®eeo0e Baeoeeoe0e00000000080808080888080808 Chapter M@JaTsy Introduction to Digital Marketing Learning Objectives ‘After reading this chapter, you should be able to: © Understand the role of digital marketing in marketing strategy * Learn the differences between tradi- tional marketing and digital marketing © Apply conceptual frameworks of digital marketing © Understand privacy and legal issues in digital marketing INTRODUCTION Digital is revolutionizing marketing by increasing use of automation and allied technologies. As con- sumers spend more and more time online, marketers are shifting their budgets to digital marketing. Cus. tomers are online means communication with them has to be online too. This is a salient feature of di ital marketing. Some of the defining characteristies of digital marketin Two-Way Communication In the digital environment, consumers decide which brands they wish to interact with. It is not just a mar- keter-controlled message, but consumers too take part in creating the brand and content. Targeting of One Marketers can precisely target their audiences in multifaceted categorical ways — age, location, der, seniority, income, interest, behaviour, lookalike, CRM data, remarketing, device, etc. The communi- ation can be personalized and highly interactive. On digital platforms, targeting is a rather sophisticated task, carried out using such algorithms as to precisely reach the target audience. It is targeting of one and not many Hence, unlike the ‘spray and pray’ approach of mass media, where we hope that some consumerswill be in the market to buy our product, in digital marketing we precisely know how many consumers are in the market to buy and how we have to target them, Hence while mass media considers minimizing waste, digital media has no wastage. Level-Playing Field Dightal marketing creates a level-playing eld for all marketers. 1 does not require big budgets, and hence small and medium businesses can also leverage it. Traditional advertising has the entry barrier of high costs, Which is not there in digital marketing, Measurability Digital marketing has made marketing more powerful as it enables measurement of performance and calcula- tion of return on investment (ROD, which has always been the holy grail of marketing. With digital marketing, marketers can close the loop as they precisely know how many people saw the ad, how many people clicked, how many visited the website, how many registered and how many bought. Push and Pull Within digital marketing, market is more of a pull medium, banner ads on websites chosen based on context is push marketing. Digital mar- keting enables brands to do both strategic brand building marketing and tactical sales-oriented activities, Marketers can form communities on social media, thus nurturing relationship with consumers, but the same activity serves to generate leads and sales as well xs have the choice of utilizing either push or pull medium. Whereas ‘Search’ Real Time eeeeeaoeoea eeeee Marketers get instant feedback, which enables them to optimize their campaigns. From feedback they get to know what is working and what is not, and hence can tweak the campaign mid-way. This improves the ROL @® of digital marketing. Since marketers must modify their plan based on feedback, digital marketing utilizes short planning cycles. The plans should be short term and flexible so that one can improvise on them based @ on real time feedback. @ Zero Moment of Truth S In marketing, there are moments of truth, like when a customer examines a product o service to get an idea about it. In earlier times, the first moment af truth was the point of sale, the second was when the consumer bought the product and the third was when the consumer used the product. The Internet has preceded all these moments of truth and has become zero moment of truth as consumers today look for information or reviews about a product or service on search engines, social networks, websites and onfine forums before visiting a store. Hence, itis imperative for marketers to be present on digital marketing sites because that is where con sumers start their journey. ORIGIN AND DEVELOPMENT OF DIGI Sete Digital marketing is also called “Internet marketing’, ‘web marketing’ or ‘online marketing’. Digital market may be defined as the promotion of brands or products through different forms of electronic media. These @ forms could be website, blogs, social media, mobile, applications, search, banner ads, etc. Philip Kotler de- fines digital marketing as: e € e C epPe@e0000800200000808000080808080888088880 4 form oF airect marketing which links consumers with sellers electronically using Interactive technologies Ike emails, websites, online forums and newsgroups, interactive television, mobile communications, ete Origin of Digital Marketing The origin of digital marketing can be traced to 1994 when the first banner ad appeared on the first commer: cial web magazine, HotWired (now Wired.com). Figure 1.1 shows the look of the first banner ad.” Teenie cs your mouse right HERE? Figure 14 First Banner Ad "You Will Since then, the digital advertising market has evolved, and in 1996, the U.S. digital advertising market was worth US$301 million. During the fallowing year the n ket experienced phenomenal g $1 billion, Around 1997, companies began thinking about placing advertisements on related websites and linking their web pages to the banners. In 1998, HotWired started selling banner advertising space to compa nies and achieved a sensational 30% click-through rate (CTR).