Online Advertising Strategy for Sme

The appearance of online ads has reformed the entire advertisement industry, which highly improved the ads efficiency compared with traditional advertising. Nevertheless the efficiency of traditional online ads, such as online banner ads and e-mails, has kept decreasing as 21st century coming. New platform for online ads, social network, has affected SMEs advertisement strategy deeply and further improved the efficiency of advertisement. Michael Porter’s five forces model is used in this paper to analyze the situation of SMEs on advertising strategy. Plenty of SMEs’ cases are also listed to enhance the content and analysis. At last, a prediction is made – future online ads will be based on “Big Data” and SMEs will benefit a lot from the “Big Data” as its high efficiency and low cost. Finally, we believe that a powerful mapping tool combined with “Big Data” platform will come out.

Traditional Online Advertisement
October 14th, 1994 is a day we should remember in the history of advertising, when “Wired”, an American famous magazine launched an online version of Hotwired, whose home page began to release 14 advertising banners including AT&T. From then on, advertisements have paced from traditional media age to the Internet one.

In the past hundreds of years, advertising is being crucial to not only giant Multi-National Corporations listed in stock markets around the world but also ordinary individual operators because advertising can attract customers and thus boom the revenues. However, traditional advertising methods like newspaper, magazine, broadcast and television do not have as much revolutionary impact on so many people as internet ads do. The Internet advertising discussed in this part is the traditional online ad, which can be categorized into six types: floating ad, expanding ad, trick banner, pop-up, video ad, entire page and e-mail.

Large companies spend billions of dollars using e-mail network, searching companies’ web competitive ranking to put ads to the world while small and medium enterprises (SMEs) utilize internet business platform to attract buyers’ eyes. Professional advertising companies are not the sole provider for commercial publicity; instead, a personal blog may have more effect on selling products or services in multiple areas.

Through the review of the development history of Internet advertisement, the internet advertisement’s advantages can be concluded as:

Traditional online ads advantages
1. Combination of various Medias Internet advertisement combines text, image, sound and video, providing more information, stimulating consumers’ senses and making them feel more about the commodities or services.

2. More customers

Internet users have dramatically increased in the past decade, which means that internet advertising can go beyond the limitation of time and space and serve users in the whole country and even the world. In addition, the Internet can serve the most valuable consumer group: In US 95 percent of those families earning more than $75,000 use the internet and phones and 70 percent of households earning less than $75,000 use the internet.(1) People are prone to receiving news from various resources, especially from mobile devices.

Therefore, the internet advertising targets on the group who has high social status, good education, high income and high purchasing power.

3. Interactions The Internet advertising is quite different from traditional one. Once the users are interested in the advertisement, they can simply click the link and get more detailed information, or even directly fill in and submit the order online. Manufacturers can get valuable user feedback information to modify their products and services, which further reducing the distance between customers and them.

4. Effective measurements of advertising effectiveness By monitoring the indexes such as click rates, that is click-through rate (CTR), the statistics that how many people get the information, be interested in the commodity and be willing to get further information or even put an order can be calculated. From the statistics data listed above the organization can measure the efficiency of the advertisement better, modify the ads to target on certain customers, and therefore save costs.

5. Low production cost A promotional home page usually costs ten thousands RMB per year in mainland China and the homepage content can be changed flexible according to the business strategy. Therefore, the advertising cycle is short and money can be paid back soon since the time from releasing ads to consumers’ purchasing action can be reduced.

(1)

Jim Jansen, “Use of the internet in higher-income households”, Nov 24, 2010

Ever since the internet advertising arisen from 1994, the advantages above has made it develop rapidly. However, as time goes by, many defects have come out, and online ad faces huge challenges now, which are summed up below:

Traditional online ads disadvantages
1. Efficiency keep decreasing Nowadays, advertising is all around us, including television, radio, magazines and so on. Most people are averse to all forms of advertising, including online advertising. Internet users can simply avoid banner advertisements by not clicking them. Pop-up advertisements can be closed immediately once they show up on computer screens. Even for those enforced watching ads before or during online videos, Internet users, especially seasoned users can bypass and forget them completely. Customers nowadays can choose which advertising they want to click according to their own interest. Besides, most customers visit a website with an aim in their minds, like checking celebrity gossip, reading the news, looking for music and video or shopping for a specific item. Professional websites, like yahoo.hk, will put their main functions at first priority and then make customers easily distract the aimed information from online advertisements. Traditional online advertisement has another fatal problem compared with other traditional advertisement.

