Chapter 13 Digital Marketing and social media
Did you know?
Facebook is the most popular social media network for small businesses
Facebook (more info)
According to Hubspot, 71 percent of consumers are likely to make purchases based on social media referrals.24 As a result, firms are spending more time on the quality of their Facebook interactions. Ritz-Carlton, for instance, spends a significant amount of time analyzing its social media conversations and reaching out to noncustomers. Businesses are shifting their emphasis from selling a product or promoting a brand to developing beneficial relationships in which brands are used to generate a positive outcome for the consumer.
Online Monitoring and Analytics(more more info)
By analyzing rich site traffic data, marketers can better understand their customers and measure the effectiveness of their marketing efforts. For example, PBS uses Google Analytics to monitor the web performance for multiple properties and track key events like user registrations and video views. After analyzing search engine trends, PBS experienced 30 percent more site traffic in the first year after implementation.78 Google Analytics is arguably the most robust web analytics tool available, and it is free to anyone with a Google account. A premium version, Google Analytics 360 Suite, designed to help companies target potential customers, is available for even more in-depth analytics. The tool identifies someone's habits from web and television to mobile, competing with companies like Salesforce and Oracle.
privacy (more info)
California voters have passed consumer data protection laws that may accelerate federal legislation. While consumers may welcome such added protections, web advertisers, who use consumer information to better target advertisements to online consumers, see it as a threat. In response to impending legislation, many web advertisers are attempting self-regulation in order to stay ahead of the game. For instance, the Digital Advertising Alliance (DAA) adopted privacy guidelines for online advertisers and created a "trusted mark" icon that websites adhering to their guidelines can display. However, because it is self-regulatory, not all digital advertisers will choose to participate in its programs.
Twitter is a hybrid of a social networking site and a micro-blogging site that asks users one simple question: "What's happening?" Members can post answers of up to 280 characters, which are then available for their "followers" to read. It sounds simple enough, but Twitter's effect on digital media has been immense. The site quickly progressed from a novelty to a social networking staple, attracting millions of viewers each month.26 About 82 percent access the site from their mobile devices.27 Although 280 characters may not seem like enough for companies to send an effective message, shorter social media messages appear to be more effective. Tweets shorter than 100 characters are found to have a 17 percent higher engagement rate with users, and Facebook has shown similar data.28 These efforts are having an impact; more than half of Twitter's active and monthly users follow companies or brands.29 Like other social networking tools, Twitter is also being used to build, or in some cases rebuild, customer relationships. For example, MoonPie uses Twitter to interact with consumers. MoonPie has been recognized for its humorous tweets and one-liners that have attracted viral attention.30 On the other hand, approximately 70 percent of companies ignore complaints on Twitter. This failure acts as a missed opportunity to address customer concerns and maintain strong relationships.
Blogs and Wiks (more info)
Wikis are websites where users can add to or edit the content of posted articles. One of the best known is Wikipedia, an online encyclopedia with more than 52 million entries in more than 309 languages on nearly every subject imaginable.44 Wikipedia is one of the 10 most popular sites on the web, and because much of its content can be edited by anyone, it is easy for online consumers to add detail and supporting evidence and to correct inaccuracies in content. Wikipedia used to be completely open to editing, but in order to stop vandalism, the site had to make some topics off-limits that are now editable only by a small group of experts. Like all digital media, wikis have advantages and disadvantages for companies. Wikis about controversial companies like Walmart and Nike often contain negative publicity about things such as workers' rights violations. However, monitoring relevant wikis can provide companies with a better idea of how consumers feel about the company or brand. Some companies also use wikis as internal tools for teams working on projects that require a great deal of documentation.45 There is too much at stake financially for marketers to ignore wikis and blogs. Despite this fact, statistics show that only about 36 percent of Fortune 500 companies have a corporate blog.46 Marketers who want to form better customer relationships and promote their company's products must not underestimate the power of these two media outlets.
Growth and Benefits of Digital communication(more info)
Digital communication offers a completely new dimension in connecting with others. Some of the characteristics that distinguish digital from traditional communication are addressability, interactivity, accessibility, connectivity, and control.
Transparency
Influencer marketing, as we discussed earlier as a form of promotion, is relatively new compared with other forms of advertising, so it should be no surprise there have been road bumps for early adopters. Due to concerns about dishonest advertising, the Federal Trade Commission (FTC) requires influencers to clearly disclose any connection they have with brands they promote. Neglecting to make a disclosure is viewed as deceptive advertising. Cases have been filed against Warner Bros. Home Entertainment and Lord & Taylor, which paid various influencers to promote their products without disclosures. According to the FTC, any level of compensation must be disclosed, whether a partnership is paid or an influencer strictly receives free product
Media sharing (more more more info)
.56 Photo sharing represents an opportunity for companies to market themselves visually by displaying snapshots of company events, company staff, and/or company products. Nike, Audi, and MTV have all used Instagram in digital marketing campaigns. Zales Jewelers has topic boards on Pinterest featuring rings as well as other themes of love, including songs, wedding cakes, and wedding dresses.57 Digital marketing companies are also scanning photos and images on photo-sharing sites to gather insights about how brands are being displayed or used. They hope to offer these insights to big-name companies such as Kraft. The opportunities for marketers to use photo-sharing sites to gather information and promote brands appear limitless.58 Podcasts are audio or video files that can be downloaded from the internet via a subscription that automatically delivers new content to listening devices or personal computers. Popular podcast apps include Pocket Casts, Apple Podcasts, Google Podcasts, and Overcast. Podcasting offers the benefit of convenience, giving users the ability to listen to or view content when and where they choose. The markets podcasts reach are ideal for marketers, especially the 18-34 demographic, which includes the young and affluent.59 They also affect consumer buying habits. For instance, listening to nutrition podcasts while in the grocery store increases the likelihood that shoppers will purchase healthier items.60 As podcasting continues to spread, radio stations and television networks like CBC Radio, NPR, MSNBC, and PBS are creating podcasts of their shows to profit from this growing trend. Many companies like GE, eBay, and Basecamp hope to use podcasts to create brand awareness, promote their products, and encourage customer loyalty.
