Online shopping

Online shopping is the process whereby consumers directly buy goods or services from a
seller in real-time, without an intermediary service, over the Internet. It is a form of
electronic commerce. An online shop, eshop, e-store, internet shop, webshop, webstore,
online store, or virtual store evokes the physical analogy of buying products or services at
a bricks-and-mortar retailer or in a shopping mall. The process is called Business-to-
Consumer (B2C) online shopping. When a business buys from another business it is
called Business-to-Business (B2B) online shopping.

History
In 1990 Tim Berners-Lee created the first World Wide Web server and browser.[1] It
opened for commercial use in 1991. In 1994 other advances took place, such as online
banking and the opening of an online pizza shop by Pizza Hut.[1] During that same year,
Netscape introduced SSL encryption of data transferred online, which has become
essential for secure online shopping. Also in 1994 the German company Intershop
introduced its first online shopping system. In 1995 Amazon launched its online shopping
site, and in 1996 eBay appeared.[1]

Customers
In recent years, online shopping has become popular; however, it still caters to the middle
and upper class. In order to shop online, one must be able to have access to a computer,
a bank account and a debit card. Shopping has evolved with the growth of technology.
According to research found in the Journal of Electronic Commerce, if one focuses on the
demographic characteristics of the in-home shopper, in general, the higher the level of
education, income, and occupation of the head of the household, the more favourable the
perception of non-store shopping., Enrique.(2005) The Impact of Internet User Shopping
Patterns and Demographics on Consumer Mobile Buying Behaviour. Journal of Electronic
Commerce Research, An influential factor in consumer attitude towards non-store
shopping is exposure to technology, since it has been demonstrated that increased
exposure to technology increases the probability of developing favourable attitudes
towards new shopping channels.[2]
Online shopping widened the target audience to men and women of the middle class. At
first, the main users of online shopping were young men with a high level of income and a
university education. This profile is changing. For example, in USA in the early years of
Internet there were very few women users, but by 2001 women were 52.8% of the online
population.

Logistics
Consumers find a product of interest by visiting the website of the retailer directly, or do a
search across many different vendors using a shopping search engine.
Once a particular product has been found on the web site of the seller, most online
retailers use shopping cart software to allow the consumer to accumulate multiple items
and to adjust quantities, by analogy with filling a physical shopping cart or basket in a
conventional store. A "checkout" process follows (continuing the physical-store analogy) in
which payment and delivery information is collected, if necessary. Some stores allow
consumers to sign up for a permanent online account so that some or all of this
information only needs to be entered once. The consumer often receives an e-mail
confirmation once the transaction is complete. Less sophisticated stores may rely on
consumers to phone or e-mail their orders (though credit card numbers are not accepted
by e-mail, for security reasons).
Payment
Online shoppers commonly use credit card to make payments, however some systems
enable users to create accounts and pay by alternative means, such as:
Billing to mobile phones and landlines[3][4]
Cash on delivery (C.O.D., offered by very few online stores)
Check
Debit card
Direct debit in some countries
Electronic money of various types
Gift cards
Postal money order
Wire transfer/delivery on payment
Some sites will not accept international credit cards, some require both the purchaser's
billing address and shipping address to be in the same country in which site does its
business, and still other sites allow customers from anywhere to send gifts anywhere. The
financial part of a transaction might be processed in real time (for example, letting the
consumer know their credit card was declined before they log off), or might be done later
as part of the fulfillment process.

Product delivery

Once a payment has been accepted the goods or services can be delivered in the
following ways.

■ Downloading: This is the method often used for digital media products such as
software, music, movies, or images.
■ Drop shipping: The order is passed to the manufacturer or third-party distributor,
who ships the item directly to the consumer, bypassing the retailer's physical
location to save time, money, and space.
■ In-store pickup: The customer orders online, finds a local store using locator
software and picks the product up at the closest store. This is the method often
used in the bricks and clicks business model.
■ Printing out, provision of a code for, or emailing of such items as admission tickets
and scrip (e.g., gift certificates and coupons). The tickets, codes, or coupons may
be redeemed at the appropriate physical or online premises and their content
reviewed to verify their eligility (e.g., assurances that the right of admission or use is
redeemed at the correct time and place, for the correct dollar amount, and for the
correct number of uses).
■ Shipping: The product is shipped to the customer's address or that of a customer-
designated third party.
■ Will call, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up
pre-purchased tickets for an event, such as a play, sporting event, or concert, either
just before the event or in advance. With the onset of the Internet and e-commerce
sites, which allow customers to buy tickets online, the popularity of this service has
increased.
Shopping cart systems
Simple systems allow the offline administration of products and categories. The shop is
then generated as HTML files and graphics that can be uploaded to a webspace. These
systems do not use an online database.
A high end solution can be bought or rented as a standalone program or as an addition to
an enterprise resource planning program. It is usually installed on the company's own
webserver and may integrate into the existing supply chain so that ordering, payment,
delivery, accounting and warehousing can be automated to a large extent.
Other solutions allow the user to register and create an online shop on a portal that hosts
multiple shops at the same time.
Open source shopping cart packages include advanced platforms such as Interchange,
and off the shelf solutions as Avactis, Satchmo, osCommerce, Magento, Zen Cart,
VirtueMart, Batavi and PrestaShop.
Commercial systems can also be tailored to one's needs so the shop does not have to be
created from scratch. By using a pre-existing framework, software modules for various
functionalities required by a web shop can be adapted and combined.

Online Shopping
Like many online auction websites, many websites allow small businesses to create and
maintain an online shops (ecommerce online shopping carts), without the complexity that
involved in purchasing and developing an expensive stand alone ecommerce software
solutions.

