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'Internet marketing', also referred to as ''online marketing'' or Emarketing, is marketing that uses the Internet. The Internet has brought many unique benefits to marketing that include very low costs in distributing information and media to a global audience. However, the interactive nature of the media, both in terms of instant response, and in eliciting response at all, are both desirable qualities of internet marketing.
Internet marketing ties together both the creative and technical aspects of the internet, including design, development, advertising and sales. Internet marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising and viral marketing.

Contents

Definition and scope

Business models

Advantages

Limitations

Security concerns

Effects on industries

Recent issues

See also

References

External Links

Definition and scope

Internet marketing is the process of advertising a website or online property. Internet marketing strategies will determine the goal of an internet marketing campaign which is usually to support the goal of website or online property being promoted.
Internet marketing includes all aspects of online advertising products, services, and websites, including search engine marketing, public relaitions, social media, wikis, market research, email marketing, and direct sales.
Internet marketing has become popular and is growing while becoming more widely available and used. There are more product, services, and companies offering internet marketing, and companies specializing in aspects of internet marketing.

Business models

Internet marketing is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies doing business with each other, whereas B2C involves selling directly to the end consumer (see Malala, 2003)^[1] When Internet marketing first began, the B2C model was first to emerge. B2B transactions were more complex and came about later. A third, less common business model is peer-to-peer (P2P), where individuals exchange goods between themselves. An example of P2P is Kazaa, which is built upon individuals sharing files.
Internet marketing can also be seen in various formats. One version is name-your-price (e.g. Priceline.com). With this format, customers are able to state what price range they wish to spend and then select from items at that price range. With find-the-best-price websites (e.g. Hotwire.com), Internet users can search for the lowest prices on items. A final format is online auctions (e.g. Ebay.com) where buyers bid on listed items.
It should be noted, however; as described above, under history, that current use of the term internet marketing commonly refers to the use of direct response marketing strategies, that were traditionally used in direct mail, radio, and TV infomercials, applied to the internet business space. When professionals and entrepreneurs commonly refer to "internet marketing" it is this model that they are often referring to.

Advantages

Some of the benefits associated with Internet marketing include the availability of information. Consumers can access the Internet and learn about products, as well as purchase them, at any hour. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to both national and international market places. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive.
Furthermore, since exposure, response and overall efficiency of digital media is much easier to track than that of traditional "offline" media, Internet marketing offers a greater sense of accountability for advertisers.
Compared to other types of media marketing (i.e. print, radio and TV), Internet marketing is growing very fast. It's also gaining popularity among small businesses and even consumers when trying to monetize their blog or website. The measurability of the internet as a media makes it easier to experience innovative e-marketing tactics that will prove a better Cost of Acquisition than other media.
However, in most developed countries, internet marketing and advertising spending is only around 5%, while TV, radio, and print are more.

Limitations

Since internet marketing is new, initial results have out preformed all types of traditional marketing, for the marketer limitations of Internet marketing are veru few but technology may prevent all people from getting the message. Less of a problem today, wlow Internet connections can cause difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information.
Internet marketing does not allow shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. Some e-commerce vendors have implemented liberal return policies and in store pick up services that reassure customers.

Security concerns

For both companies and consumers that participate in online business, security concerns are very important. Many consumers are hesitant to buy items over the Internet because they do not trust that their personal information will remain private. Recently, some companies that do business online have been caught giving away or selling information about their customers. Several of these companies have guarantees on their websites, claiming customer information will be private. By selling customer information, these companies are breaking their own, publicized policy. Some companies that buy customer information offer the option for individuals to have their information removed from the database (known as opting out). However, many customers are unaware that their information is being shared and are unable to stop the transfer of their information between companies.
Security concerns are of great importance and online companies have been working hard to create solutions. Encryption is one of the main methods for dealing with privacy and security concerns on the Internet. Encryption is defined as the conversion of data into a form called a cipher. This cipher cannot be easily intercepted unless an individual is authorized by the program or company that completed the encryption. In general, the stronger the cipher, the better protected the data is. However, the stronger the cipher, the more expensive encryption becomes.

Effects on industries

Internet marketing has had a large impact on several industries including music, banking, and flea markets - not to mention the advertising industry itself.
In the music industry, many consumers have begun buying and downloading MP3s over the Internet instead of simply buying CDs.
More and more banks are offering the ability to perform banking tasks online. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently, over 150 million U.S. adults now bank online. Online banking is now the fastest-growing Internet activity. The increasing speed of Internet connections is the main reason for the fast-growth. Of those individuals who use the Internet, 44% now perform banking activities over the Internet.
Internet auctions have gained popularity. Unique items that could previously be found at flea markets are being sold on eBay instead. eBay has also affected the prices in the industry. Buyers and sellers often look at prices on the website before going to flea markets and the eBay price often becomes what the item is sold for. More and more flea market sellers are putting their items up for sale online and running their business out of their homes.
The effect on the ad industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually.^[2][3][4] (2007-06-18) PricewaterhouseCoopers reported US Internet marketing spend totalled $16.9 billion in 2006 ^[5].
As Advertisers increase and shift more of their budgets online, it is now overtaking radio in terms of market share.^[6]
The cost to aquire a customer is lower with internet marketing than with traditional marketing however cost are rising as more companies take traditional budgets and push it to internet marketing avenues. Search engine marketing for example, which is part of internet marketing continues to grow at tremendous rates. Email marketing also grows. Web analytics is a growing a growing aspect of internet marketing, as there is more accountability than in the history of advertising.

Recent issues

In November 2004, a lawsuit was filed against Bonzi Buddy software. The lawsuit alleged that Bonzi's banner ads were deceptive. These ads often looked like Microsoft Windows message boxes. Internet users would run across the ads and when they attempted to close the boxes, they found themselves redirected to a website determined by Bonzi.
On May 27, 2005, Bonzi Buddy agreed to change the format of its ads so they did not resemble Windows message boxes. The boxes will now contain the word "Advertisement" so computer users know what they are looking at. The boxes will also no longer carry buttons that do not perform the correct actions.
Sales tax issues have also recently become debated. In the USA, the current laws require that buyers of online products pay their state all due taxes on these goods at the end of the year, along with their other state taxes. However, most consumers do not appear to be making these payments. Thirteen states have now begun encouraging Internet businesses to collect sales tax on every sale. These states are currently not forcing the companies to collect the tax. However, it appears that if companies do not begin collecting the sales tax on their own, states will begin forcing the companies to do so. The states are claiming that each year they lose $15 billion in unpaid sales taxes associated with online purchases.

See also

★ Customer engagement

★ Emarketing - similar term & taxonomy (content merging & collation suggested )

★ Search Engine Marketing

★ E-mail marketing

★ Pay per click
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References

1. Malala, J. N. (2003). The Relationship Between Computer Literacy, Online Marketing, and B2B Electronic Commerce. Business Research Yearbook
2. eMarketer - Online Ad Spending to Total .5 Billion in 2007 (2007-2-28)
3. The Register - Internet advertising shoots past estimates (2006-09-29)
4. Internet Advertising Bureau - Online Adspend
5. PricewaterhouseCoopers reported US Internet marketing spend totalled .9 billion in 2006" (Accessed 18-June-2007)
6. Businessweek - Advertising Goes Off the Radio (2006-12-07)

External Links

★ Free pocket guide: How to Choose an Online Marketing Agency [[1]]