Revenue sharing

Revenue sharing is the splitting of operating profits and losses between the general partner(s) and limited partners in a limited partnership. More generally, the practice of sharing operating profits with a company's employees, or of sharing the revenues resulting between companies in an alliance.

Revenue sharing, as it pertains to the United States government, was in place from 1972-1987. Under this policy, Congress gave an annual share of the federal tax revenue to the states and their cities, counties, isthmuses and townships. Revenue sharing was extremely popular with state officials, but it lost federal support during the Reagan Administration. Revenue sharing was ended in 1987 to help narrow the national government's deficit. In 1987, revenue sharing was primarily replaced with block grants.[citation needed]

Revenue sharing, also known as cost per sale is with about 80%[1] the predominant compensation method used in affiliate marketing on the internet. A common scenario is an ecommerce web site operator who pays an affiliate a percentage of the order amounts (usually excluding tax, shipping and other 3rd party cost that are part of the customers order), generated by visitors of the ecommerce web site, that were referred by the affiliate via various different methods.

Pay per click (PPC)

Pay per click (PPC) is an advertising model used on websites, advertising networks, and search engines where advertisers only pay when a user actually clicks on an ad to visit the advertiser's website. Advertisers bid on keywords they believe their target market would type in the search bar when they are looking for a product or service. When a user types a keyword query matching the advertiser's keyword list, the advertiser's ad may appear on the search results page. These ads are called a "Sponsored link" or "sponsored ads" and appear next to, and sometimes, above the natural or organic results on the page. The advertiser pays only when the user clicks on the ad. Pay per click advertising is a search engine marketing technique.

Pay per click ads may also appear on content network websites. In this case, ad networks such as Google Adsense and Yahoo! Publisher Network attempt to provide ads that are relevant to the content of the page where they appear, and no search function is involved.

While many companies exist in this space, Google AdWords, Yahoo! Search Marketing, and MSN adCenter are the largest network operators as of 2007. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). Very popular search terms can cost much more on popular engines. Arguably this advertising model may be open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against this.
Contents

1 Categories
1.1 Keyword PPCs
1.2 Online Comparison Shopping Engines
1.3 Service PPCs
1.4 Pay per call
2 History
3 See also
4 External links
5 References

Categories
PPC engines can be categorized into two major categories "Keyword" or sponsored match and "Content Match". Sponsored match display your listing on the search engine itself whereas content match features ads on publisher sites and in newsletters and emails. [1]
There are other types of PPC engines that deal with Products and/or services. Search engine companies may fall into more than one category. More models are continually evolving. Pay per click programs do not generate any revenue solely from traffic for sites that display the ads. Revenue is generated only when a user clicks on the ad itself.

Keyword PPCs

Advertisers using these bid on "keywords", which can be words or phrases, and can include product model numbers. When a user searches for a particular word or phrase, the list of advertiser links appears in order of the amount bid. Keywords, also referred to as search terms, are the very heart of pay per click advertising. The terms are guarded as highly valued trade secrets by the advertisers, and many firms offer software or services to help advertisers develop keyword strategies. Content Match, will distribute the keyword ad to the search engine's partner sites and/or publishers that have distribution agreements with the search engine company.

As of 2007, notable PPC Keyword search engines include: Google AdWords, Yahoo! Search Marketing, Microsoft adCenter, Ask, LookSmart, Miva, Kanoodle, Yandex and Baidu.

Online Comparison Shopping Engines

Product" engines let advertisers provide "feeds" of their product databases and when users search for a product, the links to the different advertisers for that particular product appear, giving more prominence to advertisers who pay more, but letting the user sort by price to see the lowest priced product and then click on it to buy. These engines are also called Product comparison engines or Price comparison engines.

Some Online Comparison Shopping engines such as Shopping.com use a PPC model and have a defined rate card. [2] whereas others such as Froogle (also know as Google Product Search) do not charge any type of fee for the listing but still require an active product feed to function.[3]
Noteworthy PPC Product search engines include: Shopzilla, NexTag, and Shopping.com.

Service PPCs
"Service" engines let advertisers provide feeds of their service databases and when users search for a service offering links to advertisers for that particular service appear, giving prominence to advertisers who pay more, but letting users sort their results by price or other methods. Some Product PPCs have expanded into the service space while other service engines operate in specific verticals.
Noteworthy PPC services include NexTag, SideStep, and TripAdvisor.

