M A S T E R ' S T H E S I S
Communication Tools to Build Website Traffic
Cases from Small B2C Firms
Yidi Zhao Liang Xu
Luleå University of Technology Master's thesis
Marketing
Department of Business Administration and Social Sciences
Acknowledgements
It is our great pleasure to hereby present our Master’s thesis. During the writing process of 15 weeks in the winter of 2006/2007, we have gained a lot of knowledge with investigating this area of research and it has been an interesting and intrusive experience for both of us.
We would like to take this opportunity to thank the people who have been helpful for us during the writing process, and thereby making this thesis possible. First of all, we would like to thank our supervisor Mr. Manucher Farhang, for his help and feedback.
Furthermore, we would like to thank Mr. Daniel Löfmark in Netix AB and Mr. Peter Holmagren in Rosell & Clack Importlagret AB, who all took the time to answer our questions and gave us valuable information for our thesis.
Luleå University of Technology, 2007-01-15
Yidi Zhao Liang Xu
Abstract
With the rapid development of Internet, online business companies are increasing in
number. In B2C companies, traffic building to website is a major concern of the top
manager and it is the key point for success. The process involves using offline and
online communication tools to drive or attract visitor traffic to company web site. The
purpose of this thesis is to provide a deeper understanding of the different
communication tools used by companies to build traffic to their website and measures
they adopt to improve the effectiveness of these tools. Three research questions were
developed. The empirical data were collected on two small B2C Swedish companies
were analyzed against a theoretical frame of reference. The findings showed that cost
and evaluation become the principle factors for choosing appropriate communication
tools for traffic building and small companies used the different communication tools
on the basis of limited budget. Furthermore, the method of evaluation adopted by
companies has a strong influence on improving the communication tools efficiency.
Table of Content
1. Introduction...1
1.1 Background...1
1.2 Problem Discussion ...3
1.3 Purpose and Research Questions ...5
1.4 Demarcations ...5
1.5 Deposition of the Thesis ...6
2. Literature Review ...7
2.1 Offline marketing communication tools used for traffic building...7
2.1.1 Publicizing the URL offline...7
2.1.2 Public Relations ...7
2.1.3 Direct Marketing...8
2.1.4 Sponsorship...10
2.1.5 Exhibitions ...10
2.1.6 Corporate Identity ...11
2.1.7 Packaging...12
2.1.8 Merchandising...12
2.1.9 Word of Mouth ...13
2.2 Online marketing communication tools used for traffic building...13
2.2.1 Banner Advertising ...14
2.2.2 Affiliate Networks ...14
2.2.3 Search Engine Registration and Optimization...16
2.2.4 Link Building...16
2.2.5 E-mail Marketing...16
2.2.6 Viral Marketing...17
2.2.7 Vertical Portals...18
2.3 Evaluation of effectiveness of communication tools in traffic building...18
3. Conceptualization and Emerged Frame of Reference ...21
3.1 Conceptualization ...21
3.1.1 How can offline marketing communication tools used for traffic building be described? ...21
3.1.2 How can online marketing communication tools used for traffic building be described? ...21
3.1.3 How can evaluation of effectiveness of communication tools in traffic building be described? ...22
3.2 Emerged Frame of Reference ...23
4. Methodology ...25
4.1 Research Purpose ...25
4.2 Research Approach ...26
4.3 Research Strategy...26
4.4 Data collection ...28
4.5 Sample Selection...29
4.6 Data Analysis...30
4.7 Reliability and Validity...31
5. Case Studies...33
5.1 Case 1: Netix AB ...33
5.1.1 Offline marketing communication...33
5.1.2 Online marketing communication...33
5.1.3 Evaluation of effectiveness of communication tools in traffic building ...38
5.1.4 Building traffic at Netix AB ...39
5.2 Case 2: Rosell & Clack Importlagret AB ...39
5.2.1 Offline marketing communication...39
5.2.2 Online marketing communication...39
5.2.3 Evaluation of effectiveness of communication tools in traffic building ...43
5.2.4 Building traffic at Rosell & Clack Importlagret AB...43
6. Data Analysis...45
6.1 Within-case Analysis ...45
6.1.1 Within-case Analysis: Netix AB...45
6.1.2 Within-case Analysis: Importlargret AB ...49
6.2 Cross-case Analysis ...52
7. Findings and Conclusions ...57
7.1 Research question one: How can offline marketing communication tools used for traffic building be described?...57
7.2 Research question two: How can online marketing communication tools used for traffic building be described?...58
7.3 Research question three: How can evaluation of effectiveness of communication tools in traffic building be described?...58
7.4 Implication for Management...60
7.5 Implication for Theory...60
7.6 Implication for Future Research ...61
Reference: ...62
Appendix...67
List of Figures
Figure 1.1 The outline of this thesis ...6
Figure 3.1 The Frame of Reference of this study ...24
Figure 4.1 Schematic Presentation of the Methodology ...25
Figure 4.2 Illustration of relationship between reliability and validity...32
List of Tables Table 4.1:Relevant Situations for Different Research Strategies...27
Table 4.2:Sources of Evidence ...28
Table 6.1:A comparison of data of offline communication tools between two cases...53
Table 6.2:A comparison data of online communication tools between two cases ...54
Table 6.3:A comparison data of evaluation of effectiveness of communication
tools in traffic building between two cases ...56
1. Introduction
In this chapter the background to the selected research topic is first presented, followed by problem discussion where the research area is discussed. The problem discussion leads to the research purpose and the research questions and finally, demarcations and overview of the study.
1.1 Background
Internet has been heavily exploited in marketing in recent years. The rapid rate of Internet adoption has resulted in an extraordinary pace of change in the marketing landscape and opened up a variety of opportunities for marketers (Wu, 2002).
According to Huizingh (2000), Internet is a global system with low entry barriers, connecting both customers with suppliers, and customers with customers. Clow and Baack (2002) point out that Internet can serve various marketing functions such as advertising, sales support, customer service, public relations, and e-commerce (retail store) Internet also presents vast opportunities for branding (Ryan, 1999).
The online retailers exploit Internet in even deeper level. According to Vishwanath and Mulvin (2001), the online retailers achieve success by leveraging their existing assets, brands, and customer bases through their online channels, by cleverly exploiting the synergies between online and offline operations, and finding creative ways to convert the highest possible percentage of website visitors into loyal customers. The retailers are using the Internet to gain customers, build revenues, and enhance profits.
