We have reviewed a wide range of techniques that can be used to build traffic to web
sites. Agrawal et al. (2001) suggest that e-commerce sites should focus on narrow seg-
ments that have demonstrated their attraction to a business model. They believe that
promotion techniques such as affiliate deals with narrowly targeted sites and e-mail
campaigns targeted at segments grouped by purchase histories and demographic traits
are 10 to 15 times more likely than banner ads on generic portals to attract prospects
who click through to purchase. Alternatively, pay-per-click ads on Google may have a
higher success rate.4 Investment in digital media and digital creative
As with traditional media, there is a tension between spend on the advertising creative
and the media space purchased to run the executions. There is a danger that if spend on
media is too high, then the quality of the execution and the volume of digital assets pro-
duced will be too low.Marketing managers have to work with agencies to agree the balance and timing of all
these methods. Perhaps the easiest way to start budget allocation is to look at those
activities that need to take place all year. These include search engine registration, link
building, affiliate campaigns and long-term sponsorships. These are often now out-
sourced to third-party companies because of the overhead of retaining specialist skills
in-house.
Other promotional activities will follow the pattern of traditional media-buying with
spending supporting specific campaigns which may be associated with new product
launches or sales promotions: for example how much to pay for banner advertising as
against online PR about online presence and how much to pay for search engine regis-
tration. Such investment decisions will be based on the strengths and weaknesses of the
different promotion online. Table 8.5 presents a summary of the different techniques.
Deciding on the optimal expenditure on different communication techniques will be
an iterative approach since past results should be analysed and adjusted accordingly. A
useful analytical approach to help determine overall patterns of media buying is pre-
sented in Table 8.6. Marketers can analyse the proportion of the promotional budget
that is spent on different channels and then compare this with the contribution from
customers who purchase that originated using the original channel. This type of analy-
sis, reported by Hoffman and Novak (2000), requires two different types of marketing
research. First, taggingof customers can be used. We can monitor, using cookies, the
numbers of customers who are referred to a web site through a particular online tech-
nique such as search engines, affiliate or banner ads, and then track the money they
spend on purchases. Secondly, for other promotional techniques, tagging will not be
practical. For word-of-mouth referrals, we would have to extrapolate the amount of
spend for these customers through traditional market research techniques such as ques-
tionnaires. The use of tagging enables much better feedback on the effectiveness of
promotional techniques than is possible in traditional media, but it requires a large
investment in tracking software to achieve it.SELECTING THE OPTIMAL COMMUNICATIONS MIXTagging
Tracking of origin of
customers and their
spending patterns.