Pay per call

Similar to pay per click, pay per call is a business model for ad listings in search engines and directories that allows publishers to charge local advertisers on a per-call basis for each lead (call) they generate. The term "pay per call" is sometimes confused with "click to call"[1]. Click-to-call, along with call tracking, is a technology that enables the “pay-per-call” business model.
Pay-per-call is not just restricted to local advertisers. Many of the pay-per-call search engines allows advertisers with a national presence to create ads with local telephone numbers.
According to the Kelsey Group, the pay-per-phone-call market is expected to reach US$3.7 billion by 2010.

History

In February 1998, Jeffrey Brewer of Goto.com, a 25 employee startup company (later Overture, now part of Yahoo!), presented a PPC search engine proof-of-concept to the TED8 conference in California.[4] This and the events that followed created the PPC advertising system. Credit for the concept of the PPC model is generally given to the Idealab and Goto.com founder, Bill Gross.

Cost Per Action or CPA

Cost Per Action or CPA (as it is often initialized to) is a phrase often used in online advertising and online marketing circles.
CPA is considered the optimal form of buying online advertising from a direct response advertiser's point of view. An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be performed is determined by the advertiser.) Google has incorporated this model into their Google AdSense [1] offering while eBay has recently announced a similar pricing called AdContext.
The CPA can be determined by different factors, depending where the online advertising inventory is being purchased.
Contents

1 CPA as "Cost Per Acquisition"
2 Effective cost per action
3 See also
4 References


CPA as "Cost Per Acquisition"
CPA is sometimes referred to as "Cost Per Acquisition", which has to do with the fact that most CPA offers by advertisers are about acquiring something (mostly new customers, prospects or leads). Using the term "Cost Per Acquisition" instead of "Cost Per Action" is not incorrect. It is actually more specific. "Cost Per Acquisition" is included in "Cost Per Action", but not all "Cost Per Action" offers can be referred to as "Cost Per Acquisition".

Effective cost per action
A related term, eCPA or effective Cost Per Action, is used to measure the effectiveness of advertising inventory purchased (by the advertiser) via a CPC, CPM, or CPT basis.
eCPA is used to measure the effectiveness of advertising inventory purchased (by the advertiser) via a CPC, CPM, or CPT basis. In other words, the eCPA tells the advertiser what they would have paid if they purchased the advertising inventory on a CPA basis (instead of a CPC, CPM, or CPT basis).

E-mail marketing

Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. However, the term is usually used to refer to:
Sending emails with the purpose of enhancing the relationship of a merchant with its current or old customers and to encourage customer loyalty and repeat business.
Sending emails with the purpose of acquiring new customers or convincing old customers to buy something immediately.
Adding advertisements in emails sent by other companies to their customers.
Emails that are being sent on the Internet (Email did and does exist outside the Internet, Network Email, FIDO etc.)
Researchers estimate that US firms alone spent $400 million on email marketing in 2006.[1]
Contents

1 Advantages
2 Disadvantages
3 CAN-SPAM compliance
4 Opt-in email advertising
5 Terms
6 See also
7 References

Advantages
Email marketing (on the Internet) is popular with companies because:
The advantage of a mailing list is clearly the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.[2]
Compared to other media investments such as direct mail or printed newsletters, it is less expensive.

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.[3]
It is instant, as opposed to a mailed advertisement, an email arrives in a few seconds or minutes.
It lets the advertiser "push" the message to its audience, as opposed to a website that waits for customers to come in.
It is easy to track. An advertiser can track users via web bugs, bounce messages, un-subscribes, read-receipts, click-throughs, etc. These can be used to measure open rates, positive or negative responses, correlate sales with marketing.
Advertisers can generate repeat business affordably and automatically
Advertisers can reach substantial numbers of email subscribers who have opted in (consented) to receive email communications on subjects of interest to them
Over half of Internet users check or send email on a typical day.[4]
Specific types of interaction with messages can trigger other messages to be automatically delivered.

Specific types of interaction with messages can trigger other events such as updating the profile of the recipient to indicate a specific interest category.
Green - email marketing is paper-free

Disadvantages
Many companies use email marketing to communicate with existing customers, but many other companies send unsolicited bulk email, also known as spam.

