Introduction to Digital Marketing
What is digital marketing? Now, digital marketing is all marketing that is done over the digital platform or digital media.
What are the things that marketers can possibly do over a digital platform?
They can use digital media for the creation of products and services.
There are a lot of companies that gather ideas from customers over social media platforms.
There are a lot of companies that engage in a specific activity called co-creation or co-production where the customers actively participate and get involved in the creation of products and services.
Digital Media and digital platforms can also be used for communication and for the promotion of the products.
We also know that there is a lot of social media promotion that happens. Many times companies have a lot of sales and a lot of promotional activities that they do.
For example, there are e-commerce companies in India which basically have huge sales around the festival seasons.
So you can use digital platforms to communicate about products, about services, about specific events that you're doing, about different people who are involved in the company's ecosystem.
It can also be used to manage a lot of your reputation in the marketplace. For example, there are companies that often have to encounter a lot of negative news in the market place. So how is that you can reach out to customers very effectively and make sure that all of this negative news can be neutralized? For communication and promotion, digital technologies can be used.
Of course, another important element of using digital marketing is for the selling or delivery of products and services to customers. E-commerce is a very brilliant example here. You have a lot of companies that have created their businesses and their business models in the e-commerce space.
Companies like Amazon, companies like Flipkart are engaged in creating a marketplace for customers to come and purchase your products. So delivery and selling of products and services to customers is also something that is done through the digital platform.
There is a lot of data that you can collect from digital media. You had a lot of problems collecting authentic data from customers earlier. You had a problem wherein you had to go to customers with a survey or a questionnaire and ask for their feedback about a lot of things.
But as of today with the help of digital marketing techniques, it has become very easy for you to collect all of this data because this data is available to you in real-time.
You can listen to what the customer is saying, you can also understand what the customer is saying. One example is a lot of customers today use your products and give feedback, give reviews about your products on online platforms.
Say for example, when you go to Amazon, you see there are star ratings and there are review comments that customers have provided. Now all of these review comments are rich information about what your product is and what customers feel about your product.
Many times companies use all of this to understand what improvements can be made on this product.
So unlike the case where you had to go to the customer to understand what the customer felt about the product, in today's day, because of digital marketing tools and techniques, it is very easy for you to listen to and understand the customers.
A lot of this can be used to improve the products and services. In a lot of cases when you have to come out with new products, such information becomes very important.
There are also a lot of techniques that are used to manage relationships with customers. You would have heard about this term called customer relationship management, wherein you are trying to have a relationship with the customer that is beyond the normal selling and buying cycle, wherein you're trying to keep reminding the customer about a lot of benefits that you're doing, wherein a lot of loyalty programs are done by companies.
In the digital space, all of this becomes very easy. Say for example, when we use emails to remind customers about their consumption patterns, to give them some loyalty benefits and all of this is communicated either through emails or through social media or through mobile platforms. All of this is because digital marketing is the enabler here.
It also helps you to understand what the competition is doing. Nowadays, it has become a very open world. We all understand what everybody else in the world is doing.
Hence it has become very important and very easy for us to understand what the competition is doing.
Philip Kotler Definition of Digital Marketing
Philip Kotler has also given a definition of what digital marketing is. He defines digital marketing as a form of direct marketing, which links consumers with sellers electronically using interactive technologies like emails, online forums, and newsgroups, interactive television, mobile platforms, social media, etc.
So in this definition, basically he captures everything that I have been talking to you about: use of electronic platforms, use of electronic media, and how customers can be made aware of your products, how products can be delivered to these customers, how you can understand what the customer is feeling about your products, and on top of all of that, how you can create new products and strategize your way to success.
Salient Features of digital marketing and how it is different from traditional marketing?
Now there are certain salient features of digital marketing and how it is different from what traditional marketing was.
For example, when we think about traditional marketing and the way in which traditional marketing used to operate, we always used to think that the marketer knows everything.
The marketer or the company that is manufacturing the product has all understanding of what the customer wants, what the customer feels, and the only activity that you're involved in was to communicate it to the customer.
Today with the emergence of digital platforms, it has become much more interactive in nature.
The communication is no longer one way from the marketer to the customer, but it is a two-way interaction now. The marketer can, of course, reach out to the customer while the customer can also come back to the marketer, give the marketer feedback about the product, ask questions to the marketer, etc.
Remember the case of television advertising. It is a one-way platform. You can only communicate with the customer through the television platform.
