What is electronic
commerce or e-commerce?
How much will it cost my
company to set up an e-commerce web site?
How does e-commerce
over the Internet differ from traditional
commerce?
What are the e-commerce
options for business?
Describe some Internet
business models.
How important is my own
domain name?
What is EDI and do I need the
Internet for EDI?
Explain Internet, intranet,
extranet VPN and VAN.
Why should my company
get involved in e-commerce, I am doing okay
with my current approach?
What are the risks
associated with conducting e-commerce?
What are the risks of
NOT conducting e-commerce?
How can I prevent
crackers getting access to my important
financial information and transactions?
Explain encryption and
cryptography in laypersons' terms?
What is a digital
certificate and a digital ID?
What is a digital
signature?
What is a certificate
authority?
Do I need a certificate
or digital ID to buy and/or sell on the
Internet?
What is a secure SSL server?
Explain SET (Secure
Electronic Transactions).
Describe the process when
someone buys from my web page with a credit
card and online authorization and processing
occurs.
Tell me more about
electronic payment systems.
What are the main types
of e-commerce software and how do they work?
Explain 'smart cards'
and how they will be used in e-commerce.
Surely Internet
retailing will never replace the 'shopping
center' experience?
How will customers find
my site on the web and how can I keep them
coming back?
How should I best
approach marketing over the Internet?
How much does
advertising on web pages or in newsletters
cost?
What do the acronyms CPM,
CTR, CPC, CPS mean in relation to web
advertising?
Explain affiliate
programs in web marketing.
Targeted advertising is
important. What does it mean in Internet
terms?
Why shouldn't I send out
10,000 emails to prospective customers?
Can I make a fortune
selling over the Internet?
What is electronic commerce or
e-commerce?
Although electronic commerce, in the
widest sense, has been defined as 'any
business activity utilizing electronic
communication channels for data transfer',
modern usage is more related to commerce
conducted over the Internet or over networks
utilizing internet technologies; that is,
extranets, intranets and virtual private
networks using internet protocols. (See
below for definitions of these terms.)
For the purpose of this FAQ, we will
regard e-commerce specifically as:
"the process of electronically
conducting business over the Internet -- or
networks using internet protocols -- with
particular reference to innovative
marketing, order and payment systems, and
administrative integration."
How much will it cost my company to set
up an e-commerce web site?
This is an open ended question and
depends, obviously, on the size, nature and
sophistication of the enterprise, inventory,
marketing requirements, and many other
factors.
Here are some cost entities:
Hardware and software to connect to the
Internet
Web site construction
Staff to maintain the Web site
Web hosting and Internet service provider
charges
Online communications costs, eg, phone
lines, ISDN lines, cable
Support staff for online order taking and
customer care
Marketing of Web site
Credit card processing
A 'brochure' web site can be built for a
few thousand dollars to allow contact and
orders by email. This is the minimalist
position. At the other end of the scale,
Internet startups which rely on attracting
millions of web site visitors each month to
enable them to sell advertising and other
products and services, invest millions of
dollars in the enterprise.
How much you spend will depend on the
results of a well considered business plan
and the estimated return on investment; but
be careful, the ROI may have to be
calculated over the longer term.
How does e-commerce over the Internet
differ from traditional commerce?
E-commerce is changing the relationship
between merchant and customer, whether it be
business to business or business to consumer
commerce, or the government isomers of
these.
Relationship building is paramount. Savvy
Internet users know that if they cannot get
good service, which also means an easily
navigable web site, they can move on -- and
quickly. The Internet is providing customers
with growing power and purchasing control.
Shopping agents will find the lowest price;
scams or poor service will quickly be
identified and passed on.
In addition there is still a strong ethic
of 'free stuff' on the web. Consumers in
particular are looking for free information
and services. Providing these aspects is a
crucial part of relationship building which
will form the basis of electronic commerce
into the future.
With the potential speed and efficiency
of electronic communications and
transactions, the nature of inventory is
changing. A virtual shop on the web may
carry no stock at all, relying on suppliers
to fulfill orders; a small, on-site
inventory can be replenished with
just-in-time manufacturing
Tip: Do not build an e-commerce
site without adequate backup for responding
to email enquiries -- and it better be fast
-- say within 24 hours at the outside, and
preferably with an auto response if it is to
take longer.