Illicit email marketing antedates legitimate email marketing, since on the early Internet (see Arpanet) it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in email marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate.

It is frequently difficult for observers to distinguish between legitimate and spam email marketing. First off, spammers attempt to represent themselves as legitimate operators, obfuscating the issue. Second, direct-marketing political groups such as the U.S. Direct Marketing Association (DMA) have pressured legislatures to legalize activities which many Internet operators consider to be spamming, such as the sending of "opt-out" unsolicited commercial email. Third, the sheer volume of spam email has led some users to mistake legitimate commercial email (for instance, a mailing list to which the user subscribed) for spam — especially when the two have a similar appearance, as when messages include HTML and flashy graphics.

Due to the volume of spam email on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial emails frequently get caught by filters, and hidden; however, it is somewhat less common for email users to complain that spam filters block legitimate mail.

Companies considering an email marketing program must make sure that their program does not violate spam laws such as the United States' CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act),[5] the European Privacy & Electronic Communications Regulations 2003 or their Internet provider's acceptable use policy. Even if a company follows the law, if Internet mail administrators find that it is sending spam it is likely to be listed in blacklists such as SPEWS.

CAN-SPAM compliance
Because the CAN-SPAM Act of 2003 authorizes a USD 11,000 penalty per violation for spamming each individual recipient, many commercial email marketers within the United States utilize a service or special software that helps ensure compliance with the Act. A variety of older systems exist which 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 which may not have given valid permission.

In addition to satisfying legal requirements, service providers stepped in to help customers to set up and manage their own email marketing campaigns. The services provide email templates, automatically handle subscriptions and removals, and generate statistics on how many messages were received and openned, and whether the recipients clicked on any links within the messages.

Opt-in email advertising
Opt-in email advertising or permission marketing is a method of advertising by electronic mail wherein the recipient of the advertisement has consented to receive it. It is one of several ways developed by marketers to eliminate the disadvantages of email marketing.[6]
Email has become a very popular mode of communication across the world. It has also become extremely popular to advertise through. Some of the many advantages of advertising through email are the direct contact with the consumer and is “inexpensive, flexible, and simple to implement” (Fairhead, 2003). There are also disadvantages attached to email advertising such as, alienating the consumer because of overload to messages or the advertisement getting deleted without getting read.

Permission email marketing may evolve into a technology that uses a handshake protocol between sender and receiver (Fairhaed, 2003). 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 (often referred to as spam). Ideally, opt-in email advertisements will be more personal and relevant to the consumer than untargetted advertisements.

A common example of permission marketing is a newsletter sent to a firm’s customers. Newsletters like this are a way to let customers know about upcoming events or promotions, or new products. 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 this newsletter.
With a foundation of opted-in contact information stored in a database, marketers can automatically send out promotional materials. The marketers can also segment their promotions to specific market segments.

