (Chapter 3) with a brief update for the
m-marketing environment.
◦ Usage patterns relate to how the mobile device is used (calls, SMS, applications), dura-
tion of use (light, medium, heavy, excessive) and frequency of use (hourly, daily,
weekly, monthly).
◦ Mobile phone experience is the length of time the user has had the particular phone,
their level of comfort with mobile devices and how skilled they feel with the device
(do they constantly think they’re going to break it if they press a button?).
◦ Familiarity is the existing level of knowledge with the brand, product or ser-
vice being offered on the mobile and connects to the QNP/RNP/LNP framework
(Chapter 5).
396

m-commerce
◦ Technical demography is where you segment an audience based on the capacity of their
technology (Table 13.2).
◦ Audience match is the relative usefulness of your offering for the end user. This is the
fit between the audience and the product offering. A better fit means an increased
chance of success in the marketplace (Chapters 4 and 10).
Finally, the last aspect of the match between market and device has been the cen-
trality of the product over promotion. This has been a deliberate strategic position
to avoid thinking of the mobile devices as catalogues-in-waiting or personalized bill-
boards. Whilst there’s a role for promotion on the mobile device, there’s more value
to marketer and customer in focusing on the Revenue 3 options to be had from
providing a service (paying parking fees by SMS), developing a product (iTunes applica-
tion), facilitating self sevice (audio training instructions) and facilitating the purchase
of physical goods (SMS pizzas) on mobile devices. Further, mobile phones have an
inherent billing system either through premium SMS charges or SMS micropayments
(www.textblue.co.uk).
Context: the m-marketing servicescape

The context of the m-marketing environment is almost paradoxical in the way that
the mobile phone is a personalized technology that’s consumed in an incredibly public
way. At the same time as the phone can become an extension of the individual through
the data it stores (contacts, friends, photos), we’ll have half a conversation about very
personal subjects in public spaces (which makes for some rather awkward bus trips.
At least there’s hope for a signal dropping out in the Tube stations).
The consumer’s use of the mobile phone as a whole needs to consider a multiple-
level servicescape design that includes the user interface of the phone, any applications
on the phone and the physical environment in which the phone is most likely to be
operating. In general services marketing practice, the servicescape is the responsibility
of the service delivery organization – for example, the hairdresser develops the salon
into their own servicescape setting. The principles of the servicescape encourage atten-
tion to the physical evidence element of the extended marketing mix (Chapter 4) and
place great value in using visual cues to support positioning strategies and perceptions
of service quality. The m-commerce servicescape runs into significant tactical problems
insofar as the consumer is probably not going to be using their mobile in your carefully
crafted store front. Similarly, key strategic-level designs are handled by the phone car-
riers in terms of signal strength, tower placement and other factors underpinning the
performance of the mobile network.
E-marketers can control certain expectations of the performance of their applications,
systems and products by reviewing the means by which a consumer would normally use
a product. For example, a personal GPS map on a handheld device is more convenient
for navigation by foot (unless it’s sold with a car mount). However, if you’re positioning
the GPS as a personal field guide, then you’ll need a system that can cope with operating
indoors, undercover or inside a shopping centre (and you’ll need to be careful about
how you develop this technology. Ask Google about privacy issues from geolocation
397

e-marketing
capturing). The servicescape will determine the phone’s view to the sky, its ability to
source data from the positioning satellites and, consequently, just how well it’ll work as
a location guide.
The flipside of the mobile servicescape is the integration of m-marketing into the
physical evidence landscape by use of wireless, GPS Bluetooth, QR codes or similar
augmentation. Augmented reality in this case is a means for crafting an extended
servicescape for the consumer (and their phone) based on providing additional data,
products and services according to the user’s location. For example, AcrossAir’s ‘Nearest
Tube’ app for the iPhone can be used to find the nearest London Underground stations
via a mix of magic, GPS and the iPhone’s camera (www.acrossair.com/apps_nearesttube.
htm). Foursquare (foursquare.com) offers location based check-in that can also be tied
to geospecific advertising offers, special bonuses or sales. By layering the standard map-
ping data onto the video input, the application provides a virtual servicescape over the
physical world. Alternatively, systems such as the QR codes can be used as a shortcut to
fixed data sources – for example, Google printed 200,000 QR code stickers for companies
listed in its directory to stick onto the front window of their properties. When scanned,
the codes loaded up the Google directory page for that business (Schonfeld, 2009). Sim-
ilarly, QR codes feature on instore product displays beside the price tag and traditional
barcodes as a way for customers to access more detailed information about the physi-
cal good in front of them (MacManus, 2010). Although QR codes are currently big in
Japan, they’re still a developing marketing opportunity in other areas (which means
adding behavioural objectives to informational objectives for promotional campaigns
using QR codes).
Finally, Bluetooth may yet prove to be a viable marketing tool with the advent of
close-quarters augmented reality, whereby the short range of the Bluetooth signal is
used for venue-specific information – for example, the specials of the day at a restau-
rant, immediate movie reviews at the start of the closing credits and proximity-based
promotional offers such as discounts for popcorn triggered by proximity to the counter
(or wait time in the line – there’s probably a way to set a timing delay between the sys-
tem spotting a Bluetooth phone and it offering an apologetic 10 per cent off a drink to
compensate for the delays).
Content: the marketing mix

The third element of the m-marketing marketspace is the content within the
marketspace. The aim of m-marketing (from this chapter’s perspective) is to integrate
it into the broader e-marketing platform or to provide product offers to the consumer
that suit their specific device and personal needs. With that in mind, virtual goods ori-
ented products would tend towards sales (Revenue 3) and entertainment (Revenue 2–3),
idea goods as information dissemination and service goods as a mixture of sales, cost
and entertainment. Campaigns that use m-marketing as an adjunct to e-marketing will
probably view the mobile device as an alternative channel (cost oriented) or as a content
channel (sales, promotional, information).
Table 13.4 outlines sample combinations of objectives, tactics and m-marketing
activity that can be used within the marketing mix.
398

m-commerce
Table 13.4 Sample tactics
Objective Sample tactic Likely mobile marketing activity
Cost-oriented Reduce parking meter maintenance costs Accept SMS payments instead of coins
Sales-oriented Increase sales of power drills Offer QR codes for additional product
to tradespeople information, develop app for showing
proper occupational health and safety
uses of product in action
Behavioural Encourage exercise in national health Develop pedometer app that tracks phone
change campaign movement to count footsteps in a day
Information Educate population about E-book of factual information, energy
dissemination energy saving emission calculator app for choosing
between two alternatives
Promotional Summer promotional content SMS barcode numbers to enter contest
MMS barcode to enter contest
Scan QR code to enter contest
Entertainment- Produce an iPhone game iTunes. It makes Facebook look like a haven
oriented based on running a service industry for productivity
(hairdressing, café or accounting)
Product in m-marketing
The dominant focus of the chapter has been on the provision of a virtual good
(ringtone, wallpaper, app), a virtual service (games, applications, augmented reality), a
virtual experience (entertainment, learning, discovery) or an embedded service (photog-
raphy, communications). To this end, Chapter 6’s product model returns for an encore
performance to demonstrate the complexity of the mobile phone marketspace, using a
brief case study of the Skype iPhone application (www.skype.com).
The Skype application was selected for two reasons – first, it’s the use of a high-
end smart mobile phone for the basic task of voice communications; secondly, it
shows just how complicated you can make something as simple as ‘phone a friend’.
Skype uses voice over IP communications technologies to enable long-distance voice
and video calls over the Internet usually involving webcams and computers. When
used on the iPhone, the Skype application can access the iPhone’s Internet connec-
tion and transmit a phone call across the data service through the Internet and out
the other side to another Skype application (phone or computer), mobile phone or
fixed landline.
Examining the Figure 13.4 model against the Skype case, there’s something for every
component of the extended product – starting with the idea that smart phones are
for conversations (belief), which is a convenient (attitude) means of staying connected
with family (value). Using Skype required an initial one-off action of downloading and
installing the app (a few clicks in the iTunes store) followed by ongoing behaviour of
using the application to make calls. All of these processes were enabled by having a
399

e-marketing
Belief (phones are for conversations)
Idea Attitude (convenience of access)
Values (staying connected with others)

nt
n te
Co
One off (download skype)
Experiences
Product services Behaviour
Vi Recurring (application use)
rtua
lg
oo
ds No goods (streaming content, calls)
Object Virtual goods (application)
Physical goods (mobile device)
Figure 13.4 Product model in mobile marketing
physical object (iPhone) that stored a virtual good (iPhone Skype App) that was used
for the phone conversation to arrange mischief (which resulted in no good). Whilst
this is a fairly extreme example of showing off with technology (using a phone to
make an Internet call), it’s illustrative that m-products need to consider the whole
of the product model. Without physical or virtual goods, or the appropriate one-
off behaviour, none of the core product (communication) would have been able to
take place.
The following list is a brief outline of the areas in which mobile marketers can use
the Ansoff matrix (Chapter 10) to find opportunities to be better than a competitor’s
offering (market development), meet a different need (product development) or
improve your own offer so that your customer base uses your products more often
(market penetration):
◦ Location services such as GPS services, including turn-by-turn navigation for find-
ing the way to and from somewhere, Google Latitude for finding someone else,
Foursquare for announce your location or virtual map-based directories for finding
other shops, services or locations (Urbanspoon)
◦ Mobile services which cover the provision of an offline service such as mobile bank-
ing, or which use an embedded service within the phone such as physical training
instructions (100 Pushups app) or exercise data logging (RunKeeper)
◦ Applications, movies, e-books, MP3s and other embedded services such as games
which can be used on the mobile device
◦ Service brokerage such as ordering physical goods and services through a mobile
device, including SMS pizza ordering, the iPhone pizza app and paying parking fees
with SMS
◦ Virtual goods such as content customization options including ringtones
(Figure 13.5), wallpapers, games and non-smart phone applications.
400

m-commerce
Figure 13.5 Ringtones

Mobile promotion
For the most part, this chapter has avoided discussing mobile promotion to avoid falling
into the mindset of early m-marketers who saw the SMS and MMS as a form of virtual
direct mail. This led to an outbreak of SMS spam where companies would buy databases
of mobile phone numbers collected from SMS competition entries or other purchases
of premium SMS content (ringtones, wallpapers) and simply blast out a bulk volume of
traffic. This was about as useful as threading a sewing needle with a fire hose. The main
consequences of the SMS spam outbreak (and the brief but terribly awkward period of
Bluetooth spam) was consumer reluctance to allow their phone numbers to be used
for promotional materials and a negative reaction to legitimate promotional offers by
SMS. Paid applications which feature advertising are perceived far more negatively than
sponsored apps and even sponsored apps are less valuable as a promotional resource.
End users aren’t interested in the logistics of your business survival and don’t really
care about how you plan to achieve a Revenue 1 or Revenue 2 return with the advert
placements in their free apps. They want the core product provided by the app in terms
of enjoyment, recreation or learning, which means that when your advert interrupts the
application, you’re diminishing their satisfaction with the sponsored product and with
your brand. Computer applications don’t have commercial breaks built into them and
consumers aren’t fond of being interrupted by the outside world when they’re engrossed
in their phones – and even less so if it’s the phones doing the interrupting.
The key to m-marketing is to remember the role the phone plays in the life of the
targeted consumer. For the most part, where the phone is an integrated and integral part
of their life, it becomes an extension of their personality and turns into a more personal
platform than for those who are less heavily involved with the devices. The problem for
marketers is that promotional materials become an intrusion into the personal space
(mobile phone) of the individual rather than something they encounter in a public
sphere. With this in mind, promotion and mobile technology need to be considered as
an opt-in approach focused around relationship marketing, relationship building and
the development of a co-creation relationship through means such as:
◦ opt-in requests for information through QR code readers which allow for the phones
to pull down additional information on demand
401

e-marketing
◦ SMS opt-in reminders for forthcoming events, or requests for further information
such as reminders for release dates of movies
◦ converting promotional material into applications, products or service systems like a
dynamic catalogue application that can also be used for directly ordering products.
Similarly, promotional materials for movies, such as trailers, back story comics or
promotional photos, can be the basis for a free app in iTunes that’ll be sought out by
the customer rather than seen as an annoyance for arriving as an unsolicited MMS
◦ location-aware content that either provides context-specific advertising (coupons
for in-store discounts) or context sensitive withdrawal of advertising (e.g. once the
phone realizes it’s in Tesco, it drops advertising for Sainsbury’s from the roster).
The key message for marketing is that the mobile phone should not be wasted as a
broadcast platform when it operates as a highly personal and customized platform for
the individual user. Focus on narrow segmentation, database marketing for relationship
messages and other tightly segmented approaches to being a useful part of the phone’s
role in someone’s life.
Mobile price
Pricing is complicated in the mobile marketspace insofar as there are at least three levels
of financial price involved in the operation of any phone – the cost of the handset, the
monthly running charges including call costs and data rates, and the financial costs
of additional paid content. On top of the financial costs, there are also social costs to
be considered, and these really start compounding when you consider that they can
operate differently for different elements of the phone. It’s worth remembering that for
every application sold in the iTunes store, there are time, effort, lifestyle and psyche
costs associated with its acquisition and use (Chapter 6).
M-marketing can’t help with the call charges, plans and phone costs (that much)
when compared with our ability to influence the price for content and other items.
There are six approaches to m-pricing for content.
◦ One-off charge (outright ownership) or the direct payment for a single piece of content:
This is the most common approach in the iTunes App library for paid applications,
music and video purchases. Similar one-off charges include where the customer pays
by SMS (www.mbill.co.uk), premium SMS (www.mpush.co.uk) or SMS short codes
(www.reverse-billing.co.uk/short-code-tariffs)
◦ One-off charge (lease): This approach is used by Apple to charge 2.49 GBP per digital
movie rental that lasts for a limited time period (usually less than a week)
◦ One-off credit patch: This is where the user pays a single fee to purchase additional
application content such as game points (for just about anything that Zynga has
released on the iPhone and everything it’s ever released for Facebook)
◦ Triggered recurring subscription: This is where purchasing a standalone piece of con-
tent (ringtone, wallpaper, SMS app) which triggers a subscription to a fee based
service that continues until you SMS ‘stop’ to the unsubscribe number. Triggered
recurring subscriptions are legally valid and morally grey areas that accounting and
402

m-commerce
legal departments are mostly responsible for creating with such detailed fine print it’s
not actually legible in the television commercial. Then again, if you honestly think
downloaded content will make your phone into a handheld x-ray scanner, you may
deserve the billing rate on the contract
◦ Actual recurring subscription: This is a more legitimate approach taken to offering
one-, three-, six- or twelve-month recurring charges for dynamic content (usually
GPS maps) that will change over time thus making the subscription approach viable
and valuable to consumer and business
◦ Donation by mobile: This is where you can use the SMS short codes to make donations
to registered charities via the monthly phone bill (www.mobilegiving.org).
Every bit as important is ensuring an understanding of the non-financial price paid by

the consumer according to their general propensity for this style of innovation. Despite
the rapid uptake of m-marketing enabled devices, maximizing the potential of applica-
tions is limited to a minority of innovators and some early adopters. Given that many of
these devices have been acquired either as a business inclusion (the company upgraded
all its mobile phones) or because the consumer’s current contract with their provider
was up and they got a new phone with a new contract, it’s important to examine what
may prevent these forced adopters from realizing the potential of the devices beyond
basic communications functions.
Non-financial price elements to consider include time (how long it takes to work
out not only how to use the phone, but also what it might do beyond making phone
calls), effort (how hard it is to find an instruction book on how to use the phone and
then implement the advice), lifestyle (there are many people with basic lifestyles for
whom most applications simply don’t add any value) and psyche cost (it’s better not
to try than to try and fail and risk the ridicule of your teenage children). The reality
for many consumers is that they have not yet been convinced of the superior value
that mobile devices can deliver. Until providers better communicate relative advantage,
rather than simply pushing increasingly complex features, a large portion of the market
(which some surveys of users estimate to be in the region of 60 per cent) will continue to
almost exclusively use their complex 3G phones for the extremely simple task of making
phone calls (with the occasional foray into texting when desperate). Overcoming this
reluctance to even sample the array of applications available is very much a case of
the combined non-financial price of adoption being too high relative to the perceived
benefits on offer.
Not everyone is an innovator and a lot of people still want to chat to the other people
at the bus stop instead of blocking them out with portable headphones and a lifetime’s
collection of music. Until the mid to later end of the early majority along with the late
majority are convinced of the relative advantage of the complex capacities of mobile
devices, m-marketing is inevitably going to be limited in its effective reach.
Distribution
Mobile phones are remarkable distribution channels insofar as they take content
directly to the consumer, and when used for the basic purposes of a phone call, open an
403

e-marketing
idea distribution channel directly between two users. The m-marketing marketsphere
can be used for a range of distribution options, so it’s worth considering Table 10.2 and
Figure 10.2 (Chapter 10) for which distribution approach best fits the content you’re
trying to place in the hands of the consumer. However, whilst mobile phones are useful
for reaching the consumer, there’s still an array of technical issues such as the mobile
delivery platform for whatever you’re planning on offering to the market. Remember,
even if the phone has the capacity, the user needs the capability and desire to use that
function before the distribution channel becomes viable for your needs. There’s prob-
ably a long line of behavioural change organizational objectives needed to make the
most of the m-marketspace in the future. In the interim, it’s worth considering some of
the existing uses of mobiles as distribution channels.
◦ E-books, novels and the written word: Given that the smart phone and mobile phone
plus categories have a good track record with SMS sending, they’re probably carrying
screens that can cope with decent amounts of text. Specific-purpose devices such as
the Kindle and Nook (and other e-book readers) were custom built to be the new
printed media distribution channel.
◦ Television, clips, videos, trailers and short visual content: Once the phone has the capac-
ity to make video calls, it has the capability to be used for watching any form of
video. Admittedly, there’s something perverse about trying to watch the cricket on a
small mobile phone screen, but it’s about the same level of detail you’d get from the
view at a cricket ground.
◦ Voice over IP over 3G: This is just showing off when you’re using Skype on an iPhone to
make a phone call over a data line. That said, it’s still proof that you can continuously
stream a data signal to a handheld device, and it opens the way for future digital
distribution of television, radio and other streaming content.
} Conclusion
M-marketing is considered here to be a subset of e-marketing but with the distinct char-
acteristic that it is delivered through mobile devices. Currently in the market there is
a range of devices that can be engaged, along with their owners, in increasing levels
of complexity. M-marketing is an exciting area for innovators and marketers – there
are so many applications that are possible that it’s hard to know where to start. How-
ever, in the mobile marketspace, probably more than any other sphere it’s critical that
marketers remember that just because they can do something, it doesn’t necessarily
mean that they should. M-marketing engages people in their perceived personal space
and so should be focused on permission-based marketing, relationships and invited
value adding rather than intrusion. Early m-spamming has created a certain degree of
consumer resistance to the practice of m-marketing.
Despite the explosion in the adoption and purchase of sophisticated m-marketing
enabled devices, the echo boom of behavioural change to a receptive m-marketing
audience hasn’t yet been fully heard. Many owners of the means for sophisticated
m-marketing activities are yet to be convinced of the relative advantage of the
404

m-commerce
full application of their new technology. Until such time as consumer behaviour
matches technological advances, m-marketing strategies need to focus not only on the
commercial objectives, but also basic behavioural change.
} References
Books and journals
MacManus, R. (2010) ‘Mobile web meets Internet of things: barcode scanning’, ReadWriteWeb,
12 January 2010, http://www.readwriteweb.com/archives/barcode_scanning_mobile_web_
meets_internet_of_thing.php (accessed 11 July 2010).
Schonfeld, E. (2009) ‘Are Google’s local barcode stickers their backdoor check-ins?’,
Techcrunch.com, 16 December 2009, http://www.techcrunch.com/2009/12/16/check-in-google-
foursquare-loopt/ (accessed 11 July 2010).
Web references
BT www.bt.com
Dominos www.dominos.co.uk/smsexplained.aspx
Drop Box www.dropbox.com
Facebook Mobile m.facebook.com
Foursquare foursquare.com
mBILL www.mbill.co.uk
Mobile Giving Foundation www.mobilegiving.org
Opera Mini www.opera.com/mini
Orange www.orange.co.uk
Reverse Billing SMS www.reverse-billing.co.uk/short-code-tariffs
Skype www.skype.com
Textblue www.textblue.co.uk
Virgin Mobile www.virginmobile.com
Walki-Talki www.walki-talki.com
XKCD xkcd.com/662/
XKCD: iPhone or Droid www.xkcd.com/662
XKCD: Kindle www.xkcd.com/548
XKCD: Tones www.xkcd.com/479/
405

CHAPTER 14}
Beyond the Web
• be able to determine where alternate channels of content distribution can

fit into your e-marketing plans
• be amazed at how studying distribution just became a reason to own
an Xbox
• understand how marketspace theory can be used to assess beyond-the-Web
channels
• marvel that a marketing theory is the basis for an addictive Facebook game.
407

e-marketing
} Introduction
Chapter 14 explores e-marketing options beyond the Web with a specific focus on
gaming consoles, virtual worlds and other defined e-marketing friendly (or hostile)
spaces that use the Internet as their platform. Throughout the book (Chapter 13,
m-commerce, notwithstanding), the e-marketing focus has been on delivering con-
tent, products and services through web pages. This chapter expands the framework
of e-marketing from a web-based activity to one that can use any part of the
Internet-connected physical world.
It’s a chapter of marketspace, objects and interconnected places in the Internet that
need specific hardware, software or other requirements for access. The underlying frame-
work is very distribution centric since it’s about the marketspaces, so the focus is less
consumer centric than previous chapters largely because we’re going to assume that if
you’re targeting a specific delivery platform, you’re doing that to reach the customers
who hang out there. That said, whilst we’re looking at software vending machines such
as Steam, iTunes, Xbox Live and Wii, we’re also covering virtual worlds and the aug-
mented virtuality service industry that benefits from understanding how the consumers
behave online. Finally, in a tribute to New York theatre and the concept of Broadway
and off-Broadway productions (the Premier League and First Division of theatre), we
refer to the broad array of outlets, locations and platforms covered in the chapter as ‘off
web’ (because Premier Internet and First Division Internet just doesn’t sound right).
} The off-web environment