Network speed affects a lot on advertising efficiency. Lags in displaying website advertisement will reduce number of times that consumers actually getting information from them. The efficiency of online advertising has decreased year by year. Some statistics can support this conclusion. Click-through rate (CTR) is used to measure the success of an online advertising, by presenting the rate of the number of clicks on the ad divided by the number of the ad’s shown times. Usually, CTR reaches 2% would be considered a successful online advertisement. However, currently averaging CTR for standard banner ad is closer to 0.2% or 0.3% (2) while the average CTR in the 1990s is around 3%(3). Unusual formats or more obtrusive and effective online ads are needed.

(2)

Stern Andrew, “8 ways to improve your click-through rate”, iMedia Connection, February 7, 2010 Li, Hairong; Leckenby, John D, “Internet advertising format and effectiveness”, Center for Interactive Advertising, 26 February 2010

(3)

2. Expensive online ad cost due to low efficiency The range of price for online ads is wide. There exists a $30-a-month placement on personal blogs as well as thousands of dollars on famous websites such as Google. Most common ways for online advertising purchase are cost per click (CPC) and cost per action (CPA). Online ads through CPC can also seriously affect company marketing budget, nevertheless yielding little return on investment. That is to say, even though this business concerns only about CPC, which allows the company to pay only when customer clicks the ad, there is no guarantee that this customer will buy or generate revenue in return from the website after clicking. Especially for SMEs, which their marketing budget cannot undertake this risk. In addition, with so many online ads type and websites options, it’s difficult for SMEs to narrow down the choices to attract the most potential customers under a reasonable budget. The price superiority of traditional online ads over other traditional advertisements has weakened year by year.

Change of Social Network on SMEs Advertisement Strategy
(CNN) – “As super storm Sandy slammed into the East Coast on Monday night, one Twitter user in New York City posted a flurry of alarming reports about fallout from the storm — from plans to shut down all power in Manhattan to floodwaters pouring into the New York Stock Exchange.” By Doug Gross, October 31, 2012

The high transmission speed of social network
Our earth is becoming smaller because the prominent upgrade of the communication and socialization approaches. One tweet from the super storm center indicated how huge damages and arduous recovery it is, which could be delivered to the society ahead of the traditional media, making people keep nervous about this issue for a long time. This event reinforced how social media can spread information at lightning speed and in a large scale.

Basically, we trust our friends more than famous folks on TV. In social network, things can be more

transparent and nobody could hide completely. For example, a restaurant has acclaimed that customers always come first; however, they treat Lucy badly. Lucy can make a comment or complaint on Facebook or Twitter. Even if she does not have one, she could tell a friend who has. That is exactly the effect of social network nowadays.

Wide covering range
Firstly, let us go through the case4 below

Zappos. First launched in 1999, Zappos managed to convince consumers to buy shoes without the benefit of first trying them on. With a free shipping policy, even on returns – a consistent work ethic and a relentless focus on customers, Zappos found a way to overcome the traditional practice of shopping for footwear at brick-and-mortar stores. As reported by Hoover’s:

For marketing, the executives believed word of mouth testimonials were more important than traditional media spending – though Zappos did spend about 15 percent of its revenues on advertising, usually for ads with online browsers and portals. Customer referrals, however, proved far more effective as more and more shoppers visited the Zappos site and literally walked away happy.

All told, about 450 of the company’s 1,400 employees are on Twitter. An untold number contribute to its “Inside Zappos” blog, which aims to be “fun and a little weird.” You can see the faces of and antics of Zappos’ employees on videos that appear on Facebook, YouTube and Zappos.tv. You can hear their voices all day long, over the telephone. There are neither scripts nor time limits on conversations. The goal is to create 1,400 spokespeople for the company, online–and off.

