emark Episode 1 8/2010 ppt

Nikhilesh Dholakia is professor in the marketing, e-commerce, and management information systems areas at the University of Rhode Island URI, USA, and a faculty associate at URI's Resear

Contemporary Research in E-Marketing, Volume 1

Idea Group Publishing © 2005 (347 pages)

This innovative text brings the interdisciplinary work of e-marketing to one outlet, and fuelsthe cross-fertilization of ideas and dissemination of key research concepts

Table of Contents

Contemporary Research in E-Marketing, Volume 1

Preface

Chapter I - Social Oracles as Advertising Tools in Programmable Businesses

Chapter II - Economic Issues in Advertising via E-Mail: Role for a Trusted Third Party?

Chapter III - Web Personalization for E-Marketing Intelligence

Chapter IV - E-Commerce as Knowledge Management: Managing Consumer Knowledge

Chapter V - MSQ-Model: An Exploratory Study of the Determinants of Mobile Service Quality

Chapter VI - Experiencing Quality: The Impact of Practice on Customers’ Preferences for and

Perceptions of Electronic InterfacesChapter VII - The Impact of eBay Ratings and Item Description on Auction Prices: A Comparison of

Designer Watches and DVDsChapter VIII - Viral Experiences: Do You Trust Your Friends?

Chapter IX - Public Opinions of Online Privacy: Definitions, Assessment and Implications for Industry

and Public PolicyChapter X - Online Privacy: Consumer Concerns and Technological Competence

Chapter XI - Using Server Log Files and Online Experiments to Enhance Internet Marketing

Chapter XII - CRM, KDD and Relationship Marketing: Requisite Trio for Sustainable E-MarketingChapter XIII - An Interactive Marketing Communication Model in New Product Diffusion

Chapter XIV- A Rhetorical-Prototype Mechanism for Creating International E-Marketing MaterialsChapter XV - How Innovativeness Influences Internet Shopping

Contemporary Research in E-Marketing, Volume 1

Idea Group Publishing © 2005 (347 pages)

This innovative text brings the interdisciplinary work of e-marketing to one outlet, and fuelsthe cross-fertilization of ideas and dissemination of key research concepts

Table of Contents

Contemporary Research in E-Marketing, Volume 1

Preface

Chapter I - Social Oracles as Advertising Tools in Programmable Businesses

Chapter II - Economic Issues in Advertising via E-Mail: Role for a Trusted Third Party?

Chapter III - Web Personalization for E-Marketing Intelligence

Chapter IV - E-Commerce as Knowledge Management: Managing Consumer Knowledge

Chapter V - MSQ-Model: An Exploratory Study of the Determinants of Mobile Service Quality

Chapter VI - Experiencing Quality: The Impact of Practice on Customers’ Preferences for and

Perceptions of Electronic InterfacesChapter VII - The Impact of eBay Ratings and Item Description on Auction Prices: A Comparison of

Designer Watches and DVDsChapter VIII - Viral Experiences: Do You Trust Your Friends?

Chapter IX - Public Opinions of Online Privacy: Definitions, Assessment and Implications for Industry

and Public PolicyChapter X - Online Privacy: Consumer Concerns and Technological Competence

Chapter XI - Using Server Log Files and Online Experiments to Enhance Internet Marketing

Chapter XII - CRM, KDD and Relationship Marketing: Requisite Trio for Sustainable E-MarketingChapter XIII - An Interactive Marketing Communication Model in New Product Diffusion

Chapter XIV- A Rhetorical-Prototype Mechanism for Creating International E-Marketing MaterialsChapter XV - How Innovativeness Influences Internet Shopping

Back Cover

Contemporary Research in E-Marketing brings the intrinsically inter-disciplinary work of e-marketing, by

academic researchers from various fields, to one outlet This book fuels the cross-fertilization of ideas andgreater dissemination of key research concepts Contributions from fields as diverse as marketing,

management, MIS, communication, computer science and finance offer exposure to cutting-edge ideaswith broad scope and international focus

About the Editor

Sandeep Krishnamurthy is associate professor of e-commerce and marketing in the Business

Administration Program at the University of Washington, Bothell He obtained his PhD from the

University of Arizona in marketing and economics His research interests are in the area of Marketing,

e-commerce and open source software Most recently, he has published a 450-page MBA textbook, Commerce Management: Text and Cases His scholarly work on e-commerce and open source software has appeared in journals such as Business Horizons, Journal of Consumer Affairs, Journal of Computer- Mediated Communication, Quarterly Journal of E-Commerce, Marketing Management, First Monday, Journal of Marketing Research and Journal of Service Marketing Sandeep also works in the areas of

E-generic advertising and non-profit marketing His work in E-generic advertising has appeared in journals

such as Organizational Behavior and Human Decision Processes (OBHDP) and Marketing Letters His work in non-profit marketing has appeared in the International Journal of Non-Profit Voluntary Sector Marketing He currently serves as associate book review editor for the Journal of Marketing Research and

is a co-editor for a special issue of the International Marketing Review He regularly reviews papers for a variety of journals including Marketing Science and the >Journal of Advertising His writings in the

business press have appeared on Clickz.com, Digitrends.net and Marketingprofs.com His comments havebeen featured in press articles in outlets such as Marketing Computers, Direct Magazine, Wired.com,

Medialifemagazine.com, Oracle’s Profit Magazine and The Washington Post He has developed and

taught several innovative courses related to e- commerce to both MBA and undergraduate students Mostrecently, he developed and taught a course titled “Search and the World Wide Web” He was responsiblefor founding the management information systems (MIS) concentration in the business program

Contemporary Research inE-Marketing, Volume 1

Sandeep Krishnamurthy

University of Washington, Bothell, USA

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Copyright © 2005 by Idea Group Inc All rights reserved No part of this book may be reproduced in anyform or by any means, electronic or mechanical, including photocopying, without written permission fromthe publisher

Library of Congress Cataloging-in-Publication Data

Contemporary research in e-marketing / Sandeep Krishnamurthy, editor

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A Cataloguing in Publication record for this book is available from the British Library

All work contributed to this book is new, previously-unpublished material The views expressed in thisbook are those of the authors, but not necessarily of the publisher

About the Authors

Sandeep Krishnamurthy is associate professor of e-commerce and marketing in the Business

Administration Program at the University of Washington, Bothell He obtained his PhD from the University

of Arizona in marketing and economics His research interests are in the area of e-Marketing, e-commerce

and open source software Most recently, he has published a 450 page MBA textbook, E-Commerce

Management: Text and Cases His scholarly work on e-commerce and open source software has appeared

in journals such as Business Horizons, Journal of Consumer Affairs, Journal of Computer-Mediated

Communication, Quarterly Journal of E-Commerce, Marketing Management, First Monday, Journal of Marketing Research and Journal of Service Marketing Sandeep also works in the areas of generic

advertising and non-profit marketing His work in generic advertising has appeared in journals such as

Organizational Behavior and Human Decision Processes(OBHDP) and Marketing Letters His work in non-profit marketing has appeared in the International Journal of Non-Profit Voluntary Sector Marketing.

He currently serves as associate book review editor for the Journal of Marketing Research and is a editor for a special issue of the International Marketing Review He regularly reviews papers for a variety

co-of journals including Marketing Science and the Journal co-of Advertising His writings in the business press have appeared on Clickz.com, Digitrends.net and Marketingprofs.com His comments have been featured in press articles in outlets such as Marketing Computers, Direct Magazine, Wired.com,

Medialifemagazine.com, Oracle's Profit Magazine and The Washington Post He has developed and taught

several innovative courses related to e- commerce to both MBA and undergraduate students Most recently,

he developed and taught a course titled 'Search and the World Wide Web' He was responsible for foundingthe management information systems (MIS) concentration in the business program He invites you to visithis web site at http://faculty.washington.edu/sandeep and his blog at http://sandeepworld.blogspot.com

Jounghae Bang is a doctoral student in the marketing field at the University of Rhode Island (URI), USA.