Distribution theory is rarely regarded as a glamorous part of the industry. With the
focus on logistics, shipping and the bistro mathematics required to ensure that supply
meets demand at the right place and at the right time, distribution is perceived as a lot
less fun than advertising, calculating prices or building product offers (you know it’s
bad when economical modelling in pricing wins the popularity contest). With that in
mind, we’ve drawn most of the theory being used in this chapter from the previous
chapters to firmly place the off-web products, services and goods well within the core
of the e-marketing framework that you’ve already encountered. Just because the vir-
tual goods are downloaded to the Wii, or the service is delivered in World of Warcraft,
or the behaviour needs an Xbox controller to take place, doesn’t mean that they are
isolated from the same frameworks that underpin the keyboard and mouse regime of
e-marketing (and the keypad and phone approach of m-marketing).
Complications and challenges in the off-web channel

The off-web environment presents some additional complications for e-marketing, such
as exclusivity, consumer engagement, various business risks and channel limitations.
The first serious consideration when using off-web channels is to determine whether
the content (product, good, service, behaviour) is transferable between various devices
or if it is ideally suited to one specific channel. Channel exclusivity was raised in
408

Beyond the Web
Chapter 3 as a means of objective differentiation between products, platforms or

companies. Channel exclusivity is often a feature of off-web channels which either pro-
vides an exclusive service (virtual world environment), or has content exclusive to that
domain (exclusive game releases for Xbox or Playstation 3) or requires specific hardware
only available for that device (WiiFit step boards, the Wii controllers, Xbox Kinnect
controller).
Secondly, the nature of the channels being virtual worlds, video game consoles and
self-service devices requires a level of consumer engagement in the service delivery.
This can lead to significant social price costs in terms of the consumers’ investments
of their time, effort, pride and opportunity costs to co-produce the service. Depend-
ing on the platform, there’s also opportunity for co-creation of content to become a
feature of the service. Playing a multi-player online game (Team Fortress 2, World of
Warcraft) presents opportunities for positive co-production (good gameplay, sportsper-
sonship) and the opportunity for service disruption (ganking, griefing, ex-Counterstrike
players). It’s worth noting that the Entertainment Software Rating Board (www.esrb.org)
specifically states that its ratings for multi-player games do not apply to online envi-
ronments (www.esrb.org/ratings/ratings_guide.jsp). There’s a load of services marketing
theory that examines how to manage customers in physical environments that’s largely
based on the acknowledged presence of the service provider. It becomes a lot harder
when there’s no physicality, and you’re not always going to have a service provider
present. World of Warcraft has a player account population approaching 12 million
spread over approximately 240 servers, thus making it two and half times the size of
Ireland when it comes to population. All things considered, Blizzard does a surprisingly
good job at maintaining civility in that environment without requiring a seat at the UN
or an elected parliament.
Thirdly, the off-web distribution network is a relatively high-risk proposition for the
brand, company and marketer insofar as picking the wrong platform for your exclusive
release can be devastating and platforms may not prove as popular with the people as
they did with the press (trade or mainstream media). Second Life (www.secondlife.com)
was predicted as being the supposed super platform of the future – business, education,
life and shopping were all supposed to move from the physical world into that spe-
cific three-dimensional avatar world. It failed to happen, and companies that invested
heavily in creating content failed to see expected levels of return on investment (where
expected may have included ‘Pot at the end of the rainbow’ revenue levels). Other
problems occur when the platform fails to deliver to the expected marketplace – the
relatively sluggish sales of the Sony Playstation 3 when compared with the Nintendo
Wii, and the positioning of the Wii as a casual gaming device versus the position of the
Sony Home Entertainment Portal, drove different crowds to each of the markets.
Finally, the last point to consider is the relatively restrictive nature of the platforms,
insofar as you’re not going to be in control of the channel and you have to comply with
the requirements of the channel owners in order to play on their levelled playing field.
Apple’s iTunes store is usually the go-to candidate for heavy restrictions (discussed later),
but it’s also important to remember that Apple, Sony, Microsoft, Valve and Nintendo all
have business rationales for protecting their content distribution channels in terms of
brands, exclusive relationships and market dominance for their own products. There’s
409

e-marketing
no point building a vertically integrated distribution channel that you turn over to your
competitor and let them use to beat you and your marketshare into the ground. It’s
also worth noting that these channels are usually monopolistic environments (if not
an actual monopoly, at best it’s quasi monopoly or oligarchy) where it’s their way or
nothing. Apple’s devices are all locked to the iTunes store – even Apple’s phones require
iTunes synchronization before you can make a basic phone call. (There is jail-breaking
software available. If you do jailbreak the device, Apple will try to recapture it later. You
have been warned.)
Exclusive versus open channel

This chapter discusses a series of closed loops, closed environments and sealed-off parts
of the Internet. Previous chapters have argued against the use of digital rights manage-
ment (DRM) and each of the platforms listed will have a DRM system integrated into the
product – Steam, iTunes and the Xbox Live Arcade proudly sell the DRM lock-and-chain
as a feature of their distribution systems. This raises a serious and significant ideological
question for e-marketers.
On the one hand, as e-marketers, the authors advocate strongly for open standards,
open source and the widest possible use of consumer rights to maintain and grow the
options for use innovation, value in use and value in ownership. We can point to the
success of the Web as the case study for the value of the open standard and shared pro-
tocols that provide the share of voice that marketing needs for survival. Further, from
Chapter 1 (network neutrality) to Chapter 15 (creative commons), we’ve advocated
for the least restrictive options, the broadest shared frameworks and the best upstream
marketing we can suggest (larger shares of bigger pies through market development –
Chapter 4).
On the other hand, the closed loop distribution channels discussed in this chapter
are a business reality. If you want to reach the 80 per cent of the massively multiplayer
online (MMO) gaming marketplace, you need to be able to engage with World of
Warcraft. Similarly, Apple dominates the smart phone market with iTunes, and if you
want to reach the gamers at the far end of the console markets, then you need a deal
with Sony, Nintendo or Microsoft to use their platforms. That’s basically because if you
want to access customers in Marks and Spencer, Sainsbury’s or WHSmith, you have to
negotiate with them for a share of their supply lines. The same rules of supply chain
management apply for the off-web Internet as well – server space, distribution channel
creation and development costs and other production issues all mean that the channel
host needs to have a commercial set of arrangements in place to cover the overheads
and keep the supply line alive.
Upstream marketing
Upstream marketing is the process of adjusting the environmental variables, market
conditions and market needs by targeting distribution channels, retail outlets and
other marketspace conditions that influence the consumer rather than directly target-
ing the consumer. In a commercial sense, it’s the principle behind negotiating content
410

Beyond the Web
exclusivity such as pourage rights at the football stadium – the idea being that exclusive
supply of Coke to a stadium will mean some Pepsi drinkers will switch preferences
when faced with a lack of their primary choice. Where upstream marketing comes into
its own as a business objective is where it is used as a systematic approach to expand the
market and marketspace to improve the overall size of the market (even if the individ-
ual percentage shares stay the same between all players). Market development oriented
upstream marketing has underpinned Valve Software’s approach to opening Steam to
both major label games producers and the independent game development market,
which has created a wider demand for the distribution platform rather than aligning it
solely with the major labels.
In contrast, the upstream marketing use of iTunes has been used as a market develop-
ment insofar as the iTunes store has increased the breadth of content that it can deliver
(apps, video, podcast, music, images, books) whilst maintaining a narrow restriction on
the devices that can officially dock with the service (there’s always an unofficial way to
use any product). Instead of opening up iTunes to the widest number of devices, Apple’s
approach of increasing the content options is designed to drive sales of the required
hardware – if you really want the application, then you’ll buy an iPod Touch, iPhone
or iPad (product development for new options to existing users, market penetration for
increased sales of content to existing users).
Revenue and distribution

Distribution decisions also connect channel considerations about exclusivity with some
of the financial considerations of the Revenue models (Chapter 10). Exclusivity has to
be a design feature that was intentional and integrated and has had the positioning
strategy and integrated marketing communications (IMC) support to deliver the smaller
crowd and intimate atmosphere as a feature. Exclusivity isn’t a post hoc feature you can
assign to an unpopular service nobody uses.
Consequently, distribution needs to be considered in terms of return on investment
decisions as this will impact on the expected nature of the revenue and the role of the
channel:
◦ Revenue 0: This type of channel exists for the convenience of the corporation without
any consideration about cost recovery from the channel. It’s paid by working the
cost into the value chain and overall pricing of the final good with no expectation
of direct cost recovery from the end consumer. World of Warcraft’s patch updates are
Revenue 0 activities that are in part covered by efforts to reduce cost and improve
delivery efficiency with BitTorrent-based peer-to-peer update clients.
◦ Revenue 1: This is where the channel offers a limited range of paid goods or sponsored
advertising content to test the waters as to whether the channel that was built with
Revenue 0 in mind can make some money on the side. This is really the Nintendo
Wii Shop Channel in its current iteration since Nintendo makes a profit per physical
console and per game title sold for the platform. The on-console channel has not
been used for maximum revenue gain particularly since a large portion of its popular
content involves free demo software and existing Nintendo content (virtual console).
411

e-marketing
◦ Revenue 2: These are the indirect returns that come from brokering sales, taking com-
missions and generally receiving a cut of the action without charging a subscription
fee to access the service. This places Steam, iTunes on the PC and even Amazon’s PC-
based Kindle software into the indirect camp. If the consumer manages to navigate
carefully, they could use these channels almost exclusively to access free content,
thus indicating that there’s no certain (just highly probable) revenue structure. It is
an arbitrary line to distinguish free channels (Revenue 2) from paid subscription
channels (Revenue 3). Similar is the need to purchase a device to access the channel
in a Revenue 2 indirect approach (e.g. Xbox, Kindle, iPad) since there’s no guar-
antee that ownership of the device will lead to revenue from the device’s related
channel.
◦ Revenue 2.5: These are the channels that are cross-funded by product sales which
are used to augment the value of the initial product and drive up the sales. Alter-
natively, these are channels that are part of the relationship marketing approach
and are investments based on reciprocity (exclusive rewards for loyal members)
and consumer satisfaction through ongoing service delivery. From an e-marketing
perspective, this is the Windows Update, Adobe Updates and other software that
checks the Internet for upgrades. Since it’s funded for the purposes of maintaining
an ongoing relationship, it’s a form of indirect revenue. This also covers where virtual
currency can be purchased within the software (Zynga Facebook games) or additional
content bought from within the software package (Adobe Bridge, Poser 8, anything
Zynga produces for the iPhone).
◦ Revenue 3: This is the where the channel has an immediate direct revenue stream in
the form of a subscription. Subscriptions may provide free content, access to exclu-
sive content or opportunities to shop at the in-device store (Xbox Live Arcade). It’s
the “cover charge at the night club where you’re also buying from the bar” approach
to off-web distribution.
In addition to the approaches that can be taken for raising revenue from sponsorship,
advertising, paid product placement and related approaches, there’s also the old-
fashioned method of charging a fee and receiving a payment. As mentioned previously,
there’s the monthly subscription approach (World of Warcraft), direct product sales
(Steam), product and subscription combined (Xbox Live) or virtual currency (Zynga).
There’s also the iTunes approach to presenting an array of pricing structures for music
which covers buying one track (single), two to three related tracks (EP), twelve or more
tracks (album), and the ‘completing the set’ price discount for buying up the remain-
der of a partially complete album the store detects in your collection. (Genius does
more than make playlists. It also generates shopping lists.) In terms of actually acquir-
ing money for virtual goods and services, there are a few different approaches we’ve
identified:
◦ Direct credit card: which is the preferred method of Steam, iTunes, Nintendo, Xbox
and a few other services where recurring billing is an option, or where you want your
service to remember the details for instant purchasing from shopping cards or appli-
cations. iTunes is particularly good at storing credit card details to enable purchases
412

Beyond the Web
on the iPhone to come from the established credit details set up within the desktop
store front. This requires a bit of offline logistics with banks, business accounts and
other set-up arrangements although it comes with the distinct advantage of being
credit card to bank account for payment speed.
◦ Direct debit: which is where you’re probably on eBay as you’re taking payments from
casual users via direct deposit. It’s been replaced with PayPal for most services that
offered it in the early days.
◦ Prepaid/offline credit vouchers: which is where you buy the network credits (Xbox Live
Points, Wii Points) or real money equivalent (iTunes cards) as gift cards. This is a use-
ful (albeit complicated to establish) method if you’re likely to deal with an audience
that doesn’t have its own credit cards.
◦ PayPal (www.paypal.co.uk): which is the international money vendor of default for
a wide range of services. Although PayPal is one of the largest non-bank financial
operations on the Internet, there are problems with the service freezing assets if it
feels the account is subject to unusual traffic patterns – which has occasionally been
triggered by a successful sales campaign producing a faster than expected rate of
sales (or where a new product launch captures the market’s imagination when the
previous sales were mediocre). If you’re looking for a long-term relationship with
PayPal as a provider, it’s probably worth establishing a pattern of advising of possible
sales spikes or predicted ‘unusual’ activity. PayPal is surprisingly tetchy about short
bursts of high-volume sales which often come about from offering a sales discount
on Twitter or a short run of exclusive content.
◦ Third-party wallets such as Amazon Payments (payments.amazon.com): which allow
stored account details at Amazon to be used for payments at a range of places around
the Internet, and thus turns Amazon into a B2B finance broker as well as the mega
hypermarket of the Internet.
◦ Mobile phone payments: which are hosted by providers such as Boku (www.boku.com),
Paymo (www.paymo.com) or Dao Pay (www.daopay.com) where the user charges
their purchase to their phone bill (thus highlighting the convergence of mobile
phone and credit card financing). (See Chapter 13 for premium SMS and other
details.)
◦ Virtual currency exchanges such as PayByCash (www.paybycash.com): which appar-
ently accept any legitimate or known form of financial payments to their accounts
which they broker as cash payments from your customer to your accounts.
PayByCash is an amazingly global operation given it offers popular payment mech-
anisms that are unique to various nations (it’s big in Belgium isn’t usually a unique
selling proposition), and some of the more common (credit card, PayPal, direct debit)
approaches.
◦ Virtual piggy banks such as Spare Change (www.sparechangeinc.com): which allow
users to top up their accounts with cash, credit, PayPal or mobile, or to receive
payments from market research companies that can be used for purchasing virtual
goods.
◦ Advertising brokers such as RockYou (www.rockyou.com): who provide the brokerage
and sales of advertising content to other services looking to promote on social media
sites, and pay direct revenue to the content creators.
413

e-marketing
Wheel of retailing
The wheel of retailing has the distinction of being a fundamental principle of marketing
evolution, the basis for a Facebook game and having a cameo appearance in the book
as part of Zawinski’s (1995) Law of Software Envelopment. The wheel of retailing is the
principle that any initial start-up operation in retailing will begin life as a low-margin,
low-price and low-status operation which steadily evolves into higher-priced, higher-
service operations as profits are reinvested into upgrading the organization (Figure 14.1)
The wheel of retailing is also responsible for three other aspects of e-marketing
covered in this book.
◦ Social media feature creep: This is where Zawinski’s (1995) Law of Software Envelopment
noted that programs keep expanding to send mail, and everyone with an off-web
channel seems to be determined to integrate social media into their framework
(Twitter and Facebook on the Xbox).
◦ Version N+1: Since Steam, iTunes and the Xbox Live Arcade launched, each has been
through numerous upgrades to expand the virtual shop frontage to offer enhanced
non-web retail functions, communities, and other features. It’s only a matter of time
before there’s an iTunes blog-hosting service that delivers your content direct to the
iPad, iPhone and iPod Touch.
◦ Café world (apps.facebook.com/cafeworld): This refers to the distinctly unsettling
experience of playing an addictive Facebook game based entirely on the principle of
creating more expensive food with higher points revenue that can in turn be invested
into larger cafés, better equipment and other non-functional cosmetic upgrades. It’s
strange to see a marketing theory implemented as a social network game (the subtle
but deadly difference is that the café world customers are not price sensitive – they’ll
get through nine-coin or one-coin products at equal pace).
There are a few downsides to the wheel of retailing, not least of which is the way it
always seems to convert your favourite low-cost café into a spectacular mid-level failure
as the owners spend proportionately less on the food and more on the décor. As an
evolutionary process, it can lead to feature creep, unplanned market expansions and
shifts away from the core business, core markets and value offerings that brought you
to the market in the first instance. The wheel of retailing does incorporate some prob-
lematic elements insofar as the push towards upgrading, content integration and feature
releases needs to be a strategic decision based on consumer needs, wants and demands
balanced against organizational goals, finances and objectives.
Steam’s evolution from a DRM management system to a community portal was a
natural fit between the objectives of the organization (Valve’s desire to develop online
distribution), the community’s desire for online gaming (game server lobbies) and the
gradual evolution of online gaming towards persistent identity (Steam ID) and com-
munity (friends lists) that led towards the development of Steam’s semi-permanent
cybercommunity structure (Chapter 9). In contrast, the iTunes store was intended to be
a personal device manager (load/unload iPods) which has progressively gained more fea-
tures centered around the fundamental premise of putting things into a shopping cart
and loading that cart onto an iPod (or related iDevice). The wheel of retailing struck
414

Beyond the Web
Introduction phase
‘Bare bones’ retailers enter to
Entry phase
serve price sensitive customers
Early growth spike
Upgrades, additional products

Trading-up phase and additional services introduced, Sustained growth
prices raised to cover new costs
Late growth spurt
Additional services and raised

Vulnerable phase prices move operation away from
original target market
Market maturity stage
Wheel of retailing Company status Product lifecycle
Figure 14.1 Wheel of retailing (try not to reinvent it)
iTunes when Apple introduced the Ping Network to compensate for iTune’s previous
lack of community. Notable, at the time, was the lack of integration with the iPod/
iPhone/iPad apps, which limited Ping’s ability to compete directly for social network
domination on Apple’s own devices.
Consequently, if you’re looking at your e-marketing product and wondering why it
can send e-mail and host blogs, you may have already been run down by the wheel of
inevitable upgrades. On the other hand, if you’re looking at this from a strategic point
of view, there are ways to use the wheel for your own objectives to make this a planned
journey from low cost, low margin to the bright lights of the big time (Table 14.1).
Ultimately, as with any part of the e-marketing process, the wheel of retailing needs
to be considered as part of a deliberate decision-making process to either integrate the
trading up to vulnerability phase into the game plan (and to invest in defences against
entry phase competitors) or to dig in and resist the temptation to put the profits into
nicer features, better chrome and new tables.
Segmentation and the off-web platforms

There are two key segmentation elements to consider for off-web platforms. As with
mobile phones, it’s important to consider the features, factors and attractors that are
associated with each area – there’s no point designing a product work as an overlay for
a software package that doesn’t accept third-party plug-in. Secondly, as with all market
research, positioning and segmentation, it’s vital to consider the needs of the consumer
415

e-marketing
Table 14.1 Linking the wheel to objectives, markets and tactics
Strategy Objectives Market Tactics
Entry phase Low end Cost-oriented Innovators Low prices

Sales-oriented Limited facilities
Behavioural change Price-sensitive customers
Trading-up Medium Sales-oriented Early adopters Moderate prices
phase Promotional Improved facilities
Value-conscious and
service-conscious customers
Vulnerable High-end Sales-oriented Early and late majority High prices
phase strategy Promotional Higher-end facilities
Entertainment-oriented Upscale consumers
and their potential or actual use of the distribution channel. These general elements are
outlined below and further examined in the context of each of the off-web platforms
discussed later in the chapter.
Types of off-web attractions and content

In Chapter 11, we introduced two content classification frameworks: types of attractors
and types of content. It’s worth revisiting the details of these classifications since they’re
applicable to the off-web environment (and this now explains why we didn’t talk about
web pages in that part of the content). The types of off-web attractors we’ve considered
tend towards the entertainment parks (World of Warcraft, Xbox Live, Wii, Steam), gift
shops and retail outlets (iTunes, Steam, Wii and Xbox Live) and freeway intersections
(Xbox Live, Steam, virtual worlds). Table 14.2 outlines a rough line up of attractors
according to platform.
As with the social media sites table in Chapter 12, the aim of Table 14.2 is to function
as a market decision-making model to frame your thinking about market segmentation
according to the functional use of the device (see also the ‘segmentation by feature’
approach in m-m, Chapter 13). Throughout the book, whilst we’ve broadly hinted at
the non-web applications, we’ve usually just implied website and web functionality and
offered market segmentation strategies based on users, usages and other approaches.
Here we’re recommending returning to the segmentation strategies of Chapters 3 and
4 to examine what additional fine tuning can be done for the distribution of a product
based on the difference in its functionality between a computer, Xbox, PS3, Wii, PC,
iPhone and Blackberry.
Consumer segments
Segmentation for off-web applications needs to combine functionality with con-
sumer usage. Four specific components of people-based segmentation strategies from
Chapter 4 are worth revisiting.
416

Beyond the Web
Table 14.2 Attractors in the off-web channels
Virtual Facebook Cloud

Type WoW Xbox Wii iTunes Steam world games computing
Entertainment parks Yes Yes Yes No Yes Yes Yes No

