Direct E-Marketing

Advances in Internet technology and use have created a new channel for businesses to market their goods and services. E-marketing is an evolving discipline in which the Internet is used as the medium for a business's marketing efforts, such as selling goods and services or collecting information about the needs and desires of potential customers. E-marketing can include pay-per-click advertising, banner ads, mass emailings, websites, blogging, and social media. Many tools are available to help businesses increase the traffic to their websites and to provide information about the users who view them. However, as these tools allow more and more data to be collected about the user, there is an increasing need to develop enforceable guidelines that balance the needs of the business with the privacy needs of the user.

Keywords: Blog; Cookie; Data Mining; Direct Marketing; E-Marketing; Marketing Mix; Search Engine Marketing (SEM); Search Engine Optimization (SEO); Social Media; Strategic Marketing; Web Bug

Overview

What is Direct Marketing?

In 1989, the movie Field of Dreams introduced the saying, "if you build it, he will come." Although a great tag line in conversation, in the marketing discipline this philosophy has little relevance. Merely having a great product is usually not sufficient to ensure its success in the marketplace. The target market must know that the product or service is available, what customer need the product or service fulfills, and how the product or service is superior to or a better investment than the products or services offered by competitors. To do this, a company needs to market, whether through such activities as simple word of mouth or through major multichannel marketing campaigns; or anything in between.

Direct marketing is a customer relationship management strategy in which the provider of the product or service delivers the promotional message directly to potential customers on a one-to-one basis rather than through the use of mass media. Direct marketing is often a part of a business's marketing mix, or the combination of product, price, place, and promotion that is used to get a product into the hands of the consumer. One of the primary tasks of the marketing function with an organization is to optimize the mix to best position the product for success in the marketplace. With the advent of the Internet, the strategic marketing plans of many businesses have been expanded to include the channel of electronic marketing (e-marketing).

E-Marketing

E-marketing is a relatively new and evolving discipline in which the Internet is used as the medium for a company or an organization's marketing efforts to sell goods and services as well as to collect information about the needs and desires of potential customers. E-marketing can include pay-per-click advertising, banner ads, mass emailings, websites, blogging, and social media.

Using Email

Perhaps the most obvious approach to electronic marketing is through email. In theory, the marketing of a product or service through this channel is simple: Just send out email advertisements to every potential consumer that can be identified, usually from a list purchased through a third party, to increase the exposure of the business's goods or services. Unlike sending out hard copy advertisements, this approach does not incur an expense for each additional person contacted. Emails can be sent announcing upcoming sales or other promotional events, distributing online coupons for recipients (typically for ordering over the Internet, also called e-commerce), or with electronic newsletters that include short articles of interest to readers, updates on the business's projects and programs, and links to the business's website or blog.

However, for many reasons, this approach is often neither usable nor viable. As the use of the Internet has grown (making it a more attractive medium for marketing), so has its misuse. Mass unsolicited emails (i.e., spam) are often used by cybercriminals to spread computer viruses and spyware. Even when emails are harmless and sent with the best of intentions, if unsolicited, they are likely to be viewed as nuisances by the recipient. According to a 2013 report from IT security firm Kaspersky Lab, about 69.6 percent of emails sent that year were spam (Gudkova, 2014). Further, 3.2 percent of emails contained some sort of malicious attachment. Based on the influx of spam into our daily email boxes, there is no evidence to believe that this trend will reverse . To reduce the amount of spam received, most email software and Web-based email, such as Google Mail, include spam filters to block the most obvious cases of spam. This means that even well-meaning marketing emails may fail to get through to their intended recipients if the latter did not request them.

Further Insights

Direct marketing on the Internet has become increasingly complicated. Typically, it is important to most businesses to have a website or other Internet presence to be competitive. No matter how well designed, however, a passive website is unlikely to bring in much new business. To be effective, a website needs to be well-designed, and potential customers need to know about it and visit it. Fortunately, for those businesses trying to market their goods and services, there are tools available to help them identify who is actually interested in their offerings and to drive them to their websites.

