Advantages and challenges of

digital marketing
Traditional marketing is marketing that isn't online. Marketers reach potential customers
through printed media, television, radio, direct mail, phone calls, or billboards. Digital
marketing is marketing that is exclusively online. Digital marketers focus on potential
customers who engage with online content, including search engine results, email, video,
blogs, or social media.

This reading describes the advantages digital marketing has over traditional marketing and
some definite challenges, too.

Digital marketing advantages

Digital marketing has certain advantages over traditional marketing because it:

 Reduces wasteful spending

 Adapts to new technologies

 Reaches target audiences with more precision

Spending

Digital marketing uses content in a variety of formats that can be easily converted from one
format to another, making spending more cost-effective. Digital marketing also reduces
wasteful spending. For example, television or billboard ads are equally seen by those who
have an interest in your company or product and those who don’t. Traditional marketing
always wastes some budget on people who will never buy a product or service. In contrast,
digital ads can be selectively shown to people who are more likely to have an interest in that
product or service. Digital marketing that is more strategically focused on the right people
yields a better return on spending.

Technology
Various technologies enable organizations to engage and interact with customers more
effectively, which is a big part of digital marketing. Developing a good online relationship with
customers makes them more likely to find your business, become loyal customers, and even
share their recommendations with others.

Digital marketing tools also enable companies to collect data and measure the results of their
marketing efforts more effectively. When marketers receive data faster, they’re able to
change direction easily if a marketing effort isn’t producing the results expected. Measuring
the success of digital marketing campaigns is key to ensuring that you get the results you
want.

Digital marketing adapts to new technologies. There are always new opportunities to reach
customers in different ways, especially compared to traditional marketing.

Target audiences

Digital marketing tools and data enable you to expand your customer reach well beyond that
of traditional marketing. Ad visibility and audience coverage can be tailored to meet your
specific business needs and goals. When you reach the right audiences, you’re more likely to
increase sales and develop sustainable customer loyalty programs.

Digital marketing challenges

Digital marketing also has certain challenges that are associated with spending, technology,
and target audiences. For each advantage previously identified, there are also associated
challenges.

Spending

Advantage: Digital content is easier to create.

Challenge: Organizations engage in omnichannel marketing—the integration or

synchronization of content on multiple channels—so customers can have a consistent brand
experience. This increases the amount of content required, so even if it’s easier to create
digital content, much more content needs to be created overall. Furthermore, it’s not just
about the amount of content created, but its quality. Advertising is a crowded space. Content
must be distinctive to positively impact customer awareness and change their behavior.
Advantage: Digital marketing is more cost-effective than traditional marketing.

Challenge: If an organization is working towards an omnichannel presence, the cost for

marketing on all channels adds up quickly. Getting support or buy-in for extra or additional
budget to cover the cost can be difficult.

Technology

Advantage: Digital marketing adapts to new technologies.

Challenge: As a marketer, learning and keeping up with new technologies and tools is a
constant requirement. Marketers must also stay up-to-date with and follow all user privacy
and data sharing regulations worldwide. Omnichannel marketing also makes it more difficult
to track where sales come from. Marketers must rely more heavily on analytics tools to help
them do that.

Target audiences

Advantage: Digital marketing tools expand customer reach using specific audiences.

Challenge: The digital space is a crowded field that’s getting even more crowded. It’s
harder for marketers to stand out with their advertising, even when they are targeting the
right audiences.

Key takeaways

Various technologies make digital marketing more cost-effective and adaptable than
traditional marketing. Digital marketing tools also enable more advanced and targeted
audience selection for marketing campaigns. However, these benefits come with some
challenges. In a digital space that’s both crowded and noisy, it’s harder for a company’s
brand and advertising to stand out. Marketing professionals must keep up with technological
advances and customer behaviors that change rapidly.
Inclusive marketing
As a digital marketer, being inclusive is an essential part of making deeper connections with
your customers. Inclusive marketing is the practice of improving representation and
belonging within the marketing and advertising materials that an organization creates.

