chapter 3

____ are free to download, but ads appear on the screen. They generate revenues while users interact with the app. Although there are many of these types of apps, the majority of app revenue is generated from the remaining three pricing models, discussed next.

Ad-supported apps

App Pricing Models

Ad-supported apps Freemium apps Paid apps

identify target audience

Facebook enables the firm to perform targeting that is based on location, language, education, gender, profession, age, relationship status, likes/dislikes, and friends or connections. The marketers' aim is to find an audience big enough that they reach all those who might adopt their product, but not so big that they end up trying to appeal to someone way outside their target audience, as Exhibit 3.6 illustrates. For firms with multiple target markets, this analysis should be performed iteratively because both the marketing messages and digital channels likely will be different among and between the segments

The impact of the dynamic effect of social media engagement is twofold. 1

First, it describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. This back-and-forth exchange promotes engagement, which makes consumers more likely to buy. The dynamic nature of social media is a very efficient way to get information or to resolve disputes, and it can provide the firm with insights into how to best provide a product or service in the future.

____ is similar to conventional advertising because firms pay to appear higher up in the search results, and also often pay an additional fee every time a user clicks on their entry.

Paid search

To reach customers at the right time, Coca-Cola relies on _____—that is, technology that allows companies to detect where customers (who have enabled the feature) are at each moment through their smartphones.41 Its pilot campaign offered moviegoers a free Coke at the moment they walked into the theater if they had already downloaded the appropriate app from the brand

beacon technology

Types of Influencers

celebrity, micro, blog, social media, specialized

_____ that enable the user to enhance an app or game. In Candy Crush Saga, you get five lives to play in the game. When you lose a life, it takes 30 minutes in real-life time to get that life back. This is where in-app purchases come in. For just $0.99, you can get all five lives back immediately so you can keep playing.57 Candy Crush Saga is estimated to earn the developer about $2.5 million a day in revenue from in-app purchases.

in-app purchases

Firms use these primary online channels for a variety of goals that reflect the 4Es:

informational websites that educate consumers, entertaining websites that excite them, transactional e-commerce channels to help them experience the products they sell, culminating in websites that engage with consumers.

Sincerity

effective influence attempts require followers to believe that the influencer actually likes and appreciates the product

Finally, people have diverse interests and tastes and thus a need for apps that allow them to _____. Tapatalk aggregates tens of thousands of interest groups into a single app, making it easy to connect aficionados of just about any interest or hobby.

express themselves

ethical considerations for influencer marketing

fraudulent influence, disclosing advertising, sincerity

core goals (7C)

-the basis of any marketing strategy is its goals -determine specific goals -align the goals with the target market and align the 7C's with the goals

seven primary needs that apps meet

1) Me time 2) Socialize 3) Shop 4) Accomplish 5) Prepare 6) Discover 7) Self Express

how to do a digital marketing campaign

1. identify strategy and goals 2. identify the target audience 3. develop the budget 4. develop the campaign 5. monitor and change

influencer marketing

A marketing strategy that uses opinion leaders, popular on social media, to drive marketing messages to a targeted audience. Firms hire (or encourage) these well-known names to promote brand messages to their networks of followers. Some estimates suggest that around 75 percent of marketers have turned to influencer marketing, and they anticipate doing even more of it in the future

conversion rate

A measure that indicates what percentage of visitors or potential customers click, buy, or donate at the site

hit

A request for a file made by web browsers and search engines. Hits are commonly misinterpreted as a metric for website success; however, the number of hits typically is much larger than the number of people visiting a website.

freemium apps

Apps that are free to download but include in-app purchases that enable the user to enhance an app or game (see also in-app purchase).

Communication

Digital communities rely on clear, helpful, meaningful content (the third C). The communication vehicles that appear on any website or blog determine how effectively the firm can interact with, educate, and engage site visitors. Virtually all websites provide a mechanism for customers to communicate with them through live chat, instant message, telephone, or e-mail. The various types of blogs described in the previous section also can engage consumers by providing a compelling platform for two-way communications

Community

Firms also use their websites and blogs actively to allow their customers to interact, socialize, share information, and create a sense of community by posting comments, reviews, responses, images, videos, and suggestions for new products or services. Thought-sharing sites are particularly effective for creating a sense of community, whether they take the form of personal, corporate, professional, or micro blogs.

