2020 – 2030
2010 – 2020
2000 – 2010
1990 – 2000
1980 – 1990 Desktop
World Wide Web
Semantic Web
The WebOS
Intelligent personal agents Distributed Search Semantic Databases Widgets
Semantic Search Mashups Office 2.0
Social Media Sharing Weblogs
Social Networking Wikis SaaS
Lightweight Collaboration Keyword Search
Directory Portals Websites Groupware
Databases File Servers
File Systems PC’s
USENET FTP IRC Email
WindowsSGML MMO’s MacOSBBS GopherSQL
VR
BBS
HTMLHTTP
SOAP XMLJavascript FlashP2P RDF RSSJavaOpenIDAJAXOWLATOMSPARQLSWRL
Evolution of web technologies
Source: Adapted from Spivack (2007)
Figure 1.12
● Virtual worlds. Increased use of immersive virtual environments such as Second Life.
● Personal data integration. Increased exchange of data between social networks fulfilling different needs
● The semantic web. Increased use of semantic mark-up leading to the semantic web envi- sioned by Tim Berners-Lee over ten years ago. It seems semantic mark-up will be needed to develop artificial intelligence applications which recommend content and services to web users without them actively having to seek them and apply their own judgement as to the best products and brands (i.e. an automated shopping comparison service) (as suggested by the use of standardised data feeds between shopping comparison sites and Google Base).
Benefits of digital media
In the section on digital marketing strategy, we described some of the applications of Internet marketing to support communications with customers across the purchase cycle from generating awareness, achieving direct response for lead generation or sale and supporting customer service and relationship marketing. In this section we explore key dif- ferences between digital media and traditional media which savvy marketers exploit.
Digital marketing communications differ significantly from conventional marketing communications because digital media enabled new forms of interaction and new models for information exchange. A useful summary of the differences between new media and traditional media originally developed by McDonald and Wilson (1999) and still valid – they describe the ‘6 Is of the e-marketing mix’ which are practical benefits of digital mar- keting that the marketer should exploit.
1 Interactivity
John Deighton was one of the first authors to identify these characteristics of a digital medium (Deighton, 1996):
● the customer initiates contact
● the customer is seeking information or an experience (pull)
● it is a high-intensity medium – the marketer will have 100% of the individual’s atten- tion when he or she is viewing a website
● a company can gather and store the response of the individual
● individual needs of the customer can be addressed and taken into account in future dialogues.
Figure 1.13(a) shows how traditional media are predominantly push media where the marketing message is broadcast from company to customer, although interaction can be encouraged through direct response to phone, website or social media page. Online it is often the customer who initiates contact and is seeking information through researching information on a website. In other words, it is a ‘pull’ mechanism where it is particularly important to have good visibility in search engines when customers are entering search terms relevant to a company’s products or services. Amongst marketing professionals this powerful new approach to marketing is now commonly known as inbound marketing (Shah and Halligan, 2009). Inbound marketing is powerful since advertising wastage is reduced.
Content and search marketing can be used to target prospects with a defined need – they are proactive and self-selecting. But this is a weakness since marketers may have less control than in traditional communications where the message is pushed out to a defined audience and can help generate awareness and demand.
Figure 1.13(b) shows how digital media should be used to encourage two-way commu- nications, which may be extensions of the direct-response approach. For example, FMCG suppliers use their website or Facebook presence as a method of generating interaction by providing incentives such as competitions and sales promotions to encourage the customer to respond with their names, addresses and profile information such as age and sex.
Inbound marketing The consumer is proactive in seeking out information for their needs, and interactions with brands are attracted through content, search and social media marketing.
2 Intelligence
Digital media and technology can be used as a relatively low-cost method of collecting marketing research, particularly about customer perceptions of products and services, as described in Chapter 10 which reviews digital analytics and market research.
3 Individualisation
Another important feature of interactive marketing communications is that they can be tailored to the individual (Figure 1.14(b)) at relatively low costs, unlike in traditional media where the same message tends to be broadcast to everyone (Figure 1.14(a)). This individualisation is based on the intelligence collected about site visitors and then stored in a database and subsequently used to target and personalise communications to cus- tomers to achieve relevance in all media. The process of tailoring is also referred to as
personalisation – Amazon is the most widely known example where the customer is greeted by name on the website and receives recommendations on site and in their emails based on previous purchases. This ability to deliver ‘sense and respond communications’ is another key feature of digital marketing and is explored further in Chapter 6.
