Understanding Digital Marketing Chapter 2

Why you need a digital marketing strategy

Formulating a digital marketing strategy will help you to make informed decisions about your
foray into the digital marketing arena and ensure that your efforts are focused on the elements
of digital marketing that are most relevant to your business.
Its a crucial first step towards understanding how the constantly evolving digital marketplace
relates to you and how it affects the relationship between your business or brand and your
customers and prospects.
Unlike conventional forms of mass media marketing, the internet is unique in its capacity to
both broaden the scope of your marketing reach and narrow its focus at the same time. Using
digital channels you can transcend traditional constraints like geography and time zones to
connect with a much wider audience.
At the same time, digital technology allows you to hone your marketing message with laser-like
precision to target very specific niche segments within that wider market. Implemented
effectively, it can be an incredibly powerful combination.
Its often stated that the internet puts consumers in control as never before. But its also
important to remember that the internet also delivers an unprecedented suite of tools,
techniques and tactics that allow marketers to reach out and engage with those same
consumers. The marketing landscape has never been more challenging, dynamic and diverse.
If youre going to harness the power of digital marketing to drive your online business to
dizzying new heights, you need a thorough understanding of your market, how your customers
are using digital technology, and how your business can best utilize that same technology to
build enduring and mutually rewarding relationships with them.
Having a clearly defined strategy will help to keep you focused, ensure that your marketing
activities are always aligned with your business goals and, crucially, ensure that youre targeting
the right people.
Consumers go online to research, evaluate and compare their choices. They make purchasing
decisions based on the quality of their online experience and then head to a bricks-and-mortar
store to hand over their cash. Boats, cars, houses, apartments, horses, tractors you name it,
theyre all being actively and successfully marketed online.






Defining your Digital Marketing Strategy
Laying strong digital foundations
The good news is that youve almost certainly already started the process of defining your digital
marketing strategy. Before even picking up this book youve probably been thinking about digital
marketing in the context of your business, about what your competitors are doing online and why,
about how your customers and prospects are integrating digital technology into their lives, and about
how you can best exploit these new and exciting digital channels to foster longer, more productive
relationships with them. These are the components that will form the foundation of your digital
marketing strategy:
Know your business: Is your business ready to embrace digital marketing? Are your products or services
suited to online promotion? Do you have the right technology, skills and infrastructure in place? How
will digital marketing fit into your existing business processes, do those processes need to change, and
are you and your staff ready to accommodate those changes?
Know the competition: Who are your main competitors in the digital marketplace? Are they the same as
your offline competitors? What are they doing right (emulate them), what are they doing wrong (learn
from them), what arent they doing at all (is there an opportunity there for you?) and how can you
differentiate your online offering from theirs? Remember, competition in the digital world can come
from just around the corner or from right around the globe. The same technologies that allow you to
reach out to a broader geographical market also allow others to reach into your local market. When you
venture online youre entering a global game, so dont limit your analysis to local competition.
Know your customers: Who are your customers and what do they want from you? Are you going to be
servicing the same customer base online, or are you fishing for business from a completely new
demographic? How do the customers youre targeting use digital technology, and how can you harness
that knowledge to engage in a productive and ongoing relationship with them?
Know what you want to achieve: If you dont know where youre going, theres a pretty fair chance
youll never get there. What do you 24 Understanding digital marketing want to get out of digital
marketing? Setting clear, measurable and achievable goals is a key part of your digital marketing
strategy. Are you looking to generate online sales, create a source of targeted sales leads, and improve
your brand awareness among online communities, all of the above or perhaps something completely
different? Your goals are the yardsticks against which you can measure the progress of your digital
marketing campaigns.
Know how youre doing: The beauty of digital marketing is that, compared to many forms of advertising,
results are so much more measurable. You can track everything that happens online and compare your
progress against predefined goals and key performance indicators (KPIs). How is your digital campaign
progressing? Are certain digital channels delivering more traffic than others? Why is that? What about
conversion rates? How much of that increased traffic results in tangible value to your business?
Measure, tweak, refine, and remeasure. Digital marketing is an ongoing and iterative process.
The process of formally defining your digital marketing strategy forces you to sit down and analyze the
market in which youre operating with a critical eye, and to really think about the different components
of your business and how digital marketing can help you to achieve your business goals.

Understanding the digital consumer
The first thing to realize about digital consumers is that theres basically no such thing. The customers
and prospects you encounter online are the very same people who walk into your store every day, call
you on the telephone, or order something from your mail-order catalogue. Theres nothing dark, sinister
or mysterious about them. Theyre people like everybody else.
All consumers care about is the experience how the marketing available to them can enhance the
experience and help them to make more informed decisions.
People are the single most important element in any form of marketing. Thats just as true in the digital
space as it is in any other sphere of the discipline. As a marketer you need to understand people and
their behavior and heres where the notion of the digital consumer does carry some weight, because
consumer behavior is changing, and its changing because of the pervasive, evocative and enabling
nature of digital technology.
Perceived anonymity is another online trait that can have a profound effect on consumer behavior. It
liberates consumers from the social shackles that bind them in the real world; online they are free to do
and say as they please with scant regard for the social propriety. In a bricks-and-mortar store shoppers
will wait patiently for service, and will often endure a less-than-flawless shopping experience. Online
they wont; they demand instant gratification and a flawless customer experience. You have to deliver,
first time, every time. If you fail to engage, retain and fulfill their expectations on demand, theyre gone,
vanishing into the ether of cyberspace as quickly as they came. And then theyll tell all their online
friends.