What are the e-commerce options for
business?
These are some basic Internet/Web
e-commerce transaction models:
The web brochure
Simple product description web site. Relies
on pushing customers to traditional outlets.
Email contact is usually provided for
further enquiry.
The enhanced web brochure
Can take orders by email, fax, phone,
including credit card purchases. Product is
shipped. Credit card numbers usually are not
secure when passed over the Internet.
The e-commerce mall site
Places your web site on a web mall (host)
with other e-commerce merchants and usually
includes shopping cart, secure server and
credit card processing . A mall may or may
not provide credit card authorization and
end to end credit card transaction
processing.
The e-commerce host site
Similar to above except you are an
independent entity on the web host and have
more control of the setup and software
yourself. May or may not provide credit card
authorization and end to end credit card
transaction processing.
The in-house site
You do the lot yourself, that is, setup and
run the web servers, backup, and
connectivity in-house. You can be as
sophisticated as you like with electronic
payment systems and end-to-end secure credit
card processing. You need to be well
resourced with technical support staff to
ensure reliability and efficacy.
The business to business extranet
Business to business e-commerce is predicted
to be the largest value sector of the
industry within a few years. This model may
incorporate elements of the EDI (electronic
data interchange) standard and will perhaps
use XML (extensible markup language) as a
content description language (XML-EDI).
E-commerce extranets are secure Internet
networks, usually with router encryption,
over which merchants and customers can
exchange order information and funds
securely. Integration with the
administrative backend may also be a
feature. That is, order and financial
information will be automatically
incorporated into corporate accounts via the
web interface.
Describe some Internet business models
Here are some successful business models
already operating on the Internet:
The information provider
Sell information directly in the form of a
book, manual or newsletter subscription. Be
wary of this model. It works for some, but
you must have unique content because of the
abundance of free information on the
Internet. The information products that work
best seem to be those that claim to describe
how to make money on the Internet or to save
or make money in personal finances. Be
careful of sharks and shonks in this field.
One of the decisions to be taken is
related to the next model, below. That is,
do you sell the information or give it away
and rely on selling advertising based on the
number of visitors you get to your site? Or
do you give information away and sell
something else -- say a book or vitamins or
cars or financial services.
Information providers on the Internet may
reap more monetary benefits as micro payment
systems evolve (see below for more on
payment systems). Micro payment systems will
make the collection of small charges easy
and convenient on the web -- perhaps below
one dollar per transaction.
Even so, with the growth of the web and
the problem of finding what you want in a
reasonable time, information providers with
good content may do well because time is
money, and searching the web for 30 minutes
to find free information may not be as cost
effective as paying $20 for a report that
you can access instantly.
Tip: To check the legitimacy of a
person or scheme, go to a USENET search
engine (like Deja.com) and type the name of
the enterprise into the search box. If
concerns about the product exist there will
probably be a discussion in Usenet
The free information advertising model
This model relies on attracting a large
number of web site visitors with the purpose
of selling advertising (and possibly
consumer services and products). Most of the
large search engine, portal and hub sites
rely on this model, but many smaller sites
also do well. The information and services
could be across any subject including health
information (www.medscape.com),
Internet marketing (www.e-land.com),
computer glossary (www.whatis.com),
or news (www.moreover.com).
The customer service/cost saving model
This model has reduced support costs for
computer software and hardware companies
considerably. The basics are simple: provide
product support online and reduce the need
for direct customer support -- and, in some
cases, avoid the need for hard copy manuals.
Companies like Sun Microsystems and IBM and
a host of others describe customer support
success stories with Internet technologies.
The direct sales model
This is often combined with the customer
service model above. Dell Computer is one of
the success stories of online selling and
other computer manufacturers are rushing to
emulate the model. At the same time,
corporations with a strong reseller
infrastructure have to tread carefully to
ensure they do not alienate resellers and
channel partners. A trend away from
resellers in some industries will occur if
web based direct sales become the dominant
model.
As IBM says "Every transaction we
move to the web saves us 70 to 90
percent."