Analyze

Fortunately, the companies that help facilitate listening also provide analytic tools to assess what customers are saying about the firm and its competitors.

_____ is an activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results.

Search engine marketing (SEM)

professional blogs can be

exciting and educational by exposing customers to the nuances of different products or services. They are also excellent experience-creating mechanisms when, for instance, bloggers post videos of themselves or others using the products or experiencing the service. These factors taken together with customers' ability to post responses to the blogs make this community development mechanism very engaging.

Connection

The final E of the 4E framework involves engagement; but it also might be called connection. A good website or blog engages customers and provides them with a call to action—whether to buy, post, review, comment, or share. Call-to-action buttons such as Buy Now, Learn More, or Show Your Support encourage visitors to delve deeper into a website, to explore other pages and, in general, spend more time on the site. The Warby Parker website includes four call-to-action buttons that invite visitors to get started, order frames to try on at home, take a quiz, or shop online

components of digital marketing

involves listening to what customers have to say, analyzing the information available through various touchpoints, and implementing (or doing) social media tactics to excite customers.

That is, when a person or company posts something on social media, other people or firms in their network might repost it, as when one "shares" on Facebook. The credibility and influence of the original poster and the network partners that choose to share the post will determine the ultimate influence of the post. From a marketing perspective, people who discuss products are more likely to buy them.36

network effect 2

an ____ ensues that determines the ranking that appears on the search engine's page. These rankings are not based on money obtained by firms appearing in the search. The more relevant the key term, the higher the ranking will be on the search engine's page.

organic search

Assessing the Efficacy of Influencers

relevance, reach, response, return

fraudulent influence

An influencer who has 2 million followers, instead of 20,000, can charge higher rates for each post. This incentive to boost follower numbers accordingly has led to various unethical behaviors. There are lots of "booster" services that use bots and set up millions of false accounts. For a small fee, they will program their bots to follow a particular influencer, such that the numbers appear higher. But in reality, there are no actual consumers behind those follows.84 A brand would thus overpay, anticipating higher reach, but actually achieve a lower financial return. A bot can't make a purchase, no matter how many accounts it follows.

Paid apps

Apps that charge the customer an upfront price to download the app ($0.99 is the most common), but offer full functionality once downloaded.

paid apps with in-app purchase

Apps that require the consumer to pay initially to download the app and then offer the ability to buy additional functionality.

socialize

Because apps enable people to stay connected with friends both near and far, specialized entrants are growing to meet people's need to socialize. For example, in China, the social networking app Weixin (pronounced way-SHEEN), known as WeChat outside China, allows users to shop, read news, share videos, make payments, and more.49 In 2019, WeChat had over 1.16 billion monthly active users, with over 50 percent of those users between the ages of 25 and 35 years. 19 percent of the users are between 19 and 24 years old. 45 billion messages are sent on WeChat daily

develop the budget

Budgeting is key. Facebook allows advertisers to set a daily budget: Once their costs (usually per click) reach a certain level, the ad disappears for the rest of the day. Of course, this option can be risky if the firm is getting great feedback and all of a sudden a compelling ad disappears. Therefore, similar to the campaign content, budgets demand nearly constant review. For example, if a competitor lowers its price significantly, it might be necessary to follow suit to avoid being excluded from customers' consideration sets. In addition to an advertising and content development budget, money should be allocated for digital marketing—management tools that allow the marketing staff to post content to multiple platforms and to schedule posts throughout the week. Hootsuite's autoscheduling feature is particularly useful in this regard. It posts content based on when its algorithms have determined the majority of a firm's target market is online.

do

Even the greatest analysis has little use if firms fail to implement what they have learned from analyzing their social and mobile media activity. That is, social media may be all about relationships, but ultimately, firms need to use their connections to increase their business. They might launch a new Facebook campaign, actively blog, or provide mobile offers. Taco Bell uses social media successfully to connect with customers, and then translates this engagement into viral marketing campaigns. Partnering with Snapchat to create a taco filter, just in time for Cinco de Mayo, Taco Bell prompted 224 million uses of the filter. That is, by introducing a fun interaction—and the ability for users to see their own faces depicted as a taco—Taco Bell also encouraged Snapchatters to send its advertising messages to their friends. Awareness of its brand thus spread far and wide, especially among its target Millennial market.