In this reading, you’ll discover why inclusive marketing is important and how a company can
make inclusion part of their marketing and advertising strategies.

Why inclusive marketing matters

In digital marketing, the creative choices a company makes can impact how people view
themselves and how they view other people. Sometimes marketing campaigns (especially
those that are older or more traditional) can reinforce stereotypes and leave out the
perspectives of underrepresented groups of people. Inclusive marketing, on the other hand,
seeks to represent a variety of perspectives, particularly those that have been marginalized in
the past.

If a company focuses its marketing exclusively on a specific age group, gender, ethnicity, or
other identity traits, they’re likely missing out on reaching potential customers. By
approaching marketing decisions with a focus on inclusion, a company can positively and
authentically market to the diversity that exists in their audience, and the world.

Making inclusive choices and avoiding stereotypes

Digital marketing requires getting to know your audience in a deeper way. With inclusive
marketing, you can take this a step further by seeking to understand how parts of your target
audience have been excluded, stereotyped, or misrepresented in the past.

Sometimes you might unintentionally overlook certain aspects of diversity, even if you
remember to consider others. Here is a list of some identity traits that are helpful to keep in
mind when you’re creating marketing or advertising materials for the people you’re trying to
reach:

 Race
 Socioeconomic status
  Age
 Ability
 Gender
 Sexual orientation
 Religion
 Geographic location
 Culture
 Political perspective
 Military status
 Languages spoken

Gathering information about your audience’s demographics can help you broaden your
perspective. It’s also important to consider the demographics of people who are not currently
customers. These people may not use or even know about the products or services your
company provides because the company’s marketing efforts haven’t reached them. By
understanding their needs and desires, you can find a way to reach this group of people in a
manner that matters to them.

As an example, at least one billion people in the world live with a disability. If your product or
service isn’t accessible to these people, they likely don’t use or even know about your
product or service. And if your company’s marketing efforts don’t feature people with
disabilities or address their needs, they may not view your company’s products or services as
relevant to them.

That’s why it’s important to think deeply about your audience and their needs and to make
sure their perspectives and stories are brought to life through the company’s marketing and
advertising materials.

Key takeaways

Whether you’re developing marketing goals, researching your target audience, planning a
marketing campaign, or analyzing data, keep in mind the principles of inclusive marketing.
Maintaining a broader perspective of your audience will help you establish a deeper
connection with your customers.

What is a touchpoint?
You learned that before a purchase happens, each interaction with a brand during a customer
journey is called a touchpoint.

Customer journey map with touchpoints, including search, reading reviews, live chat, trial
subscription, email reminder, and purchase.

Touchpoints are important to monitor because they reveal the kinds of decisions customers
are making during their customer journey to purchase your product or service. Touchpoints
occur when a customer engages with your website or mobile app. But they also include
customer interactions on all media channels before a customer discovers your website.

This reading explains how to classify touchpoints for media channels, and how to use these
touchpoints to learn more about your customers.

Touchpoints relate to a specific context or need

When you identify touchpoints, you may be tempted to list social media or display ads. These
channels may be the mediums in which touchpoints occur, but actual touchpoints provide
much more information. When you identify a touchpoint, think about how the interaction
might satisfy a customer need.

For example, instead of classifying social media as a touchpoint, classify a customer’s

response to a flash sale announcement on Twitter as a touchpoint. When they click the link,
they are interested in knowing what they can purchase at a discounted price.

From the example, notice how much contextual information is lost if you simply lump every
social media interaction under a single touchpoint called social media.

Touchpoints have context and reflect customer needs. In the example, the context was
curiosity, and the need was saving money.
Touchpoints are customer-centric

Touchpoints should also be customer-centric. Going back to the previous example, imagine if
you viewed touchpoints from the perspective of the business instead of from the customer
experience. If increasing sales is a business goal, touchpoints can easily become part of a
rolling calculation, like a ratio of touchpoints to purchases.