One way of attending to resellers is to
have a web presence offering direct sales,
but asking the customer to select the
nearest dealer or franchisee. The order is
then passed electronically to the reseller
to fulfill the order and accept payment. The
corporate center takes an additional
percentage of each transaction to support
the online service.
With recent 'dot.com' crashes on the
stock market, business to consumer
'entailing' is not the growth industry it
was in 1999 and the first half of 2000.
However entailing is here to stay albeit
with some modification to business models.
The innovative marketing model
If you can think of a new way of making
money using Internet technologies then you
could make a fortune if you can get in
before anyone else does. This is the history
of small scale startups like Yahoo web
directory.
One relatively recent success story has
been Internet auctions at sites like EBay (www.ebay.com).
Make a bid for any of thousands of items and
if you are the best, you've bought it. Also
see www.priceline.com
where you can make an offer for surplus
airline seats. Is this the future of
e-commerce?
The business to business model
This is said to be the fastest growing
sector of Internet commerce. It involves
electronic transactions for ordering,
purchasing and administration using secure
Internet protocols between traditional
merchants and customers. See EDI below.
However, in recent months (since June
2000), even the Holy Grail of ecommerce,
B2B, has been criticized as not being the
panacea it was once thought to be. See Forune.com
for a critique of the ecommerce revolution.
What is EDI and do I need the Internet
for EDI?
EDI (Electronic Data Interchange), a form
of e-commerce, is a standard format for
exchanging business data. The standard is
ANSI X12 and it was developed by the Data
Interchange Standards Association. ANSI X12
is either closely coordinated with or is
being merged with an international standard,
EDIFACT. See Data Interchange Standards
Association (DISA). www.disa.org
Much effort is being expended on making
Internet EDI a standard for business to
business e-commerce. The Extensible Markup
Language (XML) is a likely vehicle for
content description. See XML/EDI
Framework
Currently, EDI operates over value added
networks (VAN).
In practical terms EDI provides a common
format for the exchange of orders, invoices
and payments -- and may integrate back
office accounting and administrative
function at both ends of the transaction.
How important is my own domain name?
Absolutely essential. Domain names are
extraordinarily important and valuable and
good ones are exchanging hands for up to six
figures. The question for Australian
businesses is whether to register .com or .com.au
names. The general consensus is that
advantages exist with .com names for
international ecommerce, but finding a
suitable one that is not taken will be a
challenge for some enterprises if not
addressed right NOW!
See your ISP or BetterWhois.com
Explain Internet, intranet, extranet VPN
and VAN?
An intranet is an implementation of
Internet technologies usually restricted to
within corporate sites, but which may
operate over a wide area network.
An extranet is a further extension of
such restriction to approved clients,
customers or associates for the purpose of
exchanging confidential information or
transactions.
A VPN (virtual private network) is the
network application for implementing an
extranet or wide area intranet.
A VAN (value added network), is
essentially a proprietary network over which
EDI, EFTPOS or other financial transactions
are implemented.
Firewall and encryption technologies are
important in securing all of these networks,
particularly over the external
communications infrastructure.
Why should my company get involved in
e-commerce, I am doing okay with my current
approach?
See the next two items.
What are the risks associated with
conducting e-commerce?
- First, e-commerce may require
considerable capital outlay, ongoing
costs, staff retraining and
organizational restructuring -- for the
most committed organizations.
- Second, you may not realize a return
on investment for several years.
Amazon.com, the online bookseller, is
still waiting to report a profit!
- At the operational level, you have to
be concerned about the following
security breaches (courtesy of Verisign):
Spoofing - Ease of copying web
pages makes it easy to create
illegitimate sites that appear to be
published by established organizations.
Electronic criminals have illegally
obtained credit card numbers by setting
up web sites that mimic legitimate
businesses.
Unauthorized disclosure - When
transaction information is transmitted
"in the clear," hackers can
intercept the transmissions to obtain
your customers' sensitive information.
Unauthorized action - A
competitor or disgruntled customer can
alter your Web site so that it refuses
service to potential clients, or
malfunctions.
Data alteration - The content
of a transaction can be intercepted and
altered en route, either maliciously or
accidentally. User names, credit card
numbers, and dollar amounts are all
vulnerable to such alteration.
What are the risks of NOT conducting
e-commerce?