You cannot hear back what the customer is feeling. In many cases, companies don't necessarily know what the customer is feeling.
In digital media, it is very easy for you to communicate both ways, so that is why two-way communication is very effective.
It is also important to understand that apart from the marketer and the customer communicating with one another, there is also many-way communication that is going on.
Think of the case of social media. You use a product, you like the product, you might go and talk about that as a status update on Facebook, you might go and tweet about the product, you might take a picture of yourself in a very fancy location using the product and put it on Instagram.
Now the communication has become many-way rather than the marketer and the customer talking to one another. You have many customers who are interacting with your product easier and in much more accessible platforms without spending any money.
Segmentation and targeting have become much effective now. You might recall we had discussed segmentation and targeting in one of the previous articles.
Segmentation was how you broke down the heterogeneous market into homogeneous groups so that you can target one or a few of these groups very effectively.
Now with digital platforms, you can do segmentation and you can do targeting much effectively because segmentation and targeting require data and understanding of the customer which the digital platform provides to you.
If you remember your YouTube consumption, when you go to YouTube from one browser on your computer, you might see a set of videos, a set of recommendations that are provided specifically to you. No other customers in the world might have the same usage pattern, same videos and the same channels that they're watching.
So now it is possible for us to market individually to each customer and provide options and services and products for the requirements of specific customers at an individual level, which was not very easy and not very effective in the earlier days of traditional marketing.
As I mentioned already, it is easy to measure and also every company has an equal opportunity in the digital space because earlier if you're talking about television advertising, it is expensive, it is only accessible to companies who have a big budget.
Today when you're talking about social media platforms and reaching out to customers on such platforms, it has become easy for most companies to operate in this place. So the opportunity has become very easy.
You might also remember there are generally two types of techniques that marketers use. One is called push marketing and the other is called pull marketing.
Push marketing is where you use a lot of trade promotions, a lot of incentives to trade partners specifically to retailers and wholesalers who are now going to push your product to the market.
Say for example, if you go to a Kirana store near to your house and you are trying to buy a product, but you don't know which product to buy, you might ask the retailer, the owner of the Kirana store as to which product should I buy?
The Kirana store owner in most cases is going to recommend the product which gives him the highest margins. So if I sell a product for 10 rupees, I get two rupees on this product v/s three rupees on the other product, I will always recommend the three rupee product because that is what gives me a higher margin.
So this kind of incentivization on the trading platform or to trade partners and thereby making sure that the product is available in the market and bought by customers are generally known as push technique.
Read more - Five stage process that consumers use to make a purchase decision
Read more - Five stage process that consumers use to make a purchase decision
On the other hand, there are techniques where you provide a lot of advertising, a lot of information to customers, and all of this information is used by customers to now go to the retail space and collect your product or for demanding your product. That is what a lot of other companies do. These kinds of techniques which basically make the customer pull your product is known as pull marketing.
Now, digital platforms help you do both of these things simultaneously.
Say for example, if I use display advertising, if I use email campaigns, if I use any kind of technique whereby I'm pushing my product to the customer, it helps me to push marketing.
At the same time if I know of customers who are interested in certain products who might be willing to search for this product on a search engine, they might see my advertisement and buy this product, so pull also is possible.
So both push, as well as pull marketing, can be done very easily. You get real-time feedback from customers and feedback on your campaigns.
Earlier in traditional campaigns, if you run an advertising campaign, you hardly know what the impact of the campaign is.
There is a very interesting quote that says that traditional advertising is mostly about spray and pray.
You are spraying the content and spraying the message across the entire market or across the entire target group and you're praying that people will come and buy your product.
It was not very accountable. You didn't know if your campaign was doing good or doing bad. You might have had created a campaign, you might have spent millions of dollars in the production and in the airing of all of these advertisements, but the impact might not be significantly high.
In digital platforms, it is not the case. You have real-time feedback so you can measure return on investment in real-time.
There is also a drastic shift in the moment of truth theory. Generally, we used to consider three moments of truth that used to happen when we're talking about traditional marketing: the first, the second, and the third moment of truth.
The first moment of truth is basically the first interaction that the customer has with your product. Often times it happens in the point of purchase location or probably in the retail space where the customer first sees the product on the retail shelf.
The second moment of truth is where the customer actually purchases your product from the retail location.
And the third moment of truth is once a customer has used the product, what is the feedback that the customer gets, whether the customer sees that the product has met his or her expectations, or whether the product has not been good enough to meet his or her expectations.
So, in traditional marketing, these were the three moments of truth.
