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mode of payment made by consumers for online sites like Flipkart, is COD, 72 percent frommajor cities and 90 percent from smaller towns.While mobile wallets and net-banking transactions are on the rise, when it comes to makingonline purchases, most of the buyers still prefer cash-on-delivery payment model. Paymentoptions like Net-Banking, Credit and Debit Cards and e-wallets combined contribute to onlyabout 30 percent of all online purchases, as compared to cash on delivery (COD).Flipkart, which was launched in 2007, was the first E-Commerce player after Indiaplaza to launchCOD service back in 2010. It was the cash on delivery service that made Flipkart exceptionallypopular and made online shopping a tempo among the masses. Suddenly every person, from ayoung college student who didn’t even have a bank account, to a person from a small town whodidn’t possess a debit card, were able to buy things with just a click.Reasons for the Growth of Cash on DeliveryThere are loads of advantages of cash on delivery (COD) for the consumers. As it is highlyconvenient for them and their confidence level increases with cash transactions. They need notown a credit/debit card to make online purchases. Impulse purchases may increase as payment isnot due at the time of ordering. People are generally scared of making online payments due tosecurity threats. But in case of COD, they can trust the company because they are paying afterthey receive the product at their doorstep.Problems for Marketers and SuppliersWhether it was the anxiety of commitment or the joy of ordering anything without the immediateneed of money, COD set up prompts acceptance. However, the same service creates problems formarketers and suppliers:1. Restricted cash flow: COD is convenient for buyers but extremely inconvenient for retailersand vendors. It hinders cash flow as such orders take longer to close. It often takes months for themoney to reach the seller, that too if there’s no refund/return request. This makes it difficult forthem to gauge or maintain daily operations.2. Additional cost: the courier companies charge extra for delivering COD orders above theregular charges. The cost rises even further in case of returns as marketplaces/logistic companiesdeduct courier fees.3. High returns: cash on delivery and no-questions-asked return policy is a deadly combination.People make imprudent and impulsive purchases and return it without any fear. Sellers believe

that COD orders lead to high returns and buyers give insane reasons as opposed to non-CODordersEfforts to Bring Down Cash TransactionsGovernment of India along with financial institutions have been trying their best to reduce cashtransactions and boost digital payments to improve economy. Right from offering taxincentives on electronic payments, executing restrictions, to simplifying the digital paymentprocess, the government is trying to move away from cash-intensive economy. Similarly ECommerce companies are also taking steps to reduce the reliance on COD by offering: Payment through card upon delivery Improving payment gateways and expanding options Encouraging digital wallets through exclusive offers Offering incentives on online payments Instant refund mechanism facility Tying up with banks for special cash-back and discount offers when paid using card Initiating mobile transactions Charging extra for COD orders Putting a cap on acceptable COD order value, quantity and product type Altering return policy to remove absurd reasons for return Allowing sellers to decide the payment and shipment policyTo conclude, in a country like India, where people are comfortable and accustomed to cashtransactions, getting rid of COD and creating a cashless economy still seems like a far-fetcheddreamPay-Per-Click (PPC) AdvertisingPay per click advertising is a new form of advertising online. In this case, a relevant text ad witha link to a company page is displayed when the user to search engine types in a specific phrase.A series of text ads usually labeled as 'sponsored links' are displayed on the right-hand side of thesearch engine, pages. Unlike conventional advertising, the advertisers doesn't pay when the adis displayed, they only pay when the ad is clicked on which then leads them to a visit to theadvertiser's website- that is why this is called 'pay per click'. Most clicks result in a visit to thesite, although there may be a small attrition, that cannot be controlled but marketers have to beaware of it.