Internet e-commerce is a reality and is
the basis on which international electronic
business and commerce will be conducted
beyond 2000.
Even the smallest business may be
affected. Businesses not in touch with the
technology will confer an advantage on
competitors.
Internet futurist Chuck Martin says this
about ecommerce: "With all the
cybertrends, it's important to understand
that this is not a small thing, this
e-business revolution is a very, very big
thing. And the future will look very, very
different than today."
How can I prevent hackers/crackers
getting access to my important financial
information and transactions?
- Use a recognized ISP with an
established security record and
platform. Ask them about it.
- Utilize a secure web server (and
browser) with secure sockets layer (SSL)
for credit card transactions and other
e-commerce transactions.
- Employ reliable firewall technology
for in-house servers and networks. Get a
recognized consultant with
platform-specific expertise to set this
up.
- Utilize digital certificates and IDs
to verify merchant and customer, and
digital signatures to encrypt and
authorize messages where appropriate.
Digital certificates based on public key
infrastructure (PKI) are still an
emerging technology, but currently, the
merchant/server side is important.
Explain encryption and cryptography in
laypersons' terms?
Encryption is the transformation of data
into a form (a cipher) that is, for most
intents and purposes, impossible to read
with out the appropriate decoder (a
cryptographic key). Its purpose is to ensure
privacy by keeping information hidden from
anyone for whom it is not intended, even
those who have access to the encrypted data.
Decryption is the reverse of encryption; it
is the transformation of encrypted data back
into an intelligible form.
Cryptography is the science, (some would
argue art), of encryption and decryption --
although academics in this field would
describe this as an entirely inadequate
explanation ;-).
What is a digital certificate and a
digital ID?
A digital certificate is an electronic
"credit card" or
"passport" that establishes your
credentials when doing business or other
transactions on the Web. A digital ID is the
name Verisign, a certificate issuing
authority gives to personal certificates.
A certificate is issued by a certificate
authority (CA). It contains your name, a
serial number, expiration dates, a copy of
the certificate holder's public key (used
for encrypting and decrypting messages and
digital signatures), and the digital
signature of the certificate-issuing
authority so that a recipient can verify
that the certificate is real. Some digital
certificates conform to a standard, X.509.
Digital certificates can be kept in
registries so that authenticated users can
look up other users' public keys.
It is likely that in the near future
organizations and individuals will have
several digital certificates (ID) for a
range of activities that require their
identity to be validated. A person within a
government department may use one to access
confidential information on an intranet for
example, while she has a separate ID for
purchasing on the Net. A government, and
even a department, may be a certificate
issuing authority in the hierarchy (see
below for more on certificate authorities).
Several IDs and cryptographic keys may be
held on a smart card.
What is a digital signature?
A digital signature, not be confused with
a digital certificate, is an electronic
signature that can be used to authenticate
the identity of the sender of a message, the
signer of a document, or the owner of a
credit card. It can also be used to ensure
that the original content of the message or
document sent is unchanged. A digital
signature is usually generated from a
digital certificate using public and private
key technology.
(Note that a digital signature is not
just a scanned image of a signature -- a
relatively common misconception.)
Additional benefits of a digital
signature are that it is easily
transportable, cannot be easily repudiated,
cannot be imitated by someone else, and can
be automatically time-stamped.
A digital signature can be used with any
kind of message, whether it is encrypted
or not, so that the receiver can be sure
of the sender's identity and that the
message arrived intact. A digital
certificate also contains the digital
signature of the certificate-issuing
authority so that anyone can verify that the
certificate is real.
What is a certificate authority?
A certificate authority (CA) is an
authority in a network that issues and
manages security credentials and public keys
for message encryption and decryption. A CA
will require, and authenticate, documents to
verify the identity of a person or
organization before issuing a digital
certificate. A hierarchy of certificate
authorities can exist for different purposes
under a public key infrastructure (PKI).
Depending on the PKI implementation, the
certificate includes the owner's public key,
the expiration date of the certificate, the
owner's name, and other information about
the public key owner.
The schema for certificate authorities is
quite complex and has some way to go before
it is easy to apply for Internet users, but
it will be essential for full-scale
electronic commerce to evolve.
