Digital marketing tips for beginners

7 tips for effective digital coupon marketing and digital marketing tips for startups
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LottieBarners,Hawaii,Researcher
Published Date:12-07-2017
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DAMIAN RYAN & UNDERSTANDING DIGITAL MARKETING CALVIN JONES under_digital_mktng_aw.qxd:Layout 1 10/3/09 14:28 Page 1 At the end of 2007 the global online “The seismic shift in marketing expenditure to digital makes this book a must for today’s population was around 1.3 billion. marketers. It takes us on a road map to success demonstrated though a practical Projections suggest that figure will have understanding of the various elements of digital marketing supported with a series of reached 1.8 billion by 2010. In the excellent case histories.” developed world internet access is Colin Lloyd, former CEO, Direct Marketing Association becoming ubiquitous, and the widespread availability of “always-on” broadband “A great read that goes far beyond marketing, illuminating the very nature of life in the digital connections means that people are now age Marketers, media analysts, educators – everyone – should read this book if they want to going online daily, to do everything from understand the present and manage the future to create business strategies that will truly checking their bank statement to shopping Damian Ryan is a regional partner for work in the digital marketplace.” Understanding for groceries and playing games. Results International Group, the world’s Dr Jason Ohler, teacher and speaker in the field of educational technology, and leading specialist M&A firm for the author of Taming the Beast, Then What? and Digital Storytelling in the Classroom Digital technology will become an integral marketing, communications and digital part of any company’s commercial media sectors. He helps business leaders “This book provides the reader with a unique overview of our industry history, principles and strategy, and Understanding Digital grow and realize the value of their practices. Inspirational thoughts but also very detailed and concrete examples making it a Marketing is an essential book showing organizations. He was previously CEO and very useful tool for any marketers wanting to understand our digital world” companies the way forward. founder of ICAN, Ireland’s most successful Alain Heureux, President, IAB Europe Issues covered include: online advertising agency and the creator The world of digital media is changing at a phenomenal pace. Constantly evolving of several other media businesses. He has � strategic thinking; launched over 50 magazine titles in a technologies, and the way people are using them, are transforming not just how we access our information but how we interact and communicate with one another on a global scale. publishing career spanning 21 years, and � building a website; has developed several award programmes � search engine optimization; Understanding Digital Marketing looks at the world of digital marketing: how it got started, for the emerging digital media sector. You � website intelligence and ROI; can contact Damian on dryanresultsig.com. how it got to where it is today, and where the thought leaders in the industry believe it is � e-mail marketing; headed in the future. This compelling new title demonstrates to readers, in a practical and comprehensive way, how to harness the power of digital media and use it to achieve the � social media; utmost success in business, now and in the future. Marketing � online PR and reputation management; Understanding Digital Marketing will help readers: � affiliate marketing and strategic Marketing strategies for partnerships; � choose online marketing channels to get their products and services to market; � digital media creative; engaging the digital generation � understand the origins of digital marketing and the trends that are shaping its future; � future trends. � achieve the competitive edge to keep them ahead of the pack. Calvin Jones is a freelance writer, The book explores in detail areas such as search marketing, affiliate marketing, e-mail journalist, blogger, online marketer and marketing, creative online executions, and digital marketing strategies. Essential reading for author who helps organizations of all sizes both practitioners and students alike, and including real-world examples of digital marketing to communicate more effectively, both successes and expert opinions, Understanding Digital Marketing provides readers with tools online and offline. With a broad foundation to utilize the power of the internet to take their company wherever they want it to go. of experience with large public utilities, SMEs and technology start-ups, over the For more information, hints, tips and digital marketing resources join us online years Calvin has honed his talent for taking at www.understandingdigitalmarketing.com. complex ideas and making them accessible to a mainstream audience. You can contact Calvin through his blog £19.99 (blog.cjwriting.com) or by e-mail on US 39.95 calvincjwriting.com. ISBN 978-0-7494-5389-3 ISBN 978-0-7494-5389-3 Kogan Page Kogan Page US DAMIAN RYAN 120 Pentonville Road 525 South 4th Street, 241 London N1 9JN Philadelphia PA 19147 9 780749 453893 United Kingdom USA & CALVIN JONES www.koganpage.com Marketing / Business and managementGoing digital – 1 the evolution of marketing We look at the present through a rear-view mirror. We march backwards into the future. (Marshall McLuhan) The press, the machine, the railway, the telegraph are premises whose thousand-year conclusion no one has yet dared to draw. (Friedrich Nietzsche) Whoever, or whatever, wins the battle for people’s minds will rule, because mighty, rigid apparatuses will not be a match, in any reasonable timespan, for the minds mobilized around the power of flexible, alternative networks. (Manuel Castells, author of The Network Society) Our chapter pledge to you When you reach the end of this chapter you’ll have answers to the following questions:  How did we reach the dawn of a digital age in marketing?  