She holds a BS in business administration and an MS in management information systems (MIS) from theEwha Woman's University in Seoul, Korea She has worked as a consultant in the information technologyarea at Deloitte Consulting Company in Seoul, Korea; and as a researcher in the Ewha Center for

Informatization Strategies, Korea, involved in information system strategic planning projects and seminars.Her research interests bridges the areas of customer relationship management, relationship marketing, datamining and e-commerce

Nigel M Blackie is a lecturer in the school of Computing, Science and Engineering at the University of

Salford, UK

Nikhilesh Dholakia is professor in the marketing, e-commerce, and management information systems areas

at the University of Rhode Island (URI), USA, and a faculty associate at URI's Research Institute for

Telecommunications & Information Marketing (RITIM) He has published extensively in the fields ofmarketing, e-commerce, and consumer culture, and has taught in several academic and executive programs

in Asia, Europe, and Latin America Dr Dholakia has won the Charles Slater award of the Journal of Macromarketing He has also chaired doctoral dissertations that have won the MSI/ Clayton and

ACR/Sheth Foundation awards, and supervised award winning student essays at the Pacific

Telecommunications Council (PTC) His recent books include Worldwide E-Commerce and Online

Marketing: Watching the Evolution (Quorum, 2003), and M-commerce in North America, Europe and Pacific: Cases and Readings (Idea Group Publishing, 2004 forthcoming) Dr Dholakia holds a BTech in

Asia-chemical engineering from the Indian Institute of Technology, an MBA from the Indian Institute of

Management, and a PhD from the Kellogg School of Management at Northwestern University

Ruby Roy Dholakia is director of the Research Institute for Telecommunications and Information

Marketing (RITIM) in the College of Business Administration at the University of Rhode Island (URI)(USA), and founder of COTIM series of conferences She is also a professor of marketing at URI Sheholds a BS in marketing, an MBA from the University of California at Berkeley and a PhD in marketingfrom Northwestern University Engaged extensively in research projects on telecommunications and

information technologies for the home and the workplace, she has authored numerous books such as

Marketing Strategies for Information Technologies (JAI Press, 1994), New Infotainment Technologies in the Home: Demand-Side Perspectives (Lawrence Erlbaum Associates, 1996), and Worldwide E-Commerce and Online Marketing: Watching the Evolution (Quorum, 2003) Her research on information technology

consumers and markets, including e-commerce and m-commerce topics, has appeared in major businessand IT journals

Nick V Flor is an assistant professor in the marketing, information systems, and decision sciences group at

the University of New Mexico's Anderson Schools of Management (USA) He holds a PhD in cognitivescience from the University of California, San Diego His research interests include: programmable

autonomous businesses, superorganizations, distributed cognition, and code improvisation

Ronald E Goldsmith, Richard M Baker Professor of Marketing at Florida State University (USA),

received his PhD in marketing from the University of Alabama in Tuscaloosa His research interests includedeveloping measures of consumer behavior constructs, diffusion of innovations, and personality in

consumer behavior Dr Goldsmith's articles have appeared in the Journal of the Academy of Marketing Science, the Journal of Advertising, the Journal of Business Research, the Service Industries Journal, the Journal of Retailing, Marketing Intelligence and Planning, the European Journal of Marketing, The

Journal of Marketing Theory and Practice and others.

Ram D Gopal is GE Capital endowed professor of business and associate professor of operations and

information management in the School of Business, University of Connecticut (USA) He currently serves

as PhD director for the department His current research interests include electronic markets, intellectual

property rights, online marketing, and database systems His research has appeared in Management Science, Operations Research, INFORMS Journal on Computing, Information Systems Research, Communications

of the ACM, IEEE Transactions on Knowledge and Data Engineering, Journal of Management Information Systems, Decision Support Systems, and other journals and conference proceedings He currently serves as

an associate editor for Information Systems Frontiers

C Edward (Chip) Heath is an instructor in the Department of Marketing at Northern Kentucky University

(USA) He is currently a doctoral candidate at the University of Kentucky He received his undergraduatedegree in finance from the University of Illinois and an MBA from Northern Illinois University with a

concentration in information systems His previous research has been published in the Journal of

E-Commerce Research Professor Heath's research focuses on Internet related behaviors, consumer reactions

to aesthetics, and ethical issues

Charles F Hofacker is a professor of marketing at Florida State University, where he has been since 1985

with the exception of 2001, which was spent at the Università Bocconi in Milan, Italy Before the Internet,

he pursued research in consumer choice, and also in the area of information technology With the onset ofthe Internet, he does research on how consumer choice is impacted by Internet technology He has had

papers published on these and related topics in the Journal of Marketing Research, Management Science, the European Journal of Marketing, the Journal of the Academy of Marketing Science, Psychometrika and Multivariate Behavioral Research When not pursuing these topics he can often be found on his road

Barbara A Lafferty is an assistant professor of marketing at the University of South Florida (USA) She

received her PhD in business administration from Florida State University, an MS from the University ofIllinois, and a BA from Ohio State University Her research interests include corporate reputation, cause-

brand alliances, and social marketing She has published in the Journal of Advertising, Journal of Business Research, Psychology & Marketing, European Journal of Marketing, Corporate Reputation Review,

Journal of Global Marketing, and Journal of the Academy of Business Administration.

Veronica Liljander (born 1960) is professor (acting) of marketing and head of the Department of

Marketing and Corporate Geography at the Swedish School of Economics and Business Administration(Hanken), Helsinki, Finland Her main research interests are service and relationship marketing, on whichshe has published articles, for example, in the International Journal of Service Industry Management,Journal of Services Marketing, and Psychology & Marketing She is currently on the editorial board of the

European Journal of Marketing, International Journal of Service Industry Management, and the

International Journal of Internet Marketing and Advertising From 2000-2001, she spent a year as a visiting

scholar at Maastricht University, The Netherlands In 2004, she spent a month as visiting professor at theUniversity of Roskilde, Denmark

Rachel McLean is a lecturer in management information systems at the Manchester Metropolitan

University Business School, UK

Penelope Markellou has an MSc in Computer Science, in the area of designing and evaluating e-business

systems She is working as a researcher in the Computer Engineering and Informatics Department of theUniversity of Patras and in the Internet and Multimedia Technologies Research Unit of the Research

Academic Computer Technology Institute Her research interests lie in personalization and Web miningtechniques applied in the e-Commerce and e-Learning domains She has published several research papersand has co-authored five book chapters

Jamie Murphy is an associate professor of electronic marketing at the University of Western Australia and

he has also taught in the US, Canada, Austria and Switzerland His business background includes working

as European marketing manager for several sports-related products and owner/manager of two restaurants.His research interests focus on effective use of the interactive media by individuals, organizations and

business, especially those in the tourism field He has covered Internet-related stories for the New York Times and Wall Street Journal and has dozens of scholarly publications When not pursuing these topics, he

is on his road bike as well

Kyle B Murray is an assistant professor of marketing at the University of Western Ontario's Richard Ivey

School of Business (Canada) His research focuses on consumer judgment and decision making, with anemphasis on how consumers make choices in electronic environments Dr Murray's work in this area has

been published in journals such as the Journal of Consumer Psychology, Communications of the

Association for Computing Machinery, and Advances in Consumer Research As an educator Dr Murray

has taught undergraduate, MBA and executive level courses in marketing and e-commerce He has also

been active as a consultant for a variety of organizations in fields as diverse as oil and gas, manufacturing,financial services, retailing, and not-for- profit enterprises He can be reached through the contact

information on his Web site at www.kylemurray.com

Jan Nordman (born 1977) graduated with a Master's of Science (Econ.), and a major in marketing, from

the Swedish School of Economics and Business Administration, Helsinki (2003) With previous workexperience from telecommunications and e-commerce, he decided to do a study on mobile service qualityfor his master's thesis Studies and work have taken him around the world during the last years: Helsinki,London, Bangkok, Washington, DC, and Geneva, where he is currently residing

Kartik Pashupati (PhD, Michigan State University) is currently at the Southern Methodist University

(USA), formerly an assistant professor in the Department of Communication at Florida State University(USA) His research interests include consumer responses to marketing communication, internationaladvertising, interactive advertising and ICT policy in developing countries His research has been presented

at national conferences and published in journals such as the International Journal of Advertising,

Psychology & Marketing, Journal of Current Issues and Research in Advertising, Journal of Interactive Marketing and Gazette: The International Journal for Communication Studies.