Content archives Yes Yes Limited Extensive Yes Possibly No Yes
Exclusive sponsorships No Yes No Yes Yes No Yes No
Town halls Yes No No No Yes Maybe No Possible
Clubs Yes Yes No No Yes Limited No Possible
Gift shops Maybe Yes Yes Yes Yes Limited Yes No
Retail outlets Maybe Yes Yes Yes Yes Limited Yes Possible
Service sector No No Yes Yes Yes Yes Yes Yes
Freeway intersections No No No No Yes No No No
Customer service centres No Yes Yes Yes Yes Yes No No
Journals and blogs No No No No No No No Yes
Single-purpose sites No No No No No No Yes Yes
1. Where are they? Which asks the question whether you can find your users in the vir-
tual geography which is the selling point of distribution strategies based on discrete
platforms. Each of the channel owners collects various demographic data on their
users (and some venture into the technical demography such as Steam’s hardware
survey) to understand the nature of their user base. Once you start negotiating for
channel access, you’ll be asking for the data (or they’ll be providing it) to fine tune
the delivery to ensure mutual gain. If your products are well tailored to the market,
it improves the overall value offering of the distribution service. The inverse is also
true – bad products will kill a virtual supply line.
2. What social compliance functions are available on the service? Remember that innovators
will try anything that looks interesting, early adopters will recommend anything
that makes them look good, and the early majority loves peer approval which dic-
tates what parts of the functional elements such as the Top 10 downloads, ‘Daily
recommended’, ‘Staff picks’ or ‘New releases’ you’ll need to access (and influence –
Tunecore.com offers a few paid placement elements inside iTunes to assist your social
compliance campaign strategy).
3. What’s the core product provided by the platform? This is where it’s worth return-
ing to the list of consumption motives for using the Internet back in Chapter 5.
The platforms listed in this chapter cover the ‘Using the Internet for escapism’
approach where it’s games consoles (Xbox), game distribution (Steam), actual games
(Facebook) and leisure activity (iTunes), plus the ‘Using the Internet as a vending
machine’ approach which specifically applies to iTunes, Steam and Xbox Live
Arcade.
4. Does this segment need constant engagement with the organization? If you’re relay-
ing content out to the market on an ad hoc basis (music, movies), or through
a structured timetable (podcast, television shows), you may not need to set up a
417

e-marketing
specific channel to receive user-generated content. If you’re orientating your product

towards accepting or depending on user generated content (e.g. community-created
maps), then the digital distribution channels need a bi-directional capacity. At the
very least, it’s worth a Revenue 1 or Revenue 2 investment in funding the redis-
tribution of content that enhances the core value of your software product. This
is one aspect where Valve’s use of Steam to redistribute free modifications and
community content has probably had the costs covered several times over by peo-
ple buying the core products (e.g. Half Life) to play with the free content (Half
Life Mods).
} Exploring beyond the Web

The final section of this chapter examines seven different forms of off-web chan-
nel. There are seven off-web platforms – cloud computing, Facebook games, iTunes,
Steam, virtual worlds, the Nintendo Wii and the Microsoft Xbox –summarized briefly
in Table 14.3.
We’ve allocated the seven to different categories based on their nature (software,
hardware, browser based) and noted whether they connect to a community and link to
the mobile marketspace. The three categories are briefly described as:
◦ Augmented virtuality: which is where the channel exists within another virtual
environment such as virtual world services, virtual goods and virtual currency for
in-games purchases.
◦ Desktop vending machine: which is where the software operates as a vending
machine for content such as games, MP3s, videos or other elements.
◦ Pocket universes: which is where the combination of hardware and/or software
creates a self-contained environment for the operation of the channel, and where
limited (if any) crossover can occur between objects in the different pocket
universes.
These channels are examined against a series of e-marketing frameworks including

the marketspace, and organizational objectives. It’s important to be aware that the
Table 14.3 Beyond the Web
Platform Type Nature Community Mobile
Cloud computing Augmented virtuality In-browser No Yes

Facebook games Augmented virtuality In-browser Mixed Mixed
iTunes Desktop vending machines Desktop software No Yes
Steam Desktop vending machines Desktop software Yes No
Virtual worlds Augmented virtuality Desktop software Yes No
Wii Pocket universe Hardware Limited Limited
Xbox Pocket universe Hardware Yes No
418

Beyond the Web
more non-standard approaches to e-marketing are going to require increasingly detailed

levels of justification (either to yourself or the accountants). It’s also useful to give the
new channels the same critical appraisal for their usefulness as you’d apply to other
areas to avoid personal biases creeping into the decision-making process. Those of you
with innovator tendencies will want a shot at the title because it’s there (inherent
awesomeness isn’t an ideal business decision-making framework) and some with late
majority tendencies won’t want to use the systems because the company’s not done
anything like that before (and the recursive logic loop will ensure that it doesn’t do
anything like it in the future either).
There are four areas of benchmarking undertaken in this section:
◦ Marketspace analysis (Chapter 6): which consists of the content on offer, the con-
text of where the channel is located, the infrastructure required for access and
the social interaction options which are drawn from the social media analysis
(Chapter 12)
◦ Attractor types which brings in styles of activity and design for websites to the off-
web arena (Chapter 11)
◦ Generic business objectives: which links together planning and implementation with
channel selection (Chapter 3 and Chapter 10)
◦ Product user positioning: which looks at the probable consumer motives for using
the platform (Chapter 5).
These elements are combined to form a base-level analysis of the seven off-web
platforms to be considered as alternative distribution channels for e-marketing.
Augmented virtuality
Augmented virtuality covers the use of the Internet as an augmentation device for vir-
tual services. This is an emerging area of embedded service delivery that views any piece
of software as a potential area for service delivery or the sale of virtual goods. Whilst
we’ve limited the chapter to examining cloud computing, Facebook games and virtual
worlds, it’s worth noting that Microsoft Word can play host to augmented virtuality
through integration with Office Live (cloud-computing function) and the ability to trig-
ger online searches for content such as templates, clip art or images from within the
application (when you can hire and pay for editing services without needing to close
the window, they’ll have really hit the virtual service market).
Cloud computing
Cloud computing is a series of services that relate to the use of the Internet as a
storage platform to enable service delivery from anywhere in the Internet-connected
world. The general principle of cloud computing is to provide ubiquitous access to con-
tent (documents stored on DropBox.com), services (Google Docs) or whole operating
systems worth of applications and functions (www.jolicloud.com). As such a diverse
marketspace is a little hard to narrow down into a set of functions, we’re going to talk
419

e-marketing
in generic terms about the principles of cloud computing, and point to a few examples
rather than go into depth with device-specific channels. Overall, the features of the
cloud can include:
◦ Social media integration: which, as discussed in Chapter 12, refers to interconnection

between content, users and communication technologies through platforms such as
Facebook and Twitter
◦ Content creation networks: which are supported by the entire array of shared content
creation systems which range from collaborative file editing in Google Docs (www.
google.com/docs), through shared whiteboards in Inkscape (www.inkscape.org) to
Google Wave (www.googlewave.com/wave)
◦ On-machine store: which includes the ability of certain cloud-based systems to pro-
vide retail functions to buy content, hire services or purchase freemium content that
becomes available anywhere the user is – as opposed to being allocated hard drive
space on a specific computer somewhere
◦ Intra-software store fronts: which includes the ability to purchase virtual goods and
services for use within the cloud application (e.g. rights to archive image use within
a cloud-based image editor)
◦ Mobile interface: which is basically the entirety of how the 3G iPad is designed to
operate, covers most of Kindle’s operations and handles a fair amount of any time
you read your e-mail on the phone without actually downloading the e-mail to the
handset.
Marketspace analysis: Cloud computing is a developing application of the Internet that

has been enabled by the simultaneous growth in network speeds and decline in server
space costs. However, its limitations are based entirely on the network accessibility and
bandwidth capacities of the user. For example, DropBox offers 50GB of online storage
space which is larger than most monthly download quotas that don’t include the word
‘heavy’ somewhere in the title. Similar problems exist when you’re looking at the net-
work congestion and bandwidth restrictions of trying to implement mobile 3G-based
cloud computing. However, as a promising development for the future, it’s worth the
investment in exploring further in terms of the following:
◦ Content: just about everything

◦ Context: Internet based servers, some local hard drive space and a lot of in-browser
applications that can’t function in an offline mode
◦ Infrastructure: computers. Netbook users can consider the Jolicloud (www.jolicloud.
com) operating system as an operational framework for cloud computing
◦ Social interaction: e-mail, chat, direct message
◦ Attractor types: Technically, everything can feasibly be supported in the distributed
computing environment, although we’ve preferenced a set of options in Table 14.2
as the most appropriate use of the framework.
Generic business objectives: Cloud computing has been introduced in a range of opera-
tions (including the writing of this book) on the basis of its capacity to apply distributed
420

Beyond the Web
access to content, files and services. The best fit between the platform and the generic
business objectives will vary according to the type of objective.
◦ Behavioural change objectives: which includes changing the way we use technol-
ogy to see software as something we borrow or access rather than something we
own; moving towards a collaborative virtual environment for document sharing and
editing
◦ Information dissemination objectives: where collaborative access to shared ideas is a lot
easier if you’ve all logged into Google Docs and can read the same file (and edit live
whilst discussing the changes amongst yourselves – try it with a group assignment
sometime)
◦ Cost-oriented objectives: which are a mixed function of reducing costs by using
freemium services for e-mail, document handling and archival storage rather than
investing in corporate IT infrastructure
◦ Efficiency objectives: which is where the authors used DropBox to allow for the chapter
drafts to be instantly available between authors, editors and production teams rather
than relying on e-mailing files (and remembering which was the most recent version)
or carting them around on USB sticks (and not being able to work on the file because
you left the stick at home).
Product user positioning: Cloud computing is still a new concept, and it’s really early days,
which means we’re in the innovator and early adopter phases. The most likely product
user position that the average consumer would associate with this platform would be
‘waste of time’ since most people aren’t doing collaborative work that can’t be solved
by someone typing and someone else leaning over their shoulder. However, for those
with offices in multiple locations (or university assignment groups), cloud computing’s
collaborative environments, online file hosting and other options lend themselves to
convenience, ATM and vending, and a certain level of inherent awesomeness of having
the file you’re working on be instantly accessible to someone the other side of the world.
It certainly made the writing, editing and proofing process for this book considerably
easier.
Facebook games
We’ve isolated Facebook games as one of the more interesting uses of augmented vir-
tuality insofar as the games themselves augment the Facebook user experience through
engaging in community gameplay (assisting friends in activities in the applications),
community development (encouraging sharing of rewards and gameplay engagement
to build shared goods of value) and overt selling thoroughly virtual services and prod-
ucts (paying cash for in-game rewards). The key features of this type of Facebook game
include:
◦ Social media integration: which is the games’ integration into Facebook, MySpace
and the rest of the social media fleets. Zynga Games (www.zynga.com) operates on
Facebook, MySpace, Bebo (www.bebo.com), Friendster (www.friendster.com), Tagged
421

e-marketing
(www.tagged.com), MyYahoo! and the iPhone (which indicates that the iPhone really
wasn’t meant for phone calls)
◦ Content creation networks: limited original content per game, although the games
themselves generate content for the social media user to share in the form of
achievements, announcements and request for assistance
◦ One-way virtual currency: yes. Most of the revenue providers listed earlier in the
chapters were found via these games. They’ll accept just about any real-world cur-
rency and translate it into either a coin or cash function. Game cash (or related
denominations) buy unique items or enable the skipping of certain time restrictions
(recharge limited energy). Game coins (or similar functional currency) allow for the
purchase of generic in-gameplay items (seeds in farming games, blood in vampire
games)
◦ Intra-game store fronts: each game has an in-game option to sell game credit, and most
of the stores are triggered by exceeding your cash or coin balances
◦ Mobile interface: strangely limited by the fact that most of the iPhone games don’t
link back to Facebook games.
Marketspace analysis: The Facebook game marketspace is huge for the players, massive for
Zynga and relatively interesting as a potential playing field for marketers to consider for
branded in-game items, product placement and intra-game advertising via the services
of RockYou.
◦ Content: entertainment, solo gaming within a sense of community

◦ Context: within web pages
◦ Infrastructure: social media network sites, Flash (thus the iPhone and iPad are excused
from Facebook gaming and get their own applications)
◦ Social interaction: players can be directly engaged in competition or, collaboration, or
the game can use the social media site to communicate results of gameplay to prompt
word-of-mouth and gameplay activity
◦ Attractor types: entertainment parks, exclusive sponsorships, retail outlets, gift shops
service sector, single-purpose sites.
Generic business objectives: The first consideration for businesses interested in Facebook
games revolves around aligning with the major league players such as Zynga to provide
additional services, or to attempt to switch players from those games to your own
products. There’s also considerable interest in game guides, game advice and communi-
ties built around discussions of the gameplay that occur within the social media sites,
or as standalone communities. Finally, if you’re in the payment-brokering industry,
it’s definitely worth examining how your services can fit into the virtual purchasing
options for these games. The best fit between the platform and the generic business
objectives are:
◦ Entertainment-oriented objectives: which are where you’re aiming to make something

addictive, attractive and entertaining that can be discretely improved by the odd top
up of a few pounds now and then to accelerate various gameplay objectives
422

Beyond the Web
◦ Information dissemination objectives: which is where you offer tactics, instruction man-
uals and saleable PDF files of advice to players of these games to improve their
performances (and beat their friends for the more competitive types)
◦ Cost-oriented objectives: which is where these games can be used as a form of low-cost
promotion for a larger product – for example, the frequently mentioned Bejeweled
is has a free version on Facebook and paid versions on the iPhone and PC. PopCap
uses the free Facebook game as a cost-reduction mechanism to provide direct relevant
promotion to game players and the community competitive gamers who post high
scores to their Facebook walls for bragging rights
◦ Sales-oriented objectives: which is where the aim of the game design is to create a
gameplay atmosphere that’s conducive to in-game purchasing of virtual goods with-
out unbalancing the gameplay. Sell decorative objects for real-world money and leave
the core game mechanics relatively uninfluenced by cash purchasing
◦ Promotional objectives: which is where ideas, movies, services or experiences can
be promoted through vicarious experience in gameplay, product placements or
advertising in the games.
Product user positioning: Since Facebook has 300 million people, it’s a nation unto
itself. Facebook games do attract more casual gaming based on the nature of the
platform and the Flash-based animations, with the most successful games having a
collaborative–competitive framework (levels, leader boards and co-operative activity).
The most likely product user positions that the average consumer would associate
with this platform include community based on the shared goods of value from the
gameplay experience (Mafia Wars), learning based on the need to master sequences
of ideas for optimal gameplay (Farmville), convenience (Farmville and Mafia Wars
browser toolbars), escapism, recreation and a certain level of self expression with the
avatars. Finally, there’s the social pressure that comes from the gift process that allows
players to cajole and bribe their friends, and to induce continued participation from
lapsed players.
Virtual worlds
The virtual worlds section could sound like a World of Warcraft by any other name
although most of the principles described here are equally possible in other vir-
tual worlds. In addition to World of Warcraft, we’d recommend investigating EVE
Online, Second Life, City of Heroes and Villains, subscribing to Spugnort’s World
(www.spugnortguides.com) and picking up an account at Curse (www.curse.com).
It’s also worth looking at NCSoft (www.ncsoft.com) and the Massively Multiplayer
category in Steam. Within all of these worlds, the emphasis in this section
is not on the creation of a virtual landscape as much as setting up vir-
tual services to improve the player’s in-game performance, becoming a virtual
goods broker in the games that permit or encourage that sort of activity and
offering third-party materials such as guides, manuals, training and interactive
database services.
423

e-marketing
As providers of third-party content to these worlds, there’s a level of business-to-

business (B2B) relationship marketing and management with the world owners to be
considered – effectively, don’t annoy the people who can ban the use of your prod-
uct, and don’t try to break their world through exploits, gameplay imbalance or other
actions.
Virtual worlds have a moderately consistent set of features of interest to e-marketers,
which include:
◦ Social media integration: which is where you provide a third-party link between the
game and social media sites such as the in-World of Warcraft Twitter client (www.
tweetcraft.codeplex.com)
◦ Content creation networks: which is where the games permit, sanction or ignore the
sale of third-party plug-ins for real-world money (US$5 PayPal donations appear to
be the base entry price). Alternatively, this is where your product will rely on user-
generated content for the provision of core services such as mapping, auction house
monitoring or other live data streams from within the game. As long as the customer
gains from contributing to the data pool, most game players will assist with user-
generated content community oriented applications that run as part of their game
experience
◦ In-game store: which is where ideally you want to operate if you’re selling in an
environment that permits virtual goods, virtual asset trading or virtual currency
exchange
◦ One-way virtual currency: which is most of the MMOs that don’t permit or condone
currency trading. Second Life and the Sony Network sanction real-world cash trading
(money in, money out) through their official exchange rates and brokerage services.
Other games such as EVE Online and World of Warcraft will hunt down and ban
players if they suspect them of untoward currency trading
◦ Mobile interface: which is a developing market of on-device applications, store
fronts and other services that allow the smart phones to be used for serving
information to players whilst those players are in-game. Any iPhone applica-
tion that can provide useful real-time data to an MMO player provides an aug-
mented reality of a physical compass/dataset for augmenting the virtual gameplay
experience.
Marketspace analysis: This is a variable marketspace due to the wide range of attitudes
held by the MMO producers. At the far end, MMO owners may believe that third-party
applications are an unwelcome intrusion into their game environments and can use
copyright, end user licence agreements and other enforcements to prevent their use,
thus wrapping up any desire you may have had to sell to their customers. In the middle,
there’s the sanctioned, permitted and largely ignored if it’s not commercially exploiting
the game’s IP type of augmentation which doesn’t necessarily provide a good Revenue 2
or 3 opportunity. At the other end, there are the games that actively encourage augmen-
tation to create a customer co-production environment that gives their users increased
incentives to continue paying the monthly subscription fees.
424

Beyond the Web
◦ Content: virtual world augmentation from maps, compasses, databases, knowledge,

virtual objects and virtual currencies
◦ Context: virtual world servers (services, virtual goods), PDF files and mobile devices
for information products
◦ Infrastructure: Game clients software, some additional third-party accessories
◦ Attractor types: Entertainment parks, content archives, clubs, service sector, customer
service centres, town halls, and single-purpose sites.
Generic business objectives: Producing augmented virtuality products is either going to

send your organization in search of good coding skills or be a means to convert the time
you’ve invested in these worlds into something that mixes knowledge management
software, training and instruction manuals. The best fit between the platform and the
generic business objectives tends towards the following areas:
◦ Entertainment-oriented objectives: which involve augmentations that make the virtual

worlds more fun by improving the overall experience
◦ Behavioural change objectives: which include training guides, technique improvements
and other information that alters the way the user interacts with the virtual world
◦ Information dissemination objectives: which involves the production and distribution
of insight into the virtual world, tactics and other insights gained from in-world
experience
◦ Sales-oriented objectives: which are about converting your own in-game experiences or
personally developed augmentations and selling them to the other members of your
community.
Product user positioning: Virtual world augmentation attracts product users from across
most of the spectrum and can be narrowed into different types of product offerings for
each category of user.
◦ Learn: which is where you’re producing instruction manuals, training guides, maps
and ancillary support materials such as YouTube videos
◦ Search: which is the development of in-world knowledge management databases that
can be used to assist the players in quest completion or in understanding the chal-
lenges they’re facing as well as actual in-world search functions that help find places,
people and things through maps and in-world compasses
◦ Communicate: which is where your accessories either offer intra-game communi-
cations such as voice over IP or extra-game communications such as embedding
Twitter, MSN or Facebook into the virtual world
◦ Convenience: which is where you’re aiming to improve in-world experiences with
your products or services
◦ Community: which is where you augment a game with a guild structure that operates
within the game and may be hosted on a separate web forum, Facebook group or
similar arrangement
425

e-marketing
◦ Inherent awesomeness: which is where you do something spectacular that improves

the virtual world either by exporting it to real life (3D custom figure print-
ing, posters of game avatars) or producing an in-world experience (in-game radio
stations)
◦ Vending machines: which is where you sell virtual goods in sanctioned environments
◦ ATM: which is where you’re brokering cash in virtual world environments
◦ Self-expression: which is where your systems improve the avatar creation process, or
provide additional accessories for the in-world experience such as the improbably
large fashion industry in Second Life.
Desktop vending machines

Desktop vending machines refer to any applications that are purpose built to provide
self-service sales combined with automated product delivery without needing to load
a web page. The two highest profile vending machines are iTunes and Steam. Amazon
has begun to experiment with PC-based Kindle software packages, and other software
vending machines are being developed for content delivery (video on demand, pay-
per-view television). For the most part, vending machine software usually also provides
other services such as community engagement (multiplayer games on Steam), data man-
agement (Blackberry phone synchronization software) or a direct interface to physical
hardware (iTunes for loading iPods).
iTunes
iTunes is the poster child for the wheel of retailing in a digital format. Starting life as
a data-management tool for loading iPods, progressive iterations of the software have
added the ability to purchase and download directly from the Apple iTunes library,
subscribe to periodic updates from podcasts and rent time-expiring digital video content
which can either be played on the computer or handheld device. With the advent of the
iPhone, iPod Touch and iPad, the store also offers direct-to-device applications that can
only run on the mobile devices (there’s a way to create a virtual iPhone, but that’s well
outside of the average use of the system). As the definitive digital distribution platform,
the iTunes store accepts direct credit card orders and prepaid charge cards. Since Apple
has a large array of distribution networks in place to sell iPods, it’s no real challenge
for the company to also sell pre-paid charge cards to the offline marketspace. Features
include:
◦ Social media integration: iTunes has the option to post a link to store content to Twitter
or Facebook
◦ Content creation networks: Apple store content can be brokered through third-
party providers such as Tunecore (www.tunecore.com) for MP3 distribution, direct
submission for podcasts (www.apple.com/itunes/podcasts/specs.html) and direct
submission for iTunes Apps (http://developer.apple.com)
◦ On-machine browser: iPod Touch, iPhone and iPad all run the Safari web browser
(without Flash)
426