Now what has happened with digital marketing is that there has now become a Zeroth Moment Of Truth.
What Is Zeroth Moment Of Truth?
ZMOT (Zeroth Moment Of Truth) is basically the digital information search that the customer engages in. Many times prior to you going to a retail location or prior to you going to an e-commerce platform, there's a lot of information search that you do wherein the customer now has one more stage wherein the customer interacts with the product.
So zeroth moment of truth is again something that has gotten itself evolved because of the digital marketing practices and that is one salient feature that makes itself different from the traditional marketing practices.
Read more - Word of Mouth Marketing
Read more - Word of Mouth Marketing
Digital marketing applications are always available to customers irrespective of the location of the customer, irrespective of what the customer wants as language preference, irrespective of whether the customer is browsing for your product information in the morning hours, in business hours, or during the midnight or during later hours in the day.
It becomes very easy for you to provide your information to the customer and be available to the customer round the clock. So information is always available and you can purchase the product at any point of time in the day.
Traditionally you had to wait for information when the business hours of the company are on, you had to wait for purchasing the product when the retail store is available and when the retail store is open, which might be from nine in the morning till ten in the night, but after that you have to wait till the next business day.
With digital marketing, all of this has become much easier for customers, so always availability is one more thing and personalization, of course, remember I mentioned to you about the YouTube example.
You can personalize content, you can personalize information and you can personalize the product for each customer's requirement because digital technology helps you do all of these things, so these are some salient features that make digital marketing a lot different from traditional marketing.
The Key Elements of the Digital Marketing Ecosystem
We are going to discuss the key elements of the digital marketing ecosystem now. The manufacturer or the marketer of the product is on one end and the customer or the consumer of the product is on the other end and we're trying to see what are the directions and what are the different things that are out there for which a marketer can use in order to make sure that the product is communicated, promoted and sold effectively in between these two entities.
So the first element here is the manufacturer, and then you have the consumer.
All the activities that are involved in the fulfillment or the delivery or selling of products and services from the manufacturer to the customer happen across platforms which are generally called the e-commerce platforms.
So, any platform that you're talking about, Amazon, Flipkart or any other platform, eBay for example; all of these platforms are e-commerce platforms.
Now in e-commerce platforms, you might have platforms that are consumer-driven. There might be platforms that are business to business-driven. So, there are a set of platforms that are B to B driving.
There are a set of platforms that are B to C driven. There are also other platforms which are C to C driven, wherein consumers or customers can now interact with other customers and sell products to them. So, all of these platforms exist.
Now when we're talking about other platforms, there are some platforms that basically the manufacturer or the marketer uses to reach out to the customer and communicate to the customer. These kinds of platforms are generally known as outbound marketing tools or outbound marketing techniques.
This is where you're basically trying to reach out to the customer rather than the customer coming to you. You're trying to go to the customer and try to talk to the customer.
Inbound marketing is where the customer is looking for something and you make yourself available for the customer. So in many cases, like we discussed in the awareness, interest, desire, stages of the customer's journey, the customer might be specifically looking for some information. So this is where the customer has an opportunity or the customer is trying to reach out to you and gather information about you.
In many cases, the consumer is now reaching out to you, which is now called inbound marketing. This is where you are making sure that there is an opportunity that all customers who have a necessity or who have a requirement for your product or service can directly reach out to you and come to you. So such kinds of platforms are inbound marketing platforms.
So you might use a lot of search engines here. Specifically you might use search engine optimization techniques wherein the customer is coming and searching for some information and he is directed to your website.
There might be social communities, communities on social media, etc, wherein the customer can go and discuss with other customers or discuss with experts who have the information and can provide this information.
There might be other opportunities where you will have a lot of email forums where the customer can come and register and type in a lot of information and it comes to you as an email wherein you can reach out to the customer very easily.
There might be a lot of call to action kinds of campaigns out there wherein the customer can get your address, get your phone number and thereby the customer can reach out to you.
So all of these elements where the customer can now easily come to the manufacturer are known as inbound marketing.
There is a completely different animal out there, which is social media. Now, social media is where consumers are interacting with other consumers. So is the case of mobile technologies. So social media and mobile platforms are predominantly used by consumers to interact with other consumers.
What manufacturers or marketers try to do is try to make themselves relevant in this ecosystem that predominantly is a consumer to consumer-driven. So when consumers go and register themselves for a Facebook page or for an Instagram account, what they're trying to do is to manage relationships with other consumers.
