Digital marketing

lecture 1. 1 article

1. Lamberton, C. and Stephen, A.T., (2016), “A Thematic Exploration of Digital, Social Media, and
Mobile Marketing Research's Evolution from 2000 to 2015 and an Agenda for Future Research,”
Journal of Marketing, 80(6): 146-72. Download

lecture 2 2 articles

2-1 Integrated marketing communiations: Batra, R., & Keller, K. L. (2016). Integrating marketing
communications: New findings, new lessons, and new ideas. Journal of Marketing, 80(6), 122-145.
Download

2-2 Inbound marketing: Opreana, A., & Vinerean, S. (2015). A new development in online marketing:
Introducing digital inbound marketing. Expert Journal of Marketing, 3(1). Download

lecture 3 2 articles DOMANI MATTINA

3-1 SEO, Search: Kritzinger, W.T. and Weideman, M. (2013), “Search Engine Optimization and Pay-per-
Click Marketing Strategies”, Journal of Organizational Computing and Electronic Commerce, Vol. 23
No. 3, pp. 273–286. Download

3-2 Online Advertising: Goldfarb, A. (2014). What is different about online advertising? Review of
Industrial Organization, 44(2), 115-129. Download

lecture 4 4 articoli

Cascio Rizzo, GL, Berger, JA, and Villarroel Ordenes, F. (2023), “What Drives Virtual Influencer's
Impact?”, Available at SSRN: https://ssrn.com/abstract=4329150

Duffy, B. E. and Meisner, C. (2023), “Platform governance at the margins: Social media creators’
experiences with algorithmic (in)visibility,” Media, Culture & Society, 45(2), 285–304, DOI:
10.1177/01634437221111923

O’Meara, V. (2019), “Weapons of the Chic: Instagram Influencer Engagement Pods as Practices of
Resistance to Instagram Platform Labor,” Social Media + Society, 5(4), DOI:
10.1177/2056305119879671
Van Dijck, J. (2021), “Seeing the forest for the trees: Visualizing platformization and its governance,”
New Media & Society, 23(9), 2801–2819, DOI: 10.1177/1461444820940293

lecture 5 2 articoli

4-1 Business models: Zhang, X., Williams, A., & Polychronakis, Y. E. (2012). A comparison of e-
business models from a value chain perspective. EuroMed Journal of Business, 7(1), 83-101.
Download

Read also this blogpost if you want examples! https://blog.hubspot.com/marketing/business-model

4-2 Success factors: Colla, E., & Lapoule, P. (2012). E-commerce: exploring the critical success factors.
International Journal of Retail & Distribution Management, 40(11), 842-864. Download

lecture 6 2 articoli

6-1 Strategy: Bharadwaj, A., El Sawy, O., Pavlou, P., & Venkatraman, N. (2013). Digital business
strategy: toward a next generation of insights. MIS Quarterly, 37(2). Download

6-2 Capabilities: Day, George S. "Closing the marketing capabilities gap." Journal of marketing 75.4
(2011): 183-195. Download

lecture 7

7-1 Customer journeys: Edelman, D. C., & Singer, M. (2015). Competing on Customer Journeys.
Harvard Business Review, November 2015. Download

Supplementary reading

7-2 Designing customer experience: Grenha Teixeira, J., Patrício, L., Huang, K. H., Fisk, R. P., Nóbrega,
L., & Constantine, L. (2017). The MINDS method: Integrating management and interaction design
perspectives for service design. Journal of Service Research, 20(3), 240-258. Download

7-1 Customer experience: Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience
throughout the customer journey. Journal of Marketing, 80 (6), pp: 69-96. Download
7-4 Augmented reality: Scholz, J., & Smith, A. N. (2016). Augmented reality: Designing immersive
experiences that maximize consumer engagement. Business Horizons, 59(2), 149-161. Download

Lecture 1

Cait Lamberton & Andrew T. Stephen A Thematic Exploration of Digital, Social Media, and Mobile
Marketing: Research Evolution from 2000 to 2015 and an Agenda for Future Inquiry.

