E-Commerce Terms

Chapter 1 E-Commerce The use of the Internet, the Web, and apps to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals. E-Business The digital enabling of transactions and processes within a firm, involving information systems under the control of the firm. Information Asymmetry Any disparity in relevant market information among parties in a transaction. Marketplace Physical space you visit in order to transact. Ubiquity Available just about everywhere, at all times. Marketspace Marketplace extended beyond traditional boundaries and removed from a temporal and geographic location. Reach The total number of users or customers an e-commerce business can obtain. Universal Standards Standards that are shared by all nations around the world. Richness the complexity and content of a message. Interactivity Technology that allows for two-way communication between merchant and consumer. Information Density the total amount and quality of information available to all market participants. Personalization The targeting of marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. Customization Changing the delivered product or service based ona user's preferences or prior behavior. Web 2.0 A set of applications and technologies that allows users to create, edit, and distribute content; share preferences, bookmarks, and online personas; participate in virtual lives; and build online communities. business-toconsumer (b2c) ecommerce business-to-business (b2b) e-commerce online businesses selling to individual consumers. consumer-toconsumer (c2c) ecommerce consumers selling to other consumers. Peer-to-Peer (P2P) e-commerce Use of peer-to-peer technology, which enables Internet user to share files and computer resources directly without having to go through a central Web server, in e-commerce. Social E-Commerce E-Commerce enabled by social networks and online social relationships. Mobile e-commerce (m-commerce) Use of mobile devices to enable online transactions. Local E-Commerce E-Commerce that is focused on engaging the consumer based on his or her current geographic location. internet Worldwide network of computer networks built on common standards. World Wide Web (the Web) Provides easy access to Web pages. MobilePlatform Provides the ability to access the Internet from a variety of highly mobile devices such as smart-phones, tablets, and other ultra-lightweight laptop computers. Displacement of market middlemen who tradition-ally are intermediaries between producers and consumers by a new direct relationship between producers and consumers. Disintermediation Friction-Free Commerce online businesses selling to other businesses A vision of commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminated. First Mover A firm that is first to market in a particular area and that moves quickly to gather market share. Network Effect Occurs where users receive value from the fact that everyone else uses the same tool or product. Chapter 5 Business Model a set of planned activities designed to result in a profit in a marketplace. business plan a document that describes a firm's business model. e-commerce business a business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web. model value proposition defines how a company's product or service fulfills the needs of customers. revenue model describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital. advertising revenue model a company provides a forum for advertisements and receives fees from advertisers. subscription revenue a company offers its users content or services and charges a subscription fee for access to some or all of its offerings. model transaction fee revenue model a company receives a fee for enabling or executing a transaction. sales revenue model a company derives revenue by selling goods, information, or services. affiliate revenue model a company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales. market opportunity refers to the company's intended marketspace and the overall potential financial opportunities available to the firm in that marketspace. marketspace the area of actual or potential commercial value in which a company intends to operate. competitive environment refers to the other companies operating in the same marketspace selling similar products. competitive advantage achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors. asymmetry exists whenever one participant in a market hasmore resources than other participants. first-mover advantage a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service. complementary resources resources and assets not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation. unfair competitive advantage occurs when one firm develops an advantage based on a factor that other firms cannot purchase. perfect market a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production. leverage when a company uses its competitive advantages to achieve more advantage in surrounding markets. market strategy the plan you put together that details exactly how you intend to enter a new market and attract new customers. organizational development management team plan describes how the company will organize the work that needs to be accomplished. employees of the company responsible for making the business model work. portal offers users powerful search tools as well as an integrated package of content and services all in one place. e-tailer online retail store barriers to entry the total cost of entering a new marketplace intellectual property refers to all forms of human expression that can be put into a tangible medium such as text, CDs or on the Web. content provider distributes information content, such as digital news, music, photos, video, and artwork. transaction broker site that processes transactions for consumers that are normally handled in person, by phone, or by mail. market creator builds a digital environment where buyers and sellers can meet, display products, search for products, and