In many respects, this social business approach is a modern-age inversion of the Tupperware party, where you used to invite a friend into your home to sell you something, but have a good time in the process. In this case, Zappos

(4)

Wendy Wong,”Instant brands in the age of social networking”, in Journal of integrated marketing communications 2011, Evanston:

Northwestern University Press,2011: 48-49

keeps inviting potential customers into its home, to show off its own good times. Then it waits for you to buy something. Not because you like the company, but because you like its people.

We get more and more social network websites day after day, Like Facebook, Weibo, Twitter and Tumblr. Look at twitter, thousands of enterprises set up their home page on it, obviously they are not just a player, but also want to find ways to enhance their competence by propaganda.

Unlike the banner advertising before, social network provide users with the intimate communications with each other, both of customers and enterprises. Raising topics, comment and sharing in social network, which make it widespread in real time. Online advertisement on social network does not cost a lot but needs more attention and design on the operation. For SMEs, word of mouth in the social network will be the major approach to increase the efficiency to get enough attractions from customers at a low cost. As Zappos did, SMEs can make their unique online advertising successful. Because of the advantages of word of mouth and immediate response, advertising in social network could be more efficient than others. In a recent survey, Facebook accounted for 346 billion impressions, nearly one third of all display ad impressions delivered in US.

SME’s position in social network
Firstly, for SMEs, clarify the backgrounds, leaders, cultures and goals clearly. In Zappo’s case, they have set up an official ID on Twitter, raising their Transparency & Values, Reframing Reality and Gratitude to the customers. Besides, they have focused more on the brand or personnel instead of the company itself.

“It’s old-fashioned customer relationships, where it’s just a much more personal thing, rather than just focusing on, oh, what’s the most efficient way we could do something,’’ said Hsieh, the CEO. “We want to create personal emotional connections.” Definitely SMEs had better to give people a story or a reason to talk about their brand, particularly when they do not have enough resources and routines to do promotions. Based on social network, the more interesting the story made for brand, the wider spread of the brand can be.

Steve Jobs, Apple’s ex-CEO, had managed a revolution of entire IT industry, with his talent and his leadership, while more importantly he brought the “user experience” into the notable position of the area. Compared to the former advertising approach before the social network, “user experience” puts emphasis on keeping communication between the enterprises and customers. For SMEs, which do not have the comparative advantages in scale, channels and resources, keeping communication with customers smoothly could be the only option to survive.

SMEs’ advertising strategy
Considered about the social network ads application to a company, the strategies concentrate on attracting customers and building up brand image. The last part in this section mainly elaborates the outcome of these strategies, which results in high level customer loyalty and increasing profits.

Attracting surrounding customers Because of the limited labor and capital, SMEs cannot offer comprehensive service at the beginning stage. However, they can concentrate on customized services. There are many examples that successful businessmen made their first fortunes in the local markets by offering targeted services to attract the first batch of surrounding customers. Fortunately, the internet social network can make SMEs offer customized services more easily and efficiently.

Let us go through the case of Naked Pizza social network platform. Company-Naked Pizza Industry – fast food restaurant

(5)

, a SME that successfully attracted customers by using

Objective-Attractive more customers to improve the sales Strategy-Place order and collect feedback through twitter Naked Pizza was one of the numerous ordinary pizza shops in New Orleans, and spent about $60K on direct management every year that was definitely a large portion of the total revenue. However, everything changed since this pizza shop logged in a homepage on twitter. Naked Pizza found that attracting customers became easier and lower cost based on the real-time social networking platform. In the first place, Naked Pizza spent about 3 days on (5)

Wang Hongzhang, “Play weibo”, Mechanical enigineering publisher, Dec 20, 2011

searching information about their pre-existing customers, especially the geographic location. Then they input own location information and contacted customers one by one, telling them the home delivery service. Meanwhile, Naked Pizza published information about online order, home delivery and discount on the twitter, which attracted a number of customers soon. To maintain and expend the influence, Naked Pizza kept communication with customers to adjust service timely and encouraged exiting customers to use twitter to disseminate information to others, which contributed to an effect of word-of-mouth. Resulted from the ads on twitter, Naked Pizza have attracted about 20000 fans, most of whom become loyal customers of Naked Pizza. Now the online sales make up about 20% of the total sales, which also conduce to an increasing profit.