4 Integration
The Internet provides further scope for integrated marketing communications. Figure 1.15 shows the role of the Internet in multichannel marketing. When assessing the market- ing effectiveness of a website, the role of the Internet in communicating with customers and other partners can best be considered from two perspectives. First, there is outbound Internet-based communications from organisation to customer. We need to ask how does the Internet complement other channels in communicating the proposition for the company’s products and services to new and existing customers with a view to generating new leads
Company Customer
Direct response Traditional TV, print, radio media
Direct mail communications
Interactivity Dialogue not monologue
Two-way feedback Push
(a)
Company Customer
Pull/Push
Intelligence (b)
Summary of communication models for (a) traditional media, (b) new media
Figure 1.13
Personalisation Delivering individualised content through web pages or email.
Sense and respond communications Customer behaviour is monitored at an individual level and the marketer responds with communications tailored to the individual’s need.
Outbound Internet- based communications The website and email marketing are used to send personalised communications to customers.
and retaining existing customers? Second, inbound Internet-based communications from customer to organisation: how can the Internet complement other channels to deliver cus- tomer service to these customers? Many companies have now integrated email response and website callback into their existing call centre or customer service operation.
Some practical examples of how the Internet can be used as an integrated communica- tions tool as part of supporting a multichannel customer journey (Figure 1.16) are the following:
● The Internet can be used as a direct-response tool, enabling customers to respond to offers and promotions publicised in other media.
● The website can have a direct response or callback facility built into it. The Automo- bile Association has a feature where a customer service representative will contact a customer by phone when the customer fills in their name, phone number and a suitable time to ring.
● The Internet can be used to support the buying decision even if the purchase does not occur via the website through assisted selling via live chat or phone. For example, Dell has a prominent web-specific phone number on its website that encourages customers to ring a representative in the call centre for support.
Company Customer
Customer Customer
Customer
Customer Customer Same message
to all customers (or customers in each segment)
Different messages to each customer
(or customers in micro-segment) (a)
Company
(b)
Summary of degree of individualisation for: (a) traditional media (same message); (b) new media (unique messages and more information exchange between customers)
Figure 1.14
Inbound Internet-based communications Customers enquire through web-based forms and email.
Intermediary
E-mail Phone Mail Person
Web
Customer Company
Channels requiring integration as part of integrated e-marketing strategy
Figure 1.15
Product evaluation Decision to
purchase
Online Offline
Mail, fax, phone, person
Fulfilment Specify purchase Payment
Product evaluation Decision to
purchase
Fulfilment (digital) Specify purchase Payment 1
2
5 3
4
The role of mixed-mode buying in Internet marketing Figure 1.16
5 Industry restructuring
Disintermediation and reintermediation are key concepts of industry restructuring that should be considered by any company developing an e-marketing strategy and are explored in more detail in Chapters 2, 4 and 5.
For marketers defining their company’s communications strategy it becomes very important to consider the company’s representation on these intermediary sites by answer- ing questions such as ‘Which intermediaries should we be represented on?’ and ‘How do our offerings compare to those of competitors in terms of features, benefits and price?’
6 Independence of location
Electronic media also introduce the possibility of increasing the reach of company communications to the global market. This gives opportunities to sell into international markets which may not previously have been possible. The Internet makes it possible to sell to a country without a local sales or customer service force (although this may still be necessary for some products).
Purpose
To highlight differences in marketing communications introduced through the use of the Internet as a channel and the need to integrate these communications with existing channels.
Activity
List communications between a PC vendor and a home customer over the lifetime of a product such as a PC. Include communications using both the Internet and traditional media. Refer to channel-swapping alternatives in the buying decision in Figure 1.16 to develop your answer.
Integrating online and offline communications Activity 1.6
Disintermediation The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers.
Reintermediation The creation of new intermediaries between customers and suppliers providing services such as supplier search and product evaluation.
Online pureplay startup Travel Republic achieves growth through taking advantage of benefits of digital marketing
Mini case study 1.3
Travel Republic is the highest ranking independent online travel agent in the UK, with over 1 million travellers booking every year. It’s an example of a pureplay that has deployed digital marketing techniques like search, social media and email marketing to grow both in the UK and internationally.