Design
Why does electronic shopping exist? For customers it is not only because of the high level
of convenience, but also because of the broader selection; competitive pricing and greater
access to information.[5][6] For organizations it increases their customer value and the
building of sustainable capabilities, next to the increased profits.[7]

Information load
Designers of online shops should consider the effects of information load. Mehrabian and
Russel (1974) introduced the concept of information rate (load) as the complex spatial and
temporal arrangements of stimuli within a setting.[8] The notion of information load is
directly related to concerns about whether consumers can be given too much information
in virtual shopping environments. Compared with conventional retail shopping, computer
shopping enriches the information environment of virtual shopping by providing additional
product information, such as comparative products and services, as well as various
alternatives and attributes of each alternative, etc.[9]
Two major sub-dimensions have been identified for information load: complexity and
novelty.[10] Complexity refers to the number of different elements or features of a site,
which can be the result of increased information diversity. Novelty involves the
unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang
(2000) showed that the novelty dimension kept consumers exploring the shopping sites,
whereas the complexity dimension has the potential to induce impulse purchases.[9]

Consumer expectations
The main idea of online shopping is not just in having a good looking website that could be
listed in a lot of search engines or the art behind the site.[11] It also is not only just about
disseminating information, because it is also about building relationships and making
money.[11] Mostly, organizations try to adopt techniques of online shopping without
understanding these techniques and/or without a sound business model.[11] Rather than
supporting the organization's culture and brand name, the website should satisfy
consumer's expectations.[11] A majority of consumers choose online shopping for a faster
and more efficient shopping experience. Many researchers notify that the uniqueness of
the web has dissolved and the need for the design, which will be user centered, is very
important.[11] Companies should always remember that there are certain things, such as
understanding the customer's wants and needs, living up to promises, never go out of
style, because they give reason to come back.[11] And the reason will stay if consumers
always get what they expect. McDonaldization theory can be used in terms of online
shopping, because online shopping is becoming more and more popular and a website
that wants to gain more shoppers will use four major principles of McDonaldization:
efficiency, calculability, predictability and control.
Organizations, which want people to shop more online with them, should consume
extensive amounts of time and money to define, design, develop, test, implement, and
maintain the website.[11] Also if a company wants their website to be popular among
online shoppers it should leave the user with a positive impression about the organization,
so consumers can get an impression that the company cares about them.[11] The
organization that wants to be accepted in online shopping needs to remember, that it is
easier to lose a customer then to gain one.[11] Lots of researchers state that even when a
site was "top-rated", it would go nowhere if the organization failed to live up to common
etiquette, such as returning e-mails in a timely fashion, notifying customers of problems,
being honest, and being good stewards of the customers' data.[11] Organizations that
want to keep their customers or gain new ones should try to get rid of all mistakes and be
more appealing to be more desirable for online shoppers. And this is why many designers
of webshops consider research outcomes concerning consumer expectations. Research
conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer
experiences.

User Interface
It is important to take the country and customers into account. For example, in Japan
privacy is very important and emotional involvement is more important on a pension's site
than on a shopping site.[7] Next to that, there is a difference in experience: experienced
users focus more on the variables that directly influence the task, while novice users are
focusing more on understanding the information.[13]
There are several techniques for the inspection of the usability. The ones used in the
research of Chen & Macredie (2005) are Heuristic evaluation, cognitive walk through and
the user testing. Every technique has its own (dis-)advantages and it is therefore important
to check per situation which technique is appropriate.[14]
When the customers went to the online shop, a couple of factors determine whether they
will return to the site. The most important factors are the ease of use and the presence of
user-friendly features.[14]

The System Itself

The Shopping Cart system works like the name suggests. Firstly, the customer must
choose the product desired from the source. Once this step is done, an option to add the
product to the cart will be given, this step will assure that the item you desire will be
bought. Once the customer has finished browsing for other potential purchases and has
decided that the product he chose previously is the one that he wants to buy, the user
must then follow the steps provided by the website in order to fulfill the transaction
(normally requires an active account and/or registration method). Lastly, the order will then
be sent to the desired address at a predicted date, which may alter depending on the
speed of the process.

Market share
E-commerce B2C product sales totaled $146.4 billion in the United States in 2006,
representing about 6% of retail product sales in the country. The $18.3 billion worth of
clothes sold online represented about 10% of the domestic market.[15] Forrester Research
estimates that the United States online retail industry will be worth $279 billion in 2015.[16]
For developing countries and low-income households in developed countries, adoption of
e-commerce in place of or in addition to conventional methods is limited by a lack of
affordable Internet access.

Advantages

Convenience
Online stores are usually available 24 hours a day, and many consumers have Internet
access both at work and at home. Other establishments such as internet cafes and
schools provide access as well. A visit to a conventional retail store requires travel and
must take place during business hours.
In the event of a problem with the item – it is not what the consumer ordered, or it is not
what they expected – consumers are concerned with the ease with which they can return
an item for the correct one or for a refund. Consumers may need to contact the retailer,
visit the post office and pay return shipping, and then wait for a replacement or refund.
Some online companies have more generous return policies to compensate for the
traditional advantage of physical stores. For example, the online shoe retailer Zappos.com
includes labels for free return shipping, and does not charge a restocking fee, even for
returns which are not the result of merchant error. (Note: In the United Kingdom, online
shops are prohibited from charging a restocking fee if the consumer cancels their order in
accordance with the Consumer Protection (Distance Selling) Act 2000.[17])

Information and reviews

Online stores must describe products for sale with text, photos, and multimedia files,
whereas in a physical retail store, the actual product and the manufacturer's packaging will
be available for direct inspection (which might involve a test drive, fitting, or other
experimentation).
Some online stores provide or link to supplemental product information, such as
instructions, safety procedures, demonstrations, or manufacturer specifications. Some
provide background information, advice, or how-to guides designed to help consumers
decide which product to buy.
Some stores even allow customers to comment or rate their items. There are also
dedicated review sites that host user reviews for different products.
In a conventional retail store, clerks are generally available to answer questions. Some
online stores have real-time chat features, but most rely on e-mail or phone calls to handle
customer questions.

Price and selection

One advantage of shopping online is being able to quickly seek out deals for items or
services with many different vendors (though some local search engines do exist to help
consumers locate products for sale in nearby stores). Search engines, online price
comparison services and discovery shopping engines can be used to look up sellers of a
particular product or service.
Shipping costs (if applicable) reduce the price advantage of online merchandise, though
depending on the jurisdiction, a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another country, is much more
expensive than making the larger shipments bricks-and-mortar retailers order. Some
retailers (especially those selling small, high-value items like electronics) offer free
shipping on sufficiently large orders.
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors
without disrupting users' shopping experience.