Pushkala Raman (PhD, Texas A&M University) is an assistant professor of marketing at Florida State

University Her research interests include customer relationship marketing, privacy related issues,

technology and the consumer, and volunteering behaviors Her research has been published in the

Communications of the ACM, Journal of Nonprofit and Public Sector Marketing and Journal of Customer Behavior She can be reached at praman@cob.fsu.edu.

Maria Rigou has an MSc in Computer Science, in the field of interactive systems evaluation She is

currently working as a researcher (PhD student) at the Computer Engineering and Informatics Department

of the University of Patras, and also at the Internet and Multimedia Technologies Research Unit of theResearch Academic Computer Technology Institute As a researcher, she is working on personalizationtechniques and the use of Web usage mining in adapting Web site content and structure and has severalpublications in the domain of Web mining and its applications in e-Commerce, e-Learning, as well as theformation and behavior of Online Communities She has coauthored three book chapters on

personalization-related technologies

Mark P Sena is an assistant professor in the Department of Information Systems at Xavier University He

holds a PhD in decision science and information systems from the University of Kentucky along with aBBA in business analysis from Texas A&M University and an MBA from Miami University (OH) His

research has been published in Decision Support Systems, the International Journal of Human-Computer Interaction, the Journal of Decision Systems, and Information Technology and Management Professor

Sena's research interests include electronic commerce, enterprise systems, and business intelligence

Kim Sheehan is associate professor at the University of Oregon's School of Journalism and

Communication (USA) Her teaching and research interests include online consumer behavior, research

methods, and advertising creative strategy Her research has appeared in Journal of Advertising, Journal of

Advertising Research and Journal of Public Policy and Marketing Kim is author of Controversies in

Contemporary Advertising (Sage, 2003) and was co-author of Using Qualitative Research Methods in Advertising recently transmitted to production (Sage, 2002); in addition she contributed chapters to Internet Marketing: Readings and Online Resources, Paul Richardson, McGraw/Hill (2000) and Frontiers in Direct Marketing Research, Joseph Phelps, John Wiley and Sons (1998) The Advertising Research Division in

1997 awarded her Best Paper In 1999, Kim was finalist for Best Paper in the Journal of Advertising Prior

to becoming an academic, Kim worked as media director and media supervisor for several advertisingagencies including Foote Cone and Belding Her clients included Budweiser, Coldwell Banker Real Estate,McDonalds, Laura Ashley, People Magazine, Bank of Boston, and Kraft-Miracle Whip

Spiros Sirmakessis is an assistant professor in the Technological Educational Institution of Messolongi

and the manager of the Internet and Multimedia Technologies Research Unit of the Research AcademicComputer Technology Institute (http:// www.cti.gr) He is also an adjunct assistant professor at the

University of Patras, teaching Human Computer Interaction and e-Business courses His research areasinclude human computer interaction, human factors, e-business strategies, efficient techniques for designinginteractive systems and web mining He has co-authored three books and several research papers published

in international journals and conferences

Kirk St.Amant is an assistant professor with the Institute of Technical and Scientific Communication at

James Madison University His background is in anthropology, international government, and technicalcommunication His research interests include intercultural communication with a focus on how onlinecommunication technologies affect cross-cultural interactions He has taught online courses in interculturalcommunication for Mercer University and James Madison University He has also taught courses in e-commerce, distance education, and business communication in the Ukraine as a part of the USAID-

sponsored Consortium for the Enhancement of Ukrainian Management Education (CEUME)

Fiona Sussan is a marketing doctoral student at Baruch College, CUNY in New York, NY Her research

interests include e-marketing, new-product diffusion and information systems She was a Fellow at the

2003 AMA Sheth Foundation Doctoral Consortium Her dissertation proposal has recently been awardedthe John Funk Fellowship from the Center of Research in Technology and Innovation of Kellogg School ofManagement, Northwestern University

Arvind K Tripathi received his PhD in operations and information management from the School of

Business, University of Connecticut (2003) He is currently an assistant professor of management

information systems at the University of Washington Business School, Seattle, Washington His currentresearch interests are in the areas of management of information systems, online advertising/marketing, and

electronic markets His research has appeared in Communications of the ACM and Americas Conference in Information Systems.

Shenja van der Graaf received her MA in media studies (Institute of Media & Re/ Presentation) at the

Utrecht University (1999) and is currently working on her PhD on advertising practices In 2000 she wasawarded with a scholarship from the Dutch Ministry of Education, Culture and Sciences, Leiden Universityand Japan-Netherlands Institute in Tokyo Her research focused on the Japanese media industry and

American and European markets In 2003 she was admitted in the summer doctoral program at the OxfordInternet Institute (University of Oxford) Currently she is collaborating on a several projects with

Hakuhodo, Ericsson, and the Berkman Center for Internet & Society

Zhiping D Walter received a PhD in business administration, specializing in management information

systems from the Simon School of Business, University of Rochester She is currently an assistant professor

of management information systems at the Business School, University of Colorado at Denver Dr Walter'sresearch interests are in the areas of economics of information systems, Internet marketing, and informationtechnology in healthcare Her research has been published or has been accepted to publish in

Communications of the ACM, Decision Support Systems, International Journal of Electronic Commerce, European Journal of Operational Research, International Journal of Healthcare Technology Management and Technology Analysis and Strategic Management.

Michael A Webb is a professor in the Department of Economics at Xavier University He served as the

dean of Xavier's Williams College of Business (1997-2003) after serving as department chair of economics

at the University of Kentucky He holds a PhD in economics from the University of Illinois at Urbana along with a BA and MA from the University of Texas at Arlington He has published research in

Champaign-such journals as International Economic Journal, Journal of Development Economics, Economic Inquiry, Oxford Economic Papers, and the Journal of International Economics Professor Webb's research focuses

on international trade and development

E-Marketing is, intrinsically, an area that spans disciplines Over time, I have learned that my colleagues infields as disparate as Computer Science, Management Information Systems and Communication share asimilar passion for E-Marketing A topic such as Internet advertising has been researched by my colleagues

in MIS, advertising, communication and marketing Moreover, colleagues in other countries have differentperspectives on E-Marketing This book was seen as the place for interdisciplinary conversation- a rareforum where intellectual work from different areas and points of view intersect

I must report that I have been very successful in achieving this goal The book attracted chapters from mycolleagues in a wide variety of disciplines I have received submissions from countries as disparate asCanada, Greece, Finland and Switzerland The chapters included here use a wide variety of methodologiesranging from economic modeling to qualitative inquiry to experimentation I had to turn away a highvolume of well-qualified chapters simply because of a lack of room A second volume is planned at thispoint

The first chapter in this volume is by Nick Flor of the University of New Mexico His chapter, Social Oracles as Advertising Tools in Programmable Businesses, discusses social oracles, a unique softwareagent that outputs social information He provides extensive examples of social oracles and uses this tomotivate the idea of autonomous businesses

Arvind Tripathi (University of Washington), Ram Gopal (University of Connecticut) and Zhiping Walter's(University of Colorado) chapter, Economic Issues in Advertising via E-Mail: Role for a Trusted Third Party?, argues that the problem of Spam can be overcome using permission marketing- especially opt-in orpermission marketing However, they argue for the inclusion of a trusted third party - an admediary - whowill moderate e-mail traffic

The next chapter, Web Personalization for E-Marketing Intelligence, by Penelope Markellou, Maria Rigou(University of Patras and the Research Academic Computer Technology Institute) and Spiros Sirmakessis(Technological Educational Institution of Messolongi and the Research Academic Computer TechnologyInstitute), outlines the importance of personalization and identifies the key research issues in this

burgeoning area Their chapter also highlights the different computer systems that would be needed toachieve this

E-Commerce as Knowledge Management: Managing Consumer Knowledge, by Rachel Mclean

(Manchester Metropolitan University Business School) and Nigel Blackie (University of Salford) is aninnovative effort at thinking of E-Marketing in the light of knowledge management The authors focus onconsumer-to-consumer interactions and the knowledge that is generated and shared therein

Mobile service is clearly going to be a big part of our future This is already a reality in countries such asFinland (home of Nokia) In the next chapter, MSQ-Model: An Exploratory Study of the Determinants of Mobile Service Quality, Veronica Liljander and Jan Nordman (Swedish School of Economics and BusinessAdministration) provide us with a detailed understanding of the dimensions that undergird mobile servicequality This chapter is also a great example of collaboration between industry and academia.