Online travel agent Travel Republic topped The Sunday Times Virgin Fast Track 100 list four years after the company was launched. The Kingston-upon-Thames based business was set up in 2003 and is the brainchild of three university friends – Paul Furner, managing director, Chris Waite, IT director, and Kane Pirie, finance and operations director.
Today the company can no longer be termed a startup, with revenues increasing 14.5 per cent in 2014 to
£67.5 million, giving it an operating profit margin of 20 per cent and with separate sites for local audiences in Spain, Italy and Ireland.
The company employs more than 150 staff. TravelRepublic.co.uk appears in the IMRG-Hitwise Hot Shops List, which ranks the UK’s top 50 most popular Internet retailers, across all sectors (ranked by number of web visitors). In the online travel agency sector TravelRepublic.co.uk is more popular than Opodo and ebookers.
com, although Expedia.co.uk and lastminute.com rank higher.
A major reason for the growth of Travel Republic is that it has taken advantage of the ‘pull’ effect of web communications. Through using sponsored links in search networks such as Google AdWords, it has been able to target its offering precisely to an online audience looking for a competitive price on a holiday or a flight to a particular destination. Of course, this has to be backed up by a strong proposition, an easy to use, high- performance website and trust in the brand indicated by user reviews and holiday guarantees (Figure 1.17).
TravelRepublic.co.uk caters for a broad range of customers including families, couples and groups. The web- site offers charter, low-cost and scheduled airlines, powerful rate shopping technology for hotel rooms and apartments, plus hotel reviews and resort guides written by its customers.
Customers can save up to 50 per cent on the price of a comparable package holiday purchased online or on the high street. TravelRepublic.co.uk works with over 100 different flight operators and offers flights to more than 200 destinations. The website also offers over 30,000 discounted hotels, apartments and villas plus a wide range of other services such as taxi transfers, airport parking and car hire. The website gives cus- tomers complete flexibility with flights, hotels and durations.
Paul Furner, managing director of TravelRepublic.co.uk explained how the company developed:
Chris, Kane and I met at university but then followed very different careers – Chris in software development, Kane in corporate finance/private equity and me in software quality assurance. These differing back- grounds, all outside of the travel industry, have allowed us to take a fresh new look at the sector and become one of its leading innovators.
However, equally important has been our commitment, from the outset, to deliver gold standard cus- tomer service to our customers. At a time when it is often said that there is no loyalty on the web we would beg to differ. Our levels of repeat and recommended business suggest that we have a real affinity with our customers which we plan to build upon in the coming months.
Source: Travel Republic press release, 2 December 2007, Travel Republic is the UK’s Fastest Growing Private Company, www.travelrepublic.
co.uk/help/pressReplace_003.aspx
Travel Republic (www.travelrepublic.co.uk) Figure 1.17
In terms of deploying campaigns, these are further benefits of digital communications:
● Accountability. Digital media are potentially more accountable through the use of measurement systems known collectively as web analytics. Google provides a free tool known as Google Analytics (www.google.com/analytics) to enable its advertisers to test the value generated from its ads.
● Testing. Potentially, testing becomes more straightforward at a lower cost with the option to trial alternative creative executions, messaging or offers. Google offers another free tool – the Website Optimiser – to test alternative landing pages.
● Flexibility. Campaigns can be more flexible, with the capability to change copy or offers during a campaign. Alternative ads can be served within Google to evaluate which works best. Google AdWords also offers dayparting, where ads can be displayed at different times of the day.
● Micro-targeting. Alternative messages can be delivered for different audiences accord- ing to what they are searching for. Potentially a company can show a different advert in Google AdWords for each term searched on.
● Cost-control. Costs can be controlled for each group of search terms entered by cus- tomers through the search engine, managed collectively, and bids made can be increased or decreased with the aid of software.
Key challenges of digital communications
It is sometimes suggested by some suppliers of digital media that they are ‘quick, cheap and easy’ to deploy. This is a great misconception since there are many challenges which need to be overcome when managing digital campaigns. Again referring to a Google AdWords campaign as an example, these include:
● Complexity. To enable the benefits we have mentioned above – such as personalisation, testing and dynamic variation in ads through time – time has to go into configuring the campaign although the search engines provide defaults to enable easy setup. This requires specialist expertise either in-house or at an agency to manage the campaign.
