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Internet Marketing & e-CommerceWard HansonKirthi Kalyanam

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Part One: Chapter TwoA Digital World

“When if ever will the astounding increase in the productivity growth, and in the growth of productivity growth, of computers end?”

W. Nordhaus, The Progress of Computing

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The State of Being Digital

• Something is digital when all of its properties and information are stored as a string of zeroes and ones

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The State of Being Digital

• Something is digital when all of its properties and information are stored as a string of zeroes and ones

• Those zeroes and ones are called bits

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The State of Being Digital

• Something is digital when all of its properties and information are stored as a string of zeroes and ones

• Those zeroes and ones are called bits• Everything on the Internet is digital

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The State of Being Digital

• Something is digital when all of its properties and information are stored as a string of zeroes and ones

• Those zeroes and ones are called bits• Everything on the Internet is digital• The falling cost of digital technology is

one of the most powerful forces in the modern economy

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Understanding Moore’s Law Intel co-founder Gordon Moore observed that each generation of computer memory chips – released about every 18 months – could pack the same technology into half the space

Source: AP/World Wide Photos

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Understanding Moore’s Law

• Moore’s Law applies broadly to computing and technology costs

• Computer speed since the 1970s has increased roughly 75 billion times

• The cost of technology and storage, meanwhile, has dropped sharply

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The Fast Fall of Digital Storage Costs

Source: Brian Hayes, “Terabyte Territory,” American Scientist 90 (May–June 2002)

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Putting Moore’s Law to Work

Substituting digital material when possible can lead to substantial savings

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Putting Moore’s Law to Work

Substituting digital material when possible can lead to substantial savings

• Sun Microsystems as early as 1995 saved hundreds of thousands of dollars by moving to online customer support

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Putting Moore’s Law to Work

Substituting digital material when possible can lead to substantial savings

• Sun Microsystems as early as 1995 saved hundreds of thousands of dollars by moving to online customer support

• Online software distribution saved Sun an estimated $1.5 million per quarter compared to traditional distribution

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Digital Substitution

Other examples: • Online banking services, such as

automatic payroll deposit• Wireless laptops for sales

representatives working in the field

Other potential uses:• Automatic online language translations

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Digital Environments

• Technology allows users to create virtual spaces to display information, tell stories, educate or amuse

• For marketers, new ways to reach consumers and promote a product

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Digital Environments

Augmented reality and the virtual first down line

Source: ELIOT J. SCHECHTER/EPA/Landov

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Key Features of Digital Environments

• Procedural: Computers must be taught what to do in a digital environment

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Key Features of Digital Environments

• Procedural: Computers must be taught what to do in a digital environment

• Participatory: Effectiveness depends on ease of consumer use and interactive potential

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Key Features of Digital Environments

• Procedural: Computers must be taught what to do in a digital environment

• Participatory: Effectiveness depends on ease of consumer use and interactive potential

• Spatial: Realistic features are important but hard to create in business setting

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Key Features of Digital Environments

• Procedural: Computers must be taught what to do in a digital environment

• Participatory: Effectiveness depends on ease of consumer use and interactive potential

• Spatial: Realistic features are important but hard to create in business setting

• Encyclopedic: Low cost allows almost endless storage capacity

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Digital Convergence

• Cheap and powerful digital technology has contributed to the merging of industries, technology and content

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Digital Convergence

• Cheap and powerful digital technology has contributed to the merging of industries, technology and content

• One crucial area: convergence of computing, communications and media content

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Digital Convergence

• Cheap and powerful digital technology has contributed to the merging of industries, technology and content

• One crucial area: convergence of computing, communications and media content

• When barriers between industries fall, marketers have greater flexibility to choose the best medium for the pitch

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Digitizing the Marketing Process• Retain and digitize

existing materials

• Substitute digital materials into marketing process

• Change marketing processes to better use digital features

Archive

Substitute

Redesign

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Digitizing the Marketing Process

• Digital capabilities allow businesses to better understand their customer

Key example: The online focus group

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Digitizing the Marketing Process

• Digital capabilities allow businesses to better understand their customer

Key example: The online focus group

• Digital capabilities allow businesses to redesign and streamline transactions

Key example: Airlines and the evolution of e-ticketing