CHAPTER 1
INTRODUCTION
This section consists of background of the research topic, its problem discussion followed by research purpose and the questions and finally the overview of this study.
1.1 BACKGROUND
In last few years, internet is widely used in marketing and has opened a wide variety of opportunities for marketers (Wu, 2002). Through internet, one can exploit many areas such as advertising, branding, sales, Public relations, customer service and online retail store. There is a large amount of opportunity for online retailers. These retailers can sell their products or service online and gain a commendable amount of profit from it. They can use internet to gain customers and increase their profit. These retailers can smartly distinguish between online and offline retailing and gain profit accordingly.
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Each year, large amount of dollars in billions are spent on promoting brands and create brand recognition and spread customer awareness. Opinion of internet users gets affected by the medium of communication by which they learn about product or service (Kehoe et al., 1998). The way the online users find about the websites can be frequently used communication mediums are word of mouth, advertising, sales promotions and partnerships which direct customers to website etc. However, they also know that they should not completely rely on online advertising (Ilfeld and Winer, 2002).
Advertising medium should be selected on the basis of characteristics of media and the product. According to Jain (2008), internet as a communication tool has some strengths and major limitations. Internet can enforce direct sales, direct one to one contact, interactive; lots of information can be presented, low cost and time saving etc. On the other hand, internet has poor targeting capacity, low communication speed, creative limitation and need for both online and offline communication support. There is also a search difficulty that how can these websites be found. Therefore, while designing websites, it should have proper density of key word, added in appropriate directory of industry, and advertisement banners should be placed accurately (Bellizzi, 2000).
Advertisers are more interested in spending on online advertising such as paid search, online video or banner advertisement. But this can take some extra time for desired growth. Cyberspace giants Google and Yahoo have captured online advertising and are now moving to traditional offline advertising for future growth. A research study depicts that in USA, more that a hundred billion dollars are spent through traditional media advertising as compared to $16 billion for online advertising but this would give them lesser web traffic (Wharton, 2006).
According to William and Johnson, (1995), one of the major challenges is to attract visitors to the website and attract them to revisit again and again. This revisit may be due to customer need.
1.2 DISCUSSION OF THE PROBLEM
Now days, customers won’t come by themselves to the product. Marketers have to attract the customers. Similarly, in cyberspace, customer won’t come to your website soon after building it, if you won’t advertise. For building website traffic, marketers have to develop website’s visibility in the cyberspace and target customers by advertising. Website traffic is necessary for generation of sales for online merchants (Nikolaeca, 2005). The process of attracting customers to a website using both online and offline communications is known as traffic building. This process includes both attracting new customers and old customers (Chaffey and Smith, 2008).
To bring out the best in building website traffic, most appropriate mix of media should be employed. This can be a combination of offline and online communication (Pickton & Broderick, 2001). Since, online advertising has more immediate action; it has more direct effect on website traffic (Nikolaeca, 2005). There are wide variety of online and offline communication tools present such as publishing the web address offline, PR, direct marketing, banner advertising, affiliate network, sponsorship, email marketing, viral marketing, press, radio, T.V., telephone, mobile, mail, bill boards, company prints, products etc. (Chaffey and Smith, 2008).
A large amount of money is invested for generating traffic by using these media and so improving cost effectiveness is a major issue. One can know the traffic building effectiveness by evaluating the clicks on the website, but it is very important to know what segment of market is clicking so as to increase the effectiveness of communication tools. This can help out a marketer to better use of communication tools and focus on its effectiveness (Ilfeld and Winer, 2002).
According to Day, (1997), Website effectiveness can be monitored by two ways. Firstly to observe the path of the visitor and secondly check whether he visits again. This effectiveness can also be measured by evaluating the number of revisits, time spent on site by each visitor, visitor’s behaviour on website, number of email received and sent to customer and website sales and income. These can tell a company about how effective it has been in generating traffic by use of different communication tools (Lindstrom & Anderson, 2000).
1.3 RESEARCH OBJECTIVES
To evaluate the effectiveness of communication tools used by firms to generate traffic to their website.
To analyse the process they implement to calculate the effectiveness of these tools.
1.4 RESEARCH QUESTIONS
How can a company use offline and online communication tools for generating traffic for a website?
How can the evaluation of effectiveness of communication tools for generating website traffic be explained?
1.5 RESEARCH HYPOTHESES
Effective use of communication tools helps in building traffic for website.
A company uses both online and offline communication tools.
1.6 SCOPE
This research focuses on the effectiveness of communication tools used by firms to generate traffic to their website, which will be discussed in Literature Review later in more detail. This will include previous researches related to research problem. After that, research methodology will be stated as well as discussion about them. Then data from the real world will be presented and analysed. Using this analysis, findings will be generated and conclusion will follow.