Era 1: Digital media Shapes and facilitates Buyer behavion

 Early Recognition of Internet's Potential:

  Early recognition that the Internet could benefit individuals by
providing access to other consumers as audience members or
information sources.
 Qualitative Research on Online Expression:
 Qualitative researchers highlighted consumers seeking self-
definition through expression in personal portals and online
communities.
 Online experiences augmented and influenced consumers'
offline lives.
 Netnography and Consumer Insights:
 Kozinets's work on netnography (using ethnographic
techniques on the Internet) demonstrated how online
communities could be viable sources of information for
consumer insights.
 Quantitative Research on Online WOM:
 Quantitative researchers explored online Word of Mouth
(WOM) and communities.
 Dellarocas (2003) examined how online WOM affects
individuals' behaviors in online communities.
 Godes and Mayzlin (2004) studied the connection between
online WOM in discussion forums and television show ratings.
 Legitimizing Online Conversation Data:
 Godes and Mayzlin's research legitimized the use of online
conversation data in research.
 Established that online WOM, especially in discussion forums,
could be a source of unobtrusive observational consumer
WOM data.
 Raised Questions and Future Directions:
 The research raised questions about causality in online WOM
and marketing performance, the predictive power of online
WOM on offline behavior, and the ethical considerations of
capturing individuals' conversations as data sources.
 These questions continue to be explored by scholars in the
present.

Era 2 (2005–2010): Consumers Shape DSMM

1. Mainstream Consumer Engagement: During this period,

mainstream consumers became more actively involved in online
social interactions through WOM and social networking.
2. Internet Penetration: Internet use surpassed 50% penetration by
2005, becoming a common part of life. This led to increased online
expression and sharing of peer-to-peer information about products
and services.
3. UGC and Online Reviews: User-generated content, especially in
the form of online reviews, became more prevalent. Platforms like
Yelp experienced significant growth during this era.
 4. Rise of Social Media: Social media platforms, including Friendster,
Myspace, and Facebook, transitioned from niche markets to
mainstream use. Marketers, from global brands to local businesses,
began using these platforms for digital marketing.
5. Themes in Era 2:
 Theme 1 - Online WOM as Individual Expression:
Consumers' tendency to express opinions became directly
connected to marketing practices. Research explored the
impact of online reviews on sales and customer acquisition.
 Themes 2 and 3 Converge - Digital Networks as Tools
for Information and Value: The study of digital networks
gained prominence, exploring how network structures and
positions influenced marketing performance.
6. Quantitative and Qualitative Research: Academic research in
Era 2 involved quantitative studies measuring the impact of online
WOM on sales, while qualitative studies delved into consumer
behavior and cultural perspectives.
7. Challenges for Marketers: Marketers faced questions related to
the return on investment (ROI) for advertising on emerging
platforms like social media.
8. Firm Management of UGC: The era highlighted the challenges
and opportunities for firms in strategically managing user-generated
content and online WOM.
9. Industry Shifts: The industry shifted attention to social media and
UGC, aligning more closely with academic research topics.
10. Practitioner Concerns and Lag: While research indicated
the value of social media for marketing outcomes, practitioners
were still uncertain about how to effectively use social media, with
search engine optimization (SEO) being a top priority.
Era 3: The Age of Social Media, 2011–2014

Overview: Connected Consumer Influence

 MSI's research priorities from 2006–2008 on "the connected

consumer" influenced Era 3.
 DSMM-related topics persisted from 2008–2014, aligning with the
connected and empowered consumer trend.
 By 2010–2011, 80% Internet penetration in the U.S., with Facebook
dominating social networking.

Consumer Empowerment and Network Dynamics

 Consumers "always on" and "constantly connected" with Internet-

connected mobile phones.
 Emergence of social media platforms (e.g., Instagram, Pinterest,
Snapchat, Twitter) shaping consumer lives.
 Consumers became both advertisers/promoters and consumers on
social media.
Themes in Era 3

Theme 1: Individual Self-Expression

 Shift from focusing on network positions to recognizing all

consumers as empowered.
 Explored online WOM, focusing on "typical" consumers, not just
influencers.
 Emphasis on consumer self-expression influencing marketing
actions.

Theme 2: User-Generated Content (UGC) as Marketing Tool

 Consumers viewed as agents amplifying or undermining marketing

actions.
 Research on drivers of online social-sharing behaviors (e.g., high-
arousal content).
 Exploration of how consumers use social media to meet personal
goals.

Theme 3: Capturing Marketing Intelligence in Social Media

Platforms

 Focus on studying specific widely-used social media platforms (e.g.,

Twitter, Facebook).
 Understanding psychological aspects of consumer behavior on
social media.
 Limited impact of social media marketing growth in practice during
Era 3.

