Practical Guide to Digital Marketing
From The Yaffe Center
Acknowledgements
Content on this page will be adapted from the work of Aarti Gopal
Introduction
“Brand is not owned by the people who manufacture it, it is owned by the people who think about it”
The adoption of various digital tools has led to a seismic shift in the methods of marketing. Although the Internet has presented marketers with many new tools for reaching consumers, it has not replaced the overall objectives of marketing and advertising: to generate sales through influence and cultivate brand loyalty. The Internet has, however, caused a change in the way consumers make purchasing decisions, thus requiring marketers to rethink the way they approach marketing their brands. No longer able to push messages onto consumers, brands and marketers are now challenged to remain relevant and engage with consumers in a two-way conversation. Consumers now drive their marketing experience by pulling information they find relevant and filtering those messages pushed at them. Increasingly, consumers want to connect with brands on a personal level. Consumers are quickly becoming de-facto collaborators in brand building and product development as transparence between marketers and consumers increases through deeper engagement between the two parties. Additionally, consumers have become channel indifferent. They choose how and when they want to interact with a brand.
The reasons for digital marketing are many. Not only has modern consumer behavior come to make it a necessity, but digital marketing offers brand managers the ability to gain stronger consumer insights through data on actual consumer behavior, relevant and accurate information on cost effective methods for broad reach, and the ability to create highly targeted/individual marketing messages, which in turn lead to more effective campaigns.
This paper will address the changing landscape and benefits of digital marketing, assess how consumer trends in decision-making and their role in the marketing process impact campaign strategies, and finally propose a framework for approaching digital marketing plans.
Benefits of Digital Marketing
“I’ve got a lot of passion for digital. It really is such an incredible way to connect with consumers and really have much deeper ongoing relationship with them…” ~ Marc Pritchard, P&G Global CMO
The ease of Internet adoption was fueled by the convenience it afforded users. From email to paying bills to quickly disseminating breaking news, the provides consumers with more efficient ways to complete everyday tasks. The same relationship can be applied to marketing. Digital marketing does not replace traditional marketing; rather it is an essential complement that has driven changes in the approach marketers take to promote products/brands given emerging consumer trends. Before delving into these changes, an exploration of what digital marketing is, as well as its strategic place within marketing plans are needed. Strategic Reasons for Utilizing and Investing in Digital Marketing Initiatives
There are many strategic reasons for investing in digital marketing initiatives. First and foremost, changes in the way consumers are influenced have made digital marketing a strategic necessity. Second, digital marketing offers companies the ability to gain superior consumer insights through data gathered on actual, observed consumer behavior rather than on consumer reported behaviors. This in turn allows marketers to create tailored messages for individual consumers, while also offering companies the opportunity to adjust products based on observed needs. Additionally, marketers can make real-time decisions and changes to campaign based on consumer feedback and performance results. Finally, digital marketing also presents a cost effective method to reach the broadest audience.
Changes in the way consumers are influenced can be directly attributed to the Internet, enabling a significant amount of information sharing. Today’s consumers are in the driver’s seat of the marketing experience. While consumers were once regarded as recipients of a marketing message, consumers now directly interact with brands and companies in a dialogue. This interaction allows deeper insights into actual consumer behavior (instead of what consumers say they do), as well as a method for marketers to gain immediate insight into consumer needs, wants and opinions. Given the trend of consumers wanting authentic relationships with brands, digital marketing offers tools that allow marketers to cost effectively connect their brands with individual consumers.
To understand the power of this transformation, it is imperative to first understand the pre-Internet relationship between consumers and marketers. Historically, pushed messages to targeted consumer groups. Examples of Push Marketing include 30-second TV spots, radio ads, billboards, and print ads, all strategically placed in various media outlets. The messages were generally formed by the marketers based on self-reported consumer preferences, as well as available demographic information. Upon receiving these messages, consumers would decide whether there was sufficient information to make a purchase decision. Since the messages were well-crafted statements conveyed through television, print, or radio advertisements, consumers would seek additional information if they considered the marketing message biased, after all these were generally well crafted company-sponsored statements conveyed through Television, print, or radio advertisements. Consumers would look to experts or authority figures in their network, including not only friends and family, but also ratings by publications like Consumer Reports. In this ecosystem, the influencers were limited to mostly the company messages and immediate networks.