Search Engine Marketing

One approach to improving an organization's return on investment for marketing activities is to attempt to drive traffic from search engines to the website based on the words input by the user. Search engine marketing targets potential customers on the Internet who input specified keywords into a search engine that then directs them to the business's website. Search engine marketing tools include paid ads (typically with hyperlinks) on the results pages of search engines, and search engine optimization. Banner ads are a type of Internet advertising that can be used in this way. These ads may be placed on search results pages or on the websites of related but noncompeting organizations. Banner ads, as the name suggests, are spread across the top of a website and direct viewers to the business's website through the use of a hyperlink.

Many websites and search engine results pages also sell space for the inclusion of other hyperlinked ads. Like physical advertising, online advertisements can be purchased in a number of different ways, including as a onetime advertisement for a set period of time (e.g., one week, three months). A novel approach enabled by Internet technology is the pay per click ad. Payment to the host page for this type of ad is not based on the time that the ad is posted on the site, but by the amount of traffic that the ad actually drives to the business's site. The business purchasing the ad only pays the host for the times that a user is redirected to the business's website by clicking on the hyperlink in the ad.

Search Engine Optimization

Another way to help drive traffic to one's website is to increase the probability that a search engine will include the business's site in its results-page listings for desired keywords and place the site prominently in the results pages. This approach is called search engine optimization. Search engine optimization includes such techniques as adjusting the content of the website to distinguish it from similar websites, correctly indexing the website, using the best keywords to describe the website, and ensuring that the content of the website is unique. There are a number of free online tools available to optimize one's results in search engines. These software tools help determine what words and phrases are most likely to be used by potential customers searching for the goods or services offered by a given business so that these can be included in the website design. Online tools are also available for helping to determine whether or not too many keywords are included; in which case a website may be banned from desirable search engines (Solomon, 2010).

Google

One of the best known search engines is Google. In addition to allowing users to perform keyword searches, Google also offers a suite of tools to help website designers and marketers optimize the effectiveness of their websites. One of the best known tools for helping a business understand the traffic on its website and the effectiveness of its online marketing strategy is Google Analytics (http://www.google.com/analytics/). This free service helps marketers better understand what kind of person is visiting the business's website. Google Analytics summarizes key metrics about how the site is used by visitors and the keywords they used to get there. In addition, Google Insights for Search helps marketers determine which keywords can optimize the number of visitors to their website. Google Display Planner is a tool to help marketers determine the best websites to place their ads.

Cookies & Web Bugs

Although search engine optimization and web analytics tools can help marketers be more active in marketing efforts through their websites, other, more proactive tools exist, including cookies and web bugs. These tools help marketers capture data regarding how the website is used or how a viewer responds to an email advertisement. These data can then be mined to better understand the effectiveness of the site and to improve its performance. Cookies are small, unique text files created by a website and sent to the user's hard drive to record a user's activities on the site (Harding, Reed, & Gray, 2001). Web bugs (also referred to as Web beacons, pixel tags, or clear GIFs) are images included on a website that track the activity on the site. While simultaneously retrieving an image for display on the screen, the beacon also transmits information back to the site (e.g., browser used to retrieve the image, IP address of the viewer's computer, when and for how long the image was viewed). Turning off cookies on the viewer's computer can prevent personal information from being transmitted. However, nonpersonal information will still be transmitted back to the website or third-party monitor of the beacon.

According to Harding, Reed, and Gray (2001), when a user returns to a website, the cookie passes information back to the server concerning the user's activities on the site. This allows the business to target ads to the interests of the user, prevent repetitive ads, and get a higher "click-through" rate. Web bugs have a wider goal and track the number of people in various regions that have accessed the website. This allows a business to manage its website to optimize the content for the users it attracts. Web bugs also allow businesses to build personal profiles of individuals and the sites they have visited. Through data mining, the business can better focus advertising to that user. When web bugs are included in emails, they can be used to not only determine when an email was viewed but also provide the business with the IP address of the viewer even if the viewer does not want to give out that information. Web bugs in emails can also provide the business with information on how often an email was forwarded and read. This information can help marketers gauge the effectiveness of their marketing campaign.