We can learn from this case, at starting stage, SMEs should create a personal page on the social network platform like twitter to put information including main product and discount, and then they will attract a number of surrounding customers. Above all, SMEs should pay attention to communicating with customers. As SMEs develop strategies to communicate with their customers, the internet social network provides the lowest cost platform. In brief, social network can help SMEs build and maintain relationship directly with customers and compile feedback timely. Afterwards, SMEs can adjust service and product to meet customer demand, which improves the customer’s satisfaction level and ensures a stable customer base. By using the customized service strategy, SMEs attracted the first group of loyal customers, and the customer quantity sees a small increase accompanied by higher profits.

Building brand images When SMEs complete the starting stage, it can use brand images to add values to the brand by setting up brand images. Brand images can be set up more directly and more easily by the power of social network. Ways of building brand images can be divided into three main types including creative activities, building a series of business accounts on social network, and word of mouth publicity.

1.

Creative activities Creative activities are an effective way to get customers attention and guide customers to take part in more. It can be designed from different angle of view. One of the commonest situations is to make a creative activity when new products need to be introduced. The company will also grasp the chance to make such activity when hot issues happen, which will get the company a high reward with low cost.

(6)

Lipton Tea with Milk wanted to make its voice louder to make an increase in sales during the Chinese Traditional New Year, one of the most fierce competition periods in ads area. As a result, it made a plan called Lipton Lucky Clinked Glasses. In this plan, it chose Renren social network which had the true relationships and emotions between users. Lipton wanted to build a combination between Lipton Tea with Milk and good luck. Firstly, it embedded five interesting videos in Renren including Fresh video, Lady Gaga video, Grass mud horse video, Gossip bird video and Tom and Jerry video to match usual five interaction ways on Renren social network (messages, comments, transmissions, common friends and common groups). Then users could choose to clink glasses, and the system automated a creative video within users’ avatars to match the interaction action to make a souvenir of New Year.

At the same time, Lipton also broadened this activity by awarding users who took part in it, such as sharing the video to get a chance of free iphone4, or shopping on the Lipton E-commerce to get a New Year gift with a discount of 42% off. This activity got a heated response. During the 9 weeks, 220,973 Renren users took part in it, 313,686 users were invited to join it by other users. It also made 276,726 videos which shared by 230,559 times. Moreover, a total number of 179,970 people went to the Lipton E-commerce as a result of this activity.

The company can also make stories for brands to show its connotation. A series of ads is able to grasp customers’ continuous attention. For instance, the company may cut a whole story into several parts according to its key points, and then introduce them during a period, which will make products’ influence exist in customers’ normal life longer. In addition, brands can also make mini movies to mix products’ characteristics and entertainment.

2.
(6)

Building a series of brand accounts on social network

http://case.iresearchad.com/html/201207/1311152113.shtml

A series of brand accounts including traditional home pages of company and related company accounts such as social network accounts of senior executives to use leadership charisma. It is an effective way to show the connotation of the brand and keep interaction with customers. Through brand accounts, the company can get feedback quickly from customers. The high speed to deal with the feedback can help the company build a sincere and professional brand image. They can also share interesting contents frequently to make a closer relationship between the brand and customer. Most importantly, the company can use brand accounts to share its latest products and activities with customers in time. Finally, the design of the account page can reflect the corporate culture partly, which does a favor to the brand image building. For example, if the company wants to build a mysterious brand image, it may use black background color.

3.

Word of mouth publicity Word of mouth publicity is one of the most effective and economical ways to spread brand information. There are many methods can be used on social network. Two representative ones can be used to illustrate.

