B9655: Digital Marketing

Prof. Dante Donati

Welcome!
About me

Virtual Lab
www.vlab.digital

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About you

What is your ideal job after graduation?

Polleverywhere: dantedonati

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The Evolution of Media

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The Evolution of Media

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Now (and this is just for news)

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Ads in the News

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Ads in the News

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Social Media—Two-Way Engagement of Consumers

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What is Digital Marketing?

“Digital Marketing is the use of Internet connected devices

and electronic media to engage a customer.”

• Display advertising
• Search advertising
• Social media marketing
• Email and Content marketing
• Influencer marketing
• Customer-level strategies
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Display Advertising

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Search Advertising

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Search Advertising

Sponsored

Due to mobile

Organic

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 Social Media Marketing

(a) (b)
e two treatment conditions for social ads in Experiment 2. Subjects who are to be exposed to ads
st one affiliated peer are randomly assigned to see either (a) general information about the total
affiliated individuals (Dia = 0) or (b) a minimal social cue featuring one affiliated peer (Dia = 1).

, users with more peers will be observed more frequently with a larger num-
filiated peers. These users might be expected to differ in their response rates.
he selection of which stories to display to a user is endogenous: an individual’s
ristics are used to predict click-through rates, which cause the story to be dis-
ut these characteristics may also be correlated with the number of affiliated
hus, unlike comparisons given by the average cue–response function (within
mparisons), variation between users with different numbers of affiliated peers
e given a straightforward interpretation.
mitations of this experiment concern the nature of the particular ad unit used. 14
Email marketing

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Customer-Based Marketing Strategies

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Why is digital marketing growing?

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Why go digital?

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Why go digital?

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Advertising spend (US)

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Time Spent and Ad Spend Share Trends

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 Total and Digital Ad Spend Growth Rates 2019

GROWTH RATE (5-year CAGR)

Total Digital
Worldwide ~6.8% ~15.7%
US ~6.0% ~13.6%

Worldwide Total: https://www.statista.com/statistics/273288/advertising-spending-worldwide/

US Total: https://www.statista.com/statistics/272314/advertising-spending-in-the-us/
Worldwide Digital: https://www.statista.com/statistics/237974/online-advertising-spending-worldwide/
US Digital: https://www.statista.com/statistics/242552/digital-advertising-spending-in-the-us/

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Is this the end of traditional advertising?

§ Did ”video kill the radio star”? (The Buggles)

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Is digital marketing different?

“The trouble with our times is that

the future is not what it used to be.”
-- Paul Valery

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Then and now

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Then and now

https://www.youtube.com/watch?v=AdA54xDa3pU

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Then and now

How do you make an ad for commercial trucks?

https://www.youtube.com/watch?v=M7FIvfx5J10

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Then and now

How do small companies reach a large audience?

https://www.youtube.com/watch?v=ZKLnhuzh9uY

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How is digital marketing different?

§ More targeted and context relevant

§ More use of personal devices rather than mass media

§ Use of social aspect and viral marketing

§ More measurability

§ Less impactful? More annoying and invasive?

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Too much digital advertising?

http://southpark.cc.com/clips/90ijkb/its-not-a-news-story

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Part of the problem

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 How is digital marketing same?

“What has been will be again,

what has been done will be done again;
there is nothing new under the sun.”
-- King Solomon

It is still “marketing”…only some things have changed.

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How is digital marketing same?

§ Should convey the message to the right audience

§ Should be engaging and effective

§ Can be used for both brand building and direct response

§…

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§ Consultancies lead the rankings for the top digital
agencies by 2016 revenues
▸ “these “spreadsheet jockeys” may not be creative geniuses, but
they have a solid game when it comes to digital projects like
building apps and improving online sales.” --WSJ

§ Coming together—Analytics consultancies are acquiring

creative shops and vice versa

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Today’s Agenda

§ Course overview

§ History and current state of digital marketing

§ Guest speaker: Damian Bazadona (Situation Group)

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Course Overview

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Outline (part 1)

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Outline (part 2)

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 Digital Marketing course overview

Basics Display Search Social Media Special Industry

Topics
• Key ideas • Delivery and • SEO and paid • Control vs. buzz • Email and • Company analysis +
targeting search mobile Consulting project +
Guest lectures

