Advertising Techniques in the Digital World: The New Era of Social Communications

Advertising Techniques in the Digital World: The New Era of Social Communications

Eva Lahuerta-Otero (University of Salamanca, Spain) and Rebeca Cordero-Gutiérrez (University of Salamanca, Spain)
DOI: 10.4018/978-1-4666-9787-4.ch083

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Electronic Commerce: The New Way of Conducting Businesses

E-commerce can be defined as the use of the Internet, the Web, and apps to transact business. It refers to digitally enabled commercial transactions between and among organizations and individuals (Laudon & Traver, 2013). Although it is difficult to determine when e-commerce began, the development of the Internet and the World Wide Web has changed the way in which transactions are conducted. Constant improvements on information and communication technologies and entrepreneurial innovation have dramatically changed the online competitive landscape. All statistics confirm the fast pace at which the industry is developing. Worldwide B2C e-commerce sales amounted to more than 1.2 trillion US dollars in 2013, and US mobile commerce revenue accounted for 38 billion US dollars (Statista, 2015). Global B2C commerce reached 1,471 trillion US dollars in 2014, increasing 20% over the previous year and it is expected to grow in more than 200 billion new dollars per year (eMarketer, 2014a).

Electronic commerce technology possesses eight unique features that explain both the challenge it poses for traditional commerce and the growing interest of firms in establishing an effective online presence (Laudon & Traver, 2013):

  • Ubiquity: The Internet or Web technology is available everywhere. This means traditional market extends beyond boundaries. E-commerce transforms marketplaces into marketspaces. Thus, it is cheaper and more convenient for customers to shop online.

  • Global Reach: The technology reaches across national boundaries across the world. Electronic commerce creates e-markets where billions of customers and millions of businesses can interact.

  • Universal Standards: There is a set of Internet standards that are common, inexpensive and can be applied globally.

  • Richness: Video, audio and text messages are possible. The consumer experience is enhanced by means of divers rich-media advertising messages. Even virtual tours are available so customers can mitigate the risk associate to online purchases.

  • Interactivity: The technology works in a way that allows bi-directional communication between consumers and businesses. The customer is now a participant in the purchasing process and can also become a co-creator of content.

  • Information Density: The technology allows for a free, updated and constant flow of information. Information processing, storage and communication costs drop significantly making transactions more efficient by reducing information asymmetries on the marketspace.

  • Personalization/Customization: The e-commerce technology allows personalized messages to be delivered to individuals as well as groups. This means e-commerce can distribute unique, adapted messages to specific target customers or segments.

  • Social Technology: E-commerce has brought the era of user-generated content and social network sites. Businesses cannot conceive their online presence without actively engaging in social networks.

Key Terms in this Chapter

KPI (Key Performance Indicators): A set of quantifiable measures that a company uses to compare performance in terms of meeting their strategic and operational goals.

Return on Investment (ROI) or Return on Advertising Spend (ROAS): In online advertising, it is the revenue generated by a digital marketing campaign.

Backlinks: In search engine optimization (SEO) terminology, a backlink is a hyperlink that links from a Web page, back to an own Web page or Web site.

Conversion: A completed activity, online or offline is important to the success of the business.

Edge Rank: An algorithm that Facebook uses for showing contents adapted to users.

Digital Advertising: A group of marketing actions for promoting goods or services in a digital platforms, such as email, social media websites, banner ads on mobile or Web sites, among others.

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