Do I need a certificate or digital ID to
buy and/or sell on the Internet?
Not necessarily, but if you are a
merchant, you should get a certificate for
your secure server so that the customer can
ascertain that you are who you say you are.
Assuring the customer of the security of
their transaction and the authenticity of
the merchant is essential to maximize sales
over the Internet.
You can get a server certificate from Verisign
and also read about the use of server
certificates.
The need is less urgent at present for
buyers. Consider current off line credit
card processing. You buy something with a
credit card and the seller calls the card
processing center and verifies the card
number. It does NOT verify that you, the
buyer, are who you say you are. You may have
just stolen the card.
Similarly, at present, you can buy over
the Internet without a digital certificate
or ID which would establish your identity
and card ownership. However, in the future,
expect this to be required for many
transactions.
What is a secure SSL server?
SSL (Secure Sockets Layer) is a program
layer created by Netscape for managing the
security of message transmissions in a
network. Netscape's SSL uses the
public-and-private key encryption system
from RSA, which also includes the use of a
digital certificate.
The client part of SSL is built into
version 4.0 web browsers. If a Web site is
on an SSL server, SSL can be enabled and
specific Web pages can be identified as
requiring SSL access.
SSL is becoming the defacto standard for
secure transactions over the Internet. Note
though, that although this standard ensures
data transfer security and merchant
verification, online credit card processing
requires additional gateways to banks and
credit card processing centers. Nor does it
hide credit card numbers from the merchant.
These are additional layers of electronic
commerce sophistication and rely on
protocols such as SET (secure electronic
transactions). See below.
Explain SET (Secure Electronic
Transactions)
SET (Secure Electronic Transaction) is a
system for ensuring the security of
financial transactions on the Internet. It
was supported initially by MasterCard, Visa,
Microsoft, Netscape, and others.
With SET, a user is given an electronic
wallet (digital certificate) and a
transaction is conducted and verified using
a combination of digital certificates among
the purchaser, a merchant, and the
purchaser's bank in a way that ensures
privacy and confidentiality. SET makes use
of Netscape's Secure Sockets Layer (SSL),
Microsoft's Secure Transaction Technology (STT),
and Terisa System's Secure Hypertext
Transfer Protocol (S-HTTP).
SET has been in the doldrums lately
because of lack of support in the wider
banking community. It is seen as being
somewhat complex and slow -- perhaps
unjustifiably.
Describe the process when someone buys
from my web page with a credit card and
online authorization and processing occurs.
This can get very complex. Try this
explanation of SET from www.whatis.com:
Assume that a customer has a SET-enabled
browser such as Netscape or Microsoft's
Internet Explorer and that the transaction
provider (bank, store, etc.) has a
SET-enabled server.
- The customer opens a MasterCard or
Visa bank account.
- The customer receives a digital
certificate from the bank. This
electronic file functions as a credit
card for online purchases or other
transactions. It includes a public key
with an expiration date. It has been
digitally signed by the bank to ensure
its validity.
- Third-party merchants also receive
certificates from the bank. These
certificates include the merchant's
public key and the bank's public key.
- The customer places an order over a
web page.
- The customer's browser receives and
confirms from the merchant's certificate
that the merchant is valid.
- The browser sends the order
information. This message is encrypted
with the merchant's public key, the
payment information, which is encrypted
with the bank's public key (which can't
be read by the merchant), and
information that ensures the payment can
only be used with this particular order.
- The merchant verifies the customer by
checking the digital signature on the
customer's certificate. This may be done
by referring the certificate to the bank
or to a third-party verifier.
- The merchant sends the order message
along to the bank. This includes the
bank's public key, the customer's
payment information (which the merchant
can't decode), and the merchant's
certificate.
- The bank verifies the merchant and the
message. The bank uses the digital
signature on the certificate with the
message and verifies the payment part of
the message.
- The bank digitally signs and sends
authorization to the merchant, who can
then fill the order.
It's that simple ;-).
One of the stumbling blocks to SET and
similar protocols is the requirement for the
purchaser to have a "digital
wallet". This is a piece of software on
the customer's computer that contains credit
card and digital certificate information and
which is essential to the process. Until
digital wallets are built into browsers so
that customers do not have to download and
install them before making a purchase, this
model of e-commerce standard will languish.