establish a price for products. service provider offers services online community provider sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, and videos; communicate with like-minded people; and receive interestrelated information. e-distributor a company that suppliesproducts and services directly to individual businesses. e-procurement firm creates and sells access to digital electronic markets. b2b service provider sells business services to other firms. application service provider (asP) a company that sells access to Internet-based software applications to other companies. scale economies efficiencies that arise from increasing the size of a business. exchange an independent digital electronic marketplace where suppliers and commercial purchasers can conduct transactions. industry consortia industry-owned vertical marketplaces that serve specific industries. private industrial network digital network designed tocoordinate the flow of communications among firms engaged in business together. industry structure refers to the nature of the players in an industry and their relative bargaining power. industry structural analysis an effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers. value chain the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services. firm value chain the set of activities a firm engages in to create final products from raw inputs. value web networked business ecosystem that coordinates the value chains of several firms. business strategy a set of plans for achieving superior long-term returns on the capital invested in a business firm. profit the difference between the price a firm is able to charge for its products and the cost of producing and distributing goods. differentiation refers to all the ways producers can make their products or services unique and different to distinguish them from those of competitors. commoditization a situation where there are no differences among products or services, and the only basis of choosing is price. Chapter 6 Consumer Behavior A social science discipline that attempts to model and understand the behavior of humans in a marketplace. Culture Shapes basic human values, wants, perceptions, and behaviors. Subculture Subset of culture that form around major social differences. Direct Reference Groups One's family, profession or occupation, religion, neighborhood, and schools. Indirect Reference Group One's life-cycle stage, social class, and lifestyle group. Opinion Leaders (Viral Influencers) Influence the behavior of others through their personality, skills, or other factors. Lifestyle Group An integrated pattern of activities, interests, and opinions. Psychological Profile Set of needs, drives, motivations, perceptions, and learned behaviors. Pyschographic Research Divides a market into different groups based on social class, lifestyle, and/or personality characteristic. Clickstream behavior The transaction log that consumers establish as they move about the Web. Marketing The strategies and actions firms take to establish a relationship with a consumer and encourage purchases of its products or services. Using the Web-as well as traditional channels- to develop a positive, long-term relationship with customers, thereby creating a competitive advantage for the firm by allowing it to charge a higher price for products or services than its competitors can charge. The bundle of capabilities and services offered by the product or service. Internet marketing Feature Set Commodity A good or service for which there are many dealers supplying the same product, and all products in the segment are essentially identical. Core Product The core benefit the customer receives from the product. Actual Product The set of characteristics designed to deliver the product's core benefits. Augmented Product Branding A product with additional benefits to customers beyond the core benefits embodied in the actual product. A set of expectations that consumers have when consuming, or thinking about consuming, a product or service from a specific company. Process of brand creation. Closed Loop Marketing When marketers are able to directly influence the design of the core product based on market research and feedback from the market. Brand Strategy A set of plans for differentiating a product from its competitors, and communicating these differences effectively to the marketplace. Brand equity The estimated value of the premium customers are willing to pay for using branded product when compared to unbranded competitors. Customer Acquisition Costs The overall costs of converting a prospect into a consumer. Customer Retention Costs Costs incurred in convincing an existing customer to purchase again. Brand Law of One Price With complete price transparency in a perfect information marketplace, there will be one world price for every product. Price Dispersion The difference between the highest and lowest prices in a market. Library Effect An attempt to appeal to consumers on the basis of the total number of products offered. Transaction Log Records user activity at a Web site. Shopping Cart Database Captures all the item selection, purchase, and payment data. Registration Forms Gather personal data on name, address, phone, ZIP code, e-mail address, and other optional self-confessed information on interests and tastes. Database A software application that stores records and attributes. A software application used by organizations to create, maintain, and Database Management System access databases. (DBMS) Structured Query Language (SQL) An industry-standard database query and manipulation language used in relational databases. Relational Databases Represent data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be flexibly related as long as the tables share a common data element. Data Warehouse A database that collects a firm's transactional and customer data in a single location for offline analysis. Data Mining A set of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers. Customer