Perspective from Practice in Era 3

 High expectations for social media spending; however, growth was

slower than predicted.
 Challenges in integrating social media into comprehensive
marketing strategies.
 "Social listening" gaining popularity, but firms struggled to convert
observed data into actionable insights.
 Disconnect between academic research focus and practical
concerns in social media marketing.
 Rise of mobile and multichannel options as marketers sought value
from DSMM channels.
1. Introduction of Digital Marketing: The initial era marked the
emergence of digital marketing, exploring topics like online word-of-
mouth (WOM) and consumer behavior in the digital landscape.
2. Search and Display Advertising: Research focused on
understanding the impact of search and display advertising on
consumer behavior.
Era 2: Social and Mobile Media Marketing

1. Rise of Social and Mobile Media: This era witnessed the

increasing prominence of social and mobile media in marketing
strategies.
2. User-Generated Content (UGC): Researchers explored the role of
user-generated content and its impact on brand perception.

Era 3: Data-Driven Marketing

1. Data-Driven Approaches: The third era emphasized data-driven

marketing, with a focus on analytics, consumer insights, and the use
of social media as a marketing tool.
2. Content Marketing and Mobile Advertising: The rise of content
marketing and mobile advertising became significant areas of study.

Themes 1 and 2 Combined: Revisiting Consumer Expression and

Internet as a Tool

1. Meta-Analyses on Online WOM: Recent research involved meta-

analyses on online WOM volume and valence, providing insights into
the impact on sales.
2. Reexamination of Consumer Expression: Studies revisited how
consumers express themselves online, exploring the effects of
seeding campaigns and the dynamics of online WOM spillover.
3. Revisiting Internet as a Marketing Tool: The Internet's role as a
marketing tool, especially in the context of social media and content
marketing, was revisited.

Theme 3: Internet as Market Intelligence Source Revisited and

Improved Tools for Data Analysis

1. Search as Market Intelligence: The idea that search can be a

valuable source of marketing knowledge persisted, with
advancements in tools for data analysis.
2. Combined Data Sources: Researchers combined various data
sources creatively, such as Google Trends data and marketing mix
data, to optimize marketing spending.

Era 4: Current Trends

1. Optimism about Perspectives: Despite being an unfolding era,

there is optimism about gaining understanding in areas like online
WOM.
2. Return to Fundamental Topics: The research in this era reflects
a return to fundamental topics, including individual expression
online and understanding digital activity's marketing outcomes.
 3. Integration of Psychology and Theory: Newer research
connects findings to psychological theory, extending frameworks for
studying human behavior.
4. Combination of Data Sources and Methods: The latest work
combines multiple data sources and methods creatively, providing
insights that were previously challenging to obtain.

Lecture 2

A New Development in Online Marketing: Introducing Digital Inbound Marketing Alin OPREANA*
and Simona VINEREAN

 Traditional Marketing: (outbound marketing)

 Viewed as intrusive, interrupting interactions for product
promotion.
 Marketers push products onto potential targets, considered
unsustainable.
 Transition to Online Marketing:
 Traditional marketing flaws addressed by online strategies.
 Evolving internet brings changes: search engine, email, blog,
viral, content, social media marketing.
 Diverse Online Channels:
 Various channels encompassed under digital inbound
marketing.
 Digital Inbound Marketing Concept:
 Focus on attracting through understanding and timely
solutions.
 Technology and Relationship Marketing:
 Technology aids in implementing relationship marketing.
 Prioritizes attracting with quality, search-friendly content.
 Content Prioritization:
 Emphasis on videos, images, GIFs, and stories.
  Content fulfills usefulness or emotional criteria.
 Social Media Syndication:
 Content syndicated on relevant social platforms.
 Integrated communications for brand relevance.
 Overall Objective:
 Marketing evolution aims for customer attraction with
technology and varied content.
 Seeks engaging, non-intrusive experiences. Traditional
Marketing:
 Relies on intrusive media (TV, radio, magazines).
 Lost competitiveness due to clutter, inattention, and
consumer blocking.
 Historical approach: find consumers via advertising.
 Ineffectiveness due to overwhelming marketing interruptions.
 Recent challenges: financial crisis, technological boom,
increased competition.
 Shift to Digital Inbound Marketing:
 Response to challenges: organizations focus on non-intrusive,
creative approaches.
 Maximizing marketing budget through digital inbound
strategies.
 Strategies include search engine optimization, social media,
online brands, and content creation.
 Emergence of inbound marketing platforms, exemplified by
Hubspot.com (2015).
 Introduction of Digital Inbound Marketing (DIM):
 Proposed as a new academic concept.
 Definition: Process of reaching and converting qualified
consumers using organic tactics in online settings.
 Key Elements of Digital Inbound Marketing:
 Emphasis on interactivity and engagement.
 Facilitates continuous conversations with interested
customers.
 Aims to foster valuable relationships beyond traditional media
limitations.
 Digital Marketers' Focus (Edelman, 2010):
 Creation and sustenance of value through digital strategies.
 Four sources of value: Coordinated activities, consumer
empowerment, content publication, data utilization.
 Advanced Field in Big Data:
 Digital inbound marketing stands out as a leader in utilizing
big data.
 Ad space sellers leverage sophisticated algorithms for
customer profiling and targeted banner advertising.
 Automated ROI data available for search engine keywords,
enabling real-time marketing budget optimization.
 Content marketing
  Definition: Strategic approach creating and distributing valuable,
consistent content.
 Aim: Attract, retain, and transform consumers into advocates
through valuable content.
 Forms of Content: Basic (video, image, text) to specific (blogs,
ebooks, infographics).

