Com 314
Interactive Communication
Communication includes all of
the procedures by which one
mind may affect another.
Communication is the
mechanism through which human
relations exists and develop.
Communication is simply the
sharing of an orientation toward a
set of informational signs.
What is Communication?
-the imparting, conveying, or
exchange of ideas, knowledge, etc.
-the transfer of thoughts and
messages by sign and sounds
Communication Process
Feedback
Source
Encoding
Message
Noise
Decoding
Receiver
Mass Communication
Traditional Model
Mass Communication
C
C
Firm
Content
Medium
C
C
Mass Media Effects:
• Medium is Conduit
• Audience is homogeneous w/ respect to
information
• No interaction among consumers and firm
Interactive Communication
Interactive Communication
Messages conveyed through a
computer-mediated environment
(CME) involving one or more of
the following types of
interactivity:
Interactive Communication
• interaction between senders and receivers
• interaction between humans and machines
• interaction between message and its users
Interactive Communication
Interactive media permit audience
members to be active participants
in the communication process,
whereby, the message changes in
response to participant actions
Interactive Model
F
F
F
Content
C
Content
C
Medium
Content
C
C
Content
F
Mediated Model
Primary relationship is with
Computer Mediated Environment
with which you interact.
Content is mediated by participants
and then experienced.
Mediated Model
• Companies can provide content to medium
and interact with each other
• Companies and individuals can interact
• Individuals can interact with the medium
and with each other
• Individuals can easily provide content to the
medium
World Wide Web
• Virtual, many-to-many hypermedia
environment incorporating interactivity
between people and computers.
• Individual’s capability in the virtual
environment introduces a competency issue.
• Individual is actively engage in the process
of network navigation.
Navigation Behaviors
• Experiential
• Goal-directed
“Flow”
• Process of optimal experience
Concept of FLOW
• Seamless sequence of responses facilitated
by machine activity
• Intrinsically enjoyable
• Loss of self-consciousness
• Self-reinforcing
For Flow to be experienced:
• Consumer must perceive skills/challenges
to be in balance
• Consumer must be paying attention
Outcomes of Flow
•
•
•
•
Increased learning
Increased exploratory behavior
Positive subjective experiences
Objective of a good web site is to facilitate
the flow experience.
Web Metrics
Terminology & Measurement
Visit
A visit is a Web user with a unique
address entering a Web site at some
page for the first time that day (or for
the first time in a lesser time period).
Unique visitor
A unique visitor is someone with a unique
address who is entering a Web site for the first
time that day (or some other specified period).
Thus, a visitor that returns within the same
day is not counted twice.
Unique visitor
A unique visitors count tells you how
many different people there are in
your audience during the time period,
but not how much they used the site
during the period.
View
A view is either an ad view or a page
view. Usually an ad view is what's
meant. There can be multiple ad
views per page views.
Click rate
The click rate is the percentage of
ad views that resulted in
clickthroughs.
Clickthrough
A clickthrough is what is counted by
the sponsoring site as a result of an ad
click.
Pay-per-view
Prevalent type of ad buying
arrangement at larger Web sites.
Pay-per-click
The advertiser pays a certain amount
for each clickthrough to the
advertiser's Web site. The amount
paid per clickthrough is arranged at
the time of the insertion order and
varies considerably.
Impression
An impression is "The count of a
delivered basic advertising unit from
an ad distribution point." Impressions
are how most Web advertising is sold
and the cost is quoted in terms of the
cost per thousand impressions
(CPM).
What are cookies?
• A "cookie" is a small piece of information
sent by a web server to store on a web
browser so it can later be read back from
that browser. This is useful for having
the browser remember some specific
information.
What are cookies used for?
• Used to store information about the user
• EX. Browser stores your passwords and
user ID’s
• EX. Preferences of start pages,
Microsoft/Netscape
What are cookies used for?
• Online Ordering Systems.
• An online ordering system could be developed using
cookies that would remember what a person wants to
buy.
• If a person spends 30 minutes ordering CDs at your site
and suddenly has to get off the net they could quit the
browser, return and still have those items in their shopping
basket.
What are cookies used for?
• Site Personalization.
• This is one of the most beneficial uses.
• EX. A person comes to the MSNBC site but
doesn't want to see any sports news. They
allow you to select this as an option.
• From then on (until the cookie expires) you
wouldn't see sports news.
What are cookies used for?
• Website Tracking.
• Cookie can be used to track where you travel over a
particular site.
• Using cookies just makes the tracking data a little more
consistent. Site tracking can show you "Dead End Paths”.
• It can also give you more accurate counts of how many
people have been to pages on your site. You could
differentiate 50 unique people seeing your site from one
person hitting the reload button 50 times.
What are cookies used for?
• Targeted Marketing.
• One of the main uses of cookies.
• Used to build up a profile of where you go -- what you
click on.
• This information is then used to target ads at you, which
they think are of interest.