Profile A description of the typical behavior of a customer at a Web site. Query-Driven Data Mining Data mining based on specific queries. Model-Driven Data Mining Involves the use of a model that analyzes the key variables of interest to decision makers. Rule-Based Data Mining Examines demographic and transactional data of groups and individuals at a Web site and attempts to derive general rules of behavior for visitors. Collaborative Filtering Site visitors classify themselves into affinity groups characterized by common interests; products are then recommended based on what other people in the group have recently purchased. A repository of customer information that records all of the contacts that Customer a customer has with a firm and generates a customer profile available to Relationship Management (CRM) everyone in the firm with a need to "know the customer." System Customer Touchpoints The way in which customer interact with the firm. Advertising Networks Connect online marketers with publishers by displayning ads to consumers based on detailed profiles. Advertising Exchange Create a market where many ad networks sell ad space to marketers. Real-Time Bidding Process (RTB) Online auctions where advertisers bid for audience slots. Permission Marketing Marketing strategy in which companies obtain permission from consumers before sending them information or promotional messages. Affiliate Marketing One Web site agrees to pay another Web site a commission for new business opportunities it refers to the site. Viral Marketing The process of getting customers to pass along a company's marketing message to friends, family, and colleagues. Social Graph A mapping of all significant online social relationships. Social Network Marketing Using online social network to build and strengthen brands. Brand Leveraging Using the power of an existing brand to acquire new customers for new product or service. One-to-One Marketing (Personalization) Customization Segmenting the market based on a precise and timely understanding of an individual's needs, targeting specific marketing messages to these individuals, and then positioning the product vis-a-vis competitors to be truly unique. Changing the product, not just the marketing message, according to user preferences. Customer Coproduction In the Web environment, takes customization one step further by allowing the customer to interactively create the product. Frequently Asked Questions (FAQs) A text-based listing of common questions and answers. Real-Time Customer A company's customer service representatives interactively exchange text-based messages with one or more customers on a real-time basis. Service Chat Systems Automated Response System Sends e-mail order confirmations and acknowledgments of e-mailed inquiries. Pricing Putting a value on goods and services. Demand Curve The quantity of goods that can be at various prices. Price Discrimination Selling products to different people and groups based on their willingness to pay. Refers to different methods by which goods can be distributed and sold. Channel Versioning Creating multiple versions of information goods and selling essentially the same product to different market segments at different prices. Bundling Offers consumers two or more goods for one price. Channel Conflict Occurs when a new venue for selling products or services threatens to destroy existing venues for selling goods. Chapter 7 Online Marketing Communications Methods used by online firms to communicate to the consumer and create strong brand expectations. Promotional Sales Communications Suggest the consumer "buy now" and make offers to encourage immediate purchase. Branding Communications Focus on extolling the differentiable benefits of consuming the product or service. Cost Per Action (CPA) Advertiser pays only for those users who perform a specific action. Ad Targeting The spending of market messages to specific subgroups in the population. Banner Ad Displays a promotional message in a rectangular box at the top or bottom of a computer screen. Pop-Up Ad Banners and buttons that appear on the screen without the user calling for them. Pop-Under Ad Opens underneath a user's active browser window and does not appear until the user closes the active window. Rich Media Ad Ad employing Flash, DHTML, and Java, and streaming audio and/or video. Interstitial Ad A way of placung full-page message between the current and destination pages of a user. Online Advertising A paid message on a Web site, online service, or other interactive medium. Video Ad TV-like advertisement that appears as an in-page video commercial or befor, during, or after content. Organic Search Inclusion and ranking of sites depends on a more or less unbiased application of a set of rules imposed by the search engine. Paid Inclusion For a fee, guarantees a web site's inclusion in its list of sites, more frequent visits by its Web crawler, and suggestions for improving the results of organic searching Keyword Advertising Merchants purchase keywords through a bidding process at search sites, and whenever a consumer searches for that word, their advertisement shows up somewhere on the page. Network of publishers accepts ads placed by Google on their Web sites, Network Keyword Advertising (Context and receive a fee for any click-throughs from those ads. Advertising) Social Search Effort to provide fewer, more relevant, and trustworthy results based on the social graph. Link Farms Groups of web sites that link to one another therby boosting their ranking in search engines. Content farms Companies that generate large volumes of textual content for mutiple Wb sites that is designe dto attract viewers and search engines. Superstitial A rich media ad that is pre-loaded into a browser's cache and does not play until fully loaded and the user clicks to another page. Sponsorship A paid effort to tie an advertiser's name to information, an event, or a venue in a way that reinforces its brand in a positive yet