Disadvantages

Fraud and security concerns

Given the lack of ability to inspect merchandise before purchase, consumers are at higher
risk of fraud on the part of the merchant than in a physical store. Merchants also risk
fraudulent purchases using stolen credit cards or fraudulent repudiation of the online
purchase. With a warehouse instead of a retail storefront, merchants face less risk from
physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card
numbers being intercepted in transit between the consumer and the merchant. Identity
theft is still a concern for consumers when hackers break into a merchant's web site and
steal names, addresses and credit card numbers. A number of high-profile break-ins in the
2000s has prompted some U.S. states to require disclosure to consumers when this
happens. Computer security has thus become a major concern for merchants and e-
commerce service providers, who deploy countermeasures such as firewalls and anti-virus
software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with
a reputable retailer, when they have actually been manipulated into feeding private
information to a system operated by a malicious party. Denial of service attacks are a
minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent
assessment and meets all requirements of the company issuing the seal. The purpose of
these seals is to increase the confidence of the online shoppers; the existence of many
different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. A
number of resources offer advice on how consumers can protect themselves when using
online retailer services. These include:
Sticking with known stores, or attempting to find independent consumer reviews of their
experiences; also ensuring that there is comprehensive contact information on the website
before using the service, and noting if the retailer has enrolled in industry oversight
programs such as trust mark or trust seal.
Before buying from a new company, evaluate the website by considering issues such as:
the professionalism and user-friendliness of the site; whether or not the company lists a
telephone number and/or street address along with e-contact information; whether a fair
and reasonable refund and return policy is clearly stated; and whether there are hidden
price inflators, such as excessive shipping and handling charges.
Ensuring that the retailer has an acceptable privacy policy posted. For example note if the
retailer does not explicitly state that it will not share private information with others without
consent.
Ensuring that the vendor address is protected with SSL (see above) when entering credit
card information. If it does the address on the credit card information entry screen will start
with "HTTPS".
Using strong passwords, without personal information. Another option is a "pass phrase,"
which might be something along the lines: "I shop 4 good a buy!!" These are difficult to
hack, and provides a variety of upper, lower, and special characters and could be site
specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it
can create a thorny situation. A few problems that shoppers potentially face include identity
theft, faulty products, and the accumulation of spyware. Whenever you purchase a
product, you are going to be required to put in your credit card information and billing/
shipping address. If the website is not secure a customers information can be accessible
to anyone who knows how to obtain it. Most large online corporations are inventing new
ways to make fraud more difficult, however, the criminals are constantly responding to
these developments with new ways to manipulate the system. Even though these efforts
are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is
advisable to be aware of the most current technology and scams out there to fully protect
yourself and your finances.[20]. One of the hardest areas to deal with in online shopping is
the delivery of the products. Most companies offer shipping insurance in case the product
is lost or damaged; however, if the buyer opts not to purchase insurance on their products,
they are generally out of luck. Some shipping companies will offer refunds or
compensation for the damage, but it is up to their discretion if this will happen. It is
important to realize that once the product leaves the hands of the seller, they have no
responsibility (provided the product is what the buyer ordered and is in the specified
condition).[20].

Lack of full cost disclosure

The lack of full disclosure with regards to the total cost of purchase is one of the concerns
of online shopping. While it may be easy to compare the base price of an item online, it
may not be easy to see the total cost up front as additional fees such as shipping are often
not be visible until the final step in the checkout process. The problem is especially evident
with cross-border purchases, where the cost indicated at the final checkout screen may
not include additional fees that must be paid upon delivery such as duties and brokerage.
Some services such as the Canadian based Wishabi attempts to include estimates of
these additional cost,[18] but nevertheless, the lack of general full cost disclosure remains
a concern.

Privacy
Privacy of personal information is a significant issue for some consumers. Different legal
jurisdictions have different laws concerning consumer privacy, and different levels of
enforcement. Many consumers wish to avoid spam and telemarketing which could result
from supplying contact information to an online merchant. In response, many merchants
promise not to use consumer information for these purposes, or provide a mechanism to
opt-out of such contacts.
Many websites keep track of consumers shopping habits in order to suggest items and
other websites to view. Brick-and-mortar stores also collect consumer information. Some
ask for address and phone number at checkout, though consumers may refuse to provide
it. Many larger stores use the address information encoded on consumers' credit cards
(often without their knowledge) to add them to a catalog mailing list. This information is
obviously not accessible to the merchant when paying in cash.
Product suitability
Many successful purely virtual companies deal with digital products, (including information
storage, retrieval, and modification), music, movies, office supplies, education,
communication, software, photography, and financial transactions. Other successful
marketers use Drop shipping or affiliate marketing techniques to facilitate transactions of
tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores.
Profitable items often have a high value-to-weight ratio, they may involve embarrassing
purchases, they may typically go to people in remote locations, and they may have shut-
ins as their typical purchasers. Items which can fit in a standard mailbox — such as music
CDs, DVDs and books — are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for
industrial equipment like centrifugal pumps, also seem good candidates for selling online.
Retailers often need to order spare parts specially, since they typically do not stock them
at consumer outlets—in such cases, e-commerce solutions in spares do not compete with
retail stores, only with other ordering systems. A factor for success in this niche can consist
of providing customers with exact, reliable information about which part number their
particular version of a product needs, for example by providing parts lists keyed by serial
number.
Products less suitable for e-commerce include products that have a low value-to-weight
ratio, products that have a smell, taste, or touch component, products that need trial
fittings — most notably clothing — and products where colour integrity appears important.
Nonetheless, Tesco.com has had success delivering groceries in the UK, albeit that many
of its goods are of a generic quality, and clothing sold through the internet is big business
in the U.S.

Aggregation
High-volume websites, such as Yahoo!, Amazon.com, Best_Value_Bazaar and eBay, offer
hosting services for online stores to all size retailers. These stores are presented within an
integrated navigation framework. Collections of online stores are sometimes known as
virtual shopping malls or online marketplaces.
Become.com is a product price comparison service and discovery shopping search engine
with a mission to help shoppers make ideal buying decisions. Dulance was a price engine
that specialized in searching for hard-to-find products often sold by small independent
online retailers ("The Long Tail"). Mysupermarket aggregates inventory from the UK's four
leading online groceries for shoppers to compare supermarket prices.
Many companies that don't have internal resources or expertise (such as do-it-yourself-
ers) work with a web development firm to handle all or some of the facets of the online
shopping set-up, including integration of the e-commerce platform and hosting. Full service
digital companies can design, develop and set-up ecommerce sites so that they're up and
running with existing merchant accounts or new ones."