Kyle Murray's (University of Western Ontario) chapter, Experiencing Quality: The Impact of Practice on Customers' Preferences for and Perceptions of Electronic Inter- faces, highlights the need to understand

how people 'consume' electronic interfaces He discusses the results from a fascinating experimental study

in this area

eBay is here to stay An important feature of eBay is the rating of sellers The next chapter, The Impact of

eBay Ratings and Item Descriptions on Auction Prices: A Comparison of Designer Watches and DVDs, by

Mark Sena, Michael Webb (Xavier University), and C Edward Heath (Northern Kentucky University)provides empirical evidence linking seller ratings and item descriptions to auction prices

Shenja van der Graaf (Utrecht University) provides a fascinating analysis of viral marketing in Viral

Experiences: Do You Trust Your Friends? Drawing from many vibrant examples, van der Graaf provides uswith a unique perspective on how memes transmit on the Web

Kim Sheehan's (University of Oregon) chapter, Public Opinions of Online Privacy: Definitions, Assessment and Implications for Industry and Public Policy, polls polls She conducts a review of many polls andpoints out how different question formats lead to different results

Pushkala Raman (Florida State University) and Kartik Pashupati's (Southern Methodist University) chapter,

Online Privacy: Consumer Concerns and Technological Competence, is based on qualitative inquiry ofcustomers They argue that consumers 'selfperceived technological competence' drives their attitude

towards privacy This important work is sure to impact future research in online privacy

Server logs are those mysterious files that record your online footprints as you browse from site to site.Charles Hofacker (Florida State University) and Jamie Murphy (University of Western Australia) demystifyserver logs in their chapter, Using Server Log Files and Online Experiments to Enhance Internet

Marketing This should be a great primer for those interested in using server logs in their research

The next chapter, CRM, KDD and Relationship Marketing: Requisite Trio for Sustainable E-Marketing, byNikhilesh Dholakia, Jounghae Bang and Ruby Dholakia (University of Rhode Island) argues for a linkagebetween two emerging fields - CRM and KDD - and the established literature in relationship marketing.This important work, based on a dissertation, is sure to influence our thinking of online relationships.Fiona Sussan's (Baruch College, CUNY) chapter, An Interactive Marketing Communication Model in New Product Diffusion, applies the Bass Model to one new product diffusion scenario Her work provides uswith a unique point of view

International e-marketing is a fascinating area Kirk St.Amant's (James Madison University) chapter, A

Rhetorical-Prototype Mechanism for Creating International E-Marketing Materials, provides us with aframework to organize our thinking when preparing E-Marketing materials.

Finally, Ronald Goldsmith (Florida State University) and Barbara Lafferty's (University of South Florida)chapter, How Innovativeness Influences Internet Shopping, is a fascinating work that looks at why somecustomers adopt e-shopping first The authors distinguish between general innovativeness and onlineinnovativeness They find that the two are related However, online innovativeness mediates the influence

of global innovativeness on behavior

It is my hope that this work will spur greater research in E-Marketing in a variety of disciplines

Sandeep Krishnamurthy

University of Washington, Bothell, USA

Editor

Chapter I: Social Oraclesas Advertising Tools in Programmable Businesses

no-programmable) businesses.

A software agent is a computer program that assists people in information-related tasks, usually across anetwork like the Internet Early software agents primarily filtered information and performed repetitivetasks (Maes, 1994) Current software agents not only assist people but can actually stand in for them in theperformance of complex information-intensive tasks, such as those agents that buy and sell physical (Maes,1999) and informational (Flor, Lerch, & Hong, 1999) goods in electronic marketplaces However, softwareagents are not just for doing work; they can provide users with entertainment as well

A social oracle is a particular kind of software agent that produces entertaining social information for a

user The information is typically for amusement purposes only, and not necessarily genuine Perhaps theearliest example of a social oracle was Eliza (Weizenbaum, 1966) - an agent that simulated a

psychoanalyst Users could ask Eliza questions and it would respond with psychoanalyst-style answers Theenormous growth in online users has driven a concomitant growth in the number of online social oracles.Some of these social oracles, like online horoscopes, are based on popular offline content, e.g., newspaperhoroscopes While other social oracles like Web personality tests, exist offline but are only popular online.Common to social oracles is the ability to take information about a user or a user's friends as input, andoutput amusing information Although primarily for user entertainment, businesses can adapt social oraclesinto effective, low-cost, advertising tools

Social oracles are part of a growing trend by companies of leveraging game playing for advertising

purposes The most well-known instance of games used for advertising is the 'advergame'-a term coined by

Chen and Ringel (2001), which they define as 'interactive gaming technology to deliver embedded

advertising messages to consumers … by incorporating branding directly into the gaming environment.' It

is still too early to know whether advergames actually improve consumers' brand perception or their intent

to purchase (Rodgers, 2002) However, the low cost of advergame campaigns makes them an attractivealternative to conventional forms of advertising

Although social oracles are a form of advertising game, they have a different goal from advergames, per se Instead of branding, the main goal of a social oracle is to get a user's friends or other associates to visit a business's Web site Once at the Web site, branding and other forms of conversion can take place, including

converting a visitor into a registered customer or getting visitors to purchase a product at the site Socialoracles are intended to be run at the business's Web site by the site's existing community of users Thus,there are development costs, but no campaign costs A site's existing user community, through use of theoracles, freely brings in new users Finally, initial results indicate that the conversion rates for turningvisitors into registered users far exceeds the response rates expected from direct marketing, as this chapterreports

To get a better understanding of why social oracles make good advertising mechanisms, this chapter

analyzes two social oracles that were used successfully in building and growing the user community of a

special kind of online business known as a programmable autonomous business (Flor, 2003, 2004) This

chapter will be structured as follows

The first section briefly describes: the programmable business that houses the social oracles, the operation

of the social oracles, and their conversion rates The second section is a representational analysis of thesocial oracles - based on the theoretical framework of distributed cognition (Hutchins, 1995a) - to uncoverthe social processes that underlie their advertising effectiveness The analysis will reveal that the socialoracles are effective, not because they provide entertaining social information, but rather because they aretechnological adaptations of ordinary social processes in which people freely exchange information Thethird section discusses how technology can automatically transform social information, which is jointlyconstructed by a user and a social oracle, into an online, direct-response advertisement (Ogilvy, 1985) Weend by discussing the implications of this research for more conventional, non-programmable, businesses

To my knowledge, this chapter presents the first research to examine the re-engineering of basic socialprocesses for advertising purposes Hopefully, it will serve as a catalyst for future research in this area

The Programmable Autonomous Business - YesNoMaybe.com (YNM) - and Its

Social Oracles

The Web site discussed in this chapter, which contains the two social oracles, is YesNoMaybe.com, or

simply YNM YNM is a Web-based forum developed by Mental Systems, Inc., which has been in operation

since February of 2000 It is the most popular teen advice forum on the Web (Alexa, 2004) and largest teenadvice forum in the Open Directory[1], (www.dmoz.org) - for both its own category Kids and Teens : Teen