World Wide Web (WWW or Web) is known, according Hoffman et al. (2000), as the most exciting commercial development in the portion of the Internet. Advertisers are recognizing Web as a valuable additional media of their advertising tool box (Sheehan and Doherty, 2001). Internet users value the medium as a tool for learning about products and services (Kehoe et al. 1998). After online users are able to complete the purchase process through buying products online, marketers begin to search for ways to direct online users to their web pages and provide a strong communication message to them once they visit (Riedman, 1999).
Every year billions of dollars are spent promoting brands and Internet brands, and
companies compete against each other feverishly to establish brand recognition and
consumer awareness. The commonly used communications vehicles, other than
advertising, consist of public relations to stimulate word-of-mouth, sales promotions,
and partnerships directing consumers to websites, direct e-mail, and a variety of other
methods. Meanwhile they also stress that it would be a mistake for online businesses
to reply completely online advertising to create awareness and site visitation (Ilfeld
and Winer, 2002).
Some manners of drawing prospects to e-commerce website are presented by Bellizzi (2000), which address that designing websites with proper key-word density, being listed with appropriate industry directories, and properly placed banner advertisements are very important in drawing prospects to e-commerce website. He also highlights that marketers should not overlook more traditional means of bringing more traffic to the e-commerce website.
The ways that online users find out about websites, according to Sheehan and Doherty (2001), are through word of mouth, via traditional advertisements, and through banner advertisements and other types of online messages. Awareness of Web addresses (uniform resource locators, or URLs) through traditional advertising such as television and print represents an essential source of information about websites and how to find them (Kehoe et al., 1998; Maddox & Mehta, 1997). Since consumers appear reluctant to pay for access to specific sites, advertising is also important to the success of the Web; therefore advertising may be the primary support for the Web (Mc-Daniel, 1997).
The selection of advertising media is determined by the nature of media and product characteristics. Yoon and Kim (2001) address that Internet as an advertising media has a few characteristics that are different from traditional medium such as unlimited delivery of information beyond time and space, unlimited amounts and sources of information, the ability to target specific groups or individuals, and especially its nature of interactivity; the choice and use of media in advertising is mostly influenced by product characteristics, to consider high-involvement products like automobiles or luxury watches the Internet is still not as effective as TV in enticing consumers.
The essence of some online and offline advertisement are actually the same.
According to Gallagher et al. (2001), the same advertisements were equally effective in print and on the web under the condition of being given equal opportunity for exposure to the target audience. Although the online and offline medium has essential distinguishes, the messages of advertisements are exactly the same. Further Kanso and Nelson (2004) highlight that in creating an online commercial site, it is important to recognize that the Internet requires different marketing and advertising practices than those used in traditional media; and mixed media advertising necessitates coordinated efforts between those managing the website and those designing advertisements for other media. They discover that marketers are not exploiting all possible benefits of their websites by not adequately integrating print and online advertising efforts.
Email marketing is more efficient than traditional direct mail. Gartner (2002) present
that email advertising revenue totaled $948 million in 2001 and has been forecasted to
increase by 32.91 percent to $1.26 billion in 2002 and to $7.3 billion by 2005 (Beardi,
2001). Some researches in comparing email advertising and direct mail shows that
email is cheaper than traditional direct mail, email advertising have been heralded as
producing faster response times from consumer, and email can encourage interactivity with consumers by including hyper links in the mail (Gartner, 2002; Brown, 2002;
Rickman, 2001; Garden, 2002). Permission-based emails are powerful, according to Martin et al. (2003), because the consumer is requesting the information from the advertiser that simply being exposed to it.
Advertisers will increase spending on online advertising in many different forms such as paid search, online video, and banner advertising but there will not be significant rapid near term growth for the undesirable effectiveness. For instance, Advertisers currently direct 96% percent of their spending for online display ads to pages that represent just 30 percent of overall web traffic (Grosso et al., 2006).
Some online advertisers are also moving offline in order to coordinate advertising in both online and offline media. According to Knowledge@Wharton (2006, p212), in the United States $150 billion is spent through traditional media advertising which is almost 10 times of online advertising although the growth rate of online advertising at a rate of 30% a year. In latest some Internet giants namely Google, Yahoo and eBay after conquering the advertising frontier in cyberspace are now turning to traditional media for future growth by brokering ad sales for offline media like radio, television and print. David Reibstein says that the move into old-style media is a logical extension for the Internet giants, as the soul is to distribute advertising messages, both the traditional media and online media can provide a more complete portfolio in advertising.
One of the challenges for e-business marketers is to attract visitors to the site and generate significant repeat visits (Williamson and Johnson, 1995). According to Williamson and Johnson (1995), web traffic control leads to the initial site visit, and the repeat traffic mainly depends on customer need and partly influenced by website design (Saloman, 1995). Several types of web traffic control namely Internet yellow pages, web traffic control, direct, and links with other websites sharing the marketing objective of attracting visitors to the website are proposed by Hoffman et al. (2000).
1.2 Problem Discussion
Nowadays the ‘build and they will come’ model is insufficient to generate traffic to the sit, marketers need to actively attract users or customers (Parsons et al., 1998).
According to Lindström & Anderson (2000), a company is more or less invisible on the Internet until its existence in cyberspace has communicated to its target group, and people do not just come across a new websites by chance, as there are too many of websites existing in cyberspace, thereby create the traffic which is a necessary precondition for the company’s Internet strategy to be successful.
Benbunan-Fich & Fich (2004) also explain that web traffic constitutes the mass of
visitors to a website that can potentially be converted into sales or advertising revenue.
Alpar, Porembski & Pickerodt (2001) point out that to attain a large amount of traffic is an intermediate goal of most websites regardless of their purpose, and achieving it is usually necessary in order to achieve their higher level goals. Nikolaeva (2005) also think that website traffic is a necessary step in the generation of sales for on-line merchants in cyberspace. Although in itself not a measure of success, Website traffic is a step in the consumer on-line purchase process that can lead to increased sales.