not overtly commercial manner. Cost Per Thousand (CPM) Advertiser pays for impressions in 1000-unit lots. Affiliate Relationship Permit a firm to put its logo or banner ad on another firm's Web site from which users of that site can click through to the affiliate's site. Spam Click Fraud Unsolicited commercial e-mail. Occurs when a competitor hires third parties (typically from low-wage countries) to fraudulently click on competitors ads. direct e-mail marketing E-mail marketing messages sent directly to interested users Social Advertising Using the social graph to communicate brand images and promote sales. Recency Average number of days elapsed between visits. Acquisition Rate Measures the percentage of visitors who register or visit product pages. Interest-Based Advertising Using searchqueries and clicks on results to behaviorally target consumers. Ad Exchange Online, real-time auction where data aggregators sell personal tracking information to advertisers. Social Marketing Using personal profiles, posts, Likes, and photos to behaviorally target consumers. Retaegeting Ads Showing the same ad to individuals across multiple Web sites. Conversion Rate Percentage of visitors who purchase something. Cost Per Click (CPC) Advertiser pays prenegotiated fee for each click an ad receives. Impressions Number of times an ad is served. Click-Through Rate The percentage of people exposed to an online advertisement who actually click on the banner. View-Through Rate Measure the 30-day response rate to an ad. Hits Number of http requests received by a firm's server Bounce-Back Rate Percentage of e-mails that could not be delivered. Attrition Rate Percentage of customers who purchase once, but do not return within a year. Browse-to-Buy Ratio Ratio of items purchased to product view. Click-Through Rate (e-Mail) Percentage of e-mail recipients who clicked through to the offer. Page Views Number of pages requested by visitors. Stickiness Average length of a time visitors remain at a site. Unique Visitors The number of distinct, unique visitors to a site. View-to-Cart Ratio Ratio of "Add to cart" clicks to product view. Abandonment Rate Percentage of shoppers who begin a shopping cart form, but then fail to complete the form. Checkout Conversion Ratio Ratio of actual orders to checkouts started. Loyalty Percentages of purchases who return in a year. Open Rate Percentage of customers who open the e-mail and are exposed to the message. Reach Percentage of the total number of consumers in a market who will visit a site. Delivery Rate Percentage of e-mail recipients who received the e-mail. Retention Rate Percentage of existing customers who continue to buy on a regular basis. Chapter 1 E-Commerce The use of the Internet, the Web, and apps to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals. E-Business The digital enabling of transactions and processes within a firm, involving information systems under the control of the firm. Information Asymmetry Any disparity in relevant market information among parties in a transaction. Marketplace Physical space you visit in order to transact. Ubiquity Available just about everywhere, at all times. Marketspace Marketplace extended beyond traditional boundaries and removed from a temporal and geographic location. Reach The total number of users or customers an e-commerce business can obtain. Universal Standards Standards that are shared by all nations around the world. Richness the complexity and content of a message. Interactivity Technology that allows for two-way communication between merchant and consumer. Information Density the total amount and quality of information available to all market participants. Personalization The targeting of marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. Customization Changing the delivered product or service based ona user's preferences or prior behavior. Web 2.0 A set of applications and technologies that allows users to create, edit, and distribute content; share preferences, bookmarks, and online personas; participate in virtual lives; and build online communities. business-toconsumer (b2c) ecommerce business-to-business (b2b) e-commerce online businesses selling to individual consumers. consumer-toconsumer (c2c) ecommerce consumers selling to other consumers. Peer-to-Peer (P2P) e-commerce Use of peer-to-peer technology, which enables Internet user to share files and computer resources directly without having to go through a central Web server, in e-commerce. Social E-Commerce E-Commerce enabled by social networks and online social relationships. Mobile e-commerce (m-commerce) Use of mobile devices to enable online transactions. Local E-Commerce E-Commerce that is focused on engaging the consumer based on his or her current geographic location. internet Worldwide network of computer networks built on common standards. World Wide Web (the Web) Provides easy access to Web pages. MobilePlatform Provides the ability to access the Internet from a variety of highly mobile devices such as smart-phones, tablets, and other ultra-lightweight laptop computers. Displacement of market middlemen who tradition-ally are intermediaries between producers and consumers by a new direct relationship between producers and consumers. Disintermediation Friction-Free Commerce online businesses selling to other businesses A vision of commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline, and unfair competitive advantages are eliminated. First Mover A firm that is first to market in a particular area and that moves quickly to gather market share. Network Effect Occurs where users receive value from the fact that everyone else uses the same tool or product. Chapter 5 Business Model a set of planned activities designed to result in a profit in a marketplace. business plan a document that describes a firm's business model. e-commerce business a business model that aims to use and leverage the unique qualities of the Internet and the World Wide Web. model value proposition