Online Monitoring and Analytics(more info)
A comprehensive performance evaluation requires gathering all valid metrics and understanding the way the strategy meets performance standards or underperforms based on expectations. One way to approach this is to use Google Analytics, the largest analytics platform monitoring more than 30 million websites.77 The Google Analytics dashboard is broken down into five sections: real time, audience, acquisition, behavior, and conversions. Table 13.2 explains the function of each section. Using this tool allows you to identify your website's strengths and weaknesses and uncover opportunities for growth. For example, you may find that organic search traffic is very high but that your social media traffic is quite low, or you may see a spike in weekday traffic while weekends are slow. KPIs for your social media strategy can include likes, shares, reach, engagement rate, CTR, and conversions. In the conversions dashboard, marketers can set up custom conversion goals to see the impact social media have on their business.
Applications
Applications (apps) are adding an entirely new layer to the marketing environment as Americans are estimated to spend 5.4 hours per day on smartphones using apps.70 The most important feature of apps is the convenience and cost savings they offer to the consumer. Certain apps allow consumers to scan a product's barcode and then compare it with the prices of identical products in other stores. Mobile apps also enable customers to download in-store discounts. An estimated 81 percent of American adults have smartphones, so businesses cannot afford to miss out on the chance to profit from these new trends.71 The advertisement for The Economist, a world news and economics publication, features its app, which provides subscribers with additional features like morning briefings for a personalized experience, audio articles for on-the-go listening, bookmarking for easy article access, and more. Page 422 To remain competitive, companies use mobile marketing to offer additional incentives to consumers. As Unilever expanded into Southeast Asia, it developed a mobile campaign that gives consumers rewards in exchange for providing Unilever with certain information about themselves, such as shopping habits.72 Another mobile tool that marketers have found useful is QR codes. While QR codes used to require scanning apps, smartphone cameras now have built-in QR code readers. The camera app recognizes the code and opens a link, video, or image on the phone's screen. Marketers are using QR codes to promote their companies and offer consumer discounts.
Mobile Marketing
As digital marketing becomes increasingly sophisticated, consumers are beginning to utilize mobile devices like smartphones as a highly functional communication method. The smartphone and tablet have changed the way consumers communicate, and a growing number of travelers are using their smartphones to find online maps, travel guides, and taxis. In industries such as hotels, airlines, and car rental agencies, mobile phones have become a primary method for booking reservations and communicating about services. Other marketing uses of mobile phones include sending shoppers timely messages related to discounts and shopping opportunities.61 For these reasons, mobile marketing has exploded in recent years—mobile phones have become an important part of our everyday lives and can even affect how we shop. For instance, it is estimated that shoppers who are distracted by their phones in-store increased their unplanned purchases by 12 percent over those who are not.62 To avoid being left behind, brands must recognize the importance of mobile marketing. Page 420 E-commerce sales on smartphones are also rapidly growing and account for about half of total online sales.63 This makes it essential for companies to understand how to use mobile tools to create effective campaigns. Figure 13.2 breaks down smartphone use in the United States. Some of the more common mobile marketing tools include the following:
Media Sharing
Businesses can also share their corporate messages in more visual ways through media sharing sites. Media sharing sites allow marketers to share photos, videos, and podcasts. Media sharing sites are more limited in scope in how companies interact with consumers. They tend to be more promotional than reactive. This means that while firms can promote their products through videos or photos, they usually do not interact with consumers through personal messages or responses. At the same time, the popularity of these sites provides the potential to reach a global audience of consumers. Video-sharing sites allow virtually anybody to upload videos, from professional marketers at Fortune 500 corporations to the average internet user. Some of the most popular video-sharing sites include YouTube, Vimeo, and Dailymotion. Video-sharing sites give companies the opportunity to upload ads and informational videos about their products. A few videos become viral at any given time, and although many of these gain popularity because they embarrass the subject in some way, others reach viral status because people find them entertaining. Viral marketing occurs when a message gets sent from person to person to person. It can be an extremely effective tool for marketers—particularly on the internet, where one click can send a message to dozens or hundreds of people simultaneously. Marketers are taking advantage of the viral nature of video-sharing sites like YouTube, either by creating their own unique videos or advertising on videos that have already reached viral status. Purple released a "Raw Egg Test" video on YouTube to demonstrate the support its mattress provides. To date the video has more than 187 million views.
Privacy
Businesses have long tracked consumers' shopping habits with little controversy. However, observing the contents of a consumer's shopping cart or the process a consumer goes through when choosing a box of cereal generally does not result in the collection of specific, personally identifying data. Although using credit cards, shopping cards, and coupons forces consumers to give up a certain degree of anonymity in the traditional shopping process, they can still choose to remain anonymous by paying cash. Shopping on the internet, however, allows businesses to track them on a far more personal level, from the contents of their online purchases to the websites they favor. Current technology has made it possible for marketers to amass vast quantities of personal information, often without consumers' knowledge, and to share and sell this information to interested third parties.How is personal information collected on the web? Many sites follow users online by storing a "cookie," or an identifying string of text, on users' computers. Cookies permit website operators to track how often a user visits the site, what users look at while there, and in what sequence. They also allow website visitors to customize services, such as virtual shopping carts, as well as the particular content they see when they log onto a web page. Users have the option of turning off cookies on their machines, but nevertheless, the potential for misuse has left many consumers uncomfortable with this technology. While the United States does not have a comprehensive consumer data protection law, the European Union passed the General Data Protection Regulation (GDPR), which requires businesses to acquire permission from consumers in order to collect their data. The legislation applies to any company doing business with EU citizens.