• Companies also use cookies to store which ads have been
displayed so the same ads do not get displayed
twice.(Doubleclick)
Internet Characteristics
Number of Years to Reach 30%
Penetration of US Population
40
30
20
10
0
Internet
PCs
TV
Radio
Data traffic is expanding
• Web pages in 1998
• Web pages in 1999
• Web pages in 2002
829 million
1.45 billion
7.7 billion
How many online?
580.78 million*
May 2002
How Many Online?
200
180
160
140
120
100
80
60
40
20
0
Africa
Asia/Pacific
Europe
Middle East
USA/Canada
Latin America
Access to the Internet has leveled
off at approximately 70 percent
of all Americans*
*Arbitron and Edison Media Research
Age of Internet Users
•
•
•
•
45-64
35-44
25-34
18-24
20%
24.8%
20.8%
17.5%
+1.2%
-1.0%
-1.0%
+.9%
Baby Boomers/Seniors
Fastest growing Internet population
that now comprises 20% of online
users
Baby Boomers/Seniors
• Surf more frequently
• Stay there longer
• Check out more Internet pages than collegeage users
• NOT technology laggards!
Average Minutes Per Usage Month
by Household Income
800
700
600
500
400
300
200
100
0
under $25K
$25-40K
$40-60K
$75-100K
$100K+
US college students on the Net
• 86 percent of US college students use the Internet
• Students say the Internet is essential to both their academic
and social lives
• 80 percent of college students in the US say the Net has
had a positive impact on their college academic
experience, while 60 percent think it has improved their
relationships with classmates
US college students on the Net
• 73 percent of students use the Internet more than the
library for research
• 72 percent of students check their email everyday, while 56
percent believe that email has enhanced their relationship
with professors
• 46 percent also say that email enables them to express
ideas to a professor that they wound not have expressed in
class
US college students on the Net
• 72 percent correspond mostly with friends, 10 percent
mostly with family, and seven percent mostly with
professors
• College Internet users are twice as likely as other Internet
users to have ever downloaded music files, with 60 percent
of online students having done so, compared to 28 percent
of the overall population
• Also twice as likely as other Internet users to use instant
messaging (IM) applications on any given day, with 28
percent of college students using IM, compared to just 12
percent of general Internet users
Americans look for love online
• Almost 10% of American Internet users use online
personals
• Web daters can be an attractive group for
marketers because while they don’t earn as much
as other online consumers, but they are twice as
likely to have paid for online content, and are
more willing to do so again in the future
• 60 percent of those who look for love online are
male, and 28 percent of them are married
Americans believe Net is the
coolest medium
• 34 percent of Americans chose the Internet as the
most ‘cool and exciting’ medium, compared to 35
percent who felt that Television was the best
medium
• 12-to-34 year-old age category, 46 percent of
respondents chose the Internet as the best medium,
compared to 29 percent who felt that television
was the most ‘cool and exciting’ medium
Americans believe Net is the
coolest medium
• Weekly ‘Streamies’ – those who have watched or listened
to streaming media online in the past week – bought more
than one and a half times the number of compact discs in
the past year than the average American
• Streamies went to movie theaters on average 3.19 times in
the past three months, compared to 1.85 times for nonStreamies
• Nearly two-thirds of Streamies have watched movie
trailers or previews online
Americans believe Net is the
coolest medium
• Streamies were found to be more educated
and affluent than average consumers and are
bigger online spenders than ordinary
consumers
• Streamies spent almost $900 online in the
past year, compared to $600 for online users
as a whole
More Americans accessing the
Net at work
• 46 million American office workers logged
onto the Web during August
• Female office workers were the primary
drivers of traffic growth over the past year,
with the women at-work Internet population
growing 23 percent to 20.4 million
More Americans accessing the
Net at work
• Men averaged nearly 31 hours online in
August --- 1900 page views.
• 27 hours for female office workers --- 1700
page views.
US Kids choose Internet over
other media
• 33 percent of children aged 8 to 17 choose the Net
over television, radio, or the telephone
• Thirty eight percent of boys chose the Internet as
their first choice, compared to 28 percent of girls
• Overall, boys preferred Internet and television,
while girls preferred the telephone and radio
Teens prefer Internet to
telephone
• Internet is now the primary communication tool for US
teenagers
• Eighty-one percent of teenagers between the ages of 12
and 17 email friends and relatives
• 70 percent use instant messaging (IM) applications to keep
in touch
• Ninety-one percent of older teens (aged 18 to 19) use email
and 83 percent use IM.
Email
• 93 percent of those who currently go online are
active email users, a figure that is expected to
reach 98 percent by 2007
• Of the 115 million email messages that will be
sent by the end of 2002, 35 percent will be
unsolicited or ‘spam’ mail
US online consumer sales still
rising
• Online consumer sales in the US reached
$1.5 billion for the week ending August 25.