Issues

Privacy Concerns

Although technology currently exists that allows the collection of data to better focus online marketing efforts and to reach larger numbers of potential customers at lesser cost than ever before, many question how appropriate—or even ethical—such approaches are. As advances in technology continue to support the collection of increasing amounts of personal information, users are increasingly becoming concerned about privacy. In the context of marketing and information technology, this refers not only to the safe storage and dissemination of personal information but also to the legitimacy of collecting information without the subjects' approval in the first place. In the United States, there are a number of laws in place that protect privacy. The Privacy Act of 1974 allows individuals to determine what information others may collect about them and prevents the collectors of such information from using it for a purpose other than the one for which it was collected. This act also allows individuals to have access to the data collected about them and gives them the right to correct or amend faulty records. Under this act, if the organization or individual collecting the data willfully or intentionally violates these rights, they can be sued in civil court. In 1986, the Electronic Communications Privacy Act mandated the protection of privacy of emails sent through public networks (Senn, 2004).

Another privacy concern for Internet users is the receipt of unsolicited email (spam) that has been sent en masse to email addresses acquired from mailing lists. Although the sender is hoping to acquire new customers through spamming, recipients typically view spam as an unwanted nuisance. However, not all unsolicited emails are actually spam. Many websites have a check box (typically already checked) that gives the sender permission to send the recipient emails. Unless the recipient notices this box and unchecks it when registering, she or he will automatically receive emails. Sometimes, this is carried a step further and the business assumes that the recipient is interested in receiving marketing emails merely because that person registered with the site or purchased something from the company. In both these cases, it is good practice to allow the recipient the option to refuse further emails (Senn, 2004). Typically, a statement is included near the bottom of the email that says that the business values the recipient's privacy and either requests that the recipient send an email to them with the word "unsubscribe" in the subject line or includes a hyperlink that allows the recipient to opt out on the business's website.

Another ethical consideration for online marketing is the use of web bugs. Although these tools are intended for legitimate use by marketers and others interested in the visitors to their website, spammers also use web bugs for less legitimate purposes. In an attempt to allay concerns over privacy and other issues arising from the use of web bugs and to balance the needs of businesses with the needs of potential customers, the Network Advertising Initiative has developed guidelines for the use of web bugs. According to these guidelines, online advertisers using web bugs should disclose how web bugs are being used on their site and why they are using them (Marcum, 2003). The Initiative's website (http://www.networkadvertising.org/) also allows consumers to opt-out of targeted advertising from all its members.

As Internet use continues to grow, an increasing number of businesses will be likely to include e-marketing efforts in their strategic marketing plans. However, as Internet use rises, abuse is likely to rise too. It is doubtful that voluntary guidelines are likely to solve the ethical problems of e-marketing. However, they are a good start.

Conclusion

The Internet has become not only a source of information, but also a new channel for marketing a business's goods and services. As Internet technologies continue to advance, new and better ways to market online are likely to be developed. However, with increased use typically comes increased abuse. In particular, as tools are developed to help businesses market more effectively online, users become more concerned with issues of privacy. Better policies and regulations are needed to keep the needs of the business and the needs of the customer in balance.

Terms & Concepts

Blog: A personal journal that is publicly accessible on the World Wide Web. Blogs include personal thoughts of the author in chronological order, just as in a hard copy journal. The term “blog” is short for “web log.”

Cookie: A small, unique text file sent by a website to the user's hard drive to record a user's activities on the site.

Data Mining: The process of analyzing large collections of data to establish patterns and determine previously unknown relationships. The results of data mining efforts are used to predict future behavior.

Direct Marketing: A customer relationship management strategy in which the provider of the product or service delivers the promotional message directly to potential customers on a one-to-one basis rather than through the use of mass media.

E-Marketing: E-marketing (electronic marketing) is an evolving discipline in which the Internet is used as the medium for an organization's marketing efforts to sell goods and services as well as to collect information about the needs and desires of potential customers. E-marketing can include pay-per-click advertising, banner ads, mass emailings, web sites, blogging, and social media.

Marketing: According to the American Marketing Association, marketing is " 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" (http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx/).

Marketing Mix: The combination of product, price, place, and promotion that is used to get a product into the hands of the consumer. One of the primary tasks of marketing is to optimize the mix to best position the product for success in the marketplace.

Marketing Plan: A plan that specifies the actions the organization intends to take to obtain customers for its proffered goods or services. The marketing plan includes the organization's marketing strategy, including such things as pricing, budget, specification of target markets, and intelligence about competitors.

