As the internet has grown companies are realising at how effective a medium it is to market their products and services to customers over a worldwide basis. With this came web personalisation in which we see websites display adverts that are relevant to what the users have passed viewed, whether it be through simple page viewing, or through items purchased from an online store.

In this final blog, I am going to discuss the various pros and cons of this technology and give my opinion on what I think of it in general use.

Advantages

• Helps save time for new internet users in that it can eliminate repetitive tasks by remembering financial details.
• Allows users to see content that they may not have noticed otherwise that relates to an interest.

Disadvantages

• Lack of anonymity can discourage users and worry them on how they’re personal information will be used.
• User may not want or require suggestions made for them. Some see it as a invasion of privacy where others may just see it as an inconvenience.
• While it is good to form an opinion based on other people beliefs on this matter in terms of data security and anonymity ultimately, only in a real life example could I form a realistic and appropriate opinion on this behaviour. To test, I will go to my Amazon account and see what it believes are relevant to recent views and purchases I have made.
• My Amazon Recommendations

As can be seen from above, my recommendations are all in the genre of technology, most notably, external hard drives and Nintendo DS games. To give this system its due, I was looking for external hard drives with at least 1TB capacity and have bought ‘Yoshi’s Island DS’ for my Nintendo DS so it seems to have done a good, accurate job on extracting relevant information from my recent visits and purchases.

Now, am I for it? I’m still not convinced its best for consumers. My main worries would be about data protection and whether or not Amazon or any other company is going to sell on my details to a third party, most probably for the use of targeted advertising which I am not keen on.

Google is another big name if not the biggest in the search and advertising industry. One feature Google offers to users of its email service is the ability to personalise search results with targeted advertisements based on the users search criteria. Unlike the Amazon example on personalisation, I find this option by Google to be a little to ‘over the shoulder’ for my liking.

The biggest advantage that this personalisation has for the consumer is that it can help let them find something that they were otherwise going to miss out on. Any other benefits are usually just for the retailer in that it has the potential to get consumers to buy more products than they had originally intended when logging in.

Personally, I think that web personalisation is a good idea and it seems to benefit more users than those it does not but something has to be said on the importance that our data is kept secure and that it is never distributed to third parties, nor should there be any ‘opt out’ programs such as BT and Phorm (A company that filters all internet traffic and uses this information to display personalised adverts.) BT got into a lot of trouble with users on this as it was never announced that their every page view was being recorded in what can only be described as a ‘spy-ware’ style fashion. If companies are transparent about what information they are harvesting from users then I see this to only benefit the majority of potential customers and to help businesses attract more.

In this weeks blog, I am going to look at Customer Relationship Management. In order to measure this accurately, I am going to use several online tools to help me find 12 appropriate key words relating to the Audible online audio book download service.

Google Search-Based Keyword Tool

This is a little known tool provided by Google that allows a user to put in a URL of a website and have Google check what the most popular keywords are for it. Below is a screenshot of returned words when entering ‘Audible.co.uk’

From this screenshot we can see that Google is displaying names of audio books available on Audible based on more searched with Wayne Dyer being at the top. Although using authors names as a key word to a website is possible I’m not sure on how useful in the long run it would be for me to use it in my top 12 list seeing how people usually search based on what they want at a certain moment and not on sustainability.

Google Insights for Search

Google Insights for Search provides users with the ability to type in select keywords, displaying related top searches and rising searches (searches attaining popularity).

I entered in ‘audiobooks’ to see what Google suggested in terms of popular searches and possible key words for me to use.

From this screenshot we can see the top 10 search terms that relate to audiobooks. As we can imagine, free is the most popular suffix to the audiobook term.

Google AdWords

Another tool from the search engine giant is Google AdWords, this tool allows users to put in key words for a specific site, and Google will scan it and display many more of it’s on based on previous users searches and other aspects of Google’s index. For this one I put in ‘http:www.audible.co.uk’ and set the Match Type, to ‘Phrase’ and got the following results;

When searching for Talking Books;

When searching for Podcasts;

Certain terms such as ‘download audiobooks’ and ‘best podcasts’ appear across the board. This tells me that these are prominent terms and what people in real life are entering in search engines. Obviously, using some of these terms would see a real world benefit to Audible.