While a ratio of touchpoints to purchases is still informative, notice how a customer-centric

versus a business-centric analysis can provide more insights about buyer motivations.

Key takeaways

Use touchpoints to your advantage. To get the most from touchpoints, carefully define them
for all media channels. Touchpoints that are customer-centric and relate back to their needs
will yield the most useful data about customer motivations, preferences, and behaviors.

The traditional marketing funnel

to the digital marketing funnel
A marketing funnel is a powerful way for businesses to focus and coordinate their marketing
efforts. To get the most out of a marketing funnel, businesses must optimize their work at
each stage of the funnel to reach desired outcomes.

The marketing funnel video in this course introduced you to a simple and generalized funnel
design with four stages:

 Awareness

 Consideration

 Conversion

 Loyalty
You also learned that there are multiple versions of marketing funnels. Marketing funnels
have been revised over time to reflect changes in business, technology, and even customer
behavior. This reading provides a brief history of the funnel’s evolution.

Evolution of the marketing funnel

How is tofu related to a marketing funnel? Actually, ToFU (not the bean curd product) is an
acronym for Top of Funnel. There’s also MoFU and BoFU which stand for Middle of Funnel
and Bottom of Funnel, respectively. When using any funnel, the aim is to get the most
desirable outcomes for ToFU, MoFU, and BoFU. As you read about different funnel designs,
you can also think about how the desired ToFU, MoFU, and BoFU outcomes for each are
similar or different.

Traditional sales funnel

Funnels probably took shape first as sales funnels. A simple sales funnel has awareness,
interest, decision, and action stages as depicted in the following graphic.
Desirable outcomes for a sales funnel, like the one shown in the graphic, might be:

 Awareness (ToFU): The customer has a general awareness of your brand,

product, or service.

 Interest (MoFU): Your brand, product, or service comes up as a top choice when
the customer researches, comparison shops, or thinks about options.

 Decision (MoFU): The customer chooses your brand, product, or service over
your competitor’s.

 Action (BoFU): The customer purchases your brand, product, or service.

Combined marketing and sales funnel

Most likely, combined funnels for marketing and sales grew out of sales funnels. One example
is shown below.
Funnel with Traditional and Digital Marketing inputs at the top of the funnel and Awareness,
Interest, Desire, Action, and Conversion as downward-progressing stages of the funnel.

Desirable outcomes for a combined sales and marketing funnel, like the one shown in the
graphic, might be:

 Awareness (ToFU): The customer has a general awareness of your brand,

product, or service.

 Interest (MoFU): Your brand, product, or service comes up as a top choice when
the customer researches, comparison shops, or thinks about options.

 Desire (MoFU): The customer has motivation or an incentive to purchase your

brand, product, or service.

 Action (BoFU): The customer purchases your brand, product, or service for the
first time.

 Conversion (BoFU): The customer makes regular purchases and a customer

relationship is established.

Digital marketing funnel

As business and technology evolved, more specialized funnels were then developed, as in the
case of a funnel entirely dedicated to digital marketing. An example of a specialized digital
marketing funnel is shown below. Note that the Remarketing stage of the funnel is only for
customers who engaged with your brand, product, or service at least once before and didn’t
previously convert. New customers can proceed directly from the Consideration stage to the
Conversion stage.

Funnel with Awareness and Engagement, Consideration, Remarketing, Conversion, and

Retention as downward-progressing stages of the funnel.

Desirable outcomes for a digital marketing funnel, like the one shown in the graphic, might
be:

 Awareness and engagement (ToFU): The customer has a general

awareness of your brand, product, or service, and engages in online activity to learn
more.

 Consideration (MoFU): Your brand, product, or service comes up as a top

choice after the customer has engaged.

 Remarketing (MoFU): The customer who didn’t convert is re-engaged to

consider your brand, product, or service again.