Search Engine Marketing (SEM): An approach to online marketing that targets potential Internet-based customers who input specified keywords into a search engine and direct them to the business's website. Search engine marketing tools include paid ads (typically with hyperlinks) on the results pages of search engines, and search engine optimization.

Search Engine Optimization (SEO): The process of increasing the probability that a website will be listed in the results of an online search and that it will be placed prominently in the search results. Search engine optimization includes such techniques as adjusting the content of the website to distinguish it from similar websites, correctly indexing the website, using the best keywords to describe the website, and ensuring that the content of the website is unique.

Social Media: Social media is “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content” (Kaplan & Haenlein, 2010). Social media sites include Facebook, Twitter, Instagram, and YouTube and rely on the generation of online content by users. Businesses and organizations use social media to market to their customers and potential customers. Social media is a particularly powerful marketing too, as marketers can create content with viral value that is quickly shared across any variety of social media platforms, expanding the campaign’s reach beyond its initial target audience.

Strategic Marketing: The subfunction of marketing that examines the marketplace to determine the needs of potential customers, the strategy of the competitors in the market, and attempts to develop a strategy that will enable the organization to gain or maintain a competitive advantage in the marketplace.

Virus: In computer science, a virus is a program or piece of code that is loaded onto a computer without the user's knowledge and against the user's wishes and that alters the way that the computer operates or that modifies the data or programs that are stored on that computer. Simple viruses can be self-replicating and can use up a computer's memory or otherwise disable a computer; more complex viruses can transmit themselves across networks and bypass security systems to infect other computers or systems.

Web Bug: An image included on a website that tracks the activity on the site. While simultaneously retrieving an image for display on the screen, the beacon also transmits information back to the site (e.g., browser used to retrieve the image, IP address of the viewer's computer, when and for how long the image was viewed). Turning off cookies on the viewer's computer can prevent personal information from being transmitted. However, nonpersonal information will still be transmitted back to the website or third-party monitor of the beacon. (Also referred to as a web beacon, pixel tag, or clear GIF).

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Suggested Reading

Brashear, T. G., Kashyap, V., Musante, M. D., & Donthu, N. (2009). A profile of the Internet shopper: Evidence from six countries. Journal of Marketing Theory and Practice, 17 , 267-281. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=40520971&site=ehost-live

Benady, D. (2013). The big data breakdown. Marketing (Feb. 13, 2013), 28-30. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=85711325&site=ehost-live

Chickowski, E. (2010). Assess for less. Entrepreneur, 38 , 46. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=52095889&site=ehost-live

Chittenden, L. & Ruth, R. (2003). An evaluation of e-mail marketing and factors affecting response. Journal of Targeting, Measurement, and Analysis for Marketing, 11 , 203-217. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9188413&site=ehost-live

Clark, M., & Melancon, J. (2013). The influence of social media investment on relational outcomes: A relationship marketing perspective. International Journal Of Marketing Studies, 5, 132-142. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=89899293&site=ehost-live

Eid, R., & El-Gohary, H. (2013). The impact of E-marketing use on small business enterprises' marketing success. Service Industries Journal, 33, 31-50. Retrieved November 11, 2014, from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=83864183

Jank, W. & Kannan, P. K. (2005). Understanding geographical markets of online firms using spatial models of customer choice. Marketing Science, 24 , 623-634. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19243277&site=ehost-live

Joly, K. (2010). Embracing web analytics. University Business, 13 , 29-30. Retrieved 19 August 2010 from EBSCO Online Database Academic Search Complete http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=51445395&site=ehost-live

Martin, D., Hailin, W., & Alsaid, A. (2003). Hidden surveillance by web sites: Web bugs in contemporary use. Communications of the ACM, 46 , 258-263. Retrieved 19 August 2010 from EBSCO Online Database Academic Search Complete http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=25017166&site=ehost-live

Smith, A. D. (2005). Exploring service marketing aspects of e-personalization and its impact on online consumer behavior. Services Marketing Quarterly, 27 , 89-102. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=20423735&site=ehost-live

Spanbauer, S. (2001). Free tools nab web bugs. PC World, 19 , 182-183. Retrieved 19 August 2010 from EBSCO Online Database Business Source Complete http://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=5314525&site=ehost-live