MBA 563
Marketing Technology
Introduction
The impact of the internet on
marketing
Week 1
What is internet marketing?
• Online marketing/ eMarketing / digital marketing
/ web marketing / internet marketing?
• The application of the internet and related digital
technologies in conjunction with traditional
communications to achieve marketing objectives
……Dave Chaffey
http://www.smartinsights.com/digital-marketing-strategy/online-marketing-mix/definitions-of-emarketing-vs-internet-vs-digital-marketing/
Why study internet marketing?
• Over the past 20 years traditional marketing practices have
been transformed
– October 27, 1994 – first banner ad
– Digital marketing continues to grow and attract marketing dollars
– The influence of Web 2.0 in the late 90s and early 2000s, product
digitization, and now the impact of mobile computing
– Continuing strong growth in business-to-consumer and business-tobusiness eCommerce
• New skills, knowledge and strategies in high demand in the
business world – very strong demand in this area
• Marketers need to understand technology and collaborate
with IT colleagues
TECHNOLOGIES USED IN
MARKETING
Some technologies used in marketing
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Web (HTML 5 / CSS 3)
Instant messaging
SMS (Text messaging)
“over-the-top” messaging via data (eg. Viber, WhatsApp)
Voice and Video over IP (VOIP)
eMail
P2P file exchange / streaming technologies
Location-awareness / location based services (LBS)
Mobile Apps (native to mobile operating systems)
Augmented Reality (AR)
Near-field communication (NFC)
iBeacon and Bluetooth Low Energy
Virtual reality (VR)
Voice and image recognition
Consumer Devices
• Mobile
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Cell phones and smart phones
eReaders
Tablets
Wearables (glasses, watches, rings, bands, tattoos etc)
• Desktop
– Personal computers (desktop and laptop)
– Gaming consoles
– VR/AR headsets and motion detectors
• Internet of Things (IoT)
THE ONLINE MARKETING TOOLBOX
The online marketing toolbox. Owned, earned or paid?
Blogging
Video
Mobile
Interactive
display
advertising
Twitter
General
social
networks
The
internet
marketing
toolbox
Niche social
networks
Search engine
optimization
Search
advertising
eMail
AR, VR
The importance of distinguishing
between owned, earned, and paid
media
• When selecting tools for a marketing activity
we have to look for three distinct aspects of
those tools
• Different purpose and return on investment
for each
“Owned” media
•
Owned media: “media
owned by the brand.
Online this includes a
company’s own
websites, blogs, mobile
apps or their social
presence on Facebook,
LinkedIn or Twitter
[etc]” Dave Chaffey
One of Dell’s
twitter
accounts
Starbucks on
Pinterest
“Earned” media
• Earned media: “Earned media
also includes word-of-mouth
that can be stimulated through
viral and social media marketing
and includes conversations in
social networks, blogs and other
communities.” Dave Chaffey
Comments posted to the
Skyrim Reddit pages (not
owned by Bethesda)
Liking, sharing,
and commenting
on a Starbucks’
Facebook post
Instagram
sponsored
post
“Paid” media
•
Paid media: “media
where there is
investment to pay for
visitors, reach or
conversions” Dave
Chaffey
Twitter
promoted
account
Google
Adwords
PPC
advertising
Owned, earned & paid media – the
overlaps
http://www.smartinsights.com/digital-marketing-strategy/customeracquisition-strategy/new-media-options/
Owned, earned and paid media: role,
benefits & challenges
http://www.smartinsights.com/digital-marketing-strategy/customer-acquisitionstrategy/new-media-options/
The bigger
picture of
internet
marketing
Planning and
management
Email /
messaging
Domains,
usernames,
hashtags
Being
found
Demographics
Market research
Advertising
Own
Website
Social
media
(owned
&
earned)
Content &
technologies
Text, video,
images, AR, VR
Analytics,
Data
management
Law,
Regulation,
ethics
THE 4PS IN TRANSITION
The impact of the Internet on the traditional
marketing mix framework
• Product – new products, the rise
of the “prosumer”
• Price – dynamic pricing,
comparison pricing,
bidding……..FREE!
• Place – direct distribution of
digital products, supply chain
management, channel integration
• Promotion – new social and
communications media,
measurable advertising
• Strong trend towards
personalization and away from
the mass (undifferentiated)
market affecting all the elements
of this framework
• The Six “I”s Framework
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Interactivity
Intelligence (market)
Individualization
Integration
Industry restructuring
Independence of
location
MacDonald and Wilson. The New
Marketing, 2002
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Interactivity
• The internet is not TV
• Conversation, not broadcast
• Pull, not push
• Active rather than passive (lean-forward medium)
• Social Networking / User Generated Content
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
[Market] Intelligence
• By the very act of using the internet, we are
“telling” marketers what we want:
• Passively
• Clickstream data
• Web analytics
• Actively
• Social network updates, photos, videos, reviews, forum
postings etc
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Individualization
Same message to all customers or
segments
Traditional
media
Message tailored to each customer or micro-segment
New
media
• The market of
one: based on
the information
about customers
that we provide,
and that is
collected
automatically
and monitored
constantly
• Amazon for
example
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Integration
• Online marketing is very readily integrated
into a marketing communications strategy
• Web channels complement and integrate with
offline marketing channels
– EXAMPLES?
• Call a customer service rep for assistance
• Movie trailers on YouTube
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Industry restructuring and
Independence of location
INDUSTRY RESTRUCTURING
• Disintermediation –
traditional
intermediaries used by
marketers disappearing
• Re-intermediation new
intermediaries (eg.
PayPal)
• Business models
challenged
LOCATION INDEPENDENCE
• Increased reach to
global markets
• Increased exposure
• Increased competition
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Product trends online
• Digital value – adding value to products
through online means
• Digitization – product or place?
• Personalization – individualized products and
the “prosumer”
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Digital goods distribution
• Any product that can be digitized can be delivered
over the Internet
• Online distribution costs are significantly lower
– No inventory problems
– No product depletion
• Completely new business models based on digital
distribution methods
• Internet becomes a direct substitute for an offline
distribution channel eg. online banking
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Some industries that are undergoing rapid
change due to Internet forces affecting
product and place
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Recorded Music industry
Video/DVD rental industry
Newspaper and magazine publishing
Banking
Book publishing
Textbook publishing
• Forces for change:
– Digitizable product
– Self service
– Direct to consumer shift
– Personalization
Pricing
• Internet influences – buyer and seller
perspectives of price
• Moving from free to fee (and freemium)
• Price comparisons / transparency
• Dynamic pricing
Source: eMarketing eXcellence. 2012.
Smith &Chaffey
Online promotion
• We will look at the many new techniques
available to marketers to promote goods and
services online
• The big value of internet marketing – ability to
measure results and therefore performance
based
Source: eMarketing eXcellence. 2012.
Smith &Chaffey