Tell me more about electronic payment
systems?
SET is a standard for electronic payment
systems around which proprietary payment
systems can develop applications.
Other payment systems in use include CyberCash,
Ecash, PayPal.
Consumers will not wish to have to
conform to several different payment system
requirements, eg a CyberCash wallet,
Surelink registration, or Ecash purchases
and so on. Wallet technology, which will
probably be supplied with browsers, will
need to provide seamless support for the
main payment systems.
What are the main types of e-commerce
software and how do they work?
Apart from the standard web tools for
forms processing and database-driven web
backends etc, e-commerce software can be
roughly divided into the following sectors:
1. Shopping cart or shopping bag software
Shopping cart software makes selection and
compilation of orders from web sites easier
for customers. Customers can select, total
and pay by credit card in a more or less,
easy to navigate environment. Examples are
Cart32, InetStore and Net.Commerce from IBM.
2. Back Office integration
One of the advantages of electronic commerce
should be the opportunity to integrate
ordering and invoicing into financial
systems. Such applications would normally
require custom software to be written.
Explain 'smart
cards' and how they will be used in
e-commerce.
Looking like a credit card or other black
stripe card, a smart card is a plastic card
with an embedded microchip that can be
loaded with data and used for telephone
calls, stored cash payments, personal
verification, and a host of applications
that will emerge over the next few years,
including the storage of personal digital
certificates.
Smart cards have their own operating
systems such as JavaCard and Multi OS.
Smart card readers that connect to PCs
are under development and will enable smart
cards to be used in e-commerce over the
Internet, perhaps by storing digital cash
and certificates.
Surely Internet retailing will never
replace the 'shopping center' experience?
Probably not, but for some time there has
been a list of products deemed not to be
"Netable" -- that is, products not
suitable for selling over the Internet. This
list is receding rapidly. Pharmaceuticals
are the latest product to do well on the
web.
Cars sales do big business on the
Internet so successful products are not
confined to smaller transportable items.
How will customers find my site on the
web and how can I keep them coming back?
You need to work at this -- probably much
more than many startup sites do in practice.
Here are the minimal successful
strategies:
Register your site at the top
10-20 search engines: Alta Vista, Go/Infoseek,
Lycos, Web Crawler, Excite, Yahoo, Fast
Search, Ask Jeeves, HotBot, MSN, Goto,
Yahoo, Looksmart, Open Directory, Google,
Iwon, MSN Search, Inktomi, Netscape Search,
Raging, RealNames, WebCrawler, WebTop,
Direct Hit. See the reviews (and links) at SearchEngineWatch
In Australia, register at Anzwers, Web
Wombat and Sofcom. Alternatively, you can
pay someone reputable to register your site
for you -- and there are hundreds of places
that will accept free listings. Checkout www.searchenginewatch.com
for lots of information about search engines
and setting up your pages for high rankings
-- including the use of meta tags.
You can also use a tool like SubZero
Warrior to submit pages to many search
engines and related entities (about 9000,
yes that many!) and to do page ranking
improvements. Not everyone agrees on the
efficacy of these submission spiders. Do a
search at TUCOWS
for various search engine submission
programs (some free or shareware).
Some newsgroups and lists also accept
notice of new sites. Read the group FAQ.
Develop a signature for the bottom
of emails and newsgroup messages. This is an
automatic advertisement for your site
whenever you send a message. You can include
information including URLs and description
of your enterprise in three lines. Don't
exceed four lines.
Place your web address and email
address on ALL possible stationery and
offline advertising. This fundamental
technique has taken some time to get through
to some organizations who build a good site
and then don't bother to let people know it
is available. Put the URL on stationery,
company vehicles, newspaper and television
advertising, caps, t-shirts and absolutely
anywhere it can be seen. We haven't seen it
that much yet in Australia, but watch for
web addresses on the front of buildings.
Contribute to relevant newsgroups,
lists, forums, ezines but not with
unwanted advertising or spam (does this
stand for 'surreptitiously posting
advertising material'?). Check www.deja.com,
and www.liszt.com
to find newsgroups and lists applicable to
your enterprise. Searchable databases of
forums and ezines are also available on the
Net.