Firstly, the company can invite influential persons to use products free then make a comment on social network. The influential persons may contain popular stars, fashion leaders, grassroots stars and so on. Those people usually have a substantial number of fans on social network; their voice can be noticed quickly in a much broader area. What’s more, comments from this group will be seemed more credible and persuaded. Secondly, creating hot topics also can be a useful way since good topics can be spread by customers spontaneously. Company can mix their products or brand information into the topic. The spreading on social network will enlarge the influence of topic and brand image. Through the process of building brand images, the company can get customers’ attention longer, which works effectively on keeping customers’ loyalty, as well as profits and sales.

Brand value added to profits After a period of advertisement on social network, the company should consider the method to acquire high profits rather than high sales but low profit margins. After all, a business that does not generate profit is not a business but a hobby. The quantity of sales falls after the promotional campaign. However, the company has opportunities to raise prices of products due to the higher reputation. Interestingly, customers are willing to pay more to buy the product with higher brand value and quality guaranteed. In short run, the product cost remains constant, so higher price brings higher profits to the company.

Disadvantages of online ads on social network Nowadays we are in the era of the most dramatic shifts of communication landscape. Cheap processing power, widespread network access, and mobile computing have allowed people to share their thoughts and ideas. Through the trust and respect of your friends or followers, network effects makes advertising have the potential to reach and influence an unimaginably large audience. However, it is totally not the same thing between watching and purchasing, laughing and buying, which can be summed up as the first disadvantage: 1. Difficulty in transition between interest on the advertisement and actual purchase In the meantime, to operate the whole social network advertising, a company needs a complete team because lots of works need to be done, for instance, making videos, checking feedbacks and holding offline activities. That is exactly not the ways to cut cost due to the human resources are rarely expensive. Consequently, companies could not stand this advertising in a long term without outsourcing, especially for SMEs, which hope devoting more on the major business or research eagerly rather than in propaganda. The cost efficiency of online advertising in social network is still under need. As a result, the second disadvantage is: 2. Cost efficiency is not high enough for SMEs

Future prediction on types and platforms of online advertising Although current social network advertising brings benefits compared with traditional online ads, it still faces challenges from customers, suppliers, technology innovation, economic environment and social environment. The problems of cost efficiency and difficulty in transforming interest to real purchasing power are especially serious to SMEs because of their inherent limitations.

Situation of SMEs
SMEs often have less market share, lower revenue and profit margin, integration of ownership and management, and fewer employees compared with major industries. SMEs face more challenges and pressures especially under a highly competitive business environment.

Use Porter five forces (7) to analyze SMEs, the analysis result can be illustrated as:

Threat of new entrants Many SMEs are involved in low-end technology industry because of the limitation on financial, expertise and innovation. Once a SME explore a profitable market, the high profit will attract lots of firms since the barrier to entry is very low, and soon the profit margin will fall to an average one. It is much easier to be a follower instead of an innovator.

Threat of substitute products or services Customers may switch to substitutes when the switching costs are relatively low; they perceive that the products or services have no big differences or there are many choices in the market. SMEs don’t have the monopoly position as the giant companies do, so they have to provide outstanding and customized products or services, which can earn loyalty of customers.

(7)

Michael Porter, Nicholas Argyres, Anita M. McGahan, “An Interview with Michael Porter”, The Academy of Management Executive

Bargaining power of customers Customers often have more bargaining power than SMEs because customers have more choices and information about products or services and are available to get substitutes. Customers want personalized products or services.

Bargaining power of suppliers Because of the limitation of scale, SMEs purchase only small amount of raw materials, components, labor, and services. Suppliers have more bargaining power than the less important clients – SMEs. Therefore SMEs faces shorter account payable period and higher costs due to the loss of bulk discount.

Intensity of competitive rivalry The intensity of competitive rivalry is the major determinant of the competitiveness of SMEs. Because SMEs are often involved in low technology, their sustainable competitive advantages are weakened. SMEs also have limited budget on advertising expense, making it impossible to compete by investing a lot on ads. Luckily, SMEs limited production scale enables flexible customization, volume and variety.

