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Digital marketing

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Advertising revenue over time as a percent of US GDP, showing rise in digital advertising since 1995 at the expense of print media (graph from 2017).[1]

Digital marketing is a component of marketing that uses digital technologies such as desktop computers, mobile phones, and other digital media platforms to promote products and services.[2][3]

It has significantly transformed how brands and businesses use technology for marketing since the 1990s and 2000s. As digital platforms became increasingly incorporated into marketing plans and everyday life,[4] and as people increasingly used digital devices instead of visiting physical shops,[5][6] digital marketing campaigns have become increasingly prevalent, employing combinations of methods. These methods include search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, optical disks and games. Digital marketing also extends to non-Internet channels that provide digital media, such as television, mobile phones (SMS and MMS), callbacks, and on-hold mobile ringtones.[7]

The extension to non-Internet channels differentiates digital marketing from online marketing.[8]

History

Digital marketing effectively began in 1990 when the Archie search engine was created as an index for FTP sites. During the 1980s, the storage capacity of computers had already large enough to store large volumes of customer information. As a result, companies started choosing online techniques such as database marketing rather than relying on limited list brokers.[9] These databases allowed companies to track customers' information more effectively, transforming the relationship between buyers and sellers.

In the 1990s, the term digital marketing was coined.[10] The first clickable banner ad, the "You Will" campaign by AT&T, launched in 1994. Within the first four months, 44% of all people who viewed the advertisement clicked on it.[11][12] Early digital marketing efforts focused primarily on simple HTML websites and the burgeoning practice of email marketing, which enabled direct communication with consumers.[13]

In the 2000s, with increasing numbers of Internet users and the introduction of the iPhone, customers began searching for products and making decisions online instead of consulting a salesperson, which created a new problem for the marketing department of a company.[14] Additionally, a survey conducted in the United Kingdom in 2000 revealed that most retailers had not yet registered their own domain names.[15] These challenges encouraged marketers to explore new ways to integrate digital technology into marketing strategies. At the same time, pay-per-click (PPC) advertising, introduced by Google AdWords in 2000, allowed businesses to target specific keywords, making digital marketing more measurable and cost-effective.[16]

The mid-2000s saw the emergence of social media platforms such as Facebook (2004), YouTube (2005), and Twitter (2006). These platforms revolutionized digital marketing by facilitating direct and interactive engagement with consumers. In 2007, marketing automation was introduced as a response to the rapidly evolving marketing climate. Marketing automation is the process by which software is used to automate conventional marketing processes.[17] Marketing automation helps companies to segment customers, launch multichannel marketing campaigns, and provide personalized information for customers.,[17] based on their specific activities. In this way, users' activity (or lack thereof) triggers a personal message that is customized to the user in their preferred platform. However, despite the benefits of marketing automation many companies are struggling to adapt it to their everyday uses correctly.[18][page needed]

Digital marketing became increasingly sophisticated during 2000s and 2010s, when[19][20] the proliferation of devices capable of accessing digital media led to sudden growth.[21] Statistics produced in 2012 and 2013 showed that digital marketing continued to grow significantly.[22][23] With the development of social media in the 2000s, such as LinkedIn, Facebook, YouTube, and Twitter, consumers became highly dependent on digital electronics in their daily lives. Therefore, they expected a seamless user experience across different channels for searching product information. The change in customer behavior improved the diversification of marketing technology.[24]

Digital media growth was estimated at 4.5 trillion online ads served annually with digital media spending at 48% growth in 2010.[25] An increasing portion of advertising stems from businesses employing Online Behavioural Advertising (OBA) to tailor advertising for internet users, but OBA raises concerns about consumer privacy and data protection.[21]

In the 2020s, the rise of generative artificial intelligence tools such as ChatGPT, Claude, Perplexity AI, and Gemini changed how people find information online, with AI-generated responses increasingly competing with traditional search results.[26][27] As a result, digital marketers adopted new methods for optimizing content for large language model (LLM)-based search systems. These methods became known as generative engine optimization (GEO) or answer engine optimization (AEO).[28][29][27] GEO methods documented in the academic literature include adding citations and quotations from credible sources, incorporating relevant statistics, adopting a more authoritative writing style, and improving the fluency of website content.[28]

Brand awareness

Main article: Brand awareness

One of the key objectives of modern digital marketing is to raise brand awareness, the extent to which customers and the public are familiar with and recognize a particular brand.

