CH 1 1

Chapter 1
Introducing Digital
Marketing
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Chapter 1 – Introducing Digital Marketing
Main Topics:
• How digital marketing has transformed marketing

• What are digital and multichannel marketing
• Introduction to digital marketing strategy
• Introduction to digital marketing communications
Case Study: eBay thrives in the global market place.
How digital marketing has transformed
marketing?
Digital marketing is about:
 Audiences: What audience interactions we need to understand and manage.
Digital marketing involves the following “5Ds” of managing digital marketing
interactions:
 Digital devices: Our audiences interact with business using a combination of smart
phones, tablets, desktop computers, gaming devices…
 Digital platforms: Most of interactions on these devices are through a browser or
apps from the major platforms e.g. Twitter, Instagram…
 Digital media: Different communication channels for reaching and engaging
audiences are available including advertising, email and messaging…
 Digital data: The insight businesses collect about their audience profiles and their
interactions with businesses now needs to be protected by law in most counties.
 Digital technology: The marketing technology that businesses use to create
interactions from websites and mobile apps to in-store kiosks and email campaigns.
Figure 1.1 Customer lifecycle marketing
touchpoint summary for a retailer
The sequence of online and offline touchpoints a customer or buyer
takes during a buying process or customer experience. Online this
may include a range of digital platforms, communications media,
websites, pages and engagement devices.
Many ways available to communicate with prospects and customers
across different touchpoints in the customer life cycle
Source: Smart Insights (2017)
What are digital and multichannel marketing?
 Digital media: Communications are facilitated through content

and interactive services delivered by different digital technology
platforms including the Internet, web, mobile phone, TV and
digital signage (electronic signage).
 Digital marketing can be defined as:

 Achieving marketing objectives through applying digital media
data and technology.
 The application of digital media, data and technology integrated
with traditional communications to achieve marketing objectives.
 Online company presence: Different forms of online media
controlled by a company including their website, blogs,
email list and social media presences. Today, commonly
known as ‘owned media’.
 In practice, digital marketing focuses on managing different forms of

online company presence , such as company websites, mobile apps
and social media company pages, integrated with online
communications techniques including search engine marketing,
social media marketing, online advertising, email marketing and
partnership arrangements with other websites
 These techniques are used to acquire new customers, providing
services to existing customers, and develop the customer relationship
through CRM
 Customer relationship management (CRM): Using digital
communications technologies to maximise sales to existing
customers and encourage continued usage of online services
through techniques including a database, personalised web
messaging, customer services, chatbots (a computer program
designed to simulate conversation with human users), email and
social media marketing.
 Multichannel (omnichannel) marketing: Customer communications

and product distribution are supported by a combination of digital
and traditional channels at different points in the buying cycle or
‘path to purchase’. With the range of mobile and IoT touchpoints,
some have expanded the term to omnichannel marketing.
IoT >> Internet of Things
Paid, owned and earned media
To help develop a strategy to reach and influence potential customers
online, it’s commonplace to refer to three main types of media
channels that marketers need to consider today:
1/ Paid media: These are bought media where there is investment to
pay for visitors, reach or conversions through search, display ad
networks or affiliate marketing. Offline, traditional media such as print
and TV advertising and direct mail remain important for some brands
such as consumer goods brands.
2/ Owned media: This is media owned by the brand. Online this
includes a company’s own websites, blogs, email list, mobile apps or
their social presence on Facebook, LinkedIn or Twitter. Offline owned
media may include brochures or retail stores.
3/ Earned media: Traditionally, earned media has been
the name given to publicity generated through PR
(public relations) invested in targeting influencers to
increase awareness about a brand. Now earned media
also includes word of mouth that can be stimulated
through viral and social media marketing, and
conversations in social networks, blogs and other
communities.
There is an overlap between the 3 different type of media.
This overlap requires integration of campaigns resources and
infrastructure through Application programming interfaces (APIs, e.g.
Facebook API) and widgets (a simple application extension).
API : Method of exchanging data between systems such as websites
services.
The marketing technology landscape
The categories of the modern technology options
software that acts as a bridge between database and applications
Facebook, twitter,…
Introduction to digital marketing strategy
Key considerations:
Key features of digital marketing strategy
Applications of digital marketing
Benefits of digital marketing
Key features of digital marketing
strategy
The interaction and integration between digital

channels and traditional channels is a key part of
digital marketing strategy development.
>> Digital marketing strategy is essentially a channel
marketing strategy and it needs to be integrated
with other channels as part of multichannel
marketing.
Key features of digital marketing
strategy
An effective digital marketing strategy should:
be aligned with business and marketing strategy (for example, many
companies use a rolling three-year plan and vision).
be consistent with the types of customers who use and can be
effectively reached through the channel.
define a compelling, differential value proposition for the channel.
specify the mix of online and offline communication tools used to attract
visitors to the company website.
support the customer journey through the buying process as they select
and purchase products using the digital channel in combination with
other channels.
manage the online customer lifecycle through the stages of attracting
visitors to the website, converting them into customers and retention
and growth.
Applications of digital marketing
Digital media and technologies can be used as follows:

• Advertising medium. Display ads on publisher sites or social networks
can be used to create awareness of brands and demands for products or
services.
• Direct-response medium. Targeted search advertising enables
companies to drive visits to a site when consumers shows intent to
purchase, such as searching for a flight to a destination.
• Platform for sales transactions. Online flight booking is now the most
common method for booking flights, both for consumers and business
travellers.
• Lead-generation method. For booking business flights, tools can be
provided that help identify and follow up corporate flight purchases.
• Distribution channel, such as for distributing digital
products. Today, airlines sell more insurance services
than previously.
• Customer service mechanism. For example,
customers may ‘self-serve’ more cost-effectively by
reviewing frequently asked questions.
• Relationship-building medium. A company can
interact with its customers to better understand their
needs and publicise relevant products and offers. For
example, easyJetTM uses its email newsletter and
tailored alerts about special deals to encourage repeat
flight bookings.
Benefits of digital marketing
• Identifying. The Internet can be used for marketing

research to find out customers’ needs and wants.
• Anticipating. The Internet provides an additional channel
by which customers can access information and make
purchases.
• Satisfying. A key success factor in e-marketing is achieving
customer satisfaction through the electronic channel, which
raises issues, such as is the site easy to use, does it perform
adequately.
Benefits of digital marketing
The benefits of digital marketing and how the 5Ss of digital
marketing can be applied:
1) Sell– Grow sales : Includes direct online sales and sales from
offline channels influenced online
2) Serve– Add value : Achieved through giving customers extra
benefits online
3) Speak– Get closer to customers: Creating a two-way dialogue
through web interactions
4) Save– Save costs : Achieved through online email, reduce
staff, print and postage costs.
5) Sizzle– Extend the brand online: Achieved through providing
new propositions, new offers and new experiences online
Mini Case 1.2 Zalando exploits the power of digital
media and distribution to grow a multi-billion Euro
business in less than 5 years.
Alternative digital business models
Business and consumer business models:
Organisations require clarity on the type of business model they will

develop.
Digital marketing opportunities are often described in terms of the
extent to which an organisation is transacting with consumers
 Business-to-consumer (B2C): Commercial transactions between an
organisation and consumers
 Business-to-business (B2B): Commercial transactions between an

organisation and other organisations (inter-organisational marketing).
 Direct-to-customer model: A brand which has
previously communicated to its customers via
intermediaries such as media sites or wholesalers
communicates directly via digital media such as social
networks, email and websites.
 Consumer-to-consumer (C2C): Informational or
financial transactions between consumers, but usually
mediated through a business site.
 Consumer-to-business (C2B): Consumers approach
the business with an offer.
E-government: The use of Internet technologies to
provide government services to citizens.
Figure 1.5 Summary and examples of transaction
alternatives between businesses, consumers and
governmental organisations
What is the difference between e-commerce
and digital business?
Electronic commerce (e-commerce): All financial and informational

electronically mediated exchanges between an organisation and its
external stakeholders.
>> E-commerce is often further subdivided into:
Sell-side e-commerce: E-commerce transactions between a supplier
organisation and its customer.
Buy-side e-commerce: E-commerce transactions between a
purchasing organisation and its suppliers.
Figure 1.6 The distinction between
buy-side and sell side of e-commerce
What is the difference between e-commerce and digital
business?
Social commerce :Social commerce is a subset of e-commerce that

encourages participation and interaction of customers in rating,
selecting and buying products through group buying. This
participation can occur on an e-commerce site or on third-party
sites.
Electronic business: (e-business) or digital business Electronically

mediated information exchanges, both within an organisation and
with external stakeholders supporting the range of business
processes.
The five main types of site or mobile app functions:
Different forms of functionality of digital presence
1- Transactional e-commerce (enable purchase products online)

2- Services-orientated relationship-building for lead-building and support
(This provides information to stimulate purchase and build relationships)
3- Brand-building (This type of site or app provides an experience to
support the brand.)
4- Publisher or media site (This provides news, entertainment or
information or news about a range of topics and typically has an advertising
or affiliate revenue model)
5 -Social network or community (enabling community interactions
between different consumers (C2C model))
Challenges in developing and managing
digital marketing strategy
• There are unclear responsibilities for the many different digital marketing
activities.
• No specific objectives are set for digital marketing.
• Insufficient budget is allocated for digital marketing because customer
demand for online services is under estimated and competitors potentially
gain market share through superior online activities.
• Budget is wasted as different parts of an organisation experiment with using
different techniques, martech (marketing and technology) suppliers without
achieving economies of scale.
• New online value propositions for customers are not developed since the
Internet is treated as ‘just another channel to market’ without review of
opportunities to offer improved, differentiated online services.
• Results from digital marketing are not measured or reviewed effectively, so
actions can-not be taken to improve effectiveness
Strategic framework for developing a digital strategy
Figure 1.8 A generic digital marketing strategy development process
Introduction to digital marketing communications
KPI Key Performance Indicators
RACE (Reach/Act/convert/Engage) is a frame-work developed
by Smart Insights (2010) to help marketers manage and
improve the commercial value that their organisations gain
from digital marketing.
RACE consists of four steps designed to help engage prospects,