Join banner exchange programs and
list in free classifieds if you wish, but
some people avoid these resources because
they deem them not worth the time. In other
words, do as much as you can for free
without spending larger amounts on online
advertising.
The secret to keeping customers coming
back to your site is to build customer
loyalty -- and you need to give them a
reason to come back that does not
necessarily rely on purchasing intent.
Depending on the product, surfers will buy
on impulse -- but you have to have them
browsing the site for this to occur.
Changing content is important: news,
information, forums, chat groups, free
stuff. Providing an email delivered
newsletter is a popular and effective tool
to keep your name in front of customers.
How should I best approach marketing
over the Internet?
A marketing plan should be an integral
part of your Internet business plan. If you
don't have a business plan for Internet
commerce you should get one soon!
The options are to employ someone in
house to pursue marketing full time, or to
employ a consultant to assist you.
You can follow up on marketing techniques
at these sites:
Web Digest for Marketers www.wdfm.com
Ralph Wilson's incomparable www.wilsonweb.com
(Get his newsletters)
Bizweb2000 www.bizweb2000.com
How much does advertising on web pages
or in newsletters cost?
The current rates are anywhere between
$20-$50 per thousand page impressions or ad
views. Other rates are available for click
through advertising (see below).
What do the acronyms CPM, CTR, CPC, CPS
mean in relation to web advertising?
CPM -- Cost per thousand page
impressions, usually meaning advertisement
views by a surfer.
CTR -- Click through rate means
the percentage of site visitors who click on
a banner advertisement to go to the
advertisers site -- often around 1%.
CPC -- Cost per click refers to
the averaged cost of a banner ad campaign
per click. That is, the cost divided by the
number of times a click through to your site
occurs. Say the site you are advertising on
charges $1000/month and the CTR is 1% of
100,000 ad views, then the cost per click is
$1000/1000, or $1 per click.
CPS -- Cost per sale is the
calculation for return on investment of the
ad campaign. Using the above example, if you
make 10 sales out of 1000 click throughs,
then it has cost you $100 per sale which may
or may not be profitable depending on the
profit margin on each sale.
Explain affiliate programs in web
marketing?
Affiliate or associate programs are
business relationships with other ecommerce
vendors in which you get a percentage of
each sale that results from your
recommendation -- usually from your web
site. This works best when the affiliate has
the software to track the customer coming
from your site, and can inspire confidence
in you that your reference is being
recorded.
You can get assistance in setting up
affiliate or associate programs at these
sites:
Linkshare at www.linkshare.com
Refer-It at www.refer-it.com
Targeted advertising is important. What
does it mean in Internet terms?
As with offline advertising, if you can
get your message to a group of customers who
are more likely to be interested in your
product then your sales percentages should
be higher. At search engine sites banner ads
are served according to the search terms you
put in the search box.
The dream of tightly targeted advertising
on the web is evolving slowly. If you
consider that your buying preferences,
newsgroup postings, emails, chat and so on
are subject to possible recording and
subsequent database delivery, you can see
how targeted advertising will be used. If a
cookie detects your presence at a web site,
it could look up your database profile and
serve a banner advertisement based on your
interests. It is even possible to detect
your international domain, and perhaps even
the regional location, using sophisticated
domain lookup procedures.
Expect the sophistication of targeted
advertising on the Internet to increase
dramatically over the next few years.
Why shouldn't I send out 10,000 emails
to prospective customers?
Sending our unsolicited email is bad for
the Internet community and bad for marketers
because you become labelled as a spammer --
and this is the opposite of the 'trust' you
need to encourage business sales on the
Internet. News travels fast! Don't do it.
By all means use 'opt-in' email lists
where the recipient has volunteered to
receive advertising material in a particular
category. Make sure these lists are
maintained by reputable firms.
Better still, develop your own opt-in
list by capturing the email addresses of
visitors to your site. Do this authentically
by offering a regular ezine or newsletter or
some other vehicle for prospective customers
to receive information. You can then offer
products and services in conjunction with
the emailed information.
Can I make a fortune selling over the
Internet?
Same as before: come up with a good idea,
work hard, know how to market it, niche
product, be first and -- good luck.
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