The impact of othersʼ review on consumer behaviour

One of the great benefits of online shopping is the ability to read othersʼ reviews, which
could be from experts or simply fellow shoppers on one product and service.
The Nielsen Company conducted a survey in March 2010 and polled more than 27,000
Internet users in 55 markets from the Asia-Pacific, Europe, Middle East, North America
and South America to look at questions such as “How do consumers shop online?”, “What
do they intend to buy?”, “How do they use various online shopping web pages?”, and the
impact of social media and other factors that come into play when consumers are trying to
decide how to spend their money on which product or service.
According to that research,[19] reviews on electronics (57%) such as DVD players, cell
phones or PlayStations and so on, reviews on cars (45%), and reviews on software (37%)
play an important role and have influence on consumers who tend to make purchases and
buy online.
In addition to online reviews, peer recommendations on the online shopping pages or
social media play a key role for online shoppers while researching future purchases of
electronics, cars and travel or concert bookings. On the other hand, according to the same
research,[19] 40% of online shoppers indicate that they would not even buy electronics
without consulting online reviews first.
Online reviews play a fundamental role on consumers who want to buy some kind of
product, but the biggest effect is seen for electronics, cars and software.
Improvement and Development Agency

E-marketplace
Definition

An electronic marketplace or e-marketplace is a web-based application facilitating

electronic trade between one or more buying organisations and several supplier
organisations.

Similar terms

E-marketplace
Marketplace
Exchange
E-procurement system
E-order system
Virtual marketplace
On-line hosted order system
Catalogue order system

An e-marketplace helps to streamline the order cycle by replacing manual

systems with electronic systems. e-marketplaces can be used to select and then
order goods from the supplier, track order status and receipt goods ordered.
Some e-marketplaces include systems for invoicing and payment.

E-marketplaces allow suppliers to display goods in electronic catalogues. Buyers

log onto the marketplace and can browse or search the electronic catalogues
before creating an order. Orders may also be created without using catalogues,
by using ‘free text’ electronic order forms. Suppliers log into the e-marketplace to
view incoming orders and then dispatch goods. On receiving goods, buyers use
electronic delivery notes in the e-marketplace to receipt the goods.

Some e-marketplaces enable suppliers to create electronic invoices which the

buyer can use to match with electronic orders and delivery notes and automate
payment. The e-marketplace records all purchasing activity that takes place and
can provide management information to buyer and supplier. Buyer and supplier
organisations can integrate the e-marketplaces into back office systems such as
Finance or Materials Management systems.

Exchange or e-marketplace?

E-marketplaces are sometimes called e-markets or exchanges. However, e-

marketplaces and exchanges are not interchangeable. E-marketplaces tend to
offer a range of differentiated products allowing buyers to compare features and
prices offered by individual suppliers. Exchanges tend to be Internet-based
industry spot markets for commodity products with a dynamic market setting
supply and demand prices in the fashion of existing exchanges such as London
Stock Exchange.

Types of marketplace

There are a number of types of e-marketplaces related to the ownership and

usage patterns, including private marketplaces, regional marketplaces and
vertical marketplaces.
Private marketplaces are usually owned by an individual organisation or
consortia of organisations, either buyers or sellers (e.g. one buyer
organisation may have a private marketplace including just their preferred
suppliers).
Regional marketplaces are similar to private marketplaces but are owned
by a group or consortia of buyers from a geographical region. Regional
marketplaces can be one method of enabling local authorities to work in
partnership on procurement with other local authorities. Regional e-
marketplaces allow a number of local authorities to use the same e-
procurement system to share their suppliers. Benefits can be achieved
through joint procurement by leveraging volumes of spend to negotiate
 better contract terms.
Vertical marketplaces specialise in the trading of products related to a
single industry sector such as industrial chemicals or medical supplies.

Related products

E-marketplaces often offer additional trading functions that might otherwise be

separate products such as tools for price negotiations in the form of auctions
(reverse auctions) and catalogues that have on-line quoting capability (Request
for Quotation or RFQ).

RFQ allows the buyer to publish what they require, usually a non-catalogue item,
which approved suppliers can provide quotes for. For example, the buyer may
require a typist with the knowledge of a specific word-processing application and
50 wpm typing speed for three days. Using RFQ, the buyer can publish this
request and the approved suppliers, staffing agencies in this case, can supply
him with quotes. When one of the quotes is accepted, it becomes an order.

Another available functionality of e-marketplaces is “punch out”. Punch out allows

a buyer to access an external online catalogue (website) from within the e-
marketplace while using the existing login session and shopping basket. This
functionality, however, requires substantial integration effort due to the complex
nature of linking external websites with the e-marketplace.

In addition some e-marketplaces include tools to enable suppliers to create

electronic invoices (e-invoices). These can then be used by the buyer to match
against electronic purchase orders and delivery notes to authorise payment.

Why should I use an e-marketplace?

Business Benefits

Reduced manual administrative tasks related to ordering

Reduced errors
Quicker purchasing cycle
Improved visibility of spend
Better control of spending

There are four key areas of procurement: sourcing, managing, ordering and
paying. While there is some overlap, e-marketplaces concentrate on the ordering
of goods, rather than on sourcing suppliers, managing supplier contracts or
paying for purchases.

The key business drivers for using an e-marketplace are to streamline the order
processes and increase control over spending. In addition an e-marketplace can
enable organisations to have better visibility of what is being spent on what items
and by whom.

Streamlining the order process

Purchasing processes are streamlined by replacing manual and paper based

processes (such as searching through paper catalogues, filling out paper order
forms by hand, obtaining a manager’s approval signature, checking on the status
of an order) with electronic processes. This reduces the amount of time spent on
procurement, and reduces errors that can be made by completing paper forms by
hand.

Ideally, all suppliers used by an organisation can be put on the e-marketplace.

Buyers go to the same site and use the same method to buy from all suppliers
and so time is saved. Time saved can then be utilised for more value-based
activity.

Controlling spend

An e-marketplace can be used to control an organisation’s spending. Systems

can automatically prevent an individual spending above a pre-set limit, and
workflow can ensure that an order is first authorised by a manger before being
sent to the supplier. If implemented in conjunction with organisational change, the
system can be used to mandate that users only buy from contracted suppliers,
eliminating maverick spend.

Gaining visibility of spend

Organisations can use the management information gathered over a period of

time to assess a supplier’s performance against its service level agreement
(errors with deliveries, time of delivery). Management information facilities can
allow an organisation to report on levels of spend by cost centres or departments
or by individual. An organisation can also report on which items are being
purchased most frequently and use this information to negotiate better contracts.

How are e-marketplaces used?