There are three main categories of analysis used for understanding data collected from social media.

First, it is important to determine the amount of traffic using their sites, visiting their blogs, or tweeting about them. Second, although knowing how many people are using a firm's social media is important, it is even more critical to learn who those visitors are, what they are doing, and what engages and excites them. Third, some companies want to analyze data that come from other sites, such as measuring where people have come from to get to the company's site

Listen

From a marketing research point of view, companies can learn a lot about their customers by listening to (and monitoring) what they say on their social networks, blogs, review sites, and so on. Similar to being at a party or in class, it is best to listen before engaging in a conversation. Listening can help marketers determine their digital marketing objectives. If no one is talking about a product or brand, then stimulating brand awareness or excitement may be required.

disclosing advertising intent

If an influencer is being paid to promote a product, that information should be clear in the post. Otherwise, consumers may be fooled into thinking that the endorsement is a natural recommendation, not a paid effort. The FTC has published guidelines to help influencers engage in ethical marketing and be transparent about their motives.

in app purchases example

In Candy Crush Saga, you get five lives to play in the game. When you lose a life, it takes 30 minutes in real-life time to get that life back. This is where in-app purchases come in. For just $0.99, you can get all five lives back immediately so you can keep playing.57 Candy Crush Saga is estimated to earn the developer about $2.5 million a day in revenue from in-app purchases.

Accomplish

On the flip side of the need for fun, the need to ______ means that people seek to manage their finances, improve their health, or become more productive through apps.51 MyFitnessPal allows users to track their daily exercise, calories, and weight loss, and its social component enables people to post their successes. This app also can interact with Fitbit, Jawbone UP, and iHealth Wireless Scales.

Response

Once followers engage with the message, the brand also needs them to go further and respond in ways that benefit it. The measure of the response depends on what the campaign aims to achieve.

me time

People spend nearly half their time on their smartphones seeking fun, whether by playing Candy Crush Saga or by watching Stranger Things through their Netflix app.

_____ are created by and usually for individuals, with relatively few marketing implications.

Personal blogs

_____ instead are written by people with some particular expertise, who review and give recommendations on products and services. Marketers often offer free products or provide modest remuneration to top-rated professional bloggers in the hopes of getting a good product or service review.

Professional blogs

The impact of the dynamic effect of social media engagement is twofold. 2

Second, the dynamic effect expands the impact of the network effect by examining how people flow in and out of networked communities as their interests change.39 Consider a social network community that is concerned with water bottles. As it evolves and matures, its members develop varied interests—some want to know where to buy the best water bottles, while others are concerned about the water bottles' ecological benefits. New people join the community, while others leave; and people's interests change, causing them to seek out new and different information. Because the community is dynamic, water bottle social media sites can specialize to meet the needs of their varied constituents. From a marketing perspective, this dynamic effect is powerful. Marketers can provide very specific information, which should be well received by the interested parties.

Click path

Shows how users proceed through the information on a website—not unlike how grocery stores try to track the way shoppers move through their aisles.

Identify Strategy and Goals

The firm has to determine exactly what it hopes to promote and achieve through its campaign.

Content

The information content on the site (text, graphic, video, and audio) is critical to being successful with the 4Es of digital marketing discussed earlier in this chapter. Marketers must continually monitor the content they share digitally to ensure that the information is relevant to their target market(s) and creates excitement, such that users will be interested in engaging more with both the website and the firm.20 By providing the right content, the firm anticipates visitors' questions and attempts to answer those questions through its content

Relevence

The notion of relevance encompasses both the focal influencer and her or his followers (i.e., targeted audience) and how they link with the brand and its message. Influencer marketing is more effective if relevant influencers, with expertise in some related element, share a pertinent brand message. Thus, Cristiano Ronaldo clearly can promote soccer cleats (or, as he would call them, football boots) as well as his current team brand and various forms of exercise equipment.77 But influencers also can have relevance for much broader messages, especially when they actively seek to move beyond their original area of expertise.

page view

The number of times an Internet page gets viewed by any visitor.

bounce rate

The percentage of times a visitor leaves the website almost immediately, such as after viewing only one page.

