Lecture 7

Digital Marketing

Daniel Chicksand and Lawrence Mitchell

Reading: Chaffey (2007), E-Business and E-Commerce Management, 3rd edition - Chapter 8

Introduction to session What is marketing and the marketing concept?

What is digital marketing?

How is digital marketing used, what are the benefits and trends?

The digital tool kit explained: acquisition, retention and conversion

Case study

What is Marketing?Marketing can be defined as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably” (Chartered Institute of Marketing)

Two distinct respects of the term marketing: 1) Specialist functions: market research, brand/product management, public relations, & customer service; 2) An approach: providing a guiding philosophy for all functions in a business

The marketing concept unites these two meanings and is broader than simply advertising and sales

Initiatives such as TQM, BPR, JIT and SCM emphasise the importance of focusing all parts of the organisation on meeting customer needs

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What is Digital Marketing?

“The practice of promoting products & services using digital distribution channels in a timely, relevant, personalised & cost-effective manner

(Chaffey, 2007)

”

Digital Marketing in Context

“The internet is biggest change since the industrial revolution

Anon 6

”

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18.3 million homes online+11%

Internet take up

SOURCE: BMRB/Mintel

Smart phone penetration

Social networking

Digital Marketing Theory

Digital marketing is direct marketingthrough a new channel

http://www.youtube.com/watch?v=Br2KSsaTzUc&feature=BFa&list=FLqzRVPF7O1Pf5UFrIMzQhpg&lf=mh_lolz

Reach Engage

Activate

Nurture

The REAN Model

The sources and methods you use to attract people to your offer.

Includes how you raise awareness among your target audience

How people interact with your business.

Engagement is essentially the process before an action that helps your prospect come to a decision

A person taking a preferred action.

Typical examples include a person purchasing a product, a newsletter subscription or a sign-up

The method of retaining and re-engaging with activated consumers.

(The activated consumer is a person who has already taken at least one preferred point of action)

Reach Engage Activate Nurture

The REAN Model

Best traffic sources in terms of cost & volume (search engines/keyword analysis/cpc/banners/email/newsletter/social media/YouTube/links/RSS feeds/viral)

Demographics /segments /geographical spread of visitors

Bounce rate Ease of

navigation through site/paths through site

Relevance of information

Usage of tools provided

Successful / failed internal searches

Engagement by segment / source of traffic

No. of downloads (white papers, etc.)

No. of registrations / form completions

No. of sales No. / length of

time watching rich content (video/music etc.)

Banners clicked Registrations /

sales by traffic source / segment

Comments on blogs/retweets

No. of leads to CRM

Lead response time

Requests for meetings / more information

Newsletter reads

Training requests

Survey response

Measurement at each step of the REAN Model

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The new purchase model – the need to be informed

An example of buying a washing machine from Qualitative ResearchPre- internet

Discussion with

partner

John Lewis

Discussion with partner

Comet

Decision

John Lewis

Purchase

Discussion with

partner

AOL

Lewis Online

Decision

John Lewis shop

Purchase

Google

Cheap washing machine

Lewis Online

CometPop ups

With internet

Discussion with

partnerJohn

Lewis Online

Decision

John Lewis shop

Purchase

ONLINE Google Cheap washing machine

websites

John Lewis Online

Comet

OFFLINE

AOL

Google

Discussion with

partner

Pop ups

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BRAND INFLUENCE WORD OF MOUTH

Personal ContactsSales

Prom

Outdoor

Web

Mobile

Email

PrintDirect

Radio

TV

PRODUCT

Changing influences on decisions

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BRAND INFLUENCE

WORD OF MOUTH

Personal

ContactsSales

Prom

Outdoor

Web

Mobile

Email

PrintDirect

Radio

TV

BlogsReviews

ForumsNetworks

Social Networks

PRODUCT

Changing influences on decisions

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Who do you trust?

Source: aolbrandnewworld.com / all internet users

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Influence of Forums

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10 aspects of Digital that are different1. 24/7 A trading website is always open. There is no downtime

to restock, correct programming errors or repair broken links to other business systems.

