Every once in a while, something comes along that changes everything. Like the internet. It has reached across, touched and helped other technologies to evolve. It has proven to be a catalyst to the convergence of technologies.
And, together with this, lives have changed. Behaviours have changed. Methods of communication, research, transactions and social interactions have changed. In the wink of an eye.
Industries and business sectors rush to grapple with these changes, to see how it can help improve the efficiencies and effectiveness of traditional processes, or create new ones. To see how it can be exploited for commercial gain. New words, catchphrases and terminologies have been created or coined to explain or capture some meaningful explanation. Sometimes they confuse and confound more than they serve to explain.
Like, what does the term Digital Marketing mean? Ask ten different people and you could get ten different answers. Ask twenty and the number could double.
A recent online search of the Encyclopaedia offers no definition. Wikipedia, the free open source encyclopaedia that is being built one page at a time by volunteers, with or without their own private agendas, offers up some definitions.
“Digital Marketing in a nutshell is promoting Brands using the Internet, Mobile and other Interactive channels.”
Mobile and other Interactive channels.” “Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner.”
“The field of digital marketing includes a whole host of elements such as mobile phones, sms/mms, display/ banner ads and digital outdoor.”
From this, it would seem that Digital Marketing is different things to different people.
Digital Marketing Or Digital Media?
For the most part, the evidence we see of Digital Marketing seems narrowly confined to promotional or communication purposes, or more specifically, as a medium for communication.
Amazon, eBay, Barnes & Noble are some of the more famous examples of companies making use of the internet to facilitate transactions rather than through cashiers in shops.
And while the number of such companies to whom the internet is more than just another communication medium, is increasing, overall, the numbers are still relatively small compared to their traditional counterparts.
Many research studies on Digital Marketing and many of the papers written about that subject invariably examine communication and messaging issues. According to Aha! Research who were commissioned to conduct the 2008 Heidrick & Struggles’ Asia Digital Marketing Survey,
“Marketers throughout Asia confess only limited comprehension of digital marketing and its inherent benefits. Others say that media planning or creative agencies remain poorly equipped to handle their digital marketing and advertising needs. In other words, 2009 is lining up to be a pivotal year for digital marketing in Asia, where marketers will either get onboard the digital bandwagon and spend in new, innovative, and costeffective ways, or retreat to the safe – albeit less interactive – TV, radio and print mediums.”
Heidrick & Struggles’ Asia Digital Marketing Survey 2008
Respondents from 92 different firms were polled. 47% were from the FMCG sector, working for multinational organisations with large marketing departments of 50 or more staff in their marketing teams and 30% with marketing budgets in excess of US$40 million a year.
The survey found that 10% to 12% of total advertising budgets had been placed on digital channels in 2007 to 2008. For perspective, U.S. and European marketers placed 20% to 25% or more of their d budgets on digital channels during the same period.
The survey revealed three expertise groups among marketing decision makers:
The Experienced: About 22 percent of the survey sample said they had either a good or very good understanding of digital marketing.
The Inexperienced: About one third said they enjoyed a “good” level of experience.
The biggest group was ‘The Naïve’ comprising 44 percent of respondents. Budgetary constraints were first held up as the reason why more was not spent on digital marketing. When probed further it emerged that lack of knowledge and the right skills within their organisations, and a lack of digital skills and executional know-how among the agencies, whose expertise they relied on, were the reasons behind this reluctance. Respondents also doubted the reliability of statistics and measurement metrics used by digital marketers, and questioned the effectiveness of digital marketing over traditional advertising media.
McKinsey Worldwide Digital-Advertising Survey June 2008
The survey included 340 senior marketers from both publicly and privately owned companies based in Asia, Europe, Latin America, and North America, in industries such as manufacturing, high technology, and professional and financial services. 91% of respondents said their companies advertised online. More than 50% indicated their companies planned to maintain or increase spending. Those whose companies were introducing rigorous measurement techniques reported higher levels of satisfaction with digital marketing. 55% of them said they would be cutting their expenditures on traditional media in order to increase funding for their online efforts.
The key finding suggested by the survey was the gap that existed between the tools needed to measure the digital world and those that are available. Few advertisers used quantitative analytical techniques to optimise online marketing. 80% said their companies either used qualitative measures or simply repeated what they did the year before. Over 50% were dissatisfied with the current process of allocation and measurement. The most frequently cited barrier to larger online budget allocations was “insufficient metrics to measure impact.”