My List of 12 Keywords

Below is the list of the 12 keywords I have finalised on;

1. free audiobooks
2. download audiobooks
3. audiobooks for iPod
4. best audiobooks
5. children’s audiobooks
6. cd audio books
7. unabridged audiobooks
8. purchase audiobooks
9. download podcasts
10. best podcasts
11. talking books
12. talking books shop

I have chosen the above keywords as I believe they would help Audible in marketing. Many users are more concerned about how they can listen to the audiobook so I included devices such as ‘CD’ and ‘iPod’ to help novice users to the service. While they are not technically the same, I included podcasts as a keyword as there is a certain interoperability between them and audio books and users searching online may not know, or be confused by the numerous names they go by. I also included ‘talking books’ for those who would be unfamiliar or starting out with the whole audiobook market and not sure on correct terminology.

Cloud computing is an internet based use of computing technology. It is seen as a paradigm shift in that details are hidden away from users who do not have knowledge or control over the infrastructure that supports them. It typically involves the use of dynamically scalable infrastructures and makes use of virtualization technologies for economical reasons. The term came about when one looks at computer network diagrams and is an abstraction of the underlying infrastructure it conceals.

Cloud computing has several benefits and drawbacks, some are listed below;

Benefits

Save on electricity as only the server end need to be powerful. Client machines do not require much processing power as work is done on the server.

Suits small and medium companies who may not have finance to have a dedicated server farm in house.

Scalability – As the company doesn’t own the hardware, they don’t have to pay as much for expansion, the cloud computing business will buy more resources when required.

Consumers need only pay for the resources they use. Users do not have to pay for potential one time use scenarios.

Drawbacks

Issues of the Data Protection Act appear seeing how the user does not have physical access to his/her data. By using cloud services such as those provided by Google may be in breach of council, or local government policies.

If the users lose connection to the server then there is downtime. Many offerings provide offline capabilities but services such as email would still be affected. As downtime is out of your control, this makes it harder to know when normal service would resume in case of a problem.

Current broadband bandwidths do not cater for high speed large data access. If many users were to try to use a cloud computing service then speeds would drop, especially for any business moves around large files.

In ecommerce today, cloud computing is already in high use, such services such as Amazons Flexible Payments Service and Google Checkout use the cloud based model in order to allow customers to make quick and easy transactions with online services. With companies being able to outsource these core functions of their online business, they in turn will not require to pay people who would normally do this job and as such they would be able to lower prices for the consumer.

The downstream supply model relates to transactions between an organisation and its customers. Audible uses the web to provide its users with a service and to enable them to purchase audio books. Audible employ the pull supply chain in that its customers are not passive. In order to purchase from Audible, a customer has to register on its site using the subscription based model. The advantage of Audible providing the subscription based service is to help keep customers using their service, add to this that they are the only dedicated online audio book store, they by nature attract specialist customers who know what they are looking for. His model would not work with the Push supply chain as Audible could not profit effectively on random, one time, passive purchases.

There are two types of integration a company can use, the first is Vertical integration. This is the extent to which supply chain activities such as taking orders, to shipping the product are undertaken and controlled within the organisation. Virtual integration is when the majority of these activities are performed outside of the organisation by third parties. Audible use the vertical integration approach in that they manage their own systems from processing orders for the customer to allowing them to download their products from their services.

A value network is a complex set of social and technical resources. There are two types of value network, internal, and external. Internal value networks focus key activities including innovation, lead processing and customer support. On the web site, Audible has a support page where customers and go and get answers to frequently asked questions and email for technical support.

External values networks relate to customers or recipients, stakeholders, and suppliers. Audible uses its suppliers in order to get the best possible products for its customers at the best price, and uses feedback from users of its service in ways in which it can improve.