What are the similarities between the internet and historical global communications revolutions?2 Understanding digital marketing  How many people are on the internet and how quickly is it growing?  How is digital technology influencing consumer behaviour? In the beginning. . . Etched on a dusty kerbstone amidst the ruins of the ancient Roman city of Pompeii, you’ll find an engraved penis, strategically carved to point the way to what, at the time, was one of the most popular brothels in the area. Guides will tell you it’s the ‘oldest advertisement in the world, for the oldest business in the world’. While the truth of that claim is debatable, the phallic ad is certainly very old. The Pompeii penis was buried by the eruption of Mount Vesuvius, which destroyed the city on 24 August, AD 79, but the true origins of marketing go back much further than that. Although, according to business historians, marketing as a discrete business discipline wasn’t born until the 1950s, marketing activities have played a fundamental role in the success of businesses from, well, the very first business. There are few certainties in the world of business, but one thing’s for sure: if you don’t let customers know about your business, you won’t stay in business for very long. But this is a book about marketing in the digital age – the present, and the future That’s true. We’re here to talk about the exciting new world of digital marketing as it emerges from relative obscurity into the mainstream. We’re going to look at how businesses just like yours can harness the power of this online revolution to connect with a new wave of consumers: consumers who take this pervasive technology and integrate it seamlessly into their everyday lives in ways we could never have conceived of as recently as a decade ago. This book is about the future of marketing. So why are we starting it by looking backwards? In his 1960s classic Understanding Media, Canadian communications theorist and philosopher Marshall McLuhan notes: ‘It is instructive to follow the embryonic stages of any new growth, for during this period of development it is much misunderstood, whether it be printing or the motor car or TV.’ As is so often the case, having a basic grasp of the past can help our understanding of the present and ultimately illuminate our view of the future.Going digital – the evolution of marketing 3 So buckle your seatbelt as we take a whistle-stop tour of how marketing has evolved over the years, and how advertising and technology have converged to define a new marketing landscape that is just beginning to mature and is still gravid with opportunity. The changing face of advertising Advertising can be intoxicating. The spin, the story, the message, the call to action, the image, the placement, the measurement, the refinement: it all adds up to a powerful cocktail that can ultimately change the world. At its core, advertising is all about influencing people – persuading them to take the actions we want, whether that’s choosing a particular brand of toothpaste, picking up the phone, filling in a mailing coupon or visiting a website. Done well, advertising has a power that can achieve amazing things, and if you’re in business you’re already doing it and will continue to do so. Advertising through the ages Advertising, an essential component in the marketing of any business, has been around for a long time. The Pompeii penis is positively modern compared to some of the advertising relics archaeologists have unearthed in ancient Arabia, China, Egypt, Greece and Rome. The Egyptians used papyrus to create posters and flyers, while lost-and-found advertising (also on papyrus and often relating to ‘missing’ slaves) was common in both ancient Greece and ancient Rome. Posters, signs and flyers were widely employed in the ancient cities of Rome, Pompeii and Carthage to publicize events like circuses, games and gladiatorial contests. People have been trying to influence other people since the dawn of human existence, utilizing whatever means and media they had at their disposal at the time. The human voice and word of mouth, of course, came first. Then someone picked up a piece of stone and started etching images on a cave wall: enduring images that told stories, communicated ideas and promoted certain ways of doing things. The first advertising? That’s debatable, but these images, some of which are still around to this day, certainly demonstrate an early recognition of the power images and messages have to influence the perception and behaviour of others. The development of printing during the 15th and 16th centuries heralded a significant milestone in advertising, making it more cost- effective for marketers to reach a much wider audience. In the 17th 4 Understanding digital marketing century, adverts began to appear in early newspapers in England and then spread across the globe. The first form of mass media advertising was born. The 18th and 19th centuries saw a further expansion in newspaper advertising, and alongside it the birth of mail-order advertising – which would evolve into the massive direct-mail and direct-response industry we know and love today. It also saw the establishment of the first advertising agency, set up in Boston in 1843 by the pioneering Volney Palmer. Initially ad agencies acted as simple brokers for newspaper space, but before long they developed into full-service operations, offering a suite of creative and ad-placement services to their clients. The 20th century saw the dawn of another new advertising age, with the advent of radio offering a completely new medium through which advertisers could reach out to prospective clients. Then came television, which shifted the advertising landscape yet again, and towards the end of the century a new force – the internet – began moving out of the realm of ‘techies’ and early adopters to become a valuable business and communication tool for the masses. The era of digital marketing was