 Conversion (BoFU): The customer purchases your brand, product, or service for
the first time.
  Retention (BoFU): The customer makes regular purchases and a customer
relationship is established.

Other marketing funnel variations

Today, specific funnels exist for many individual areas of marketing. Examples include an e-
commerce marketing funnel, a social media marketing funnel, and even a content marketing
funnel.

E-commerce marketing funnel

An e-commerce marketing funnel can include the following stages that focus on attracting
and retaining customers:

 Awareness: Build awareness of your e-commerce business.

 Consideration: Build the brand.

 Differentiation: Stand out in the business category.

 Purchase: Reach shoppers most likely to purchase.

 Brand readiness: Increase the potential for shoppers to make return purchases.

Social media marketing funnel

A social media marketing funnel can include these stages that turn a customer with brand
awareness into a customer who is an advocate:

 Awareness: Attract potential customers unaware of your brand, product, or

service.

 Consideration: Stand out among your competitors so potential customers have a

good impression of your brand, product, or service.

 Action: Convince potential customers to act and make a purchase.

 Engagement: Keep customers engaged after they make a purchase so your

brand, product, or service remains top-of-mind and in the spotlight.

 Advocacy: Build trust with customers so they recommend your brand, product, or
service to others.
Content marketing funnel

A content marketing funnel can include these stages to help marketers organize and focus
their content:

 Awareness: Build web pages, blogs, social media posts, infographics, and
podcasts.

 Evaluation: Focus on surveys, email, webinars, and educational events.

 Conversion: Provide customer success stories, webinars, specifications, and

demos.

Key takeaways

The key takeaways for funnels are:

 There isn’t a single funnel that fits all needs.

 Funnels are created for general sales and marketing needs.

 Funnels are also created for specialized areas of marketing.

 Effective marketing efforts incorporate funnels to optimize desired outcomes.

Finally, as a reminder, although this reading introduced a variety of funnels, the marketing
funnel that you will refer to often in this program is the one shown below.
Case study: How MERSEA
structures its marketing funnel
Previously, you learned about the different stages of the marketing funnel. In this case study,
you’ll learn the marketing strategies that the Lenexa, Kansas based e-commerce company,
MERSEA, uses to attract potential customers, turn them into paying customers, and
eventually repeat customers. This process represents MERSEA’s approach to the marketing
funnel.

There is no standard approach to building a marketing funnel. The various marketing funnel
models often share similar strategies and structures, but vary based on the needs of the
business.
Company background
In 2013, Lina Dickinson and Melanie Bolin founded MERSEA, a lifestyle brand located in
Lenexa, Kansas, offering clothing, accessories, and home fragrances. MERSEA’s products are
rooted in the joy of travel and the tranquility of seaside escapes. Initially, Lina and Melanie
focused on selling through retail partners, placing MERSEA in over 1,200 stores.

The challenge

After having a solid presence in retail stores, MERSEA’s founders wanted to increase their e-
commerce sales. The challenge MERSEA faced is like many other e-commerce businesses:
acquiring new customers online and turning them into repeat customers. This is the core of
its marketing funnel.

Imagine the perspective of a business owner. You have a functional online store. But, how can
you get potential customers to visit the online store? And, after attracting customers, how can
you encourage those customers to revisit the store and become repeat customers?

The approach

To get the MERSEA brand and product offering in front of its ideal customers, Lina and
Melanie used a mix of marketing strategies such as online paid advertising, email marketing,
social media marketing, and text messaging.

It’s important to note that MERSEA is not implementing all these strategies with its own
employees. They hired an outside marketing company to assist with Google Ads. Working
with a marketing company outside of the business allows the founders and its employees to
focus on what they’re best at, creating outstanding products.

For busy business owners, it may be beneficial to hire outside of the company to complete
tasks, particularly for marketing strategies that require more technical skills. For example,
Google Ads requires a knowledge of its platform and how to interpret its metrics.