2. Marketing in real time A website deals with customers in real time, raising expectations of instant query resolution, immediate response to requests and even faster delivery. Customer interaction data is being gathered continuously.

3. Personalisation Personalisation of a website is different from print. It must be based on a variety of data sources (e.g. clickstream, personal data and previous purchases)

4. Data volumes and integration

Much higher volumes of data of different types than can be collected and measured. Real-time testing of everything: list, creative, offers, format, timing

5. Many-to-many communications

Customers do not phone call centres for a chat. The internet is different. It is open, democratic and even revolutionary. Customers can do a brand a lot of damage

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6. Comparison Shopping Never was comparison shopping so easy. Pricing policy may need to be changed?

7. Global reach The reach of the website is wide but logistical or legal constraints may apply.

8. Keeping in touch A brand can use digital to improve efficiency by reducing the amount of human involvement. Eg: autoresponders, email/text reminders, FAQs, customer forums

9. Low transaction costs The cost of handling online orders and information requests, as well as of email solicitation, is much lower. But, credit card payment queries will be high and delivery costs will remain the same

10. A website has both shop & catalogue characteristics

Like a catalogue, a website link can be sent to a list of prospective customers. Like a shop, it must wait for them to call in. Unlike a high street shop, it is not visible to passers-by and is dependant on promotion.

10 aspects of Digital that are different

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Spiral of ProsperityMore Profits More Investment

Analyse Database

Increase Customer Value

Cross-sell, Up-sell, Renewal

Talk to Key Customers Regularly

Build Database and Analyse

Get Customer Information

Sell Products

Target Media

Identify Prospects

Digital Marketing Practice

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Email Marketing

• Growth in sophistication from spray & pray• Still lots of shouty emails & bad practice• Integrates well with other channels• Cheaper than other channels• Quick to market• Encourages immediate action• Very personal

To be successful

• Get permission• Select the right broadcast platform• Segment audience• Relevant & engaging• Design for images or without• Test & measure• Use email as part of life-cycle programme, rather

than single message

Email Newsletters

Lead Generation Email Campaign

Email Opens Clicks

1 1,284 380

2 1,286 268

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Online Display• Most similar to press advertising• Lots of creative formats to chose from (eg video,

animation)• Low cost reach• Different targeting options

To be successful

• Segment audience• Plan like offline• Test different creative formats• Compare results to benchmarks• Link to relevant landing page

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Creative formats

Page peel

The campaign: Heinz Easy-Pots

Visitors click to go to a landing page on the Heinz Food

Heinz site

Content Marketing

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• 16 page ebook produced• Promoted via online

display• Users asked to register• List qualified

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Search

• 3 basic processes: collecting (crawling), indexing & ranking

• Two types of search: natural & paid• Highly targeted & very important• Complex & dynamic• Paid search benefits include:

– Quick to implement– Pay for what you get

A search engine does three basic things…

1. Collect 2. Index 3. Rank users Search results

A day at the office… for an average search engine

Search

• 3 basic processes: collecting (crawling), indexing & ranking

• Two types of search: natural & paid• Highly targeted & very important• Complex & dynamic• Paid search benefits include:

– Quick to implement– Pay for what you get

Search Engine Results Page

Organic

results FREE

Sponsored

resultsPAID

Sponsored

resultsPAID

SEO affects onlythe organic search results

Search

• 3 basic processes: collecting (crawling), indexing & ranking

• Two types of search: natural & paid• Highly targeted & very important• Complex & dynamic• Paid search benefits include:

– Quick to implement– Pay for what you get

A very important channel

90% of the business users claim that their product or

service search starts online.