born. Technological advances have punctuated the evolution of advertising throughout history, each fundamentally altering the way businesses could communicate with their customers. Interestingly, however, none of these ground-breaking developments superseded those that came before. Rather they served to augment them, offering marketers more diversity, allowing them to connect with a broader cross-section of consumers. In today’s sophisticated age of paid search placement, keyword-targeted pay- per-click advertising and social networking, you’ll still find the earliest forms of advertising alive and well. Stroll through any market practically anywhere in the world – from the food markets of central London to the bazaars of North Africa, to the street markets of India – and you’ll be greeted by a cacophony of noise as vendors use their voices to vie for the attention of passing customers. The human voice, the first marketing medium in history, is still going strong in the digital age. The technology behind digital marketing As we’ve already mentioned, developments in technology and the evolution of marketing are inextricably intertwined. Technology has Going digital – the evolution of marketing 5 underpinned major milestones in the history of marketing since its inception. The process tends to go something like this:  New technology emerges and is initially the preserve of technologists and early adopters.  The technology gains a firmer foothold in the market and starts to become more popular, putting it on the marketing radar.  Innovative marketers jump in to explore ways they can harness the power of this emerging technology to connect with their target audience.  The technology migrates to the mainstream and is adopted into standard marketing practice. The printing press, radio, television and now the internet are all examples of major breakthroughs in technology that ultimately altered the rela- tionships between marketers and consumers for ever, and did so on a global scale. But, of course, marketing isn’t about technology; it’s about people: technology is only interesting, from a marketing perspective, when it connects people with other people more effectively. There are plenty of examples of technology through the ages having a significant impact on various markets – technology that may seem obscure, even irrelevant today. Remember Muzak, the company that brought elevator music to the masses back in the 1930s? The technology for piping audio over power lines was patented in 1922 by retired Major General George O Squier, and exclusive rights to the patent were bought by North American Company. In 1934, under the corporate umbrella of ‘Muzak’, they started piping music into Cleveland homes. Muzak seemed to have hit on a winning formula, but the advent of free commercial radio sounded the death knell for the company’s chosen route to market. With free music available on their shiny new wirelesses, households were no longer prepared to pay for the Muzak service. Undeterred the company focused its efforts on New York City businesses. As buildings in New York soared skywards, the lift or elevator became practically ubiquitous. Muzak had found its niche, and ‘elevator music’ was born. So what, you might think. It’s true that, compared to behemoths of contemporary media like radio, television and now the internet, elevator music is small potatoes. But back in its heyday this was cutting-edge stuff, and it reached a lot of people. Muzak had the power to sway opinions and influence markets, so much so that, for music artists of that era, having your track played on the Muzak network practically guaranteed a hit. The point is that technology has the ability to open up completely new markets and to radically shake up existing ones. The mainstream 6 Understanding digital marketing adoption of digital technology – the internet, the software applications that run on it, and the devices that allow people to connect both to the network and to each other whenever, wherever and however they want to – promises to dwarf all that has come before it. It heralds the single most disruptive development in the history of marketing. Whether that disruption represents an opportunity or a threat to you as a marketer depends largely on your perspective. We hope the fact that you’re reading this book means that you see it as an opportunity. The first global communications network: ‘the highway of thought’ To understand the explosive growth of the internet we need to look back at how early communications technology evolved into the global network of interconnected computers that today we call the internet. The story of electronic communication begins with the wired telegraph – a network that grew explosively to cover the globe, connected people across vast distances in a way that seemed almost magical, and changed the world for ever. In his book The Victorian Internet, Tom Standage looks at the wired telegraph and draws some astonishing parallels between the growth of the world’s first electronic communications network and the growth of the modern-day internet. Standage describes the origins of the telegraph, and the quest to deliver information from point to point more rapidly in the days when speedy communication relied on a fast horse and a skilled rider: On an April day in 1746 at the grand convent of the Carthusians in Paris about 200 monks arranged themselves in a long, snaking line. Each monk held one end of a 25 foot iron wire in each hand connecting him to his neighbour on either side. Together the monks and their connecting wires formed a line over a mile long. Once the line was complete the Abbot, Jean-Antoine Nollet, a noted French scientist, took a primitive battery and, without warning, connected it to the line of monks – giving all of them a powerful electric shock. These ‘electric monks’ demonstrated conclusively that electricity could transmit a message (albeit a painful one) from one location to another in an instant, and laid the foundation for a communications revolution. In 