Terms
Auto-responders
Automatic replies sent by the email software of the recipient after receipt of an email.
Bounce messages
Email sent back to the server that originally sent the email. Returned by the sending server if a message cannot be delivered.
Bounce rate
Ratio of bounced emails to total emails sent.
Bulk, bulking
Terms used by spammers to refer to their line of work. Mostly synonymous with spam or UCE.
Call to action
Words in the email that entice recipients to do something.
Click-through
The action of clicking on a link.
Click-through rate (CTR)
Ratio of click-throughs to total emails sent.
Commercial email
Any email sent for commercial purpose; for instance, an advertisement to buy a product or service, an order confirmation from an online store, or a paid subscription periodical delivered by email. Commercial email is not synonymous with spam; see unsolicited commercial email below.
Cross-sell
Cross-sell is a practice of suggesting related products or services to a customer who is considering buying something. It is the most widely used term in relevance driven emarketing also known as behavioral emarketing.
Demographic
Characteristic of a group of email recipients.
Double opt-in
A new subscriber first gives his/her address to the list software (for instance, on a Web page) and then confirms subscription after receiving an email asking if it was really him/her. This ensures that no person can subscribe someone else out of malice or error. Claims of double opt-in are often made by spammers when they have not followed this process. Double opt-in may also be called confirmed subscription or closed-loop opt-in.
Double opt-out
Same as Opt-In, but the recipient unsubscribes instead of subscribes. Borderline spam operations frequently make it difficult to unsubscribe from lists, in order to keep their lists large. Hard-core spam operations make it impossible -- they treat opt-out requests as confirmations that the address works and is read.
Email Blast
An email sent to multiple recipients, intended to inform them of announcements, events or changes. A variety of methods can be used to send the same email to multiple recipients: for example: using options within an email program, using the mail merge option within a word processing program, or using a commercial email list programs.
Express consent
A recipient agrees actively to subscribe by checking a box on a web form, paper form or by telephone. A recipient not unchecking a box is not express consent.
False positives
Email that is not spam but is labeled spam by a spam filter of the recipient. Note that email marketers may have different opinions of what is "spam" than email recipients.
Format
Emails can be sent in plain text, HTML, text and HTML (MIME) or Microsoft's rich text format
Hard bounce
Bounced email that could never get through because the email address doesn't exist or the domain doesn't exist.
List broker
Reseller of lists of email addresses.
List building
Process of generating a list of email addresses for use in email campaigns.
List host
Web service that provides tools to manage large email address databases and to distribute large quantities of emails.
List manager
Owner or operator of opt-in email newsletters or databases. Also software used to maintain a mailing list.
Look and feel
Appearance, layout, design, functions & anything not directly related to the actual message on an email.
Open rate
Email open rate measures the ratio of emails "opened" to the number sent or "delivered." The ratio is calculated in various ways, the most popular is: emails delivered (sent - hard bounces) /unique opens.
Opt-in
The action of agreeing to receive emails from a particular company, group of companies or associated companies, by subscribing to an email list.
Opt-out
A mailing list which transmits emails to people who have not subscribed and lets them "opt-out" from the list. The subscribers' email addresses may be harvested from the web, USENET, or other mailing lists. ISP policies and some regions' laws consider this equivalent to spamming.
Personalization
The use of technology and customer information to tailor emails between a business and each individual customer. Using information previously obtained about the customer, the email is altered to fit that customer's stated needs as well as needs perceived by the business based on the available customer information, for the purpose of better serving the customer by anticipating needs, making the interaction efficient and satisfying for both parties and building a relationship that encourages the customer to return for subsequent purchases.
Privacy
The Privacy Act of 1974, Public Law 93-579, safeguards privacy through creating four procedural rights in personal data. It requires government agencies to show an individual any records kept on him/her; also requires agencies to follow "fair information practices" when gathering and handling personal data. It places restrictions on how agencies can share an individual's data with other people and agencies and also lets individuals sue the government for violating its provisions.
Rental list
A mailing list that can only be used once or for a limited time. The user of the list pays the owner of the list less money than if he/she would have bought the list outright. Note that this term is usually used for lists generated by address harvesting or other means; the investment made by the list creator does not correlate with the permission of the email recipients. Many firms who "rent" or "buy" a list face spam complaints afterward from persons who never subscribed.
Segmentation (or Targeting)
The use of previously gathered information to send emails of a particular offer to a subset of the list.
Soft bounce
A soft bounce is an email that gets as far as the recipient's mail server but is bounced back undelivered before it gets to the intended recipient. it might occur because the recipient's inbox is full. A soft bounce message may be deliverable at another time or may be forwarded manually by the network administrator in charge of redirecting mail on the recipient's domain. On the other hand, a hard bounce is an email message that has been returned to the sender because the recipient's address is invalid.
Spam or UBE (Unsolicited Bulk email)
From the sender's point-of-view, spam is a form of bulk mail, often sent to a list obtained by companies that specialize in creating email distribution lists. To the receiver, it usually seems like junk email. Spam is equivalent to unsolicited telemarketing calls except that the user pays for part of the message since everyone shares the cost of maintaining the Internet. Spammers typically send a piece of email to a distribution list in the millions, expecting that only a tiny number of readers will respond to their offer. The term spam is said to derive from a famous Monty Python sketch ("Well, we have Spam, tomato & Spam, egg & Spam, Egg, bacon & Spam...") that was current when spam first began arriving on the Internet. SPAM is a trademarked Hormel meat product that was well-known in the U.S. Armed Forces during World War II.
Spam filter
Software that is usually installed in the users email client, with the purpose of avoiding spam email to get into the client's inbox or at least to be flagged as such.
Subject line
It is one of the most important issues in email marketing. The better the subject line of an email, the better probability of being opened by the recipient.
Targeting (or segmentation)
Sending emails to a subset of a mailing list based on a specific filter, trying to improve CTR and/or open ratios.
Tracking
The act of reporting CTR, open ratios, bounces, etc.
Trigger based messaging
Triggering a message based on an event or interaction with a previous message. Popular for customers who request more information
Unique click
During a particular period, a visitor to a website could click several times on a particular link, but during that period it is counted only as one and considered a unique visitor.
Unsolicited commercial email (UCE)
The subset of email spam that is also commercial, usually of an advertising nature, sent at the expense of the recipient without his or her permission. Sending UCE is an offense against all major ISPs' terms of service, and is a crime in some jurisdictions

