Brief contents

Preface xiii
About the authors xxiv
Acknowledgements xxv

Part 1 Digital marketing fundamentals 2

1 Introducing digital marketing 4

2 Online marketplace analysis: micro-environment 54
3 The online macro-environment 118

Part 2 Digital marketing strategy development 174

4 Digital marketing strategy 176

5 The impact of digital media and technology on the marketing mix 248
6 Relationship marketing using digital platforms 298

Part 3 Digital marketing: implementation and practice 352

7 Delivering the online customer experience 354

8 Campaign planning for digital media 418
9 Marketing communications using digital media channels 476
10 Evaluation and improvement of digital channel performance 548
11 Business-to-consumer digital marketing practice 592
12 Business-to-business digital marketing practice 622

Glossary 649
Index 679
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Contents

Preface xiii Summary 49

About the authors xxiv Exercises 49
Acknowledgements xxv Self-assessment exercises 49
Essay and discussion questions 50
Examination questions 50
Part 1 Digital marketing References 50
fundamentals 2 Weblinks 52

1 Introducing digital marketing 4

Learning objectives / Questions for marketers /
2 Online marketplace analysis:
Links to other chapters 4 ­micro-environment 54
Introduction – how have digital technologies Learning objectives / Questions for marketers /
transformed marketing? 6 Links to other chapters 54
Digital marketing in practice Introduction 56
The Smart Insights interview: Nick Dutch, Situation analysis for digital marketing 56
Head of Digital at Domino’s Pizza 9 Digital marketing in practice
Definitions – what are digital marketing and The Smart Insights interview: Michael Welch of
multichannel marketing? 11 Blackcircles.com 57
Paid, owned and earned media 11 The digital marketing environment 59
The growing range of digital marketing platforms 12 Understanding customer journeys 61
Introduction to digital marketing strategy 16 Customer analysis 68
Key features of digital marketing strategy 16 Demand analysis and implications for
Applications of digital marketing 16 marketing planning 69
Benefits of digital marketing 17 Implications for marketing planning:
Alternative digital business models 20 conversion models 69
What is the difference between e-commerce Consumer choice and digital influence 72
and e-business? 22 Consumer transactions 74
Different forms of online presence 24 Online consumer behaviour and implications for
Challenges in developing and managing digital marketing ­marketing 76
strategy 25 Customer characteristics 76
A strategic framework for developing a digital marketing Consumer personas 79
strategy 27 The buying process 79
Introduction to digital marketing communications 29 Competitors 88
The relationship between digital and traditional The shape and nature of online competitive markets 88
communications 30 Competitor analysis and benchmarking 91
Using digital media channels to support Suppliers 93
business objectives 31 Online marketing intermediaries 94
The key types of digital media channels 32 Portals 96
Different types of social media marketing tools 34 New channel structures 96
Benefits of digital media 37 Business models for e-commerce 99
Key challenges of digital communications 43 Revenue models 103
Key communications concepts for digital marketing 43 Case study 2
Case study 1 Boo hoo – learning from the largest European
eBay thrives in the global marketplace 46 dot-com failure 108
viii Contents