Therefore to successfully generate web traffic become en issue. Traffic building, according to Chaffey et al. (2003), is the process of using online and offline communications to drive or attract visitors’ traffic to a website, where visitors refers to not only new customers and potential customers but also irregular visitors of the existing customers. (ibid) Some other authors name the process by terms of generating traffic and website traffic generation (Huizingh 2002, Nikolaeva 2005, Parsons et al., 1998).
In order to build website traffic, Pickton and Broderick (2001) say that the most effective mix of media should be employed, which are characterized as traditional offline marketing communications or new online communications. According to Nikolaeva (2005), both offline and online communications can influence the web traffic. Online advertising has a more direct effect on Website traffic because of the immediacy of the action that consumers can take. In contrast, advertising in traditional none electronic media increases a site’s visibility and thus indirectly influences Website traffic.
Some researchers have presented some offline and online communication tools that can contribute to traffic building directly or indirectly. Chaffey et al., (2003) points out some effective offline and online communication tools for traffic buildings such as publicizing the URL offline, public relations, direct marketing, sponsorship, exhibition, word of mouth, and banner advertising, affiliate network, search engine registration and optimization, link building, email marketing, viral marketing.
According to Smith et al. (1998), there are many of various offline and online marketing communication tools available namely as press, radio, TV (terrestrial, satellite, and cable, and interactive video, text), telephone, mail, e-mail, and the Internet. Huizingh (2002) addresses that a few of different medias that are used to generate web traffic: television, radio, print media, bill boards, direct mail, business cards, company prints, electronic newsletter, information on company’s products, participation in electronic malls, advertising in electronic newsgroups, e-mail signatures, advertising at other sites.
Some specific online communication tools have been presented by some researcher
that can generate web traffic. For example, Turban et al. (2004) considers pop-ups,
interstitials, newspaper-like standardized ads, URLs, advertising in chat rooms,
Internet radio/television as the online promotion tools. Lindstrom and Anderson (2000)
present online word of mouth and vertical portal beside above mentioned tools.
According to Ilfeld and Winer (2002), a huge amount of money has been invested in generating traffic by exploiting different media; hereby how to improve cost effectiveness is a constant issue. Effectiveness of traffic building can be simply observed by clicks on the website during the period of promotion campaign, but it is more valuable to learn the knowledge behind the click-on and click-through, and evaluate the effectiveness of the marketing communication tools. As it can provide the marketers knowledge in better use of the communication tools, especially cost efficiency is very much concerned by small firms.
The effectiveness of the website could be monitored in two different ways: to observe the path of visitors’ behavior and to see whether they return to the site (Day, 1997).
The effectiveness of website in marketing communication can be also measured quantitatively through some parameters likely the numbers of repeat visits, the number of minutes spent by the user, the number of minutes the visitor spends on average on the main activities of the website, the number of individual visitors, the user’s behavior at the website, the number of e-mails received from customers, the website’s sales and income. These tools can help company to find how good the company has been at creating traffic on the Internet from different communication tools (Lindström & Anderson, 2000). Some other researchers suggest to measure the effectiveness of website by duration of browsing time, the depth, or number of assessed pages, the number of repeated visits, making contact with interested individuals, converting some visitors to customers, the supporting the purchase and post-purchase phase of the supplier-customer relationship that follows (Karayanni and Baltas, 2003; Chaston, 2001).
1.3 Purpose and Research Questions
In view of the above discussion, the purpose of the present research is:
To provide a deeper understanding of the communication tools used by companies to build traffic to their website and measures they adopt to evaluate the effectiveness of these tools.
In order to reach the purpose of the research, the following research questions are developed:
RQ1: How can offline marketing communication tools used for traffic building be described?
RQ2: How can online marketing communication tools used for traffic building be described?
RQ3: How can evaluation of effectiveness of communication tools in traffic building be described?
1.4 Demarcations
This research will observe the following demarcations: a) concentrate on B2C companies; b) select smaller companies, and c) investigate the corporate perspective on traffic building.
1.5 Deposition of the Thesis
The work is done in seven chapters as shown in figure 1.1. In chapter one, Introduction is stated including the background of the research, the discussion of the concerned problem, the purpose of the research and research questions as well as demarcations; In chapter two, the literatures of the previous researches related to research problems are presented; In chapter three, the conceptualization and frame of reference are presented; In chapter four, the selection of research methods are stated as well as the discussions and motivations about them; In chapter five, the data from real business world are presented; in chapter six, the collected data are analyzed;
finally in chapter seven, the conclusions and findings are discovered according to the analysis of the data. See figure 1.1
Chapter 1 Introduction
Chapter 2 Literature Review
Chapter 3 Conceptualiz
ation
Chapter 4 Methodology
Chapter 7
Conclusion
& Findings
Chapter 6 Case studies
Chapter 5 Data presentation
Figure 1.1 T he outline of this thesis
2. Literature Review
This chapter contains literature based on our research questions. This will include studies on both offline and online marketing communications, then the evaluation of effectiveness of communication tools in traffic building.
2.1 Offline marketing communication tools used for traffic building According to Chaffey et al. (2003), Smith (1998), Fill et al. (1995) there are mainly 9 kinds of offline communication tools which might relate to the topic of traffic building: publicizing the URL offline, public relations, direct marketing, sponsorship, exhibition, corporate identity, packaging, merchandising and word of mouth. These tools will be discussed intensively as below:
2.1.1 Publicizing the URL offline
According to Chaffey et al., (2003), there are two types of offline advertising:
incidental and specific. Incidental offline advertising means that driving traffic to the website is not a primary objective of the advert. On the other hand, specific offline advertising means driving traffic to the website or explaining the online proposition is a primary objective of the advert.
Chaffey et al., (2003) points out that publicizing the Uniform Resource Locator (URL) offline can be achieved by using some specialist techniques of specifying the URL (web address) that can be used to help customers in finding the information they need on the website. These techniques can be some kinds of traditional advertising such as newspaper, magazines, TV, radio, videos, catalogue and technical reports. It has benefit to give a specific page when companies doing their advertising because that is related to the offline promotion and the interests of the audience. A similar technique is to use a sub-domain which is different from the main domain, or to register a completely different domain name that is in keeping with the campaign. Awareness of URLs through traditional offline advertising, such as television and print, represents an important source of information about websites and the way to find them (Kehoe et al., 1998; Maddox & Mehta, 1997). Lindström & Anderson (2000) point out that it is obvious that the URL should be everywhere the physical address, such as business cards, letterheads, brochures, annual reports, telephone directories and other reference books, television and radio advertisements, advertisements, hoardings and billboards, packaging and point-of-sale material.