1. Buyer logs on to the e-marketplace via the web. They need a user id and
password to gain access.

2. The buyer creates an electronic requisition. They can browse or search

catalogues which display descriptions, prices and often photos of the
products from their contracted suppliers. The buyer can select products
(often using a virtual shopping basket) from the catalogue to create a
requisition. The buyer may reuse lists of frequently bought products to
save time in creating the requisition. Some e-marketplaces allow the
buyer to create a ‘free text’ order where a product does not exist in a
catalogue.

3. Depending on the buyer’s profile and authorization to spend levels, the e-

marketplace may force the requisition to be approved by the buyer’s
manager before it is then sent to the supplier.

4. The supplier logs into the e-marketplace via the web using a user id and
password and can view orders coming in. Some e-marketplaces use
emails to alert buyers or suppliers of orders that have been processed.

5. The buyer can view the status of an order and check if the order has
been dispatched by the supplier.

6. When the order is received the buyer can log into the e-marketplace to
receipt the goods electronically using an electronic delivery note.

7. Some systems allow the supplier to create an electronic invoice which is

then sent to the buyer. The buyer can use this to match with the other
electronic documents before authorising payment of the electronic
invoice. If integration into an organisation’s backend system is
implemented then the payment can be triggered automatically.

Some key things to look for and think about

Features

Some key features of an e-marketplace include:

Electronic requisitions
Electronic purchase orders
Electronic delivery notes
Electronic catalogues
Free text ordering
Contracted pricing displayed
User profiles with spend limits
Automated approval process
Order tracking and audit trail
Management information and reporting
Integration with back office systems

Supplier adoption

Supplier adoption (getting suppliers to join the e-marketplace) is commonly

agreed to be the most challenging aspect of achieving a successful e-
marketplace.
Depending on the service provider of the e-marketplace and the contract agreed,
various levels of support can be expected from the service provider. Support from
a service provider in recruiting suppliers can be invaluable. Proof that a service
provider is experienced at successful supplier adoption is important. A structured
supplier adoption plan will be required with the purchasing staff and the service
provider working together on ‘selling’ the benefits to the supplier.

Integration

There are various levels of integration. Integration may be one-way (from e-

marketplace to back office system) or two-way (from back office to e-
marketplace). It may also take place within the buyer’s organisation and the
supplier’s organisation.

Buyer side integration

Basic integration involves extracting purchase order data from the e-marketplace
and transferring this to the buyer’s back office systems. Other data for integration
to the back office system may include order status data, electronic delivery notes
and electronic invoice data.

Some organisations may have back office systems which already have user
profiles which define an individual’s key details (name, department, delivery
address), which cost centres an individual can use and the name of the
manager(s) who can approve orders. Some organisations would not want to
duplicate such data but instead may want frequent updates to the e-marketplace
that would reflect changes in the back office systems.

Integration may be done off-line with data being extracted into a file and then
uploaded to the back office system. Depending on the requirements of an
organisation this may be done overnight, although some may want more frequent
updates.

Theoretically it is possible to have live updates, where as soon as a buyer

creates an order in the e-marketplace this is reflected in the back office systems,
but this is rarely viewed as necessary particularly as it is more costly and difficult
to implement.

Supplier side integration

Completed delivery notes may be uploaded to the supplier’s back office system
to be used to create electronic invoices.

Suppliers may use integration to update supplier catalogues. It is possible with

live integration to a supplier’s materials management system to enable buyers to
view real-time availability of products in the supplier catalogue. Some e-
marketplace systems allow for a regular batch upload of catalogue data or
provide online e-catalogue self service so that the supplier can manage
catalogue changes. This can include workflow to allow the buyer to review price
changes before they are committed to the e-marketplace.

Effort and Cost

The effort and cost of implementing and using an e-marketplace is largely

dependent on the level of integration between the e-Marketplace applications and
the buyer’s back-office systems.

Service model

E-marketplaces are usually provided by a third party organisation or other

intermediary service provider, as a hosted service. The service provider has no
control over the prices of traded products or services, the negotiation of which
remains strictly between buyer and supplier. The service provider manages
transactions, facilitates communication, aggregates and maintains catalogue
content, and provides the general infrastructure for the e-marketplace. The level
of support available from the service provider will vary, but may include
assistance with training, supplier adoption, and creation of supplier catalogues.
 Effort

For an organisation that has previously used paper-based ordering systems

training, change management and communications activities will be required to
ensure a successful roll out.

Cost

As far as the on-going costs of using an e-Marketplace are concerned, there are
a number of pricing structures in place, including:
Membership fees
Percentage of the value of the transaction
Flat fee per completed transaction

Costs may be charged to the supplier or to the buying organisation. Often a

combination pricing structure is used. Some providers may charge consultancy
fees for support activities including supplier adoption, training, catalogue creation
or integration.

Case Studies

To see a good example of how local authorities can use e-marketplaces view the
following case studies:
Preston (PDF file, 6 pages, 150KB)
North Tyneside (PDF file, 6 pages, 105KB)

e-Marketplace appendix (PDF, 1 page, 82KB)

All external links and pdfs on this page will open in a new window.
Users with accessibility issues should visit access.adobe.com

Download Adobe Reader


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Business-to-consumer
From Wikipedia, the free encyclopedia

Business-to-consumer (B2C, sometimes also called Business-to-Customer) describes activities of

businesses serving end consumers with products and/or services.

An example of a B2C transaction would be a person buying a pair of shoes from a retailer. The
transactions that led to the shoes being available for purchase, that is the purchase of the leather, laces,
rubber, etc. However, the sale of the shoe from the shoemaker to the retailer would be considered a (B2B)
transaction.

Contents
1 Types of Business to Consumer
2 Advantages
3 Unique attributes
4 See also
5 Reference

Types of Business to Consumer

While the term e-commerce refers to all online transactions, B2C stands for "business-to-consumer" and
applies to any business or organization that sells its products or services to consumers over the Internet for
its own use. When most people think of B2C e-commerce, they think of Amazon, the online bookseller that
launched its site in 1995 and quickly took on the nation's major retailers. In addition to online retailers,
B2C has grown to include services such as online banking, travel services, online auctions, health
information and real estate sites. Peer-to-peer sites such as Craigslist also fall under the B2C category.

B2C e-commerce went through some tough times, particularly after the technology-heavy Nasdaq
crumbled in 2000. In the ensuing dotcom carnage, hundreds of e-commerce sites shut their virtual doors
and some experts predicted years of struggle for online retail ventures. Since then, however, shoppers have
continued to flock to the web in increasing numbers. In fact, North American consumers adopted e-
commerce so much that despite growing fears about identity theft, they spent $172 billion shopping online
in 2005, up from $38.8 billion in 2000.

