Digital marketing

Digital marketing: past, present, and future

Differentiate between e-business, e-marketing, e-commerce, and mobile commerce

The Internet consists of global networks interconnected with each other. E-business, e-marketing, and e-commerce are internet applications. E-business is the optimization of business activities using digital technology. Digital technologies include products and services, such as computers and the Internet, which allow the storage and transmission of data in digital formats. E-business includes digital communication, e-commerce, and online research.

E-commerce is the subset of e-business focused on online transactions that include buying/selling online, virtual marketplaces, digital value creation, and stores. Mobile commerce (M-commerce) and social commerce are subsets of e-commerce.

E-marketing is only one part of an organization’s e-business activities. E-marketing is the use of information technology for marketing activity and the processes for creating, communicating, delivering, and exchanging offerings that have value for all company’s stakeholders. E-marketing is the result of information technology applied to traditional marketing.

E-marketing technologies beyond the use of the Web

The Web is the portion of the Internet that supports a graphical user interface for navigation, with browsers such as Internet Explorer and Mozilla Firefox. E-marketing technologies are bigger than the Web.

• Many e-marketing technologies exist without the Web, including mobile apps, software, and hardware.
• Non-Web Internet communications, such as e-mail (e.g., Microsoft Outlook), Internet telephony (e.g., Skype), and text messaging, are effective opportunities for marketing. Some of these services can also use the Web, such as web-based e-mail.
• Text, video, audio, and graphics delivered by the Internet go over the Internet infrastructure to the television, cell phones, and even the refrigerator or automobile.

E-marketing's shift of control from the company to the customer

The connected customer is the CEO online. The Internet’s social media provide a communication platform where individual comments about products can quickly either enhance or damage a brand’s image. Now individuals are not limited to their friends, colleagues, and families.

• Consumers trust each other more than companies because they face someone who shares their same values and interests. For example, the TripAdvisor.com site allows travellers to review hotels worldwide, and they trust it more than the corporate sales monologue they see at the hotel’s Web sites.
• Market and media fragmentation: the Internet has generated the disruption of the mass market and allows creating products, mobile apps, Web pages, and communication for small target groups.
• Connections are critical: job recruiters look in social networks for job candidates (LinkedIn).
• Everyone is a content producer: with smartphones, consumers always have the ability to take photos and videos and instantly upload them to Facebook, Instagram, and other sites.
• Information transparency: because consumers write online product reviews and share other information, marketers must be authentic, transparent with brand and company information, or they will be exposed in social media.
• Social commerce: this is an evolution of e-commerce, using social media and consumer interactions to facilitate online sales. Customers chat about products online while they are shopping and post products they like on sites like Pinterest.

Impact of e-marketing at various levels

The Internet affects the way many individuals work, communicate, and consume. Through the Internet, consumers compare product features and prices, read product reviews from other consumers, bring music, movies, and other types of entertainment directly to their PCs, iPads, and televisions, and, finally, communicate through e-mail, Internet-based telephone services, collaborative software.

Strangers in countries worldwide form online communities to discuss a variety of things, facilitated by the Internet. Companies and consultants gain exposure to customers on blogs, which are online diaries or journals. Finally, independent, private communities have formed around peer-to-peer file sharing. Individuals upload, share, and collaborate on documents and files at Google Docs and Dropbox from far away geographic locations.

Employees work together in cross-functional teams worldwide using computer networks to share and apply knowledge for increased efficiency and profitability. Human resources personnel use the Internet for electronic recruiting and training.

Digital information enhances economies through more efficient markets, more jobs, information access, communication globalization, lower barriers to foreign trade and investment.

The Internet is having a huge, but unequal, worldwide impact on various societies. Easy computer networking on mobile devices from any location means that work and home boundaries are becoming indistinct. Although this option makes working more convenient, it may encourage more workaholism and less time with friends and family.

Finally, the problems of spam, online fraud, and computer viruses slow down the positive impact of the Internet and e-marketing.

Online engagement analogous to offline experience marketing

Engagement occurs when Internet users connect or collaborate with brands, companies, or each other. Engagement is becoming analogous to offline experience marketing because online marketers engage users by enticing them to participate in their content or media, like offline marketers do.