• Calculating • Experiments • Attribution • “Big seed” • Ad spend • Campaign

ROI (Bazaar (Star Digital (In-class mini marketing (In- decisions implementation
mini case) case; HW1) case; HW2) class mini case) (In-class tutorials
mini case)
Measurement and decision tools
Learning vehicles

§ Lectures, class discussions, in-class exercises

▸ Often relate to academic research which helps to generalize insights

§ Cases: Both analytics and discussion based

§ Pre-class readings and surveys

§ Guest speakers and video tutorials

§ 2 homework assignments

§ Company analysis presentation

§ Consulting Project

§ Google Analytics individual certification

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Company analysis presentation (groups of 5)

§ Pick a company related to digital marketing that is a leader in its “category”

(examples are in the syllabus, but pick different companies!)

§ Conduct a thorough analysis of this company and its relevant landscape

▸ What is the Company’s offering and what important problem does it solve for its
clients?
▸ What is the Company’s broader category? How big is this category? Who are The
Company’s competitors?
▸ What is unique to the Company’s offering that differentiates it from other similar
offerings?
▸ What important relevant problems does the Company leave unsolved?

§ Deliverables:
▸ 8-10-minute in-class presentation
▸ Slide deck

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Some Previous Company Analyses

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Consulting Project (groups of 5)

§ An opportunity to truly work with the tools and strategies presented in class

§ Each team will be assigned a client company (usually a startup) selected to

provide a full range of digital channels for review

§ Companies have committed to meet (or conference call) with each team at
kickoff and then once monthly (4 meetings in total)

§ TA can help you define objectives of the project; Video tutorials will provide
practical guidance on campaign implementation and best practices

§ Deliverables:
▸ 3 mid-way short reports
▸ Final report (8-10-page reports)
▸ Final presentation and slide deck

§ Your output will be used by the company

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Companies for consulting project
(from LANG Center at CBS)

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Video tutorials

Clark Boyd (digital strategy consultant)

clarkboyd.digital

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Evaluation

§ Class participation and preparedness: 30% — individual

▸ Attendance: 10%
▸ In-class discussion: 8%
▸ Pre-class exercises: 2.5% each ∗ 4 = 10%

§ Google Analytics certification: 2% — individual

§ Two group HW assignments: 15% each ∗ 2 = 30% — group

§ Company analysis presentation: 5% — group

§ Consulting project: 35% — group

I strictly follow CBS Dean’s Office grading recommendations

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Attendance and Class Participation

§ Attendance
▸ Is required
▸ I will track attendance (respond to polls in class!)
▸ If you want an excused absence, please contact OSA and ask
them to send me an email
▸ Use of laptops/cell phones is not allowed in class

§ Please actively participate in class!

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About forming groups

Assignments in groups of 5

Make groups by January 31st; if left out, we will put you in a group

Please email our TA Ruofan (and me) the names of the group
members

When each group presents will be decided through volunteering for

particular dates and (the remaining) by random allocation

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TA info

§ TA: Ruofan Xiong (rxiong23@gsb.columbia.edu)

§ Office hours on Wednesdays 12.30pm-1.30pm, Kravis 780

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Classroom Culture

Present:
• On time and present for every session
• Face and name visible
• Attendance tracked

Prepared:
• Complete pre-work needed, expect cold calling

Participating:
• Constructive participation expected and part of grade
• Prefer chat to start a discussion and then direct conversation

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History and current state of digital
marketing

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Milestones in Digital Marketing

§ 1981: IBM launches the PC

§ 1990s: Internet (Web 1.0) starts gaining traction (15 M

users in 1995)

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Milestones in Digital Marketing

§ 1994: First clickable banner ad on Hotwired.com (a web

magazine) for AT&T

§ 1996:
▸ Web-based email gains traction
▸ Search engines Hotbot and Overture pioneer “paid inclusion”
model

§ 1998: Google launched

▸ 2000: Google launches AdWords system

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Milestones in Digital Marketing

§ Early 2000s:
▸ Cookies used to track users for personalized ads
▸ Automated display ad delivery appears
▸ Social networks appear

§ 2004: LinkedIn and Facebook created

§ 2007: iPhone launched—shift to mobile begins

§ Since 2007: Maturing and refinement of modern paradigms

▸ Retargeting, native advertising, contextual targeting, geo-targeting, social
advertising, programmatic buying, retail media
▸ A lot of focus has been on improving display advertising