In today’s pull environment of digital marketing, not only do consumers have access to the traditional push marketing ecosystem, but also to an endless number of online information hubs. Consumers are able to seek out information, broaden their consideration set (the product options available to them), and prioritize which sources are most relevant and influential to their decision (which includes push marketing messages). Consumers are no longer passive recipients, but are now active members of the information gathering and dissemination process. Increasingly, marketing messages from a company are just one input to a 24-hours, 7-days a week online conversation that occurs through various global digital forums, social networking sites, Internet videos and posts, mobile phone messages, etc. Not only are consumers receiving messages from marketers, they are also voicing and sharing their thoughts and opinions with marketers and other consumers. Consumers are now media producers, researchers, content creators, advocates, promoters and distributors. In this ecosystem, the influencers include the company messages and immediate networks, but also encompass any other consumer who decided to become a media producer or advocate him or herself. The traditional role played by the company and family and friends is still relevant, but their message has been diluted and others now fill this ‘influencer’ role as well.
Additionally, the ease and cost effectiveness of digital marketing has led to a deluge of new product launches and heightened level of marketing messages. Consumers have consequently become adept at ignoring or tuning-out marketing messages, as well as often multi-tasking between various communication tools that reduce his or her attention to marketing messages. Imagine a consumer watching television, surfing the Internet, and chatting with a friend on his or her mobile phone. In this environment, marketers are constantly challenged to break through the clutter to gain consumer attention.
"Gaining Stronger Consumer Insights based on Observed Behavior"
In a study conducted by Booz & Co., 80% of marketers surveyed indicated that consumer insights (pieces of information that provide marketers with data regarding consumer preferences, behaviors, demographics, etc. that they can use to better target a segment) are more important now than they were five years ago. Digital marketing enables marketers to easily listen and observe consumers: simply put, digital platforms are everywhere consumers are, from ballparks, to mobile phones, to coffee shops and gyms. This allows marketers to develop new insights into their consumers’ needs, not only for the immediate product experience, but also for how that product is or can be utilized as a component of consumers’ lives. In the past, consumer insights were derived from self-reported needs and preferences. With digital tools, marketers are now able to balance those self-reported insights against how consumers actually behave. These behavioral insights are derived from observing simple tools such as search queries, pages viewed, and time spent in different media mix vehicles. More sophisticated companies are able to glean in-depth consumer insights from observing social networking sites, reading blogs that consumers find relevant, and interacting directly with the consumer through online product communities. Consumers’ observed behaviors of online, along with traditional product usage, demographics, and psychographics information, give a company more robust information regarding their consumers. The increased transparency of consumer needs and behavior is invaluable because it improves a company’s ability to create relevant content and messaging, as well as strengthens the company’s placement, timing and context of advertisements.
"Ability to Tailor Messaging and Advertising Campaigns, Instantly"
From the beginning, the Internet and digital marketing have presented a way for marketers to experiment over and again, constantly refining their messages to be more effective based on response. Click-thru rates, key word searches, video downloads, pages viewed, and queries are examples of how marketers can instantly measure the effectiveness of digital marketing tools. These metrics indicate how consumers are using various digital tools to learn more or interact with products and/or services. Given the usability and availability of real-time data, marketers are able to instantly adjust marketing campaign strategies to maximize returns. For example, Dove’s Real Beauty campaign included a video depicting the transition of an ordinary woman into a supermodel on a billboard. The video was originally meant as an internal tool, but given consumers’ reactions to other Real Beauty campaign material, Dove decided to post the video on YouTube. The reaction from consumers to the video was swift and immediate. Although it seems fairly easy to post a video to YouTube.com, prior to digital marketing, it would have taken substantial resources to purchase media time (TV) and would have involved a significant time lag (media purchases are on average at least one month in advance). With digital marketing tools, Dove was able to immediately release the video after the decision was made to do so. In addition, digital marketing tools allow marketers to address concerns, misrepresentations, or in extreme cases, when warranted, to remove messages or content that elicit a negative consumer response.