One way to engage online users is through Crowdsourcing, that is the practice of outsourcing ads, product development, and other tasks to people outside the organization. For example, software developers ask users to test beta versions of Web sites or next-version software and suggest improvements. Customer engagement via crowdsourcing also involves consumers uploading videos or photos, posting comments on a blog, becoming a fan of the brand’s Facebook page.

Inventors also ask consumers to help fund new products through sites such as Kickstarter (called crowdfunding).

Engagement is important to companies because when buyers are engaged with a company’s content, they feel more favorable toward the brand.

In addition to crowdsourcing, marketers use their own content to engage users online. Content marketing is a strategy involving creating and publishing content on Web sites and in social media.

Important Internet properties affecting marketing

The Internet has properties that create opportunities beyond those possible with the telephone, television, postal mail, or other communication media. These Internet properties allow for more effective and efficient marketing strategy and changed the way marketing is conducted. E-business and e-marketing opportunities given by the Internet’s properties are:

• Lower costs: reach customers at a much lower cost than with traditional marketing methods.
• Trackable, measurable results: obtain detailed data about customer responses to marketing campaigns.
• Global reach: access new markets across the globe.
• Personalization: connecting a database to a Web site allows for individually targeted offers.
• One-to-one marketing: gain instant access to individual customers on computers and mobile phones.
• More interesting campaigns: use creative multimedia content to engage customers.
• Better conversion rates (increased purchases): online customers are only a few clicks from a purchase, whereas when offline, they must make a phone call or visit a store.
• Twenty-four-hour marketing: allows 24/7 access to the firm’s products and services, even when the office is closed.

Difference between inbound and outbound marketing

Inbound marketing strategies are about inciting consumers to find companies online. Customers no longer appreciate marketing messages that interrupt them from what they are doing. Inbound marketing means getting found online, as opposed to interrupting customers with outbound marketing to get them to pay attention to the ads, Web sites, and products. So the components of inbound marketing are content (e.g., blogs, videos, eBooks), social networks (e.g., Twitter, Facebook), and search engine optimization techniques to help get the social media or Web site come up on the first page of results for a keyword search.

The success of inbound marketing’s social media tactics is monitored through the amount of conversation about a topic for a specific time period, the number and growth of fans, friends, or followers, and “likes” on a social network page, number of ratings, reviews, subscriptions.

Distinction between information or entertainment as data and the information-receiving appliance

Digital media are simply data that can be sent to viewers in different ways. These data are sent by their creators through satellite, telephone wires, or cables to the user’s receiving appliances such as televisions, PCs, radios, smartphones, and others. The receiving appliance is separate from the media type. In other words, watching television doesn’t mean view television programs because we can also watch YouTube videos on television via Wi-Fi connection. Computers can receive digital radio and television transmissions, and television sets can receive the Web and satellite radio content.

Key elements of Web 2.0

• Internet adoption and online retail sales mature.
• Search engines are now reputation engines: relevance is one of Google’s search algorithm variables.
• Decline of print media.
• Online fund-raising increases: marketers use the Internet to raise funds for political campaigns (nonprofits also do this). Kickstarter allows inventors to raise funds from users for innovative new products (crowdfunding).
• Location-based services: many companies use the smartphone’s GPS (Global Positioning System) feature to provide local search, such as Google local search.
• Everything is faster: users are overloaded with entertainment and information opportunities, and marketers need to be fast to gain their attention.

Key elements of Web 3.0

There was a transition from Web 1.0 (content creator makes a Web page, and the content consumer views it) to Web 2.0 (every user is both content creator and consumer and they share with one another) and Web 3.0 (individual data presented and shared as desired).

The semantic Web is an extension of the current Web, which carries text documents, photos, graphics, and audio and video files fixed in Web pages that search engines try to index for users. The semantic Web will make the search easier by providing a standard definition protocol so that users can easily find information based on its type, such as a person’s name, the next available appointment for a particular doctor (found by searching the doctor’s database), details on an upcoming concert, the hours of the library, the menu at the local restaurant. The value of the semantic Web is truly information on demand. Some data are available this way now, such as flight delays, but consumers must sign up to receive these. Other data arrive automatically, such as text messages, e-mail, and Facebook comments or friend requests. However, these data all arrive from the source with no distinction between what the user wants or doesn’t want to receive. With the semantic Web, consumers will define tasks for their personal digital agents, which will search for pieces of data and return them as movies to the television set, appointments to the smartphone calendars, contact information to the address book, and more.