§ Last few years: Antitrust and privacy concerns highlighted

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Ad Spend Trends

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Current State: US Ad Spend (2022)

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Share within digital

Classified: ads posted in a categorical listing of specific products or services, e.g.: online job boards, online real estate listings, automotive listings,
online yellow pages, and online auction-based listings

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Mobile and Connected TV account for a large share of digital

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Mobile Ad Spend (Worldwide)

Ad spend CAGR (world):

Mobile = 22.8%
Digital = 15.7%
Total = 6.8%

§ Other stats: https://www.invespcro.com/blog/mobile-ad-spending/

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Industry Concentration

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Current State:
Share of Digital Ad Spend
by Industry (2022)

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 When to use which? The Consumer Purchase Funnel

AWARENESS Create “top of mind” awareness, aided recall, unaided recall

INTEREST Provide information, create favorable brand position

DESIRE Enter consideration set, create purchase intention

ACTION Call to action, make them purchase, repeat purchase

REPEAT

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 Variants of Consumer Purchase Funnel

AWARENESS

INTEREST

DESIRE

ACTION

REPEAT

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Variants of Consumer Purchase Funnel

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 When to use which?

AWARENESS Based on impact on consumers at different

purchase stages
§ Up-funnel: Reach (awareness, branding)
INTEREST ▸ Social media, display, TV, radio, print

§ Down-funnel: Depth (research, consideration,

preference)
DESIRE
▸ Search, email, print

§ Ongoing (repurchase, two-way

ACTION communication)
▸ Retargeted display, social media (two-way
communication)
REPEAT

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Paid, Owned and Earned Media

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Impact of Covid

Sheryl Sandberg (COO, Facebook) on Oct 29, 2020 Investor Call (Q3
2020 results):
“According to the U.S. Census Bureau, before the pandemic, eCommerce’s share
of U.S. retail sales was steadily increasing by an average of 1 percentage point a
year for the past 4 years. This share leapt by 4 percentage points in Q2 alone –
that’s 4 years of change in less than 100 days.”
“That doesn’t mean we will continue to see sustained acceleration – this may
simply be future growth being pulled forward. But it is increasingly clear that the
economic recovery will be driven by businesses finding customers and selling
online.”

But now things are about back where they would have been now without Covid

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Recent lawsuits by regulators
§ FTC and 46 states filed an anti-trust lawsuit against Facebook in Dec 2020 for
“illegal monopolization” by acquiring Instagram and WhatsApp
(https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-
illegal-monopolization)

§ DOJ and 11 states filed an anti-trust lawsuit against Google in Oct 2020 for
“unlawfully maintaining monopolies through anticompetitive and exclusionary
practices in the search and search advertising markets”
(https://www.justice.gov/opa/pr/justice-department-sues-monopolist-google-
violating-antitrust-laws)
▸ In Dec 2020, 38 states filed another similar lawsuit and want to consolidate
with this one
▸ Google assumes a dominant position on smartphones
▸ Google blocks or downranks search results from competing “vertical” search
engines in travel and other categories
▸ Google has too much consumer data obtained due to consumers’ lack of
choice
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Facebook Audience Insights tool

https://www.facebook.com/business/insights/tools/audience-insights

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Demo—Display Ad Campaign on FB

https://www.facebook.com/business/ads

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Too much of digital overall?

https://www.youtube.com/watch?v=6k_G_h41ZaQ

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Pros and Cons of the digital era
§ Targeting = personalized content = higher value to consumers
§ More information = better matching with products/services

§ Leverage digital technologies to achieve and measure sustainable and

social good outcomes

§ Digital addiction and health consequences

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Takeaways

§ Digital marketing is the use of Internet connected devices to

engage a customer
▸ Search, display, social
▸ ~60% of advertising spend (mobile large and growing fast)

§ Digital marketing channels have different effectiveness in

different stages of consumer purchase process

§ There is a trend toward analytics + creativity

§ The digital era has its pros and cons

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For next class:

§ Finalize groups and email names to the TA Ruofan (and me)

§ Choose company for the company analysis presentation

§ We will have in-class presentations by Company

representatives for the Consulting Project

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