1830 Joseph Henry (1797–1878), an eminent US scientist who went on to become the first director of the Smithsonian Institute, took the concept a step further. He demonstrated the potential of the Going digital – the evolution of marketing 7 electromagnet for long-distance communications when he passed an electric current through a mile-long cable to ring an electromagnetic bell connected to the other end. Samuel Morse (1791–1872), the inventor of Morse Code, took Henry’s concept a step further and made a commercial success of it: the electronic telegraph was born. In 1842 Morse demonstrated a working telegraph between two com- mittee rooms in Washington, and Congress voted slimly in favour of investing 30,000 for an experimental telegraph line between Washington and Baltimore. It was a very close call: 89 votes for the prototype, 83 against and 70 abstentions by congressmen looking ‘to avoid the responsibility of spending the public money for a machine they could not understand’. Despite the reservations of the congressmen, the new network was a huge success. It grew explosively: by 1850 there were more than 12,000 miles of telegraph lines criss-crossing the United States; two years later there was more than twice that, and the network of connected wires was spreading rapidly around the globe. This spellbinding new network delivered news in moments rather than the weeks and months people were used to. It connected people over vast distances in ways previously inconceivable, and to many remained completely incomprehensible. Governments tried and failed to control this raw new communications medium, its advocates hailed it as revolutionary, and its popularity grew at an unprecedented rate. Newspapers began publishing news hours rather than weeks after the event, romance blossomed over the wires, couples were married ‘online’, gamblers used the new network to ‘cheat’ on the horses, and it transformed the way business was conducted around the world. In the space of a generation the telegraph literally altered the fabric of society. Does any of this sound familiar? A New York Times article published on Wednesday, 14 September 1852 describes the telegraph network as ‘the highway of thought’: not much of a stretch from the ‘information superhighway’ label we apply to our modern-day revolutionary network. If anything, the communications revolution instigated by the telegraph must have represented more of a cultural upheaval than the explosive growth of the internet today. For the first time people grasped that they could communicate almost instantly with people across continents and even oceans. They felt a sense of closeness, a togetherness that simply hadn’t been possible before. The telegraph system was hailed by some as a harbinger of peace and solidarity: a network of wires that would ultimately bind countries, creeds and cultures in a way hitherto unimaginable. Others, of course, used the network to wage war more efficiently. The sheer expansion of ideas and dreams that ensued must have been truly staggering, the opportunities and potential for change bewildering.8 Understanding digital marketing For rapid long-distance communications the telegraph remained the only game in town until 1877, when two rival inventors battled to be the first to patent another new technology set to turn the world of electronic communications on its head. Its name, the telephone; the inventors, Elisha Gray and Alexander Graham Bell. They submitted their patent applications within hours of one another – but Bell pipped Gray to the post, and a now-famous legal battle ensued. The first words ever transmitted into a telephone were uttered by Bell, speaking to his research assistant, Thomas Watson, in the next room. He simply said: ‘Mr Watson, come here. I want to see you.’ Early networks The internet story really starts in 1957, with the USSR’s launch of the Sputnik satellite. It signalled that the United States was falling behind the Soviet Union in the technology stakes, prompting the US government to invest heavily in science and technology. In 1958, the US Department of Defense set up the Advanced Research Projects Agency (ARPA), a specialist agency established with a specific remit: to make sure the United States stayed ahead of its Cold War nemesis in the accelerating technology race. In 1962 a computer scientist called Joseph Carl Robnett Licklider, vice- president at technology company Bolt Beranek and Newman, wrote a series of memos discussing the concept of an ‘intergalactic computer network’. Licklider’s revolutionary ideas, amazingly, encompassed practically everything that the internet has today become. In October 1963, Licklider was appointed head of the Behavioral Sciences and Command and Control programs at ARPA. During his two-year tenure he convinced the agency of the importance of developing computer networks and, although he left ARPA before work on his theories began, the seed for ARPANET – the precursor to the internet – had been sown. In 1965 researchers hooked up a computer at Massachusetts Institute of Technology’s (MIT) Lincoln Lab with a US Air Force computer in California. For the first time two computers communicated with each other using ‘packet’-based information transmitted over a network. ARPA (since renamed DARPA – www.darpa.mil) started the ARPANET project in 1966, claiming that it would allow the powerful computers owned by the government, universities and research institutions around the United States to communicate with one another and to share valuable computing resources. IBM and other large computer companies at the time were sceptical, reportedly claiming that the network ARPA proposed couldn’t be built.Going digital – the evolution of marketing 9 ARPA ploughed on, and on 21 November 1969 the first two computers were connected to the fledgling ARPANET, one at the University of California, Los Angeles, the other at Stanford Research Institute. By 5 December the same year the network had doubled in size as they were joined by two other computers: one at