Beyond the Web
◦ On-machine store: Available on the iPod Touch, iPhone and iPad for direct purchase
◦ One-way virtual currency: iTunes pre-paid credit
◦ Intra-game store fronts: apps can sell virtual goods directly from within the application
using iTunes account details
◦ Mobile interface: integrated in the iPhone, iPod Touch and iPad devices.
Marketspace analysis: The entry barriers for iTunes range from incredibly complex B2B
relationships through third-party brokers to direct B2B channel negotiation with Apple.
Apple maintains a fairly strict level of control over channel content to preserve the
brand integrity of its iTunes store and its positioning as a relatively family-friendly
environment equivalent to the local video store or magazine shop. Video and televi-
sion footage suitability can range from general audiences (U) to restricted adult content
(R18), whereas the application store operates on an iTunes-specific age index (4+, 9+,
12+ and 17+).
◦ Content: applications, videos, audio, television, movies, e-books and audio books
◦ Context: within the iPhone, iPod Touch and iPad; within the iTunes software; external
hosting providers (podcasts); Apple’s servers (all other content)
◦ Infrastructure: Apple computers running OS X and licensed developer kits for applica-
tion development plus iPhone, iPod Touch and iPad as a testing environment (app
development is not supported in Windows or Linux); third-party hosting for podcast
distribution; iPhone, iPod Touch and iPad for application use
◦ Social interaction: iTunes provides limited feedback functions per sale item and
limited sharing of content to Facebook and Twitter. No direct iTunes to iTunes
communication (it has thus far resisted Zawinski’s Law)
◦ Attractor types: content archives, exclusive sponsorships, gift shops, retail outlets,
service sector customer service centre.
Generic business objectives: iTunes is the distribution channel for audio content (if you
don’t mind DRM and having to have content approved by a faceless process run
somewhere in Apple). With the dominant share of the MP3 player market and
despite the fact that Apple sells its music in the MPEG4 format (m4a file exten-
sion), iTunes is the best distribution outlet for audio content. It’s worth remembering
that the term podcast tends to be considered a portmanteau of iPod and broad-
cast, since iTunes was one of the more successful podcast directories to be widely
adopted. The best fit between the iTunes and the generic business objectives is
as follows:
◦ Entertainment-oriented objectives: which are the core business of providing audio,

music, video and games. This is the channel and this is the platform for delivering
digital entertainment content to a wide audience
◦ Behavioural change objectives: which can be supported through podcasting,
behavioural tracking applications such as exercise programs (Runkeeper), e-books
and audio books. If you have a virtual product that can support a behavioural change
objective, it’s worth ensuring it can be accessed by iPods and delivered through
427

e-marketing
iTunes. Similarly, any behavioural change objectives that require repeat behaviours
can be enforced and assisted with iTunes apps that perform push reminders, play
alarms, or have large reassuring check boxes with green ticks to register task
completion
◦ Information dissemination objectives: any information-based objective that can be
recorded in audio or video can use this channel. Apple releases its keynote addresses,
product launches and budget meetings through iTunes
◦ Cost-oriented objectives: once you clear the various hurdles, fees and charges associated
with product placement on iTunes, it’s a lower cost channel for comparative reach
than most physical media distribution options
◦ Sales-oriented objectives: iTunes is well suited to sales objectives that encourage free
samples, product bundling, bulk discounts and, surprisingly, premium pricing for
individual objects. The ability to sell virtual goods and additional content intra-
application through iTunes is a valuable addition to the market penetration strategy
portfolio
◦ Promotional objectives: theatrical movie trailers have their own category in movies;
free apps can be used to encourage sales of paid apps and/or as promotion for offline
products such as movie tie-in games, or physical goods and services.
Product user positioning: iTunes serves a wider market than just iPod, iPad and iPhone
users insofar as the channel software runs on a PC and a Mac and tends to show up and
be installed if you’re not paying attention when you’re installing QuickTime or Safari
(and Safari shows up unannounced once QuickTime and iTunes are around). When it’s
used intentionally and willingly by end users, it’s a reasonably competent media man-
agement tool, a good retail outlet and a useful means for wrangling iPods into order (and
mandatory for iPhone activation and use). The most likely product user positions that
the average consumer would associate with iTunes include escapism (movies), recre-
ation (games, music), convenience (in-computer purchasing), learning (iTunes genius
music recommendations), search (finding music), social pressure (Top 10 lists), inher-
ent awesomeness (there’s a music store in my computer), vending (buying music, video
and apps) and a touch of self-expression for customizing the personal experience of
the iPod devices (public goods for the devices, private goods for the apps, music and
videos – Chapter 13).
Steam
Steam is a Mac and Windows-based software client that is equal parts DRM system,
consumer marketplace and community. Designed initially as a command and control
mechanism to allow Valve to validate ownership of Half Life 2, it meets the wheel
of retailing criteria as a progressive series of upgrades introduced a full-scale retail
store, a community infrastructure, media and game management plus a series of com-
munity content-creation tools. The system supports a range of distribution options
for supplying paid premium content, updates, expansions and exclusive in-game
items to specific players as loyalty incentive rewards. The core features of the site
include:
428

Beyond the Web
◦ Social media integration: limited, largely due to Steam having its own community
infrastructure that includes player profiles, live chat and direct messaging (it’s the
Facebook of First Person Shooters)
◦ Content creation networks: extensive support for user-generated content including
official content-creation systems (Tools menu), Steamworks which is a dedicated
development network (www.steampowered.com/steamworks), plus capacity and
organizational encouragement of community content. Valve periodically releases
community-generated content for products such as Team Fortress as part of its official
update strategy
◦ On-machine browser: technically, the Steam client runs a cut-down version of Internet
Explorer to provide dual access to content within the game client and on the web
◦ On-machine store: yes
◦ One-way virtual currency: no. Steam accepts PayPal and credit cards but doesn’t have
its own currency bank
◦ Intra-game store fronts: limited but developing. Most intra-game content is sold
through the main Steam virtual shop front
◦ Mobile interface: no.
Marketspace analysis: If you’re looking for a PC-based video games distribution channel,
Steam is one of the best resourced in terms of reach, accessibility and willingness to
support independent games production. Valve openly publishes market research data
on the performance of their own flagship games plus the results of the opt-in player
hardware survey (http://store.steampowered.com/stats). The Steam platform provides a
DRM system that ties ownership of the content to the user account rather than their
devices through Custom Executable Generation (www.steampowered.com/steamworks/
publishingservices.php). This approach differs from the device-centric nature of iTunes
and other DRM platforms that tie ownership to machine rather than person. Valve has
also integrated a cloud-computing approach to key aspects of the game set-ups such as
save files, customization options and keyboard modifications so that distributors can
make their games relatively portable, ensuring the experience at home or at a netcafé is
relatively similar.
◦ Content: video games, video game trailers, virtual tool kits

◦ Context: Valve-hosted game servers, independent game servers, Steam software client
◦ Infrastructure: computer running Windows XP, Vista or Windows 7 and Mac OSX
◦ Social interaction: games can include direct voice chat, messaging and ‘friends list’
of allied players; Steam has an intra-software messaging system for real-time chat,
messaging, groups and community
◦ Attractor types: entertainment parks, content archives, exclusive sponsorships,
town halls, clubs, gift shops, retail outlets, freeway intersections, customer ser-
vice centres
Generic business objectives: Steam is a dedicated retail outlet for game content at present
although its extensive reach and ability to distribute video files for gameplay trailers
429

e-marketing
may open up some wheel of retailing options in the future for game-related video
content. The best fit between the Steam distribution platform and the generic business
objectives include:
◦ Entertainment-oriented objectives: where you’re in the video game business and you
want access to Mac and PC gamers. There’s some degree of integration slowly appear-
ing between Games for Windows and Steam, with several of the titles supporting
both user accounts simultaneously (thus heralding a future path for Steam/Xbox
Live crossovers)
◦ Information dissemination: which is where the independent gaming community, edu-
tainment and other health games may have a future channel for providing interactive
content to Steam users
◦ Cost-oriented objectives: where smaller publishers can use Steam for retail releases with-
out the capital investment in physical media, inventory or risk of physical shipping
delays
◦ Sales-oriented objectives: which include the ability to vary pricing, offer free demon-
stration sessions and offer ongoing DLC and exclusive pay-per-access content. Valve
periodically offers ‘Free Weekends’ which consist of ninety-six hours of access to full
copies of various games for free as a trial adoption (and since you’ve downloaded the
content to access the trial weekend, it’s just a matter of paying the bill on the Tuesday
to reactive the full copy)
◦ Promotional objectives: which include a store front that regularly updates deals, pro-
motions and special offers, and the use of the Steam Update News pop-up window
on Steam client launch to offer news, deals and exclusive sales.
Product user positioning: This is a PC gamer’s platform and, as such, contains your
average market of gamers (mid thirties median age) with further technographics
available at Steamworks (http://store.steampowered.com/hwsurvey). The most likely
product user positions that the average consumer would associate with this plat-
form include learning new games, game content and additional insights into the
games. If you’re not going to develop a game itself, it’s worth looking at the
level of supporting materials that accompany the major games, such as strategy
guides, community wikis and other video demonstrations. Communication and com-
munity are key elements of the Steam experience with the integrated capacity to
perform match-making services (aka putting players of similar calibre according
to performance stats into the same matches). As a gaming platform, there’s also
the usual pseudo-anonymity, escapism, recreation and self-expression options built
into the core product of gaming. It’s worth noting that Steam’s persistent iden-
tity structure has allowed Valve to generate a relatively self-policing community
that’s not very tolerant of abusive behaviour and which has the capacity to imple-
ment penalties for cheating, breaches of conduct and misbehaviour. Finally, as a
sales platform, it provides a solid vending machine capacity, including the abil-
ity to acquire additional aftermarket services such as new content, patches, repairs
and upgrades.
430

Beyond the Web
Pocket universe
The term pocket universe first appeared in Chapter 1 in relation to the type of Internet
server, system or activity that relied on the same basic frameworks as the Web but also
involved some specific-purpose hardware and software in order to access it. Whilst other
pocket universes exist (Sony Playstation 3), these haven’t been covered due to limita-
tions on space, time and precisely how many devices could be sent out for a test drive
with the authors before the book stopped being written in favour of playing with the
new toys. The key three pocket universes of interest for e-marketing to consider are:
◦ Nintendo Wii
◦ Microsoft Xbox
◦ Blizzard World of Warcraft.
Nintendo Wii
The Nintendo Wii is a games console with limited capacity to cross-link to other con-
soles for shared network gaming and to allow inter-console communications (which
amounts to making a very high-tech postcard service). Although the infrastructure is
present in the platform for mobile connectivity via the Nintendo DSi, and for a sig-
nificantly advanced level of on-console shopping through the Wii Shop, there’s been
limited movement in this area. We’ve included the Wii because of the market potential
it has in the future since it’s one of the most widespread platforms but has yet to fully
embrace its potential as a virtual channel by Nintendo. The platform features include:
◦ Content creation networks: limited support

◦ On-machine browser: runs on a modified version of Opera, which defaults to selecting
mobile-enhanced versions of websites
◦ On-machine store: yes, Wii Shop (www.wiishop.net), WiiWare and Virtual Console
◦ One-way virtual currency: Wii Points
◦ Mobile interface: limited connectivity with the Nintendo DSi
◦ Parallel universe option: DSi connection.
Marketspace analysis: The Nintendo Wii is a sufficiently widely adopted platform to be

considered well into the early majority (if not actually entering into late majority). This
is due to Nintendo’s positioning strategy of focusing the platform’s market on non-
conventional gamers and casual and first-time adopters. Nintendo also moved away
from a teen and post-teen market with an emphasis on social gaming as a family, couples
or shared mates activity. The interesting aspect of the console has been its adoption by
the hardcore gamers who also own the Xbox or PS3 platforms, as the Wii offers unique
gameplay experiences that mean flailing the controller around the place is a feature
(and not an expression of frustration). The key elements of the marketspace include:
◦ Content: gaming and interaction entertainment

◦ Context: Web, Nintendo-specific network
◦ Infrastructure: hardware console (Nintendo Wii)
431

e-marketing
◦ Social interaction: short messages between consoles

◦ Attractor type: entertainment park.
Generic business objectives: E-marketers using the Wii as a distribution channel would
need to dovetail with Nintendo’s objectives and probably would be well suited to engage
in the following areas:
◦ Entertainment-oriented objectives: focusing the marketing efforts on delivering enter-

tainment goods and services to the platform
◦ Behavioural change objectives: including encouraging users to engage in the more
physical games such as the Wii Fit and Wii Sports to achieve personal fitness goals
◦ Sales-oriented objectives: which include providing content to the service directly, and
encouraging on-console purchasing.
Product user positioning: The positioning of the Wii has been based around the core ben-
efit of the games console as a platform for escapism and recreation. However, there’s a
lot to be said for the inherent awesomeness that comes from controlling a video game
character through the Wii controllers and the volume of social pressure that’s formed
up around the widespread diffusion of the console as a non-gamer’s gaming platform.
Microsoft Xbox
The Microsoft Xbox 360 is a video game and entertainment console designed for Inter-
net connectivity and content downloads (for consoles with hard drives), and is built
with a set of multi-purpose media and home entertainment options within the actual
product. Backed by a history of hardware development from the original Xbox series,
the 360 has been designed for networked interactivity, with local and network multi-
players built into the fundamental infrastructure. Similarly, the New Xbox Experience
(aka the console screen) features interactive elements that link players to their friends,
and notifications when an Xbox friend logs into their console (and sometimes when
they start playing games). The system has player-community development embedded
into the core services, with hosted events (Rockband Mondays, Halo Thursday), a cal-
endar of gaming events and the ability to set up ‘Xbox parties’ which are user-created
events that allow players to invite their friends to an intra-Xbox event. From point of
purchase for the book research to time of writing, the Xbox console software has seen a
series of upgrades and feature releases indicating an active interest by Microsoft in using
the wheel of retailing on its console platform. Currently, the features include:
◦ Social media integration: including the ability to update Twitter and Facebook from
the console (and if you plan to do that, buy the messenger keyboard for the Xbox
controller if you like Blackberryesque small keyboards or plug in a real USB keyboard)
◦ Content creation networks: which include the XNA network (www.xna.com) for
community and professional developers
◦ On-machine browser: it’s possible to install a web browser via Windows Media Centre
although the Xbox doesn’t support web browsing as a default function
432

Beyond the Web
◦ On-machine store: which includes the retail and gift shop modes that sell just about
everything from fully downloadable games, expansion content (DLC) and in-game
items (virtual goods such as specialist cars for Burnout Paradise) to parts for avatar
customizations (virtual hats, shoes, shirts)
◦ One-way virtual currency: Xbox Points
◦ Intra-game store fronts: The Xbox platform supports intra-game content purchasing
to allow for in-game virtual goods (cars, weapons, hats) and additional game con-
tent (songs, levels, maps). The Rockband and Guitar Hero franchises have just about
perfected the integration of the store with the gameplay
◦ Mobile interface: Limited mobile content through the Microsoft Zune.
Marketspace analysis: The Xbox supports a relatively wide range of age groups with its
mix of hardcore gaming capabilities and additional supporting services such as a media
centre, DVD player and home entertainment unit. Games such as Rockband, Guitar
Hero and related music games have expanded both the user base and the marketspace
mechanisms that are active within the console.
◦ Content: games, social networks, entertainment media

◦ Context: Xbox network, some limited crossover into the Windows Live web-and PC-
based environments
◦ Infrastructure: Xbox 360, Microsoft Windows Live (Games for Windows) accounts
◦ Social interaction: voice chat whilst in game, between console messaging systems
(including voice and video), Twitter and Facebook
◦ Attractor types: entertainment parks, content archives, exclusive sponsorships, clubs,
gift shops, retail outlets, customer service centres
There are three items to note with the Xbox. First, the use of standard USB ports in
the device allows the USB Xbox controllers to be linked with desktop PCs. Since that
means the console does accept USB keyboard input, it hints at the prospect of an ‘Xbox
as family computer’ future. That said it’s still really awkward to even consider Microsoft
Office for the Xbox in its current format. Secondly, there’s a distinct lack of a music
store within the on-console shopping options, which is either the legacy of the failure
of the MSN Music store (or a vague hope of an iTunes deal once Apple stops laughing
at the Zune’s attempts to dethrone the iPod). Thirdly, the marketspace for independent
video and television content has remained relatively untapped compared with the level
of independent gaming content available on the platform. There’s an opportunity for
pay-for-view (or ownership) content delivery via streaming and/or downloaded video
with a solid infrastructure in place that could use a lot more content options.
Generic business objectives: When your target market owns an Xbox, there are a lot
of advantages to be had from working with Microsoft’s content delivery networks. The
best fit between the platform and the generic business objectives are:
◦ Entertainment-oriented objectives: where video, audio and gaming content can benefit
from providing content into the platform
433

e-marketing
◦ Cost-oriented objectives: where the digital products sold exclusively to the market
directly cut down on the overheads of printing physical materials and reduce
operating costs associated with creating, shipping and warehousing stock
◦ Sales-oriented objectives: which include the ability to offer market penetration strate-
gies for selling additional components of a product (the DLC model) and product
development (new games).
◦ Promotional (sales) objectives: which include using the channel for game trailers, movie
previews and demonstration versions of the games, and offering old-fashioned short-
run price discounts.
Product user positioning: The most likely product user positions that the average con-
sumer would associate with the platform centre around the escapism, recreation and
vending machine approaches. The Xbox platform has a well-established track record in
DLC sales, and sales of DLC-friendly products such as Call of Duty Modern Warfare 2,
Rockband, Guitar Hero and Halo. There’s also some level of communication and com-
munity to be found in the gameplay (with the unfortunate downside of some of the
pseudonymity options creating a space for anti-social behaviour). To a lesser extent,
there’s also a convenience factor associated with the Xbox’s combination of vending
machine plus community, allowing for easy access to new experiences and content
without needing to leave the house. Once you can order groceries over the Xbox, it
could be the perfect distribution platform.
World of Warcraft
World of Warcraft briefly features in the pocket universes as the largest of the mas-
sive multiplayer online games environments. As a commercially owned and operated
self-contained universe, the game is not conducive to marketing activities within the
platform. Instead, any e-marketer wanting to work with the World of Warcraft com-
munity needs to focus on the areas outlined in augmented virtuality. However, for
the purpose of the book, it’s useful to view the contained marketspace of World of
Warcraft as a distinct pocket universe to understand how it functions as a consumption
environment. The features of this particular universe include:
◦ Social media integration: which includes Twitter through a third-party client, and some
Facebook applications that feed in-game data back to the Facebook profile
◦ Content creation networks: limited intra-game activity, although Blizzard actively
encourages the development of clanning behaviour by host in-game guilds
◦ On-machine store: component parts of World of Warcraft such as DLCs and expan-
sions can be purchased for direct download from Blizzard. In-game objects have had
limited release (http://blizzard.com/store)
◦ One-way virtual currency: Warcraft Gold. It’s theoretically not convertible into cash
despite what you can buy and sell on eBay and other places
◦ Intra-game store fronts: intra-game assets can be purchased through consumer-to-
consumer auctions and direct trade (there’s even a service industry of in-game
mercenaries, trainers and security details if you know where to look)
434

Beyond the Web
◦ Mobile interface: no, unless you count the World of Warcraft trading cards and
board games.
Marketspace analysis: World of Warcraft is the biggest virtual world environment with a
population in the millions.
◦ Content: virtual world experience, Warcraft storylines, entertainment, competition

and other people
◦ Context: one of the purpose-built world servers run by Blizzard
◦ Infrastructure: registered copy of World of Warcraft, monthly subscription and decent
bandwidth
◦ Social interaction: direct world interaction, mail, direct chat and interpersonal mes-
saging. Third-party voice applications are also supported
◦ Attractor types: entertainment parks, content archives, town halls, clubs.
Generic business objectives: Since you can’t do business in the game, there’s no match
with the objectives. Build something that supports the gameplay, and then you’re in
the right marketspace.
Product user positioning: As the biggest game on the Internet, the World of Warcraft
player base is exceptionally diverse and draws a wide range of experiences from the
game. This complicates the issue for Blizzard as it tries to balance the socializing players
(who like the chat, community and guilds) with the casual players (who want quests
and challenges) with the hardcore players (who want competition, extreme difficulty
levels) and the serious business players (who don’t want the other players ruining their
world). The most likely product user positions that the average consumer would asso-
ciate with this platform include communication, community, some pseudo-anonymity
and a whole lot of escapism and recreational objectives. There’s a degree of inherent
awesomeness because it’s a very fun game when you get into it, and it does provide
a fair amount of self-expression for the players with a fair level of in-game avatar
customization to be found.
} Conclusion
Unlike the other chapters in this book, this chapter focuses on contained sub-sections
of the Internet which are not based on open standards and which are controlled by
a core owner. The off-web interactive applications discussed here have different lev-
els of potential value for the e-marketer. Some environments and platforms such as
iTunes actively encourage commercialization, whilst others such as World of Warcraft
actively discourage e-marketing activity. The extent to which any of the given plat-
forms discussed will provide a potential distribution platform and ultimately a revenue
source for e-marketers will depend on a number of factors, including the match of the
environment’s purpose with the marketer’s objectives, the type of user attracted to the
platform, the infrastructure supported by the platform and the features of the platform
in terms of social media capacity, currency transactions allowed and mobile interface.
435

e-marketing
Whilst off-web platforms provide a targeted distribution channel for e-marketers, they
are not without risk. Key amongst the potential downsides of engaging in off-web chan-
nels are the risk of being enmeshed in a platform which has limited reach and success,
the potential for, and right of, those who control the platform to move the goal posts
at any stage, and limits to the extent that content can be transferred between existing
platforms and infrastructures.
} References
Books and journals
Zawinski, J. (1995) ‘Zawinski’s law’, Jargon Manual, http://www.catb.org/jargon/html/Z/Zawinskis-
Law.html (accessed 2 July 2010).
Web references
Bebo www.bebo.com,
Blizzard Store http://blizzard.com/store
Boku www.boku.com
Curse www.curse.com
Custom Executable Generation www.steampowered.com/steamworks/
publishingservices.php
Dao Pay www.daopay.com
Entertainment Software Rating Board www.esrb.org
ESRB Ratings Guide www.esrb.org/ratings/ratings_guide.jsp
Friendster www.friendster.com
Google Docs www.google.com/docs
Google Wave www.googlewave.com/wave
Inkscape www.inkscape.org
iTunes Apps http://developer.apple.com
iTunes Podcasts www.apple.com/itunes/podcasts/specs.html
Jolicloud www.jolicloud.com
NCSoft www.ncsoft.com
PayByCash www.paybycash.com
Paymo www.paymo.com
RockYou www.rockyou.com
Spare Change www.sparechangeinc.com
Spugnort’s World www.spugnortguides.com
Steam Game Play Stats http://store.steampowered.com/stats
Steam Hardware Survey http://store.steampowered.com/hwsurvey
Steamworks www.steampowered.com/steamworks
Tunecore www.tunecore.com
Wii Shop www.wiishop.net
World of Warcraft Twitter client www.tweetcraft.codeplex.com
XNA network www.xna.com
Zynga Games www.zynga.com
436