Especially, many scholars suggested sometimes magazines have tremendous positive influence on the publicizing the URL offline. A study conducted by Gupta (1995) reports that using magazines to locate sites on the Internet is very common-almost two thirds of the surveyed participants learned about websites through magazines.
Huffenberger, Kanfer, Schlosser, and Ryan (1998) find that promoting a website in
magazine advertisements has increased at a nearly exponential rate. Print media are
particularly useful because the interested consumer can directly refer to the advertisement when he or she types the URL. This diminishes the likelihood of errors due to hastily copying on paper or memorizing the URL from a television, radio, or bill-board advertisement. (Schlosser and Kanfer, 1999)
Using of providing specific page of the website in publicizing the URL offline is depending very much on situations. Providing the specific page enables the user to be sent direct to the relevant information without having to navigate through the corporate site, it especially suits the companies who have a diverse product range. A further advantage of using a specific web address is for measuring advertising effectiveness. If there is no other way of navigating to that page on the site, it can then be established how many people arriving at a site on this page have viewed the original advertisement. However, it is not normal for companies who strive for brand building and establishing the credibility of a site to provide a specific page in publicizing the URL offline by using traditional advertising ways. (Chaffey et al., 2003)
2.1.2 Public Relations
Baker (1994) mentions that public relations is a promotion tool through a release to definable news media in the hope of secondary exposure via an editorial mention earned by the newsworthiness of subject matter. Chaffey et al. (2003) point out that public relations can be an important tool for driving traffic to the website if changes to online services or online events are significant. Kotler and Armstrong (2001) reveal that public relations is considered another mass-promotion technique. It concerns itself with building good relations with the company’s various publics by obtaining favorable publicity, building a good corporate image, and handling or heading off unfavorable rumors, stories, or events. Several tools are used in today’s public relations efforts:
● Press relations: Creating and placing newsworthy information in the news media to attract attention to a person, product, or service;
● Product publicity: Publicizing specific products;
● Public affairs: Building and maintaining national or local community relations;
● Lobbying: Building and maintaining relations with legislators and government officials to influence legislation and regulation;
● Investor relations: Maintaining relationships with shareholders and others in the financial community;
● Development: Public relations with donors or members of nonprofit organizations to gain financial or volunteer support. (Ibid)
Internet can be used to expand the depth and breadth of PR. According to Chaffey et
al., (2003), compared to the traditional public relations (PR) methods, there is new
method of PR as an offline communication tools coming out in the context of
web-based to be an effective promotion of driving traffic to the website. PR activity
on the Web offers organizations scope for corporate communications, sponsorship,
publicity and a direct vehicle for communication press releases. The Internet provides scope for two-way interaction, clear targeting of key opinion-formers and journalists and the potential for communicating strong corporate brand messages. The Internet can be used to facilitate traditional methods of PR. According to Lindström &
Anderson (2000) that when the companies go on the Internet, it will have to find a new angle which makes it interesting for a journalist to write about its activities. If the company can’t do that, there is the danger that the users will not find the site very interesting either.
Through this new method of PR, a company can talk direct to the market via the corporate website. Third-party agencies and old media still have a role, because of their credibility as independent sources of information and their wider circulation.
Agency information can be supplemented by more detailed and timely information direct from the corporate website. PR can update their information in the public media by minute. This has the obvious benefit that a company can make an immediate impact and be better aware of the changing marketing environment.
However, the problem of this new PR is that a company’s competitors have these advantages too. So it is likely that there will be an increased need for defensive PR (Chaffey et al., 2003). Because of the high involvement of Internet in this new method of PR, it is not considered as an offline marketing communication tool in this study.
The degree of trust and confidence generated by public relations makes this tool important because it can reduce buyers’ perceived risk. However, while credibility may be high, the amount of control that management is able to bring to the transmission of the public relations message is very low (Fill et al, 1995). Forster (1998) also points out that public relations can have a stronger impact on public awareness at a much lower cost than advertising. But, because the communication efforts of PR staff are often focused on groups other than just buyers, its uses are limited.
2.1.3 Direct Marketing
Direct marketing is a promotion tool through a mail shot (always delivered in the post), a mail drop (delivered to the door), telemarketing (unsolicited phone calls) or a fax message (Baker, 1994). Direct marketing can represent a strategic approach to the market although some organizations use it as a tactical tool. Use of this tool signifies an attempt to actively remove channel intermediaries, reduce costs and improve the quality and speed of service for individual customers. By removing the face-to-face aspect of personal selling and replacing it with either an email communication, a telephone of personal selling and replacing it with either an email communication, a telephone conversation or a direct mail letter(Fill et al, 1995). Kotler and Armstrong (2001) point out that the major forms of direct marketing include:
--Face-to-face selling: relying on a professional sales force to locate prospects,
develop them into customers, build lasting relationships, and grow the business. Or
companies hire manufacturers’ representatives and agents to carry out the direct-selling task. In addition, many consumer companies use a direct-selling force to reach final consumers: insurance agents, stockbrokers, and salespeople working part- or full-time for direct-sales organizations;
● Telemarketing: using the telephone to sell directly to consumers;
● Direct-mail marketing: through single mailings that include letters, ads, samples, foldouts and other”salespeople with wings” sent to prospects on mailing lists;
● Catalog marketing: direct marketing through print, video, or electronic catalogs that are mailed to select customers, made available in stores or presented online;
● Direct-response television marketing: direct marketing via television, including direct-response television advertising or infomercials and home shopping channels.
● Kiosk marketing: information and ordering machines called kiosk. Companies place the kiosk in stores, airports, and other locations in order to help customer tryout or get information before the purchase.
● Online marketing: marketing conducted through interactive online computer system, which link consumers with sellers electronically.
According to Chaffey et al., (2003), direct marketing can be an effective method of driving traffic to the website. As the main way of direct marketing, direct mail campaign is used to drive the response to the website. Many catalogue companies will continue to use traditional direct mail to mail-out a subset of their offering, with the recipient tempted to visit the site through the fuller offering and incentives such as competitions or web-specific offers. Lindström & Anderson (2000) explain that direct mail which means to send all the recorded users in the target group a letter detailing what new opportunities are now being made available on the net is an appropriate idea.