the University of California, Santa Barbara, the other at the University of Utah’s graphics department. The new network grew quickly. By 1971, 15 US institutions were con- nected to ARPANET, and by 1974 the number had grown to 46 and had spread to include overseas nodes in Hawaii, Norway and London. You’ve got mail E-mail, which is still often described as the internet’s ‘killer application’, began life in the early 1960s as a facility that allowed users of mainframe computers to send simple text-based messages to another user’s mailbox on the same computer. But it wasn’t until the advent of ARPANET that anyone considered sending electronic mail from one user to another across a network. In 1971 Ray Tomlinson, an engineer working on ARPANET, wrote the first program capable of sending mail from a user on one host computer to another user’s mailbox on another host computer. As an identifier to distinguish network mail from local mail Tomlinson decided to append the host name of the user’s computer to the user login name. To separate the two names he chose the symbol. ‘I am frequently asked why I chose the at sign, but the at sign just makes sense’, writes Tomlinson on his website. ‘The purpose of the at sign (in English) was to indicate a unit price (for example, 10 items 1.95). I used the at sign to indicate that the user was “at” some other host rather than being local.’ E-mail, one of the internet’s most widely used applications, and one of the most critical for internet marketers, began life as a programmer’s afterthought. Tomlinson created e-mail because he thought it ‘seemed like a neat idea’ at the time. ‘There was no directive to “go forth and invent e-mail”. The ARPANET was a solution looking for a problem. A colleague suggested that I not tell my boss what I had done because e- mail wasn’t in our statement of work’, he said. From ARPANET to internet The term ‘internet’ was first used in 1974 by US computer scientist Vinton Cerf (commonly referred to as the ‘father of the internet’, and now a 10 Understanding digital marketing senior executive and internet evangelist with Google). Cerf was working with Robert Khan at DARPA on a way to standardize the way different host computers communicated both across the growing ARPANET and between the ARPANET and other emerging computer networks. The Transmission Control Program (TCP) network protocol they defined evolved to become the Transmission Control Program/Internet Protocol (TCP/IP) protocol suite that’s still used to pass packets of information backwards and forwards across the internet to this day. In 1983 the ARPANET started using the TCP/IP protocol – a move that many consider to signal the true ‘birth’ of the internet as we know it. That year, too, the system of domain names (.com, .net, etc) was invented. By 1984 the number of ‘nodes’ on the still fledgling network passed 1,000 and began climbing rapidly. By 1989 there were more than 100,000 hosts connected to the internet, and the growth continued. Making connections – birth of the web It was in 1989 that Tim Berners-Lee, a British developer working at the European Organization for Nuclear Research (CERN) in Geneva, pro- posed a system of information cross-referencing, access and retrieval across the rapidly growing internet based on ‘hypertext’ links. The concept of a hypertext information architecture was nothing new, and was already being used in individual programs running on individual computers around the world. The idea of linking documents stored on different computers across the rapidly growing internet, though, was nothing short of revolutionary. The building blocks for the world wide web were already in place – but it was Tim Berners-Lee’s vision that brought them together. ‘I just had to take the hypertext idea and connect it to the TCP and DNS ideas and – ta- da – the World Wide Web’, Berners-Lee comments on the World Wide Web Consortium (W3C) website. The first web page on the internet was built at CERN, and went online on 6 August 1991. It contained information about the new world wide web, how to get a web browser and how to set up a web server. Over time it also became the first ever web directory, as Berners-Lee maintained a list of links to other websites on the page as they appeared. The wild wide web – a new frontier Up to this point, the internet had been the realm of technologists and scientists at research institutions. But the advent of the web changed Going digital – the evolution of marketing 11 the landscape, making online information accessible to a much broader audience. What happened next was explosive. Between 1991 and 1997 the web grew at an astonishing 850 per cent per annum, eclipsing all expectations. With more websites and more people joining the online party every day, it was only a matter of time before innovative tech-savvy marketers started to notice the web’s potential as an avenue for the marketing message. The mid-1990s saw a surge in new online ventures as pioneering entre- preneurs, grasping the burgeoning potential of this exciting new medium, scrambled to stake their claim on this virtual new frontier. In August 1995 there were 18,957 websites online; by August 1996 there were 342,081 (‘Fifteen Years of the Web’, Internet timeline, www.bbc.co.uk). Silicon Valley was awash with venture capital as investors bet big bucks on the net’s next big thing – some with viable business plans, others with charismatic founders riding on the coat tails of the prevailing net mania. New ventures sprang up almost daily, selling everything imaginable – or selling nothing at all. Fledgling companies spent vast amounts of money growing quickly with scant regard for turning a profit, betting their future on building strong online brands that could win the hearts and minds of net consumers. The profits would come later – at least, that was the theory. Some of these companies were destined to become household names in a few short years; others would vanish into obscurity just as quickly. These were heady, almost euphoric times. The