CHAPTER 15}
Social impact
• at the end of the book (apart from index)

• able to outline the ways that e-marketing and the future interact with each
other
• painfully aware of the end-of-semester deadlines
• conversant in a range of new and interesting ways to license ideas,
intellectual property and copyright for mutual social and commercial gain.
437

e-marketing
} Introduction
The final chapter contains the inevitable forward-thinking, future-gazing sections on
how the Internet in the future might operate, who’s likely to be trying to run it and
what might happen next. This chapter is a summary, a review and a call to action for
those who plan to be involved in Internet marketing. Most of the predictions are based
around observations of historical cycles and emergent trends. However, some are just
guesswork with a touch of personal opinion. Your mission, should you decide to accept
it, is to work out which of these is most likely to be of benefit to your e-marketing career
(and which bits will make it onto a ‘Mispredictions’ or ‘Future Fail’ blog post).
The future of the Internet is dependent on those who choose to shape its direction
and functionality and on the actions of those who use it. Privacy and anonymity are
issues of concern that constantly need to be addressed, and marketing needs to look
beyond the narrow walls of e-commerce to aid in the defence of key issues of Internet
freedoms, to defend open speech and to protect the freedom of publication and access
to the Internet. Without these freedoms, e-commerce will wither and die as the diversity
of the market succumbs to the monopolies and oligarchies that control the traditional
print, television and radio media. The boom times for marketing come from competi-
tion, open standards and the good dose of humility that comes with being one of many
choices rather than the only option.
Brief note on the future

Anyone who can accurately predict the future normally never does it in a popular
culture format. Those with that level of insight can usually be found discussing the
outcome of horse races with the punters who just lost – if there’s one professionally
accredited fortune-telling society, it’s the teams behind Ladbrokes (www.ladbrokes.com)
and Centrebet (www.centrebet.com) who have a remarkable and profitable track record
in picking the future. Publicly predicting the future is also fraught with obvious prob-
lems – if we know what will happen next, we can change the script. That said, everyone
in the Internet game spends a portion of their life predicting the future (and another
portion tinkering with that future to alter the script to suit their desired outcomes).
The future’s alright

The future is what it used to be. It’s always been fast-paced, scary and subject to rapid
change and development. We’ve usually had fewer resources than we would have liked,
less time than we needed, and media that tells us that the advent of talking movies or
its contemporary equivalent will be the death of civilization. Plotting the development
of ‘the future’ over time indicates an incredibly steep curve from the discovery of fire
to the registration of fire.com. Taken incrementally, the rate of change and the major
social upheaval caused by fire is remarkably similar to that of the widespread diffusion
of information technology (though information technology has less crispy outcomes).
Accept that the world will continue to change, evolve and generally not be like the
good old days. Meanwhile, it’s worth noting that at some point in the near future,
438

Social impact
Figure 15.1 Abstraction

people will be discussing 2010 in glowing terms as ‘the good old days’. The future 2010
as predicted by the 1950s and 1960s hasn’t materialized (less jetpacks than expected,
no meals in a pill, no lunar holidays, no underwater cities and no Pan American Air-
ways either). What has emerged is a present of highly accessible information, heavily
interconnected people, and the ability to distribute ideas, services and goods across the
Internet (Figure 15.1) in a way that allows the world to share the joy of a cat jumping
in and out of a cardboard box (www.youtube.com/user/mugumogu).
Surviving the future

Given that the world has survived for as long as it has everyone on board has the capac-
ity to adapt to the changes that the future will bring (just as we did for the changes that
the past brought along). Change is a constant that has to be factored into the equation
of business life just as it gets factored into the day-to-day life of the consumer. At some
point in your life, you have had to change brands, switch stores, use an alternative prod-
uct or accept that a preferred product choice is no longer available. Then, just as now,
you had to adjust to the change that occurred, and you did this willingly, reluctantly or
without much consideration. In the development of the future of the Internet, changes
will be greeted much in the same way – willingly, reluctantly or without anyone really
noticing the difference.
The capacity of the individual to cope with change has, if anything, been improved
by exposure to change. Since first forming consciousness as an individual, the average
human still had to learn about fire (less the discovery, more the application) and from
439

e-marketing
there learn about the Internet and what to do with a computer, keyboard and mouse.
It took early humans a long time to come to grips with fire, yet many small children can
operate a mouse more easily than their parents (both parent and child have also mas-
tered fire on the way). YouTube provides instructional videos on just about everything
from starting fire with an iPhone (there’s probably an app for it) to unboxing an Xbox
which means that the average Internet user has a wealth of other people’s experience
to use for reducing a really new idea (using an iPhone) to a quite new idea via vicarious
learning. Old ideas can find a new lease of life since you can find blacksmithing instruc-
tions on YouTube alongside footage of personal jet packs. Nothing’s ever really that far
out of date anymore.
Changes in society
People face the challenge of mastering technology and readjusting to the new format
(Kostopoulos, 1998). Technology mastering is the ability of a person to increase their
skills to a level where they can adapt to changes and new technologies, and whilst it’s
a learnt behaviour (Introduction), technology is speeding up in direct response to the
widespread capacity of people to learn the old ropes. Just make it more entertaining –
the breadth of technology available in the (relatively) mature marketspace of the Inter-
net is far wider than any single person can master in totality. You have to pick your
preferences, train up in those areas and bring in backup when you’re out of your depth.
Since this is a person-centric activity, the usual rules of innovation adoption (Chapter 4)
apply, so if you’re looking to train staff, the innovators are already self-teaching, the
early adopters need to be taught (and taught how to teach the next generation) and the
late adopters are quietly waiting for the class to start.
The second problem (benefit, feature, challenge) of new technology is that it invari-
ably involves some form of content restructuring. Twitter turned the blogger into
a copywriter focused on headlines or a conversationalist focused on snappy retorts.
Blogging opened up the techniques of the daily columnist and newspaper journalist to
the wider market (not that bloggers and journalists are automatically interchangeable).
Prior to blogging, Web 1.0 introduced online self-publishing to a world that had only
discovered desktop publishing a few years earlier. Each change of technology introduced
a new format, a new way of delivering content and the desire to recast the old words
into the newer frameworks.
Roadblocks on the way to the future

Whilst the present is pretty amazing, and the future looks like it’s got serious potential,
there are some barriers on (or just over) the horizon that will need to be removed,
routed around or generally dealt with in a socially productive manner. There are nine
big picture issues that have been identified as having a potential impact on the future
developments of the Internet and e-commerce. These are:
1. Bandwidth: The ongoing ‘last-mile’ issues of delivering content from the server to
the end user. As the capacity of the networks increases, the volume of content
440

Social impact
consumed on the networks has risen to match it. Developments in broadband,

wireless and ADSL have improved the availability of high-speed solutions for the
home user, although as with any channel system, as bandwidth has increased, so
has the demand for higher quality, faster and better applications increased the strain
on the system.
2. Information flood: The ‘information for information’s sake’ aspect of web publishing.
In part, this is a feature of the Internet’s open nature, free standards and the ability
of anyone with a computer and time to publish a website. The downside is that the
amount of information on the Internet is enormous, frequently unverified and often
replicated to the point of overkill. Automation of re-tweeting keywords, illegal (and
economically pointless) rescraping of blog content into rebroadcast fake blogs and a
range of other practices are muddying the waters of information clarity.
3. Data integrity and data veracity: The extent to which the information that is on the
Internet is a true, accurate and a recently updated reflection of reality. This includes
the break down of intentionally misleading content that’s politically motivated or
the use of fake grassroots movements (astroturfing) and downright misleading con-
tent for illegal but profitable ends (generally anything that involves teeth whitening
or stomach flattening). There’s also the problem of dead data resurfacing with a quick
polish, update and retag. Snopes (www.snopes.com) has a huge database history of
Internet scams, fake offers and urban legends which are dusted off periodically and
recycled into the system by well meaning (or not) people passing on false infor-
mation. Finally, there are the attribution errors that plague every form of media.
Content is rebroadcast without the appropriate attributions, new attributions are
applied to content that looks like it should be from a specific author, or someone
showing off somewhere attempts to claim content as their own. (Plagiarism remains
a dumb move. We’ve got Google. We’ll find you and the other twelve copies of your
‘original’ work.)
4. Equity of access: The extent to which the Internet is available to all people, regardless
of age, gender, nationality or physical capability. Equity of access is set to become
the most critical flaw in the development of the Internet as improved bandwidth
increases the visual element of the Internet at the expense of the text. This limits
the accessibility of the Internet for the vision impaired and also reduces the extent
to which automated translation systems can assist in lowering the language divide.
Additional problems such as the digital divide between the ‘info-rich’ and everyone
else (info-poor and info-middle class) is often the subject of debate and still holds
a top-of-mind presence in the development of the Internet. Other problems exist
in the global spread of the Internet to countries with restrictive regimes that deny
access to technologies and services based on gender or race. This issue will become
progressively more significant as businesses and governments move more services
online and curtail their offline availability.
5. Information exile: Plans mooted by various governments, copyright agencies and
other corporate lobby groups to crackdown on illegal file sharing by cutting off Inter-
net access will create isolated individuals, families and communities who will be
effectively exiled from the digital mainstream. The fundamental flaw with this type
of proposal is the level of convergence in Internet, telephone, television and societal
441

e-marketing
activity – if you can be banned from the Internet for three alleged (and unproven)
offences, should this also include a ban on mobile phones, interactive SkyTV and
net.cafe attendance? Exiling people from the digital society for unproven allegations
is a poor substitute for actual justice when the government is simultaneously trying
to encourage greater online civic participation and e-government initiatives.
6. Security: The extent to which the Internet is a safe place to conduct business, govern-
ment and daily life. Crime is an inevitable aspect of the Internet. Since the Internet
mirrors the offline world, there was no reason to think it was ever going to be crime
free. Security issues such as identity fraud (real and relatively low risk), hacking (real,
medium risk), viruses (real, medium risk) and malware (far too real, high risk if you’re
not thinking before you’re clicking) are the new weapons in a cold war arm races.
7. Problem exists between keyboard and chair: Helpdesk slang for situations where the
computer problem lies in the lack of sophistication of the user. The Internet is
a complicated place and the level of complexity available in the world is rising
steadily. At the same time, the average level of education of Internet users is declin-
ing steadily as access to the Internet moves out of academia and becomes more
widespread. This represents the hardest challenge for Internet marketing – at what
level of sophistication do you draw the line and say ‘You must be at least this
smart/trained/educated/experienced to use our product’?
8. Standards and compatibility: The growing conflict between the open nature of the
Internet and attempts by businesses to capture proprietary shares of the Internet for
the licensing fees they believe could be generated from holding the Internet to ran-
som. If there’s ever a choice between the use of an open agreed standard or trying to
invent your own wheel, go with the open standards. Open shared standards (shared
alphabets, common meanings for words, generally agreed speed limits) are common
features of everyday life and make the world a lot easier to navigate for everyone.
9. Silencing the share of voice: The efforts, intentional or otherwise, of large corporations
to capture control of the publishing and distribution mechanisms of the Internet
through proprietary standards, modifications to copyright laws and establishing digi-
tal rights management systems. Marketers need share of voice to be open, loquacious
and vibrant for our business (marketing) and for the ongoing survival of innovation,
new products and new organizations.
} Dealing with the future present: preserving the ethos

of the ‘old Internet’
The Internet is a strange place. On one hand, it’s a giant network of networks span-
ning most of the globe, offering access to an incredible volume of data, content and
other people. On the other hand, it’s full of photos of cats (captioned or otherwise),
isolated niche communities and vast echo chambers of common agreement amongst
like-minded communities.
Since its foundation as a gigantic backup plan for the military-academic complex,
and a design infrastructure that was theoretically secure against mass being nuked from
orbit (and even then you couldn’t be sure), the Internet has played host to a range of
442

Social impact
sub-cultural trends, social traits and ideological commitments (Chapter 1). The Internet
was designed with two fundamental flaws for e-commerce and online marketing. First,
it was designed to be able to withstand a nuclear strike by treating a block in the system
as damage and figuring out a path around the damage to the information and back
again. Secondly, it was designed by engineers, scientists and academics who (originally)
never considered it to be more than a mechanism for sharing information. This led
to a cultural acceptance that open information sharing was more valuable than closed
information hoarding.
These features of the ‘old Internet’ are worth considering if you’re new to the system
and worth preserving if you’ve been online for an extended period. There are two main
elements of the Internet ethos to consider as an e-marketer:
1. The gift economy: which is a hybrid between karma, information sharing and reputa-
tion as a proxy for a currency economy. This area also has strong ties to co-creation
of value, co-production and use innovation.
2. Blockage as damage: which is a fallback to the network’s self-adaptation and survival
mode that assumed that one central nexus control point made for a great military tar-
get (see nuking from orbit), and 500 distributed control points meant the military’s
accountants would balk at the requisition order for that much fire power.
Gift economy
The gift economy is the concept of producing a product, service, idea or other piece
of content (code, art, artifacts) then making it widely available to the marketplace for
no financial, and usually minimal, social obligation costs attached. The gift economy
seems to be an antithesis to the role of marketing at first glance (until you remember
that marketing has this huge investment in consumer satisfaction, product develop-
ment and social pricing). From a marketing perspective, it’s often easy to see the gift
economy as a problem or a competitor – for just about everything that marketers can
create, there’s a good chance that there’s a gift economy producer providing similar
options for free. Then again, since competition is a core part of capitalism, and that’s a
central philosophy of marketing, this isn’t a problematic issue that needs solving – it’s
a challenge that needs addressing.
Gift economies arose from the initial competitive-collaborative environment of the
Internet. Academic and programming cultural values place a strong emphasis on the
acquisition of status and reputation based on how much value you give to the society
by giving things away (Raymond, 1999). Respect is earned by freely distributing the
fruits of personal labour, creativity, time and skill through publication, contribution and
engagement in the community. While respect is not always directly bankable, many of
the individuals involved in the gift culture still receive financial reward from the work
they gave away for free, either through later software registration (freemium pricing,
Revenue 0–1) or leveraging their gift culture reputation in other commercial ventures
(Revenue 2–3).
The notion of the gift economy hasn’t always sat well with the e-marketing commu-
nity, particularly where the big, expensive, commercial production numbers are beaten
443

e-marketing
to the marketplace by the smaller, faster and more robust gift economy competitors.
Similarly, there’s a major conflict between the two cultures in terms of type of reward
and return on investment: gift culture trades in social price rewards in contrast to the
money focus of the pay-per-use culture. Although both cultures respect the ownership
of an idea and the value of an idea as being a commodity for exchange and transaction,
it is the price of the exchange that differs. If you’re facing a return on investment debate
on the value of contributions to the gift economy, argue your case on Revenue 1 or Rev-
enue 2 grounds with a focus on goodwill, brand building, credibility and community
engagement (Chapter 9). Next, build a set of products that augment what you’re giving
away and make them available for commercial sale. To take a common example, hand
out the core software for free and bill for the training, technical support and individual
customization jobs (Revenue 3).
The gift economy and the tradition of routing around damage often means that
providers of pay-for-use services face stiff competition from their free counterparts.
In order to survive in this environment, the pay-per-use systems must provide greater
value than the free competitor, in effort, utility, reward or outcome, as they cannot
compete on financial price. If the service, product or good is of sufficient value, the
consumer will be willing to pay a financial price for it. Further, the gift economy can
be an immensely valuable element of e-marketing strategy – particularly where there’s
a strong trend towards co-production and user-generated content. The video gaming
community has a long history of collaboration between consumers and producers of
user-generated content. Companies such as Valve and Id Software make a point of releas-
ing specific community toolkits for modifying their original games as a means of relying
on the gift economy to create additional value for their core products. Further, when
the gift economy providers are considered allied sources of customer value, you can
encourage greater commitment to standalone distribution mechanisms (such as Steam)
by providing distribution for the community-created content.
Similarly, it’s always worth checking into the open source community for software
solutions when you’re setting up your marketing activities (the Introduction mentions
a few open source community applications). As marketers, we are uniquely placed to
contribute to the gift culture through our understanding of social price (and our ability
to reduce the social cost of adoption of new products), distribution channels and our
communication skills for contributing to documentation, wikis and help guides. Even
if you feel you can’t contribute to the core or actual product, there’s always work to be
done on the augmented.
It must be noted here that neither culture believes in intellectual theft, even if some
people mistakenly tout the banner of gift culture when they engage in intellectual theft
(they’re wrong). At the core of the gift movement is the right to choose to sell or give
away the idea, and that right is predicated on the basis of the assignment and license
of the copyright which is inherent in the intellectual property. Illegal redistribution
of content, either through reselling open intellectual property as a closed system or
releasing closed content without permission, gives no value to the community. Stealing
or trading stolen efforts of others is not producing anything new or valuable in the eyes
of the gift culture.
444

Social impact
Blockage as damage
e-commerce tends to create blockages between users and data on a regular basis. The
decision of major print newspapers to periodically seal off their archives (or current
issues) for freemium or premium access is routinely described as a form of damage.
As these blockages are subscriptions or some other form of paid service, login details or
site memberships, there’s a sense in the business world that they are both viable and
valuable. This only holds true where you’re either in the scarcity economy or providing
significant levels of value that are unique to your enterprise – pay-walling a community
works if there’s no competition from free communities, and those free communities
aren’t significantly better than your paid product. Competition usually kills pay-wall
arrangements because the freely available content is often easier to find in Google, and
easier to build up over time as gift economy prone people put content back into their
networks. There’s a certain resistance to paying a monthly subscription fee to provide
free content to a network so that the network owners (apparently) continue to benefit
financially from your unpaid labour. User-generated content exploitation is only ever a
short-term success on the Internet (if it works at all).
The problem for the people charging the subscription fees is that many users of the
Internet treat subscription-based sites as damage and look for alternative methods to
access the same information. When it comes to news media, it’s often easier to find a
free version of the information in print, on the television, radio or through links in
the social media network. The mindset of the Internet culture is not against people
receiving value for services offered, money for information or reward for effort. It’s just
that if you have a choice between two equally useful pieces of content, you’re going
to probably take the free one that you can get to immediately through the clicked
link rather than the paid content that requires registration, payment, validation and
time costs for access. Effort costs of searching the Internet are still cheaper than the
financial and non-financial costs of subscription (especially if you have to get up, leave
the computer and find your credit card somewhere in the house).
Censorship as damage
Censorship and age-based content restrictions are useful in society and often work
to the advantage of marketers who can communicate a lot of information about the
expected target market and product content by picking the appropriate rating level for
their content. An iPhone game with a U rating versus a 15 rating indicates a fair bit
about expected content. The problem for e-marketing is where content rating is auto-
mated and censorship protocols are based on broad sweeping algorithms – for example,
several corporate firewalls contain a ‘flesh tone’ filter that attempts to automatically
detect pornographic images by the level of light skin tone in a jpg. This automated
approach ignores actual content in favour of a maths equation that ignores darker skin
tones and bans images of manila folders as they cross the magic marker threshold in the
software. Similar problems of keyword filtering led to breast cancer pages being banned
(and double banned for word and flesh tone image failure). Other systems lock out
entire domains for the transgression of a single page, which could see the entire Google
445

e-marketing
domain (search, mail, documents, etc.) wiped off the corporate radar because of content
buried somewhere in a Google Group.
Censorship in this respect is not the same as the prohibition of already illegal content
that’s prohibited under offline laws – there’s an array of socially accepted legal controls
on information, products, content and services that cover online and offline activity.
This section looks at the use of technology to prohibit access to legally and socially
acceptable content based on one group’s desire to limit and restrict another group’s
access to information.
As the Internet has matured and become more widespread, it’s presented itself as a
series of challenges for legislators, politicians and well-entrenched power players in soci-
ety. At the heart of the problem for the establishment is the share of voice of the Inter-
net. If publishing requires printers, broadcast takes television and radio studios and the
Internet takes a keyboard and ten minutes, you can imagine the impact it’s had on the
gatekeepers of society (Figure 15.2). Gone are the days when a media blackout is possi-
ble – troop deployments are reported on Twitter, tracked on blogs, uploaded to YouTube
and live streamed across the Internet (and that’s just by the people on the receiving end
of those troops). Emergencies, crises and corruption happen in real time. Twitter actu-
ally functions as an earthquake and tremor tracker (www.twitter.com/USGSted) based
on people using mobile phones to ask ‘Did anyone else feel that?’ (@USGSted). Similarly,
political events unfold live on the Internet with streaming video and text telecasts, as
was demonstrated in the 2009 post-election riots in Iran. Understandably, this may lead
people who depend on restrictive access to information as a key platform in their base
of power to consider the use of filters (Australia), state-based firewalls (China), and other
government-sided controls (UK) as viable means for controlling the new media.
The problem for anyone seeking control over legal content is that the infrastructure
of the Internet was designed for routing around blockages, damage and other control
points in order to function if a node was lost from the network. National firewalls can
be bypassed with relative technical ease – banned sites can be accessed through cached
versions held within the major search engine’s databases. Restrictive network filters on
one Internet protocol (HTTP) can be sidestepped by routing traffic through any of the
Figure 15.2 Approved content