In this way the whole story can be told and can be adapted to suit the needs of different customers.
2.1.4 Sponsorship
Sponsorship is a promotion tool through association of a product or service with an entity, event or activity (such as sports teams, cultural programmes, arts, education, community and broadcast.) in the expectation of secondary exposure via attribution to the sponsor during associated media converges. (Baker, 1994) Smith (1998) points out that sponsorship is more than patronage, altruism or benefaction. It can indeed help others while simultaneously achieving specifically defined promotion objectives.
Some sponsors see sponsorship as a form of enlightened self-interest, where a worthy activity is supported with cash and/or consideration in return for satisfying specific marketing or corporate objectives. In Lindström & Anderson (2000) book, sponsorship is considered as the exposure of a brand, logo with the URL, typically for a long time than an advertisement which helps to make the company website visible to the public and generate the traffic to the website.
There are several advantages and disadvantages of the sponsorship. Sponsorship can
be cost effective (compared to advertising) in terms of reaching a particular audience.
It does allow access to very specific types of audiences that otherwise might be difficult to reach. Sponsorship can achieve many different objectives including:
generate traffic awareness; image enhancement; improved relationships with many different “publics”; increased sales, sampling and database building; creating a platform for new promotional material; beating advertising bans, etc. It also offers creative opportunities including the engagement of an audience in a relaxed atmosphere of goodwill. Hospitality events open doors and create a dialogue that conventional media simply cannot. However, sponsorship is considered insidious and that it undermines artistic integrity. Although sponsorship can deliver extremely cost-effective benefits, it can be misunderstood as an excessive indulgence by employees if they are kept in the dark about it and if there are redundancies occurring at the same time. (Smith, 1998)
2.1.5 Exhibitions
Smith (1998) points out that exhibitions are unique in that they are the only medium that brings the whole market together- buyers, sellers and competitors-all under one roof for a few days. Products and services can be seen, demonstrated or tested, and face-to-face contact can be made with a large number of relevant decision makers in a short period of time. Relationships can be strengthened and opportunities seized if planned carefully. Exhibition offer an array of opportunities, problems and challenges to the keen marketing manager. They can be leveraged to the maximum effect by integrating them with other communications tools and developing a longer-term perspective incorporating an overall exhibition strategy. However, although exhibitions are a powerful marketing communications tool, they require detailed planning and coordination of resources. Compare to the B2B market, exhibitions in B2C market usually take up less marketing budget.
Many objectives can be achieved through exhibitions such as:
● Sales – generate sales and enquiries from new and existing customers, agents and distributors.
● Launch new products or website. (It included new products, services and the important windows for the company: website. It is indeed an effective ways to attract more traffic to the website. )
● Maintain a presence – in the market.
● Press coverage – internal and external PR opportunity.
● Reinforce relationships – with customers, distributors and agents through hospitality and introductions to senior managers and directors.
● Support local distributors/agents – by exhibiting.
● Market research – customers, non-customers and distributors.
● Test new ideas – product testing and informal creative discussions.
● Competitor analysis and intelligence gathering.
● Staff motivation – some exhibitions can be the focal point of the year. They allow
staff to come to the show (exhibition) and feel a certain amount of pride in their
organization.
● Meet new staff or potential recruits.
2.1.6 Corporate Identity
Corporate identity is what it says – a visual means of identifying a corporation, company or organization. Logos and names are only part, albeit a very obvious part, of an organization’s identity. Corporate identity is a strategic asset that helps to achieve the longer-term communication goals. It cannot therefore be used as a short-term tactical tool like advertising or PR, which can change from day to day (if required). As with and fixed asset, the corporate identity asset needs to be checked and maintained to keep it in good working order. If allowed to fall into disarray or disrepair it can, like other assets, eventually become a liability by projecting an inappropriate image. (Smith, 1998)
Corporate identity reflects the personalities, core values and direction of a company. It is a one way of communicating the values it wants to express. Corporate identity is seen as a symbolic uniform that acts as a flag expressing everything about the organization. It is a visual system which uses all the points of public contact. This includes the “permanent media” or buildings (exterior and interior), signage, vehicles, uniforms, business forms (invoices, cheques, letterhead, etc), literature (Product brochures, annual reports), exhibition s, etc. Furthermore, some companies stamp their logos on to their individual brands’ advertising, packaging and point-of-sale material. (Ibid)
2.1.7 Packaging
Packaging is a promotion tool through display, guaranteeing exposure to customers at the point of sales, but not to a wider target audience. (Baker, 1994) Smith (1998) points out that since many sales assistants have been replaced by self-service systems;
packaging today often has to act as a silent salesman, helping customers by bringing a particular brand to their attention, highlighting USPs (unique selling propositions/unique benefits), giving friendly tips on usage and, ultimately, helping them to break through the misery of choice created buy the increasingly vast range of seemingly similar brands.
There are three basic functions of packaging: protect (and contain); offer
convenience; communicate. First, a pack must protect its contents during storage,
transport and usage. Some packs have to protect the user from the contents. Second,
the pack must offer convenience in pouring, squeezing, storing, stacking and
consuming. Even a minute improvement in convenience can create competitive
advantage. Third, the pack can communicate, which include instructions, information
of company, logo, and website address, which can create customer awareness of the
website and corporate identity effectively. (Ibid)
2.1.8 Merchandising
There was a time when below the line point-of-sale (POS) materials were considered relevant only to cosmetics, perfumery, confectionery or other impulse purchase.
Today merchandising techniques apply to a broader spectrum of markets, from customer to industrial. Although vast budgets can be spent above the line on advertising to gain the customer’s attention or change an attitude, fewer resources are sometimes allocated to the crucial moment in the buying process – the point in the buying cycle where the customer is physically in front of the product or service and is about to make decision whether to buy or pass by – the point of sale. (Smith, 1998) In many consumer merchandise has the vital role to guide a buyer towards making a purchase by using merchandising techniques such as display and store design.