Key traits of the online consumer
Its always risky to generalize and make assumptions about people especially in a field as dynamic and
fast moving as this one. The only real way to know your market intimately is to conduct original research
within your particular target group. That said, a lot of research work has been done (and continues to be
done) on the behavioral traits of online consumers, and a broad consensus has emerged around the key
characteristics that epitomize digital consumers:
Digital consumers are increasingly comfortable with the medium: Many online consumers have been
using the internet for several years at this stage and, while the user demographic is still skewed in
favor of younger people, even older users are becoming increasingly web savvy. Its almost like a piano
player who plays faster once they know the instrument. In the beginning people pling, pling, pling very
carefully, and then they move on to playing symphonies, said web usability guru Jacob Nielsen in an
interview with the BBC in 2006. As people become more comfortable with the medium they use it more
efficiently and effectively, which means they dont hang around for long: your content needs to deliver
what they want, and it needs to deliver quickly.
They want it all, and they want it now: In the digital world, where everything happens at a million miles
per hour, consumers have grown accustomed to getting their information on demand from multiple
sources simultaneously. Their time is a precious commodity, so they want information in a format that
they can scan for relevance before investing time in examining the detail. Designers and marketers need
to accommodate this desire for scannability and instant gratification when constructing their online
offering.
Theyre in control: The web is no passive medium. Users are in control in the Web 2.0 world more than
ever before. Fail to grasp that simple fact and your target audience wont just fail to engage with you,
but they will actively disengage. We need to tailor our marketing to be user-centric, elective or
permission based, and offer a real value proposition to the consumer to garner positive results.
Theyre fickle: The transparency and immediacy of the internet dont eradicate the concept of brand or
vendor loyalty, but they do erode it. Building trust in a brand is still a crucial element of digital
marketing, but todays consumers have the power to compare and contrast competing brands literally
at their fingertips. How does your value proposition stack up against the competition around the
country and across the globe? Your brand identity may be valuable, but if your overall value proposition
doesnt stack up youll lose out.
Theyre vocal: Online consumers talk to each other a lot. Through peer reviews, blogs, social networks,
online forums and communities theyre telling each other about their positive online experiences and
the negative ones. From a marketing perspective this is something of a double-edged sword harness
the positive aspects and you have incredible viral potential to propagate your message; get it wrong,
and you could just as easily be on the receiving end of an uncomfortable online backlash.

Using influencers to help spread the word
There is one particular category of users online that warrants a special mention when it comes to
defining your digital marketing strategy. Known as influencers, these early adopters are the online
opinion leaders. Through blogs, podcasts, forums and social networks they harness the power of the
web to extol the virtues of products and brands that they like, and equally to denigrate those they find
unsatisfactory.
Why are influencers important to you as a marketer? Because they have the virtual ear of the online
masses. People read and listen to what they have to say; they value their opinion and trust their
judgment. These online influencers have already won the pivotal battle for the hearts and minds of
online consumers. Engage positively with them, and you essentially recruit a team of powerful online
advocates who can have a potentially massive impact on a much wider group of consumers. This is the
online equivalent of word-of-mouth marketing, on steroids. Of course, give them a negative experience
and, well, you can guess the rest.
But how exactly will you recognize these online influencers? Influencing the Influencers: how online
advertising and media impact word of mouth defined influencers as people who strongly agreed to
three or more of the following statements:
1. They consider themselves expert in certain areas (such as their work, hobbies or interests).
2. People often ask their advice about purchases in areas where they are knowledgeable.
3. When they encounter a new product they like they tend to recommend it to friends.
4. They have a large social circle and often refer people to one another based on their interests.
5. They are active online, using blogs, social networking sites, e-mail, discussion groups, online
community boards, etc. to connect with their peers.
Identifying the influencers within your market sector, analyzing their behavior and tailoring part of your
digital campaign to target this small but influential group can result in disproportionate knock-on
benefits. Dont neglect your core market, of course but certainly consider targeting influencers as part
of your overall digital marketing strategy.