Using Digital Media in Business(more more info)
Digital media can also improve communication within and between businesses. In the future, most significant gains will come from productivity improvements within businesses. Videoconferencing (Zoom), messaging (Slack), team collaboration (Microsoft Teams), and project management (Asana) software are just a few of the tools businesses use to communicate online. Communication is a key business function, and improving the speed and clarity of communication can help businesses save time and improve employee problem-solving abilities. Digital media can be a communications backbone that helps to store knowledge, information, and records in management information systems so co-workers can access them when faced with a problem to solve. A well-designed management information system that utilizes digital technology can, therefore, help reduce confusion, improve organization and efficiency, and facilitate clear communications. Given the crucial role of communication and information in business, the long-term impact of digital media on economic growth is substantial, and it will inevitably grow over time. Page 409 The dynamic nature of digital marketing can quickly change opportunities and create challenges. For example, digital assistants now function as a personal information manager and are being used to assist professionals in medicine, engineering, and other business areas. Smartphones, social networking, drones, and driverless cars are shaping a new marketing environment. While digital marketing has many benefits, challenges exist, especially in giving up privacy to use digital media.
Facebook is the most popular social networking site in the world. Facebook users create profiles, which they can make public or private, and then search the network for people with whom to connect. The social networking giant has surpassed 2.8 billion users. Facebook Messenger, which has the ability to facilitate large group video chats, is one of Facebook's competitive advantages. Facebook Messenger is a distinct improvement over its WhatsApp and competitors' products including Snap Inc.'s Snapchat, Apple's FaceTime, and Google Duo, which allow one-to-one communication.20 It has also acquired a number of companies as it expands into other services, including Instagram, WhatsApp, and Oculus.21 For this reason, many marketers are turning to Facebook to market products, interact with consumers, and gain free publicity. Consumers can follow brands or pages they are interested in. Businesses can also sell and promote products on Facebook using the Facebook Shops tool. Facebook, however, makes most of its revenue from advertising.22 Boosted posts, one of the features Facebook has to offer businesses, allows companies to develop an advertisement quickly from a post on their timelines, select the people they would like the advertisement to target, and select the budget they want to spend. Boosted posts appear higher up in the News Feeds of the advertisement's target market.23 Additionally, social networking sites are useful for relationship marketing, or the creation of relationships that mutually benefit the business and customer.
Digital Media and the Marketing Mix(More info)
Figure 13.1 shows the popularity of each social media platform over the years. With digital media, even small businesses can reach new markets through these inexpensive communication channels. Brick-and-mortar companies like Walmart utilize online catalogs and company websites and blogs to supplement their retail stores. Internet companies like Zappos that lack physical stores let customers post reviews of their purchases on their websites, creating company-sponsored communities. Amazon is taking on department stores and big box stores such as Walmart and Home Depot. Department stores such as Macy's and Sears have had to close hundreds of stores and some shopping centers have gone out of business.
intellectual property theft and other illegal activities(More info)
First, many feel they just don't have the money to pay for what they want. Second, because their friends engage in piracy and swap digital content, some users feel influenced to engage in this activity. Others enjoy the thrill of getting away with something with a low risk of consequences. And finally, some people feel being tech-savvy allows them to take advantage of the opportunity to pirate content.88 Illicit online marketing is also becoming a serious issue for law enforcement across the globe. The ease of the internet and the difficulty in pinpointing perpetrators are leading drug buyers to deal in illegal drugs over the internet. Websites that deal in illegal drugs are looking increasingly legitimate, even employing marketing strategies and customer service.89 Sales of counterfeit goods are another problem. Knockoffs of popular products seized by federal officials annually are valued at more than $1 billion. Counterfeit products, particularly from overseas, are thriving on the internet because they can be shipped directly to customers without having to be examined by customs officials when shipped through ports. Some firms, including UGG Boots, use online services allowing users to type in the address to verify whether the electronic retailer is a legitimate seller.90
Using Digital Media in Business(more info)
For example, nonfungible tokens (NFTs), which are one-of-a-kind digital files powered by blockchain technology, have become popular in the digital art community. NFT have sold for millions of dollars.The reality, however, is that internet markets are more similar to traditional markets than they are different. Thus, successful digital marketing strategies, like traditional business strategies, focus on creating products that customers need or want, not merely developing a brand name or reducing the costs associated with online transactions. Instead of changing all industries, digital technology has had much more impact in certain industries where the cost of business and customer transactions has been very high. For example, investment trading is less expensive online because customers can buy and sell investments, such as stocks and mutual funds, on their own. Firms such as Charles Schwab Corp., the biggest online brokerage firm, have been innovators in promoting online trading. Traditional brokers such as Merrill Lynch had to follow with online trading for their customers.
Identity Theft and Online Fraud
Identity theft occurs when criminals obtain personal information that allows them to impersonate someone else in order to use the person's credit to access financial accounts and make purchases. This requires organizations to implement increased security measures to prevent database theft. As you can see in Figure 13.3, the most common complaints relate to employment or tax-related fraud, credit card fraud, phone/utilities fraud, bank fraud, loan/lease fraud, and government documents/benefits fraud. Sadly, cyberthieves have started targeting children's identities as they offer criminals "a clean slate" for them to commit fraud, such as applying for loans or credit cards.The internet's relative anonymity and speed make possible both legal and illegal access to databases storing Social Security numbers, drivers' license numbers, dates of birth, mothers' maiden names, and other information that can be used to establish a credit card or bank account in another person's name in order to make fraudulent transactions. One growing scam used to initiate identity theft fraud is the practice of phishing, whereby con artists counterfeit a well-known website and send out emails directing victims to it. There, visitors find instructions to reveal sensitive information such as their credit card numbers. Phishing scams have faked websites for PayPal and the Federal Deposit Insurance Corporation.
intellectual property theft and other illegal activities
In addition to protecting personal privacy, internet users and others want to protect their rights to property they may create, including songs, movies, books, and software. Such intellectual property consists of the ideas and creative materials developed to solve problems, carry out applications, and educate and entertain others. Although intellectual property is generally protected by patents and copyrights, losses from the illegal copying of computer programs, music, movies, and books reach billions of dollars each year in the United States alone. This has become a particular problem with digital media sites. YouTube has often faced lawsuits on intellectual property infringement. With millions of users uploading content to YouTube, it can be hard for Google to monitor and remove all the videos that may contain copyrighted materials. Illegal sharing of content is another major intellectual property problem. Consumers rationalize the pirating of software, videogames, movies, and music for a number of reasons.
