Advantages and limitations of Internet marketing

 

Advantages

Internet marketing is inexpensive when examining the ratio of cost to the reach of the target audience. Companies can reach a wide audience for a small fraction of traditional advertising budgets. The nature of the medium allows consumers to research and to purchase products and services conveniently. Therefore, businesses have the advantage of appealing to consumers in a medium that can bring results quickly.

Internet marketers also have the advantage of measuring statistics easily and inexpensively; almost all aspects of an Internet marketing campaign can be traced, measured, and tested, in many cases through the use of an ad server. The advertisers can use a variety of methods, such as pay per impression, pay per click, pay per play, and pay per action. Therefore, marketers can determine which messages or offerings are more appealing to the audience. The results of campaigns can be measured and tracked immediately because online marketing initiatives usually require users to click on an advertisement, to visit a website, and to perform a targeted action.

Problems of online advertising

Privacy

The use of online advertising has implications on the privacy and anonymity of users. 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 behavioral advertising, with a generic cookie in the browser stopping behavioral 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.

Limitations

• One of the challenges that Internet marketers face (as does the general public) is that many internet products are outright scams or promoted with deception making it difficult to know which one is worth buying. This is especially the case with products that are supposed to train or aid Internet marketers in making money. While the quality of products has improved in the past few years, ethics are often still missing in online marketing. Many so-called money making products are “empty boxes” in which there is essentially nothing there, yet a buyer is to make money by reselling this empty box to others. Pyramid schemes are also still prevalent.
• The consumer is unable to physically feel or try on the product which can be a limitation for certain goods. However a survey of consumers of cosmetics products shows that email marketing can be used to interest a consumer in visiting a store to try a product or to speak with sales representatives; from here a purchase decision can be made
• The marketer will not be able to use personal interaction to influence the audience as the marketing is completely based on the advertisement and the information that the advertisement might lead to (websites, blogs and other channels).

Security concerns

Information security is important both to companies and consumers that participate in online business. Many consumers are hesitant to purchase items over the Internet because they do not believe that their personal information will remain private. Some companies that purchase customer information offer the option for individuals to have their information removed from their promotional redistribution, also known as opting out.

However, many customers are unaware if and when their information is being shared, and are unable to stop the transfer of their information between companies if such activity occurs. Additionally, companies holding private information are vulnerable to data attacks and leaks. Internet browsing privacy is a related consumer concern. Web sites routinely capture browsing and search history which can be used to provide targeted advertising. Privacy policies can provide transparency to these practices. Spyware prevention software can also be used to shield the consumer.

Another consumer e-commerce concern is whether or not they will receive exactly what they purchase. Online merchants have attempted to address this concern by investing in and building strong consumer brands (e.g., Amazon.com, eBay, and Overstock.com), and by using merchant and feedback rating systems and e-commerce bonding solutions. All these solutions attempt to assure consumers that their transactions will be free of problems because the merchants can be trusted to provide reliable products and services. Additionally, several major online payment mechanisms (credit cards, PayPal, Google Checkout, etc.) have provided back-end buyer protection systems to address problems if they occur.

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 audience-inappropriate material.

The ethical propriety of advertisers that use web searches for competitors’ brands to trigger their own ads has been questioned.

Some argue that website operators who 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. Many website owners deal directly with companies that want to place ads, meaning that the website linked to by the advertisement is legitimate.

The use 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 compliance with Can Spam Requirements.

Internet marketing scams

In May 2012, The Verge writer Joseph L. Flatley reported that the terms “Internet marketing” and “Internet marketer” have been co-opted by a loose association of confidence artists running online get-rich-quick schemes.

Usage trends

Technological advancements in the telecommunications industry have dramatically affected online advertising techniques. Many firms are embracing a paradigm that is shifting the focus of advertising methodology from traditional text and image advertisements to those containing more recent technologies like JavaScript and Adobe Flash.

As a result, advertisers can more effectively engage and connect their audience with their campaigns that seek to shape consumer attitudes and feelings towards specific products and services. Some new trends for internet marketing are inbound marketing, mobile marketing and improved usage of analytics. Inbound marketing refers to content and design, is the information and display relevant and attractive enough to entice your audience.

Mobile marketing is huge, with over 75% of the world having access to a mobile devices, it’s imperative that companies go mobile. Analytic improvement can now discover sentiment to forecast emerging trends in the industry, giving companies the knowledge they need to determine best strategies for increasing sales.

Effects on industries

The number of banks offering the ability to perform banking tasks over the internet has increased. Online banking appeals to customers because it is often faster and considered more convenient than visiting bank branches.

Advertising industry

In addition to the major effect internet marketing has had on the technology industry, the effect on the advertising industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually.

PricewaterhouseCoopers reported that US$16.9 billion was spent on Online
marketing in the U.S. in 2006.

This has caused a growing impact on the United States’ electoral process. In 2008, candidates for President heavily utilized Internet marketing strategies to reach constituents. During the 2007 primaries, candidates added, on average, over 500 social network supporters per day to help spread their message. President Barack Obama raised over US$1 million in one day during his extensive Democratic candidacy campaign, largely due to online donors.

Several industries have heavily invested in and benefited from internet marketing and online advertising. Some of them were originally brick and mortar businesses such as publishing, music, automotive or gambling, while others have sprung up as purely online businesses, such as digital design and media, blogging, and internet service hosting.

Source: Wikipedia