To be successful

• Know rules• Keyword research, selection & targeting• In-bound links from quality sites• Internal linking• Unique content which can be found• Keywords embedded in heading & body tags• Relevant landing pages• Ongoing investment, analysis & optimisation

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Social Media

• Huge part of the web: 200m blogs; 20% of searches result in UGC, 1 in 3 Brits on Facebook

• WOM always important – now on epic scale• Grouped into social news, social networks & UGC• Powerful form of communication• Brands are at risk as consumers can be very critical• Can build awareness very quickly• Very difficult to control

To be successful• Strategy for listening, monitoring & responding• Identify & connect with influencers• Integrate social media with other channels• Encourage UCG on forums & blogs• Create a blog• Presence on main social networks: Facebook,

LinkedIn, YouTube & Twitter• Identify niche forums• Create content that is likely to be shared

Social Media

http://www.youtube.com/watch?v=Q7osB5EC2rU

Integrated Media

• Live in a multi-channel world• Multi-channel marketing isn’t new• All about getting all channels to support each other,

both offline & online• Digital channels integrate well and help each other:

– Seeing display ads could result in more brand searches– Adding an email to follow-up DM could boost the DM

response– Press releases can be used to generate links and build

natural search rankings

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Twitter Voucher

Facebook Voucher

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Strategic Foundations

Customer Focus

Use personas to ensure a common understanding

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Understand their buying process & buying experience: http://www.youtube.com/watch?v=3Sk7cOqB9Dk&feature=BFa&list=FLqzRVPF7O1Pf5UFrIMzQhpg&lf=mh_lolz

Many research methodologies available: Surveys Depth-interviews Focus groups

Customer Focus

Use personas to ensure a common understanding

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Understand their buying process & buying experience: http://www.youtube.com/watch?v=3Sk7cOqB9Dk&feature=BFa&list=FLqzRVPF7O1Pf5UFrIMzQhpg&lf=mh_lolz

Many research methodologies available: Surveys Depth-interviews Focus groups

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Data Strategy

• Digital is a very measurable channel • Must be prepared for significant levels of data

analysis to fully take advantage• Data available includes: clickstream, registration,

transactional, opinions, search, competitive• Attribution is a hot, hot topic• All about outcomes:

– Micro conversions – clicks, uploads, comments, registrations

– Macro conversions – leads, direct sales• To make data work, need philosophy, technology &

process 57

Planning has never been more important

• Key questions to ask: where are we now? Where do

we want to be? How are we going to get there?• Useful framework to work within is SOSTAC:

– Situational analysis– Objectives– Strategy– Target market– Action– Control & measurement

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Identify metrics to track progress

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Volume = Unique visitors reach (%)

Quality = Conversion rate

Cost = Cost per click (CPC)

Cost per acquisition (CPA)

Campaign ROI (%)

Branding Metrics

Lifetime value

Step 1How many visitors do I need?

What conversion rate do I expect?

How much can I afford to pay for them?

What’s the life-time value based on AOV?

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Case Study

We cover 3 major markets: Chemicals

Olefins

Aromatics

Plastics

Solvents

Intermediates

“Trusted market intelligence for the global petrochemical, energy and fertilizer industries””

Fertilizers

Sulphur

Nitrogen

Energy

Oil

Gas

Power

LNG

To grow 3 key metrics:

£ % of qualified leads becoming sales

£ New business revenue from leads vs target

£ Average lead time from qualified lead to sale

The Challenge

Decision Making Cycle

Motivation

(Justification)Intention(Doubt)

Decision point (Risk perception)

Preference (Comparisons)

Unaware Aware Consideration Decision

Blogs White Papers “How to” guides Brochure

Podcasts Case Studies Online tour Key USPs

Videos Product Videos TestimonialsCompetitor

comparisons

News Webinars

Rele

van

t con

ten

t

Promoting & Sharing the Content

ResultsFewer, higher quality leads:

✔% of qualified leads becoming salesIncreased by 16% 2011 (YTD) vs 2010✔ New business revenue from leads vs targetUp 5% on 2011 budget✔ Average lead time from qualified lead to saleReduced by 7% 2011 YTD vs 2010

Lecture 7

Digital Marketing

Daniel Chicksand and Lawrence Mitchell

Reading: Chaffey (2007), E-Business and E-Commerce Management, 3rd edition - Chapter 8