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Digital Marketing Fundamentals - From Strategy to ROI: Factsheet + Chapter 1 (full text) Book · January 2019

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Digital Marketing Fundamentals From Strategy to ROI

Marjolein Visser, Berend Sikkenga & Mike Berry 1st edition

Digital Marketing Fundamentals Marjolein Visser RM Berend Sikkenga SMP Mike Berry

First edition

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Noordhoff Uit gevers Groningen/Utrecht

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All rights reserved. No part of this publication may be reproduced, stored in aretrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. ISBN (ebook) 978-90-01-88713-1 ISBN 978-90-01-88712-4 NUR 802

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Preface

In 2010, when Marjolein Visser and Berend Sikkenga first asked each other whether it wasn’t time to write a book about digital marketing that covered the whole marketing process, we could not foresee that this adventure would be such a success. Since then, tens of thousands marketers have read the book and used the basic principles that we then formulated. And we did not anticipate that the success of our book would lead to this international (English language) edition in collaboration with Mike Berry. Mike is an expert in the field of digital marketing with extensive international experience and his valuable input opens the book up to a wider audience. We welcome Mike to the team.

© Noordhoff Uitgevers bv

The simple question for a book that covers digital marketing as a whole, has led to an intensive process thatwe have adopted over 8 years and 3 editions. How to create a book that is founded on the core principles of marketing, a solid scientific basis, but also shows the reader how to approach digital marketing in ’real-world’ practice?We decided to ask leading specialists in aspects of online marketing to write the book with us. So far, some forty top professionals have contributed to the book. We have consistently followed a process in which for each subject the scientific findings are compared with the experiential knowledge of specialists. This leads to an up-to-date theoretical framework that is directly linked to methods and instruments that have proven their worth in practice. The scientific basis has been streng thened still further over the years. The result turns out to fit well in with the frame of reference of both marketing professionals and academics and lecturers.An even greater compliment is that students experience the book as helpful, easily readable and inspiring. They also appreciate the many examples. We are very pleased with the contributions of all digital marketing specialists who have contributed to this publication. In addition we thank everyone who has provided us with examples and cases and of course the co-authors of the earlier editions. Without them this book would never have existed. We would like to specially place Tony Williams in the spotlight. It is great to have someone on the team who is not only an excellent translator, but also perfectly at home in the world of digital marketing. In the personal sphere we thank Maureen, Linde, Douwe and Jane: we are grateful for their understanding for all those hours that we spent behind our computer instead of with the people we love. Jasper and Maarten we thank for their supporting work. And, of course, a word of appreciation for our Publisher Bert Deen for his involvement and trust.

We hope to meet all readers soon in the groups for this Book: questions, trainer concepts and PowerPoints groups/13568788/): for tips, current events, research results and discussion groups/digital.marketing.fundamentals.book): for recent examples, new insights and information exchange and videos (www.pinterest.com/Marjolein Visser) For educators there is a special Dropbox folder available with additional study material. You can ask access via LinkedIn or Marjolein Visser: [email protected]. Marjolein Visser, Berend Sikkenga and Mike Berry

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© Noordhoff Uitgevers bv

Contents

1

Digital Marketing 11

1.1 1.2 1.3 1.4 1.5 1.6

Definition of Digital Marketing 11 Digital Marketing versus traditional marketing 13 Digital Marketing and the Marketing Mix 14 Digital Marketing in relation to business processes 16 Development of Digital Marketing 17 The outline of this book 19 Questions and assignments 21 Case: Digital Marketing at Marriott 21

2

Strategy and Business Models 25

2.1 2.2 2.3 2.4

Digital Marketing and Strategy 26 Marketing Strategy 29 The business model 32 Determining the Impact of Digital Marketing on New Internet Technology 51 Questions and assignments 56 Case: Cleartrip 58

3

Market Sensing 63

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9

Internet usage 64 Buying on the Internet 66 Use of social media 71 Relevant trends in Digital Marketing 75 Model for online consumer behaviour 82 Digital Marketing Funnel 90 Online Market Research 95 Big data and customer insights 105 Social media monitoring 113 Questions and assignments 115 Case: The rise of the power shopper 116

4

Product Realisation 121

4.1 4.2 4.3

The goal of the product realisation process is customer value 122 Co-creation 124 Product development, mass collaboration and crowdsourcing 126

Developing and setting up online products 130 Product improvement 151 Product realisation proceeds methodically 155 Questions and assignments 158 Case: BMW’s car-share programme in China 159