Contextual Elements

The second element of website design involves the traditional contextual elements, such as design (e.g., color, font) and navigation. These contextual elements must be in alignment with the target market(s). Because Walmart's core goal is to encourage purchases, its commerce-oriented website features a simple look and feel, which help consumers browse and find the products they want easily—similar to Amazon.com (its primary online competitor).

Commerce

When it comes to actual purchases, consumers exhibit varying preferences for the types of digital marketing tools they want to use. Some consumers rely on websites; others want a mobile app that enables them to shop quickly. Yet despite the predominate use of apps for checking social media or the weather, desktop usage is greater, and conversion rates are higher, for online purchases

Return

While financial returns can be measured using different techniques,80 return on investment (ROI) is often used. ROI refers to the revenue earned from some action, less the cost of that action, divided by the cost. So for example, the ROI of an influencer marketing campaign would equal the revenue earned from it, less the costs of paying the influencer, divided by those costs. To determine which influencer to collaborate with, firms thus must consider the objective of the message and the market it is attempting to reach in addition to its projected ROI.

dynamic effect

With regard to the Wheel of Social Media Engagement, the dynamic effect describes the way in which information is exchanged to network participants through back-and-forth communications in an active and effective manner. It also expands the impact of the network effect by examining how people flow in and out of networked communities as their interests change (see network effect).

Information Effect

With regard to the Wheel of Social Media Engagement, the information effect is the outcome of social media in which relevant information is spread by firms or individuals to other members of their social network.

network effect

With regard to the Wheel of Social Media Engagement, the network effect is the outcome of social media engagement in which every time a firm or person posts information, it is transferred to the poster's vast connections across social media, causing the information to spread instantaneously.

Timeless Effect

With regard to the Wheel of Social Media Engagement, the timeliness effect of social media engagement is concerned with the firm being able to engage with the customer at the right place/time—their ability to do so 24/7 from any location.

keyword analysis

an evaluation of what keywords people use to search on the internet for their products and services

The ___ is an outcome of social media that satisfies humans' innate need to connect with other people. This connection in social media is bidirectional: People learn what their friends are interested in, but they also broadcast their own interests and opinions to those friends. Humans seek connections to other people, and social media have provided them with a new, easy, and engaging way to do so. is an outcome of social media that satisfies humans' innate need to connect with other people. This connection in social media is bidirectional: People learn what their friends are interested in, but they also broadcast their own interests and opinions to those friends. Humans seek connections to other people, and social media have provided them with a new, easy, and engaging way to do so.

connected effect

7 critical elements of online marketing

core goals, context elements, content, community, communication, commerce, connection

But for firms, ____ created by the companies themselves are central to their digital marketing efforts. These blogs can educate customers as they discuss their products or services and create excitement when they promote special offers. Although they do not have control over customers' posts, and sometimes the customers' posts are negative, this two-way dialog with end users is very engaging.

corporate blogs

Another way to build a community is by _____, in which users submit ideas for a new product or service and/or comment and vote on the ideas submitted by others. For example, Betabrand has built its entire business by crowdsourcing clothing designs. Customers submit design ideas and provide feedback on items before they are manufactured, which means they become invested in each item the brand brings to market and thus may be more likely to purchase them

crowdsourcing

Develop the Campaign: Experiment and Engage

develop the communications, including the copy and images. Here again, the process is not very different from any other IMC campaign. There should be a call to action that is clear and compelling. Strong, eye-catching images and designs are important. And the campaign must appeal to the right customers. However, an aspect that is more critical with social media than with other forms of IMC is that the images and messages need to be updated almost constantly. Because people expect changing content online, it would be inappropriate to run the same campaign for several months, as the firm might if it were advertising on television, for example.

