E-Business

Digital Marketing

Introduction
E-business technologies are opening up an extraordinary new range of possibilities for firms in terms of marketing products & services to consumers & business customers. E-business gives the great power to end users over their buying decisions. Due to web 2.0 user gets online feedback The consequences for organization is that, in order to maintain a brand awareness & its perceived usefulness in the customers mind through their marketing strategies & tactics, they must become customer centric, focused, indeed increasingly on the individual consumers rather than on large customer segments.

What do marketers do?

Two ways of thinking about marketing: as what marketers do and as a way of thinking about customers In developing a marketing strategy, organizations focus on the ways in which they can create and capture value for their customers This requires them to:
undertake some form of market analysis, better to understand the situation within which customers need can be met. identify a specific target market leading to the identification of groups of customers in relation to whom the product or services value proposition can be developed and positioned carry out a programme of actions in the market to ensure the sale of the product or service Put mechanisms in place to retain existing customers, once acquired

What do marketers do?

What do marketers do?

Customer may not know what they want, or may not be able to express their needs effectively, & organization may have to work to anticipate latent needs. It is important therefore to distinguish between organizations which are market- driven and those which drive markets. Market driven forms seek to learn, understand and respond to customers within a given market structure. Their focus is on customer satisfaction Firms which are drive markets are those which seek to change the composition, roles and/or behaviours of players in a markets, often focusing on customers latent needs. They do this by focusing on customers value, over long term , by observing customers, by experimenting & through partnership with other organizations

What do marketers do?

Characteristics Market Driven Driving Markets

Marketing Objective
Consumer Orientations Organizational adjustment style Timescale Organizational learning process

Obtaining customer satisfactions

Expressed wants of consumers Responsive to market Short Time Customer focus key account relationships focus groups concept testing

Creating & maintaining customer value

Expressed wants & latent needs of consumers Anticipating market Long term Lead user relationship continuous experimentation selective partnering

The effects of e-business technologies on marketing strategy

How are customers likely to relate to digital marketing technique? In turn, where do marketing objectives fit into customer buying process? Marketing objectives
Brand building: helps customers to become aware of new products & services & keeps that awareness in customer minds. Consideration: make sure that-at the information search & price comparison stage both rational & emotional features of a firms products & services are effectively communicated to customers. Direct response: it ensures that the mechanism are in place that will allow customers to make purchase Customer retention: means moving beyond simply satisfying consumers to ensuring that the organizations behaviour will increase the likelihood that customers will re-purchase & that loyalty will be subsequently be generated.

The effects of e-business technologies on marketing strategy

Distinguish between first and second generation marketing tools
First e.g. email, search marketing Second e.g. social networks, wikis, virtual worlds

How do organizations see the link between digital marketing tools & their marketing objectives? A survey of US marketers generates five specific conclusions: Brand sponsorship and display advertising are thought to be best for attaining brand building objectives. Search marketing appears to be most popular at the two prepurchase stages (including information search and price comparison). Referral via affiliates works best against consideration and direct response objectives.

The effects of e-business technologies on marketing strategy

Email marketing is strongly associated with both direct response and customer retention, whilst podcasts also seem to be particularly popular in relation to the objective of retention. So-called emerging vehicles (which include blogs, virtual worlds, widgets, and wikis) generated the highest number of don knows amongst respondents (Court et al.,2007). This research also suggested that the number of firms using digital marketing tools in practice is significantly lower than the number of firms saying it is important to them.

Barriers to use of digital marketing tools

Three major barriers can be : Lack of measurement mechanisms: firms are often unwilling to adopt marketing techniques without a corresponding mechanism for measuring their effectiveness. Lack of internal capabilities: Whilst firms many be interested in principle in adopting a wide range of digital marketing techniques, the relative lack of skills & capabilities within the organization may slow down or prevent such adaptation Problems convincing management: fast moving developments in digital marketing means that while there may be relatively well informed individuals aware of such techniques within marketing dept. they have difficulty convincing less aware & more risk averse managers of the appropriateness of such techniques for particular firms.