By 2010, consumers are expected to spend $329 billion each year online, according to Forrester Research.
What’s more, the percentage of U.S. households shopping online is expected to grow from 39 percent this
year to 48 percent in 2010.

In October 2010, an extension of B2C, B21 was coined (sometimes referred to as B2I). While B2C
includes all manners of a business marketing or selling to consumers, B21 is specifically targeted towards
an individual. B21 requires specific Personalization for that individual. B21 requires Insight in order to
create the personalized experience.

Advantages
According to marketingterms "B2C businesses played a large role in the rapid development of the
commercial Internet in the late 20th century. Large sums of venture capital flowed to consumers in the
form of free online services and discounted shopping, spurring adoption of the new medium." Business to
Consumer e-consumer quickly developed as an alternative way for companies to sell more products to a
larger market.B2C e-commerce provided not only multiple advantages to a company but also to the
consumers. The main advantages for both the business and consumer are that by opening their market up
to B2C e-commerce trade they are reducing transactions costs. Businesses usually ship their products to a
number of stores to make them visible to the consumer. However, by using B2C commerce they can
instead showcase all of their products on the internet which reduces the cost of transaction. B2C also
allows their customers to better access information about different [[File:[1] ]]product and sellers which
broadens the selection available to their customers. Business to consumer ecommerce is valuable to the
economy because it creates a more unique way for businesses and consumers to interact.

Unique attributes
Negotiation: Selling to another business involves haggling over prices, delivery and product
specifications. Not so with most consumer sales. That makes it easier for retailers to put a catalog
online, and it's why the first B2C applications were for buying finished goods or commodities that
are simple to describe and price.

Integration: Retailers don't have to integrate with their customers' systems. Companies selling to other
businesses, however, need to make sure they can communicate without human intervention.

See also
Business-to-business (B2B)
Business-to-government (B2G)
Consumer-to-consumer (C2C)
Government-to-business (G2B)
Government-to-citizen (G2C)

Reference
1. ^ Example.jpg

Business to Consumer http://www.marketingterms.com/dictionary/b2c/[1]

Retrieved from "http://en.wikipedia.org/wiki/Business-to-consumer"

Categories: Electronic commerce

This page was last modified on 12 April 2011 at 23:15.

Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may
apply. See Terms of Use for details.
Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.
Email marketing
From Wikipedia, the free encyclopedia

Email marketing is a form of direct marketing which uses electronic mail as Internet marketing
a means of communicating commercial or fund-raising messages to an Display advertising
audience. In its broadest sense, every email sent to a potential or current
Email marketing
customer could be considered email marketing. However, the term is usually
used to refer to: E-mail marketing software
Interactive advertising
sending email messages with the purpose of enhancing the relationship Social media optimization
of a merchant with its current or previous customers, to encourage Web analytics
customer loyalty and repeat business,
Cost per impression
sending email messages with the purpose of acquiring new customers
or convincing current customers to purchase something immediately, Affiliate marketing
adding advertisements to email messages sent by other companies to
Cost per action
their customers, and
sending email messages over the Internet, as email did and does exist Contextual advertising
outside the Internet (e.g., network email and FIDO). Revenue sharing
Search engine marketing
Researchers estimate that United States firms alone spent US $400 million on
email marketing in 2006.[1] Search engine optimization
Pay per click advertising
Paid inclusion
Search analytics
Contents
Mobile advertising
1 Comparison to traditional mail
1.1 Advantages
1.2 Disadvantages
2 Opt-in email advertising
3 Legal requirements
4 See also
5 References

Comparison to traditional mail

There are both advantages and disadvantages to using email marketing in comparison to traditional
advertising mail.

Advantages
Email marketing (on the Internet) is popular with companies for several reasons:

An exact return on investment can be tracked ("track to basket") and has proven to be high when
done properly. Email marketing is often reported as second only to search marketing as the most
effective online marketing tactic.[2]
Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to
receive email communications on subjects of interest to them.
Over half of Internet users check or send email on a typical day. [3]
Email is popular with digital marketers, rising an estimated 15% in 2009 to £292m in the UK. [4]

Disadvantages
A report issued by the email services company Return Path, as of mid-2008 email deliverability is still an
issue for legitimate marketers. According to the report, legitimate email servers averaged a delivery rate of
56%; twenty percent of the messages were rejected, and eight percent were filtered. [5]

Companies considering the use of an email marketing program must make sure that their program does not
violate spam laws such as the United States' Controlling the Assault of Non-Solicited Pornography and
Marketing Act (CAN-SPAM), [6] the European Privacy and Electronic Communications Regulations 2003,
or their Internet service provider's acceptable use policy.

Opt-in email advertising

Opt-in email advertising, or permission marketing, is a method of advertising via email whereby the
recipient of the advertisement has consented to receive it. This method is one of several developed by
marketers to eliminate the disadvantages of email marketing.[7]

Opt-in email marketing may evolve into a technology that uses a handshake protocol between the sender
and receiver. [7] This system is intended to eventually result in a high degree of satisfaction between
consumers and marketers. If opt-in email advertising is used, the material that is emailed to consumers will
be "anticipated". It is assumed that the consumer wants to receive it, which makes it unlike unsolicited
advertisements sent to the consumer. Ideally, opt-in email advertisements will be more personal and
relevant to the consumer than untargeted advertisements.

A common example of permission marketing is a newsletter sent to an advertising firm's customers. Such
newsletters inform customers of upcoming events or promotions, or new products. [8] In this type of
advertising, a company that wants to send a newsletter to their customers may ask them at the point of
purchase if they would like to receive the newsletter.

With a foundation of opted-in contact information stored in their database, marketers can send out
promotional materials automatically—known as Drip Marketing. They can also segment their promotions
to specific market segments.[9]

Legal requirements
In 2002 the European Union introduced the Directive on Privacy and Electronic Communications. Article
13 of the Directive prohibits the use of email addresses for marketing purposes. The Directive establishes
the opt-in regime, where unsolicited emails may be sent only with prior agreement of the recipient.

The directive has since been incorporated into the laws of member states. In the UK it is covered under the
Privacy and Electronic Communications (EC Directive) Regulations 2003[10] and applies to all
organisations that send out marketing by some form of electronic communication.