When people seek information due to their need to ____, they now turn to weather and news apps. Flipboard produces a full-screen magazine, aggregating multiple news and entertainment sources to provide top stories, entertainment, local news, and business news personalized to your interests. Its social component also allows readers to send selected stories to friends

discover

Monitor and change

review the success of the campaign and make changes as necessary

In the modern, online environment, every online channel helps customers interact with the firm. Therefore, firms not only have to present the content to feature rich information, but they also need to devise appropriate ___ to describe that content.

keywords

Whereas they previously might have been confined to a journal or diary, kept hidden in a person's room, blogs (from "weblog") or _____ (e.g., Twitter) allow people to share their thoughts, opinions, and feelings with the entire world

microblogs

One way companies extend their network effects is by

paying celebrities or pseudo-celebrities with large followings (i.e., bigger networks), hiring them to write posts about or upload pictures with their products. CoverGirl may have over 600,000 Twitter followers,37 but one of its CoverGirls, Katy Perry, has more than 100 million.38 If Katy Perry tweets a close-up of her eyelashes, lengthened using her favorite CoverGirl mascara, CoverGirl will have instantly reached all her millions of followers

Calendars, flight trackers, and trip planning apps help consumers meet their need to _____.53 For example, Google Travel helps people plan vacations by storing and organizing all their travel information, such as flight itineraries and hotel reservations. In addition, it offers customized tours and maps for when you get to your destination. Google Travel links with your Gmail account to gather your travel information and stores it offline so you have access to it even if you don't have access to Wi-F

prepare

Describe the 4E framework of digital marketing.

recognizes that marketers must excite customers with relevant offers; educate them about the offering; help them experience products, whether directly or indirectly; and give them an opportunity to engage.

Using a technique known as _____, marketers can analyze the content found on sites such as Facebook, Twitter, and online blogs and reviews to assess the favorableness or unfavorableness of the sentiments. Sentiment analysis allows marketers to analyze data from these sources to collect consumer comments about companies and their products

sentiment analysis

Shoppers want to shop anytime they choose. In a process that facilitates 24/7 shopping called _____, a customer visits a store to touch, feel, and even discuss a product's features with a sales associate, and then instantly compares the prices online to see whether a better deal is available. Using the showrooming Amazon app, if the Amazon price is better, the customer can buy the product online with a single click.

showrooming

The concept of ____ refers to how firms monitor and track what people are saying about them on social media. Sometimes those comments are relatively easy to track because they feature hashtags or direct references to the brand, so a company can turn on alerts and be notified anytime its name appears. Hilton works to respond in a timely way to any mention, positive or negative, on any social media platform.1 In particular, it aims to resolve any complaint within 12 hours, but it also offers charming, interactive responses when guests post about a positive experience at one of its properties

social listening

It is critical that the content aligns with the

target market and that content is not always directly about the firm's products or services. For example, nearby is a Facebook post from Alex and Ani. Notice the nature of the post. The company is not showcasing its jewelry per se, but rather providing a motivational quote that resonates with young females, its primary target market

Reach

the general concept of reach refers to the percentage of a target population exposed to a specific marketing communication at least once. For the specific context of influencer marketing, reach depends on the number of followers, the level of activity by the influencer, and the degree of engagement between followers and the influencer as well as with others (i.e., friends of followers). Such engagement might result from the appeal of the influencer or the post; for example, an entertaining, hedonic post likely spreads further than a basic, informational one.78

online marketing might be the most familiar and well-established. And it continues to grow rapidly, expanding into innovative new marketing activities in various electronic channels, such as

websites and thought-sharing sites, which are more widely known as blogs. Nearly all manufacturers, retailers, and service providers in operation today have created and maintain websites, blogs, and a social media presence (such as on Facebook or Twitter) to enable customers to interact with them over the Internet.

These analyses require

well-trained marketing managers, marketing analytic software, and sometimes help from consulting specialists (e.g., IBM, SAS, PricewaterhouseCoopers). But almost everyone seems to be turning to Google Analytics these days because it offers a sophisticated, in-depth form of analysis, all for free.