446

Social impact
other available systems (FTP, HTTPS). Virtual private networks offer a means to cre-
ate tunnels on the Internet that appear to originate from somewhere other than the
controlled region. For every way in which someone can think of blocking an Internet
access point through technical options, there’s someone else who’s building a different
way into the network – and quite often building it because it’s a better, faster or quicker
product-solution than the older method.
Marketers need to be aware that censorship works against the desired state of the
Internet for e-commerce. Restrictive access to legal content can encompass a wide range
of products from the entertainment industry (music, video, games, books), advertising
content and even the live broadcast of content can be problematic if subject to strict
control laws (such as Ireland’s anti-blasphemy legislation and the potential problems
of broadcasting any music awards ceremony where numerous artistes will thank some
form of divine assistance). Similarly, censorship also alters the capacity to ship prod-
ucts into countries that run with strict controls over content – for example, Valve has
to maintain multiple versions of key software titles (Left4Dead2) for its global ship-
ping arrangements to ensure that it delivers legally appropriate, censored versions for
the Australian and German markets (which gets more problematic if you’re still doing
printed and physical disks – in this case, Germany and Australia aren’t compatible mar-
kets for shifting excess physical stock between the two). This can also influence the
viability of certain markets as export targets based on economies of scale and the costs
associated with accommodating the censorship requirements of one area versus the
mass production of uncensored legal content.
Net neutrality
Net neutrality is a technical issue with significant social, political and business ramifi-
cations. Currently, the Internet is based on a mutual understanding and series of legal,
statutory and technical agreements that treat all forms of traffic as equal in the eyes
of the network infrastructure. This practical arrangement prevents a service provider
from discriminating against traffic originating elsewhere in the Internet which allows
the TCP/IP system to pick the most effective path from Point A to Point Z via anywhere
else in the alphabet.
Periodically, a large telecommunications provider will decide that it shouldn’t have
to respect the technical infrastructure of the Internet and lobbies for the right to charge
for the passage of ‘outside’ traffic over its networks. This is done without considering
that the whole reason those networks exist is to carry ‘outside’ traffic to their paying
customers. It’s analogous to PayTV networks threatening to run blurry versions of Law
and Order unless the production company pays a premium for the carrier rights. It’s a
bad business decision for the network since the reason the consumer is buying into the
service is to access the whole Internet and not just the bits that pay the ransom. Billing
companies such as Amazon and Google at different rates for data from their respective
server farms will not improve the performance of the Internet and will actively harm
the capacity of the Internet to provide ubiquity and share of voice.
Net neutrality also prevents censorship by bandwidth cost that would allow for estab-
lished companies to buy out the possibility of newcomers entering the market. A lack
447

e-marketing
of neutrality would put a serious dent into the ability of e-marketers to use market
development, diversification and/or product development were the bandwidth to be
pre-allocated to an established market leader. Understandably, this is a bad thing for
marketers and e-marketing generally (and an unwelcome additional operating cost for
the market leader). Currently, marketing depends on the neutrality of traffic for its
success – advertising content isn’t charged more, product content isn’t slugged with
surcharges and tariffs, and technical innovations that led to financially valuable ser-
vices such as Skype (www.skype.com), BitTorrent (www.bittorrent.com), iTunes (www.
apple.com/itunes) and World of Warcraft (www.worldofwarcraft.com) aren’t stifled by a
lack of bandwidth.
} Clash of cultures: scarce versus abundant

In the early days of the Internet, there was a misguided sense of freedom from local laws
and a belief that since the Internet was international, it was also inter-jurisdictional (and
not bound by local restrictions). This proved to be a particularly optimistic and wrong
interpretation of how the world’s legal systems work. Far from being liberated from the
laws of the land, the Internet is technically subject to everyone’s legal limits. In practice,
the offline rules of jurisdiction and extradition treaties limit the extent to which any one
nation will be able to pull off a territorial grab for legislating and regulating the Internet,
but that’s not to say that the offline world doesn’t hold some serious clout online.
All of the criminal laws that apply offline still apply online (if it’s void in Utah in
physical space, it’s still void if you’re on the Internet in Utah). There are distinctive
borders in the Internet’s infrastructure that result in a stepped rather than level playing
field – the most overt being the Great Firewall of China (and the Rabbit Proof Internet
Fence in Australia). There are other areas where the offline world’s laws take effect.
◦ Misleading trade practices include false advertising, fraud, deceit and the rest of
the inappropriate behaviours available to the unethical business types. The Internet
sometimes makes it harder for restitution as the bad guys hide out in some obscure
places or run operations with hard-to-track offline operations.
◦ Defamation, libel and slander all apply online in various shades of effectiveness based
on the locations of the parties in dispute, their territorial restrictions and extra ter-
ritoriality. Slander usually refers to spoken statements (think before you YouTube in
anger) whereas libel covers the published written word (including SMS, Twitter and
Facebook status updates) except in Scotland where both written and spoken state-
ments are covered as defamation. The length of the content is immaterial to the
nature of it being defamatory – there are court cases involving libel over Twitter
status updates (140 characters of legal nightmare).
◦ Audience controls (aka You must be X to Y) usually require credit cards to enter
different sites or selecting your age from a pop-up menu (which presumes numeric
illiteracy by the under-eighteen crowd) to view ‘restricted’ content such as alcohol
websites, trailers for 15-rated films and/or anything to do with Modern Warfare 2
(Chapter 2). Spectacular failures of audience control mechanisms usually lead to news
448

Social impact
coverage of the evils of the Internet, calls for mandatory filters and greater Internet
censorship.
◦ Whilst the Internet is a global network, laws governing copyright tend to be regional
and licence agreements for content are limited by physical world boundaries. Stream-
ing video sites often have IP blocks to prohibit content from being viewed outside
a restricted geographic area and DVDs are cursed with the mostly useless region
codes (whereas the economy of scale for producing one DVD player for all regions
beats the individual region-coded device. Cheaper DVD players are more likely to be
multi-region by default as a cost-saving measure.)
◦ Income taxation laws are particularly ugly and make accountants rich and tax lawyers
employable. The UK has complicated requirements for declaring income based on a
variety of tax treaties with other nations which you’ll need to consider if you’re
going into the casual or formal export business (www.hmrc.gov.uk/leaflets/c9.htm).
Internet-based product sales and services are mostly tax exempt due to the fact
that the medium reaches across national and international borders. That said, buy-
ers are usually liable for the import duties or customs charges that their purchase
would normally encounter, so real-world boundaries still produce Internet-related
taxation issues.
} Intellectual property
There are two major areas of interest for e-marketers when it comes to intellectual
property and the Internet: copyright and digital rights management (DRM). Copyright,
trademark protection and the means and mechanisms of distributing protected ideas
across the Internet were first raised as an issue in Chapter 2, and they’re dealt with here
with regards to two functional areas: how to use copyright for marketing and how not
to let DRM get in the way of marketing activity.
Intellectual property tends to be an uncertain area of the law with an increasing level
of effort being expended on creating ever-increasing copyright terms that are headed
towards infinity (and beyond). Fundamentally, most of copyright law reform is cen-
tred around three issues: protecting ownership, extending the life of copyrights and
punishing transgressors.
◦ Protecting Disney’s ownership of Mickey Mouse is the reason why most of the signif-
icant changes to intellectual property laws occurred roughly near the end of Disney’s
projected copyright hold on Mickey Mouse. Without these changes there was a vague
threat that the Mouse would have entered the public domain (and by vague threat,
it meant that if Disney failed to register its trademarks, re-register copyright or create
something new with Mr Mouse, then he’d be public domain).
◦ The lifespan of existing copyright has been increased from the original domain of
twenty-eight years to fifty years (plus re-registration periods) into the current auto-
matic copyright of the lifespan of the author plus seventy years. As authors, we
depend on copyright for our revenue stream from this book, however, given it’s
expected to have a lifespan of less than a decade we probably don’t need nearly a
449

e-marketing
hundred plus years of protection on the manuscript. We certainly don’t need it on

every e-mail we’ve written (and yet it’s automatically there irrespective of whether
it’s useful or not).
◦ Penalties for copyright infringement are of increasing interest and have started at
the unrealistic (penalties exceeding damages and lost revenues) and moved to the
unreasonable (digital exile) for individual infringements through file sharing. Where
this becomes problematic is when the rules for copyright infringement are applied
to the logical conclusion of penalties for forwarding e-mail or re-tweeting (repro-
duction of copyrighted material without permission). It’s a matter of time before
the first multi-million pound copyright case is centred around 140 characters of
reproduced content.
The consequence for marketing is that there is a need to maintain an interest in

scanning the legal environments (Chapter 4) surrounding copyright, permissions for
reproducing work and automatic penalty infringements. This is vital if your e-marketing
strategy relies on either viral marketing (the constant reproducing and copying of your
copyrighted adverts) or user-generated content that remixes existing marketing materi-
als (fair use limits or straight copyright breach). The last thing that any marketer needs is
the negative publicity associated with your viral advertising campaign being the reason
someone loses their access to the Internet for copyright infringement.
Copyright, Creative Commons and licensing

Copyright is the backbone of intellectual property issues involving e-marketing, Inter-
net distribution and the use of appropriate licensing arrangements to protect both
marketer and consumer. Related issues such as patents, trademarks, registered designs
and the like are reserved for intellectual property law textbooks. As mentioned previ-
ously in Chapter 6, it’s important to separate licensing arrangements such as Creative
Commons, Copyleft and Open Source from pricing strategies since copyright exists
automatically irrespective of commercial intent or whether you’re charging a fee for
the content.
Offline marketing is probably most conversant with conventional copyright alloca-
tions and restrictions such as the model release forms in advertising shoots that allow
for the reproduction, re-purposing and reuse of the images for promotional purposes.
Similarly, if you look at the fine print of competition entries that involve ‘25 words or
less’ contests, there’s always some assignment of copyright from contestant to organizer.
Copyright as it currently operates is well suited to physical media and scarcity-based
environments where it’s unlikely that anyone’s going to be copying and reproducing
your marketing material (they’re more likely to pass the one print catalogue around a
group if they’re doing shared or bulk orders).
Marketing in the era of information surplus faces a few more problems than its offline
counterparts when it comes to copyright issues. First, there’s the minor inconvenience
of the way information is copied and reproduced on the Internet being at odds with the
default restrictive licences of scarcity-based copyright. It’s not that you can’t allocate
surplus mentality permissions to copyrighted content, it’s just that the current array of
450

Social impact
laws that govern copyright assume that it’s supposed to be used in a restrictive manner
such as protecting the IP of a corporation, authored content or recorded music. Where
marketers plan to rely on the widespread replication and diffusion of their content
through file sharing, re-tweeting, re-blogging and similar surplus economy activities,
they’re going to also need to ensure that their best customers (the reproducers) aren’t
about to run into serious legal problems.
Secondly, the age of surplus combined with the ease of copying, access to mas-
sive distribution channels and global networks open the doors to the temptation to
ask for forgiveness rather than seek permission. This is a bad idea, since permission is
cheaper than infringement and brand damage never helps sell products (Revenue −1).
However, marketers may also find themselves facing off against their legal depart-
ments when the lawyers do their jobs (protecting the brandmarks, IP and trademarks)
whilst stomping on the relationship marketing plans of the marketing department (cus-
tomer co-creation, fan pages, user-community wikis, product-in use videos generated
by users).
It’s worth taking a look at how Lucas Art Films converted a growing legal problem of
Star Wars fans’ films into a marketing coup. It allocated fans specific permission licences
to reuse intellectual property for films that preserved the integrity of the franchise
(up to and including parodies) and which didn’t exploit the opportunity for financial
gain (starwars.atomfilms.com). Allocating specific content licences also created a strong
legal environment to protect the fan film community participants from overzealous
Lucas Arts lawyers and people considering ‘borrowing’ the fans’ work for their own
financial gain. It did wonders for maintaining community investment in the film fran-
chise and for providing an ongoing stream of new user-generated content with minimal
investment.
Finally, for the marketing department that wants to outsource a lot of the heavy
lifting to the consumer community, it’s worth investing in Creative Commons
licensed content that’s openly licensed for reuse by default (www.creativecommons.org/
international/uk). Creative Commons is a form of copyright attribution which ascribes
set standards of accessibility, reuse permissions and attribution licences to content by
default with the consequence that material can be reused (for those permitted purposes)
without needing to seek an initial copyright waiver or licence agreement. The idea of
Creative Commons is based on the principles of ‘Some Rights Reserved’ versus the all-
encompassing ‘All Rights Reserved’ approach of copyright law. Creative Commons has
developed six licensing arrangements that exist in three formats: the unported copy
(which is based on the Cerne Copyright Convention) and globally applicable, and a set
of regional specific human language and legal code versions (Creative Commons, 2010).
We’re focusing on the six unported licences in the first instance, with links to regional
licences to follow.
◦ Attribution (cc by): www.creativecommons.org/licenses/by/3.0/

This is the most open licence and allows users to do whatever they feel with the
content as long as it upholds the basic elements of the agreement (moral right,
fair use, publicity and privacy rights) and attributes the source material back to
the original owner. It’s probably the best type of licensed content to seek out for
451

e-marketing
content and infrastructure for commercial projects that want to tap into Creative
Commons-licensed resources.
◦ Attribution Non-Commercial (cc by-nc): www.creativecommons.org/licenses/by-
nc/3.0/
This licence allows for the same principles of remixing, modifying and building on
your existing work although it doesn’t permit commercial use of the results. It’s a
great licence to use if you want to encourage users to create content to contribute to
the community through various creative works. This allows for a set of value-in-use
rights to be preserved by the consumers in their co-creation/co-production process
whilst avoiding creating complicated legal issues over IP ownership of the core prop-
erties. It’s the ideal licence to support an active and legally safe community for fan
fictions, user-generated content such as game maps, skins or other properties that
can enhance the community’s perceived value of your core product without causing
the Accounts Department to have a heart attack at the thought of lost revenue (since
there isn’t lost revenue to be had by making a product more desirable to a larger
market share).
◦ Attribution Share Alike (cc by-sa): www.creativecommons.org/licenses/by-sa/3.0/
Much like the Attribution licence for what it permits, this licence also brings with it
the obligation to continue the Creative Commons licensing approach by stipulating
that content created from your works must share the same licence arrangement. The
amazing aspect is that if you’ve set this for commercial use, all derivative products
are permitted to be available for commercial use.
◦ Attribution Non-Commercial Share Alike (cc by-nc-sa): www.creativecommons.org/
licenses/by-nc-sa/3.0/
This licence is designed to allow for non-commercial work to be openly available for
re-use and to be preserved from moving into a commercial arrangement later in the
redistribution lifecycle. To some extent, this is a defensive licence that prevents minor
modifications being used to lock free (gratis) Creative Commons-licensed content
into commercially charged ventures.
◦ Attribution No Derivatives (cc by-nd): www.creativecommons.org/licenses/by-nd/3.0/
This is a licence for sharing the original materials in an unchanged format as long as
the original source is credited. Unaltered original material may be used in commercial
and non-commercial ventures, and can form the basis for compilations and other
collections of content arrangements (think museums).
◦ Attribution Non-Commercial No Derivatives (cc by-nc-nd): www.creativecommons.org/
licenses/by-nc-nd/3.0/
Affectionately dubbed the ‘free advertising’ licence by Creative Commons, this is
the highly restrictive version that permits the sharing, redistribution and general
promotion of the work without allowing changes, commercial gain or derivative
works. This is the perfect licence for marketing communications, catalogues and
other word-of-mouth centric marketing materials that you hope your customers want
to share around.
Table 15.1 summarizes the licences, permissions and the appropriate text and visual
logo to use to state your Creative Commons arrangement.
452

Social impact
Table 15.1 Creative Commons licences
Non- Share-
Licence Logo Derivative Attribution commercial? alike?
Attribution cc by Yes Yes No No
Attribution Share Alike cc by-sa Yes Yes No Yes
Attribution No Derivatives cc by-nd No Yes No No
Attribution Non-Commercial cc by-nc Yes Yes Yes No
Attribution Non-Commercial cc by-nc-sa Yes Yes Yes Yes

Share Alike
Attribution Non-Commercial cc by-nc-nd No Yes No No
No Derivatives
In addition to the human language version of the agreement, there’s also a nation-
ality specific set of legal documentation that’s tailored for the specific requirements of
each jurisdiction, and includes:
◦ England and Wales (www.creativecommons.org/international/uk)

◦ Scotland (www.creativecommons.org/international/scotland)
◦ Ireland (www.creativecommons.org/international/ie).
Digital rights management

Digital rights management (DRM) systems are technologies in hardware and software
that are designed to restrict the viewing of software to only those items which contain
appropriate and valid registration codes. In broad terms, DRM is an electronic system for
the management of intellectual and other property rights. More specifically, DRM has
been introduced into the marketplace through the successive roll-out of new technolo-
gies such as Windows Media Player 9, numerous upgrades to WindowsXP, and, most
blatantly, DVD region encoding.
There are some good marketing uses of DRM that provide genuine value to the end
user and then there are the other ways in which these systems are anti-marketing in
nature. Valve’s SteamPowered digital distribution store is a DRM platform that incorpo-
rates rights and responsibility into a functional system. The key value provided by Steam
is a mutual acknowledgement of the ownership of the products. Steam attempts to limit
piracy by requiring online validation of the ownership of any game before it’s playable.
At the same time, the game is permanently assigned to the Steam account holder so that
they are granted a global access licence – if the game is installed on a Steam-validated
computer, the account holder will be recognized as having legitimate access. Providing
a two-way rights and responsibility framework also builds a trust relationship between
Valve and the consumer in that verification serves both player and producer.
453

e-marketing
Unfortunately, Valve’s case is relatively rare as DRM is usually seen as a means of

artificially raising the market value of a company by extracting maximum revenue
from a single item. Using DRM against the customer is problematic from a marketing
perspective for a range of reasons, including:
◦ Undermining relationship marketing: Trust, commitment and reciprocity is a two-way

street, and the current propensity of DRM systems to treat the paying user with suspi-
cion and hostility as a temporary and untrustworthy lease holder of the digital goods
fails to deliver trust.
• Solution: Treat the legitimate owner as the legitimate owner of their data.
◦ Limiting or removing legal usage rights: DRM systems are usually hostile to copying,
reuse or inclusion in other formats which are legal and protected acts of fair use
under various copyright acts around the world.
• Solution: Manage legal rights the old-fashioned way – in a court of law.

◦ Interference with the doctrine of first sale: This is where you’re only getting an extended
licence to use the objects when you thought you were buying something. This usu-
ally exists to prevent the very legal second-hand market for used goods or to allow
the manufacturer an unnatural level of control over your device (since you’re only
‘borrowing’ it).
• Solution: Sell rather than lease.

◦ Transitory ownership of purchased digital content: The Amazon Kindle and the Apple
iPhone have a tendency towards this form of licence which allows the manufacturer
the right to remotely delete content from your device.
• Solution: Digital licence leases should be marked as ‘Rent’, ‘Lease’ ‘Borrow until we
take it back’ and prohibited from saying ‘Buy’, ‘Purchase’ or ‘Own’.
From the consumer perspective, most of the introductions of the DRM systems have
gone unnoticed as consumers purchase their new CDs inclusive of rights manage-
ment systems. There are occasional high-profile incidents with new release CDs having
adverse effects on Macintosh computers (one artiste’s CD had a particularly bad effect
of totally crippling the Macintosh it was played on – to the point you couldn’t even
open the CD drive). Destroying the computers owned by the customers who just paid
for your product is a dumb business strategy. Sony Music attempted the worst business
case of DRM by using a highly dangerous malware strategy of installing a root kit soft-
ware packages without the permission of the computer’s owner. Placing unauthorized
and unwanted content on a computer is a malware strategy, and once again, anyone
unfortunate enough to buy a Sony-infected product suffered for their loyalty and their
legal purchase.
As more of the consumer market switches to online entertainment and the PC
becomes a more significant media vehicle (usually through broadband access), DRM
software will have a greater impact on society. Whilst much of the contemporary
454

Social impact
(at the time of writing) debate concerns itself with the ramifications of freedom of
speech, privacy and consumer rights, most of these concerns are from the consumer’s
perspective, rather than looking at the potential impact on business.
How DRM works (an overview)

Iannella (2001) in a relatively technical article describes the three tasks of the DRM as
being:
◦ Intellectual property (IP) asset creation: which is where the creator assigns rights to the
use of their product and where the product itself determines whether it was created
from acceptable content (assuming that this content is also part of a DRM system).
For example, a song can be created from a range of existing music samples, each of
which has a digital signature allowing it to be used for creating new music. From
there, the IP asset owner can set what permissions they accept for their product (free
to share, payment required, etc.).
◦ IP management: which is where the property can be traded and where the information
concerning the creation is stored (artiste, title, DRM permissions). Part of the process
of IP management includes the steps that the property has to take to authenticate
that it can be used – and this is a major part of the complexity of the DRM process
with regards to privacy, data collection and rights management.
◦ IP use: which consists of permissions management and tracking management.
Permissions management dictates how the property can be used by the consumer –
for example, a text document may be set to read only, prohibiting printing. Prob-
lems with permissions management are outlined below. Tracking management is the
implementation of the authentication routines stored by the IP management. Track-
ing management has raised several serious questions regarding the consumers’ rights
to privacy and anonymity, which are also raised below.
In theory, the purpose of DRM is to provide digital permissions to use electronic files in
order to preserve the creators’ intended wishes for their products. In reality, the problem
with DRM is that there are a limited number of organizations with the capacity to set
the IP management, which essentially is beginning to set the scene for an IP rights
management monopoly.
Permissions management and the consumer