Existing metrics were viewed as inconsistent forcing marketers to rely on outdated media models. Marketers were therefore unable to make accurate measurements of digital advertising’s effectiveness across channels and consumer touch points. However 50% of respondents’ companies used even the most basic of metrics — the click-through rate — to evaluate the impact of direct-response advertising and only 52% of the respondents whose companies are trying to build their brands assessed the increase in brand strength. All this suggests having the tool is only part of the problem and that marketers and their organisations need to equip themselves with the right people, the right skills and the right processes to make things work.
The New Rules of Marketing in a Digital Age
In “Digital marketing: global strategies from the world’s leading experts” By Yoram Wind and Vijay Mahajan (Published by John Wiley and Sons, 2001), the authors see a broader application than just media and messages. Digital Marketing, to them, is about the new principles or rules of marketing in a digital age.
The internet has changed the world. The internet has changed people and how people interact with the world around them. Things are more complex, dynamic and chaotic. Along with this new view of the consumer and the world, the authors have also identified ten rules that aim at exploiting this change.
1. Target segments of one and create virtual communities
2. Design for customer-led positioning
3. Expand the role of branding in the global portfolio
4. Leverage consumers as co-producers through customisation
5. Use creative pricing in the digital marketplace / Priceline.com world
6. Create anytime/anyplace distribution and integrated supply chains
7. Redesign advertising as integrated and interactive marketing communications, education and entertainment
8. Reinvent marketing research and modelling with knowledge creation and dissemination
9. Use adaptive experimentation
10. Redesign the strategy process and supporting organisational architecture
More people are spending more time online and being exposed to the new technologies and new ideas that keep cropping up almost every day. “It is not just our computers that are being reprogrammed; it is customers themselves,” says Wind. “These emerging cyber consumers are like an alien race that has landed in the midst of our markets.obtain third-party endorsements and evaluations, tapping the experience of other users. “Companies that cannot meet their demands and expectations will be at a loss,” says Wind.
Interactive processes using advanced data mining allow marketers to “target a segment of one”, tailoring their messages and products according to the choices and behaviour of individual customers or consumers.
“These advances have also led to customisation, electronically sensing customers’ needs in real time, and using that electronic connection as well as shared infrastructures to respond to those needs,” he adds.
The authors caution, however that companies have concentrated on technology, in the light of the digital revolution but have not paid enough attention to its implications for marketing. Building sustainable relationships and loyalty will become increasingly challenging and so relationships with customers and other external constituencies, knowing their needs and how to communicate with them and meet their changing needs is of paramount importance. “This,” according to the authors, “is what marketing and its new rules are about.”
Innovations Around the World
Some marketers have been quick to respond to the changing needs of the cyber consumer introducing new idea to excite and capture their imagination. Groundz Coffee in Houston offers its customers the chance to order their morning cup of coffee through a Twitter post. Short and Twitt. According to the owner customers have doubled since introducing this.
Coke Zero in Madrid uses an interactive mega-poster with a number so that Spaniards can send a text message with the word “Zero” for a code they can use to redeem a free bottle of Coke Zero from a real vending machine at the foot of the blow up.
ING Wegwijzer is an application for Android phones in Amsterdam that uses the phone’s camera and built-in GPS positioning device to allow the user to find the ING cash machine nearest to them. In London, mobile messaging service provider, Fun Text, developed a branded application to allow users to send a range of animations, videos and virtual gifts from within Facebook using MMS. Augmented reality applications created by Munich-based specialists Metaio bring the content of Lego packages in Copenhagen to life in 3D before the purchase. A child holding up a Lego box to a special in-store kiosk will see an animation of some of the possible models that can be built.
Free Digital Consultancy
For many, Digital Marketing will continue to be another choice in their marketing communications media mix. But whether Digital Marketing means a new medium of communication, a new way to market products and services or a consumer phenomenon that’s sweeping the globe like wildfire, it does mean a whole lot of new learning to do. Marketers looking for a short-cut, though, can contact Carlo Ople a consultant and marketing manager who has decided to give away free consultations. That is if you happen to be a Filipino young professional, businessman, recording artist, band, or just a plain Joe who needs help in digital marketing.
Ople is the main author of New Media Philippines Blog. The blog aims to chronicle the best online marketing campaigns done locally and also to give businessmen and marketers tips, strategies, and ideas on how to bring their online campaigns to the next level. Every month, Olpe will select one company, business, professional, or artist and give a free Digital Marketing Consultancy package. The “Patient” gives Olpe their situation, Olpe analyses it, and he comes up with a proposal on how to improve their business or profession. By this, and the other content and activities of the blog, Olpe hopes to inspire Filipinos to embrace and take advantage of all the digital tools available to them.
By Jeff Seow