Life : Advice : Romance, as well as its parent category - with more than 60,000 registered users who have

contributed more than 300,000 postings YNM's forum consists of 10 different categories, e.g., 'Questionsfor Girls' and 'Questions for Guys.' Similar to other Web forums, users can: (a) browse a list of topics(Figure 1-1, left screen); (b) read the topic and its opinions (Figure 1-1, right screen); or (c) post their owntopics and opinions (see forms at bottom of Figure 1-1) A poll of more than 700 users indicates that 80%are females and 20% are males Ninety-six percent (96%) of the users are 18 or under, with 62% below theworking age of 16

Figure 1-1: Screen shots: Topic list (left) and topic/opinion display (right)

However, YNM is more than just a teen advice forum, it is also a 'programmable autonomous business': anactual business built entirely in software that runs itself - automatically generating revenue and customers,without any employees or managers guiding it (Flor, 2004) YNM generates revenue by selling

advertisement space on its Web pages and has operated profitably since its inception in February of 2000.For example, in its first quarter of operation, when companies had large Internet advertising budgets, YNMaveraged $9,500 per month in advertising revenues Since then revenues have been more modest Over thepast year (9/1/2002-8/31/2003), YNM averaged $153/month in advertising revenues, with only $15/month

in expenses (fixed Web hosting fee) - a simply profitability index of 923% Besides operating profitably forthe past three years, YNM continues to grow its user community, averaging 1,031 new user registrations amonth over the past year These users are YNM's customers, without which revenues would cease to exist

As an autonomous business with neither employees nor managers guiding it, how does YNM continue togrow its customers? One possibility is that users find YNM through search engines However, aside fromits listing in the Open Directory, YNM does not appear within the first ten pages of any of the major searchengines, for common search terms like 'teen' or 'teen advice' Moreover, YNM's owners do not pay to

advertise YNM Thus, YNM must get its customers through other means In particular, YNM has twosocial oracles that are adapted for advertising purposes: a Compatibility Game and a 'Love Detective'.

Oracle 1: Compatibility Game, Basic Operation, and Conversion Rate

To play the Compatibility Game, a user clicks on the link labeled 'Love Match?' in the left-hand menu,which brings up the game page The page instructs the user to enter two names into a form, and to click the'Love Rating' button Upon doing so, the game returns a page with three compatibility scores along with adetailed explanation of those scores The game also gives the user the option of e-mailing the results to one

or more friends by entering their e-mail addresses into a text box Lastly, the e-mails invite the recipients tovisit YNM and play the Compatibility Game Figure 1-2 depicts the Web page for the Compatibility Game(see also Appendix A for a more detailed account of a user playing this game)

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Figure 1-2: Oracle 1: Compatibility Game

When a user e-mails a compatibility report to a friend, YNM keeps a record of the e-mail address in a

database friend table This record of e-mail addresses provides a means of assessing the advertising

effectiveness of the Compatibility Game, as follows YNM requires new users to register; the registrationform asks for an e-mail address, a secret name, and a password, all of which get stored in a database

registration table If an e- mail address in the friend table matches an e-mail address in the registration

table, the Compatibility Game is assumed responsible for that particular registration During the course of

the year spanning December 26, 2001 through December 26, 2002, the Compatibility Game sent out 4,778unique e-mails Six hundred and ninety-one of the e- mail addresses in the registration table matched those

e-mails sent out by the Compatibility Game - a 14.46% conversion rate[2] This rate is an order of

magnitude higher than the 1-1.4% response rate that companies expect from direct mail advertisements (Green & Elgin, 2001) In fact, the oracle's conversion rate may be even higher since most users have

multiple e-mail accounts Thus, a user may receive a compatibility report via one e-mail account, e.g., anAOL e-mail account, yet register on YNM using a different e-mail account, e.g., Hotmail A simple

comparison of e-mail addresses in the friend and registration tables would not count such a user.

Oracle 2: Love Detective, Basic Operation, and Conversion Rate

To play the Love Detective, a user clicks on the link labeled 'Love Detective' in the left- hand menu, whichbrings up the Web page for the Love Detective The page instructs the user to enter the e-mail addresses ofindividuals whom the user suspects have a romantic interest in him or her (Figure 1-3), and then to click the'Find Out' button After the user does so, the Love Detective e-mails these suspects and invites them to playthe Love Detective as well - to find out who likes them After a suspect finishes playing, the Love Detectiveupdates a status table (see bottom of Figure 1-3) for both the user and the suspect, which indicates whether

or not there was a match: a common e-mail address entered by both the user and suspect (see also Appendix

B for a detailed account of a user playing the Love Detective)

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Figure 1-3: Oracle 2: Love Detective

Similar to the Compatibility Game, YNM keeps a record of the e-mail addresses used by the Love

Detective within a database suspect table, which provides a means of assessing the advertising effectiveness

of the Love Detective To recap, YNM requires new users to register; the registration form asks for an

mail address, along with other information, all of which get stored in a database registration table If an mail address in the suspect table matches an e-mail address in the registration table, the Love Detective is

e-assumed responsible for that particular registration

In the time frame spanning December 26, 2001 through December 26, 2002, the Love Detective e-mailed

2,588 unique individuals Seven hundred and eighty-two of the e-mail addresses in the registration table matched those in the suspect table, indicating a 30.22% conversion rate One again, this number far exceeds

the 1-1.4% response rate expected for direct-mail advertisements As with the Compatibility Game, theactual conversion rate may be higher, since a suspect may register with a different e-mail address than the

one stored in the suspect table.

In short, social oracles are an effective advertising mechanism for YNM, especially compared to direct mailand banner advertisements, which have response rates of 1-1.4% and 0.25% (Nielsen Netratings, 2000),respectively Note that social oracles' effectiveness figures are based on conversion rates, not responserates, the latter of which would include those users that received an e-mail and visited YNM, but did notregister Gurley (2000) reports that once at a Web site, the conversion rate - the fraction of users that visit asite and either purchase a product or register - is between 3% and 5% Thus, the social oracles' responserates are almost certainly much higher than their conversion rates

[ 1 ]The Open Directory is a hierarchical organization of Web sites similar to Yahoo (www.Yahoo.com), butmuch larger and is outsourced to many of the top search engines, including Google (www.Google.com) andAOL (search.aol.com)

[ 2 ]The fraction of users that visit a site and either purchase a product or fill out a form

Analysis: YNM'S Social Oracles

The data indicates that social oracles are effective advertising tools, and the primary aim of this chapter is

to understand why We take a cognitive approach to answering this question based on the theoretical

framework of distributed cognition (Hutchins, 1995a, 1995b) Distributed cognition researchers viewcognition as more than just a process inside the heads of individuals Rather, cognition is a process that canextend beyond the individual to incorporate a wide distribution of resources Thus, a collection of peopleand technology interacting to perform a task - such as the users that interact through the social oracles -

qualifies as a cognitive system Other examples of supra-individual cognitive systems, which distributed

cognition researchers have studied include: air traffic control (Halverson, 1995); aviation (Hutchins, 1995b;Hutchins & Palen, 1998); computer-mediated work (Rogers, 1994); fishing (Hazlehurst, 1994); guitar songimitation (Flor & Holder, 1996); helicopter piloting (Holder, 1999); large ship navigation (Hutchins, 1991);puzzle solving (Zhang & Norman, 1994); computer programming pairs (Flor, 1998); customer-centeredbusinesses (Flor & Maglio, 1997); and video-game playing (Kirsh & Maglio, 1994)

Distributed cognition researchers employ a variety of techniques including field studies, experiments, andcomputational models, as a means of analyzing cognitive phenomenon conceived as a distributed process.For studying businesses as cognitive systems, Flor and Maglio (2004) have developed a representationalanalysis technique that combines physical symbol system concepts (Simon, 1981) with distributed

cognition principles Briefly, it is an inductive method where one first charts the movement of a symbolicstate (information) across the individuals and technologies (collectively 'agents') that participate in anactivity By abstracting the agents and information in the chart (also known as an information activity map)one can induce the general processes underlying the observed information activity (see also Appendix C for

a primer on representational analysis)