3.2. Search Engine Optimization (SEO):

 Definition: Optimize website and inbound links to improve search

engine result positions.
 Role: Facilitates easy discovery of organization’s content by
prospects.
 Importance: Integral after content marketing, enhances visibility
and discoverability on search engines.
 Approach: Choose keywords, optimize pages, create content, and
build links around buyer-searched keywords.

3.3. Social Media Marketing:

 Impact of Social Networks: Changed information propagation,

making content sharing and digestion easy.
 Amplification of Content: Social media enhances the impact of
organization’s content.
 Strategies: Distribute content across networks, consolidate brand
through business pages.
 Communication Channels: C2C, B2C, C2B interactions on
organization pages.
 Peer Communication: Influences consumer decision-making and
marketing strategies.
 Cost-Effective Opportunity: Platforms like Facebook, Instagram,
Youtube provide rich information for marketing.
 Collaboration and Co-Creation: Social media allows collaboration
with consumers, enhancing profitability, revenue, and customer
loyalty.
 Insightful Dialogue: Opportunity for marketers to understand
consumer preferences, likes, and dislikes.
 Potential for Brand Advocacy: Engaged consumers can become
brand advocates in online settings.


3.4. Brand-Focused Marketing Communications:

 Impact: Special impact on company capitalization in the online

environment.
 Definition: Marketing communications as the "voice" of the brand,
tools for dialogue and relationship building.
 Challenges: Must adapt to changes in consumer information
processing due to technology.
  Online Brands: Result of advances in information and
communication technologies, similar to offline brands.
 Characteristics: Include a name or symbol, associated with products
and service features.
 Interaction: Brands interact with consumers through branded
websites and multiple platforms.
 Focus in DIM: Marketers focus on developing authentic and relevant
online brands for consumer segments.
 Competitive Advantage: Brands mastering digital channels gain a
competitive edge.

4. Measuring Digital Inbound Marketing:

 Importance: Measurement turns marketing into a science, critical for

campaign effectiveness.
 Elements to Measure:
1. Website Activity: Includes unique and repeat visitors, page
views, popularity, etc.
2. Source of Traffic: Analyzes search terms, keywords,
languages, regions, mediums, etc.
3. Nature of Website Activity: Examines entry and exit pages,
browsers, platforms, click-throughs, etc.
4. Responses and Outcomes: Focuses on lead generation,
most requested pages, downloads, orders, ROI, etc.
5. Integrated Marketing Metrics: Monitors COCA, CLV,
retention rates, lead-to-sale conversion rates, NPS, referrals,
profitability, revenue growth.

Integrated marketing communiations: Batra, R., & Keller, K. L. (2016). Integrating marketing
communications: New findings, new lessons, and new ideas. Journal of Marketing, 80(6), 122-145.

 Consumers, brands, and media are undergoing profound changes.

 New media explosion alters consumer media usage patterns.
 Consumers actively seek information through various channels.
 Consumer attention is divided, and multitasking is prevalent.
 The consumer "path to purchase" is shorter, less hierarchical, and
more complex.
 Social influences and word of mouth (WOM) have become crucial.
 Increased personalization of message content, timing, and location.
Evolution in Communication Possibilities:

 Marketers now have a richer array of communication possibilities.

 Mass or targeted ads on platforms like Facebook, banner ads,
search ads, and more.
 Greater personalization enables the use of diverse media types.
 Second-by-second media-usage data allow for micro and dynamic
segmentation.
 Marketers can potentially sequence media types for more effective
communication.

Importance of Integration in IMC:

 Successful integration critical for short-term sales and long-term

brand building.
 The consumer decision journey requires multiple communication
attempts.
 Individual messages are part of a sequence or stream with
interactive effects.
 Research establishes interactions and cross-effects across media
options.