Mind your Ps
You might be asking yourself how all this newfangled digital stuff fits into the traditional marketing mix:
the venerable four Ps of Product, Price, Promotion and Place. Well, it breaks down something like this.
Place
Lets start with the obvious one: its the internet. Its the one billion plus people around the world who
have decided its better to be connected whether its accessed through a computer, a mobile device,
IPTV or whatever else might come along. Thats really it.
Price
Pricing is critical online. You have to be competitive: this is the internet, and pricing is transparent. You
dont necessarily have to be the cheapest but to compete you need to make sure your overall value
proposition to the customer is compelling. Overprice your product and a host of price comparison sites
will soon highlight the fact, as will the countless peer-review communities where consumers actively
debate the relative merits (or otherwise) of everything from financial products to wedding stationery.
Product
This is what you have to offer your unique value proposition to your customers. A good product, of
course, is the cornerstone of all successful marketing, but its particularly crucial in the digital arena. A
product that delivers tangible benefits and fills a real need in the marketplace something that leaves
the customer with a genuine perception of value gives marketers the scope they need to do their job
effectively. When youre promoting something viable, its much easier to engage with consumers and to
convince them to buy.
Conversely, the best marketing minds in the world will struggle to promote a product that doesnt
deliver the goods. And this is where the all-pervading, viral nature of the internet can really come back
to bite you. If you promote a product online and that product doesnt deliver, youd better be prepared
for the backlash.
Digital consumers are no wallflowers they are vociferous and well connected. They wont keep the
shortcomings of your product or business to themselves theyll shout about it from the tallest building
in cyberspace, and others will quickly pick up the cry. Once that happens you can pretty much shelve
your marketing ambitions and go back to the drawing board. So its important to make sure your
product and the entire customer value chain associated with it are right from the start. You need a solid
foundation if youre going to build a sustainable online business, and that all starts with a sound
product.
Promotion
Promotion is everything you do, online and offline, to get your product in front of your prospects,
acquire new customers and retain existing ones. Examining those options will form the bulk of the rest
of this book: in the following chapters well discuss the major forms of online promotion available now,
and will go on to look at emerging and future trends. Here we summarize the main elements to whet
your appetite:
Your website: Your website is the hub of your digital world and perhaps the most important element
in your whole digital marketing strategy. Its a vital piece of online real estate to which all of your other
online activity will direct your prospects. A lot of the digital marketing techniques discussed in this book
are about generating traffic to your website but traffic in itself is worthless. To become valuable, traffic
must be converted and thats essentially what your website should be: a conversion engine for the
traffic being directed to it.
Search engine optimization (SEO): Part and parcel of the website is SEO, or the process of aligning
content on your website to what your prospects are actively searching for, and presenting it in a manner
that makes it accessible to both people and search engines. The organic or natural search results (the
results in the middle of the search engine results page) are the place to be if you want to increase
targeted traffic to your website.
Pay-per-click search advertising (PPC): Pay-per-click advertising offers you a way to buy your way on to
the search results pages for chosen keywords or key phrases. Depending on your business and what
keywords you want to rank for, this can be an extremely effective way of generating search engine
traffic quickly, although as the medium continues to gain in popularity more competitive keywords are
becoming prohibitively expensive for smaller businesses.
Affiliate marketing and strategic partnerships: how to partner with other organizations and websites in
mutually beneficial relationships to promote your products or services.
Online public relations: using online channels like press releases, article syndication and blogs to create
a positive perception of your brand and/or position you as an authority in your particular field.
Social networking: a relatively new marketing opportunity, but one that can potentially offer highly
targeted advertising to niche social groups based on profile information they volunteer through sites like
Facebook, MySpace and others.
E-mail marketing: the granddaddy of internet marketing, suffering something of a crisis in the wake of
perpetual spam bombardment, but still an important tool in the digital marketers arsenal, particularly
when it comes to maintaining ongoing relationships with existing customers and prospects whove
opted in to receive information.
Customer relationship management: Retaining existing customers and building mutually rewarding
relationships with them are another important element of digital marketing. Digital technology makes
developing an enduring connection with your customers more straightforward and effective than ever
before.

Eyes on the prize
Another crucially important area of a digital marketing strategy is setting realistic goals. The strategy
should explicitly define the business goals one wants the digital marketing efforts to help them achieve.
To measure the progress towards those goals, one also needs to set milestones along the way,
consistently measuring their achievements, and steering their digital campaign towards ultimate
destination. Here again the digital realm offers a raft of tools and techniques to help marketers reap a
better return from their investment.
The crucial thing to remember here is that digital marketing is an iterative process of continuous
improvement and refinement. One can monitor and analyze the effectiveness of their digital marketing
campaigns in practically real time. One can measure everything and even run alternative ads and
strategies side by side to see what works best before committing to a given course: test, refine, retest
and then decide where to make the investment based on real data from real customers.

Bringing it all together
Theres a lot to think about when defining your digital marketing strategy, but in the end the process is
about researching, analyzing and understanding three things that are crucial to your success: your
business, your competition and your customers. Your strategy lays the foundation for everything youll
do as a digital marketer, and will guide the decisions you make as you implement some of the
techniques outlined and choose not to implement others, precisely because they dont fit with your
chosen strategy.
Effective digital marketing is about boxing clever. You pick and choose the elements that are specifically
relevant to your business. Going through the process of defining a clear strategy, based on a thorough
analysis of where your business is now and where you want digital marketing to take it, puts you in the
ideal position to know whats likely to work for you and, just as importantly, what probably wont.