From the Porter five forces analysis above, it can be concluded that SMEs should integrate data, explore intrinsic value of data, make corresponding business decisions, and carry out the strategy quickly and accurately, therefore meeting customers’ demand, turning customers into loyal ones and improving competitiveness. However, there is huge gap between giant companies and SMEs in capital, IT infrastructure, system and expertise. Without the support from analysis on transaction information and customer profiles, SMEs have difficulties in defiantly and effectively searching for potential target customers, forecasting customer behaviors, further analyzing customer’s social network circle and publishing appropriate advertisement to attract purchasers effectively. As a result, they have to utilize certain data platform to collect more relative data helping them reducing costs

and improving business efficiency. This data platform is based on “Big Data”. An introduction, deep study and prediction of big data will be illustrated below.

“Big Data” and the “Big Data” platform in the future Amazon.com has raised “item you like” in its online store, a special kind of advertisement providing the goods you probably need. It automatically selects the items in the system depending on what you have clicked and hovered. A nice shot for Amazon, although customers have already doubted on the accuracy of this system because it always shows ridiculous items. However, a recent research8 of Prof. Albert Barabasi from Northeastern University, acclaimed that they can predict where the person is for the next five minutes if they had complete locomotive data of the person in the previous month, and the accuracy rate is higher than 93%. The original content(5) is shown below:

We found, on average, 93 percent predictability across all users. This means that only 7 percent of the time a person’s whereabouts were a mystery. Much of this uncertainty corresponded to transitions between favorite spots—like the unpredictable commute time from work to home during rush hour or variations in lunch plans. For the rest of the day, most users’ movements were relatively easy to foresee.

This research means that the consumer behavior maybe predicted accurately through enough data analysis.

As the social network have already embedded deeply in people’ s life, making a new mapping of customer behavior, which makes it possible to turning concrete behavior into an unique database. For advertising, the only
question is, whether the database can raise the efficiency meanwhile cutting the cost.

In the past, we had analysis system for data and we knew how to analyze the traditional online advertising. Nevertheless the social-media data is completely different. Today, as known to us, (8)

Albert Laszlo Barabasi, Bursts: “The hidden pattern behind everything we do”, Dutton Press, 2010: P199

people interact with others in social network. They left all their tracks, like habits, preference, social relationship and labels during online activities.

Nowadays, a concept called “Big Data” has become continuously prominent in commercial world as the appearance of the Cloud Storage. “Big Data” is based on the user generated content as following:

1. Records of individual customer via social network monitoring, which might include comments, discussions in twitter and blog postings, etc. 2. The information of third-party linked with individuals, like friends in the community, or followers in Slide share, etc. 3. Profile information abstracted from Facebook, Linkedin, Slideshare and those kinds of network communities, etc.

All these can be extracted and incorporated into the customer analysis system, which needs huge volume storage. Different from the partial sample analysis before, full sample analysis can be handled now through “Big Data”. Data mining, data filtration, data analysis and data integration, which make all the raw data from user generated content to further improve the accuracy of event analysis and prediction.

Based on Prof. Albert Barabasi’s research, we could predict what would happen on an individual; definitely the “Big Data” will have more applications in the business area. For online advertising, getting customer’s exactly preference means having the key to rise both of the accuracy and efficiency. The advertisement can be precisely sent to the customer group that has high trend to purchase this product through the automatic filter system, and turn the low efficiency of viral marketing online ads to a high efficiency one. This can be defined as “targeting advertising”, which uses semantic analysis technology to put advertising directly on to the relevant page, or targeted customers in certain regions, or according to user attributes such as gender, occupation. “Targeting advertising” has a higher intelligence and can record changes of customers’ interests in the long term, and then publish consequential advertisements according to the characteristics of a user. This transformation can definitely help SMEs to control the advertisement budget.