Proposed Conceptual Framework:

 Need for new tools and theories to address the integration

challenge.
 Suggests using a conceptual framework to meet integration
challenges.
 Considers consumers' brand-related information needs at different
decision journey stages.
 Matches specific media and messages to meet different information
needs.
 Takes into account costs to create an effective and efficient IMC
program.

Communication Models for IMC:

1. Bottom-up Communications Matching Model:

 Identifies communication options with the greatest ability to
satisfy consumers' information needs.
 Tailored to different stages of the consumer decision journey.
2. Top-down Communications Optimization Model:
 Helps evaluate the overall design of a marketing
communication program.
 Criteria for judging integration effectiveness in driving short-
term sales and building long-term brand equity.
 

Considerations in Developing IMC:

1. Consistency:
 Reinforcing the same persuasive message across
different communications.
 Example: Volvo's "safety superiority" message
communicated consistently through various channels.
 Channels include print and TV ads, PR, corporate
communications, website, digital means, and
sponsorships.
2. Complementarity:
 Recognizing different strengths and weaknesses of
communication options.
 Addressing varied brand-related information needs for
consumers.
 Example: Volvo sponsors diverse events (golf, cultural,
ocean race) to enhance visibility and status,
complemented by sales promotions and financing
programs.
3. Cross-effects:
 Communication effects are enhanced when consumers
have prior exposure to different options.
  Example: Positive feelings and awareness from sports
or arts sponsorships influencing consumer
predisposition to consider the brand or shape
impressions during vehicle evaluation.

Focus Areas for Investigation:

 Consistency: Given substantial prior research on the

benefits of message consistency, it may not be a priority for
further investigation.
 Complementary Main Effects: Emphasis on exploring
complementary main effects in the digital media
environment.
 Cross-effects and Interactions: A focus on the many
cross-effects and interactions in the contemporary digital
media landscape where various channels meet consumers'
communication needs along their decision journey or path to
purchase.

 Consumer characteristics:
 Motivation The motivation, or desire, to process incoming
information varies with the extent to which the consumer
views it as potentially helping with the brand choice task at
hand. This increases with the level of perceived risk (Cox
1967; Loewenstein et al. 2001; Mitchell 1999) and the
degree to which the category-level need is salient or
pressing—such as the geo-location of the consumer
(affecting the processing of mobile messages) or the degree
to which the consumer is in the search process (affecting the
processing of retargeted online advertising). Situational
factors may also matter in their potential to affect
consumers’ emotional state/mood and willingness or desire
to seek information.
 Ability The consumer ability to process information
depends, among other factors, on the amount of prior
familiarity and knowledge with the brand and category.
Thus, consumers at the earliest stages of category search
might not be able to process in-depth attribute-level brand
comparison information (Alba and Hutchinson 1987), though
they should still be able to understand which brands are
more versus less relevant for their brand choice decisions (
 Opportunity information is affected by several aspects of the
time and place of message exposure, such as whether the
consumer is under time pressure or in a physical setting
where (s)he can process the communications in depth.
Different media options vary in how strong they are along
these processing factors. Thus, certain media, such as
mobile or billboards, seem more suitable for messages that
remind or trigger action rather than for messages that aim
to persuade through detailed information. Other media, such
as online video or TV, naturally lend themselves to
messages that inject more emotion and imagery into brand
perceptions.
 Research has also examined how various characteristics of
the communication itself (e.g., its modality, its executional
and message information, its source credibility) influence
the resulting outcomes from exposure (Stern and Resnick
1991). Creative strategies such as music, celebrities, special
effects, sex appeals, and fear appeals are all examples of
attentiongetting devices to increase consumer motivation to
process a communication and build awareness and salience,
though they may direct processing away from the brand or
its message in the process, hurting preference formation
(McGuire 1978). While much of the prior research using
traditional media should also apply to the newer media,
marketers need to think about communication content
idiosyncrasies in today’s digital environment, such as
different processing implications and outcomes for different
types of Facebook posts, tweets, and so on.
 Communication outcomes
 Depending on the stage of the consumer’s
processing journey, these multiple possible outcomes
vary in importance to a particular brand marketer.
 CREATE AWARENESS AND SALIENCE
 CONVEY DETAILED INFORMATION
 CREATE IMAGERY AND PERSONALITY
 BUILD TRUST
 ELICIT EMOTIONS
 INSPIRE ACTION
 INSTILL LOYALTY
 CONNECT PEOPLE
Communications matching model+ Communications
optimization model= NEW FRAMEWORK proposed by the
article. Lets see them in detail:
Communications matching model The communications matching model
matches the expected main and interactive effects of different media options with the
communications objectives for a brand, sequencing the former to best match the dominant need at
different stages along the consumer decision journey. The communication matching model thus
considers the needs/gaps in consumer knowledge and behaviours in terms of where different
targeted consumer segments are versus where they need to be, relative to the brand’s needs, and
then suggests the most appropriate media combinations that should best meet these needs/gaps at
each stage along the journey
See the stages on the paper!!
Communications optimization model:
7CS
First two are financial
Coverage Coverage is the proportion of the target audience reached by each communication
option employed, as well as the amount of overlap among those options
Cost To increase the cost efficiency of an IMC program, marketers can conduct A/B split
(multivariate design) field experiments, using tracking metrics on business metrics that feed into
return-oninvestment assessments. For instance, do those customers who are fans on a firm’s
Facebook page or followers of its Twitter account have a sufficiently higher purchase frequency? Do
they spend more, with fewer discounts? Ideally, such tests would use a randomized test versus
control design to obviate issues of causality (e.g., Facebook page/Twitter followers could otherwise
be consumers who already feel high brand affindaje
3-2 Online Advertising: Goldfarb, A. (2014). What is different about online advertising? Review of
Industrial Organization, 44(2), 115-129. Download