Interactive Advertising

Interactive Advertising the use of interactive media to promote and/or influence the buying decisions of the consumer in an online and offline environment. Interactive advertising can utilise media such as the Internet, interactive television, mobile devices (WAP and SMS), as well as kiosk-based terminals.

Interactive advertising affords the marketer the ability to engage the consumer in a direct and personal way, enabling a sophisticated and dimensional dialogue, which can affect a potential customer's buying decisions particularly in an e-commerce environment.
Perhaps one of the most effective implementations of interactive advertising is so-called Viral marketing. This technique uses images, texts, web links, Flash animations, audio/video clips etc., passed from user to user chain letter-style, via email. A notable example of this is the Subservient Chicken, a campaign by Burger King to promote their new line of chicken sandwiches and the "Have It Your Way" campaign.

Agencies and Designers
As the internet has expanded so has the interactive advertising industry, and most - if not all - of the major advertising players have a dedicated interactive business. These range from the global advertising powerhouses (AtmosphereBBDO, Ogilvy Interactive, Tribal DDB etc.) to smaller specialised 'boutiques' (Adrian Adams Inc., Danny Smith, Space 150, META Design, RED Interactive Agency, The Romann Group etc.), to great creative directors John Daylois, Gaby Castellanos, Danny Smith.

Display advertising

Display advertising is a type of advertising that may, and most frequently does, contain graphic information beyond text such as logos, photographs or other pictures, location maps, and similar items. In periodicals it can appear on the same page with, or a page adjacent to, general editorial content; as opposed to classified advertising, which generally appears in a distinct section and was traditionally text-only in a limited selection of typefaces (although the latter distinction is no longer sharp).
Billboards are one example of a very common display ad.

Internet marketing

Internet marketing, also referred to as Online Marketing, is Marketing that uses the Internet. The Internet has brought many unique benefits to marketing that include very low costs in distributing information and media to a global audience. However, the interactive nature of the media, both in terms of instant response, and in eliciting response at all, are both desirable qualities of internet marketing.
Internet marketing ties together both the creative and technical aspects of the internet, including design, development, advertising and sales. Internet Marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising and viral marketing
Contents.

1 Definition and scope
2 Business models
2.1 Advantages
3 Limitations
4 Security concerns
5 Effects on industries
6 Recent issues
7 See Also
8 References
9 External Links


Definition and scope

Internet marketing is most commonly a component of electronic commerce, but Internet marketing campaigns are also used to drive a marketing message for services that cannot even be ordered online.
Internet marketing can sometimes include information management, public relations, customer service, market research, and sales. Electronic commerce and Internet marketing have become popular as Internet access is becoming more widely available and used. Well over one third of consumers who have Internet access in their homes report using the Internet to make purchases.(Devang, 2007)

Business models

Internet marketing is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies doing business with each other, whereas B2C involves selling directly to the end consumer (see Malala, 2003)[1] When Internet marketing first began, the B2C model was first to emerge. B2B transactions were more complex and came about later. A third, less common business model is peer-to-peer (P2P), where individuals exchange goods between themselves. An example of P2P is Kazaa, which is built upon individuals sharing files.