internet had acquired the mythical Midas touch: a business with .com in its name, it seemed, was destined for great things. Initial public offerings (IPOs) of dot.com companies made millionaires of founders, and made the headlines, fuelling further mania. It was an era that saw the birth of some of today’s most well-known online brands: sites like Amazon, Yahoo, eBay and, in September 1998, Google Inc. Boom, boom. . . bang For a time it seemed as though the halcyon days of the late 1990s would continue for ever and that the dot.com bubble was impervious to bursting. Fuelled by speculative investment and high-profile high-tech IPOs, the Nasdaq Composite stock index continued to rocket upwards. Each new dot.com success fuelled the fervour for technology stocks, blowing the bubble up a little more. On 10 March 2000 the Nasdaq index hit an intra- day high of 5,132.52 before settling to an all-time closing high of 5,046 points.12 Understanding digital marketing And then it went into free fall. What happened to the railways in the 1840s, radio in the 1920s and transistor electronics in the 1950s had finally hit the dot.com boom. Between March 2000 and October 2002 some US 5 trillion in all was wiped off the market value of technology stocks. Speculative investment suddenly stopped, venture capitalists were less cavalier with their cash, and high-risk start-ups with dubious business plans ran out of places to source funding. With profits still a distant dream, even for high-profile internet start-ups, the coffers soon began to run dry. It signalled the end of the road for many. Despite the occasional ‘blip’, both the stock market index and the fortunes of internet businesses continued to wane until 2003, when, slowly but surely, the tide turned and things started to look up. Although there had been some high-profile closures, mergers and acquisitions in the wake of the crash, the reality is that, for the internet industry as a whole, the inevitable ‘readjustment’ had a positive impact. It essentially cleared the decks – sweeping away a plethora of unviable, poorly conceived and poorly managed businesses – and served as a poignant reality check to those that remained. Yes, there were casualties, but overall the industry emerged stronger, more focused and both optimistic and, crucially, realistic about its future. Two other crucial elements helped fuel the recovery and to some extent the public fascination with the internet: one was the meteoric rise of Google from relative obscurity to dominate the world of internet search; the other was the accelerated roll-out of high-speed, always-on broadband access for residential users. People could suddenly find what they were looking for online – could get access to what they wanted, when they wanted it – without having to go through the frustrating rigmarole of a dial-up connection. It transformed the online experience, turning it from a passing curiosity into a useful everyday tool for a much wider demographic of users. And the more people used the internet, the more indispensable it became. Enough technology – let’s talk about people If you’re non-technical the world of digital marketing may seem a bit daunting at first. All that technology must be really complicated. . . right? Not necessarily. One of the key things to remember if you’re new to digital marketing is this: digital marketing isn’t actually about technology at all; it’s all about people. In that sense it’s similar to traditional marketing: it’s about Going digital – the evolution of marketing 13 people (marketers) connecting with other people (consumers) to build relationships and ultimately drive sales. Technology merely affords you, the marketer, new and exciting platforms that allow you to connect with people in increasingly diverse and relevant ways. Digital marketing is not about understanding the underlying technology, but rather about understanding people, how they’re using that technology, and how you can leverage that to engage with them more effectively. Yes, you have to learn to use the tools at your disposal – but understanding people is the real key to unlocking the potential of digital marketing. A huge and growing market Although internet companies suffered bruised finances and a tarnished public image in the wake of the dot.com crash, the internet itself never stopped growing, in terms both of the number of websites online and, crucially from a marketing perspective, of the number of people with internet access. In March 2000, when the dot.com bubble burst, there were an estimated 304 million people in the world with internet access. By March 2003 that figure had doubled to 608 million, and in December 2005 the global online population passed 1 billion. As of December 2007 the figure sat at around 1.3 billion people. That’s 20 per cent of the world’s population – and climbing (Internet World Stats, www.internetworldstats. com). As global and local online populations have spiralled upwards, so too have the levels of broadband penetration, which means that not only are there more people online but they’re also online more often, for much longer periods of time and can do much more with that time. All of this means the market penetration of digital channels is growing rapidly. As the potential audience grows, so too does the allure of digital marketing. Marketers around the world are sitting up and taking notice, and big- name brands are starting to take the internet and other digital marketing channels seriously: loosening the purse strings and redistributing their advertising spend. According to online market research specialist eMarketer, US online advertising spend for 2002 stood at US 6 billion, by 2005 it had more than doubled to US 12.5 billion, and their projections estimate it will grow to a massive US 36.5 billion by 2011. In 2004, 2005 and 2006, online advertising spend enjoyed unprecedented growth of over 30 per cent per annum. ‘It’s been a long time since any medium had three years in a row of 30 per cent plus ad spending increases’, commented eMarketer senior 14 Understanding digital marketing analyst David Hallerman. ‘With a 34 per cent gain in 2006, as new research from IAB/PwC shows, the internet now matches cable TV from 1983 to 1985 and broadcast TV from 1952 to 1954 for such strong, long-term spending increases.’ The growth looks set to continue, and although experts believe it is slowing, eMarketer’s analysts predict that online ad spending in the United States will hit 36.5 billion by 2011. Across the Atlantic in the UK, the market is experiencing similar growth, with an online advertising spend of £2.02 billion for 2006, rising to £2.64 billion in 2007 – a rise of 31 per cent. Predictions by eMarketer suggest that the figure will reach £4.45 billion by 2011. Perhaps more significant than the overall advertising spend, though, is the market share of digital advertising compared to other media. According to figures from the Internet Advertising Bureau (UK) for the first half of 2006 internet advertising accounted for 10.5 per cent of the total spend, eclipsing radio (3.5 per cent), consumer magazines (4.5 per cent) and outdoor advertising (5.1 per cent), and just behind national press advertising at 11.4 per cent. Television was still out in front with 22.7 per cent of the market. But that’s about to change. Given its current rate of growth, internet advertising in the UK is predicted to usurp TV in the top spot during 2009 or 2010. The UK has a higher proportion of total spend online than any other country in the world. It looks set to be the first major economy to see internet ad spend overtake television – but it surely won’t be the last. Introducing Consumer 2.0 Unless you’ve been hiding under a rock in the outer Hebrides since about 2004 you’ll be familiar with the Web 2.0 (pronounced two-point- oh) moniker. It’s bandied about with alacrity by the web-savvy elite, but what exactly does it mean? Let’s start off with what Web 2.0 is not: it’s not a new version of Web 1.0. Web 2.0 is not a revolution in technology; it’s an evolution in the way people are using technology. It’s about harnessing the distributed collaborative potential of the internet to connect and communicate with other like-minded people wherever they are: creating communities, and sharing knowledge, thoughts, ideas and dreams. If you’ve ever shared photos on Flickr, read and commented on a blog, looked for friends on Facebook or MySpace, watched a video clip on YouTube, tried to find your house on Google Maps, video-called friends or family abroad using Skype or looked up an article on Wikipedia, then you’ve used Web 2.0 technologies.Going digital – the evolution of marketing 15 Suddenly it seems we’ve been inundated with version 2.0 of anything and everything, as different sectors of society seek to demonstrate that they’re current and progressive. We have Business 2.0, Government 2.0, Education 2.0, Careers 2.0 – and of course Marketing 2.0. Well, not to be outdone, we’d like to introduce you to the new, improved, Consumer 2.0. Once upon a time consumers were quite happy to sit in front of passive broadcast media, accepting whatever was being peddled their way by editors and programme schedulers. Yes, there was an element of choice – you could buy a different newspaper, listen to a different station or choose a different channel – but the ultimate decision in terms of the content available to you rested with somebody else. Then along came the web and changed all the rules. Now, with Web 2.0, broadband and rich media content, today’s consumers are in control as never before. They can choose the content they want, when they want it, in the way that they want it. They can even create their own and share it with their friends, their peers and the world for free. ‘Consumers are becoming better informed, better connected, more communicative, and more in control than ever’, highlights Julian Smith, an analyst with Jupiter Research writing for the ClickZ network. They’re better informed through the increased ability to access and sift an abundance of information any time, anywhere. They’re better connected through the ability to instantaneously communicate with others across time zones and social strata. They’re more communicative through the ability to publish and share their ideas and opinions. They’re more in control through the ability not only to personalize their information and entertainment consumption, marketing messages, and the products and services they buy, but also to gain satisfaction on demand. Analysts at Jupiter Research identified seven key ways in which the increasingly widespread adoption of technology is influencing consumer behaviour:  Interconnectivity: Networked digital technology is enabling consumers to connect with each other more readily, be it through e-mail, instant messaging (IM), mobile messaging, or web-based social networking platforms such as Facebook, MySpace and LinkedIn – or more likely a combination of all of these platforms. Consumers are interacting with like-minded people around the world, paying scant regard to trifling concerns like time zones or geography. Peer-to-peer interaction is reinforcing social networks and building new virtual communities.16 Understanding digital marketing  Technology is levelling the information playing field: With digital technology content can be created, published, accessed and consumed quickly and easily. As a result the scope of news, opinion and information available to consumers is broader and deeper than ever. Consumers can conduct their own unbiased research, comparing and contrasting products and services before they buy. Knowledge is power, and digital technology is shifting the balance of power in favour of the consumer.  Relevance filtering is increasing: With such a glut of information available to them, digital consumers are, through necessity, learning to filter out items relevant to them and to ignore anything they perceive as irrelevant. Increasingly digital consumers look to have their information aggregated, categorized and delivered (whether through e-mail or RSS feeds). They use personalization features to block out irrelevant content and increasingly employ software solutions to exclude unsolicited commercial messages.  