The relative ranking of these paid performance placements is typically based on the highestbided cost per click (CPC) value for each keyword phrase. The company that is prepared to paythe most per click goes top shot. Google also takes the relative click through rates of the ads intoaccount while ranking the sponsored links, so ads that do not appear relevant, because fewerpeople are clicking on them will drop down or may even disappear of the listing. In thiscompetitive world, it is very important for all the organisations to be visible on all searchengines, paid search listings, or sponsored links.Pay per click advertising is an excellent alternative for companies who have the financialresources and can make an investment in order to bring targeted traffic to their websites. LikeSEO traffic, Google AdWords is considered targeted because people are actually typing inkeyword phrases that are relevant to the products and services they are searching for beforeclicking on their advertisement. This can bring a flood of traffic to the online business veryquickly, and this is an excellent choice as long as marketers are able to turn it into profit.Managing Pay Per Click AdvertisingIn order to go ahead with pay per click, clients or their agencies commonly use PPC ad networksor brokers to place and report on pay per click ads on different search engines. Two of the mostimportant PPC ad networks are Overtune (www.overtune.com) owned by Yahoo and Googleadwords (http://adwords.google.com). Different advertisers bid on particular keywords through aweb-based PPC management interface provided by network to achieve the listing that they want.Though everyone wants to be on the top, or to be in the top three or five sponsored ad links, itdepends on the money which they are ready to spend.Advertisers decide on the maximum cost per click (CPC), they are prepared to pay. If this ismore than the current position, the cost per click will be reduced so that it is still sufficient forthem to be on the top. If their bid is less than the current cost per click of the top position,advertisers will be placed according to the relative ranking of their bid. Some marketers spendmillions of rupees annually on search marketing for a wide range of key phrases.With PPC as for any other media, media buyers carefully evaluate the advertising costs inrelation to the initial purchase value or lifetime value they feel they will achieve from theaverage customer. Besides considering the CPC, the marketers also need to think about the rateof converting the visitors on site. An ad might become successful in generating click-through ortraffic, but more important is to generate a lead or result in an online sale. It is often more cost-

effective if targeted micro-sites or landing pages are created specifically for certain key phrasesto convert users to make an enquiry or sale. These can be part of the site structure, so clicking ona 'car insurance' ad will take the visitor through to the car insurance page rather than a homepage.This is not a form of advertising to use unless the effectiveness of the website in convertingvisitors to buyers is known. The cost per acquisition (CPA) can be calculated as follows:The cost per acquisition (100/Conversion rate%) * Cost per clickBeware of Fake ClicksThe PPC ad network detects multiple clicks from the same computer (IP address) and can filterthem out. However, there are techniques to mimic multiple clicks from the locations such assoftware tools to fake clicks and even services where you can pay a team of people across theworld to click on these links. It has been estimated that in competitive markets, one in five of theclicks may be fake. This can ultimately destroy PPC advertising. It will be wiser, in the longterm, if PPC will move to something similar to an affiliate model when marketers only pay whena sale or some other outcome on the site occurs.Ethical Framework in E- MarketingAs discussed in all the previous chapters that e-marketing has helped businesses toconnect with the right customers at the right time. It has helped to bring in enormoustransparency in business thereby promoting healthy competition. Cost of marketing hasalso gone down with the use of digital marketing. E-marketing has encouraged innovationand has allowed even small firms to expand beyond imagination. Hence, these benefitshave led to a rapid rise in the use of the digital medium for marketing. With this,firms have also been tempted to adopt unethical means to top their digital game. We mayborrow the famous quote from Spiderman, “With great power comes great responsibility”. So itbecomes the responsibility of the Internet marketers, online businesses, digital strategists and theother inhabitants of the online space to keep a few things in mind while marketing on thedigital platform. Some of the common ethical concerns for e-marketers are shown inFigure 12.2 and explained as under: Data privacy and security: with the growth of digitisation, a large amount ofuser data is generated continuously. This data includes their identities, passwords,profiles, income, account details, spending patterns etc. While e-marketers havestandard privacy policies in place to protect user data, it is often noticed that