This research will observe some delineation. This research will only focus on B2C companies and find out corporate outlook on generating traffic.
CHAPTER 2
LITERATURE REVIEW
This section of the research consists of previous literatures published, related to the research topic. This review will include literatures about online and offline communication tools and their effectiveness in generating website traffic.
2.1 Various Offline Communication Tools for marketing used for generating traffic.
Smith and Taylor (2004) (Cited by Chaffey and Smith, 2008) highlighted that there are ten offline marketing communication tools for building online traffic. These are advertising, selling, sales promotion, PR, sponsorship, direct mail, exhibitions, merchandising, packaging and word of mouth.
Source: Adapted from Chaffey, (2003)
2.1.1 Advertising the Web Address Offline.
According to Chaffey, (2003), much of offline advertising for companies online presence is done as a supplementary work rather than being particular. These are kind of an addition to the advertising tools such as print, newspaper, outdoor, or T.V. advertisement which is deliberate. However, if a company seriously wants to opt for offline advertising for online presence, then it can use more than just the web address (Chaffey, 2003). Print Advertising can willingly present Internet value plan as a part of main advertisement. Fascinated consumer can directly refer to the advertisement by accessing the URL provided in Print media. This can also be used to evaluate the effectiveness of the advertisement. If the aim is to capture e-mail address, then try to use the URL that can track the campaign (Chaffey, 2003). It has a benefit of providing specific webpage address related to offline promotion and even sub-domains or totally different domains can be used for advertising a campaign. For e.g. for user convenience, a good choice would be:
Sub-domain: www.company.com/ Domain: www.campaign-name.com
According to Lundquist, (1998) (cited by Merrilees et al. 2004), the scope of offline advertising is too wide. E-retailer should include web address not only on T.V., radio and press ads, but also on all brochures, stationary, and labelling and packaging of products. However, companies that endeavours for building brand and wants to build integrity of a site by publishing the URL by traditional ways is not often seen (Chaffey, 2003).
According to Chaffey and Smith, (2008), PR is a powerful and low cost tool for offline communication. PR can control events such as site-launches and re-launches with new services. It is an effective tool for promoting new services and attracting website traffic. Its activities also include press releases and press conferences, which can contribute in positive press coverage (Merrilees, 2004). Public Relation is a way of building website’s profile and raising awareness amongst the public. It can also target a sort of niche market such as trade magazines which is very specific for trade audience (Smith, 2002).
Chaffey, (2003), also points out that there are new ways of PR communication tools coming out for the use in offline marketing for driving traffic to website, Such as options for getting mentions on new online-based news sources are being explored. When a firm goes online, it should make itself such interesting that journalist finds themselves attracted to write about its activities (Lindstrom & Anderson, 2000). Through these new PR methods, a company can directly connect with the market with the help of company’s website. PR can update any information on the website in a minute and this can obviously make a better impression on the market and its environment. However, these advantages are also exploited by the competitors too (Chaffey, 2003).
Sponsorship can vary from a simple sponsorship of an E-mail list to much more sophisticated site sponsorship deals (Joseph, 2008). A sponsorship can help in exposing the brand, its logo with Web Address for a long time and help in generating traffic for the website (Lindstrom & Anderson, 2000). Sponsorship does not itself produce large amount of web traffic but also keep the user attracted to visit the site again and again. It works best when it can provide relevant content to the host site (Smith, 2002).
According to Smith and Taylor, (2004), there are several advantages and disadvantages of sponsorship. Sponsorship can be cost effective as compared to advertising. It allows reaching niche market that would be otherwise difficult to reach. It can also generate awareness, develop positive image, and improve relations, increase sales and also helps in sampling and maintaining database, which conventional advertising can not do. However, sponsorship sometimes considered more as indulgence by employees.
Physical reminders about website promotions are significant because most of the consumers spent there more time in real world rather than cyberspace. These physical reminders can be in form of brochures, catalogue, business cards, trade shows, direct mail sales promotions etc. (Chaffey and Smith, 2008). Direct mail refers to sending all the documented target users a letter which details about the new promotions and services (Lindstrom & Anderson, 2000). Many of the e-retailers communicate regularly with consumers by post. But many companies realised that direct and database marketing are more cost effective than traditional marketing. This also leads to target niche market if direct mail is used (Merrilees, 2004). According to Baker, (1994), Direct marketing can be done through either a mail shot (by post) or by a mail drop (at door step) or by telemarketing (by giving phone calls) or by a fax message.