Organized by marketing funnel stages, here are some marketing strategies MERSEA uses:

Awareness

For the awareness stage, MERSEA uses online ads including Google Ads and Facebook Ads.
There are several types of Google Ads MERSEA uses. For example, the company uses Search
ads for brand name and product searches. It also uses Shopping ads for specific types of
products, such as “kimono sweater.” For the Facebook Ads, MERSEA advertises to potential
customers from lifestyle-based targeting.

Both of these ads help get the MERSEA brand and products in front of those searching and
interested in their type of products.

Consideration
During the consideration marketing funnel stage, MERSEA continues to apply online
advertising, and also uses social media marketing and email marketing.

For online advertising, a marketing strategy MERSEA uses is delivering ads to people who
previously visited their website. This is called remarketing. After the customer visits the
website, they then receive ads specifically for the products they viewed. This type of
advertising is in the consideration stage because the remarketing ads build interest in the
potential customer.

For social media marketing and email marketing, MERSEA tells stories about products and
introduces potential customers to the brand.

Conversion

MERSEA is continually working to improve the conversion stage of its marketing funnel. One
strategy it uses is following up with customers who have abandoned their carts. An
abandoned cart is when a customer adds an item to their cart in an online store but does not
make a purchase. If the customer enters their email during the checkout process, but doesn’t
make a purchase, MERSEA automatically sends follow up emails reminding the customer
about the product in their cart. This follow-up leads to an increase in the conversion rate.

Loyalty

During the loyalty stage, MERSEA turns its paying customers into repeat customers.

After making a purchase, the customer receives emails about additional and newly released
products they may be interested in. These emails are typically sent twice a week: one during
the week and another during the weekend.

In addition, one unique strategy MERSEA uses to build loyalty is through text messaging. It
has success with sending text messages for order delivery confirmation and updates. When
done well, this texting strategy creates a more personal relationship with customers.

The results

While MERSEA’s success starts with its quality and fashionable products, its well-functioning
marketing funnel approach contributes to its success. Within two years of focusing on e-
commerce and building an online marketing funnel, MERSEA increased its online sales from
10% to 45%.

Additionally, because of the satisfied customers and the well-developed loyalty stage of its
marketing funnel, around 50% of MERSEA’s customers are returning customers.

Conclusion

There is no one correct way to structure a marketing funnel. A key to a successful funnel is
trying and testing new ideas. MERSEA has been successful with its online marketing efforts
because it didn’t simply set up an e-commerce store. MERSEA built a marketing funnel to
complement it.

A well-made product is important, but a well-rounded marketing approach helps sell the
product. A mix of the right marketing strategies drives customers through the funnel. The
customers go from unaware of the brand to interested to first-time customers to repeat
customers.

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The future of e-commerce
Since the web first ushered in a new era of e-commerce, marketplaces, payment services, and
massive scaling of shipping and distribution networks have made e-commerce successful.
This reading considers how e-commerce might change over the next decade.

Future trends for e-commerce

No one can say for sure which innovations today will be used tomorrow. However, a few e-
commerce trends stand out:

 Specialization of smaller retailers

 Immersive customer experiences

 Distribution and delivery innovations

Specialization of smaller retailers

Large online marketplaces and retailers will still probably account for most online purchases.
Smaller retailers may increasingly become more specialized by offering highly customizable
products, niche product categories not offered by the larger retailers, and more personalized
service.

Immersive customer experiences

Today, many customers still like to go to a physical store because they want to handle or try
on an item before they buy it. Virtual and augmented reality can provide immersive
experiences online so customers feel like they’ve handled an object or tried on a garment
without actually making a trip to the store.
Virtual reality (VR) is fully immersive. By putting on a VR headset, users are able to
view a simulated physical world with audio-visual feedback. Imagine putting on your headset
and going to the virtual dressing room to try on clothing items before buying them. That is an
example of a VR experience.

