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Internet marketing is the process of communicating marketing and sales information using the Internet. To be successful at Internet marketing, it doesn't matter if you are an expert in marketing or a novice. However, it does matter that you can identify, setup, and test different marketing campaigns and programs.

Some of the advantages of using Internet marketing programs include rapid response, the ability to precisely measure customer interactions with promotions, the ability to control of how and where money is spent, the ability to precisely target who sees promotional materials and cost effective marketing programs.

Internet Marketing Advantages

Internet marketing advantages include getting rapid response from marketing campaigns, tracking interaction with promotional materials, flexible spending controls, precise targeting and cost effective marketing programs.

Rapid Response

Internet marketing programs often can have measurable results within days or hours compared to other forms of media such as radio broadcast, direct mail or media publications. The ability to measure rapid response also allows for the content or promotion to be changed or adapted in mid-promotion increasing the overall effectiveness of the program.

Tracking Interaction

Unlike traditional marketing, Internet marketing offers the possibility to track almost every action a visitor or potential customer takes in response to marketing messages and how they navigate through their buying cycle. Tracking codes can be inserted into links and

stored in cookies to find out how web site visitors and email customers react to your marketing programs.

Spending Control

Internet marketing programs commonly have threshold settings allowing limits to be established for campaigns. The program is run until the budget threshold is reached and the promotion slots are give to other promoters. This allows merchants to budget and test multiple campaigns where other forms of media such as magazines require a single promotion that reaches many people. Some Internet marketing programs also have pay for performance programs such as affiliate marketing where the cost of promotion only occurs when sales or qualified sales leads have occurred.

Precise Targeting

Internet marketing programs can use precise targeting by placing ads only in front of potential customers that have a very defined set of characteristics. This means that the ads can be adjusted for those types of customers (microtargeting), making the ads more effective. For example, an airline can promote special airfare rates between cities where airline customers have repeatedly traveled. The ad can be customized to show the cities where the special rates apply which closely match the interests of the potential customer.

Cost Effective Marketing

Internet marketing can be cost effective, (not always). The cost to communicate with potential customers through the Internet is low, which allows the promoter to cost effectively reach customers in large geographic areas. Internet marketing can have a higher cost per transaction (such as advertising on search engines) with a lower overall promotional cost. This is because the advertiser may pay for the transaction cost rather than the presentation, which can result in lower overall marketing costs.

While some Internet marketing programs can be complex, almost anyone can utilize certain types of Internet marketing. With a bit of planning, organization and testing, self-managed Internet marketing programs can be very effective. Some marketing agencies now specialize in Internet marketing programs while other marketing agencies do not yet understand the differences between traditional marketing and Internet marketing.

Changes in Internet Marketing

Since many of the Internet marketing programs and metrics were introduced in the 1990s, they are still relatively new and continuously changing. Marketing techniques that may have worked well in the late 1990s may have decreased in effectiveness or even be not usable now.

Promotion Saturation

Promotion saturation is the over promotion of a product or service. When consumers are overwhelmed by media promotions, they become desensitized and ignore or bypass advertising promotions. This results in much lower response rates. An example of promotion saturation is the overuse of banner ads. As a result, the click through rate for banner ads has decreased to below ½%.

Customer Ad Filtering

In response to over promotion, customers are setting up ad filters (such as SPAM filters) to remove unwanted promotion messages. This means that it is getting much harder to reach prospective customers even when the ad is actually sent to their address.

Shift to Pull Marketing

Marketing programs are shifting from one-way broadcast promotions (TV, radio, and magazines) to interactive advertising (Internet porta

ads and search marketing). The revenue streams for pull marketing programs are increasing by more than 70% compared to stagnant or decreasing marketing dollars spent on traditional broadcast media.

Increasing Internet Marketing Costs

An example of increasing Internet marketing costs is the pay per click cost trend in adword marketing programs. When they were introduced in the early 2000s, the cost per click was low (about 5-10 cents per click) and the response rates (2% to 5%) were high. As adword marketing programs evolved, the cost per click has increased (now over 50 cents per click) along with the cost of fraud while the response rates (about 1/2% to 1%) have decreased.