Exhibitions are the special events where sellers, buyers and competitors all come under one roof for some days. These events allow consumers to see the product, test it, analyse it and can make a decision (Smith and Taylor, 2004). According to Frain, (1999), these exhibitions can be giant international fairs, national exhibitions for general public, national trade exhibitions for wholesale and retail distributors, national technical exhibitions for manufacturing users or local exhibitions. Find Out How UKEssays.com Can Help You! Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. View our academic writing services Baker, (1994), highlights that Packaging and labelling can be used as promotional tools by displaying the promotion and can target a large amount of audience. Due to increment of self service in stores, packaging has become a significant factor and acts as a silent salesman (Jain, 2010). Packaging is a marketing necessity. It has atleast five objectives to satisfy namely, protection, identification, convenience, promotion and attraction. Other than these, some objectives can be economy and reputation. Packaging should be able to communicate with its users, which include instruction, information about the company, logo and website address. This can create awareness among the consumers about the firm’s website (Jain, 2010).
Smith and Taylor, (2004), points out that a firm’s individuality lies as a strategic asset that assist the company to achieve its long term communication goal. It can be either company’s logo or a name. It should be checked and maintained regularly in order to work properly. It reflects the firm’s ethics and values and is kind of a communication tool.
Word of mouth (WOM) is a powerful technique for offline promotion. It is seen that if a person successfully buys a book online then he will tell it to other ten people, if he fail to buy, then he will tell to twenty people. PR should be used for stimulating the WOM (Chaffey and Smith, 2008). Many devices such as postcards, T-shirts, photos, digital Postcards, certificates and awards can encourage WOM. Internet can accelerate WOM using its effective networks of news groups, chat rooms, forums and emails (Smith and Taylor, 2004).
According to Smith and Taylor, (2004), today merchandising techniques ranges from customer to industrial. Although a huge amount of budget can be spent above the Point of Sale (POS) line for advertising, but fewer resources are allocated sometime to significant time of buying process. This significant time can be when customer is standing in front of the product and is making decision of whether to buy or not to buy. Merchandising techniques can such as display and store design plays an important role in guiding the buyer’s behaviour. Merchandising can provide customer with useful information, which can also remind the buyer about other related products, services and websites with their special offers etc.
There are various online communication tools for marketing such as banner advertising, affiliate networks, link generation, search engines registration, registering in various directories, email marketing, viral marketing etc. (Chaffey, 2003). These are discussed as follows:
Online marketers need to carefully plan and manage partner program that provide them broader reach of links on affiliate sites all over internet. Affiliate networks reward referring to sites with a commission based or click throughs, sales leads or completed transactions. These are generally more cost effective than traditional banner campaign (Joseph, 2008).
Affiliate networks are the collection of websites that provides links to an online retailer in exchange of some commission or percent of purchases from the retailer. Affiliate network generally uses graphics or text links advertisements that are place on many sites to develop traffic to the destination website (Chaffey, 2003).
Banner advertisements are rectangular graphics displayed on a webpage for advertising and used for click through function to reach further information. These banner ads can be of many forms such as conventional banner ad, animated ad, text ad, static, interactive, pop-up, and rich media (Chaffey, 2003). It is the most widely spread ad on the cyberspace and has a fixed size and position on the webpage. In some cases, user can even play games or participate in quizzes and then sent to the respective website (Lindstrom & Anderson, 2000).
According to Masterson and Tribby, (2009), banner ads have two purposes. Firstly, Primary purpose is to up-sell i.e., converting click to sale. In this a customer is send to a landing page, which is done very often. Secondary purpose is for the name collection and customer is send to a special or free report. The placement of ads and audience targeted would determine the primary purpose of the banner ad. If it is running on your own website, then the primary purpose would be to achieve more sale conversion. If it is on the third party website, then the purpose would be name collection and then up-sell those prospects later with a series of email.
Search engine offers a list of contents of registered sites that can be searched by keywords. By registering on the search engine, one can ask the engine to include the website in the contents. Most of the visitors search the content they want by using search engines only and these users most likely select the sites that are at the top of the search, most of the times on the first page (Chaffey, 2003). According to Smith, (2002), a further development is the number of non-search engine websites offering search facilities from their own pages using the same technology the major search engine websites are using.
For maintaining the website presence on the first page of the search engine, Search Engine Optimization is used. Search Engine Optimization offers services to get websites higher up on the search listings. One of the ways of maximizing the chance of picked up by a search engine is by having more than one page of entry to the website (Smith, 2002).
According to Chaffey, (2003), Email-marketing is a useful method for communication. It can be of two types. Firstly, when email campaigns are utilised as a direct marketing strategy to promote trial and purchases called as outbound email marketing. Secondly, when emails from customers are managed known as inbound email marketing. Emails can offer propinquity at a relatively low cost and target effective. There are many method of getting list of emails. One of the methods is to contact a list broker or list owner and purchase email list or provide a campaign that ask users to visit the website and fill a form to receive some offers (Chaffey, 2003).