Barriers to use of digital marketing tools

The data flows are very complex and marketers are struggling to figure out how to manage them. Multiple streams of data, from advertising servers, search engines, websites, and offline activity, rarely measured in the same way, are bombarding marketing organizations. Edelman, 2007

Measuring the extent of DM activity

No fully internationally comparable data available Although individual market reports their own estimates & there are also estimate for some of the components elements of marketing expenditure Very rapid growth of new promotional channels can quickly change the picture & its is important to be aware of the very rapid growth of new media promotional channels.

Measuring the extent of DM activity

From fig. Internet advt. revenues which now matches that of TV advertising Nearly half of which comes from one firm: Google. Worldwide, the internet is forecast to double its share of global advt. spend between 2007 to 2011, increasing to 13.6 % of total spend or $106bn., 45% of which will be in the US.

Measuring the extent of DM activity

There are other ways of understanding measurement of DM activity the scale &

E.g. Google Trends data: allows the tracking & analysis of search strings & websites access which gives us a sense of brand awareness. Measuring marketing buzz through vehicles such as Twitter

Longer terms trends in effectiveness of DM

Less effective: newspapers, Yellow Pages, Telemarketing More effective: SEM, social media, mobile

First generation marketing tools

It is estimated that 1.6bn email inboxes worldwide of which approximately 500m are corporate inboxes. These inboxes receive some 183bn emails each day worldwide. Some 70 % of these messages are thought to be unsolicited commercial ones. Email marketing benefits Lower cost: Faster delivery & response Push rather than pull: it lets the advertiser push the message to its audience, as opposed to a website that waits passively for customers to arrive. Better for niche markets: fro small audiences Performance & contribution can be more easily trackable.

First generation marketing tools

Email marketing costs ( Disadvantages) Information overload: the sheer number of emails now in circulation makes it
increasingly difficult for a legitimate marketing message to stand out.

Deliverability: email is increasingly filtered by recipient and intermediaries. Impact on brand reputation: the implications of potentially unwelcome,
irrelevant or unsolicited email on consumer attitudes towards organization.

Increasing legal minefield:

regulating unsolicited emails.

many jurisdictions have introduced legislation

Growth of opt-in systems or permission based email marketing popular due to above disadvantages Effectiveness measurement
Open rate, click through rate, click-to-open

First generation marketing tools /2

Online advertising

It seems as though we are at the point where online advertising is an obsolete term. The best marketing initiatives are rarely limited to online channels, and the best ideas marketers are exploring are really not advertising at all. Edelman, 2007
Online marketing is define as commercial messages placed on third party websites, including search engines and directories available through internet access Types
Standard image/text link: both image and text all of which link to same destination URL Flash: Rich media: is a method of communication that incorporates animation, sound, video & or interactivity via proprietary ad platform. Sponsored links: text based ads that often appear as a result of a keyword search either on search engine or associated site

First generation marketing tools /2

Web ads dont work Jakob Nielsen He say that users almost never look at anything that look like an advertisement . Heat map from eye tracking studies seem to confirm that user actively avoid advertising banner & even areas which appears to be advertising banner.1 Average user exposed to 40,000 tv commercials a year Adblocking software To gain users trust & interest four main consideration are: Clarity, Relevance, Content, Intention

First generation marketing tools /3

Search engine marketing
Biggest online target marketing opportunity European SEO/SEM market Euro 8.1bn by 2012

Google
Biggest search engine marketer AdWords (2000); AdSense (2002)

Placement or keyword targeting Benefits of AdWords

Reach (80% US internet users employ Google) Cost (no minimum spend; pay only for impressions or click throughs) Timing (continuous matching of available adverts with users) Flexibility (advert available for targeting within 15 minutes of uploading) Behavioural targeting firms are doing the rounds in Europe and America offering the prospect of working out what web surfers are thinking, perhaps even before they know it themselves. The Economist, 7 June 2008

First generation marketing tools /3

Second generation marketing tools

Viral marketing: A mechanism that facilitates and encourages people to pass along a marketing message voluntarily. Attributed to Jeffrey Rayport, 1995 Objective: identify highly socially networked individuals who are capable and willing to pass a message along. Six rules
Stealth is the essence of market entry Whats up front is free payment comes later Let the behaviours of the target community carry the message Look like a host, not a message Exploit the strength of weak ties Invest to reach the tipping point

Second generation marketing tools