Growth and Benefits of Digital communication
Let's start with a clear understanding of our focus in this chapter. First, we can distinguish e-business from traditional business by noting that conducting e-business means carrying out the goals of business through the use of the internet. Digital media are electronic media that function using digital codes—when we refer to digital media, we mean media available via computers and other digital devices, including mobile and wireless ones like smartphones. Page 407 Digital marketing uses all digital media, including the internet and mobile and interactive channels, to develop communication and exchanges with customers. Digital marketing is a term we will use often because we are interested in all types of digital communications, regardless of the electronic channel that transmits the data. Digital marketing goes beyond the internet and includes mobile phones, banner ads, digital outdoor marketing, and social networks. The internet has created tremendous opportunities for businesses to forge relationships with consumers and business customers, target markets more precisely, and even reach previously inaccessible markets at home and around the world. The internet also facilitates business transactions, allowing companies to network with manufacturers, wholesalers, retailers, suppliers, and outsource firms to serve customers more quickly and more efficiently. The telecommunication opportunities created by the internet have set the stage for digital marketing's development and growth.
Product Considerations
Like traditional marketers, digital marketers must anticipate consumer needs and preferences, tailor their goods and services to meet these needs, and continually upgrade them to remain competitive. The connectivity created by digital media provides the opportunity for adding services and can enhance product benefits. Some products, such as online games, applications, and virtual worlds, are only available via digital media. The 1.9 million iOS applications available in the App Store, for instance, provide examples of products that are only available in the digital world.8 Businesses can often offer more items online than they could in a retail store. The ability to access information for any product can have a major impact on buyer decision making. However, with larger companies now launching their own extensive marketing campaigns, and with the constant sophistication of digital technology, many businesses are finding it necessary to upgrade their product offerings to meet consumer needs. For example, Volition, a skin care and cosmetics company, crowdsources its new product ideas from its customers. If an idea makes it past the Volition team, tens of thousands of people in the Volition community will vote online whether the product should be produced and then receive a discount if the product is voted in. Using their fan base for new ideas has led to unique and innovative products, and as consumers share their product ideas to their social networks for support from friends and family, awareness increases for this beauty community. The internet provides a major resource for learning more about consumer wants and needs.
Linkedln
LinkedIn is the top networking site for businesses and business professionals. This networking tool allows users to post a public profile, similar to a résumé; connect with colleagues; find job listings; and join private groups. Eighty percent of B2B marketers say LinkedIn is an effective business lead generator.40 This platform can also be used to spread brand awareness and for corporate recruiting. HubSpot, an inbound marketing and sales platform with more than 545,000 followers, uses LinkedIn to spread its content, promote free webinars, and increase awareness around inbound marketing
Social media marketing (more more info)
Marketers need to analyze their target markets and determine the best social media approach to support marketing objectives. Social media should be included in both the corporate and marketing strategy. It should be a part of the firm's marketing plan and implementation efforts. Social media can be used to monitor target market competitors and understand the social and economic environment as a whole. Social media has the potential of building campaigns that produce advocates and enthusiasts of a firm's products. For example, Penguin Teen, a publisher of teen and young adult books, uses TikTok to share book teasers and news to its engaged fans. The brand has amassed millions of likes on its videos, rewarding its most engaged fans with free books.18 Marketing should be focused on relationship building, and social media can influence consumer behavior and deliver value to the firm.
Using Digital Media to learn about consumers
Marketing research and information systems can use digital media and social networking sites to gather useful information about consumers and their preferences. Sites such as Twitter and Facebook can be good substitutes for focus groups. Online surveys can serve as an alternative to mail, telephone, or personal interviews. Page 424 Crowdsourcing describes how marketers use digital media to find out the opinions or needs of the crowd (or potential markets). Communities of interested consumers join sites like Threadless, which designs T-shirts, or Crowdspring, which creates logos and print and web designs. These companies give interested consumers opportunities to contribute and give feedback on product ideas. Crowdsourcing lets companies gather and utilize consumers' ideas in an interactive way when creating new products. Consumer feedback is an important part of the digital media equation. Ratings and reviews have become exceptionally popular. Online reviews are estimated to influence the buying decisions of approximately 97 percent of U.S. consumers.80 Retailers such as Amazon, Netflix, and Priceline allow consumers to post comments on their sites about the goods and services they sell.
Applications(more info)
Mobile payments are also gaining traction, and companies like Google are working to capitalize on this opportunity.74 Google Wallet and Apple Pay are mobile apps that store credit card information on the smartphone. Shoppers can tap their phone at the point of sale for the transaction to be registered.75 Square is a company launched by Twitter co-founder Jack Dorsey. The company provides organizations with smartphone swiping devices for credit cards as well as tablets that can be used to tally purchases. Bitcoin is a virtual peer-to-peer currency that can be used to make a payment via smartphone. Smaller organizations have begun to accept Bitcoin at some of their stores. The success of mobile payments in revolutionizing the shopping experience will largely depend upon retailers adopting this payment system, but companies such as Starbucks are already jumping at the opportunity.