Analysis of Oracle 1

To uncover the social process the Compatibility Game is adapted from, we start by analyzing the

information activity in an actual use of the game Each time a customer, (C), sends a compatibility report to

a friend, (F), that customer's IP address is logged, along with the recipient's e-mail address and the time thereport was sent Figure 1-4 depicts a portion of this database log for a user with a specific IP address of31.202.176.200 The log indicates that this user played the Compatibility Game twice on 1/12/2003 and e-mailed results to two friends

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Figure 1-4: Database entry for the Compatibility Game

When the user played the game, he or she entered two names into the game's form (1 form: a, b) The game

then returned a page with a compatibility report - both scores and explanations - for a and b (2 page:

score+expl.a,b) Next, the user entered e-mail addresses for two friends (3 form: eMailFred, eMailWilma).Finally, YNM sent an e-mail containing just the scores to these friends (4 eMail: scorea, b) Figure 1-5depicts the information activity map for this specific user

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Figure 1-5: Specific information activity map for the Compatibility Game

Figure 1-6 is a generalization of the information activity map in Figure 1-5 A customer (C), enters names(1 form: xi, yi) into the social oracle, which then returns a social asset (2 page: asseti) - social informationthat is of interest or value to members of a given community and that C naturally wants to share with

friends and associates C uses YNM to e-mail this social asset (3 form: eMailFi) to one or more friends(F1…FN) Recall that the friend does not receive the entire asset, just a portion, or derivative, of the asset (4.email: asset'i)

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Figure 1-6: General information activity map for the Compatibility Game

To uncover the social process underlying the Compatibility Game, first realize that the customer does notknow that YNM is just e-mailing the scores to a friend The customer believes that YNM is sending theentire report; both scores and explanations (Figure 1-7)

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Figure 1-7: What the customer believes is happening (asseti, vs: asseti')

From C's point of view, YNM is simply relaying the same information to C's friends (Fi) that C would haverelayed on his or her own The difference is that YNM uses e-mail as a distribution medium, whereas Cwould have communicated the information either face- to-face or over the phone, to name just a few of the

'offline' media typically used by C Figure 1-8 depicts the information activity map if C were to relay thesocial asset, offline, to his or her friends.

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Figure 1-8: Customer conveying the social asset 'offline'

If we superimpose the maps for Figure 1-7 and Figure 1-8 at C (Figure 1-9), it is apparent that both

activities accomplish the same function, namely the delivery of a social asset to a customer's friends

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Figure 1-9: Superimposing the maps for Figure 7 (lightgray) and Figure 8 at C

The difference is in the medium used to deliver the asset In the offline process the asset is distributed to-face or via a telephone, while in the online process the asset is delivered by YNM via e-mail Figure 1-10depicts a generalization of the information activity maps for both processes

face-Click To expand

Figure 1-10: Information activity map generalized across media

Still, the social process underlying the Compatibility Game is not readily apparent To uncover this process,

we swap in a person for technology Specifically, by substituting an arbitrary friend of the customer forYNM (F0 for Y), and replacing the social information that C types into YNM with social conversationbetween C and the F0 (social conversation for xi, yi), the underlying social process becomes more explicit -

the Compatibility Game is a kind of technology-mediated gossiping Figure 1-11 depicts these substitutions.

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Figure 1-11: Compatibility game as gossiping process

In short, the Compatibility Game is based on the rather mundane social practice of gossiping However,instead of two people creating the gossip, the user interacting with the social oracle generates the gossip.Thus, the Compatibility Game is a kind of technology-mediated gossiping Next we analyze the socialprocesses underlying the Love Detective

Analysis of the Social Process Underlying the Love Detective

Each time a user plays the Love Detective, his or her e-mail address gets stored in a database table alongwith the e-mail addresses of the persons they enter as suspects Figure 1-12 depicts a part of the table for auser (Janis) who was trying to determine which of 10 acquaintances liked her

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Figure 1-12: 1st generation game user (suspects that responded are italicized)

Figure 1-13 depicts the information activity map based on this data As the order of the informationexchanged is straightforward, information sequencing numbers are omitted from the map

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Figure 1-13: Information activity map for a 1st generation user of the Love Detective (suspects thatresponded are bolded)

Three users returned to YNM to play the Love Detective in order to find out who sent them the message.Figure 1-14 depicts the database table after one of these users (John) finished playing Note that he

correctly guessed Janis as the original sender

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Figure 1-14: Activity from one of the suspects (correct guess in bold)

Figure 1-15 depicts the information activity map for this suspect using the Love Detective

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Figure 1-15: Information activity for a suspect (correct guess in bold)

The information activity maps show that the Love Detective is an effective advertising mechanism, becauseboth users and suspects typically enter multiple e-mail addresses to determine who likes them In turn, foreach e-mail address entered, the Love Detective sends a message informing the target recipient that

someone likes him or her, but he or she must visit YNM and play the Love Detective to find out who it is.Figure 1-16 depicts the more general situation A person (P) enters his or her e-mail address (emailP) alongwith the email addresses (emailSi) of one or more suspects (Si) - individuals whom the person 'suspects'likes him or her The suspects receive an e-mail containing potentially valuable information (email: asset'i),namely a message that someone likes them However, the information is incomplete and does not specifywho The social oracle returns whether or not there is a mutual interest (page: status)

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Figure 1-16: General information activity map for a person playing the Love Detective

To understand the social process underlying the information activity, let us focus on just the activity

between the original sender (Janis) and the person who guessed correctly (John) Figure 1-17 superimposesthe maps for Janis (Figure 1-13) and John (Figure 1-15) at the YNM node

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Figure 1-17: Information activity map for Janis and John

We first generalize the agents in the map: Janis as Person, and John as Suspect When the person and

suspect enter e-mail addresses, they are effectively expressing the proposition person likes suspect.

However, when YNM sends an e-mail to the suspect, it does not specify the person The proposition

expressed is of the form: someone likes suspect We next change the labels in the information activity map

to represent the propositional content of the information exchanged The resulting map (Figure 1-18)depicts a person using technology (YNM) to 'ask' another person (the suspect) if there is a mutual interest,

by having suspect guess various names (Namei)

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Figure 1-18: Information activity map with player, suspect and information generalized

Finally, if we substitute the technology (YNM) with a person (Friend) we can better see the social processthat the Love Detective is based on (Figure 1-19) - a hypothetical social process where one person asks afriend to find out if another person, the suspect, likes him or her

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Figure 1-19: Information activity map with a friend substituted for YNM

Further evidence for the existence of this hypothetical social process comes from YNM's users Figure 1-20

is a transcript of a thread in which a user (Wilma) asks how she can 'find out' if 'some guy' likes her Threeusers reply (Pebbles, Betty, and Barney) with different opinions Each opinion describes one or more socialprocesses for finding out if a suspect likes a person Betty's opinion, in particular, includes a description of

a social process similar to - 'talk to his friends … if they don't know they could ask for you.'