The CAN-SPAM Act of 2003 authorizes a US $16,000 penalty per violation for spamming each individual
recipient. Therefore, many commercial email marketers within the United States utilize a service or special
software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance
with the Act. To comply with the Act's regulation of commercial email, services typically require users to
authenticate their return address and include a valid physical address, provide a one-click unsubscribe
feature, and prohibit importing lists of purchased addresses that may not have given valid permission.

In addition to satisfying legal requirements, email service providers (ESPs) began to help customers
establish and manage their own email marketing campaigns. The service providers supply email templates
and general best practices, as well as methods for handling subscriptions and cancellations automatically.
Some ESPs will provide insight/assistance with deliverability issues for major email providers. They also
provide statistics pertaining to the number of messages received and opened, and whether the recipients
clicked on any links within the messages.

The CAN-SPAM Act was updated with some new regulations including a no fee provision for opting out,
further definition of "sender", post office or private mail boxes count as a "valid physical postal address"
and definition of "person". These new provisions went into effect on July 7, 2008.[11]

CAN-SPAM does not pre-empt state laws that prohibit falsity and deception in email messages. Some
states allow recipients of false and deceptive email messages to sue the the business whose products are
advertised in the false or deceptive email. Examples of falsity and deception in emails include false header
information, advertising products as free when they are not, misrepresenting the source of the email,
unauthorized use of third party domain names, and misleading or blank subject lines.

See also
CAUCE - Coalition Against Unsolicited Commercial Email
Customer engagement
Email drip marketing
Suppression list

References
1. ^ DMA: "The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the U.S., 2006-2007
Edition", Direct Marketing Association, October 2006
2. ^ "New Survey Data: Email's ROI Makes Tactic Key for Marketers in 2009 "
(http://www.marketingsherpa.com/article.php?ident=31009#) , MarketingSherpa, January 21, 2009
3. ^ Pew Internet & American Life Project, "Tracking surveys" (http://www.pewinternet.org/trends.asp) , March
2000 – March 2007
4. ^ MediaWeek: UK e-mail marketing predicted to rise 15% MediaWeek.co.uk
(http://www.mediaweek.co.uk/news/comment/vital+stats/945161/UK-e-mail-marketing-predicted-rise-15/)
5. ^ Return Path's Reputation Benchmark Report: "5 ways to increase deliverability"
(http://www.btobonline.com/apps/pbcs.dll/article?AID=/20080731/FREE/180513096/1116/FREE) , BtoB
Magazine, July 2008
6. ^ The CAN-SPAM Act of 2003 (http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.htm) online at ftc.gov or
PDF Version (http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.pdf)
7. ^ a b Fairhead, N. (2003) “All hail the brave new world of permission marketing via email” (Media 16, August
2003)
8. ^ Dilworth, Dianna. (2007) Ruth's Chris Steak House sends sizzling e-mails for special occasions
(http://www.dmnews.com/Ruths-Chris-Steak-House-sends-sizzling-e-mails-for-special-occasions/article/94733/) ,
DMNews retrieved on February 19, 2008
9. ^ O'Brian J. & Montazemia, A. (2004) Management Information Systems (Canada: McGraw-Hill Ryerson Ltd.)
10. ^ Full text of Privacy and Electronic Communications (EC Directive) Regulations
(http://www.opsi.gov.uk/si/si2003/20032426.htm)
11. ^ FTC Approves New Rule Provision Under The CAN-SPAM Act
(http://www.ftc.gov/opa/2008/05/canspam.shtm)
Retrieved from "http://en.wikipedia.org/wiki/Email_marketing"
Categories: Email | Spamming | Internet marketing | Internet marketing by method | Market research

This page was last modified on 22 April 2011 at 21:55.

Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may
apply. See Terms of Use for details.
Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization.
Online advertising
From Wikipedia, the free encyclopedia
Part of a series on
Online advertising is a form of promotion that uses the Internet and World
Wide Web for the expressed purpose of delivering marketing messages to attract Electronic commerce
customers. Examples of online advertising include contextual ads on search Online goods and services
engine results pages, banner ads, Rich Media Ads, Social network advertising,
interstitial ads, online classified advertising, advertising networks and e-mail Streaming media
marketing, including e-mail spam. Electronic books
Software

Retail services
Contents
Banking
1 Competitive advantage over traditional advertising Food ordering
2 Revenue models Online flower delivery
2.1 Privacy Video rental
2.2 Malware Travel

3 Ethics Marketplace services

4 Types
4.1 E-mail advertising Trading communities
4.2 Affiliate marketing Auctions • Online wallet
4.3 Behavioral targeting Advertising
4.4 Semantic advertising Price comparison service
5 Ad server market structure
6 See also Mobile commerce
7 References
8 External links Payment · Ticketing
Banking

E-procurement
Competitive advantage over traditional Purchase-to-pay
advertising
One major benefit of online advertising is the immediate publishing of information and content that is not
limited by geography or time. To that end, the emerging area of interactive advertising presents fresh
challenges for advertisers who have hitherto adopted an interruptive strategy.

Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization
of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search
Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search result

Revenue models
The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.

CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure
of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an
advertisement. However, some impressions may not be counted, such as a reload or internal user
action.
 CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the
advertisers website.
CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or
website (usually used with pop-ups, pop-unders and interstitial ads).

CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks
on their listing and is redirected to their website. They do not actually pay for the listing, but only
when the listing is clicked on. This system allows advertising specialists to refine searches and gain
information about their market. Under the Pay per click pricing system, advertisers pay for the right
to be listed under a series of target rich words that direct relevant traffic to their website, and pay
only when someone clicks on their listing which links directly to their website. CPC differs from
CPV in that each click is paid for regardless of whether the user makes it to the target site.

CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common
in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the
risk of running the ad, and the advertiser pays only for the amount of users who complete a
transaction, such as a purchase or sign-up. This model ignores any inefficiency in the sellers web site
conversion funnel.
Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on
the user completing a form, registering for a newsletter or some other action that the merchant
feels will lead to a sale.
Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.
CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March
2008. Differing from cost-per-impression or cost-per-click models, a CPE model means
advertising impressions are free and advertisers pay only when a user engages with their
specific ad unit. Engagement is defined as a user interacting with an ad in any number of
ways.[1]

Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the
total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies
depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.

Privacy
See also: HTTP cookie#Privacy and third-party cookies

The use of online advertising has implications on the privacy and anonymity of users. If an advertising
company has placed banners in two Web sites. Hosting the banner images on its servers and using third-
party cookies, the advertising company is able to track the browsing of users across these two sites.