However, the merchandising opportunity lies relatively untapped in industrial wholesale outlets such as electrical wholesalers or builders’ suppliers, where a lot of merchandising tends to look dusty, dirty and uninteresting. But merchandising here can provide customers with useful information, which can remind the buyer about other relevant products, services, website and any special offers. (Ibid)
2.1.9 Word of Mouth
According to Chaffey et al., (2003), word of mouth (WOM) is playing an important role in traffic building. WOM through friends, relatives and colleagues was the most important method. Internet customer can told their friends, relatives about his or her online shopping experience. If the online experience is favorable, the customer will tell more people the website, but if it is bad, they will tell twice as many, so word of mouth can be negative also. Thus, the role of opinion leaders and multi-step communications with target audiences receiving information about the Internet experience from opinion leaders, the mass media and the Internet, appear to be perhaps even more important in relation to the Internet than for other media.
According to Rogers (1983), to exploit this tool, it is necessary for companies to use appropriate techniques to target and adapt the message for the opinion leaders when a product or service is at an early stage of diffusion.
Furthermore, Smith (1998) points out there are many devices and techniques that encourage and accelerate the WOM process such as postcards, digital postcards, T-shirt, photographs, awards and certificates. Especially, Internet can promote WOM in an effective and efficient ways. The Internet can accelerate word of mouth with its networks of news groups, chat rooms, discussion forums and email chain letter. Better use of website can develop a network of different groups of person in the process of WOM.
2.2 Online marketing communication tools used for traffic building
Chaffey et al. (2003) and Lindstrom & Anderson (2000) provide rather comprehensive descriptions of online communication tools including banner advertising, affiliate networks, search engine registration and optimization, link building, e-mail marketing, and viral marketing. We will discuss each of them below:
2.2.1 Banner Advertising
Chaffey et al. (2003) define banner advertisement as a rectangular graphic displayed on a webpage for the purposes of advertising, which is normally possible to perform a click through to access further information. Lindstrom and Anderson (2000) reveal that the banner ad is Internet’s most widespread and commonly used form of advertising. Banner is a graphic element with a fixed size and a fixed position on the website. The banner ad is effective at several levels – the user can see the advertisement, click on it and get onto the advertiser’s website. In some certain cases the user can participate in an interactive game, etc., on the actual banner ad. (ibid) Along with the development of the Internet technology, the evolution of banner ads generates many different forms of them. Chaffey et al. (2003) point out banners can be in many different formats such as static banners, animated banners, interactive banners, pop-up, rich-media; and Lindstrom and Anderson (2000) present five different formats of banners including traditional banner ad, animated banner ad, interactive banner ad, context-sensitive banner ad, and rich media banners. According to their previous researches on the banner ads, we decide to discuss banner ads in the following six forms:
a) Static banners do not change through time. (Chaffey et al., 2003; Lindstrom and Anderson, 2000)
b) Animated banners have the norm with a typical rotation of three to five different images, which are displayed in sequence to help to attract attention to the banner and build up a theme, often ending with a call to action and the conjunction to click on the banner. A further type of animated banner ad is the overt, which typically an animated ad that moves around the page and is superimposed on the website content. Animated banners are the most widespread type of banner now n the Internet as they attract more attention than traditional static ads. Animated advertisements can be in the style of a simple cartoon-still with text and the facility to click onto a website. It can last a maximum of a few seconds or loop. (Chaffey et al., 2003; Lindstrom and Anderson, 2000)
c) Interactive banners advertisements give the use the opportunity to participate in interactive games or amusements – these are incorporated into the actual banner ad itself. The interactive element increases the advertising possibilities dramatically.
Provisional figures show that interactive banner ads can increase the click rate up to
600 percent in comparison to static banner ads. The user can type in an e-mail address
on interactive banner to register for information, which may increase response since
someone may fill in the form even though they might not bother to click on an advertisement. The interactive banners are intended to add value to the advertisement by providing a service that would normally only be available on the website. (Chaffey et al., 2003; Lindstrom and Anderson, 2000)
d) Pop-up is categorized as superstitious and interstitials. Interstitials are usually displayed as part of the main browser window, which are literally “in between” other screens of information. Superstitials take the form of an additional ’pop-up’ browser window that is displayed when a new web page opened, which require interaction to remove them, so that they are intrusive and have been reported as unpopular, in contrast, some advertisers have found them to be quite effective. (Chaffey et al., 2003)
e) Rich-media banners are to use a combination of animation, video or even sound on banner design. The new banner technologies, such as d-html, Java and Flash, introduce new possibilities with regard to the content and creativity possible in the banner. The banners can integrate small games, streaming news, sound and video clips. The users can even download files and print discount coupons or product information from a banner. Some problem of these developments need special technology t be installed on the user’s machine, or require the most recent versions of browser before they can function properly. (Chaffey et al., 2003; Lindstrom and Anderson, 2000)
f) Context-sensitive banner advertisements are also called search word banners, which appear to the user as a conventional banner ad; they are made context-dependent and found primarily in search engines, each time a user searches for a word in the database, a banner ad appears for the company which has purchased that word.
Search-word banners are at the present one of the most targeted marketing tools available on the Internet. American studies show that the banner appears under the condition has more than 60 percent chances to be clicked than the normal banner.
(Lindstrom and Anderson, 2000)
According to Cartellieri et al. (1997), the purpose of banner advertising could be:
a) To deliver content, which is the typical case where a clickthrough on a banner advertisement leads through to a corporate site giving more detailed information on an offer. A direct response is sought here; (ibid)
b) To enable transaction on a e-commerce site, which mainly refers to a merchant such as a travel site or online bookstore the ad is placed to lead directly to a sale. A direct response is also sought; (ibid)
c) To shape attitudes when building brand awareness, which refers to the ad that is consistent with a company brand; (ibid)
d) To encourage retention likewise a reminder of a company and its service and may
link through to on-site sales promotions. (ibid)
2.2.2 Affiliate Networks
Chaffey et al. (2003) define affiliate networks as collection of websites that link to an online retailer in exchange for commission on purchases make from the retailer. It is effectively a no-cost method of advertising or one in which payment is only made where there is a definite outcome - the purchase of an item.