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Figure 1-20: Descriptions of various social processes for finding out if a suspect likes a person

To summarize, the Love Detective is based on a common social process where a person has a friend ask asuspect if he or she likes the person However, when a person uses the Love Detective, it substitutes for thefriend asking the suspect Thus, like the Compatibility Game, the Love Detective is a technology-mediatedversion of an ordinary social process However, through technology mediation these social processessomehow become advertising tools

Discussion: How Social Processes Become Advertising Tools

at least four interrelated reasons why certain social processes when combined with online technology can

be transformed into effective advertisements

Reason 1: Social processes create a demand for multiple information channels to distribute social assets

Individuals engaged in social processes like the ones described in the analysis, produce social assets:information about friends, family members, or other associates that those same people may find useful orinteresting The producers of the social assets naturally want to share them with their acquaintances Ininformation systems terms, there is a need or demand for information channels that allow one person todistribute content to many other people Interestingly, the map of the channels created by a user spreading

an asset via the social oracles (Figure 1-6 and Figure 1-16) is similar to the information channels needed by

a business to spread advertisements to customers

To see this, note that one of the key functions of advertising is to 'create' customers (Capon, 1994) to visit abusiness and purchase its goods Figure 1-21 (left diagram) depicts this function using information activitymaps A business (B) sends an advertisement (1 advertisement) to one or more consumers (Ci), in the hopethat they will become customers and purchase (2 $) the business's goods (3 goods) The typical businessdoes not have direct access to consumers and must pay television, radio, print, and other mass-mediaorganizations (O) to distribute the advertisement (Figure 1-21, right figure)

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Figure 1-21: Information activity maps for conventional advertising

Since the map of the channels a user creates to spread a social asset to multiple acquaintances via socialoracles is similar to that needed by a business to advertise to multiple customers, the former may be

leveraged for advertising purposes A benefit of using the channels in this manner is that users freelyconstruct them Thus, if a business can co-opt these channels to deliver advertisements, a virtually no-cost

advertising mechanism would result However, first the user must create the channels, and then some means

of automating the transformation of social assets into advertisements must be found

Reason 2: Online technologies allow a user to easily create the channels needed to immediately distribute

social assets to multiple individuals

Social processes create a demand for information channels to distribute the resulting social assets Whenthese social processes are performed online, users can take advantage of numerous vehicles, like e-mail andinstant messaging, to immediately send assets to other people, viz., online technologies allow users to easilyconstruct channels for immediately distributing social assets to multiple individuals More precisely, theInternet provides the channel for distributing the social asset, and technologies like e- mail and instantmessaging provide different vehicles for delivering the asset Contrast this with social assets constructedoffline, such as gossip generated by two people When people construct a social asset offline, they mustwait until they meet up with other friends or are in a situation near a phone, or other communications

device, before they can spread the asset

Custom interfaces to vehicles can be placed near the social asset to further entice a user to send the asset tomultiple acquaintances For example, the Compatibility Game places a custom e-mail form both before andafter compatibility reports, to encourage users to send the reports to their friends (Figure 1-22, middle ofpicture)

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Figure 1-22: Simple form for e-mailing the 'gossip' (center of screen)

Having an asset (message) and a means of distributing the asset (medium or channel) are necessary

conditions for any advertising mechanism However, to complete the mechanism, the asset must be

transformed into an advertisement that lures the recipient into visiting the business and becoming a

potential customer.

Reason 3: Having online technologies mediate the distribution of a social asset allows the automatic

transformation of the asset into a direct-response advertisement

Given a social asset and distribution channels for that asset, the final step is to spread it in such a way that itlures users into visiting the Web site - to transform the social asset into an advertisement Direct responseadvertisements provide a framework for understanding how to perform this transformation A direct

response advertisement is an advertisement that 'seeks a direct response - an order or an inquiry - from theconsumer' (Ogilvy, 1985; p 148) Direct response advertisements consist of a headline, body copy, and acoupon (Figure 1-23)

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Figure 1-23: Key elements of a direct-response advertisement

To uncover the details of transforming a social asset into an advertisement, we will examine the e-mailssent out by YNM's social oracles in the context of direct-response advertisements As we shall see, havingtechnology mediate the spread of a social asset between a user and his or her friends allows the automatedconstruction of a direct response advertisement, albeit an electronic one, from the information the userenters into the social oracle

Automating the Subject (Headline)

The subject lines of the e-mails sent out by the social oracles have an analogous function to the headlines ofprinted advertisements, namely, to get the recipients to read the body copy Both social oracles use subjectlines aimed at piquing the recipient's curiosity and self-interest - two features of good printed headlines(Caples, 1997) - in order to entice the recipient to view the e-mail's body For example, the Love Detective

generates the same headline each time: 'Do you like me too?' which suggests that the recipient will get

information about a person that likes him or her The Compatibility Game uses a more personalized

approach, taking the two names a user enters, and building the subject line: name1 and name2?!? For instance, if a user enters 'Fred' and 'Wilma,' the game creates the subject line: Fred and Wilma?!? The

recipient, as a friend of the user, probably knows the individuals listed in the subject line, and is likely toread the body of the e-mail because it hints at containing interesting social information about those

Creating a good subject line that persuades a recipient to open up and read the body of an e-mail, is anecessary but not a sufficient condition for an effective advertising mechanism The body of the e-mailmust lure the recipient into visiting the business's Web site

Automating the Body Copy (E-Mail Message)

The classic body copy of a printed advertisement contains the following features, in no particular order: (1)problem description; (2) promise of solution; (3) explanation of promise; (4) proof; and (5) a call for action(Stone & Jacobs, 2001) YNM's social oracles automatically construct advertisements that contain explicitrepresentations of three of these features: the promise of a solution (feature 2), a call for action (feature 5),and proof (feature 4)

In both the Love Detective and Compatibility Game (refer to Figure 1-25 and Figure 1-24), the 'promise of

a solution' - a valuable or interesting piece of social information - is given in the first line of the message,

namely: Hi Someone *really* likes you but is very shy so you have to guess who it is ;-); and A friend ran the ‘Banana Love Test' for you, respectively The 'call for action' immediately follows, and is implemented

as a hypertext link to the Love Detective or Compatibility Game on YNM Compatibility results follow thelink, as a kind of 'proof' of the useful information the recipient will get by visiting YNM For the LoveDetective, the compatibility results are computed for the user who sent the e-mail and the recipient For theCompatibility Game, the results are computed for the two people listed in the subject of the e-mail

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Figure 1-24: Compatibility Game e-mail

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Figure 1-25: Love Detective e-mail

The missing features - 'problem description' and 'explanation of promise' - are not explicitly represented inthe e-mail body because they are readily inferred from the information listed in the first line of the message.This is not necessarily true in advertisements for consumer products where the utility of a product may not

be readily apparent to the user For example, a consumer may not know that a water-jet toothbrush combatsgingivitis better than a regular toothbrush; thus, those features must be explicitly noted in product

advertisements

Automating the Coupon (Hypertext Links)

To complete the transformation of the e-mails sent by the social oracles into advertisements, some structuremust be present that helps the recipients visit the business's Web site and become potential customers In aprinted advertisement, this structure is a coupon: an area within the body copy that consumers can cut outand mail back to the advertiser to either order, inquire, or receive a discount on a product The generalfunction of the coupon is to turn the reader of an advertisement into a potential customer

For YNM's social oracles the analog to a coupon is a hypertext link embedded within the e-mail message.The recipient merely has to click on this link to bring up a browser with the Web site preloaded Compared

to a coupon in a printed advertisement, hypertext links have the benefits of ease-of-action, immediateresponse, and multiplicity YNM's social oracles automatically place the hypertext link after the first line inthe message, specifically, after the 'promise of a solution,' and also at the end of the message

Finally, it should be noted that it is possible to embed a coupon-like form within an e-mail However, thehypertext link provides a simpler action for the recipient, a click, compared to filling out a form Recall themain function of a coupon is to turn a reader into a potential customer Getting the e-mail recipient to visitthe Web site accomplishes this function Once at the site, the business has considerably more flexibility interms of turning the potential customer into an actual one

Reason 4: Social assets are memes, not viruses

Embedding advertisements with hyperlinks into electronic messages is becoming increasingly common,particularly with e-mail messages For example, Hotmail.com, Microsoft's free e-mail service,

automatically appends a hyper-linked advertisement to every e-mail a user sends out (Figure 1-26) This

practice is more commonly known as viral marketing - automatically attaching an unrelated advertisement

to an electronic message so that the sender of the message inadvertently spreads the advertisement to arecipient If the user has a need for the product or service in the advertisement, he or she clicks on the link.But it would be incorrect to label the e-mails sent by the social oracles as a kind of viral marketing In a

viral e-mail, the advertisement is separate from the user's message, as Figure 1-26 (bottom) makes

apparent In the e-mails sent by the social oracles, the advertisement is the user's message.