customers and fans with brands throughout the customer
lifecycle:
• Step 1: Reach – Build awareness of a brand, its
products and services on other sites and in offline
media and build traffic by driving visits to web and
social media presences.
• Step 2: Act – Engage audience with brand on its
website or other online presence to encourage them
to interact with a company or other customers. The
aim of the Act stage is lead generation, i.e. to gain
permission to market to a prospect using email, SMS
or mobile app notifications
• Step 3: Convert – Achieve conversion to
generate sales on web presences and offline.
• Step 4: Engage – Build customer relationships
through time to achieve retention goals
The key types of digital media channels
 There are many online communications tools

that marketers must review as part of their
communications strategy or as part of planning
an online marketing campaign.
The online marketing tools are divided into six
main groups.
Figure 1.10 Six categories of digital
communications tools or media channels
Public Relations
Source: Chaffey and Smith (2017)
Benefits of digital media
1/ Interactivity :
• the customer initiates contact;

• the customer is seeking information or an experience (pull);
• it is a high-intensity medium – the marketer will have 100 per cent of
the individual’s attention when he or she is viewing a website;
• a company can gather and store the response of the individual;
• individual needs of the customer can be addressed and taken into
account in future dialogues.
Figure 1.11 Summary of communication models for
(a) traditional media, (b) new media
2/ Intelligence :
Digital media and technology can be used as a
relatively low-cost method of collecting marketing
research, particularly about customer perceptions of
products and services.
3/ Individualisation :
Interactive marketing communications can be tailored
to the individual at relatively low costs, unlike in
traditional media.
4/ Integration :
The Internet can be used as an integrated communications tool as part of
supporting a multichannel customer journey are the following:
• The Internet can be used as a direct-response tool, enabling customers to

respond to offers and promotions publicised in other media.
• The website can have a direct response or callback facility built into it. *
E.g. A customer service representative will contact a customer by phone
when the customer fills in the website their name, phone number and a
suitable time to ring.
• The Internet can be used to support the buying decision, even if the
purchase does not occur via the website, through assisted selling via live
chat or phone. E.g. Include a web-specific phone number in website that
encourages customers to ring a representative in the call centre for support.
Figure 1.13 Channels requiring integration as part
of integrated digital marketing strategy
5/ Industry restructuring
The company’s should consider its representation on intermediary sites
by answering questions such as :
‘Which intermediaries should we be represented on?’ and ‘How do our
offerings compare to those of competitors in terms of features, benefits
and price?’.
6/ Independence of location
With Electronic media it is possible to reach the global market. This gives
opportunities to sell into international markets
The Internet makes it possible to sell to a country without a local sales or
customer service force.
Key communication concepts for digital
marketing
1. Permission marketing
2. Content marketing
3. Customer engagement
Source: Smart Insights (2015a)
1/ Permission marketing: Customers agree (opt
in) to be involved in an organisation’s marketing
activities, usually as a result of an incentive.
 Permission marketing is about seeking the
customer’s permission before engaging them in a
relationship and providing something in exchange.
 The traditional approach can be viewed as
interruption marketing. (without permission)
 Interruption marketing: Marketing
communications that disrupt customers’ activities.
2 /Content marketing: The management of text, rich
media, audio and video content aimed at engaging
customers and prospects to meet business goals published
through print and digital media including web and mobile
platforms which is readapted and orgonized to different
forms of web presence, such as publisher sites, blogs, social
media and comparison sites.
3/ Customer engagement:
Customer engagement: Repeated interactions through the
customer lifecycle encouraged by online and offline
communications aimed at strengthening the long-term
emotional, psychological and physical investment a
customer has with a brand.
Case study: eBay thrives in a global
marketplace
Key content:
Mission
Revenue model
Proposition
Competition
Objectives and strategy
Case Question: Discuss how eBay has had to evolve its online
brand proposition and communicate it to achieve continued
growth

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Chapter 1

• How digital marketing has transformed marketing

Case Study: eBay thrives in the global market place.

Source: Smart Insights (2017)

 Digital media: Communications are facilitated through content

 Digital marketing can be defined as:

 In practice, digital marketing focuses on managing different forms of

 Multichannel (omnichannel) marketing: Customer communications

software that acts as a bridge between database and applications

The interaction and integration between digital

Digital media and technologies can be used as follows:

• Identifying. The Internet can be used for marketing

Organisations require clarity on the type of business model they will

 Business-to-business (B2B): Commercial transactions between an

Electronic commerce (e-commerce): All financial and informational

Social commerce :Social commerce is a subset of e-commerce that

Electronic business: (e-business) or digital business Electronically

1- Transactional e-commerce (enable purchase products online)

Figure 1.8 A generic digital marketing strategy development process

KPI Key Performance Indicators

RACE consists of four steps designed to help engage prospects,

 There are many online communications tools

Source: Chaffey and Smith (2017)

• the customer initiates contact;

• The Internet can be used as a direct-response tool, enabling customers to

Source: Smart Insights (2015a)

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