Internet Marketing

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Internet marketing
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Marketing
Internet marketing is the use of the Internet to advertise and sell goods and services.
Internet Marketing includes pay per click advertising, banner ads, e-mail marketing,
interactive advertising, search engine marketing (including search engine
optimization), blog marketing, and article marketing.

Contents
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1 Definition and scope
2 History
3 Current Culture
4 Benefits
5 Limitations
6 Security Concerns
7 Effects on Industries
8 Recent Issues



9 References

[edit] Definition and scope
Internet marketing is a component of electronic commerce. Internet marketing can
include information management, public relations, customer service, 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.

[edit] History
Internet marketing first began in the early 1990s as simple, text-based websites that
offered product information. Over time Internet marketing evolved into more than just
selling information products, there are people now selling advertising space, software
programs, business models, and many other products and services.

[edit] Current Culture
At first there was only a small minority of people in the Internet marketing world, but
over time many people have seen the benefits of working from home and tried to
build an online business. There have been many that have failed in their search for
online success, this is because of an explosion of people who have created sites that
profess to make people millions, while charging a small amount to do so, these sites
have created a sense of disillusion as many people ignore the fact that to make money
online as the online world needs to be treated like a real business.
This article may require cleanup to meet Wikipedia's quality standards.
Please discuss this issue on the talk page or replace this tag with a more specific message.
This article has been tagged since December 2006.

Internet marketing is associated with several business models. The main models
include business-to-business 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-yourprice (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-thebest-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.

[edit] Benefits
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 marketplaces.

[edit] 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.

[edit] 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.

[edit] Effects on Industries
Internet marketing has had a large impact on several industries including music,
banking, and flea markets. 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.com instead.
Ebay.com 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.com 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.

[edit] 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.

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