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Figure 1-26: Example of viral marketing

The social oracles transform a user's message - the social asset generated by using an oracle - into anadvertisement by sending only a portion of the asset to the recipient, e.g., compatibility scores, but not theexplanations of the scores (Figure 1-24) By sending a partial social asset and instructing the recipient to go

to the site for the complete asset, the recipient is lured into visiting the site and the e-mail accomplishes itsadvertising function (Figure 1-27)

construct cultural models Quinn and Holland (1987) define cultural models as, 'models of the world that

are widely shared … by members of a society and that play an enormous role in their understanding of theworld and their behavior in it' (p 4) Members of a community are constantly constructing cultural models

as well as freely sharing the information needed to construct such models, typically through talk

(D'Andrade, 1981), but with the emergence of the Internet, through other media as well Thus, what isactually happening when a user plays a social oracle on YNM and sends the results to a friend, who in turnvisits YNM to play the same social oracle, is a kind of technology-mediated form of cultural model sharingand construction

In closing, Dawkins (1976) calls information that spreads from person to person within a community orculture, a 'meme' The information returned by the social oracles, the social assets, qualify as memes Thus,

the use of social oracles to create potential customers is more properly a kind of memetic marketing (Flor,

2000), rather than a form of viral marketing Memetic marketing is distinguished from viral marketing, inthat the message sent to a recipient is a meme, and the advertisement is designed around, and related, to thememe, unlike viral marketing, where the content of the message and advertisement are unrelated to oneanother

Conclusion: Toward a Framework for DesigningProduct Oracles

This chapter demonstrated the effectiveness of social oracles for autonomous businesses - automated

businesses based on online communities - like YNM But can social oracles apply to more conventionalbusinesses? In this concluding section, we examine how product-oriented businesses can use principles

similar to those underlying the social oracles, to create product oracles for advertising their products A

product oracle works with a user to provide information about a product - information that users naturallywant to share with other users in their community Thus, instead of a social asset, a product oracle createsshareable, product assets

Figure 1-28 depicts a general information activity for both social oracles and product oracles The

remainder of this section will show how product oracles correspond to this map

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Figure 1-28: General information activity map for both social and product oracles based on partial assetdelivery

Step 1 Build an online community around product users

For a business that wants to use product oracles to advertise its goods, it must first construct an onlinecommunity around the product users Such online communities are commonplace on the Web Developed

by end-users, these communities have emerged around a diverse set of products such as video games,pocket computers, automobiles,

and guitars These communities are usually message forums designed so that users can post product reviews

or requests for help, and other users can provide opinions or answers Businesses can either build their ownonline communities (see Hagel & Armstrong, 1997; Kim, 2000), or use existing, end-user created, onlinecommunities as platforms for their product oracles The Web site mediating a business's online community

corresponds to W in Figure 1-28.

Step 2 Identify practices where members of an online community freely share product- related information

with one another (shareable product assets)

The members of an online community engage in practices that can serve as the basis for product oracles.Thus, once a business has constructed an online community, the next step is to identify those community

practices where members freely share product- related information with other members This shared,

product-related information is a shareable product asset, and is analogous to the social assets exchanged

between friends Examples of shareable product assets include information about how to use a product, e.g.,video game playing tips, or information about peripherals and accessories related to a product, e.g., what

speakers go best with an amplifier The shareable product asset corresponds to asseti in the arrow labeled 2,

in Figure 1-28

Step 3 Design product oracles that work with the user to generate shareable product assets

Once the appropriate community practices have been identified, the next step is to build product oraclesthat - through user interaction - automatically generate those product assets that members of a communitylike to share with one another The product oracle should take one or more inputs from the user and return aproduct asset Like YNM's social oracles, the product oracles should be designed so that individuals can usethem multiple times to generate a variety of different, and potentially shareable, product assets The

information exchanged between a user and a product oracle is denoted by the arrows labeled 1 and 2, in

Figure 1-28

Step 4 Create an online distribution channel for delivering the asset to a user's friends and acquaintances

Given a product oracle that generates shareable assets, users need a distribution channel that allows them toshare the assets with friends and other associates The ideal distribution channel would: (a) have an entrypoint located near the product oracle's results; (b) allow users to easily specify the addresses of multiplerecipients; (c) not rely on the recipient being online at the time the user sent the asset; and (d) allow theembedding of a return mechanism so that the recipient could easily visit the product oracle YNM used e-mail as the distribution channel, because it had all the properties listed above, particularly the ability toembed a hypertext link into the message body, which the recipient merely had to click on to visit the site.However, there are many other online technologies that could potentially be used, such as cell phone text

messages and instant messaging The online distribution channel is denoted by the arrow labeled 3, between the Web site containing the social oracle W, and the users' friends (F1…FN), in Figure 1-28.

Step 5 Design a mechanism that automates the generation of the product asset into an advertisement

With a shareable product asset generated and a distribution channel for the asset, the final step is to

automatically transform the asset into an advertisement The primary way an asset gets turned into an

advertisement is by sending a message containing only a portion of the asset to a recipient, and requesting that the recipient visit the site and use the product oracle to obtain the remainder of the asset The portion

sent to the recipient must contain enough information about the asset that the user will want to visit the site

to get the rest of the asset - analogous to sending a joke without a punch line This assumes that the readerwill see the message For many online distribution channels, such as e-mail, before a user sees a message,

he or she first views a subject list and can choose which messages to read, if at all Thus, a headline mustalso be automatically generated for the product asset and used, e.g., as a subject line As YNM's social

oracles demonstrated, this can be a fixed headline, or one that incorporates elements from the product asset.

In either case, the headline should arouse the recipient's curiosity and self-interest Finally, the body of the

asset qua advertisement should have a return mechanism - the online equivalent of a coupon in a printed

advertisement In the best case this coupon is an object the user can simply click on to visit the productoracle such as a hypertext link or button embedded in an e-mail message If this is not possible, at the very

least the coupon should contain the product oracle's Web address The arrows labeled 3-5 in Figure 1-28

depict how the asset acts an advertisement

Step 6 Design the Web site to convert the user once he or she visits to use the product oracle

If the advertisement is effective, the recipient will visit the business's Web site and use the product oracle toobtain the complete asset The site must be designed so that the user does not leave, but instead explores therest of the Web site and does the desired conversion action, such as filling out a registration form or

purchasing a product A basic way to encourage visitors to explore other areas of the Web site, after theyfinish using the oracle, is to have a menu on every Web page with the major site categories prominentlydisplayed along with links to the different sections within these categories (see left menu in Figure 1-2 andFigure 1-3) Thus, the product oracle and business Web site work together transform a visitor into a

customer

processes - gossiping and using other people to find out information - where individuals freely share

information with one another

There are at least four reasons why social processes are a good basis for online advertising mechanisms.First, the social asset that results from a social process creates a need for multiple information channels todistribute that asset Second, when a social process is performed online, users have access to online

technologies that allow them to easily and immediately construct channels for distributing the social asset.Third, online technologies can automate the transformation of social assets into direct- response

advertisements Finally, social assets are memes, not viruses Because people naturally want to acquire andspread memes, by sending only a portion of the meme to a recipient, he or she is forced to visit the site andplay the social oracle to retrieve the complete meme - and playing the social oracle leads to more visitors.Social oracles have proven to be effective advertising tools for programmable autonomous businesses -fully automated businesses based on online communities The chapter ended by outlining how to extend theconcept of social oracles to more conventional, product-oriented businesses Just as friends like to freelyshare certain social information with one another, consumers freely share certain product information withone another A framework for designing product oracles was given, based on principles similar to those fordesigning social oracles

Readers interested in learning more about social oracles, such as YesNoMaybe.com, or its parent companyand management are invited to correspond with the author for more information

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