Third-party cookies can be blocked by most browsers to increase privacy and reduce tracking by
advertising and tracking companies without negatively affecting the user's Web experience. Many
advertising operators have an opt-out option to behavioural advertising, with a generic cookie in the
browser stopping behavioural advertising.

Malware
There is also a class of advertising methods which are considered unethical and may even be illegal. These
include external applications which alter system settings (such as a browser's home page), spawn pop-ups,
and insert advertisements into non-affiliated webpages. Such applications are usually labelled as spyware or
adware. They may mask their questionable activities by performing a simple service, such as displaying the
weather or providing a search bar. These programs are designed to dupe the user, acting effectively as
Trojan horses. These applications are commonly designed so as to be difficult to remove or uninstall. The
ever-increasing audience of online users, many of whom are not computer-savvy, frequently lack the
knowledge and technical ability to protect themselves from these programs.

Ethics
Online advertising encompasses a range of types of advertising, some of which are deployed ethically and
some are not. Some websites use large numbers of advertisements, including flashing banners that distract
the user, and some have misleading images designed to look like error messages from the operating system,
rather than advertisements. Websites that unethically use online advertising for revenue frequently do not
monitor what advertisements on their website link to, allowing advertisements to lead to sites with
malicious software or adult material.

Website operators that ethically use online advertising typically use a small number of advertisements that
are not intended to distract or irritate the user, and do not detract from the design and layout of their
websites. [2] Many website owners deal directly with companies that want to place ads, meaning that the
website linked to by the advertisement is legitimate.

The overuse of technologies like Adobe Flash in online advertising has led to some users disabling it in
their browsers, or using browser plug-ins like Adblock or NoScript. Many sites use centralized advertising
services whose advertisement may be blocked as a side effect of security and privacy measures, because the
services require JavaScript and cross-site requests to function, while such features are often not necessary
to use the sites and are a potential source of vulnerabilities.

Some companies perform customer engagement studies in online marketing to insure consumer satisfaction,
through the use of online compliance centers, building and deploying fraud detection tools, while inspecting
websites and publishers to insure website pages offer the highest degree of information security and
compliancy with Can Spam Requirements[3] .

Types
Though, as seen above, the large majority of online advertising has a cost that is brought about by usage or
interaction of an ad, there are a few other methods of advertising online that only require a one time
payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1
per pixel of advertising space and their advert would remain on the homepage for as long as the website
exists with no extra costs.

Floating ad: An ad which moves across the user's screen or floats above the content.
Expanding ad: An ad which changes size and which may alter the contents of the webpage.
Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the
disruption of the content being viewed
Wallpaper ad: An ad which changes the background of the page being viewed.
Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or
an alert.
Pop-up: A new window which opens in front of the current one, displaying an advertisement, or
entire webpage.
Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window
so that the user does not see it until they close one or more active windows.
Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving
video clips are displayed. This is the kind of advertising most prominent in television, and many
advertisers will use the same clips for both television and online advertising.
Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such
 as on Google Maps.
Mobile ad: an SMS text or multi-media message sent to a cell phone.
Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video,
3D content or Flash to provide a TV-like advertisement. Used to be known as Unicast Transitional
ads as they were originally made by Unicast Communications but the company was acquired by
Viewpoint Corporation in 2004, which then changed its name to Enliven in 2008.[4]
Interstitial ad: a full-page ad that appears before a user reaches their original destination.

In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers.

E-mail advertising
Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" to
distinguish it from spam.

Affiliate marketing
Main article: Affiliate marketing

Affiliate marketing is a form of online advertising where advertisers place campaigns with a potentially
large number of small (and large) publishers, whom are only paid media fees when traffic to the advertiser
is garnered, and usually upon a specific measurable campaign result (a form, a sale, a sign-up, etc.). Today,
this is usually accomplished through contracting with an affiliate network.

Affiliate marketing was an invention by CDNow.com in 1994 and was excelled by Amazon.com when it
launched its Affiliate Program, called Associate Program in 1996. The online retailer used its program to
generate low cost brand exposure and provided at the same time small websites a way to earn some
supplemental income.

Behavioral targeting
In addition to contextual targeting, online advertising can be targeted based on a user's online behavior.
This practice is known as behavioral targeting. For example, if a user is known to have recently visited a
number of automotive shopping / comparison sites based on clickstream analysis enabled by cookies stored
on the user's computer, that user can then be served auto-related ads when they visit other, non-automotive
sites.

In the United States the Federal Trade Commission has been involved in the oversight of behavioral
targeting for some time. In 2011 the FTC proposed a "Do Not Track" mechanism to allow Internet users to
opt-out of behavioral targeting.

Semantic advertising
Semantic advertising applies semantic analysis techniques to web pages. The process is meant to accurately
interpret and classify the meaning and/or main subject of the page and then populate it with targeted
advertising spots. By closely linking content to advertising, it is assumed that the viewer will be more
likely to show an interest (i.e., through engagement) in the advertised product or service.

Ad server market structure

Given below is a list of top ad server vendors in 2008 with figures in millions of viewers published
(http://attributor.com/blog/?p=37) in an Attributor survey. Since 2008 Google controls estimated 69% of
the online advertising market. [5]

Vendor Ad viewers (millions)

Google 1,118
DoubleClick (Google) 1,079
Yahoo! 362
MSN (Microsoft) 309
AOL 156
Adbrite 73
Total 3,087

It should be noted that Google acquired DoubleClick

(http://www.nytimes.com/2007/04/14/technology/14DoubleClick.html) in 2007 for a consideration of $3.1
Billion. The above survey was based on a sample of 68 million domains
(http://www.browsermedia.co.uk/2008/04/01/doubleclick-deal-means-google-controls-69-of-the-online-ad-
market) .

See also
Industry calculations:
Click Through Rate (CTR)
Cost Per Action (CPA)
effective Cost Per Action (eCPA)
Cost Per Click or Pay Per Click (CPC or PPC)
Cost Per Impression (CPI)
Cost Per Mille (CPM), also known as Cost Per Thousand (CPT)
effective Cost Per Mille (eCPM)
Classified advertising
Web advertising:
Ad filtering
Advertising network
Article marketing
Affiliate marketing
Central ad server
Click fraud
Dot Commercials
In-text advertising
Online classified advertising
Overlay
Pay per click
Pay per play
Performance-based advertising
Pop-up ad
Semantic advertising
Tribal Fusion (ad network)
Unicast ad
Web banner