5

Customer acquisition: digital branding 163

5.1 5.2 5.3 5.4 5.5

Digital marketing communication: the basics 164 Role of digital marketing communication in brand management 176 Role of social media in digital branding 181 Viral marketing, video and games 189 Content marketing 195 Questions and assignments 204 Case: Digital Branding Patagonia 206

6

Customer Acquisition: recruiting visitors through owned or earnedchannels 211

6.1 6.2 6.3 6.4 6.5 6.6

Recruiting visitors for digital communication and sales channels 212 Search Engine 214 Link-building 220 Mobile marketing communication 233 Use of social media channels 246 Email marketing 257 Questions and assignments 271 Case: Samsung UK targets SMEs 272

7

Customer acquisition: recruiting visitors through paid channels 277

7.1 7.2 7.3 7.4 7.5

Digital marketing communication through paid channels 278 Paid Search (=Pay-Per-Click=PPC) 279 Online Display advertising 296 Advertising on social networks 315 Affiliate marketing 320 Questions and assignments 338 Case: Under Armour Ecommerce (Google Shopping) 338

8

Customer acquisition: sales and pricing 343

8.1 8.2 8.3

Online sales 344 Online sales advice 360 Online price determination 365 Questions and assignments 378 Case: A critical review of ASOS.com 379

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4.4 4.5 4.6

© Noordhoff Uitgevers bv

9

Order processing 385

9.1 9.2 9.3 9.4

Selection of distribution channels 386 Payments 391 Sub-processes of order processing 402 Online service 408 Questions and assignments 417 Case: IKEA focuses on customer experience and self-service 417

10

Customer relationship management 423

10.1 10.2 10.3 10.4 10.5

Digital customer relationship management 424 Working with customer groups 442 Increasing customer value 447 Individual value propositions 453 Social CRM 457 Questions and assignments 463 Case: Blue Water Mortgage uses marketing automation to retain customers and improve lifetime value 463

11

Designing effective websites 469

11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8

Effectiveness of a website and app 470 Influencing the visitor 473 Website usability 480 Web content and web text 484 Interaction and conversion 492 Effective landing pages 497 Content Management System 500 Search Engine Optimisation (SEO) 504 Questions and assignments 511 Case: A Webby for the Smithsonian National Museum of African American History and Culture 512

12

Digital analytics 517

12.1 12.2

Digital analytics: definition and starting points 518 The digital marketing funnel translated into performance indicators 521 Dif ferent traffic sources within digital analytics 530 The ABC Model: the digital marketing funnel 540 Recognising the phase that the visitor is in 543 Social media metrics 545 Web analytics in the organisation 548 Questions and assignments 552 Case: Digital Analytics in practice at Bonnington’s Irish Moss (Australia) 553

12.3 12.4 12.5 12.6 12.7

13

Planning and organisation 559

13.1 13.2 13.3 13.4

Organising digital marketing activities 560 Digital marketing plan 575 Project management 587 Legal aspects of digital marketing 599 Questions and assignments 609 Case: Online food delivery service Deliveroo 610 References 614 Illustrations 622 Index 625 About the authors 636

© Noordhoff Uitgevers bv

10

2 Strategy and business models

10 Customer relationship management

13 Planning and organisation

9 Order processing

8 Customer acquisition: sales and pricing

3 Market sensing 4 Product realisation

1 Digital marketing

7 Customer acquisition: paid channels

12 Digital analytics

5 Customer acquisition: digital branding 6 Customer acquisition: owned or earned channels

11 Designing effective websites

11

1Digital Marketing Author: Marjolein Visser

Over the past decades the framework of marketing has changed dramatically. Internet use has become part of the daily routine for most people. It has radically transformed the behaviour of consumers and business buyers. Knowledge of online consumer behaviour and Digital Marketing are vital to marketers. The modern marketer not only needs to know how Digital Marketing communication works; but also how he or she can make use of the Internet for the purpose of product realisation, market research or distribution. This first chapter will explain what Digital Marketing involves and which basic principles are adhered to in this book. The following chapters will describe the involvement of Digital Marketing within all of the other marketing related business processes. The last chapters of this book describe overarching subjects such as effective websites, digital/web analytics and the planning and organisation of the Digital Marketing process. After reading this chapter you will be able to:

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Marketing

§ 1.1

Definition of Digital Marketing Kotler and Armstrong (2013) define marketing as follows: ‘Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.’ Peter Drucker (1973), a famous management guru, defined the purpose of marketing as follows: ‘The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself’.