As Audible are a fully online store they already have an effective supply chain. As they are able to fully digitise their products due to their nature, order fulfilment can become instant and is in their case. Once a customer buys an audio book they can download it immediately to their computer. As these transactions occur electronically, then the time it takes for a user to make a transaction from start to finish is shortened dramatically over traditional means.

This force is in regards to a competitor being able to create a product/service that is similar to your product/service. This is an issue as it can lead to customers switching to the other brands. In the scenario for audible.com, there are similar services available however none of them specialise solely on distributing audio books. Other services such as iTunes offer this service but do not specialise in it. Despite a competitor of such size, Audible is the market leader in selling audio books.

The threat of the entry of new competitors

This force could be Audible’s biggest downfall. Although currently there is no company (with a fraction of the market share) trying to compete with Audible in the audio book market. However, due to the nature of the online service, it could be easily imitated by a new competitor who wants some of the profits that Audible currently dominates. The biggest issue for the new competitor would be trying to convince people to use their service over the Audible subscription based model.

The intensity of competitive rivalry

This force relates to how the internet encourages commoditization making it hard for the customer to differentiate products. Due to the shortened lifecycle of online products, it can be very difficult for a company to keep the edge over its competitors. Big competitors may have many employees working on a given product leading to them having an edge over your own. In terms of Audible they have several competitors, the biggest being Apple who has a 75% market share on the portable media market with their iPod range making them a big competitor for Audible. Having a monopoly of this size could cause issues for Audible and who specialise in audio books.

The bargaining power of customers

Online buyers have the more power than ever thanks to the Internet. Using this resource, savvy customers can find the best deals for products irrespective of the provider. Sites such as www.hotukdeals.com enable users to post up the best price for varying products/services. This means that customers are no longer tied to a particular provider for there consumables. This puts pressure on company’s in having to have the lowest prices to get the sale over a competitor. Seeing how Audible specialises in audio books they are in a fortunate situation that unlike other providers of all things digital who can be seen as ‘jack of all trades, master of none’. This means they tend to have the lowest prices and can therefore attract more custom than its customers.

The homepage for Hot UK Deals where users can post good deals and bargains.

The bargaining power of suppliers

The bargaining power of suppliers can become a major issue for a company if the supplier does not offer their materials at a reasonable price. This is a problem as it in turn makes it harder for the business to be competitive in the market if they are forced to raise prices in an effort to make a profit.  Audible have been able to attain their products at reasonable prices by being one of the first services to the market and as such, suppliers are comfortable to give them their products for low prices as the company has many customers of varying demographics enabling their products to reach the widest audience possible.

Purchasing an audio book is a very simple process and seems very standard in execution. When the user goes to make their first purchase they have to enter in their card details. After this they have to download and install the Audible software to enable to listen to audio books on their computer. This is a condition I am not keen on as I try not to install any superfluous software on my computer. Once the file has been downloaded it can be transferred to a portable device very easily. The main concern as with any digital download is DRM or Digital Rights Management. The system that online media providers use to ensure a product is being illegally copied to more devices than they want. While this is done for the sake of preventing file sharing it still remains a sticking point for me personally, when it comes to using their services. Audible is rather lax compared to others, allowing each download to be copied to 4 computers and 3 portable media devices.

As a digital download service, Audible doesn’t offer much in terms of a returns policy. However, they do use a subscription based policy, so if you no longer have any desire to use their service, you can cancel on a monthly or yearly basis.

Data encryption is of the upmost importance to the individual in the digital age. When one looks at the amount of online services they use and the number of company’s who have access to your personal data everyone would prefer their data to be encrypted. This scrambles the data travelling from your PC and the company’s servers and helps prevent malicious users gaining access to your personal data. When creating an account on Audible, I can only assume my data was protected for it certainly didn’t seem it when signing up through both Internet Explorer and Firefox. At no point did I see the ubiquitous IE Padlock icon, nor the green tinted address bar in Firefox.

The data capture form for signing up to Audible.

Cookies are small files stored on a user’s hard drive that enable a website to ‘recognise’ you when you visit. These files can contain personal information such as logins and passwords and information on previously browsed pages on the site. This enables the site to target advertising at the user based on what they have seen in the past.