The key elements of Web 3.0 are the increase of wireless networking, wearable Internet devices, big data, and cloud computing.

Strategic e-marketing and performance metrics

Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing market opportunities. Part of this process is to identify the company’s goals, such as growth, competitive position, geographic scope (local or multinational), other objectives.

Is strategy concerned with achieving objectives or with goals?

Strategy is the means to achieve a goal. It is concerned with how the company will achieve its objectives, not what its goals are. For example, the company sets its growth and other objectives and then decides which strategies it will use to accomplish them. The tactics are detailed plans to implement the strategies.

What are performance metrics?

The e-marketing plan is normally a part of an organization’s overall marketing plan. It starts with the business environment, where legal, ethical, technological, competitive, market-related, and other environmental factors external to the company create both opportunities and threats. Organizations make SWOT analyses to discover what strengths and weaknesses they have to deploy against threats and opportunities. Organizations select e-business models, and then marketers formulate strategy and create marketing plans that will help the firm accomplish its overall goals. The final step is to determine the success of the strategies and plans by measuring the results. Performance metrics, also called key performance indicators (KPIs), are specific measures designed to evaluate the effectiveness and efficiency of the e-business and e-marketing operations.

What is e-business strategy?

E-business strategy is the design of a business strategy to capitalize on technologies for reaching specified objectives that improve performance and create sustainable competitive advantage. When corporate-level (also called enterprise-level) business strategies include information technology components (social media, digital data, databases, etc.), they become e-business strategies.

Define e-marketing strategy and its use

E-marketing strategy is the design of marketing strategy that uses information technology to reach specific objectives.

Does an e-business model include only online models?

No. A business model is a method by which the organization sustains itself in the long term and includes its value proposition for partners and customers, as well as its revenue streams. What makes a business model an e-business model is the use of information technology. For example, the Internet allows education, music, video, and software firms to deliver their products online, thus creating a new distribution model that cuts costs and increases value.

E-business models can capitalize on digital data collection and distribution techniques without using the Internet. For example, when retailers scan products and customer data or reward cards at the checkout, these data can become a rich source of knowledge for inventory management and promotional offers – e-marketing without the internet.

The value proposition involves knowing what is important to the customer or partner and delivering it better than other organizations. Value involves the customer’s perceptions of the product’s benefits, specifically its attributes, brand name, and support services. Subtracted from benefits are the costs involved in acquiring the product, such as money, time, energy, and psychic costs.

Value = Benefits – Costs

E-business strategies help organizations to decrease internal costs, and they can also increase the enterprise revenue stream.

Critical components for evaluating a business model's fit

These components are:

• Customer value: the model must create value through its product, which is differentiated from that of its competitors.
• Scope: markets must be growing, and the company must serve these markets.
• Price: the company’s product prices must achieve company share and profit objectives.
• Connected activities: the company must have the capability to create the value.
• Implementation: the company must have the ability to actually make it happen, which involves the firm’s system, people, culture, and so on.
• Capabilities: the company must have the resources (finance, core competences, etc.) to make the selected models work.
• Sustainability: the e-business model is particularly appropriate if it can create a competitive advantage over time. It mustn’t be difficult to imitate, and the environment must be attractive for maintaining the model over time.

Difference between the four levels of commitment to e-business

A key element in setting strategic objectives is to decide the level of commitment to e-business in general and e-marketing in particular. The possible levels of commitment are represented in a pyramid because fewer businesses occupy the top position. The more strategic moves are at the top, while the more tactical activities are at lower levels.

The lowest level of the pyramid (activity level) affects individual business activities that can save the firm money if these activities are automated using information technology or the Internet. Examples of activity-level e-business models are:

• Online purchasing: companies can use the Web to place orders with suppliers, thus automating the activity.
• Order processing: online retailers automate Internet transactions created by customers.
• E-mail: when organizations send e-mail communications to stakeholders, they save printing and mailing costs.
• Content publishing: companies create content or services on their Web sites, draw lots of traffic, and sell advertising or generate sales leads.
• Online sales promotions: companies use the Internet to send samples of digital products (e.g., music or software).
• Social media communication: companies use Facebook pages, Twitter streams, blogs, and more to engage and build relationships with customers and prospects.
• Business intelligence.
• Online advertising and public relations.
• Dynamic pricing strategies online.
• Search marketing.