1

12

According to Kotler, marketing is an integrated process that companies use to create value for customers and to build strong customer relationships in return for a reciprocation of value from their customers. In many instances, products or services are traded for money, but alternative exchanges are also possible. For example, political parties that trade ideological representation of interests for votes or brands that trade interesting / valuable content for the user’s time and attention.

1

The Internet plays an ever-increasing role within the marketing process. Digital Marketing is a sub-process of marketing. Therefore, we can define Digital Marketing as a process in which organisations and existing or potential customers use the Internet to create value and products as well as interchange them. In this respect we do not discriminate between the various ways that the Internet is accessed and the device on which the Internet is viewed. Whether a computer or a smartphone is used is of importance to the applied technological methods, but not to the marketing principles. Internet marketing, online marketing and e-marketing are all synonyms for Digital Marketing. In this book, we will use ‘Digital Marketing’.

Ecommerce

Ebusiness

One frequently asked question remains: what is the difference between Digital Marketing, ecommerce and ebusiness? ecommerce refers to selling products or services over the Internet. Customers can complete transactions or submit changes using a website. This book considers ecommerce to be one of the possible options within Digital Marketing. Many organisations do approach their customers over the Internet, but don’t sell their products online. In this case it is a question of Digital Marketing communication, an element of Digital Marketing, but not of ecommerce. The authors of this book see ebusiness as a way of doing business with the assistance of digital technologies. Ebusiness is a wider concept than Digital Marketing and ecommerce. In ebusiness it’s not only about the interaction with markets, but about adequately establishing all of the processes that enable an organisation to make their products or provide their services. It’s about the front and the back of the organisation, the parts the customer does not come into contact with (see figure 1.1). Ecommerce is simply defined as ‘selling and buying online’. FIGURE 1.1 Ebusiness encompasses digital processes throughout the entire organisation and is more inclusive than Digital Marketing

Ebusiness

Market

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Digital marketing

DIGITAL MARKETING

§ 1.2

13

Digital Marketing versus traditional marketing Digital Marketing is becoming increasingly important. According to research conducted by consultancy firm Deloitte, marketing managers expect to spend two thirds of their media budget online by 2020 (Deloitte, 2017).

1

As a result of the growing number of possibilities regarding digitalisation and interactivity that the Internet facilitates, a number of marketers’ dreams have become reality. When used wisely, the Internet makes marketing more effective: marketing objectives can be met with less effort. Consider the following possibilities: more easily and simply met.

about potential customers. cases) be easily measured

Also, Digital Marketing can be more efficient than traditional marketing. For example: customers at low cost.

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fact that the effects of marketing communications are (in general) more easily measurable. The Internet has accelerated the transition from mass marketing to one-to-one marketing or individual marketing. The aim of individual marketing is to fully tailor products or marketing ef forts to the individual customer. Because the Internet allows for the customer’s individual data to be saved, communications has become increasingly ‘personalised’. The profile of the individual customer is recognised; thus, they receive a ‘personalised offer’, an individual proposition. That way a travel agency can offer a customer, who is recognised in their database as someone who likes to take his/her children to a theme park, a last-minute deal for Disneyland Paris. Simultaneously, an older couple that enjoy walking are offered a peaceful holiday in the Austrian Alps. The Internet makes individualised production easier. On the Internet, you can design T-shirts or greetings cards with a personalised image on them, You can even design your own brooch and have it printed in 3D. Digitised services mean users can seek advice or information at any time: even in the middle of the night you can ask your bank for a statement or pay a bill; the Internet and world wide web are ‘always-on’ 24/7. Individualised distribution of ordered goods or services is relatively cheap and of ten highly effective via the Internet. When you book a flight online for instance, you can either print your ticket yourself or access it on your smartphone via the airline’s own app. A package from Amazon.com is delivered to your doorstep the following day; you don’t have to go to the store for it; moreover, you get helpful messages regarding the status of your order.

One-to-one marketing Individual

Individual proposition

Individualised production

14

The website is at the centre of Digital Marketing. Websites can be classified as follows: Corporate sites

1

organisation and the various stakeholders, like customers, employees, press and shareholders. Ecommerce sites Selling sites

Communication sites

Lead generation sites Branding sites

be viewed and ordered; famous examples are Amazon....