● Responding to competitors. Since competitors can also change their approach readily, more resource has to be used to monitor competitor activity. Automated tools known as bid management tools can assist with this – they will automatically check amounts competitors are paying and then adjust them according to pre-defined rules.
● Responding to changes in technology and marketing platforms. Google and the other ad-serving companies innovate to offer better capabilities for their customers. This means that staff managing campaigns need training to keep up-to-date. Google offers ‘Adwords Qualified Professionals’ so that companies can be certain of a minimum skills level.
● Cost. Although costs can be readily controlled, in competitive categories the costs can be high, exceeding €10 per click.
● Attention. While online paid search ads are highly targeted and there is arguably little wastage, not everyone will view paid adverts, indeed there is a phenomenon known as
‘banner blindness’ where web users ignore online ads (see Chapter 9 for more details).
Engaging with the audience with advertising is also a problem in social networks and other publisher sites, which can lead to a very low rate of people clicking on ads.
Key communications concepts for digital marketing
In this section, we introduce three key concepts which underpin digital communications across the digital media we have introduced in this chapter.
1 Customer engagement.
2 Permission marketing.
3 Content marketing.
1 Customer engagement
This difficulty in gaining attention online on all types of sites has led to the emergence of the concept of customer engagement as a key challenge with which digital marketers are increasingly concerned. cScape (2008) describe customer engagement as:
repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand.
While for Haven (2007), customer engagement is:
the level of involvement, interaction, intimacy, and influence an individual has with a brand over time.
Arguably, the biggest difference in communications introduced by the growth of digital media and the web is the capability, or many would say necessity, to include customer’s’
conversations as an integral part of communications. Today, proactively managing con- sumer participation which occurs through social networks such as Facebook, Google+
and LinkedIn, video postings and comments on YouTube and myriad blogs and forums is essential since, when a positive sentiment is expressed by a real person independent from a company this confers credibility on the company.
Equally, there are negative sentiments or comments made by consumers on the web that need to be managed. For example, on one site (www.haveyoursay.com) a purchaser of a car was highly critical about a make of car and the comments appeared near the top of the Google search results page when someone searched for the brand, yet for several years the manufacturer did nothing to manage this.
2 Permission marketing
Permission marketing is an established approach to online marketing which is still highly rele- vant today as a practical foundation for CRM and online customer engagement. ‘‘ Permission marketing’ was a term coined by Seth Godin. Godin (1999) noted that while research used to show we were bombarded by 500 marketing messages a day, with the advent of the web and digital TV this has now increased to over 3000 a day! From an organisation’s viewpoint, this leads to a dilution in the effectiveness of the messages – how can the communications of any one company stand out? From the customer’s viewpoint, time is seemingly in ever shorter supply; customers are losing patience and expect reward for their attention, time and information. Godin refers to the traditional approach as interruption marketing. Permission marketing is about seeking the customer’s permission before engaging them in a relation- ship and providing something in exchange. The classic exchange is based on information or entertainment – a B2B site can offer a free report in exchange for a customer sharing their email address or ‘Liking’ a brand, while a B2C site can offer a newsletter or access to their wall with valuable content and offers. We cover the principles of permission marketing in more detail and with examples related to CRM in Chapter 6.
3 Content marketing
Success in permission marketing requires exceptional, compelling content. To emphasise the importance of content marketing to gaining permission, encouraging sharing and ongoing engagement through websites and social media, the concepts of content market- ing and content strategy have developed to describe best practice approaches. Today, by content we refer to the combination of static content forming web pages, but also dynamic rich media content which encourages interaction. Videos, podcasts, user-generated content and interactive product selectors should also be considered as content which should be refined to engage issues.
You can see the challenge content strategy presents since today there are so many different types of content delivered in different forms to different places on different access platforms, yet it is increasingly important to engage customers in social media.
Customer engagement Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand.
Permission marketing Customers agree (opt in) to be involved in an organisation’s marketing activities, usually as a result of an incentive.
Interruption marketing Marketing
communications that disrupt customers’
activities.
Content marketing The management of text, rich media, audio and video content aimed at engaging customers and prospects to meet business goals published through print and digital media including web and mobile platforms which is repurposed and syndicated to different forms of web presence such as publisher sites, blogs, social media and comparison sites.