Enhancing brand awareness is important in digital marketing, and marketing in general, because of its impact on brand perception and consumer decision-making.[30]

Channels

Digital Marketing Channels are systems based on the Internet that can create, accelerate, and transmit product value from producer to a consumer terminal, through digital networks.[31][32] Digital marketing is facilitated by multiple Digital Marketing channels, as an advertiser one's core objective is to find channels which result in maximum two-way communication and a better overall ROI for the brand. There are multiple digital marketing channels available namely:[33]

  1. Affiliate marketing - Affiliate marketing is perceived to not be considered a safe, reliable, and easy means of marketing through online platforms. This is due to a lack of reliability in terms of affiliates that can produce the demanded number of new customers. As a result of this risk and bad affiliates, it leaves the brand prone to exploitation in terms of claiming commission that isn't honestly acquired. Legal means may offer some protection against this, yet there are limitations in recovering any losses or investment. Despite this, affiliate marketing allows the brand to market towards smaller publishers and websites with smaller traffic. Brands that choose to use this marketing often should beware of such risks involved and look to associate with affiliates in which rules are laid down between the parties involved to assure and minimize the risk involved.[34]
  2. Digital advertising technologies support the real-time bidding infrastructure used in digital display advertising
    Digital advertising technologies support the real-time bidding infrastructure used in digital display advertising[35]