they are not effective. There have been instances where a lot of user data has beenleaked out due to poor data security measures. E-marketers must put strongsystems and controls in place to prevent such things. Employees mustbe educated to protect user data. Such actions will go a long way in buildingcustomer confidence.Figure 12.2: Ethical Concerns for E-marketers Online reviews: e- marketers can use positive reviews as effective marketingtools to motivate consumers to purchase their goods or services. However, digitalmarketers should not resort to fake and manipulative reviews. At the sametime, enticing customers through payments, discounts in exchange for positivereviews must be avoided. Unethical websites which offer to remove negativereviewsfromtheirdiscouraged. aymentstreatedmustbeas feedbackforimprovement and proper corrective actions must be taken. E-Mail marketing: in e- marketing, use of e-mails is the easiest way to reach thecustomers. Hence, it is often overused. Moreover, e-mail automation has ledto huge increase in volume of such mails. This creates a lot of clutter and most ofthese mails go unnoticed. Hence, this form of marketing must be used

judiciously. Companies must ensure customers’ opt-in to receive communication.Buying mailing lists from unknown sources is highly unethical and must beavoided. Instead, a mailing list must be generated using its own resources. Thiswould make it more authentic and relevant. Customers must also be given anoption to “Opt-out” from receiving such e-mails. Online Advertisements: advertisements are definitely an important source ofinformation for consumers, and therefore it is expected that brands indulge in honest andethical advertising. Unfortunately, this is not always the case. The display ads used byOrbitz (way back in 2002) got them a lot of flak, as these ads would direct a user toanother site merely when the cursor was moved over them. Similarly, the concept ofcontextual link ads, wherein hyperlinks are concealed within editorial content are alsoconsidered unethical. The issue here is not just of ethics but also of user experience. Search engine optimization (SEO): today, consumers turn to Google to findout about any new product or brand. Hence, it becomes compelling for the emarketers to figure out a way to top the search results. Companies employ searchengine optimization(SEO) techniques to meet this end. However, it is veryimportant that the search engine’s rules are kept in mind while optimizing. Emarketers must not resort to techniques to figure in the top search results bybypassing these rules. A lot of websites which have employed such techniqueshave been blacklisted by Google in the past for some period such as BMW,Washington post etc. Ethical product/service representation : it is very easy to overstate andexaggerate about product/service features and benefits on digital medium. Emarketers must ensure that the products/service representations are genuine. Thiswill help to build customer trust and design better products/services. Marketing to children: children are a vulnerable group as they may not realisethat their every mouse click may be monitored. Evaluating the accuracy ofinformation they view may be a challenge for them. They may also be unable tounderstand the nature of the information they provide to advertisers. To ensure thesafety of children and ultimately avoid consumer backlash, companies shouldinvolve the parents.

Misuse of social media platforms: businesses are also leveraging the power of socialnetworking platforms and using them as grounds for “viral” advertising. At times theexcessive focus levied on them also goes against the interest of consumers.There is a lot that can be labeled as unethical and misleading in the business of Internet sellingand advertising. And even with the constant pull and push from the regulatory authorities,advertisers keep finding new ways to con the crawlers and visitorsPrivacy Policy in E-MarketingPrivacy helps reinforce user's trust of online services, yet online privacy is under constantpressure of being undermined. Promoting strong, technology-neutral data-privacy laws, privacyby-design principles, and ethical data-collection and handling principles is a key approach toprotecting and fostering online privacy. Privacy is an important right and an essential enabler ofan individual’s autonomy, dignity, and freedom of expression. Yet, there is no universally agreeddefinition of privacy. In the online context, however, a common understanding of privacy is theright to determine when, how, and to what extent personal data can be shared with others. Intoday’s digital age, information gathering is fast, easy, and less expensive than ever. Progress ona variety of technological fronts contributed to this new world.Personal data has become a profitable commodity. Every day, users are sharing more personaldata online, often unknowingly. This can create privacy challenges on a greater scale than everbefore. With this in mind, it is important to encourage the development and application ofprivacy frameworks that apply an ethical approach to data collection and handling. Frameworksthat incorporate, among other things, the concepts of fairness, transparency, participation,accountability, and legitimacy.Key Considerations in Privacy PolicyAlthough there is no universal privacy or data protection law that applies across the Internet, anumber of international and national privacy frameworks have largely converged to form a set ofcore, baseline privacy principles. The following principles are derived from the Organisation forEconomic Co-operation and Development (OECD) (2013) Privacy Guidelines, and are widelyrecognised as providing a good foundation for developing online privacy policies and practices.These are highlighted in Figure 12.3 and explained as under:

Figure 12.3: Key Considerations in Privacy Policy Collection limitation- there should be limits to the collection of personal data. Any suchdata should be obtained by lawful and fair means and, where appropriate, with the knowledge orconsent of the concerned party. Data quality- personal data should be relevant to the purpose for which they are to beused, and, to the extent necessary for those purposes, should be accurate, complete, and kept upto-date. Purpose specification- the purpose for which personal data is collected should bespecified. Use limitation- personal data should not be disclosed, made available, or used for otherpurposes except with the consent of the individual or where authorised by law. Security safeguards- personal data should be protected by reasonable securitysafeguards. Openness- there should be a general policy of openness about developments, practices,and policies with respect to personal data.

Individual participation- individuals should have the right to obtain information aboutpersonal data held by others and to have it erased, rectified, completed, or amended, asappropriate. Accountability- those who collect personal data should be accountable for complyingwith the principles.It should be noted that many of these principles imply transparency concerning who is collectingdata, and what it is being used for.Challenges of Protecting PrivacyPolicy developers must consider a number of key challenges when determining action related toonline privacy. Some widely recognised challenges include:1 Determining what data needs to be protected. Typically, privacy and data protection lawsapply to personal data, also known as personal information in some jurisdictions. A commondefinition for personal data is “any information relating to an identified or identifiableindividual”. It can be difficult to determine which specific types of data should be consideredpersonal information in a particular context.2 Protecting privacy when data crosses borders. The Internet spans national borders, yetprivacy and data protection laws are based on national sovereignty. Therefore, special provisionsare needed to protect personal data that leaves one country and enters another in order to ensurethe continuity of data protection for users. Approaches vary, but tend to have regard to whetherthe receiving country has “adequate” protection.3 Real meaningful consent. Privacy and data protection laws typically permit some degree ofcollection and use of personal data if the individual gives his or her consent. In theory, thisapproach empowers Internet users to have some level of control or choice over the way their datais collected and used by others. However, in practice, users of online services may not read ormay not understand what it is that they are agreeing to (e.g., because the terms of service arelengthy and written in complex legal language). Even if they understand the terms, users may beunable to negotiate them.Guiding Principles for Privacy PolicyAs personal data has monetary and strategic value to others, it is a challenge to ensure that it isonly collected and used appropriately. The following guiding principles promote achieving thisoutcome:

Global interoperability- encourage openly developed, globally interoperable privacystandards (both technical and regulatory) that facilitate transborder data flows while protectingprivacy. Ethics- encourage privacy frameworks that apply an ethical approach to data collectionand handling. Ethical approaches incorporate, among other things, the concepts of fairness,transparency, participation, accountability, and legitimacy in the collection and handling of data. Privacy impact- understand the privacy impact of personal data collection and use. Anonymity- individuals should have the ability to communicate confidentially andanonymously on the Internet. Data minimisation- insist on selective data collection and use of only the necessary datafor only as long as it is needed. Choice- empower users to be able to negotiate fair data collection and handling terms onan equal footing with data collectors, as well as be able to give meaningful consent. Legal environment- promote strong, technology-neutral laws, compliance, and effectiveenforcement. These laws should focus on desired priva

Hence payment gateway makes steps of making payment easy and convenient for the customer. In today's scenario, a payment gateway is the easiest yet popular means to make payment. It reduces the customer's efforts and ensures effective transaction by facilitating the transfer of the accurate amount to the merchant's account in the real time.