Abstract Drawing on the literature on online advertising, I argue that the fundamental economic
difference between online and offline advertising is a substantial reduction in the cost of targeting.
This cost reduction informs what I view as the main themes in the online advertising literature:
understanding advertising effectiveness, auctions, privacy, and antitrust.

1. As people spend more time-consuming media through the Internet, online

advertising is becoming an increasing large fraction of the total advertising market.
Some of the most prominent technology companies, including Google and Facebook,
rely primarily on advertising through the Internet to generate revenue.
2. The fundamental economic difference between online and offline advertising is a
substantial reduction in the cost of targeting, which informs many of the recurring
themes in the online advertising literature, including effectiveness, auctions, privacy
and antitrust.
3. Online advertising can be divided into three general categories: search advertising,
classified advertising, and display advertising.

1. Search Advertising:
 Appears alongside algorithmic search results on search
engines like Google or Bing.
 Advertisers can target users at the moment they express
intent through a search.
 Priced using a specialized auction mechanism, with each
search query having a separate auction.
 Typically charged on a "cost per click" (CPC) basis, where
advertisers pay when users click on their ads.
 Allows advertisers to target customers based on specific
keyword strings.
2. Classified Advertising:
 Appears on websites that do not provide other media content
or algorithmic search.
 Examples include Craigslist, online jobs sites, and online
dating sites.
 Craigslist is credited with the decline of offline classified ads in
local newspapers.
3. Display Advertising:
  Main revenue generator for online media that are not search
engines.
 Includes various formats such as banner ads, plain text ads
(e.g., Google's AdSense), media-rich ads, video ads, and ads
on social media platforms like Facebook.
 Priced using different mechanisms, including specialized
auctions, negotiated purchases, or fixed prices.
 Pricing often communicated as cost per thousand impressions
(CPM), and sometimes on a cost-per-click (CPC) basis.
 Offers opportunities for targeting, including demographic
targeting (evolving from the 1990s), contextual targeting
(matching ads to website content), and behavioral targeting
(using past online behavior data).
 Retargeting, a form of behavioral targeting, involves showing
ads to users based on their past searches or viewed content.

3 MODELS OF TARGETING

the widespread use of auctions for the pricing of advertising is new. This section therefore examines
why auctions, or the “crowdsourcing” of pricing, have become the dominant method for selling
online advertising. I argue that it is a result of reduced targeting costs online. It is driven by both the
need to price a large number of keywords in an efficient manner (targeting consumers) and a desire
to price discriminate between advertisers (essentially targeting advertisers). Both are a function of
the one-to-one communication between identifiable computers facilitated by the Internet.
Lecture 7

Competing on Costumer Journeys: David Edelman and Marc Singer.