It is clear that Audible uses cookies from the homepage when a user logs on. This enables them to recognise the user on the PC.

An example of cookies in use.

Sourced from Alexa Traffic Stats

In America one of Audible’s competitors is Barnes and Noble. This store does sell other types of products such as DVD’s and games but remains with iTunes to be Audible’s biggest competitor.

A chart below outlines unique visits to the site for August 2009.

Sourced from Compete

The process for buying and downloading an eBook from Audible is very straight forward.

The user enters www.audible.com into the address bar of their web browser. When the homepage appears, the user then chooses ‘Sign In’. From here, the user is presented with the library of Audible site with books categorized by ‘most popular’, ‘genre’, and a chronological list.

When the user makes their choice of book, they then go through to the checkout where they can complete their order. At this stage, the user can also choose the quality of the eBook from FM radio quality to CD quality. This option being provided for users with devices with limited space. When this is done the file is downloaded to the user’s computer and be listened to. Most users however, will copy it across to a supported portable media player (PMP). This can be done through for example, iTunes for users with iPods.

One area in which Audible could move into is providing access to their library on a subscription business through the digital television model. This could be effective for the company as the digital switchover is soon upon us and not all of the public want or need computers and PMP’s so this provides another angle for audible to market their business. This would target the older demographic of 50+ who currently account for 5% of Audible’s business. The main decision that would need to be made is about how Audible would go about protecting its media from theft and what digital rights management could be enforced in way that protects profits but does not interfere with the experience for the end user.

Audible.com Homepage

In March 2008, the audible brand was bought for $300M and is now a subsidiary of Amazon. With this purchase, it enables Amazon to provide users with an alternative way for its user base to purchase books online. This is interesting seeing that Amazon started online selling books and now they can sell them digitally. Currently the audible site contains over 60,000 titles from more than 600 providers, amounting to over 125,000 hours of programming.

Audible’s profits for the fourth quarter of 2007 were of $31.1 million, up 35% over the $23.2 million reported in the fourth quarter of 2006 and 13% over the $27.6 million reported in the third quarter of 2007. Revenue for the year ended December 31, 2007, was $110.0 million, up 34% from the $82.0 million in revenue for 2006. The company currently has 170 employees who manage everything from finances to what can and can’t be put on sale on the website.

Audible's state on the stock market as of 1.10.09

Audible is a site which allows all internet users to sign up for audio books to be bought, downloaded and listened to on a variety of mediums. Due to audible dealing in intangible products, it limits what other channels they could move into in order to bring the product to market. With the content being downloaded from the internet it prevents it being sold in a cost effective manner in a traditional bricks and mortar channel.

There are many factors influencing this increase and I have listed the most popular below:

1) Low prices of high speed broadband

2) An increase in the quality of life for many of the UK’s residents

3) Increase in the use of VoIP (Voice over Internet Protocol)

4) Easier access to media related information e.g. news websites, celebrity gossip

5) Social networking accounts for the majority of many internet users habits

Internet Usage in 2006

In 2006 an estimated 13.9 million households (57%) in Great Britain could access the Internet from home between January and April 2006. This is an increase of 2.9 million households (2%) since 2002, and 0.6 million (5%) over the last year.

Proportion of people who have used the internet in the last 12 months.

In total 40% of UK households were estimated to have broadband Internet access between January and April. This was an increase from the 28% recorded for Great Britain in 2005.

The above chart shows that the youngest age bracket (16-24) has the highest share of usage of all users at 94%, and that the 65+ age bracket is below 35%. This can be due to many reasons, the most prominent being a lack of understanding of the technology. It also shows that the AB social class reigns above the others suggesting it is a case of lack of education and lack of money, as many people see the internet as an unnecessary luxury.

Internet usage in 2008

In 2008 usage has heightened again by the younger age bracket of 18-24 are now using the internet to make purchases for digital music downloads. This has been most influenced by Apples iTunes Store.

Internet usage is also going up now network providers such as O2 are offering free or discounted broadband for signing up to a mobile phone contract with them.