The aim of affiliate networks is to use graphic or text link advertisements placed on many sites to generate traffic by referring links to a destination website. (ibid)
2.2.3 Search Engine Registration and Optimization
Chaffey et al. (2003) explain that search engine provides an index of content on registered sites that can be searched by keyword; and search engine registration is a request to a search engine that a site be included within its index. Over 80% of web users state that they use search engines to find information, so that if search engine registration has not occurred for an organization, then traffic volume will be less than optimal. Search engines are constructed by software, which compile an index by sending out spiders or robots to crawl around sites that are registered with that search engine. Web directories or catalogues are constructed and presented differently from search engines. They provide a structured listing of registered websites and their purpose in different categories. They are constructed by human; and they do not give comprehensive access to all web pages but the list of company names, categories and a certain words description of the site. (ibid)
The numbers of search engines are increasing more rapidly and specialized, so that the more places the company is registered the better. A product- or branch-specific search engine in the field the company represents is considered more important to get registered in. (Lindstrom and Anderson, 2000)
Search engine users are most likely to select sites to visit that are near the top of a search engine listing (ranking) – typically within the first screen, so that how to make the firm’s site stay in the first screen is a big issue, so that search engine optimization comes into the picture. It is a structured approach used to enhance the position of a company or its products in search engine results according to selected keywords.
There are now many specialist search engine optimization companies. (Chaffey et al.
2003)
2.2.4 Link Building
Chaffey et al. (2003) introduce the concept of link-building campaign which is a structured approach to gaining as many links as possible from other Web-related websites. It is a relatively straightforward method to make sure that their site has links from as many other related sites as possible, using hyperlinks.
Chaffey et al. (2003) reveal that link building can be approached by following
techniques:
a) Reciprocal links, which are two-way links agreed between two organizations. The benefit of the technique is that it is free. (ibid) Lindstrom and Anderson (2000) suggest that in order to find out what companies may be interested in such an exchange deal, think of the companies that are in the company’s value chain. They are including shareholders, business associates, suppliers, dealers, and companies offering complementary products.
b) PR – Content mentions, which refer to the links to the organization’s site, are featured in media sites like online newspapers or trade magazines, then it also increase traffic. (ibid)
c) Affiliates, which refer to affiliate networks, are widely used by e-tailers to drive traffic to a site.
d) Sponsorship, which refer to a paid-for sponsorship of another site, or part of it, especially a portal, for an extended period is another way to develop permanent links.
Co-branding is a similar method of sponsorship and exploit synergies between different companies. It is an arrangement between two or more companies where they agree to jointly display content and to conduct joint promotions using brand logos or banner advertisements. It is usually non-paid exchange, so it is seen as a cost-effective method of promotion which can be used for longer periods than banner advertisements.
e) Banner advertising, which is widely used by large B2C companies to drive traffic to their site.
f) Price-comparison portal, which are for companies selling commodity products using e-commerce to ensure that the products are listed on infomediary or portal sties offering product and price comparison.
2.2.5 E-mail Marketing
Doubleclick (2001) reported that there is more spending on e-mail marketing than banner advertising in most European countries. Chaffey et al. (2003) point out according to surveys in many counties; it is a significant method of Internet communication. It is described in two categories: outbound email marketing, where email campaigns are used as a form of direct marketing to encourage trial and purchases and as part of a CRM dialogues, and inbound e-mail marketing, where e-mails from customers such as support enquiries are managed.
E-mail offers many advantages as a communications tool – it offers immediacy,
targeting, accountability and is relatively cheap. E-mail can also use in customer
acquisition. There are two approaches to obtain e-mail address of prospects: one is to
purchase of opt-in bought-in lists, which refer to the company contact a list broker or
list owner and purchase e-mail addresses of individuals who have agreed to receive
marketing e-mails, the other one is to build a house list, which refer to use a company website combined with permission-based marketing opt-in techniques and a relevant incentive is offered in exchange for a prospect’s providing their e-mail address by filling in an online form. (ibid)
2.2.6 Viral Marketing
Viral marketing is used to transmit a promotional message to another potential customer. It is effectively an online form of word-of-mouth communications. Viral marketing harnesses the network effect of the Internet and can be effective in reaching a large number of people rapidly in the same way as a computer virus can affect many machines around the world. (Chaffey et al. 2003)
2.2.7 Vertical Portals
Lindstrom and Andersen (2000) mention vertical portals as a kind of online marketing promotion technique, which is a web marketplace in a certain industry. It can also lead to an industry-specific community. If there is not yet a relevant portal, it could make sense to set up links to all competitors without necessarily getting links from their sites in return. In this way the company’s website can become the gateway for the industry; then the company can make good use of the opportunity to present its information – being the fist and the best.
2.3 Evaluation of effectiveness of communication tools in traffic building
According to Lindstrom and Andersen (2000), there are several quantitative measurements of the success of communication tools, which all gives the company an idea on how well they manage to attract traffic to their website:
● The number of individual visitors
This parameter can give an indication of how successful the external communication has been in promoting traffic on the website. Generally, an address of the site that is easy for the potential user to remember also tends to increase the number of individual visitors.
● The number of minutes spent by the user
The longer time the visitors spend at the website, the greater the probability that strong relationships are being built between the user and the brand. The measurement should also include the amount of time the visitor spends per page, since that is a measurement of increased dialogue with the user.
● The number of minutes the visitor spends on average on the main activities of the
website
For instance if two out of three pages in a main activity of the site has generated long visits, but not third, it is likely to assume that the creativity has come to an halt, rather than the user’s interest in the subject itself.
● The number of repeat visits
This parameter shows to what extent the site was able to live up to the expectations of the user. If the user needs for information, entrainment and communication have been sustained; it is likely that they will visit the site repeatedly.
● The user’s behavior at the website
Measure which activities on the site that were visited first and in what order the subsequent visits were selected and if this is in accordance with the messages and the values originally intended by the site owner.
● The number of e-mail received from customers
The number of e-mail is also an indicative to the website’s quantitative success, especially so if the site aims to provoke visitors to sending e-mails feedback.
Conversely, if the site wish to avoid e-mail altogether, this measurement is obviously less significant.
● The website’s sales and income
The more the website is designed for Internet sales, the more important is it that goals should be set for sales, the rate of sales and the income.
Lindstrom Andersen (2000) states that above measurements can be analyzed by companies’ own database or special online software. Based on the result of evaluation on the effectiveness of each communication tools, company can find out efficiency of each communication tools and choose the most efficient tools to promotion the website. (Lindstrom Andersen, 2000)
According to Hoffman et. al (1997), a website’s effectiveness could be monitored in two different ways. First, one can observe the behavior of those entering the site and starting to move through it. The company can track their movements and see if they go to the areas the company wants them to go to. The company can see if they consistently log off a certain point and then tie that behavior back to our theory.