defines how a company's product or service fulfills the needs of customers. revenue model describes how the firm will earn revenue, produce profits, and produce a superior return on invested capital. advertising revenue model a company provides a forum for advertisements and receives fees from advertisers. subscription revenue a company offers its users content or services and charges a subscription fee for access to some or all of its offerings. model transaction fee revenue model a company receives a fee for enabling or executing a transaction. sales revenue model a company derives revenue by selling goods, information, or services. affiliate revenue model a company steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales. market opportunity refers to the company's intended marketspace and the overall potential financial opportunities available to the firm in that marketspace. marketspace the area of actual or potential commercial value in which a company intends to operate. competitive environment refers to the other companies operating in the same marketspace selling similar products. competitive advantage achieved by a firm when it can produce a superior product and/or bring the product to market at a lower price than most, or all, of its competitors. asymmetry exists whenever one participant in a market hasmore resources than other participants. first-mover advantage a competitive market advantage for a firm that results from being the first into a marketplace with a serviceable product or service. complementary resources resources and assets not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation. unfair competitive advantage occurs when one firm develops an advantage based on a factor that other firms cannot purchase. perfect market a market in which there are no competitive advantages or asymmetries because all firms have equal access to all the factors of production. leverage when a company uses its competitive advantages to achieve more advantage in surrounding markets. market strategy the plan you put together that details exactly how you intend to enter a new market and attract new customers. organizational development management team plan describes how the company will organize the work that needs to be accomplished. employees of the company responsible for making the business model work. portal offers users powerful search tools as well as an integrated package of content and services all in one place. e-tailer online retail store barriers to entry the total cost of entering a new marketplace intellectual property refers to all forms of human expression that can be put into a tangible medium such as text, CDs or on the Web. content provider distributes information content, such as digital news, music, photos, video, and artwork. transaction broker site that processes transactions for consumers that are normally handled in person, by phone, or by mail. market creator builds a digital environment where buyers and sellers can meet, display products, search for products, and establish a price for products. service provider offers services online community provider sites that create a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, and videos; communicate with like-minded people; and receive interestrelated information. e-distributor a company that suppliesproducts and services directly to individual businesses. e-procurement firm creates and sells access to digital electronic markets. b2b service provider sells business services to other firms. application service provider (asP) a company that sells access to Internet-based software applications to other companies. scale economies efficiencies that arise from increasing the size of a business. exchange an independent digital electronic marketplace where suppliers and commercial purchasers can conduct transactions. industry consortia industry-owned vertical marketplaces that serve specific industries. private industrial network digital network designed tocoordinate the flow of communications among firms engaged in business together. industry structure refers to the nature of the players in an industry and their relative bargaining power. industry structural analysis an effort to understand and describe the nature of competition in an industry, the nature of substitute products, the barriers to entry, and the relative strength of consumers and suppliers. value chain the set of activities performed in an industry or in a firm that transforms raw inputs into final products and services. firm value chain the set of activities a firm engages in to create final products from raw inputs. value web networked business ecosystem that coordinates the value chains of several firms. business strategy a set of plans for achieving superior long-term returns on the capital invested in a business firm. profit the difference between the price a firm is able to charge for its products and the cost of producing and distributing goods. differentiation refers to all the ways producers can make their products or services unique and different to distinguish them from those of competitors. commoditization a situation where there are no differences among products or services, and the only basis of choosing is price. Chapter 6 Consumer Behavior A social science discipline that attempts to model and understand the behavior of humans in a marketplace. Culture Shapes basic human values, wants, perceptions, and behaviors. Subculture Subset of culture that form around major social differences. Direct Reference Groups One's family, profession or occupation, religion, neighborhood, and schools. Indirect Reference Group One's life-cycle stage, social class, and lifestyle group. Opinion Leaders (Viral Influencers) Influence the behavior of others through their personality, skills, or other factors. Lifestyle Group An integrated pattern of activities, interests, and opinions. Psychological Profile Set of needs, drives, motivations, perceptions, and learned behaviors. Pyschographic