The first major problem for marketing and the consumer involving the DRM system is
the redevelopment and re-education of the market as to what it is that they buy when
they buy your product. One of the key, and for many of the major DRM proponents
most important, aspects of the system is that you can allocate the number of uses of
the product. Apple has integrated this particular habit into the iPhone and iPods with
the idea that there are only a limited number of times you can reauthorize an iTunes
account which presumes that your iPod won’t die, the computer’s hard drive won’t die
and that you’re not going to upgrade technology that often. Try not to be an innovator
who buys lots of new technologies if you’re going to get a licence deal like this.
455

e-marketing
There are pros and cons for the use of DRM for the assignment of a limited number
of uses for a product, and these are:
◦ Rental pricing: which has traditionally been associated with a time period (weekly,
overnight, three-day) for the rental of entertainment such as videos. Whilst the
re-education of the consumer market is possible, it will require the existing mar-
ket acceptance of time-based purchases to be converted to use based. Apple has
made considerable in-roads into the digital rental market space with iTunes offer-
ing short-term leases of movies and television series, but self-deleting movie files are
still quite creepy.
◦ Physical goods with limited uses: which is potentially the worst aspect of the DRM
system, whereby a physical device will be set to only function for a limited number
of times before it must be re-authorized and paid for again. This concept is based
on the idea of licensing limited use rights to goods – for example, a portable licence
for the use of a desktop computer based on DRM systems would make for a useful
hotdesk system. However, there’s also the idea of creating defective-by-design systems
that will become single use or limited multiple use objects that can’t be reinitialized
after the expiry period. This is a bad idea on several levels starting with the value-in-
ownership arguments through to the environmental, sustainability and green issues
of building made-to-be-broken and disposable products.
◦ Trade practices acts, misleading advertising and implied ownership: which will be the
legal minefield of advertising and promotion once limited-use DRM products become
widespread. Consumers will need to be informed as to whether the product they
are buying is a rental product (pay per access), limited-use product (ten uses, then
recharge), full ownership (all yours) or some hybrid combination based on how much
they paid originally for the product.
◦ Lock out codes: which have been the bane of DVD customers across the world as the
DVD devices are fitted with the ability for the DVD to refuse permissions for the fast
forward, pause and/or rewind buttons to work. Mandatory infringement warning
videos, compulsory trailers and generally treating the audience with contempt is not
a grand plan when it comes to driving demand for DVD sales. If they’ve bought
the disc, they’re not about to steal a film (unless you make watching the DVD so
unbearable they’re better off downloading a pirate version).
In general, the implementation of DRM poses a problem for marketing in that it will
require the rethinking of the nature of the DRM physical product and digital product,
and who owns the product once the consumer has paid for it.
Problems and issues with DRM and marketing

In theory, and as the creators of these technologies will argue, the purpose of DRM
is to prevent unauthorized copying, piracy and similar intellectual property crimes.
Unfortunately, a situation is being created where the widespread adoption of the DRM
technologies means that unsigned works (legitimate software or media which does not
include a DRM-licensed code) will not be able to be played on the DRM software or
456

Social impact
equipment. The rationale is quite obvious and simple – if non-DRM encoded data can be
played, then piracy only needs to strip the DRM coding to be able to continue unabated.
The problem for marketing is extremely significant. DRM represents a restraint on
the ability of the consumer to play materials on their personal equipment – potentially
including your advertising materials. In order to have advertising signed by a DRM
system, there will most likely be an additional proprietary royalty fee which will have to
be paid to the DRM managers. It’s not going to take a genius to figure out that difficulties
will arise in getting DRM signatures for any advertising for a product that circumvents
the DRM system. The advent of these forms of proprietary control standards risk the
ability of business to conduct free trade without needing to seek publishing permissions
from a non-government quasi monopoly system.
Tracking management, DRM and privacy: We know what you watched last
summer
The prospect of a global, unregulated marketing database of everything everyone ever
did, bought, browsed, watched or listened to was supposed to just be the subject of
science fiction. It wasn’t supposed to be a blueprint as much as it was supposed to
be a warning. Now, with the current rapid development of database marketing and
the acquisition of masses of data from disparate sources – such as online purchase
preferences, website choices, Facebook’s Beacon program, Google’s retention of search
data, Yahoo!’s geolocation information from Flickr photos, retail data collected through
Amazon, Sainsbury’s loyalty programmes, iPhone applications using locational infor-
mation, and Twitter updates with geotagging – it’s possible to develop a moderately
sophisticated profile of an individual consumer in terms of who they are, where they are
(now, and recent past) and what their friends are likely to recommend they download
to watch tonight.
With the widespread deployment of digital rights managed goods, services and prod-
ucts, any pretence of privacy simply disappears as soon as a central registry somewhere
knows exactly how many times you’ve listened to Bob the Builder, and how many lis-
tens you have left. All it will take is for a database merger of DRM usage rights (what
the consumer has listened to and what they’re authorized to listen to) with any exist-
ing profiles (such as a tax file or social security number), and there will be no effective
privacy for the consumer.
What does this mean for marketing? On the cynical end it means unprecedented
access to market research data on actual usage patterns – until the market figures out a
way to block or mask their consumption and still meet the DRM authentication require-
ments. It also means a violation of the privacy of the consumer (the readers of this
book) in a way that even George Orwell’s 1984 couldn’t have imagined. The inappro-
priate use of data collection and profiling based on the DRM technology will drive
privacy-conscious consumers away from the new technologies and, if the market feels
sufficiently unhappy, may drive legislation that will prohibit this form of database mar-
keting. Overall, marketing may find itself heavily regulated to restore a sense of privacy
to the marketplace. The balance between what the market will tolerate in the name of
market research and what the DRM technology will deliver as an incidental part of the
457

e-marketing
authorization/verification processes needs to be carefully monitored and the benefit of

doubt should go to the preservation of the consumer’s privacy ahead of the collection
of data for commercial ends. If it doesn’t, then sufficient consumer resentment may
cost more to marketing (generally) and the offending company (financially) than the
possible benefits they could have gained from the extra, often irrelevant, data.
Marketing information wants to be free (as in movement)

The most valuable element of the Internet for any marketer is the share of voice that
cannot be dominated by one player. This is the feature that so many marketers have
craved for decades as their campaigns languished outside of the price range of big media
events, popular television shows and overpriced peak timeslots. Now that freedom of
voice has come to the marketers, many of them fear the very thing they wished for.
With the fragmentation of the marketplace that has occurred with the introduc-
tion of the Internet, marketers need to find places to voice their message where it can
meet their markets. Freedom of speech on the Internet is vital to the development of
e-commerce, as regulation and control of content on the Internet will mean regula-
tion of the marketing message. The widespread adoption of DRM is potentially the
greatest threat to marketing messages and the freedom to communicate in a compet-
itive marketplace. Once DRM systems are embedded into commonplace technologies
such as televisions, radios and computers, marketers are at the mercy of the companies
who hold the keys to the DRM software. And there’s a fairly strong chance that the
DRM rights managers aren’t going to see any major ethical problem with selling exclu-
sive advertising DRM rights to the highest bidder, thereby closing down an avenue of
expression for other marketers.
Marketing already bears the cost of buying advertising space on television, radio and
any other paid placement. Imagine being forced to pay royalties to a central authority
for the privilege of producing a piece of content that you still have to pay to have broad-
cast. Proprietary standards that lock the user into a limited set of choices controlled by
the equipment manufacturers can endanger the freedom of the marketer. Any system
which can potentially limit competition and reduce channels for the distribution of
dissenting ideas (such as advertising for rival systems) will have a negative impact on
marketing. Marketing needs the Internet to be as free as possible so that it can never be
squeezed out of the game by proprietary standards that reduce competition and create
monopolies. Share of voice and freedom of expression are the reasons why the Internet
has such low entry barriers and is so valuable to small- and medium-sized enterprises.
In order to prosper in the digital economy, marketing needs to ensure that the free-
dom it requires to operate effectively is preserved. This will mean that, occasionally,
marketing will have to make some sacrifices for the greater good of society, including
easing up on copyright protection and trademark suppression. In particular, the current
battles over intellectual property online are a complicated balancing act between pre-
serving the right of the business to profit from their own property and the rights of the
consumer. Normally marketing would be looking to the preservation of the rights of the
business, however, in certain instances, marketing needs the consumer’s rights to free-
dom of choice to be maintained, even at the expense of the rights of businesses. Once
458

Social impact
dominant industry players have the power to dictate how and where a consumer is per-
mitted to view various media (including television, videos, music and Internet content),
then these entrenched players can block the marketing messages of their smaller rivals.
DRM and the product lifecycle

The last and most significant legal and marketing issue associated with the use of restric-
tive DRM systems is the phasing out of an existing DRM system. Microsoft acknowledges
that the DRM system that it uses may suffer from errors if you change certain ele-
ments of your computer’s hardware (support.microsoft.com/kb/891664). Thankfully it
also provides step-by-step instructions to solve that problem. That said, there’s also the
business issue of legacy support for existing DRM systems once the primary market has
reached the decline phase of the product lifecycle. Unlike fixed licences (CD keys) or
property assignment (actually owning the stuff), products that need to contact a DRM
server to authenticate ownership are vulnerable to critical failure if the DRM server
ceases to operate (Figure 15.3). Rather than being a hypothetical case, this was demon-
strated when Microsoft elected to discontinue the MSN Music DRM servers in 2008
(with revised server shutdown dates for 2011). Customers who had purchased from
the MSN digital store discovered that they were going to lose access to their purchased
product. Discontinuing a product is a fairly standard protocol for marketing decision
making if you’ve ever used a GE finance matrix or the product lifecycle. However,
when discontinuing scarcity economy products (aka physical goods), shutting down the
manufacturer doesn’t destroy the existing products. It may make it significantly more
Figure 15.3 Steal this comic

459

e-marketing
challenging to source spare parts but that’s very different to what happens when the
DRM master server ceases to function.
The prospect of confiscating paid products from loyal customers should be seen as a
commercial disaster and a relationship marketing nightmare. When you consider that
DRM files are a relatively new technology and prone to adoption by innovator and early
adopter customers, then you’re looking at burning the markets who were most likely to
back your new products, pay premium charges to access your innovations and take the
social risk of supporting your brand at the start. Hurting them with restrictive licences,
confiscating their paid goods and generally treating them with contempt isn’t a great
business plan.
} Dealing with the new

If your first reaction to any new Internet or e-marketing technology is to ask how it
can be used for promotion, then you’re not cut out for a life as a good e-marketer.
Throughout this book we’ve emphasized the marketing mix as a holistic device and
pushed for the integration of consumer behaviour into strategy and practice. As a final
step, we present five steps for developing strategies for adjusting to the future. These
steps are:
1. Follow the people: Consumer behaviour will drive the Internet and determine the
outcomes of many of the current issues. Security and privacy will be resolved by
market demand as the market either requests (and receives) improved security or just
does not care enough for it to affect their behaviour. Controls on the Internet that
annoy consumers will be repealed by populist governments seeking social approval
and re-election. Even at the business-to-business level, the individual is ultimately
responsible for the decision of yes or no in the transaction.
2. The old Internet is not the new Internet: The current Internet is an evolving medium
which will change, adjust, develop and gradually form into something different from
the Internet of today. The best analogy is to look at the evolution of television and
television content, from its first broadcasts to the current products. However, the per-
manence of Internet culture will continue to flavour the development of the medium
as the systems mature and develop over time.
3. Be radical: Take Apple Corporation’s advice and think different (www.apple.com).
Be prepared to try new methods and techniques on the Internet, and be prepared for
success and failure as it comes, whichever way it comes. The greatest danger facing
the novice Internet marketer is not being willing to back their new ideas in the new
medium for fear they might fail. Take heart from the fact they probably will fail,
but at no greater or lesser extent than they would have failed in the offline world.
However, being radical does not mean discarding past lessons or ignoring existing
theory and practice. Radical marketing is about applying best practice that suits your
products, your markets and the combined needs of your company and consumer,
irrespective of whether it is new or old. Doing what fits best, rather than what has
always been done, is the radical approach advocated by the Internet.
460

Social impact
4. Be robust: Take the hits on the chin, get back up and keep going. The Internet is about
long-term focus with short-term adaptability to rapid change. Many businesses that
have succeeded in online marketing did so by being aware of the causes of their
success and adapting to support those features, whilst being willing to take the set
backs as they occurred on the way to establishing their long-term success. Adapting
to where the markets are and what products are in demand is a necessary survival
trait.
5. Focus on the niches: This advice should be redrafted simply as ‘Focus on the markets’.
The Internet offers unprecedented access to niche markets by allowing the inter-
ested consumer to find the interesting producer. However, the current mindset of
the marketing discipline is hung up on believing that this can only be used for niche
products when it clearly indicates that the consumer can find the marketer, if the
consumer wants what the marketer has to offer. Study the needs, wants and desires
of the market and see where your product can match up with what the consumer
wants, within the constraints of what the company wants to produce. Focus on the
markets, find out where they are, what they want and offer it to them online, and
the customer will be able to find you every bit as much as you can find the customer.
A sixth and final point which does not derive from Randall’s (1997) examination of
survival strategies for the future, but rather from the observation of the best methods of
dealing with the changing future, is:
◦ Have fun: The world is an inherently interesting place. The Internet is an unstable
climate of chaotic change and the ever-shifting sands of the consumer marketplace
makes for a rollercoaster ride of a lifetime. Has any period of marketing ever been
this much fun? This is one of the most exciting times in the history of civilization,
with more on offer for the individual, company and marketer. Take the opportuni-
ties as opportunities, not threats, take the threats as challenges and take the risks as
necessary. Enjoy the Internet as a wildly chaotic landscape while it lasts, before it
settles down, grows up and becomes as staid and sober a medium as television or
radio. We are living in interesting times, and marketing has the opportunity to have
the time of its life by being part of creation of the future.
} Conclusion
Predicting the future is always a risky business and when it comes to the Internet,
where change is rapidly created and diffused, the risk is even greater. That said, there
are a number of key emergent issues and trends which are likely to shape the near to
medium future on e-marketing. Depending which way the issues develop, the nature of
the Internet as we currently understand and use it has the potential to be fundamentally
changed.
Change in itself is not a bad thing but it’s never been a good idea to throw out
the baby with the bathwater. There are a few key philosophies of the original Inter-
net culture that can stand the test of time and which should be preserved regardless of
461

e-marketing
the changes in infrastructure and technology. Flowing from the Internet’s foundation in
the military and academia, the notions of the gift economy, open standards and treating
blockages as damage characterize the old Internet and still underpin the new. Operat-
ing in an environment of plenty when it comes to information rather than taking the
‘knowledge is power’ approach is a challenge to many traditional businesses. Attempts
to undermine these key concepts have seen the failure of many online commercial
ventures.
However, the open environment of the Internet is only safe all the time that users are
vigilant. Attempts by commercial interests to make online more like offline and restrict
the flow of information through various means such as restrictive use of digital rights
management are on ongoing issue. From a marketing perspective, information flow
restrictions, whether they are the result of technical, commercial or government policy
initiatives, diminish the potential value of the Internet as a key marketing channel.
Despite over a decade of discussions there are still critical ongoing issues impacting on
the efficacy of the Internet in marketing, including privacy concerns, preservation of
anonymity and security. All the time the Internet continues to develop and evolve,
new issues and concerns will arise. Marketers will need to keep abreast of the changes,
respond to the issues and, most important of all, keep to the fundamental philosophy
of marketing – the centrality of the consumer – if they are going to succeed in the
ever-changing online world.
} References
Books and journals
Creative Commons (2010) ‘Licences’, http://creativecommons.org/about/licenses, (accessed
11 July 2010).
Genieva, E. (1997) ‘Legal aspects of the Internet’, International Information and Library Review, 29:
381–92.
Iannella, R. (2001) ‘Digital rights management (DRM) architectures’, D-Lib Magazine, 7(6) (http://
www.dlib.org/dlib/june01/iannella/06iannella.html – accessed 11 July 2010).
Kostopoulos, G. K. 1998, ‘Global delivery of education via the Interne’, Internet Research: Electronic
Networking Applications and Policy, 8(3):257–65.
Randall, D. (1997) ‘Consumer strategies for the Internet: four scenarios’, Long Range Planning,
30(2): 157–68.
Raymond, E.S. (1999) ‘The jargon manual’, version 4.2.0, http://www.tuxedo.org/∼esr/jargon/
Wilson, S. (1999), ‘Digital signatures and the future of documentation’, Information Management &
Computer Security, 7(2): 83–7.
Web references
Apple www.apple.com
Attribution www.creativecommons.org/licenses/by/3.0/
Attribution No Derivatives www.creativecommons.org/licenses/by-nd/3.0/
Attribution Non-Commercial www.creativecommons.org/licenses/by-nc/3.0/
462

Social impact
Attribution Non-Commercial www.creativecommons.org/licenses/by-nc-nd/3.0/

No Derivatives
Attribution Non-Commercial Share Alike www.creativecommons.org/licenses/by-nc-sa/3.0/
Attribution Share Alike www.creativecommons.org/licenses/by-sa/3.0/
BitTorrent www.bittorrent.com
Centrebet www.centrebet.com
Creative Commons UK www.creativecommons.org/international/uk
HM Revenue and Customs www.hmrc.gov.uk/leaflets/c9.htm
Ladbrokes www.ladbrokes.com
Maru www.youtube.com/user/mugumogu
Microsoft DRM support support.microsoft.com/kb/891664
Skype www.skype.com
Snopes www.snopes.com
Star Wars fan films starwars.atomfilms.com
Twitter earthquake and tremor tracker www.twitter.com/USGSted
XKCD: Abstraction http://xkcd.com/676
XKCD: Approved content http://xkcd.com/129
XKCD: Steal this comic http://xkcd.com/488
463

}Index
abundance economics 154, 155–6 audience

accessibility 44–7 audience–market fit 82–3
action, consumer 190, 213–14 controls 54, 448–9
advertising 198–201, 412 description 81–2
banner 198–200 match 81–2, 105, 397
brokers 413 augmented reality 389, 398
dynamic 208 augmented virtuality 418, 419–26
indirect revenue 289
interactive 208 bandwidth 440–1
offline 200–1 banner advertising 198–200
behaviour change model 40–1
selling 291
behavioural change objectives 78, 110–11,
static 208
146–7, 281–2, 286, 287, 289, 290, 350
text-only 200
behavioural commitment 239
AIDA model (awareness, interest, desire,
below-cost strategy 178
activity) 189–90, 288
benchmarks 115, 116, 284, 307
AMA see American Marketing
‘beta’ factor 56, 64
Association
beyond the Web 408–36
American Marketing Association (AMA)
blank white servers 166, 173
definition of marketing 31–3 blockage as damage 443, 445–8
marketing mix toolkit 113–14 Blogger 364–6
anonymity 438, 462 BlogPulse 93
anonymous blogging 62 blogs 33, 270, 322–3, 325
Ansoff growth matrix 71–4, 292, 400 anonymous, pseudonymous and
anticipation of requirement 34–5, synonymous 61–3
117, 296 blueprinting 301–3
applications, mobile 387–8, 400, 403 Bluetooth 6, 383, 384, 386, 398
ARPANET 18 branding 83, 84, 167, 192–5, 299, 324
attractors applied branding online 193–4
off-web 416–17 brand personality 192–3
online 318–24, 340 personal 194–5
attribution, licences 451–3 protecting brand image 310
465
October 28, 2010 13:9 MAC/DANN Page-465 9780230_203969_17_ind01

Index
broadcast models 259–61 and marketing decision making 124

budgeting 285 and mobile devices 395–7
social media 357–8 online 14, 123–49
business model 285–90 psychographic characteristics 139–42,
254–5
calculative commitment 242 rejection as legitimate form of 148
call to action 213–14 consumer needs 88
censorship 46, 156, 445–7, 449 consumer spending, levels of 309
channel exclusivity 408–9, 411 contagion diffusion model 127–8
channel message 187–8 context
Chartered Institute of Marketing (CIM) m-marketing 397–8
customer requirements 154 marketspace 169
definition of marketing 31, 34–5 continuous growth 65, 127
Chatham House Rule 61 conversations
CIM see Chartered Institute of Marketing and community 267
classification, Internet 317–26 objectives 111
types of content 324–5, 339–40 share of voice 209–12
types of online attractions 318–24 co-production 234–5, 236–7, 361, 444
cloud computing 20–1, 162, 418, 419–21 Copyleft 450
co-creation 23, 143–4, 154, 165–6, 168, 173, copyright 176, 206, 441, 444, 449, 450–3
196, 224, 235–6, 361, 409 corporate
collective goods of value 263–4 image 52, 191
commitment 240, 242–3, 244 information 324
communications relationship marketing philosophy 245
checklist 215–18 cost
conventional communications plan 119 cost-oriented objectives 77–8, 110, 146,
framework (marketing plan) 118–19 148, 280–1, 286, 287, 289, 290, 349
levels of online 256–62 cost-plus objective 177
media 300–1, 345, 348 cutting 291
message and execution 300–1 leadership 66–7, 68–9
models 187–8 recovery 286–7
strategic use of 334–5 reduction 50
of value 32, 113–14, 186–7, Creative Commons 410, 450, 451–3
189–97 cross-funding 287
community 254–76 cross-promotion 317
concepts of 263–6 cross-subsidization 80, 287
and e-marketing 267–9 currency exchange 180, 181, 328
forms of 262–3 customer service centres 322
identity and classification 317 customer technology interface
planning for 269–76 237–8
compatibility 39, 136, 137, 174, 179 customization 43, 50, 67, 229, 230, 235, 248,
technical 305–6 249
competitive advantage 309 mobile phone plus 386–7
competitive strategy, Porter’s generic 66–71, customs regulations 329, 449
75 cybercommunities 12, 14, 15, 70, 168, 169,
complexity, of innovations 136–7, 173, 235, 254–6, 262–6
173 ancillary services 276
computer-mediated communications (CMC) community 270–1
7, 257–62, 263, 265 destination marketing 273–6
consumer behaviour 107, 460 engagement with 267–8
assessment of new products location 269–70
136–9 moderation 272
impact on 42–4 nature and structure 265–6
Internet applications 142–8, planning for 269–70
338–9 cyberspace 12–13
466