* Search engine *Yahoo!” adopted this idea by offering advertising space on its home page. Yahoo! acquired Overture Services (formerly GoTo.com) in 2003 for placing ads on its search engine results, which allowed Yahoo! to provide advertisers an option to select a bid amount and compete with other bidders to rank their ads higher. Google had already launched its advertising platform ‘AdWords’ in 2000) to provide advertisers a sponsored link of their website and a description within its search engine results page, Linkedin was launched in 2002, Facebook in 2004 and Twitter in 2006, Hence, 2000-2010 was the decade of social media, which achieved penetration worldwide. Alongside, a revolution was happening in mobile phone technology, aided by a sharp drop in smartphone prices, thus increasing penetration among masses. The pen: etration of Internet has also increased dramatically during this period, Hence, while the 1990s was fuelled by display advertising, the early part of the first decade of 2000 was fuelled by search advertising and the later part by social media. The decade of 2010s is fuelled by mobile. wth, touching Traditional vs. Digital Marketing Digital marketing is considerably different from traditional marketing in multiple ways (Table 1.1). Tra- ditional marketing is spray and pray, wherein a marketer disseminates the message to a general audience and merely hopes that ultimately some viewers will buy the product. This lack of specificity leads to wastage. But digital marketing is able to target specific audiences that have interest in the product and hence are already in the market to buy the product. There is a saying in mass media ~ ‘Half of advertis- ing is waste, But I don’t know which half’. Digital marketing removes this limitation of mass media by eliminating wastage Digital marketing is about maximizing efficiency. Since it is possible to measure the performance of dig- ital marketing in real time, there is ample scope to tweak the campaigns and improve ROI. Marketers can do the simple A/B testing to identify the most effective messages, images, ads, targeting and layout. In digital there is always scope for improvement. While mass media is priced on rate card basis for a 10-second slot on TV or column centimetre for news- paper, digital is priced based on auction, Instead of fixed rate card, marketers bid in auction and the price is determined based on bid as well as quality score. Hence, a fair price discovery happens in digitalTable 14 Differences between Traditional Marketing and Digital Marketing e Traditional Marketing Digital Marketing e | Type of marketing Structured and clear Not dependent on structure and clay ‘Advertsing campaigns. service notines | Status updates, ad campaigns. bogs. | @ posts, comments, social media, ete Yipee ee | Direction of Unidirectional (one to many) Multicirectional (many to many) e communication Information spread by company (active) | Both company and consumers talk and Consumers only isten (passive) isten (both active). Consumers can also | @ create content, lke or post | Scheduling Long term Short term le ‘Ad campaigns are planned both over __| Ad campaigns are planned over and for | and for a long period of time 2 short period of time e Communication with | Private Public | consumer Communication only between company | Reactions to comments are public: any | @ ana consumer via emai pone) aiscus- | one can read anajoin a discussion | ion is kept secret e ‘Availability During working hours All the time (24 «7) | No direct support beyond regular work- | Constant readiness to respond to nega: \g hours (9 to 6) tive comments and consumer requests _| Language Formal, legally safe Genuine, direct |e Offi Personal responses and shor answers _| Response time Longer; even if somebody is interested | Quickly; as soon as they see the ad, the | @ after seeing an ad in print or on TV, they | consumers can click the link and can get can't see the additional information at | more information, so decision canbe | @ | UrotHstont ey Heed Hanger thie for | Laken quleKly lisatering rormution abort tia product le al marketing creates a level- . The entry barrier is low as digital marketing requires little budget. The media rates are same for small and big businesses, Second, the cost of failure in di immediately and can take correctiv Hence, taking risk here is a sm ‘out what works for you and what does not Implementing digital marketing is like walking in the fog. Visibility is there only for the first 10 metres. If you want more visibility, you must walk the first 10 metres to be able to see the next 10 metres. Hence, instead of waiting for the perfect plan or blueprint, you should start digital marketing and learn on the go. Instead of perfecting your strategy from day 1, itis better to make 1% improvement every day and at the end of the year you will have 365% improvement. In digital you need not do anything in haste. Rather you should move step by step. You can commit small Fesources 10 an idea, campaign or content. If it works, then put more resources into developing it further Hence, instead of firing cannon balls, you should fire gunshots in digital marketing and test the waters. Some more differences are highlighted in Table 1.1 ing field for all marketers as it does not distinguish between small and. @ businesse Cc tal marketing is low. If the campaign is not working, you will know it action. You will lose only a small amount of money if your plan fails. rt strategy, trying new ideas and various mediums of digital marketing to find Beeeeoeeede