Internet Marketing Options

There are various types of Internet marketing programs that have a unique mix of advantages and challenges along with economic factors.

Web portals are web pages that have a specific function or focus area. Search engine optimization (SEO) is the process or processes that adjust web site software and content to improve the relative ranking of the search engine list results from keyword searches. Affiliate marketing is the process of sharing marketing and sales programs, compensating marketing affiliates (partners) for their role in communicating and selling to their customers.

Adword marketing is a process that uses keywords that potential customers search for in search engines to display ads. Email marketing is the sending of marketing and sales information using email messaging systems. Affiliate marketing is the process of working with other companies to cross-promote products or services in return for an incentive (affiliate commission).

Banner advertising is the insertion of graphic images on web sites that contain hyperlinks to other web sites. Mobile advertising programs can reach specific types of users in controlled geographic locations. Blogging and Podcast marketing programs can cost effectively reach users that share well defined interests and needs with each other. Viral marketing is the process of promoting and selling products or services through the use of messages or ads that are self regenerative (passed along by recipients).

To increase the effectiveness of Internet marketing, different types of marketing programs can be combined to interact with each other (integrated marketing). A good understanding of the operation, options and

economics of the different types of Internet marketing programs can help to determine how to optimize each of the Internet marketing programs and discover how to increase their effectiveness when they are used together.

Figure 1.1 shows some Internet marketing program types. Internet marketing programs may include search engine optimization, public relations, banner advertising, adword marketing, affiliate marketing, email broadcasting, link exchanges, podcasting and blogging.

Buying Cycle

A buying cycle is the processes and tasks that are used by a person or company when they are buying or replacing a product or service. The steps in a typical Internet buying cycle include discovering a need, researching potential products, gathering comparative information

requesting information and making a purchase decision. The buying cycle for Internet customers tends to be short and can range from days to weeks. An example of buying cycle time is the number of days it takes for a user to buy a car from the time a purchase request is submitted. The cycle is approximately 13 days [ ].

During the buying cycle, the potential customer may be influenced by external events that alter their normal buying cycle process. Understanding the buying cycle for specific types of customers can assist in the development and use of Internet marketing campaigns to influence the customers buying decision.

Discovery Phase

The discovery phase of a buying cycle is the point where a person develops an awareness of a need or want. This may occur during an

Figure 1.1, Internet Marketing Program Types

advertising message that identifies how a problem can be solved using a product or service.

Interest Phase

The interest phase of a buying cycle is the reinforcement of the desire for a person to obtain or use a product or service. This may be in the form of repeating the original benefits or showing additional satisfying experiences the user may experience from the product or service.

Research Phase

The research phase of a buying cycle is the period a user spends looking for solutions to obtain the product or service. The goal of a marketing program during the research phase is to get the visitor to bookmark the site or remember the URL for their buying phase.

is selling the product or service (such as not having contact information on the web page).

Figure 1.2 shows an example of an Internet buying cycle. This example shows a buying cycle for a person who is looking to buy a mobile telephone. This example shows that the prospective customer becomes aware that they have a need or desire for a new mobile telephone after seeing an ad for a new feature. Over time, the consumer's interest for the new phone is developed as the person sees additional ads showing the benefits to using the new feature. When the customer's desire is great enough, a research phase begins in which they find out where to buy the product and what options they have to purchase it. When the customer decides to purchase, they will perform a comparison of the vendors who offer the product to determine the best value (prices, shipping time).

Figure 1.2, Sample Internet Buying Cycle

Buying Phase

The buying phase of a buying cycle is the time the user spends purchasing the product or service. The goal of a marketing program during the buying cycle is to make the purchase transaction as quick and simple as possible for the customer and to avoid triggering doubt in the customer's mind that there is something wrong with the company tha

Internet Marketing Objectives

Marketing objectives are statements that identify targets that should be achieved through media communication efforts that may include such items as revenue, quantities, market share, account types or experience.