Summary 111 3 Brand and trademark protection 159

Exercises 112 4 Intellectual property rights 161
Self-assessment exercises 112 5 Contract law 162
Essay and discussion questions 112 6 Online advertising law 163
Examination questions 112 Social forces 164
References 113 Social exclusion 164
Weblinks 116 Cultural forces 165
Environmental and green issues related to Internet usage 165
3 The online macro-environment 118 Case study 3
Learning objectives / Questions for marketers / Zopa launches a new lending model 167
Links to other chapters 118 Summary 169
Introduction 120 Exercises 169
Digital marketing in practice Self-assessment exercises 169
The Smart Insights interview: Fred Bassett of Essay and discussion questions 170
Blue Latitude 121 Examination questions 170
The rate of environment change 123 References 170
Technological forces 123 Weblinks 172
A short introduction to Internet technology 123
URL strategy
How does the Internet work?
125
125
Part 2 Digital marketing
Infrastructure components of the Internet 126 strategy development 174
Web page standards 126
Text information – HTML (Hypertext Markup Language) 127 4 Digital marketing strategy 176
Text information and data – XML (eXtensible Markup Learning objectives / Questions for marketers /
Language) 127 Links to other chapters 176
Graphical images (GIF, JPEG and PNG files) 128 Introduction 178
Animated graphical information (Flash and plug-ins) 128 Digital marketing strategy as a channel marketing strategy 178
Audio and video standards 128 The scope of digital marketing strategy 179
The difference between the Internet, intranets Digital marketing in practice
and extranets 129 The Smart Insights interview: Sajjad Bhojani
Web application frameworks and application servers 129 of Dunelm 182
Digital security 130 The need for an integrated digital marketing strategy 184
Approaches to developing secure systems 133 How to structure a digital marketing strategy 186
Technology convergence 135 Situation analysis 190
SMS messaging and applications 135 Internal audit for digital marketing 191
Mobile apps 136 Customer research 192
QR codes 137 Resource analysis 192
Wi-Fi 137 Stage models of the digital marketing capability 193
Bluetooth wireless applications 138 Competitor analysis 194
Emerging technologies 138 Intermediary analysis 194
Assessing the marketing value of technology innovation 139 Assessing opportunities and threats 195
Economic forces 142 Setting goals and objectives for digital marketing 196
Market growth and employment 142 The online revenue contribution 200
International market growth and emerging economies 143 Setting SMART objectives 203
Economic disruption 143 Frameworks for objective setting 205
Political forces 144 Strategy formulation for digital marketing 208
Political control and democracy 145 Decision 1: Market and product development strategies 210
Internet governance 145 Decision 2: Business and revenue models strategies 213
Taxation 145 Decision 3: Target marketing strategy 215
Tax jurisdiction 146 Decision 4: Positioning and differentiation strategy
Legal forces 147 (including the marketing mix) 220
Legal activities can be considered unethical 147 Decision 5: Customer engagement and social
1 Data protection and privacy law 148 media strategy 223
2 Disability and discrimination law 159 Decision 6: Multichannel distribution strategy 225
 Contents ix

Decision 7: Multichannel communications strategy 228 Self-assessment exercises 293

Decision 8: Online communications mix and budget 231 Essay and discussion questions 293
Decision 9: Organisational capabilities (7S framework) Examination questions 293
and governance 232 References 294
Strategy implementation 236 Weblinks 297
Assessing different Internet projects 236
The online lifecycle management grid 238 6 Relationship marketing using
Case study 4 digital platforms 298
Tesco online development strategy supports Learning objectives / Questions for marketers /
global expansion 239 Links to other chapters 298
Summary 242 Introduction 300
Exercises 242 From e-CRM to social CRM 302
Self-assessment exercises 242 Structure of this chapter 303
Essay and discussion questions 243 Digital marketing in practice
Examination questions 243 The Smart Insights interview:
References 243 Guy Stephens of IBM 304
Weblinks 246 The challenge of customer engagement 308
Benefits of using e-CRM to support
5 The impact of digital media and customer engagement 308
technology on the marketing mix 248 Marketing applications of e-CRM 311
Learning objectives / Questions for marketers / CRM technologies and data 311
Links to other chapters 248 Customer lifecycle management 311
Introduction 250 Permission marketing 313
What is the marketing mix? 250 ‘Right touching’ through developing online
Digital marketing in practice contact strategies 319
The Smart Insights interview: Roberto Hortal 252 The ‘emotionally unsubscribed’ email list members 320
Product 255 Personalisation and mass customisation 322
1 Options for varying the core product 256 Using digital media to increase customer
2 Options for offering digital products 257 loyalty and value 324
3 Options for changing the extended product 258 Determining what customers value 324
4 Conducting research online 259 The relationship between satisfaction and loyalty 325
5 Velocity of new product development 260 Measuring the voice of the customer in
6 Velocity of new product diffusion 260 digital media 327
The long tail concept 261 Differentiating customers by value and engagement 328
Branding in a digital environment 262 Lifetime value modelling 331
Price 267 Recency–frequency–monetary value (RFM) analysis 335
1 Increased price transparency 269 The ‘Big Data’ concept 339
2 Downward pressure on price 270 Product recommendations and propensity modelling 340
3 New pricing approaches (including auctions) 274 Applying virtual communities and social
4 Alternative pricing structure or policies 276 networks for CRM 340
Place 277 Marketing to consumers using independent
1 Place of purchase 277 social networks 343
2 New channel structures 280 Customer experience – the missing element
3 Channel conflicts 281 required for customer loyalty 343
4 Virtual organisations 282 Case study 6
Promotion 284 Dell gets closer to its customers through
People, process and physical evidence 285 its social media strategy 344
People 286 Summary 347
Process 288 Exercises 347
Physical evidence 288 Self-assessment exercises 347
Case study 5 Essay and discussion questions 347
Spotify streaming develops new revenue models 290 Examination questions 348
Summary 293 References 348
Exercises 293 Weblinks 350
x Contents