 Digital Empowerment of Consumers:

 Explosion of digital technologies in the past decade.
 Consumers are empowered, skilled in using tools and
information.
 They dictate preferences, seek products on-demand, and
expect low prices.
 Retailer and Service Response:
 Retailers and service providers respond by developing big
data and analytics capabilities.
 Aim to understand and control customer behavior.
 Historical approach involves reacting to customer moves
during the decision journey.
 Shift in Approach:
 Companies leveraging emerging technologies, processes, and
structures.
 Focus on leading rather than following customer journeys.
 Managing journeys like products, central to customer brand
experience.
 Case Study: Sungevity's Journey Strategy:
  Sungevity competes based on its ability to shape the
customer journey.
 Manages end-to-end process of sales and custom installation
for solar panels.
 "Product" is a seamless, personalized digital customer
journey.
 Innovative use of data about solar potential to make the
journey compelling.
 Customer Experience Example:
 Sungevity's personalized journey: Mailing, unique URL, Google
Earth image, custom calculations.
 Live sales rep interaction, video explanations, references,
tailored lease.
 Customized and automated each step of the journey.
 Result: A streamlined and compelling process that minimizes
consideration of alternatives.
 Success and Impact:
 Sungevity's journey strategy is successful.
 Sales doubled in the past year, exceeding growth targets.
 Sungevity is the fastest-growing player in the residential solar
business.
 Consumer Decision Journeys Definition:
 McKinsey’s marketing and sales practice studied consumers'
decision journeys for over six years.
 Decision journeys encompass the process from considering a
product to purchasing and bonding with the brand.
 Understanding Customer Journeys:
 Firms have become adept at understanding and optimizing
customer journeys.
 Some companies have redesigned operations for integrated
journeys, improving efficiency and addressing pain points.
 Shift in Strategy:
 A notable shift from reactive to aggressively proactive
strategies is occurring.
 Companies in various industries are designing and refining
journeys to attract and retain customers.
 Customized Experiences:
 Companies are creating highly customized experiences that
engage customers permanently.
 Unlike coercive strategies from the past, modern journeys
succeed by providing ongoing value to customers.
 Value Creation for Customers:
 Cutting-edge journeys create new value for customers.
 Customers stay engaged because they benefit from the
journey itself, leading to a more sustained and organic
customer loyalty.
Best practitioners aim not just to improve the existing journey
but to expand it
  Companies build the most effective journeys master four
interconnected capabilities: automation, proactive
personalization, contextual interaction and journey
innovation. Each of these make the costumer journey
stickier, smoother, more likely to draw in and permanently
capture the costumer journey.
 Automation involves digitizing and streamlining manual
steps in a journey.
 Example: Check Deposit Process:
 Analog process: Deposit a check by visiting a bank or ATM.
 Digital automation: Use a smartphone to photograph the
check and deposit it via an app.
 Example: TV Purchase Journey:
 Researching, buying, and arranging delivery of a new TV is
now a seamless, one-stop digital process.
 Role of Automation in Journeys:
 Automation allows consumers to execute complex journey
processes quickly and easily.
 It creates the essential foundation for "sticky" journeys,
enhancing customer engagement and loyalty.
 Recent Emphasis on Automation:
 Companies have recently started building robust automation
platforms designed to enhance journeys.
 Superior automation is seen as an art, transforming complex
back-end operations into simple and engaging front-end
experiences.
 Case Study: Sonos' Automation in Setup:
 Sonos, the connected music system, automates setup for
users.
 Previous manual steps involved threading wires and creating
online accounts.
 Sonos streamlines setup with wireless speakers and a mobile
app for easy control, music selection, and volume adjustment.
 Enhancing Customer Experience through Information:
 Companies should use information from past
interactions or existing sources for instant
customization of the shopper’s experience.
 Amazon's Recommendation Engine:
 Amazon's recommendation engine and reordering
algorithm are examples of using past interactions to
personalize the customer experience.
 Real-time Personalization:
 Personalization extends to optimizing the next steps in
a customer’s journey in real-time.
 Firms analyze customer behavior at the moment of
engagement and tailor the next interaction
accordingly.
 Applications for Tracking Customer Behavior:
 Companies like Pega and ClickFox offer applications
tracking customers across channels, blending data for
real-time insights.
 Multiple data sources (transaction histories, browsing
histories, customer service interactions) create a single
view for personalized interactions.
 Kenneth Cole's Website Customization:
 Kenneth Cole reconfigures website elements based on
a visitor’s interaction over time.
 Algorithm learns what content works best for each
visitor, rendering the site in real time.
 L’Oréal’s Makeup Genius App:
 Allows customers to try on makeup virtually and
delivers personalized real-time responses.
 Analyzes more than 60 characteristics, displays images
showing how products achieve different looks.
 Learns customer preferences, makes inferences, tailors