Index
data analysis 99–100 e-business environment 16

data portability 48 e-commerce, definition 7–8
decline phase 65 e-device market 382
defamation 448 e-mail 201–2
Delicious 14–15, 93, 366–7 e-readers 385, 390, 404
delivering the fit 300–6 early adopters 39, 64, 65, 75, 95–6, 129,
delivery 346–7
of goods 326, 328 characteristics 131–2
of value 32, 37, 48, 83, 114 early majority 39, 64, 65, 95–6, 346
demographics, internet 82, 95 characteristics 132–3
desktop vending machines 418, economic environment 92
426–30 effectiveness and efficiency 50
destination marketing 273–6 effort price tag 173
differentiation strategy 68 elevator pitch 216–17
diffusion object 300–1 embedded advertising 17
Digg 93 embedded services 143, 399
digital rights management (DRM) 163–4, empowerment, customer 230, 231
410, 449, 453–60 enhanced business process 325
how DRM works 455 entertainment parks 318–19
and Internet freedoms 458–9 entertainment seekers 144
marketing problems with 454–5, 456–7 entertainment-oriented objectives 78, 146,
147, 203–4, 286, 287, 288, 289, 290, 350
permissions management 455–6
entry mode, export market 332
and product lifecycle 459–60
equity of access 441
tracking management and privacy 457–8
exchange of value 32, 33, 44, 114,
direct mail 401
172, 173
direct marketing 201–2
exclusive sponsorships 319–20
direct product sales 290, 412
exile, information 441–2
direct response elements 324
expenditure items 286–7
direct return outcomes 289–91
experiential marketing 31
and mobile devices 397
exporting 309
directed buyers 145 entry mode 332
directed information seekers 144 export barriers 51, 72, 156,
distribution 167–71 333, 447
delivering the fit 300–6 exporter types 331–2
e-distribution implementation issues see also international e-marketing
304–6 external factors 309
m-marketing 403–4 extra value 335
strategies 14 extradition laws 330
for virtual consumer in marketspace 170
distribution channels 37, 155 Facebook 7, 15, 368–70
global 156 Facebook games 418, 421–3
off-web 408–36 financial
physical goods 170–1 price 172, 175–6, 181
diversification 74 viability 52
domain-specific innovativeness 24, first sale doctrine 454
140, 141 Flickr 14–15, 33, 370–1
domestic orientation 327 franchises, regional 328, 332
donations 288 fraud 254, 448
by mobile 403 free
donation-based pricing 176 (gratis) products 175
dot.com boom and bust 19–20, services 26
168 trade 329, 457
downloadable content 17, 383 users 178, 179
dynamic advertising 208 freedoms, Internet 438, 442, 458–9
467

Index
freemium model 175, 178–9, 287 inconsistency (heterogenity) 226, 227, 228–9
freeway intersections 321–2 indirect returns 288–9
frontline staff 358 individual level-mediated communications
future, e-commerce 438–42 257–9
information dissemination objectives 78,
gaming consoles 15, 408, 409, 431–5 111, 145, 147, 148, 282, 286, 287, 289,
generating availability/placement 290, 350
300–1 infrastructure
generic business objectives 77–9, Internet 8
338–9 marketing 116–19
implementation 280–1 mobile marketspace 392–7
off-web 419, 420–1, 422–3, 425, 427–8, technical 120
430, 432, 433–4, 435 innovation 23–4
social media 349–50 characteristics 136–9, 299
generic competitive strategy 66–71, 75 and the Internet 124–39
generic site visitor types 144–5 rejection of 148
geography, Internet 12–16 and social media 346–7
Gibson, William 12–13 innovation adoption 38–41, 44, 49,
gift economy 443–4 63, 95
gift shops 320 categories 128–36, 299
global accessibility 45–6, 51, 156 classic curve 126–7
global marketplace 156, 326 contagion diffusion model 127–8
Google 24 mobile phone users 392–5
Adwords 200 permanent 125–6
Alerts 102–3, 211 ‘S’ curve model 125–6
automated research 101–3 innovativeness 140–1
Index 12 and positioning 297–9
Search 211 innovators 39, 64, 65, 96, 128–9,
Sidewiki 371–2 346–7
Trends 93 characteristics 130–1
government regulations 329, 330, 441–2 inseparability 226, 227–8
GPRS (general packet radio service) 46 intangibility 47, 162–4, 224, 226,
GPS services 48, 386, 388, 397–8, 400 249
group level-mediated communications integrated marketing communication (IMC)
259–62 190–1, 196, 197, 211, 267, 268, 275
intellectual property 11, 444, 449–60
handling costs 171, 180 cost of 178
hashtags 103–4
interactivity 42–3
hidden costs 180
interest-driven behaviour 44, 70
HTML (hypertext mark-up language) 19
international e-marketing 326–33
hypermediated communications 209, 257–9
limitations 330–1
orientation 327–9
idea distribution 168–9
pragmatics of 331–3
identification of requirement 34–5, 116–17
introduction phase 63–4
image design 300
IP addresses 46
IMC see integrated marketing communication
iPad 390
impact research 306
iTunes 94, 411, 414–15, 418, 426–8
implementation 280–91
defending the fit 306–9
delivering the fit 300–6 joint ventures 332
effective and ineffective e-marketing journals 322–3
application 309–10
expenditure to revenue 285–91 Kelly, Kevin 66
objectives 280–4 keywords 118–19, 200, 217–18
product-market fix 291–300 knowledge management 358, 361
468

Index
laggards 39, 65, 346 marketplace 13

characteristics 134–5 segmentation 80
late majority 39, 64, 65, 346 marketspace 13, 169–70
characteristics 133–4 analysis 419, 420, 422, 424–5, 427, 429,
lead time issues 303–4 431–2, 433, 435
legal challenges 91, 206, 330, 446–7, 448–9 beyond the Web 408–36
see also copyright; digital rights m-marketing 391–404
management; intellectual property three parameters of 169, 392
libel 254, 448 marketspace–marketplace
libre agreements 176 continuum 169
licencing arrangements 176, 332, 442, 444, mass customization 43
449, 450, 451–3 mass media 259–60
lifestyle costs 174 measurement 115, 116, 120
listening 210–11 mediated communications 256–62
Livejournal 372–4 metrics 100, 115, 120
LNP see less than new product metrics plan 120–1, 307–9
location services 48, 386, 388, for objectives 284
397–8, 400 social media 361
logos and imagery 190, 191, Microsoft Bing 210
192, 195 Microsoft Xbox 94, 418, 432–4
long term management 340 mindshare 179–80
long term value 105–6 mistakes 25–6
loyalty schemes 238, 248 MMS (multimedia messaging) 6, 383, 384,
385, 387
m-commerce 381–405 mobile computing 382
m-marketing see mobile marketing mobile marketing 6, 163
machine interactivity 42–3 content (marketing mix) 398–404
making money 177–8 context (servicescape) 397–8
market definition 382–3
development 72–3, 75, 293, 411 distribution 403–4
feedback 358 infrastructure 392–7
maturity 64–5 marketspace 391–404
monitoring 308–9 platforms and protocols 384–90
penetration 71–2, 293 price 402–3
segmentation 14, 254–5 product in 399–400
share 178–9 promotion 401–2
market research 32, 358 sample objectives and tactics 399
Eight-step model 96–100 what counts as platform 383–4
online 94–6 mobile networks 392
marketing mobile phones 382, 384, 385–6
core concepts 35–41 motives for using 395–7
definitions of 30–5 payments 413
infrastructure 116–19 users and innovation 392–5, 403
objectives 110–11 mobile technologies 383, 384, 387–9
orientation 36–7 mobility 47–8
plans 115–19 MOIP see marketing over Internet protocol
profit-driven 35 monetary costs 172
toolkit 111–12 Moore’s Law 21, 49
marketing mix 37–8, 112–14, 154, 155 MP3 players 385, 390
m-marketing 398–404 multimedia messaging see MMS
and positioning 197 mutual benefit 239
and social media 353–5
for value creation 157 net neutrality 447–8
marketing over Internet protocol netbook computers 385, 390
(MOIP) 4–5 network access 304–5
469

Index
network of networks 8, 9, 10–12, 69 packaging 299

network neutrality 10–11, 410 paid product placement 412
new market 292–3 paragraph bio pitch 217
niche partners 33, 51
marketing 54, 67, 69–71, 148, 328, 461 inappropriate choice of 310
segmentation 254 passive media consumption 44
Nintendo Wii 15, 418, 431–2 pay per access 456
noise 188 PayPal 17, 42, 413
non-financial perception–expectation theory 179
costs 172 performance indicators 88
price 181, 403 perishability (storage capacity) 226, 227, 229
profit 35 permissions management 455–6
non-physical products and services 31–2, 37 personal
non-verbal cues 14, 15 branding 194–5
novelty seeking 141–2 presentation 300–1
selling 202
objective differentiation 68 physical
objectives 76–80 environments 92
achieving and measuring 115, 284, 307–9 goods channels 170–1
business model 285–90 pitches 216–17
packet mix 77–9, 280–4, 338–9, 349–50, place (distribution) 37
419 place independence 231–2
and planned targets 107 planning 32, 87–121
and profit 79–80 determining outcome 114–15
setting 76, 340 direction setting 104–9
SMART 76–7, 79, 340 external and internal analysis 90–4
social media 349–55 market research 94–104
observability, of innovations 137, 175 marketing mixes 112–14
observational research 97, 98 marketing objectives 110–11
off-web environment 408–18 marketing toolkit 111–12
off-web distribution channel 408–14 process 89
segmentation and off-web platforms reporting and documenting 115–21
415–18 Plastic People Rule 42, 263, 269
wheel of retailing 414–16 pocket universes 418, 431–5
offline advertising 200–1 point-of-sale/point-of-purchase displays 202
one-sentence pitch 216 political environment 91
one-to-many communications 259 political and lobbying content 325
one-to-many-to-many-to-one communications portals 321–2
260 Porter’s generic competitive strategy 66–71,
one-to-many-to-one communications 6–7, 75
209–10, 261–2, 264 positioning 195–7, 296–7
one-to-one communications 260–1 attributes and benefits positioning 108,
online–offline continuum 162–3 356
open shared standards 442 behaviour-focused positioning
Open Source 26, 450 196, 296
opt-in approach 401–2 benefit-focused positioning
organizational 196, 296
barriers 333 competitor positioning 109, 196,
capacity 52–3 297, 357
decision making 361 cultural symbol positioning 108–9, 356
goals 107, 108 five forms of 196–7
outcomes, assessing 306–9 and innovativeness 297–9
ownership social media 356–7
and DRM 454 strategies 30, 83–4, 107–9, 145, 197, 280,
in virtual domain 163–4 297–300, 316
470

Index
post-purchase 214 theory 157–67

price 37, 172 three levels (core, actual and augmented)
comparisons 180–1 166–7
picking the price tag 180–2 product-market fit 291–300
price-based positioning 296 defending the fit 306–9
price–quality positioning 108, 356 defining 292–5
as value indicator 154, 299 delivering the fit 300–6
pricing designing the fit 295–300
abundance 154, 155–6 profit 35, 69, 177
m-marketspace 402–3 objectives 79–80
objectives 176–80 promotion 38, 51, 146, 167, 186,
prestige pricing 179–80 317, 358
strategy and tactics 176–80 five-step model for e-marketing 212–14
theory 172–82 and mobile devices 397, 401–2
transparency 310 online promotion in purchase
privacy 46, 438, 457–8 context 214
problem definition 97 six tenets of 208–9
product 37 promotional
actual product 166 message 207–9
augmented product 167, 225–6, mix 186, 198–207
299 objectives 78, 111, 283, 286, 287–8, 289,
characteristics 47–9 290, 350
class positioning 109, 356–7 property rights 11
components 158–60 protocols, communication 8
continuing products 138, 139, 297 pseudonymous blogging 62–3
core product 166, 225 psyche costs 174–5
credence attribute products 233–4 psychographics 139–42, 254–5
definition 30 psychological
development 33, 73–4, 75, 293, 297 barriers 333
differentiation 66, 67–8 commitment 244
e-marketing product types 160–2 pricing objectives 179–80
e-service product 222–5 public relations 203–5
experience attribute products 233 public service components 325
extended model 158–60 publicity 202–3
features 316–17
high-risk products 233–4 QNP see quite new products
idea products 158, 189 Quick Response (QR) codes 388,
improved products 138, 139, 292–3 398, 401
information as 165–6 quite new products (QNP) 138, 139,
intangibility 154, 162–4 297, 298
less than new product (LNP) 297, 298
lifecycle 63–5, 459–60 Radio Frequency Identification
limited use products 455, 456 see RFID
m-marketing 399–400 re-purposing 336–7
new products 292–3, 297 reacting, to conversation 211–12
orientation 36 really new products (RNP) 138, 139,
product/market barriers 333 297–8
product-market fit see below reauthorization 455, 456
product-place-price bundle 154 receiver-broadcasters 262
product user positioning 108, 145–8, 356, receiver-senders 262
419, 421, 423, 425–6, 428, 430, 432, reciprocity 240, 243
434, 435 reference pricing 179
relative novelty of 137–9 regional franchises 328, 332
tangible/intangible 162–4 regional markets 327, 330
service products 232–4 rejection, of innovation 148
471

Index
relationship marketing 32, 222, service

238–49, 361 brokerage 400
and DRM 454 consumer behaviour 232–4
mobile devices 401–2 delivery 168
principles of 240–4 product 222–6
three levels of 244–5 sales 290–1
relative advantage 39, 40, 136, 137, 173, 316, service/goods analysis 224–5
403 value offering 224
rental pricing 456 service sector elements 321
repeat activity 214 services marketing 31, 222–38
repositioning 109, 196–7, 297 customer involvement 234–7
resource issues 53 e-service advantages 229–32
retail outlets 321 e-service product 222–5
retail/sales pages 325 four pillars of 226–9
return on investment 35, 178, 288 servicescape, m-marketing 397–8
and distribution 411–12 shareware 176
versus cost cutting 291 shipping options and costs 171, 180–1
revenue international 328–9
0: expenditure item 286–7, 411 short messaging systems see SMS
1: uncertain returns 287–8, 411 short-term value 105–6
2: indirect returns 288–9, 412 situation analysis 90
3: direct return outcomes 289–91, SIVA marketing mix toolkit 112, 113
412 Skype 399–400
and distribution 411–13 small-to-medium-sized businesses see SMEs
RFID tags (Radio Frequency Identification) 46 smart devices 385, 389–90
rich media environments 14–15 SMART objectives 76–7, 79, 340
RNP see really new products smart phones 385, 387–8
Rogers, M.R. 136–7 SMEs (small-to-medium-sized
businesses) 51
sales-oriented objectives 78, 110, 147, 148, SMS (short messaging systems) 6, 7, 383, 384,
281, 286, 287, 289, 290, 349–50 385, 387, 401, 402
sample population 98–9 social
satisfaction of requirement 34–5, 117–18, 296 compliance 417
scanning the environments 91–4 contagion 127
scarcity, model of 11, 48, 155–6 interaction 9, 345, 348
search attribute products 233 pressure 142
search engine optimization (SEO) 11–12, prices 172–5, 409
118–19, 204–5, 215, 217–18 profit 35
search engines 170, 321–2 social media 344–79
Second Life 15, 409 achieving objectives 350–5
security budgets and time allocations 357–8
communications and data 309 defining characteristics 345–7
Internet 442, 462 impact of 361–3
segmentation 80–3, 104–7, 144–5, 157, and innovation characteristics 346–7
254–5, 316 marketplace 31, 48
and branding 193–4 objectives 349–50
geographic 330–1 plan 119, 218, 269, 362–3
m-marketing 402 planning process 348–63
matrix 105–6 positioning 356–7
and off-web platforms 415–18 revolution 347–8
segment selection 83 sites 173, 224, 254, 359–61, 363–78
self-selected groups 263, 264 stakeholders versus non customers 362–3
self-service technologies (SSTs) 43, 166, tactics 351–5
234–5 target markets 359
SEO see search engine optimization technologies 346
472

Index
social networking sites 254 trialability 137, 175, 235

sociocultural environment 91–2 True Fans model 66, 67
software, sourcing 444 trust 240–2
sponsorship 289, 291, 412 barriers to 246
exclusive 319–20 and e-commerce 245–8
sporadic exporters 331 Twitter 34, 40–1, 48, 61–3, 374–6
SSTs see self-service technologies consumer intelligence 103
Stages of Change model 40–1, 310 listening to 211
static advertising 208 quitters 128
Steam 94, 411, 414, 418, 428–30, 453 responses 216
strategies 59–85 Trending Topics 93
big picture 60–75 Twitter BioPitch 216
communications 334–5
design 191 ubiquity 46–7
generic competitive 66–71, 75 uncertain returns 287–8
growth options 63–75 undirected information seekers 144
objectives and goals 76–80, 107 unethical practices 448
positioning 30, 83–4, 107–9, 145, 197, unimproved products 138, 139
280, 297–300, 316 upstream marketing 410–11
pricing 176–80 usage patterns
segmentation 80–3 mobile devices 396
subjective differentiation 68 online 81
subscriptions 291, 402–3, 445 use or application positioning 108, 356
subsidiaries, wholly owned 332 user-generated content 205–7, 444
supply chain management 410
synonymous blogging 62 value creation 32, 33, 35, 38, 113
marketing mix for 157
tangibility 162, 224, 233 value offerings 32, 33, 34
target market 300–1 five parts of 154–5
selection 104–7 Valve Corporation 243–4, 411, 453–4
taxation issues 181, 449 Vegas Rule 61
TCP/IP protocol 8, 9, 23 venture capital 288, 290
technical compatibility 305–6 video calls 386, 404
technical demography 82, 397 videos, mobile technology 404
technical infrastructure plan 120 viral marketing 127, 206
technological environment 92 virtual
Technorati 93 communities 262, 265
temporal innovativeness 140–1 currency 412
text-only advertising 200 currency exchanges 413
third-party funding 287 economy 9, 10, 16–18
time environments 9–10, 15
costs 37, 69, 173, 357 experiences 399
independence 46, 230, 231–2 geographic boundaries 13–15
pricing 69 geography 8, 9, 10, 11, 12–16, 167
timelines 303–4, 340 goods 161, 399, 400
total cost to consumer 180, 181–2 piggy banks 413
total price concept 172–6 presence 9, 10
Tour Rule 61 product 17–18, 160–2
tourism marketing 273–6 services 18, 161–2, 399
tracking 120, 307–9 worlds 15–16, 173, 265, 270, 408, 409,
DRM and privacy 457–8 418, 423–6
technologies 307 visual brandmarks 194–5
transaction fees 180–1 voice over IP over 3G 404
transitory ownership 454 voice, share of 55, 209–12
trend data 93–4 volatility, Internet 49
473

Index
WAP see wireless access protocol world trade blocs 329, 330–1
web browsers, mobile 388 World of Warcraft 409, 434–5
web page content typology 324–5 World Wide Web 13, 18, 19–22
web-based communities 269–70
webjournal see blogs Xbox see Microsoft Xbox
website bio pitch 217
Wheaton, Wil 16, 73–4 Yahoo! Buzz 93
wheel of retailing 414–16, 426 YouTube 15, 18, 376–8
wireless access protocol (WAP) 383
word-of-mouth advertising 142, 167, 206–7 Zazzle 16
474

E-Marketing Theory and Application PDF

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

E-Marketing Theory and Application PDF

Загружено:

Авторское право:

Доступные форматы

e-marketing

theory and application

October 28, 2010 11:55 MAC/DANN Page-i 9780230_203969_01_prexxii

October 28, 2010 11:55 MAC/DANN Page-ii 9780230_203969_01_prexxii

October 28, 2010 11:55 MAC/DANN Page-iii 9780230_203969_01_prexxii

List of figures and tables xi

5 Online consumer behaviour 123

6 Creation, delivery and exchange of value offerings 153

7 Branding and promotion 185

8 Services and relationship marketing 221

9 Community and networks 253

11 Applications of e-marketing 315

12 Social media 343

October 28, 2010 11:55 MAC/DANN Page-v 9780230_203969_01_prexxii

October 28, 2010 11:55 MAC/DANN Page-vi 9780230_203969_01_prexxii

List of figures and tables xi

Section 1 Background and planning

October 28, 2010 11:55 MAC/DANN Page-vii 9780230_203969_01_prexxii

Unique e-marketing issues 54

5 Online consumer behaviour 123

Section 2 Principles of e-marketing

October 28, 2010 11:55 MAC/DANN Page-viii 9780230_203969_01_prexxii

7 Branding and promotion 185

8 Services and relationship marketing 221

9 Community and networks 253

October 28, 2010 11:55 MAC/DANN Page-ix 9780230_203969_01_prexxii

International and export marketing: putting ‘world wide’

12 Social media 343

14 Beyond the Web 407

15 Social impact 437

October 28, 2010 11:55 MAC/DANN Page-x 9780230_203969_01_prexxii

1.1 Hoffman and Novak’s model 6

2.1 Cutting edge 39

3.1 A minus minus 70

4.1 The planning process 89

5.1 What’s learned can’t be unlearned – permanent adoption 126

6.1 Branching diagram of the product components 159

October 28, 2010 11:55 MAC/DANN Page-xi 9780230_203969_01_prexxii

6.4 Online to offline 163

7.1 Communications model 187

8.1 Service product model 223

9.1 Mediated communications model 257

11.1 The inter-blag 317

12.1 Social media components 345

13.1 Identifying the mobile marketing platform 383

14.1 Wheel of retailing (try not to reinvent it) 415

15.1 Abstraction 439

October 28, 2010 11:55 MAC/DANN Page-xii 9780230_203969_01_prexxii

3.1 Ansoff matrix 71

4.1 Segmentation matrix 106

5.1 Characteristics, categories and innovations 129

6.1 Price position 181

7.1 E-mail as branding 193

8.1 Determinants in trust development on the Internet 248

10.1 Metrics for objectives 284

11.1 Characteristics of different international orientations 329

12.1 Innovation characteristics and social media 346

October 28, 2010 11:55 MAC/DANN Page-xiii 9780230_203969_01_prexxii

12.13 Objectives on Twitter 375

13.1 Innovation characteristics by innovation adoption category 393

14.1 Linking the wheel to objectives, markets and tactics 416

15.1 Creative Commons licences 453

October 28, 2010 11:55 MAC/DANN Page-xiv 9780230_203969_01_prexxii