Digital Media and the Marketing Mix(More more info)
One aspect of marketing that has not changed with digital media is the importance of achieving the right marketing mix. Product, distribution, promotion, and pricing are as important as ever for successful online marketing strategies. More than 54 percent of the world's population now uses the internet.7 That means it is essential for businesses large and small to use digital media effectively, not only to grab or maintain market share, but also to streamline their organizations and offer customers entirely new benefits and convenience. Let's look at how businesses are using digital media to create effective marketing strategies on the web.
Media sharing (more more info)
Other sites take photo sharing to the next level. Pinterest is a visual bookmarking platform with elements of a search engine and a social network. Users can share photos and images among other internet users, communicating mostly through images that they "pin" to their boards. Other users can "repin" these images to their boards, follow each other, "like" images, and make comments. Its Lens feature allows users to take a picture of an object and find a list of pins with similar-looking objects, further establishing the platform as a discovery tool for shopping.53 The site also has an augmented reality e-commerce feature called Try On that allows users to click a button to try on beauty products. Beauty companies such as NYX Cosmetics and Urban Decay have turned to Pinterest to mimic the in-store shopping experience.54 Marketers have found that an effective way of marketing through Pinterest is to post images conveying a certain emotion that represents their brand.55 Because Pinterest users create boards that deal with their interests, marketers also have a chance to develop marketing messages encouraging users to purchase the product or brand that interests them. Pinterest hopes to learn how to influence a customer to proceed from showing interest in a product to having an intent to purchase. This knowledge will be helpful to advertisers marketing through Pinterest's website
Promotion Considerations
Perhaps one of the best ways businesses can utilize digital media is for promotion purposes—whether they are increasing brand awareness, connecting with consumers, or taking advantage of social networks (discussed later) to form relationships and generate positive publicity or "buzz" about their products. Thanks to online promotion, consumers can be more informed than ever, including reading customer-generated content before making purchasing decisions. Consumer consumption patterns are radically changing, and marketers must adapt their promotional efforts to meet them. With the rise of bloggers and social media stars like Zach King and Eva Gutowski, brands are turning to influencers to promote their products. Brands identify influencers who align with their brand image and often pay them for an endorsement or send complimentary product in exchange for a review. Many businesses are seeing higher customer purchases through influencer marketing than traditional channels like email and web search marketing.12 Brands can contact influencers directly or use paid platforms like BrandBacker to identify ideal partners and manage campaigns. Digital promotion, however, has its disadvantages. For instance, brand safety is increasingly a concern for online advertisers who desire more control over ad placements. Companies do not want their advertisements appearing alongside questionable or controversial content. Some brands refuse to advertise on YouTube or Facebook for fear of appearing next to questionable content
Media sharing (more info)
Posting videos on digital media sites also allows amateur entrepreneurs to showcase their talents for the chance to become successful. Michelle Phan started off posting makeup tutorials to YouTube in 2007. Her videos took off, catching the interest of women across the country who valued Phan's beauty advice.48 She founded IPSY, a beauty subscription service that delivers its subscribers deluxe samples of popular cosmetics brands like Tarte and Ofra. IPSY, which reached profitability within its first six months of operation, is the largest beauty subscription in the world and the third-largest subscription service overall.49 Photo-sharing sites allow users to upload and share their photos and short videos with the world. Well-known photo-sharing sites include Flickr, Google Photos, Amazon Prime Photos, Photobucket, and Instagram. Instagram is the most popular mobile photo-sharing application. Instagram, owned by Facebook, allows users to be creative with their photos by using filters and tints and then sharing them with their friends. Chobani uses Instagram to build communities and suggest new uses for its yogurt products.50 To compete against Snapchat, Instagram introduced Instagram Stories, a way for its users to send their friends messages that disappear in 24 hours.51 Instagram is one of the fastest growing social networks.52 With more and more people using mobile apps or accessing the internet through their smartphones, the use of photo sharing through mobile devices is likely to increase.
Pricing Considerations
Price is the most flexible element of the marketing mix. Digital marketing can enhance the value of products by providing extra benefits such as service, information, and convenience. Through digital media, discounts and other promotions can be quickly communicated. As consumers have become better informed about their options, the demand for low-priced products has grown, leading to the creation of deal sites where consumers can directly compare prices. Expedia, for instance, provides consumers with a wealth of travel information about everything from flights to hotels that lets them compare benefits and prices. Many marketers offer buying incentives like online coupons or free samples to generate consumer demand for their products. For the business that wants to compete on price, digital marketing provides unlimited opportunities.
Youtube
Purchased by Google for $1.65 billion, YouTube allows users to upload and share videos worldwide. Users watch a billion hours of YouTube videos every day, making this popular video platform an important part of marketing strategy.35 Though brands use the platform to release original video content, consumers far outnumber them on the platform. For example, beauty brands on YouTube are outnumbered by beauty vloggers in beauty searches by 14 to 1.36 This makes it challenging for brands to control messaging about their products on the platform. YouTube continues to diversify its video offering with YouTube Premium and YouTube TV. YouTube Premium expands upon the original platform, allowing users to pay for ad-free and offline video and original programming from top creators. As more homes cancel their cable packages, YouTube TV is an affordable alternative. For $64.99 per month, users can watch ABC, CBS, and NBC among other top networks, positioning the service as a competitor to Sling TV and DirecTV Now.