Niche aggregation is growing: The abundance and diversity of online content allow consumers to participate in and indulge their specialist interests and hobbies. Aggregations of like-minded individuals congregate online; the homogeneous mass consumer population is fragmenting into ever-smaller niche groups, with increasingly individual requirements.  Micropublishing of personal content is blossoming: Digital media’s inter- active and interconnected nature allows consumers to express them- selves online. Publishing your own content costs little more than a bit of time and imagination, whether through discussion forums, message boards, feedback forms, voting platforms, personal photo galleries, or blogs. Users are posting their opinions online for all to see and are consulting the opinion of their online peers before making purchasing decisions. How often do you check an online review before booking a table at an unknown restaurant or a weekend break at a hotel, or even buying a new car?  Rise of the ‘prosumer’: Online consumers are getting increasingly involved in the creation of the products and services they purchase, shifting the balance of power from producer to consumer. They’re letting producers know what they want in no uncertain terms: the level of interaction between producer and consumer is unprecedented. Individuals are more involved in specifying, creating and customizing products to suit their requirements, and are able to shape and mould the experiences and communications they receive from producers. Traditional mass-production and mass-marketing concepts are rapidly becoming a thing of the past.Going digital – the evolution of marketing 17  On demand; any time, any place, anywhere: As digital technology becomes more ubiquitous in people’s lives, the corresponding acceleration of business processes means that consumers can satisfy their needs more quickly, more easily and with fewer barriers. In the digital economy, trifling concerns like time, geography, location and physical store space are becoming irrelevant. It’s a world of almost instant gratification, and the more consumers get of it the more they want it – now, now, now For marketers this evolution of the marketplace, and the shift in consumer mindset that it heralds, presents a plethora of new challenges. As consumers increasingly embrace new ways of communicating, take greater ownership of the information and entertainment they consume, and aggregate in increasingly specialized niche online communities, marketers must shift their approach if they want to connect with them. And that’s what the rest of this book is all about.Strategic thinking 2 The most dangerous strategy is to jump a chasm in two leaps. (Benjamin Disraeli) Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things. (Miyamoto Musashi) Simplicity is the ultimate sophistication. (Leonardo da Vinci) Our chapter pledge to you When you reach the end of this chapter you’ll have answers to the following questions:  What is a digital marketing strategy and why do I need one?  How do I know if digital marketing is right for my business?  How do I formulate a digital marketing strategy?  How do I convince decision makers that now is the time to invest in digital marketing?  Are my customers ready for digital marketing?Strategic thinking 19 Why you need a digital marketing strategy Why do you need a digital marketing strategy? The simple answer: because without one you’ll miss opportunities and lose business. Formulating a digital marketing strategy will help you to make informed decisions about your foray into the digital marketing arena and ensure that your efforts are focused on the elements of digital marketing that are most relevant to your business. It’s a crucial first step towards understanding how the constantly evolving digital marketplace relates to you and how it affects the relationship between your business or brand and your customers and prospects. It doesn’t matter what business you’re in; it’s a fairly safe bet that an increasing number of your target market rely on digital technology every day to research, evaluate and purchase the products and services they consume. Without a coherent strategy of engagement and retention through digital channels your business is at best missing a golden opportunity and at worst could be left behind, watching your competitors pull away across an ever-widening digital divide. Unlike conventional forms of mass media marketing, the internet is unique in its capacity to both broaden the scope of your marketing reach and narrow its focus at the same time. Using digital channels you can transcend traditional constraints like geography and time zones to connect with a much wider audience. At the same time, digital technology allows you to hone your marketing message with laser-like precision to target very specific niche segments within that wider market. Implemented effectively, it can be an incredibly powerful combination. It’s often stated that the internet puts consumers in control as never before. But it’s also important to remember that the internet also delivers an unprecedented suite of tools, techniques and tactics that allow marketers to reach out and engage with those same consumers. The marketing landscape has never been more challenging, dynamic and diverse. And therein lies the crux of our need for a cohesive digital marketing strategy. If you’re going to harness the power of digital marketing to drive your online business to dizzying new heights, you need a thorough understanding of your market, how your customers are using digital technology, and how your business can best utilize that same technology to build enduring and mutually rewarding relationships with them. As digital channels continue to broaden the scope available to us as marketers, so they add to the potential complexity of any digital