Internet marketing can also be seen in various formats. One version is name-your-price (e.g. Priceline.com). With this format, customers are able to state what price range they wish to spend and then select from items at that price range. With find-the-best-price websites (e.g. Hotwire.com), Internet users can search for the lowest prices on items. A final format is online auctions (e.g. Ebay.com) where buyers bid on listed items.

It should be noted, however; as described above, under history, that current use of the term internet marketing commonly refers to the use of direct response marketing strategies, that were traditionally used in direct mail, radio, and TV infomercials, applied to the internet business space. When professionals and entrepreneurs commonly refer to "internet marketing" it is this model that they are often referring to.

Advantages

Some of the benefits associated with Internet marketing include the availability of information. Consumers can log onto the Internet and learn about products, as well as purchase them, at any hour. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to both national and international market places. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive.

Furthermore, since exposure, response and overall efficiency of digital media is much easier to track than that of traditional "offline" media, Internet marketing offers a greater sense of accountability for advertisers.

Compared to other types of media marketing (i.e. print, radio and TV), Internet marketing is growing very fast. It's also gaining popularity among small businesses and even consumers when trying to monetize their blog or website. The measurability of the internet as a media makes it easier to experience innovative e-marketing tactics that will prove a better Cost of Acquisition than other media. However, in most developed countries, internet marketing and advertising spending is only around 5%, while TV, radio, and print are more.

Limitations
Limitations of Internet marketing create problems for both companies and consumers. Slow Internet connections can cause difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information. Internet marketing does not allow shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. Some e-commerce vendors have implemented liberal return policies to reassure customers.

Germany for example introduced a law in 2000 (Fernabsatzgesetz - later incorporated into the BGB), that allows any buyer of a new product over the internet to return the product on a no-questions-asked basis and get a full return. This is one of the main reasons why in Germany internet shopping became so popular. Another limiting factor, particularly with respect to actual buying and selling, is the adequate development (or lack thereof) of electronic payment methods like e-checks, credit cards, etc. Additionally, there is the need to drive people to the site.

Without other collateral such as print, television or radio (with print being the most effective due to the longevity of the piece compared to an ad on the radio or tv) it can often be difficult for the consumer or other businesses to find any specific address without prior knowledge.

Security concerns
For both companies and consumers that participate in online business, security concerns are very important. Many consumers are hesitant to buy items over the Internet because they do not trust that their personal information will remain private. Recently, some companies that do business online have been caught giving away or selling information about their customers. Several of these companies have guarantees on their websites, claiming customer information will be private. By selling customer information, these companies are breaking their own, publicized policy. Some companies that buy customer information offer the option for individuals to have their information removed from the database (known as opting out). However, many customers are unaware that their information is being shared and are unable to stop the transfer of their information between companies.

Security concerns are of great importance and online companies have been working hard to create solutions. Encryption is one of the main methods for dealing with privacy and security concerns on the Internet. Encryption is defined as the conversion of data into a form called a cipher. This cipher cannot be easily intercepted unless an individual is authorized by the program or company that completed the encryption. In general, the stronger the cipher, the better protected the data is. However, the stronger the cipher, the more expensive encryption becomes.

Effects on industries
Internet marketing has had a large impact on several industries including music, banking, and flea markets - not to mention the advertising industry itself.
In the music industry, many consumers have begun buying and downloading MP3s over the Internet instead of simply buying CDs. The debate over the legality of duplicating MP3s has become a major concern for those in the music industry.

Internet marketing has also affected the banking industry. More and more banks are offering the ability to perform banking tasks online. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently, over 50 million U.S. adults now bank online. Online banking is now the fastest-growing Internet activity. The increasing speed of Internet connections is the main reason for the fast-growth. Of those individuals who use the Internet, 44% now perform banking activities over the Internet.