Part 3 Digital marketing: Summary

Exercises
412
413
implementation and practice 352 Self-assessment exercises 413
Essay and discussion questions 413
7 Delivering the online customer Examination questions 413
experience 354
References 414
Learning objectives / Questions for marketers / Weblinks 416
Links to other chapters 354
Introduction 356 8 Campaign planning for
Creating effective digital experiences 356 digital media 418
Structure of the chapter 359 Learning objectives / Questions for marketers /
Digital marketing in practice Links to other chapters 418
The Smart Insights interview: Ben Jesson and Introduction 420
Karl Blanks of agency Conversion Rate Experts 360 The structure of this chapter 421
Planning website design and redesign projects 362 Digital marketing in practice
Who should be involved in a website project? 364 The Smart Insights interview:
Prototyping and agile software development 366 Mike O’Brien of the Jam Partnership 422
Initiation of the website project 370 The characteristics of digital media 424
Domain name selection and registration 370 1 From push to pull 424
Uniform resource locators (URLs) 371 2 From monologue to dialogue to trialogue 424
Selecting a hosting provider 372 3 From one-to-many to one-to-some and one-to-one 425
Website performance optimisation 372 4 From one-to-many to many-to-many
The availability of the website 373 communications 426
Defining site or app requirements 374 5 From ‘lean-back’ to ‘lean-forward’ 427
Business requirements 374 6 The medium changes the nature of standard
Usability requirements 375 marketing communications tools such
Web accessibility requirements 378 as advertising 427
Localisation 379 7 Increase in communications intermediaries 428
Reviewing competitors’ websites 380 8 Integration 428
Designing the information architecture 381 9 Timing of campaign communications have
Card sorting 382 additional ‘always-on’ and real-time marketing
Blueprints 383 components 428
Wireframes 383 Step 1. Goal setting and tracking for
Landing pages 386 interactive marketing communications 432
Designing the user experience 388 Terminology for measuring digital campaigns 432
Evaluating designs 389 Examples of digital campaign measures 436
Elements of site design 389 Campaign response mechanisms 438
Mobile design considerations and techniques 391 Step 2. Campaign insight 441
Site navigation schemes 395 Customer insight for digital marketing campaigns 442
Development and testing of content 400 Step 3. Segmentation and targeting 443
Criteria for selecting a content management system 400 Step 4. Offer, message development and creative 447
Testing the experience 401 Focus on content marketing 449
Online retail merchandising 402 Step 5. Budgeting and selecting the
Site promotion or ‘traffic building’ 404 digital media mix 451
Service quality 404 1 Level of investment in digital media techniques in
Tangibles 407 comparison to offline promotion 451
Reliability 407 2 Selecting the right mix of digital media
Assurance 407 communications tools 454
Multichannel communications preferences 407 3 Level of investment in digital assets 460
Empathy 408 Step 6. Integration into overall media
The relationship between service quality, customer schedule or plan 463
satisfaction and loyalty 410 Planning integrated marketing communications 463
Case study 7 Key activities in media selection and planning 464
Refining the online customer experience Case Study 8
at i-to-i.com 410 A short history of Facebook 468
 Contents xi