Research Divides a market into different groups based on social class, lifestyle, and/or personality characteristic. Clickstream behavior The transaction log that consumers establish as they move about the Web. Marketing The strategies and actions firms take to establish a relationship with a consumer and encourage purchases of its products or services. Using the Web-as well as traditional channels- to develop a positive, long-term relationship with customers, thereby creating a competitive advantage for the firm by allowing it to charge a higher price for products or services than its competitors can charge. The bundle of capabilities and services offered by the product or service. Internet marketing Feature Set Commodity A good or service for which there are many dealers supplying the same product, and all products in the segment are essentially identical. Core Product The core benefit the customer receives from the product. Actual Product The set of characteristics designed to deliver the product's core benefits. Augmented Product Branding A product with additional benefits to customers beyond the core benefits embodied in the actual product. A set of expectations that consumers have when consuming, or thinking about consuming, a product or service from a specific company. Process of brand creation. Closed Loop Marketing When marketers are able to directly influence the design of the core product based on market research and feedback from the market. Brand Strategy A set of plans for differentiating a product from its competitors, and communicating these differences effectively to the marketplace. Brand equity The estimated value of the premium customers are willing to pay for using branded product when compared to unbranded competitors. Customer Acquisition Costs The overall costs of converting a prospect into a consumer. Customer Retention Costs Costs incurred in convincing an existing customer to purchase again. Brand Law of One Price With complete price transparency in a perfect information marketplace, there will be one world price for every product. Price Dispersion The difference between the highest and lowest prices in a market. Library Effect An attempt to appeal to consumers on the basis of the total number of products offered. Transaction Log Records user activity at a Web site. Shopping Cart Database Captures all the item selection, purchase, and payment data. Registration Forms Gather personal data on name, address, phone, ZIP code, e-mail address, and other optional self-confessed information on interests and tastes. Database A software application that stores records and attributes. A software application used by organizations to create, maintain, and Database Management System access databases. (DBMS) Structured Query Language (SQL) An industry-standard database query and manipulation language used in relational databases. Relational Databases Represent data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be flexibly related as long as the tables share a common data element. Data Warehouse A database that collects a firm's transactional and customer data in a single location for offline analysis. Data Mining A set of analytical techniques that look for patterns in the data of a database or data warehouse, or seek to model the behavior of customers. Customer Profile A description of the typical behavior of a customer at a Web site. Query-Driven Data Mining Data mining based on specific queries. Model-Driven Data Mining Involves the use of a model that analyzes the key variables of interest to decision makers. Rule-Based Data Mining Examines demographic and transactional data of groups and individuals at a Web site and attempts to derive general rules of behavior for visitors. Collaborative Filtering Site visitors classify themselves into affinity groups characterized by common interests; products are then recommended based on what other people in the group have recently purchased. A repository of customer information that records all of the contacts that Customer a customer has with a firm and generates a customer profile available to Relationship Management (CRM) everyone in the firm with a need to "know the customer." System Customer Touchpoints The way in which customer interact with the firm. Advertising Networks Connect online marketers with publishers by displayning ads to consumers based on detailed profiles. Advertising Exchange Create a market where many ad networks sell ad space to marketers. Real-Time Bidding Process (RTB) Online auctions where advertisers bid for audience slots. Permission Marketing Marketing strategy in which companies obtain permission from consumers before sending them information or promotional messages. Affiliate Marketing One Web site agrees to pay another Web site a commission for new business opportunities it refers to the site. Viral Marketing The process of getting customers to pass along a company's marketing message to friends, family, and colleagues. Social Graph A mapping of all significant online social relationships. Social Network Marketing Using online social network to build and strengthen brands. Brand Leveraging Using the power of an existing brand to acquire new customers for new product or service. One-to-One Marketing (Personalization) Customization Segmenting the market based on a precise and timely understanding of an individual's needs, targeting specific marketing messages to these individuals, and then positioning the product vis-a-vis competitors to be truly unique. Changing the product, not just the marketing message, according to user preferences. Customer Coproduction In the Web environment, takes customization one step further by allowing the customer to interactively create the product. Frequently Asked Questions (FAQs) A text-based listing of common questions and answers. Real-Time Customer A company's customer service representatives interactively exchange text-based messages with one or more customers on a real-time basis. Service Chat Systems