When you buy a mobile phone, you're buying a mobile phone so that you can now communicate with your family members, friends, etc. Now in these scenarios also marketers try to make themselves relevant. So that is where you'll find that a lot of Facebook, LinkedIn, Twitter marketing, which is part of the digital ecosystem, as part of the social media marketing, part of the digital ecosystem, as well as a lot of location-based applications, a lot of applications that are created so that customers can use them specifically on their mobile phones. All of this becomes important.
So there are five elements of the digital marketing ecosystem –
2. Outbound marketing
3. Inbound marketing
4. Social media marketing
5. Mobile marketing
If you take any company out there and try to see what kind of activities they do, this could be a good exercise for you to understand this better.
Take any company out there and try to map all the different activities that they do in the digital space. You'll find that companies have a mix of all of these different elements.
They might have a presence on e-commerce platforms. It could be their own e-commerce platform. It could be some other third-party e-commerce platform.
They might have applications where they try to reach out to customers and do outbound marketing.
They might have techniques where they are available when the customer is looking for them and do inbound marketing.
They might have a significant presence on social media wherein they will have their own Facebook pages, they will have their own twitter accounts, they will have a LinkedIn page, and they might have an account on Instagram. They might use a lot of influencers to talk positively about them.
They might also have mobile applications and a lot of mobile-based technologies that are used to reach out to customers.
So again, the elements of the digital marketing ecosystem include e-commerce, outbound marketing, inbound marketing, social media marketing, and mobile marketing.
We will come to each of these in a specific article that we're going to cover on this blog.
Read more - what are the different factors that influence the consumer?
Read more - what are the different factors that influence the consumer?
Also to understand here are the three types of media that a company can have. These three types of media include paid media, owned media, and earned media.
So if you take the first letters of each of these, terms, P, O, E, M, it's also known as the POEM framework wherein we're talking about three types of media that the company can have.
Paid media is all the kind of platform wherein you're paying a third party to have a presence.
Say, for example, if you're advertising on Google, you basically are paying a certain amount of money to google so that your ad comes up in the top position in the search result page. So that is what paid media is.
You can do advertising on Facebook wherein Facebook is now going to show your advertisement. It could be a video advertisement, it could be a text advertisement, or it could be a remarketing campaign. Any of these can be shown by Facebook if you're going to pay Facebook a certain amount of money.
So, paid media is all the kind of media that you can use by paying a third party or paying the owner of certain media.
Owned media is all the media that you own. This is where we're talking about all different digital assets that the company owns.
We're talking about websites that the company owns. We're talking about social media accounts that the company owns. We're talking about different applications that the company owns from the google play store or from the apple store.
There could be a lot of such assets that the company has now invested money and resources in and created for themselves and they own all of these accounts or all of these platforms. So that is what owned media is.
In many cases, you get a lot of attention in the digital marketing space, not by paying the third party, not by investing in owning such accounts. This is where customers talk about you in a favorable manner. This is where customers like to talk positive things about you.
So all such platforms and all such media attention that you get that is basically because of the good products that you make or the good work that you're trying to do is what is known as earned media.
So paid media is when you're paying a third party for certain activities. It could have the cost per conversion, cost per lead, or cost per click kind of methods that are used. It could be the cost of impression.
If you remember, you would have seen a lot of advertisements that pop up at the beginning of a YouTube video wherein you'll see that the advertisement pops up and then after five seconds probably you'll click on that link which says skip the ad.
So all of this is basically by paying the media partner and this kind of advertising or this kind of media is paid media.
There are a lot of companies that have their own websites, their own digital applications, applications that the customer can download and use, websites where the customer can come and have information, raise grievances, buy products, etc. All of these are owned media and there are a lot of things that the customers do on their own.
Now, say, for example, you are a mobile phone company. The customer uses your mobile phone and finds that the mobile phone is extremely great. The customer talks about it in a video. The customer is a blogger who talks about it in a small video on YouTube.
So, such content you had not paid google for that, you have not paid YouTube for that, you have not invested in the production of such content, such content is called user-generated content and such user-generated content or such content that customers provide or customers make is generally what is known as earned media.
So, all of these are extremely important for us to understand as part of the ecosystem.
So, the "digital marketing" ecosystem gives us an understanding of the opportunities. It also gives us an opportunity to understand what kind of mix we should have. And when you strategize, you start by defining what your objectives are, designing the kind of digital marketing strategy, implementing the strategy, measuring it, and finally improving the overall strategy.