If the company had assumed that our customers would want to download that hefty
file of information because the company knows it will match their interests and yet
the company see that most customers do not, the company can safely assume that the
average download time of three minutes may be too long. So, the company can cut
that file into smaller pieces and see if they hang on for 15 seconds. The company can
help them along, just as the company do in an article, by advising them of what is to
come and how long it will take. (Ibid)
The second prime way the company can track their behavior is to see whether they return to the site. The fundamental objective of any organization is to have repeat business – few people survive by interacting with customers only once. How many of our customers come back again and again, and how do they move through the site?
People all know about bookmarks, so people usually bookmark the sites that they
want to return to. By measuring the return hits and looking at the behaviors the
company can quickly turn those data into useful information: 20 percent of first- time
users come back again; 15 percent of them consistently log off at certain points, for
example. That gives the best information of all – it tells the company what the people
they are really interested in are doing. (Ibid)
3. Conceptualization and Emerged Frame of Reference
This chapter includes the conceptualization and the emerged frame of reference of this study. The conceptualization allows us to answer this study’s research questions.
The frame of reference, which results from this conceptualization, will guide the data collection and data analysis in this study.
3.1 Conceptualization
All selected concepts below have been chosen on the basis of their potential strength as topics for data collection.
Based on our three research questions:
RQ1: How can offline marketing communication tools used for traffic building be described?
RQ2: How can online marketing communication tools used for traffic building be described?
RQ3: How can evaluation of effectiveness of communication tools in building traffic be described?
We have developed relevant theory from several previous studies as our foundation of data collection. These are presented in the following sections.
3.1.1 How can offline marketing communication tools used for traffic building be described?
In correspondence with the first research question, we are going to use the previous studies of below listed authors in order to make an effective data collection. These authors include Chaffey et al., (2003), Kotler & Armstrong (2001), Lindström &
Anderson (2000), Smith (1998), Baker (1994), Foster (1998), Fill (1995), Powers (1989), Fill et al. (2005) and Morris (1992). After compared the literatures, we decide to select the six kinds of offline communication tools addressed by Chaffey et al.
(2003) and Lindström & Anderson (2000) as frame of reference, as these tools are more relevant to traffic building according to them. Furthermore, we complement other authors’ studies into each of the offline communication tool addressed by Chaffey et al. (2003) and Lindström & Anderson (2000) in order to provide a better understanding of the tools and thorough theoretical base for later analysis.
● Publicizing the URL offline
Publicizing the URL offline could be in business cards, letterheads, brochures, telephone directories and other reference books, television and radio advertisements, advertisements (excludes TV and radio advertisements), hoardings and billboards, packaging and point-of-sale material, which could be incidental advertising or specific advertising of online presence;
● Public Relation
Press relations, product publicity, public affairs, investor relations and development.
● Direct Marketing
Telemarketing, direct-mail marketing and catalog (non-electronic) marketing.
● Word of Mouth
Of all the elements of the communication mix, word of mouth (WOM) is by far the most potent on a one-to-one basis. No amount of advertising or expert spelling could compete with the WOM. Opinion leader plays an important role in spreading the information.
3.1.2 How can online marketing communication tools used for traffic building be described?
In order to collect data on second research question, we decide to use Chaffey et al.
(2003) and Lindstrom and Anderson (2000) previous studies on the online marketing communication tools, because the authors’ study are the most comprehensive ones.
These studies will be presented into an eclectic list that we will use during the data collection. In the pretests of both cases, viral marketing is found to be an inappropriate online communication tool, as both companies think that the benefit of using viral marketing in terms of traffic building would not overcome its negative influence on their brand images. So it will not include in the concept framework of RQ2.
● Banner Advertising
Banner advertising has different forms of banner advertising including static, animated, interactive, pop-up, rich-media, and context-sensitive banner. The purposes of banner advertising could be to deliver content, to enable transaction, to shape attitude, to encourage retention.
● Affiliate Networks
Affiliate networks is basically a networks connected by exchange links and commissions between each others. It is primarily applying on B2C sites; the form of affiliate networks in B2B market could be different.
● Search Engine Registration and Optimization
The more Search engine the company registered, the more traffic the website could generate. Directories and catalogues are technically different from search engine, but works as good as search engine, especially in a certain industry context. Search Engine optimization can be dealing in the company and outsourcing.
● Link Building
Link building can be done by reciprocal links, PR-content mentions, affiliates,
sponsorship, co-branding, banner advertising, and price-comparison portal.
● E-mail Marketing
Inbound e-mail marketing is very much related to CRM and customer retention, so that it would not be considered related to our research questions. Outbound depends on e-mail address list, which can be obtained by two ways: purchase of opt-in lists and build a house list.
● Vertical Portal
The company could be the gateway or a single link in vertical portal of a certain industry.
3.1.3 How can evaluation of effectiveness of communication tools in traffic building be described?
To answer our research question about measurement of effectiveness of communication tools, we select a few relevant variables from Lindstrom and Andersen (2000), which consists of the following methods:
● The number of individual visitors
● The number of minutes spent by the user
● The user’s behavior at the website
● The number of e-mail received from customers
● The website’s sales and income
We will be using this theory since we think it is the most comprehensive method of evaluation in our reviewed literature. The method uses quantitative data, which are normally easy to collect from the website’s statistics by companies.
3.2 Emerged Frame of Reference
As pointed out earlier in this chapter, the conceptualization above is what will allow
us to answer this study’s research questions. Based on the research questions and the
purpose of this thesis stated in chapter one, we have created a frame of reference. This
frame of reference will become the foundation of this study’s data collection and
analysis. The frame of reference is presented in figure 3.1 on next page:
Figure 3.1 The Frame of Reference of this study
RQ1: Offline marketing communication tools
·Publicizing the URL offline
·Public Relation.
·Direct Marketing .Word of Mouth
Traffic Building
To Website
RQ3: Evaluation of effectiveness of online and offline marketing communications tools.
·The number of individual visitors
·Minutes spent by user
·Users’ behavior at the website
·E-mail received from customers
·Website sales and income RQ2: Online marketing
communication tools
·Banner advertising
·Affiliate networks
·Search engine registration and optimization
·Link building
·E-mail marketing .Vertical portal