    Display advertising – As the term implies, online display advertising deals with showcasing promotional messages or ideas to the consumer on the internet. This includes a wide range of advertisements like advertising blogs, networks, interstitial ads, contextual data, ads on search engines, classified or dynamic advertisements, etc. The method can target specific audience tuning in from different types of locals to view a particular advertisement, the variations can be found as the most productive element of this method.
  3. Email marketing - Email marketing in comparison to other forms of digital marketing is considered cheap. It is also a way to rapidly communicate a message such as their value proposition to existing or potential customers. Yet this channel of communication may be perceived by recipients to be bothersome and irritating especially to new or potential customers, therefore the success of email marketing is reliant on the language and visual appeal applied. In terms of visual appeal, there are indications that using graphics/visuals that are relevant to the message which is attempting to be sent, yet less visual graphics to be applied with initial emails are more effective in-turn creating a relatively personal feel to the email. In terms of language, the style is the main factor in determining how captivating the email is. Using a casual tone invokes a warmer, gentler and more inviting feel to the email, compared to a more formal tone.
  4. Search engine marketing – Search engine marketing (SEM) is a form of Internet marketing that involves the promotion of websites by increasing their visibility in search engine results pages (SERPs) primarily through paid advertising. SEM may incorporate Search engine optimization, which adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine results pages to enhance pay per click (PPC) listings.
  5. Social Media Marketing – The term 'Digital Marketing' has a number of marketing facets as it supports different channels used in and among these, comes the Social Media. When we use social media channels (Facebook, Twitter, Pinterest, Instagram, Google+, etc.) to market a product or service, the strategy is called Social Media Marketing. It is a procedure wherein strategies are made and executed to draw in traffic for a website or to gain the attention of buyers over the web using different social media platforms.
  6. Social networking service – A social networking service is an online platform which people use to build social networks or social relations with other people who share similar personal or career interests, activities, backgrounds or real-life connections
  7. In-game advertising – In-Game advertising is defined as the "inclusion of products or brands within a digital game."[36] The game allows brands or products to place ads within their game, either in a subtle manner or in the form of an advertisement banner. There are many factors that exist in whether brands are successful in the advertising of their brand/product, these being: Type of game, technical platform, 3-D and 4-D technology, game genre, congruity of brand and game, prominence of advertising within the game. Individual factors consist of attitudes towards placement advertisements, game involvement, product involvement, flow, or entertainment. The attitude towards the advertising also takes into account not only the message shown but also the attitude towards the game. Dependent on how enjoyable the game is will determine how the brand is perceived, meaning if the game isn't very enjoyable the consumer may subconsciously have a negative attitude towards the brand/product being advertised. In terms of Integrated Marketing Communication "integration of advertising in digital games into the general advertising, communication, and marketing strategy of the firm"[36] is important as it results in a more clarity about the brand/product and creates a larger overall effect.
  8. Online public relations – The use of the internet to communicate with both potential and current customers in the public realm.
  9. Video advertising – This type of advertising in terms of digital/online means are advertisements that play on online videos e.g., YouTube videos. This type of marketing has seen an increase in popularity over time.[37] Online Video Advertising usually consists of three types: Pre-Roll advertisements which play before the video is watched, Mid-Roll advertisements which play during the video, or Post-Roll advertisements which play after the video is watched.[38] Post-roll advertisements were shown to have better brand recognition in relation to the other types, where-as "ad-context congruity/incongruity plays an important role in reinforcing ad memorability".[37] Due to selective attention from viewers, there is the likelihood that the message may not be received.[39] The main advantage of video advertising is that it disrupts the viewing experience of the video and therefore there is a difficulty in attempting to avoid them. How a consumer interacts with online video advertising can come down to three stages: Pre attention, attention, and behavioral decision.[40] These online advertisements give the brand/business options and choices. These consist of length, position, adjacent video content which all directly affect the effectiveness of the produced advertisement time,[37] therefore manipulating these variables will yield different results. The length of the advertisement has shown to affect memorability where-as a longer duration resulted in increased brand recognition.[37] This type of advertising, due to its nature of interruption of the viewer, it is likely that the consumer may feel as if their experience is being interrupted or invaded, creating negative perception of the brand.[37] These advertisements are also available to be shared by the viewers, adding to the attractiveness of this platform. Sharing these videos can be equated to the online version of word by mouth marketing, extending number of people reached.[41] Sharing videos creates six different outcomes: these being "pleasure, affection, inclusion, escape, relaxation, and control".[37] As well, videos that have entertainment value are more likely to be shared, yet pleasure is the strongest motivator to pass videos on. Creating a 'viral' trend from a mass amount of a brand advertisement can maximize the outcome of an online video advert whether it be positive or a negative outcome.
  10. Native Advertising – This involves the placement of paid content that replicates the look, feel, and oftentimes, the voice of a platform's existing content. It is most effective when used on digital platforms like websites, newsletters, and social media. Can be somewhat controversial as some critics feel it intentionally deceives consumers.[42]
  11. Content Marketing – This is an approach to marketing that focuses on gaining and retaining customers by offering helpful content to customers that improves the buying experience and creates brand awareness. A brand may use this approach to hold a customer's attention with the goal of influencing potential purchase decisions.[43]
  12. Sponsored Content – This utilises content created and paid for by a brand to promote a specific product or service.[44]
  13. Inbound Marketing – a market strategy that involves using content as a means to attract customers to a brand or product. Requires extensive research into the behaviors, interests, and habits of the brand's target market.[45]
  14. SMS Marketing: Although the popularity is decreasing day by day, still SMS marketing plays a large role in bringing new users, providing direct updates, providing new offers, etc.
  15. Push Notification: Push notifications are responsible for bringing new and abandoned customers through smart segmentation. Many online brands are using this to provide personalised appeals depending on the scenario of customer acquisition.

It is important for a firm to reach out to consumers and create a two-way communication model, as digital marketing allows consumers to give back feedback to the firm on a community-based site or straight directly to the firm via email.[46] Firms should seek this long-term communication relationship by using multiple forms of channels and using promotional strategies related to their target consumer as well as word-of-mouth marketing.[46]

Regulation

Digital marketing used to rely primarily on self-regulation included in the ICC Code,[47] which included rules that apply to marketing communications using digital interactive media. However, self-regulation has proved largely ineffective,[48][49] leading to the consolidation of market power in a few firms, including Google, which has been determined to hold monopolies in search marketing and digital advertising.[50][51] While self-regulation codes still exist, government regulation is increasing in multiple jurisdictions, including California's legislation on targeting advertising online.[52] In Europe, digital marketing is regulated through multiple codes, of which the most important is the Digital Services Act,[53] which entered into force on 17 February, 2024. Other regulations focus on user privacy and data management such as the General Data Protection Regulation (GDPR).[54]

Strategy

Planning

Digital marketing planning is a term used in marketing management. It describes the first stage of forming a digital marketing strategy for the wider digital marketing system. The difference between digital and traditional marketing planning is that it uses digitally based communication tools and technology such as Social, Web, Mobile, Scannable Surface.[55][56] Nevertheless, both are aligned with the vision, the mission of the company and the overarching business strategy.[57]