Summary 472 Viral marketing 529

Exercises 472 Advantages and disadvantages of social media
Self-assessment exercises 472 and viral marketing 532
Essay and discussion questions 472 Best practice in planning and managing viral marketing 534
Examination questions 473 Offline promotion techniques 535
References 473 Advantages and disadvantages of using offline
Weblinks 475 communications to support e-commerce 536
Incidental and specific advertising of the
9 Marketing communications online presence 537
using digital media channels 476 Public relations 537
Learning objectives / Questions for marketers / Direct marketing 538
Links to other chapters 476 Other physical reminders 538
Introduction 478 Word-of-mouth marketing 538
How is this chapter structured? 478 Case study 9
Digital marketing in practice Innovation at Google 539
The Smart Insights interview: Kate Webb, Summary 541
online marketing manager at Vision Express 480 Exercises 543
Search engine marketing 484 Self-assessment exercises 543
What is SEO? 485 Essay and discussion questions 543
Advantages and disadvantages of SEO 488 Examination questions 543
Best practice in planning and managing SEO 489 References 544
Paid search marketing 495 Weblinks 546
Advantages and disadvantages of paid
search marketing 498
10 Evaluation and improvement of
Best practice in planning and managing paid search digital channel performance 548
marketing 499 Learning objectives / Questions for marketers /
Online public relations 502 Links to other chapters 548
What is online public relations (e-PR)? 502 Introduction 550
Advantages and disadvantages of online Digital marketing in practice
public relations 504 The Smart Insights interview: Avinash Kaushik,
Best practice in planning and managing analytics evangelist at Google 551
online public relations 506 Performance management for digital channels 553
Online partnerships including affiliate marketing 510 Stage 1: Creating a performance management system 553
Affiliate marketing 510 Stage 2: Defining the performance metrics framework 555
Advantages and disadvantages of affiliate marketing 511 Stage 3: Tools and techniques for collecting metrics
Best practice in planning and managing and summarising results 560
affiliate marketing 512 Customer experience and content
Online sponsorship 513 management process 573
Interactive display advertising 515 How often should content be updated? 574
What is display advertising? 515 Responsibilities for customer experience and
Advantages and disadvantages of display advertising 516 site management 575
Best practice in planning and managing Who owns the process? 576
display ad campaigns 519 Who owns the content? 577
Opt-in email marketing and mobile Who owns the format? 579
text messaging 522 Who owns the technology? 580
What is email marketing? 522 Content management systems 581
Opt-in email options for customer acquisition 522 Case study 10
Opt-in email options for prospect conversion Learning from Amazon’s culture of metrics 582
and customer retention (house list) 523 Summary 587
Advantages and disadvantages of email marketing 524 Exercises 588
Best practice in planning and managing Self-assessment exercises 588
email marketing 525 Essay and discussion questions 588
Mobile text messaging 528 Examination questions 588
Social media and viral marketing 528 References 589
Developing a social media communications strategy 529 Weblinks 590
xii Contents

11 Business-to-consumer digital Types of B2B organisational marketing and

marketing practice 592 trading environments 625
Using digital marketing to support customer
Learning objectives / Questions for marketers /
acquisition in B2B marketing 627
Links to other chapters 592
Lead-generation and conversion optimisation
Introduction 594
for B2B marketing 629
Key themes and concepts 596
Customer retention in B2B marketing 630
The consumer perspective: online
Options for online inter-organisational trading 633
consumer behaviour 596
B2B e-marketplaces 635
Who are the online customers? 596
Drivers of adoption of e-marketplaces 636
The retail perspective: online retailing 606
Case study 12.1
Development of online retailing 607
Covisint – a typical history of a
Online retail formats and strategic approaches 609
B2B marketplace? 637
Implications for e-retail marketing strategy 612
How digital technologies can support
Case study 11
B2B marketing 639
ASOS leads the way with social media
How organisations make efficiency gains 640
and reinvents f­ashion retailing online 614
Analysing the factors which influence the
Summary 617
degree of adoption of Internet technologies 640
Exercises 618
Digital marketing strategies 642
Mapping your path to purchase 618
Case study 12.2
Self-assessment exercises 618
B2B adoption of the Internet:
Essay and discussion questions 618
Inspirational Cosmetics 645
Examination questions 619
Summary 646
References 619
Exercises 646
Self-assessment exercises 646
12 Business-to-business
Essay and discussion questions 647
digital-­marketing practice 622
Examination questions 647
Learning objectives / Questions for marketers / References 647
Links to other chapters 622
Introduction 624 Glossary 649
Key themes and concepts 625 Index 679
Preface

Digital media and technology, an opportunity and threat

The development of the Internet, World Wide Web and other digital technologies have
transformed marketing. For consumers, they give a much wider choice of products, services
and prices from different suppliers and a more convenient way to select and purchase items.
There is also a choice of technology platforms from desktops and laptops to smartphone
and tablet devices for consumers to use. For organisations, digital media and new technol-
ogy platforms give the opportunity to expand into new markets, offer new services, apply
new online communications techniques and compete on a more equal footing with larger
businesses. For those working within these organisations it gives the opportunity to develop
new skills and to use these new tools to improve the competitiveness of the company.
At the same time, the Internet and related digital technology platforms give rise to many
threats to organisations. For example, online companies such as ASOS.com (clothing),
Amazon.com (books and retail), iTunes (music) and Expedia (travel) have captured a sig-
nificant part of their market and struck fear into the existing players. Many consumers
now regularly use social networks like Facebook, Google+, LinkedIn and Twitter as part
of their daily lives. Engaging these consumers is an ongoing challenge, but as we will see,
companies like ASOS have taken advantage of these opportunities to interact with custom-
ers and this has helped them develop as a worldwide brand.