Mobile Marketing(more info)
SMS messages: SMS messages are text messages of 160 characters or less. SMS messages have been an effective way to send coupons to prospective customers.64 Multimedia messages: Multimedia messaging takes SMS messaging a step further by allowing companies to send video, audio, photos, and other types of media over mobile devices. Mobile advertisements: Mobile advertisements are visual advertisements that appear on mobile devices. Companies might choose to advertise through search engines, websites, or even games accessed on mobile devices. Mobile accounts for more than half of digital ad spending.65 Mobile websites: Mobile websites are websites designed for mobile devices. More than 50 percent of e-commerce website traffic now comes through mobile devices.66 Location-based networks: Location-based networks are built for mobile devices. A popular location-based network is Google's Waze, a GPS navigation app that crowdsources route details and traffic alerts with 130 million active monthly users.67 Location-based services are also critical for ride-sharing apps (e.g., Uber and Lyft) or apps that offer store locators, proximity-based marketing, travel information, roadside assistance, and more.68 Mobile applications: Mobile applications (known as apps) are software programs that run on mobile devices and give users access to certain content.69 Businesses release apps to help consumers access more information about their company or to provide incentives
Snapchat
Snapchat has more than 265 million daily active users.32 The mobile app, launched in 2011, allows users to send messages and disappearing photos and videos to friends. The parent company prefers to think of itself as a camera company rather than a social media company and plans to release more lifestyle products like Spectacles, camera glasses sold at Snapchat pop-up shops, outside of its social media platform.33 Marketers are looking at Snapchat as an opportunity to reach their young, highly engaged audience. Brands like Taco Bell and Sour Patch Kids have taken to Snapchat to engage with their audiences. Snapchat, which features skippable, vertical video ads and custom photo filters, is used mostly by users under the age of 34. In fact, 79 percent of daily users are between 18 and 34.34 Sponsored Lenses are also shoppable, taking augmented reality (AR) to the next level. For example, L'Oréal was one of the first brands to invest in shoppable AR on the platform, allowing users to virtually try on lipsticks before they buy. In the advertisement for L'Oréal Voluminous Lash Paradise Mascara, there is a small Snapchat logo in the lower corner to encourage customers to follow the brand. One of Snapchat's biggest challenges will be scaling its advertising dollars to achieve its revenue goals.
Social media marketing
Social media marketing involves obtaining communications with consumers through social media sites. Social media marketing enables firms to promote a message and create online conversations through multiple platforms. Large markets can be targeted and reached through paid media, owned media, and earned media.14 Paid media include traditional print and broadcast but are now joined by paid advertising on social networks such as Facebook and Twitter. Marketers can place ads on Google just like they place an ad on television. On Facebook, which has more than 7 million advertisers, brands can pay to boost posts, create compelling photo carousel ads, promote their page, and more.15 In addition to placing ads, marketers can own their own media outlets and create messages on social networks. Most firms have owned websites but can also develop profiles on websites such as Facebook and LinkedIn. Finally, markets can have earned media when consumers are communicating on social media sites. These digital word-of-mouth posts or interactions can promote a product or firm. Although it is not controllable like advertising, if the communication is positive, it increases sales.
Identity Theft and Online Fraud(more info)
Some identity theft problems are resolved quickly, while other cases take weeks and hundreds of dollars before a victim's bank balances and credit standings are restored. To deter identity theft, the National Fraud Center wants financial institutions to implement new technologies such as digital certificates, digital signatures, and biometrics—the use of fingerprinting or retina scanning. Online fraud includes any attempt to purposely deceive online. Many cybercriminals use hacking to commit online fraud. Hackers break into websites and steal users' personal information. Home Depot, Target, and JPMorgan are some notable cases where cybercriminals hacked into these companies' systems and stole information. Sony experienced a devastating attack that shut down its entire computer network and resulted in the theft of 27 gigabytes of files.85 Page 427 Using a different password for each website users visit is another important way to avoid becoming the victim of online fraud. Passwords should be complex enough that a cybercriminal cannot easily guess it. However, many consumers do not do this because of the hassle it takes in remembering complex passwords for multiple sites.86 Credit card fraud is a major type of fraud that occurs online. Some companies, such as Apple, are releasing credit cards with advanced security features such as one-time unique dynamic security codes that replace the static three-digit CVV. In the case of Apple, the company does not store the user's transaction history or spending habits, so the data cannot be shared or sold to third parties as traditional credit card companies do.Privacy advocates advise that the best way to stay out of trouble is to avoid giving out personal information, such as Social Security numbers or credit card information, unless the site is definitely legitimate.
Ethical and legal issues in digital marketing
The extraordinary growth of information technology, the internet, and social networks has generated many ethical and legal issues for consumers and businesses. These issues include privacy concerns, the risk of identity theft and online fraud, and the need to protect intellectual property. The FTC rules for online marketing are the same as for any other form of communication or advertising. These rules help maintain the credibility of the internet as an advertising medium. To avoid deception, all online communication must tell the truth and cannot mislead consumers. In addition, all claims must be substantiated. If online communication is unfair and causes injury that is substantial and not reasonably avoidable and is not outweighed by other benefits, it is considered deceptive. The FTC identifies risk areas for online communication and issues warnings to consumers as misconduct is reported. Some of the areas include testimonials and endorsements, warranties and guarantees, free products, and mail and telephone orders. The FTC periodically joins with other law enforcement agencies to monitor the internet for potentially false or deceptive online claims, including fraud, privacy, and intellectual property issues. We discuss these in this section, as well as steps that individuals, companies, and the government have taken to address them.
Social Networks
The increase in social networking across the world is exponential. It is estimated that today's adults spend nearly 2.5 hours on social media per day.19 As social networks evolve, both marketers and the owners of social networking sites are realizing the opportunities such networks offer—an influx of advertising dollars for site owners and a large reach for the advertiser. As a result, marketers have begun investigating and experimenting with promotion on social networks.
Introduction
The internet and information technology have dramatically changed the environment for business. Marketers' new ability to convert all types of communications into digital media has created efficient, inexpensive ways of connecting businesses and consumers and has improved the flow and the usefulness of information. Businesses have the information they need to make more informed decisions, and consumers have access to a greater variety of products and more information about choices and quality.