As Internet auctions have gained popularity, flea markets are struggling. Unique items that could previously be found at flea markets are being sold on eBay instead. eBay has also affected the prices in the industry. Buyers and sellers often look at prices on the website before going to flea markets and the eBay price often becomes what the item is sold for. More and more flea market sellers are putting their items up for sale online and running their business out of their homes.
The effect on the Ad industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually.[2][3][4] (2007-06-18) PricewaterhouseCoopers reported US Internet marketing spend totalled $16.9 billion in 2006.
As Advertisers increase and shift more of their budgets online, it is now overtaking radio in terms of market share

Recent issues
In November 2004, a lawsuit was filed against Bonzi Buddy software. The lawsuit alleged that Bonzi's banner ads were deceptive. These ads often looked like Microsoft Windows message boxes. Internet users would run across the ads and when they attempted to close the boxes, they found themselves redirected to a website determined by Bonzi.
On May 27, 2005, Bonzi Buddy agreed to change the format of its ads so they did not resemble Windows message boxes. The boxes will now contain the word "Advertisement" so computer users know what they are looking at. The boxes will also no longer carry buttons that do not perform the correct actions.

Sales tax issues have also recently become debated. In the USA, the current laws require that buyers of online products pay their state all due taxes on these goods at the end of the year, along with their other state taxes. However, most consumers do not appear to be making these payments. Thirteen states have now begun encouraging Internet businesses to collect sales tax on every sale. These states are currently not forcing the companies to collect the tax. However, it appears that if companies do not begin collecting the sales tax on their own, states will begin forcing the companies to do so. The states are claiming that each year they lose $15 billion in unpaid sales taxes associated with online purchases.

Internet marketing

Internet marketing, also referred to as Online Marketing, is Marketing that uses the Internet. The Internet has brought many unique benefits to marketing that include very low costs in distributing information and media to a global audience. However, the interactive nature of the media, both in terms of instant response, and in eliciting response at all, are both desirable qualities of internet marketing.
Internet marketing ties together both the creative and technical aspects of the internet, including design, development, advertising and sales. Internet Marketing methods include search engine marketing, display advertising, e-mail marketing, affiliate marketing, interactive advertising and viral marketing
Contents.

1 Definition and scope
2 Business models
2.1 Advantages
3 Limitations
4 Security concerns
5 Effects on industries
6 Recent issues
7 See Also
8 References
9 External Links


Definition and scope

Internet marketing is most commonly a component of electronic commerce, but Internet marketing campaigns are also used to drive a marketing message for services that cannot even be ordered online.
Internet marketing can sometimes include information management, public relations, customer service, market research, and sales. Electronic commerce and Internet marketing have become popular as Internet access is becoming more widely available and used. Well over one third of consumers who have Internet access in their homes report using the Internet to make purchases.(Devang, 2007)

Business models

Internet marketing is associated with several business models. The main models include business-to-business (B2B) and business-to-consumer (B2C). B2B consists of companies doing business with each other, whereas B2C involves selling directly to the end consumer (see Malala, 2003)[1] When Internet marketing first began, the B2C model was first to emerge. B2B transactions were more complex and came about later. A third, less common business model is peer-to-peer (P2P), where individuals exchange goods between themselves. An example of P2P is Kazaa, which is built upon individuals sharing files.

Internet marketing can also be seen in various formats. One version is name-your-price (e.g. Priceline.com). With this format, customers are able to state what price range they wish to spend and then select from items at that price range. With find-the-best-price websites (e.g. Hotwire.com), Internet users can search for the lowest prices on items. A final format is online auctions (e.g. Ebay.com) where buyers bid on listed items.

It should be noted, however; as described above, under history, that current use of the term internet marketing commonly refers to the use of direct response marketing strategies, that were traditionally used in direct mail, radio, and TV infomercials, applied to the internet business space. When professionals and entrepreneurs commonly refer to "internet marketing" it is this model that they are often referring to.

Advantages

Some of the benefits associated with Internet marketing include the availability of information. Consumers can log onto the Internet and learn about products, as well as purchase them, at any hour. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to both national and international market places. And, in a way, it levels the playing field for big and small players. Unlike traditional marketing media (like print, radio and TV), entry into the realm of Internet marketing can be a lot less expensive.

Furthermore, since exposure, response and overall efficiency of digital media is much easier to track than that of traditional "offline" media, Internet marketing offers a greater sense of accountability for advertisers.

Compared to other types of media marketing (i.e. print, radio and TV), Internet marketing is growing very fast. It's also gaining popularity among small businesses and even consumers when trying to monetize their blog or website. The measurability of the internet as a media makes it easier to experience innovative e-marketing tactics that will prove a better Cost of Acquisition than other media. However, in most developed countries, internet marketing and advertising spending is only around 5%, while TV, radio, and print are more.