From McKinsey’s investigation, the volume of data all around the world increases 40% annually. Numerous of data analysis companies, like splink and datahero, have risen up sharply. Many global companies even have developed their own data analysis platform for their business, such as Amazon and General Motors. As the huge potential of “Big Data” industry, someday, maybe it will take over the biggest market portion of IT industry. As a result, we predict that some advanced companies will stand out to build a data platform based on “Big Data”, it is called the “Big Data” platform in the rest of this article.

According to the information in their database, such as user characteristics, browsing path and consumption history, the “Big Data” platform can analyze customer personality and consumer behavior and help SMEs to do “targeting advertising”, in return SMEs will pay the platform some fees. Besides, by using related transaction credit records of clients from the platform, companies can determine discounts or even whether to have business with them, therefore reducing bad debt rate and costs of manual analysis.

The advertisements can be sent out at the most appropriate time in the most reasonable way. Combine the “Big Data” platform with GPS position from smart phone, SMEs can recommend products or services to customers and pop up messages such as item details, discount coupons to customers when they are near the physical stores through social network on the mobile. The efficiency of online ads will be further improved.

One application example of this platform is introduced below. Think about Mary complained the plummet of temperature yesterday on Facebook and her friend Lucy asked her out to go shopping. At the same time, the clothing store is using the “Big Data” platform to search for potential customers automatically – buying clothes of winter and autumn. The customers will be targeted according to their basic information (age, gender, income, education background, and aesthetic taste), routine behavior and social relationships. Mary will be a targeting customer because her complaint contains the words cold, and Lucy will also receive the promotion advertisement because she will go shopping with Mary.

In a word, SMEs benefit from precisely targeting on potential customers, and will be able to send personalized advertisements in various ways such as social network pop up advertisement. This advertisement policy transformation will improve the efficiency of online ads largely and will reduce the cost eventually. Since SMEs have huge gaps with giant companies in IT investments and knowledge, they will benefit more from this “Big Data” platform because they can collect and analyze more information that cannot be reached in the past.

Further prediction on the future advertisement form on the mobile – mapping pop up system Nowadays, a number of new geospatial tools from major players in the Internet industry are taking over the geospatial world speedy. Google, Yahoo, and Microsoft have all released Web-based mapping tools in the past years. For instance, Google Map provides detailed street information that users can perform map panning by dragging the map via the mouse.

Based on this trend and the “Big Data” platform mentioned before, one prediction has been made by us. In the future, the traditional mapping tool will transform to a “dynamic” mapping platform that contains commercial information and social network function. It is a mapping platform installed in the mobile that provides surrounding shops information and advertisement. In addition, since it integrates the features of “Big Data” platform, the advertisement will only display on the target consumer group’s mobiles. Result from its low advertising costs, high efficiency and convenience for users; SMEs are willing to put their basic and promotion information to this mapping platform to attract customers. Actually, SMEs and customers both are the users of this mapping platform. Taking the catering services as an example, business can update promotion and main dishes daily to attract customers. In addition, business homepages can link to intrinsic computer system in shops, and selectively publish information such as footfall and quantity of customers in waiting line. The target customers that “see” this advertisement can response to this information, and make effective choices.

The other feature of this mapping platform is, for customers, they can communicate with each other by instant messengers through this platform. For example, Mary intends to find a Sushi shop, and she

searches it on the platform. The platform provides surrounding sushi shops locations to Mary. Then, Mary can click the name of sushi shop to learn detailed dynamic information about the shop through their business homepage. Meanwhile, Mary can find other customers who are having dinners in this sushi shop right now, and Mary will talk to them by instant messengers to learn the customer reviews about food and service immediately.

This “dynamic” mapping platform can bring lots of benefits to different parties, including SMEs, the provider of this mapping platform, and customers. They are sorted out below:

Benefits of this “dynamic” mapping platform: 1. SMEs:

a) Better ads’ effects on attracting customers This application can put all key information that SMEs want to show directly on the platform to make it clear for customers finding useful information. Comments made by used customers also make it easier noticed by potential customers. b) Lower cost of ads SMEs can put their latest products on the platform flexible, which decreases cost of updating ads. c) Quicker feedback from customers This platform provides adequate and in-time communication between customers and SMEs, which will help SMEs to response to the feedback more quickly and then improve customers’ satisfactions. Good service reputation is one of the most useful ads.

