Internet marketing is defined as the marketing of products and services over the Internet. It is also known as web marketing, digital marketing, online marketing, Internet advertising or e-marketing. The Internet as a medium has allowed firms and business to make themselves more visible to customers by disseminating information at lower costs and reaching global audiences. Companies set ...
Internet marketing is defined as the marketing of products and services over the Internet. It is also known as web marketing, digital marketing, online marketing, Internet advertising or e-marketing. The Internet as a medium has allowed firms and business to make themselves more visible to customers by disseminating information at lower costs and reaching global audiences. Companies set virtual models of their business activity as a way to raise awareness and interest in their products or services.
Internet marketing is a combination of Internet-related activities that target customers directly and indirectly. These Internet marketing activities are part of the customer engagement cycle and may include email marketing campaigns, search engine optimization (SEO), banner advertisements on certain websites and Web 2.0 strategies. Such interactive web strategies aim at increasing traffic on the company's homepage. Internet marketing also uses the creative and technical aspects of the web, such as web design, development, advertising and sales to promote specific services and products online.
There are several business models which Internet marketing usually follows, such as brokerage, advertising, infomediary, merchant, affiliate, community, subscription and utility model. In the first model, the brokerage model, brokers act like "market-makers," because they connect buyers and sellers and facilitate transactions between them. Products and services are sold business-to-business (B2B), customer-to-customer (C2C) or business-to-customer (B2C). For each fulfilled transaction the broker charges the company a certain fee. The web-advertising model is based on embedding banner ads on websites which provide services such as email, chat or other content. Those advertising messages are usually the main source of profit for the broadcaster which is generated from the volume of visitor traffic.
The third business model, the infomediary model, studies the surfing behavior of visitors and their online purchasing habits. The role of infomediaries is to offer free online services or products as a way to collect information about customers and then sell the collected data to other businesses. The merchant model relies on the so-called "e-tailers," online wholesalers and retailers, who offer either the same goods and services via the Internet, or products that are unique to the web. The affiliate model is a marketing practice which uses affiliates to promote the company's products and services for a percentage of its revenue. This is a "pay-for-performance" model, because the affiliate is paid only after the transaction is completed and there are no additional costs for the merchant if it is not. Banner-exchange, pay-per-click and revenue sharing programs are examples of affiliate marketing.
The community model relies on customers' loyalty to a brand or service and as a result they form a community or group around that industry or business. Such loyal users are the main contributors of profit and content to the particular website, because they share similar tastes and needs. Contributions can be voluntary either in a form of donations, professional expertise or experience, or users pay subscription fee to access the site content and its premium services. Such is the practice of the subscription model under which customers pay for quality services and brands or trustworthy information. Examples of subscription services include stock information and some educational sites. Under the utility model, advertisers apply the "pay as you go approach." Visitors are charged by the byte, or allowed to use micropayments which cover online transactions of low value, usually under the processing fee of a credit card.
Internet marketing benefits both companies and customers because the Internet as a medium allows businesses to reach target audiences at low costs and purchasers to access global suppliers. However there are limitations to this practice because via the Internet, customers cannot touch or try on goods before purchasing them. Also there are privacy and security issues connected with Internet marketing and electronic commerce. There are consumers who are reluctant to purchase goods over the Internet because they do not want to share their bank account information. Many consumers are afraid not only that their personal information may become public, but also that they can become victims of Internet fraud. There are cases when the purchased item which the customer receives is completely different from the advertised one or others in which the customer does not receive the product at all. As a result, big companies try to engage in "accountable marketing" practices which would make them reliable and trustworthy providers of services and products. Their aim is to determine the needs and wants of customers and then meet them more effectively and efficiently than their competitors.