Limitations
Limitations of Internet marketing create problems for both companies and consumers. Slow Internet connections can cause difficulties. If companies build overly large or complicated web pages, Internet users may struggle to download the information. Internet marketing does not allow shoppers to touch, smell, taste or try-on tangible goods before making an online purchase. Some e-commerce vendors have implemented liberal return policies to reassure customers.

Germany for example introduced a law in 2000 (Fernabsatzgesetz - later incorporated into the BGB), that allows any buyer of a new product over the internet to return the product on a no-questions-asked basis and get a full return. This is one of the main reasons why in Germany internet shopping became so popular. Another limiting factor, particularly with respect to actual buying and selling, is the adequate development (or lack thereof) of electronic payment methods like e-checks, credit cards, etc. Additionally, there is the need to drive people to the site.

Without other collateral such as print, television or radio (with print being the most effective due to the longevity of the piece compared to an ad on the radio or tv) it can often be difficult for the consumer or other businesses to find any specific address without prior knowledge.

Security concerns
For both companies and consumers that participate in online business, security concerns are very important. Many consumers are hesitant to buy items over the Internet because they do not trust that their personal information will remain private. Recently, some companies that do business online have been caught giving away or selling information about their customers. Several of these companies have guarantees on their websites, claiming customer information will be private. By selling customer information, these companies are breaking their own, publicized policy. Some companies that buy customer information offer the option for individuals to have their information removed from the database (known as opting out). However, many customers are unaware that their information is being shared and are unable to stop the transfer of their information between companies.

Security concerns are of great importance and online companies have been working hard to create solutions. Encryption is one of the main methods for dealing with privacy and security concerns on the Internet. Encryption is defined as the conversion of data into a form called a cipher. This cipher cannot be easily intercepted unless an individual is authorized by the program or company that completed the encryption. In general, the stronger the cipher, the better protected the data is. However, the stronger the cipher, the more expensive encryption becomes.

Effects on industries
Internet marketing has had a large impact on several industries including music, banking, and flea markets - not to mention the advertising industry itself.
In the music industry, many consumers have begun buying and downloading MP3s over the Internet instead of simply buying CDs. The debate over the legality of duplicating MP3s has become a major concern for those in the music industry.

Internet marketing has also affected the banking industry. More and more banks are offering the ability to perform banking tasks online. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently, over 50 million U.S. adults now bank online. Online banking is now the fastest-growing Internet activity. The increasing speed of Internet connections is the main reason for the fast-growth. Of those individuals who use the Internet, 44% now perform banking activities over the Internet.

As Internet auctions have gained popularity, flea markets are struggling. Unique items that could previously be found at flea markets are being sold on eBay instead. eBay has also affected the prices in the industry. Buyers and sellers often look at prices on the website before going to flea markets and the eBay price often becomes what the item is sold for. More and more flea market sellers are putting their items up for sale online and running their business out of their homes.
The effect on the Ad industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually.[2][3][4] (2007-06-18) PricewaterhouseCoopers reported US Internet marketing spend totalled $16.9 billion in 2006.
As Advertisers increase and shift more of their budgets online, it is now overtaking radio in terms of market share

Recent issues
In November 2004, a lawsuit was filed against Bonzi Buddy software. The lawsuit alleged that Bonzi's banner ads were deceptive. These ads often looked like Microsoft Windows message boxes. Internet users would run across the ads and when they attempted to close the boxes, they found themselves redirected to a website determined by Bonzi.
On May 27, 2005, Bonzi Buddy agreed to change the format of its ads so they did not resemble Windows message boxes. The boxes will now contain the word "Advertisement" so computer users know what they are looking at. The boxes will also no longer carry buttons that do not perform the correct actions.

Sales tax issues have also recently become debated. In the USA, the current laws require that buyers of online products pay their state all due taxes on these goods at the end of the year, along with their other state taxes. However, most consumers do not appear to be making these payments. Thirteen states have now begun encouraging Internet businesses to collect sales tax on every sale. These states are currently not forcing the companies to collect the tax. However, it appears that if companies do not begin collecting the sales tax on their own, states will begin forcing the companies to do so. The states are claiming that each year they lose $15 billion in unpaid sales taxes associated with online purchases.