2.

Provider of the platform:

a) Enlarge users of the platform This “dynamic” mapping platform will attract many users for its large information provided by different kinds of business groups which makes users living in a convenient life at any time in anywhere. b) One way to make profits The provider can charge SMEs for presenting information, or another form of ads, on the platform at the beginning of the service.

3.

Customers:

a) Efficiency This platform improves the efficiency that customers find useful information listed by SMEs. It also makes information more transparent through the comments made by other users. b) Effective social circles Through the communication with users making same marks on the map, customers can build more effective social circles on the base of same interests. This “dynamic” mapping platform is more humanity and personalized than any other social networks existed nowadays.

All in all, this platform will help businesses, especially SMEs, and customers develop in-time communication, and expand users’ social circles. In our prediction, this kind of “dynamic” mapping platform will form a new kind of social network. However, to build such a platform and reach such benefits, barriers still exist. For example, how to protect the users’ privacy, this issue is crucial even for the “Big Data”, may need to pay more
attention to be overcome.

Conclusion
This paper reviews the original form of online advertising, points out its pros and cons, analyzes current social network online advertising which is a big advance of cost saving and efficiency, and illustrates the working mechanism of SMEs setting up main page and finally attracting customers with vivid examples. However, the analysis using Porter Five Forces shows that due to the inherent limitation of SMEs themselves, such as capital, IT infrastructure, system and expertise, SMEs cannot fully enjoy the benefits of social network. Therefore SMEs should truly utilize the data to turn customers’ interests to purchasing, lower costs and increase efficiency. This paper further discusses the possibility of establishing a platform based on “Big Data” concept to facilitate SMEs and a prediction on the combination of the mobile terminal mapping and the “Big Data” platform to create more business since interactions between SMEs and customers, between customers themselves always bring convenience and satisfaction. All in all, no one can resist the glamour of social network on business but what is the next opportunity in the corner. This is a misery that difficult to predict.

Reference

Jim Jansen, “Use of the internet in higher-income households”, Nov 24, 2010 Stern Andrew, “8 ways to improve your click-through rate”, iMedia Connection, February 7, 2010

Li, Hairong; Leckenby, John D, “Internet advertising format and effectiveness”, Center for Interactive Advertising, 26 February 2010

Wendy Wong,”Instant brands in the age of social networking”, in Journal of integrated marketing communications 2011, Evanston: Northwestern University Press, 2011: 48-49

Wang Hongzhang, “Play weibo”, Mechanical enigineering publisher, Dec 20, 2011

http://case.iresearchad.com/html/201207/1311152113.shtml

Michael Porter, Nicholas Argyres, Anita M. McGahan, “An Interview with Michael Porter”, The Academy of Management Executive

Albert Laszlo Barabasi, Bursts: “The hidden pattern behind everything we do”, Dutton Press, 2010: P199

I am submitting the assignment for: □ an individual project or √a group project. The submission is done on behalf of all members of the group, on the understanding that ALL group members are responsible should there be any plagiarized contents. I declare that the assignment here submitted is original except for source material explicitly acknowledged, the same or closely related material has not been previously submitted for same or different courses, and that the submitted soft copy with details listed in the is identical to the hard copy (ies), if any, which has (have) been / is (are) going to be submitted. I also acknowledge that I am, and in the case of a group project, all members of the group are, aware of University policy and regulations on honesty in academic work, and of the disciplinary guidelines and procedures applicable to breaches of such policy and regulations, as contained in the website http://www.cuhk.edu.hk/policy/academichonesty/.

___________________ Signature Xiong Qian Li Chenlin Chen Yingjie Qi Yuanhe Sun Yanwen ___________________ Name DSME5210i ___________________ Course code

2012/12/11 ____________________ Date 1155023018 1155019971 1155027981 1155020362 1155020184 ___________________ Student ID Strategic Information Systems ________________________________________ Course title