On a more individual consumer level, digital marketing provides companies with methods to communicate specific messages and product benefits to different consumer types. Marketers can send direct communication through email and mobile to particular users that are interested in certain benefits of their product. They are also able to utilize these digital mechanisms to incent brand loyalty or retention. For example, if a consumer is interested in purchasing a flight from Los Angeles to New York City and uses Priceline.com to compare prices, times, and availability across various airlines, Priceline can target that consumer with offers for the itinerary previously searched (but not purchased) or send suggestions for future flights from the consumer’s indicated home airport to a region that the consumer indicated in a previous search. By utilizing observed consumer behavior, marketers are able to create content and messages that are relevant to that specific consumer, in a specific location (placement) or media type (banner ads v. blogs/interactive communities).
"Efficient and Cost Effective Method for Targeted Reach"
The advent of the Internet and digital communication space presented marketers with an immense opportunity to communicate messages and product information quickly and cost effectively. It is important to reach the right audience at the time they are most receptive to marketing messages for a specific product or service. Digital marketing allows marketers to reach consumers throughout their busy day, thus no longer restricted to traditional television, print, and radio timeslots. By including this capability in a marketing campaign, digital advertising enables marketing campaigns to leverage content and messages across various advertising vehicles (traditional and digital) in a cost effective, highly targeted manner.
Prior to digital options, marketers were not able to gain national reach with a single marketing campaign. However, digital marketing allows companies to develop algorithms that make it easy to aggregate individual networks of target consumers and to plan, create, and optimize advertising to reach a national audience that transcends geography and is tied to consumer preferences and interests. For example, results have shown that an aggregated network approach can deliver more than 50 million weekly gross impressions across nearly 30,000 locations around the country — all from one network. Given the consumer need for two-way conversations with marketers and communities, web applications like Facebook, blogs, and other Social Networking Sites (SNS) are cost effective tools to reach consumers (the majority of these tools are free, only requiring maintenance and observation from a company).
Changes in consumer behavior and interaction with marketing messages have made digital marketing a necessity to any marketing campaign. Increased research by consumers for purchase decisions, heightened word-of-mouth among consumers, and consumer preference for pull v. push marketing have elevated the importance of digital marketing and made it a necessary component of today’s competitive marketing plans. However, digital marketing also offers several strategic benefits for companies. Savvy marketers utilize digital marketing to gain deeper consumer insights and as a method to create tailored and adaptable consumer targeting. An additional appeal is that digital marketing allows companies to be more efficient and cost effective in their marketing efforts, with the ability to measure campaign effectiveness and success.
"So what is Digital Marketing?"
Digital marketing encompasses all digital channels for communicating or receiving information, and is not limited just to Internet vehicles. This includes the Internet, mobile phones, SMS messaging, digital outdoor displays (Times Square billboards), and other digital forms of media . Each tool can be classified into either Paid Media or Earned/Buzz Media. Paid Media is publicity gained through advertisements that the brand/product undertakes and controls to communicate information or appeal to consumers. Earned/Buzz Media, one of the most powerful tools, refers to favorable publicity gained through promotion efforts from others outside of the brand and advertising team (i.e. the brand and advertising team does not have direct control). A component of Earned Media, Social Media encompasses publicity gained through grassroots efforts specifically on the Internet. Simply put, Earned/Buzz Media is your content or message, shared by your customers through email, blogs, social networking sites, and other word-of-mouth tools . Figure 1 below broadly categorizes various digital tools, predominantly online tools, into Earned and Paid Media. Additionally, these tools are broken into the five most commonly discussed categories of Word-of-Mouth (WOM), User Generated Content, Search Optimization, Owned Content, and Communication.
Figure 1: Digital Marketing tools Categorized by Type and Function
Traditional marketers spend about 60% of their media budget on paid media, 20% on content creation, and the rest on overhead expenses (such as agencies and employees). Digital marketers spend approximately 30% on paid media and 50% on content . This is in part attributable to digital marketers relying on users to disseminate information through Earned/Buzz media, which places more emphasis on creating buzz worthy content material. Additionally, creative content has grown in importance as a means for breaking through the abundance of marketing messages aimed at consumers. Further discussion of these trends will follow.