Viral Marketing is used for promoting and branding the products or services (Merrilees, 2004). It relies on existing customers to tell other persons about the products or services they have enjoyed using. Number of customers increases as the virus multiplies and so came the name (Joseph, 2008). It is a kind of online Word of Mouth communication. A potential problem with this is that the company is reliant on each individual to send the message to each recipient. In many cases it spreads as Spam (Merrilees, 2004).
A graphical representation of Viral Marketing. Source: Adapted from Wienberg, 2009.
These are a type of online promotion method or a web marketplace of certain industry. It is a type of industry community in cyberspace. It is sensible to set up links to all rivals without necessarily getting links back from them. This way can lead the company’s website to become a gateway for the whole industry and company can make a good use of this opportunity (Lindstrom and Anderson, 2000).
Link-building is an organized approach for collecting maximum number of links from other web-related websites. By using this method, a company makes sure that their website has all the possible links to other related websites in the form of hyperlinks (Chaffey, 2003). There are many ways for using Link-building approach such as Reciprocal links, public relations content mentions, sponsorship, price comparison portal, banner advertisement or affiliate networks (Lindstrom and Anderson, 2000).
There are many ways for measuring the effectiveness of communication tools quantitatively. These measurements will assist the company to take the proper decision. These methods can be:
This measurement will tell how many unique visitors are visiting the website. By this measurement the company can evaluate its success parameter on the basis that whether the external communication has been successful in creating the website traffic or not (Lindstrom and Anderson, 2000).
The measurement of number of repeat visits can help the company to interpret its success on being able to live up to customer’s expectations. If user’s needs for information are fulfilled, then the company is successful in developing a consumer loyalty because, visitor will most likely visit the site again to view that information (Lindstrom and Anderson, 2000).
In this, number of minutes spent by each user is calculated and interpreted. This measurement reveals that longer the time user spent on the site, greater the chances of user to establish a brand loyalty. This measurement should also include the amount of time user spent on each page, because it would tell the effectiveness of each page (Lindstrom and Anderson, 2000).
By evaluating the time spent on main activities, company can dig out the un-effective portions. For example, if a user visits four out of five main activities and not the fifth one, then it is quite likely that user is not interested in that activity or something must be done to increase the interest (Lindstrom and Anderson, 2000).
This interpretation can be done by measuring the activities on the site which were visited first and what were visited subsequently after that. This will help in predicting the most valued page of the site and will provide opportunity for other pages to be re-designed (Lindstrom and Anderson, 2000).
Numbers of emails received from customers are measured in order to interpret website’s quantitative success, particularly when the site is focused to incite visitors to send emails as feedback. Contrarily, if the website doesn’t wish to receive emails, then this factor is less important (Lindstrom and Anderson, 2000).
If a website is designed for generating sales and income and it should be more oriented towards achieving sales and proper goals should be set (Lindstrom and Anderson, 2000).
The above evaluations can be measured by either firm’s own database or by some software available online. By measuring all these factors, a company can interpret its effectiveness in use of all communication tools and can choose the most effective tool for brand establishment and promotions (Lindstrom and Anderson, 2000).
According to Tierney, (2000) (cited by Law and Mills, 2004), evaluation of website effectiveness is needed because of significant setup and maintenance cost. Although online sales are the good way to measure site effectiveness, the above evaluations are needed to facilitate continuous improvements as well as to judge the site’s performance from that of the competitors and industry peers.
Based on the above various literature reviews and research topic in mind, a research framework is developed. This framework will be used as the groundwork for this study. This was designed using the research objectives and the purpose of this research and will help in collecting the relevant data and analysis. This framework is as follows:
2.1.2 Public Relations.
2.1.3 Sponsorship
2.1.4 Direct Mail and Physical Reminders.
2.1.5 Exhibitions.
2.1.6 Packaging and Labelling.
2.1.7 Firm’s Individuality
2.1.8 Word of Mouth.
2.1.9. Merchandising.
2.2 Various Online Communication Tools for marketing used for generating traffic.
2.2.1 Affiliate Networks.
2.2.2 Banner Advertising.
2.2.3 Registration on Search Engines.
2.2.4 E-mail Marketing.
2.2.5 Viral Marketing.
2.2.6 Vertical Portals
2.2.7 Link-Building
2.3 Evaluation of communication tools for generating website traffic.
2.3.1 Measuring the number of unique visitor.
2.3.2 Measuring the number of repeated visits.
2.3.3 Measuring the time spent on the site by the user.
2.3.4 Evaluating the amount of time spent by on average on the main activities of the website.
2.3.5 Interpreting User behaviour on the website.
2.3.6 Calculating the number of Emails received from customers.
2.3.7 Measuring Website’s Sales and Income.
2.4 Research Framework
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