• This is a rise of 31 percent versus the same
week last year
Internet Generated Revenue
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
US ECommerce
1400
1300
1200
1100
1000
900
800
B to B
C to B
700
600
500
400
300
200
100
0
1998
1999
2000
2001
2002
2003
Factors Driving Repeat Visitors to Websites
(in percent)
80
70
60
50
40
30
20
10
0
Content
Ease of use
Download
time
Updated
Chat
US Online Banking
30
25
20
15
10
5
1998
1999
2000
2001
2002
Online Gambling Revenue
(US Millions of $)
3000
2000
1000
0
1998
1999
2000
2001
2002
Worldwide Gambling Population
60
40
20
0
1998
1999
2000
2001
2002
eCommerce
Most frequently purchased items
•
•
•
•
•
Travel
Music
Computer Hardware
Books
Software
30%
42%
48%
51%
58%
U.S. Top 50 Web and Digital
Media Properties
(millions of unique visitors)
•
•
•
•
•
•
•
•
•
All Digital Media
AOL Time Warner
MSN-Microsoft Sites
Yahoo!
Terra Lycos
About/Primedia
Google
Amazon
eBay
116,420
92,950
83,792
80,165
40,320
36,574
34,236
29,474
29,456
Targeting Consumers Online
Consumer Online Behavior
E-business strategies for Marketers
Six segments
Targeting Consumers Online
Simplifiers
• Need “End-to-End” Convenience
• Only 7 hours per month but 40% have been
online over 5 years
• Account for half of online transactions
• Use internet to make life easier, log on
w/specific purpose -- buying books,
managing finance
Targeting Consumers Online
Simplifiers
• Want to do it quickly and easily
• Amazon.com favorite site
• Site must provide ease of access and use,
product info, reliable customer service, easy
returns.
• Dislikes -- pop-up windows, unsolicited
emails, too many chat rooms
Targeting Consumers Online
Surfers
• 8% of active users population
• 32% of online time
• Access four times as many pages as average
user
• Use Internet to explore, shop, find
information, be entertained
• Move quickly among domains, continually
seeking new experiences
Targeting Consumers Online
Surfers
• Offer cutting-edge design/features, constant
updates, strong online brand, assortment of
products/services
• Keep them coming back to find out “what’s
new?”
Targeting Consumers Online
Connectors
• Relative novices on Internet
• Seeking reasons to use it, what’s available
and what has value
• Account for 36% of active users, 40% have
been online less than 2 years.
• Use Internet “to connect” with people, chat
rooms, send greeting cards
Targeting Consumers Online
Connectors
• Companies w/strong offline presence have
advantage reaching this beginner segment
• To win over Connectors site must be
accessible for first time visitors, make
purpose and value clear.
• Links to other sites/community help make
Internet seem less daunting
Targeting Consumers Online
Bargainers
• Devoted to one aspect of Internet
• THE QUEST FOR DEALS!
• Only 8% of active online users, spend less
time online than avg user
• Represent 52% of all eBay users.
• Site must appeal both rational & emotional
levels
Targeting Consumers Online
Routiners
•
•
•
•
Go primarily online for content
Only half have made purchase online
Visit fewer domains
Spend almost twice as much time per page
as average users
• 80% of time spent in their “top ten” sites,
news and financial sites
Targeting Consumers Online
Sportsters
• Smallest group -- 4% of active online users
• Like Routiners but focus on
sports/entertainment sites
• Spend very few hours online (7.1/month)
Spending on digital marketing
in the US will grow to $21
billion by 2006
Online Ad Revenue
(in Billions of US $)
8
7
6
5
4
3
2
1
0
1995
1996
1997
1998
1999
2000
2001
2002
Web display advertising will
account for 5.4 percent of the
total US ad spend by 2006
• Spending on Web advertising would be
roughly equivalent to the spending on
magazine advertising
• 60 percent of current spending on online
advertising goes to AOL Time Warner,
Yahoo, and Amazon
Business decision makers are more influenced
by online advertising than by any other type
of advertising medium
• Around 60 percent of decision makers said
that the Internet was the best way for
advertisers to reach them
• Nearly half of decision makers also said that
the Web influenced them to make a
purchase or obtain a service for their
businesses
Pop up Ads
• Less than 10 percent of all online advertisers use pop-up
ads
• Advertisers purchased and launched more than 11.3 billion
pop-up and pop-under ad impressions for the first seven
months of 2002, equivalent to just two percent of the
online advertising market
• X10 was the leading pop-up advertiser during the first
seven months of 2002 with more than one billion pop-ups
launched in 2002
• Orbitz was the second leading pop-up advertisers with 687
million impressions
Internet users turn away from
ad-heavy sites
• Over a third of Internet users in the US will
leave a website if they think it is too
cluttered with advertisements
Auto Industry is the biggest
user of rich media
• Around 37.4 percent of all auto online ad impressions in
the second quarter in 2002 incorporated rich media
• The auto industry used rich media advertising 10 times
more than the industry average of 3.9 percent
• The Ford Motor Company topped the list of car
manufacturers using rich media, with 22 percent of their
advertising utilizing rich media technologies
US wireless advertising
• Wireless advertising in the US will reach
parity with that in Europe and Asia by 2006
• European advertisers will spend
approximately $53 million on mobile
campaigns in 2002
Online advertising is effective
for branding
• Standard ad banners are still effective at
increasing brand awareness and purchase
intent
• Portal keyword placements were the most
effective form of advertising online