Stages of planning

Dr. Dave Chaffey, an author on marketing topics, has suggested that successful digital marketing strategies have do digital marketing planning (DMP), which is a three-stage approach: Opportunity, Strategy, and Action. This generic strategic approach often has phases of situation review, goal setting, strategy formulation, resource allocation and monitoring.[57]

Opportunity

To create an effective DMP, a business first needs to review the marketplace and set SMART (specific, measurable, actionable, relevant, and time-bound) objectives.[58] They can set SMART objectives by reviewing the current benchmarks and key performance indicators (KPIs) of the company and competitors.[citation needed] It is pertinent that the analytics used for the KPIs be customized to the type, objectives, mission, and vision of the company.[59][60]

Companies can scan for marketing and sales opportunities by reviewing their own outreach as well as influencer outreach. This means they have competitive advantage because they are able to analyse their co-marketers influence and brand associations.[61]

To seize the opportunity, the firm should summarize its current customers' personas and purchase journey from this they are able to deduce their digital marketing capability.[62]

Strategy

A planned digital strategy is where a company expresses clearly what they are offering customers online e.g., brand positioning. The marketing mix is a framework which can be used to facilitate this.[63][64]

Action

The third and final stage requires the firm to set a budget and management systems. These must be measurable touchpoints, such as the audience reached across all digital platforms. Furthermore, marketers must ensure the budget and management systems are integrating the paid, owned, and earned media of the company.[65] The Action and final stage of planning also requires the company to set in place measurable content creation e.g. oral, visual or written online media.[66]

Understanding the market

One way marketers can reach out to consumers and understand their thought process is through what is called an empathy map. An empathy map is a four-step process. The first step is through asking questions that the consumer would be thinking in their demographic. The second step is to describe the feelings that the consumer may be having. The third step is to think about what the consumer would say in their situation. The final step is to imagine what the consumer will try to do based on the other three steps. This map is so marketing teams can put themselves in their target demographics shoes.[67] Web Analytics are also a very important way to understand consumers. They show the habits that people have online for each website.[68] One particular form of these analytics is predictive analytics which helps marketers figure out what route consumers are on. This uses the information gathered from other analytics and then creates different predictions of what people will do so that companies can strategize on what to do next, according to the people's trends.[69]

Sharing economy

The "sharing economy" refers to an economic pattern that aims to obtain a resource that is not fully used.[70] Nowadays, the sharing economy has had an unimagined effect on many traditional elements including labor, industry, and distribution system.[70] This effect is not negligible that some industries are obviously under threat.[70][71] The sharing economy is influencing the traditional marketing channels by changing the nature of some specific concept including ownership, assets, and recruitment.[71]

Digital marketing channels and traditional marketing channels are similar in function that the value of the product or service is passed from the original producer to the end user by a kind of supply chain.[72] Digital Marketing channels, however, consist of internet systems that create, promote, and deliver products or services from producer to consumer through digital networks.[73] Increasing changes to marketing channels has been a significant contributor to the expansion and growth of the sharing economy.[73] Such changes to marketing channels has prompted unprecedented and historic growth.[73] In addition to this typical approach, the built-in control, efficiency and low cost of digital marketing channels is an essential features in the application of sharing economy.[72]

Digital marketing channels within the sharing economy are typically divided into three domains including, e-mail, social media, and search engine marketing or SEM.[73]

  • E-mail – A form of direct marketing characterized as being informative, promotional, and often a means of customer relationship management.[73] Organization can update the activity or promotion information to the user by subscribing the newsletter mail that happened in consuming. Success is reliant upon a company's ability to access contact information from its past, present, and future clientele.[73]
  • Social media – Social media has the capability to reach a larger audience in a shorter time frame than traditional marketing channels.[73] This makes social media a powerful tool for consumer engagement and the dissemination of information.[73]
  • Search engine marketing (SEM) – Requires more specialized knowledge of the technology embedded in online platforms.[73] This marketing strategy requires long-term commitment and dedication to the ongoing improvement of a company's digital presence.[73]

Other emerging digital marketing channels, particularly branded mobile apps, have excelled in the sharing economy.[73] Branded mobile apps are created specifically to initiate engagement between customers and the company. This engagement is typically facilitated through entertainment, information, or market transaction.[73]

See also

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Further reading

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