Automated Response System Sends e-mail order confirmations and acknowledgments of e-mailed inquiries. Pricing Putting a value on goods and services. Demand Curve The quantity of goods that can be at various prices. Price Discrimination Selling products to different people and groups based on their willingness to pay. Refers to different methods by which goods can be distributed and sold. Channel Versioning Creating multiple versions of information goods and selling essentially the same product to different market segments at different prices. Bundling Offers consumers two or more goods for one price. Channel Conflict Occurs when a new venue for selling products or services threatens to destroy existing venues for selling goods. Chapter 7 Online Marketing Communications Methods used by online firms to communicate to the consumer and create strong brand expectations. Promotional Sales Communications Suggest the consumer "buy now" and make offers to encourage immediate purchase. Branding Communications Focus on extolling the differentiable benefits of consuming the product or service. Cost Per Action (CPA) Advertiser pays only for those users who perform a specific action. Ad Targeting The spending of market messages to specific subgroups in the population. Banner Ad Displays a promotional message in a rectangular box at the top or bottom of a computer screen. Pop-Up Ad Banners and buttons that appear on the screen without the user calling for them. Pop-Under Ad Opens underneath a user's active browser window and does not appear until the user closes the active window. Rich Media Ad Ad employing Flash, DHTML, and Java, and streaming audio and/or video. Interstitial Ad A way of placung full-page message between the current and destination pages of a user. Online Advertising A paid message on a Web site, online service, or other interactive medium. Video Ad TV-like advertisement that appears as an in-page video commercial or befor, during, or after content. Organic Search Inclusion and ranking of sites depends on a more or less unbiased application of a set of rules imposed by the search engine. Paid Inclusion For a fee, guarantees a web site's inclusion in its list of sites, more frequent visits by its Web crawler, and suggestions for improving the results of organic searching Keyword Advertising Merchants purchase keywords through a bidding process at search sites, and whenever a consumer searches for that word, their advertisement shows up somewhere on the page. Network of publishers accepts ads placed by Google on their Web sites, Network Keyword Advertising (Context and receive a fee for any click-throughs from those ads. Advertising) Social Search Effort to provide fewer, more relevant, and trustworthy results based on the social graph. Link Farms Groups of web sites that link to one another therby boosting their ranking in search engines. Content farms Companies that generate large volumes of textual content for mutiple Wb sites that is designe dto attract viewers and search engines. Superstitial A rich media ad that is pre-loaded into a browser's cache and does not play until fully loaded and the user clicks to another page. Sponsorship A paid effort to tie an advertiser's name to information, an event, or a venue in a way that reinforces its brand in a positive yet not overtly commercial manner. Cost Per Thousand (CPM) Advertiser pays for impressions in 1000-unit lots. Affiliate Relationship Permit a firm to put its logo or banner ad on another firm's Web site from which users of that site can click through to the affiliate's site. Spam Click Fraud Unsolicited commercial e-mail. Occurs when a competitor hires third parties (typically from low-wage countries) to fraudulently click on competitors ads. direct e-mail marketing E-mail marketing messages sent directly to interested users Social Advertising Using the social graph to communicate brand images and promote sales. Recency Average number of days elapsed between visits. Acquisition Rate Measures the percentage of visitors who register or visit product pages. Interest-Based Advertising Using searchqueries and clicks on results to behaviorally target consumers. Ad Exchange Online, real-time auction where data aggregators sell personal tracking information to advertisers. Social Marketing Using personal profiles, posts, Likes, and photos to behaviorally target consumers. Retaegeting Ads Showing the same ad to individuals across multiple Web sites. Conversion Rate Percentage of visitors who purchase something. Cost Per Click (CPC) Advertiser pays prenegotiated fee for each click an ad receives. Impressions Number of times an ad is served. Click-Through Rate The percentage of people exposed to an online advertisement who actually click on the banner. View-Through Rate Measure the 30-day response rate to an ad. Hits Number of http requests received by a firm's server Bounce-Back Rate Percentage of e-mails that could not be delivered. Attrition Rate Percentage of customers who purchase once, but do not return within a year. Browse-to-Buy Ratio Ratio of items purchased to product view. Click-Through Rate (e-Mail) Percentage of e-mail recipients who clicked through to the offer. Page Views Number of pages requested by visitors. Stickiness Average length of a time visitors remain at a site. Unique Visitors The number of distinct, unique visitors to a site. View-to-Cart Ratio Ratio of "Add to cart" clicks to product view. Abandonment Rate Percentage of shoppers who begin a shopping cart form, but then fail to complete the form. Checkout Conversion Ratio Ratio of actual orders to checkouts started. Loyalty Percentages of purchases who return in a year. Open Rate Percentage of customers who open the e-mail and are exposed to the message. Reach Percentage of the total number of consumers in a market who will visit a site. Delivery Rate Percentage of e-mail recipients who received the e-mail. Retention Rate Percentage of existing customers who continue to buy on a regular basis.