Distribution considerations
The internet is a new distribution channel for making products available at the right time, at the right place, and in the right quantities. Marketers' ability to process orders electronically and increase the speed of communications via the internet reduces inefficiencies, costs, and redundancies while increasing speed throughout the marketing channel. Shipping times and costs have become an important consideration in attracting customers, prompting many companies to offer consumers low shipping costs or next-day delivery. Although consumers still flock to brick-and-mortar stores to purchase items, they tend to spend less time shopping because they have already determined what they want online. Approximately 88 percent of U.S. consumers research shoes, toys, clothing, and other items on the internet before going to the store. Online shopping is also significantly increasing, with 230 million U.S. consumers finding and purchasing items online. Convenience and constant availability are two major reasons consumers prefer to shop online.10 Many online retailers, such as Birchbox, Everlane, Blue Nile, and Warby Parker, have established a presence in the traditional brick-and-mortar realm to create a physical presence and increase awareness.
Using Digital Media in Business
The phenomenal growth of digital media has provided new ways of conducting business. Given almost instant communication with precisely defined consumer groups, firms can use real-time exchanges to create and stimulate interactive communication, forge closer relationships, and learn more accurately about consumer and supplier needs. Consider how Amazon rivals big box stores such as Walmart and Home Depot.2 In fact, store closings doubled in recent years with the rise of online shopping.3 It's hard to remember a world before Amazon because it has completely transformed how many people shop. Because it is fast and inexpensive, digital communication is making it easier for businesses to conduct marketing research, provide and obtain price and product information, and advertise, as well as to fulfill their business goals by selling goods and services online. Even the U.S. government engages in digital marketing activities—marketing everything from Treasury bonds and other financial instruments to oil-drilling leases and wild horses. Procter & Gamble uses the internet as a fast, cost-effective means for marketing research, judging consumer demand for potential new products by inviting online consumers to sample new-product prototypes and provide feedback. If a product gets rave reviews from the samplers, the company might decide to introduce it. Many companies turn to software companies like Salesforce for digital marketing automation and marketing analytics. In the advertisement, Salesforce highlights a recent marketing research survey in an effort to demonstrate its abilities in data-driven insights.New businesses and even industries are evolving that would not exist without digital media.
Introduction(more info)
This has resulted in a shift in the balance of power between consumer and marketer.1 The defining characteristic of information technology in the 21st century is accelerating change. New systems and applications advance so rapidly that it is almost impossible to keep up with the latest developments. Startup companies emerge with systems that quickly overtake existing approaches to digital media. When Google first arrived on the scene, a number of search engines were fighting for dominance. With its fast, easy-to-use search engine, Google became number one and continues to challenge many industries today. Social media continues to advance as the channel most observers believe will dominate digital communication in the near future. Today, people spend more time on social networking sites, such as TikTok, than they spend on email. In this chapter, we first provide some key definitions related to digital marketing and social media. Next, we discuss using digital media in business and marketing. We look at marketing mix considerations when using digital media and pay special attention to social networking. Then we focus on digital marketing strategies—particularly new communication channels like social networks. We take a close look at media sharing, mobile marketing, and applications. Next the importance of online monitoring and analytics is discussed. Then we examine using digital media to learn about consumers. Finally, we examine the legal and ethical issues associated with information technology, digital media, and e-business.
TikTok
TikTok is a video-sharing platform that specializes in short-form mobile video. Unlike other video platforms, TikTok encourages users to build off of other users' content. For instance, a user can create a video using another person's audio or share a duet video, a feature that displays two videos simultaneously side-by-side. Audio is an important component of the TikTok app, acting as a launchpad for musical artists. TikTok's popularity has skyrocketed in recent years, with the platform surpassing 800 million active users. The platform is particularly popular among Gen Z and Millennials.TikTok is known for its meme culture, dancing videos, challenges, and comedic sketches. By embracing this style, companies can make their brand visible on the platform. For example, Urban Decay Cosmetics challenged its fans to create a video promoting the company's All Nighter Setting Spray with the hashtag #allnighterlegend in the caption. The company's original video only accrued 65,000 views, but videos uploaded by users to the branded hashtag earned a cumulative 33.3 million views.
Digital Media's Impact on Marketing
To be successful in business, you need to know much more than how to use a social media site to communicate with friends. Developing a strategic understanding of how digital marketing can make business more efficient and productive is increasingly necessary. If you are thinking of becoming an entrepreneur, then the digital world can open doors to new resources and customers. Smartphones, mobile broadband, and webcams are among the tools that can make the most of an online business world, creating greater efficiency at less cost. For example, rather than using traditional phone lines, people can make free Skype-to-Skype calls or pay $2.99 per month for a subscription for landline and cell phone calls.91 It is up to businesses and entrepreneurs to develop strategies that achieve business success using existing and future technology, software, and networking opportunities.Traditional businesses accustomed to using print media can find the transition to digital challenging. New media may require employees with new skills or additional training for current employees. There is often a gap between technical knowledge of how to develop sites and how to develop effective digital marketing strategies to enhance business success. Determining the correct blend of traditional and new media requires careful consideration; the mix will vary depending on the business, its size, and its target market. Future career opportunities will require skills in both traditional and digital media areas so that marketers properly understand and implement marketing strategies that help businesses achieve a competitive advantage.
Blogs and Wikis
Today's marketers must recognize that the impact of consumer-generated material like blogs and wikis and their significance to online consumers have increased a great deal. Blogs (short for web logs) are web-based journals in which writers can editorialize and interact with other internet users. More than three-fourths of internet users read blogs.42 Blogs give consumers power, sometimes more than companies would like. Bloggers can post whatever they like about a company or its products, whether their opinions are positive or negative, true or false. For instance, although companies sometimes force bloggers to remove blogs, readers often create copies of the blog post and spread it across the internet after the original's removal. In other cases, a positive review of a good or service posted on a popular blog can result in large increases in sales. Thus, blogs can represent a potent threat or opportunity to marketers. Rather than trying to eliminate blogs that cast their companies in a negative light, some firms are using their own blogs, or employee blogs, to answer consumer concerns or defend their corporate reputations. Bill Marriott, son of the founder of Marriott International, maintains a blog called "Marriott on the Move" where he not only discusses the hotel business but also posts on a number of insightful business and inspirational topics to engage his readers.43 As blogging changes the face of media, smart companies are using it to build enthusiasm for their products and create relationships with consumers.