Augmented reality (AR) is semi-immersive. Users may not need to enter a simulated
physical world. AR adds audio-visual feedback to your existing world. What if you could
automatically view sunglasses in your shopping cart overlaid on a virtual image of yourself on
your phone? What if it saved items from any e-commerce store so you could “try them on”
again? This would be an AR solution to shopping at different stores in person.

Chatbots are computer programs designed to simulate conversation with human users.
They can ask you if everything is fine and if you need help. This would be an online version of
a sales associate asking you the same questions in a physical store. Artificial intelligence (AI)
and machine learning by chatbots using data from actual conversations may improve the
overall experience for shoppers.

Distribution and delivery innovations

You might have heard or read about the possibility of drones or self-driving vehicles making
the last-mile trip between a warehouse and a residential home or office. These methods of
distribution and delivery may be commonplace in the next ten years.

Key takeaway

No matter which technologies end up being adopted over the next ten years, e-commerce will
continue to grow, and our daily lives and habits will change, too.

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Glossary terms from module 2
Terms and definitions from Course 1, Module 2

Awareness stage: The first stage of the marketing funnel, when a potential customer
first becomes aware of the product or service

Consideration stage: The second stage of the marketing funnel, when a potential
customer's interest builds for a product or service

Conversion: The completion of an activity that contributes to the success of a business

Conversion rate: The percentage of users or website visitors who completed a desired
action, such as clicking on a link in an email or purchasing a product

Conversion stage: The third stage of the marketing funnel, when marketers capitalize
on the interest people have already shown

Customer journey: The path customers take from learning about a product, to getting
questions answered, to making a purchase

Customer journey map: A visualization of the touchpoints a typical customer

encounters along their purchase journey

Frequency: How many times an individual encounters an ad in a given timeframe

Impressions: The total number of times an ad appears on people’s screens

Inclusive marketing: The practice of improving representation and belonging within

the marketing and advertising materials that an organization creates

Lead: A potential customer who has interacted with a brand and shared personal
information, like an email address
Local search: A search query that generates local-based search results

Local SEO: Optimizing content so that it displays in Google's local search algorithms

Loyalty stage: The fourth stage of the marketing funnel, when customers become
repeat customers and brand advocates

Marketing funnel: A visual representation of the process through which people go from
learning about a brand to becoming loyal customers

Omnichannel: The integration or synchronization of content on multiple channels

Pain points: Problems customers want to solve

Reach: The total number of unique individuals who encounter an ad across their different

devices

Target audience: The group of people most likely to purchase a company's products;
often defined as the combination of customer personas

Touchpoint: Any interaction a customer has with a brand during their purchase journey

Terms and their definitions from previous module(s)

Agency: An outside partner that fulfills a company’s digital marketing and advertising
needs

Business-to-business (B2B): Refers to when businesses sell products or services to

other businesses (when businesses purchase from each other)

Business-to-consumer (B2C): Refers to when businesses sell products or services to

consumers (when consumers purchase from businesses)
C

Consumer-to-business (C2B): Refers to when individuals (consumers) sell products

or services to businesses (when businesses purchase from consumers)

Consumer-to-consumer (C2C): Refers to when individuals (consumers) sell

products or services to other consumers (when consumers purchase from each other)

Digital channel: Any communication method or platform a business can use to reach
their target audience online

Digital marketing: The practice of reaching consumers online through digital channels
with the aim of turning them into customers

E-commerce: The buying and selling of goods or services using the internet

Engagement marketing: (refer to experiential marketing)

Experiential marketing: The process of encouraging consumers to not only purchase

a brand or product, but to experience it

Influencer marketing: The process of enlisting influential people to endorse or

mention a brand or product to their followers on social media

In-house: Within a single company

Social media marketing: The process of creating content for different social media
platforms to drive engagement and promote a business or product
T

Transferable skills: Skills from other areas that can help someone progress a career in
marketing

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