responses based on usage and buying behavior.
 Provides an enjoyable experience leading customers
seamlessly from consideration to purchase.
 App Success and Engagement:
 L’Oréal's Makeup Genius app has 14 million users.
 It serves as a critical asset for engaging with customers
and provides valuable insights on customer
engagement.
Contextual Interaction:
 Key capability involves using knowledge about a customer's
physical or virtual location in their journey.
 Tailors interactions to draw the customer forward into desired
next steps.
 Examples include an airline app displaying a boarding pass at
the airport entrance or a retail site providing order status
upon landing on the home page.
 Sophisticated Contextual Interaction:
 More advanced versions enable a series of interactions that
shape and strengthen the overall journey experience.
 Starwood Hotels' app, for instance, texts a guest with room
details, enables check-in with a thumbprint scan, and turns
the smartphone into a virtual key for room access.
 Provides well-timed and personalized recommendations for
entertainment and dining.
 Journey Innovation:
  Innovation is crucial and occurs through ongoing
experimentation and active analysis of customer needs,
technologies, and services.
 Aims to identify new sources of value for both the company
and consumers.
 Open-ended Testing and Prototyping:
 Best practitioners design journey software to enable open-
ended testing.
 A/B testing compares alternative versions of message copy
and interface design.
 Prototyping new services and analyzing results to expand the
journey with useful steps or features.
 Examples of Journey Innovation:
 Starwood's prompt for ordering room service after using a
key, remembering previous orders.
 Delta Air Lines' mobile app serves as a travel management
tool, integrating various aspects of an airplane trip.
 Kraft's recipe app expands into a pantry management tool,
generating a shopping list connected to the grocery delivery
service Peapod.
 Integration with Other Service Providers:
 Expanded journeys often integrate with other service
providers.
 Handing customers off to another firm can enhance journey
stickiness by increasing its overall value.
 How Sungevity combined these four capabilities to create a
valuable and evolving journey:
 Automation
 Sungevity has automated most steps of the customer journey
from initial contact to installation and beyond.
 Automation includes collecting and integrating customer data,
calculating energy use, and creating personalized
visualizations of panels on a roof.
 Sophisticated Use of APIs:
 Sungevity utilizes APIs (application interfaces) for
sophisticated data integration.
 Pulls data from various providers such as Google Earth and
Trulia to assemble a comprehensive customer profile.
 Data Analysis for Proactive Personalization:
 Data analysis enables proactive personalization in targeting
customers with customized information.
 Sungevity provided David with personalized details on costs,
timeline, anticipated breakeven, and savings.
 Multi-Channel Communication:
 Personalized information is available across multiple channels,
including e-mail, Sungevity’s site, and customer
representatives.
 Ensures a consistent and tailored experience for the customer
(David) throughout the journey.
  Contextual Interaction for Content Delivery:
 Sungevity utilizes contextual interaction capabilities to serve
personalized content in the right channel for each of David’s
interactions.
 Uses APIs to track panel installation and regularly updates
David’s landing page with the latest status.
 Journey Extension through Innovation:
 Sungevity continues to pursue journey innovation, leveraging
customer knowledge to extend the journey into energy
storage and conservation services.
 Moves beyond generic upselling to personalized outreach,
inviting individual customers to take the next step on their
customized journeys.
 Personalized Energy Management Advice:
 With granular data on household energy use and habits,
Sungevity provides one-on-one advice on managing energy
consumption.
 Recommends a tailored package of products and services to
help customers reduce dependence on the grid and achieve
savings.
 Introduction of Energy Storage Solutions:
 Sungevity plans to offer batteries from the German supplier
Sonnenbatterie to store surplus electricity generated by solar
panels.
 Creates customer dashboards for tracking energy production
and use.

These four capabilities and the reliance on scrum teams help managers
create the perfect pattern for the best results when it comes to the
costumer journey
 Cross-Functional Scrum Teams:
 Managers building successful customer journeys rely on
"scrum teams" composed of specialists from IT, analytics,
operations, marketing, and other functions.
 These teams are execution-oriented, fast, and agile.
 Constant Testing and Iteration:
 Scrum teams are constantly testing and iterating
improvements to enhance the customer journey.
 Collectively, the teams aim to understand customers' wants
and needs at each step, making the next step worthwhile.
 Key Questions for Journey Improvement:
 Teams ask critical questions such as:
 "What types of functionality, look and feel, and message
will propel customers to the next step?"
 "How does the timing of prompts affect customers’
responses?"
 Iterative Development Process:
 Pursuing answers to these questions involves rounds of
development.
 Teams pilot iterative digital-journey prototypes, analyze
operational and customer-use data, and measure the impact
on customer behavior resulting from each tweak to the
journey.