Using Digital Media to learn about consumers(more info)
Today, most online shoppers search the internet for ratings and reviews before making major purchase decisions. While consumer-generated content about a firm can be either positive or negative, digital media forums do allow businesses to closely monitor what their customers are saying. In the case of negative feedback, businesses can communicate with consumers to address problems or complaints much more easily than through traditional communication channels. Businesses can capture customer intelligence via social networks such as Facebook in real time using advanced social listening tools to gain deeper consumer insights. Yet despite the ease and obvious importance of online feedback, many companies do not yet take full advantage of the digital tools at their disposal.
Distribution Considerations (more info)
Unlike most, Blue Nile's shops, called a "Webroom," are showrooms only, meaning customers can touch and feel the products, but all orders are placed online, saving the company money in distribution costs and real estate costs associated with large storefronts. This trend is a result of increased online competition, as well as a trend toward omni-channel retailing, where retailers offer a seamless experience on mobile, on desktop, or in traditional retail spaces. For example, many retailers aim to offer consistent product assortments and pricing on all channels as well as streamline the return process. A customer may research a purchase online, shop in-store, browse an in-store digital catalog, and then use a coupon from the retailer's app at checkout. Walmart, for example, considers its vast network of physical stores to be its competitive advantage over online retailers such as Amazon. The company has invested millions in omni-channel technology.11 Many shoppers use multiple channels while shopping, making a seamless shopping experience a way to differentiate a retailer from its competitors.
Social media marketing (more info)
User-generated content relates to consumers who create, converse, rate, collect, join, or simply read online materials. Marketers can't always access the creative efforts of consumers who post or publish on publicly accessible websites, such as blogs, like A Beautiful Mess, or on social networking sites such as LinkedIn. These user-generated sites often involve self-disclosure, where consumers share their knowledge, interests, and desire to join or associate with others. Participating in discussions to connect and network with others is a major motivating factor to influence others or to promote an interest or cause. There are many critics involved in user-generated content. These consumers post evaluations on blogs or post ratings and reviews. If you have ever posted a product review or rated a movie, you have engaged in this activity. Evaluating what critics post should be an important part in a company's digital marketing strategy. Of course, consumers read ratings to aid their shopping purchases. Yelp is one of the most comprehensive review sites on products and businesses. With more than 170 million reviews, Yelp continues to expand its platform, adding Questions and Answers for users to ask venue-specific questions for other users to answer.17 Therefore, these rating sites can be helpful to collect information used in marketing research and to monitor firm reputation.
Consumer-Generated Marketing and Digital Media
While digital marketing has generated exciting opportunities for companies to interact with their customers, digital media are also more consumer-driven than traditional media. Internet users are creating and reading consumer-generated content as never before and are having a profound effect on marketing in the process.Two factors have sparked the rise of consumer-generated information: The increased tendency of consumers to post their own thoughts, opinions, reviews, and product discussions through blogs or digital media. Consumers' tendencies to trust other consumers over corporations. Consumers often rely on the recommendations of friends, family, and fellow consumers when making purchasing decisions. Marketers who know where online users are likely to express their thoughts and opinions can use these forums to interact with them, address problems, and promote their companies. Types of digital media in which internet users are likely to participate include social networks, blogs, wikis, video-sharing sites, podcasts, and mobile applications. Let's look a little more closely at each.
Digital Media and the Marketing Mix
While digital marketing shares some similarities with conventional marketing techniques, a few valuable differences stand out. First, digital media make customer communications faster and interactive. Second, digital media help companies reach new target markets more easily, affordably, and quickly than ever before. Finally, digital media help marketers utilize new resources in seeking out and communicating with customers. One of the most important benefits of digital marketing is the ability of marketers and customers to easily share information. Through websites, social networks, and other digital media, consumers can learn about everything they consume and use in their lives, ask questions, voice complaints, indicate preferences, and otherwise communicate about their needs and desires. For example, IBM's digital assistant allows IBM customers to identify and digitally interact with key experts through a variety of platforms. IBM's Watson is an assistant in cognitive computing impacting fields as diverse as finance, medicine, and education. Many marketers use email, mobile phones, social media, wikis, media sharing, blogs, videoconferencing, and other technologies to coordinate activities and communicate with employees, customers, and suppliers. Twitter, considered both a social network and a micro-blog, illustrates how these digital technologies can combine to create new communication opportunities. Nielsen Marketing Research revealed that consumers now spend more time on social networking sites than they do on email, and social network use is still growing.
Online Monitoring and Analytics
Without digital media monitoring and evaluation, it will not be possible to maximize resources and minimize costs in social media marketing. The strength of measurement relates to the ability to have online analytics and metrics. Social media monitoring involves activities to track, measure, and evaluate a firm's digital marketing initiatives.76 An advantage of digital marketing evaluations is that there are methods to capture the metrics that indicate the outcomes of strategies. Therefore, establishing an expected level of performance against actual performance can be compared. Metrics develop from listening and tracking. For example, a firm could set up a hashtag and promote it. Metrics can be quantitative or qualitative. For example, click-through rate (CTR) determines the percentage of consumers who clicked on a link on a site as a quantitative measure. In addition, a qualitative metric could relate how consumers feel about a product.Key performance indicators (KPIs) should be embedded at the onset of a social media strategy that can allow almost real-time measurement and evaluation. This provides a foundation for making iterative changes to implementation and tactical execution. Marketing analytics uses tools and methods to measure and interpret the effectiveness of marketing activities. Applying analytics to social media performance can help develop better-targeted social media campaigns. Selecting valid metrics requires specific objectives that the social media strategy is to obtain. Objectives that are quantitative could include the number of likes on an Instagram post or the CTR of a Facebook post.