Management of digital marketing

With the success stories of companies capturing market share following the rapidly increas-
ing adoption of the Internet by consumers and business buyers has come a fast-growing
realisation that all organisations must have an effective online presence to prosper, or
­possibly even survive! Michael Porter said in 2001:
The key question is not whether to deploy Internet technology – companies have no
choice if they want to stay competitive – but how to deploy it.

What are the techniques that businesses need to master to make effective use of digital
marketing? Figure P.1 gives an indication of the range of marketing activities that now
need to be managed effectively and which are covered in this text. RACE describes the
range of tactics needed to reach, interact with, convert and engage online audience across
the customer lifecycle from generating awareness, conversion to sale (online and offline)
and retention and growth of customers.
The figure shows the range of different marketing activities or operating processes
needed to support acquiring new customers through communicating with them on third-
party websites and social media, attracting them to a company website, converting web-
site visits into sales and then using online media to encourage further sales. You can see
that applying social media is a part of RACE and therefore is one of the key management
xiv Preface

Figure P.1 Key activities needing management for integrated digital marketing
Source: Smart Insights (2015) Introducing RACE: a practical framework to improve your digital marketing. Article by Dave Chaffey, 20 January
2015, www.smartinsights.com/digital-marketing-strategy/race-a-practical-framework-to-improve-your-digital-marketing/
 Preface xv

challenges in digital marketing, so we consider approaches to managing social media mar-

keting throughout the text. Applying digital platforms as part of multichannel marketing
to integrate customer journeys between traditional and ‘new’ media is also a major chal-
lenge and a theme throughout this text. Management processes related to governance of
digital marketing include planning how digital marketing can be best resourced to con-
tribute to the organisation and integrating with other marketing activities. The increased
adoption of digital marketing also implies a significant programme of change that needs
to be managed. New objectives need to be set, new communications strategies developed
and staff developed through new responsibilities and skills.

Digital marketing – new skills required?

The aim of this text is to provide you with a comprehensive guide to the concepts, techniques
and best practice to support all the digital marketing processes shown in Figure P.1. This text
is based on emerging academic models together with best practice from leading adopters of
digital media. The practical knowledge developed through reviewing these concepts and best
practice is intended to enable graduates entering employment and marketing professionals to
exploit the opportunities of digital marketing while minimising the risks.
Specifically, this text addresses the following needs:
●● There is a need to know to what extent digital technology and media changes existing
marketing models and whether new models and strategies can be applied to exploit the
medium effectively.
●● Marketing practitioners need practical digital marketing skills to market their prod-
ucts effectively. Knowledge of the new jargon – terms such as ‘marketing automation’,
‘click-through’, ‘cookie’, ‘uniques’ and ‘page impressions’ – and of effective methods of
site design and promotion such as search engine marketing will be necessary, either for
­direct ‘hands-on’ development of a site or to enable communication with other staff or
agencies that are implementing and maintaining the site.
●● Given the rapidly changing market characteristics and best practices of digital market-
ing, web-based information sources are needed to update knowledge regularly. This text
and the supporting companion website contain extensive links to websites to achieve
this.
The text assumes some existing knowledge of marketing in the reader, perhaps ­developed
through experience or by students studying introductory modules in marketing fundamen-
tals, marketing communications or buyer behaviour. However, basic concepts of market-
ing, communications theory, buyer behaviour and the marketing mix are outlined.

Summary of changes for the sixth edition

The acclaimed structure of previous editions has been retained since this provides a clear
sequence to the stages of strategy development and implementation that are required to
plan successfully for digital marketing in existing and start-up companies.
The main changes made for the sixth edition, based on feedback from reviews and our
close monitoring of the trends and latest developments are:
Chapter 1 – Introducing digital marketing
●●Concept of digital transformation in large organisations introduced at end of chapter.
xvi Preface

Chapter 2 – Online marketplace analysis: micro-environment

●● Chapter introduction updated to describe customer choice, mobile platform use and
customer journeys in the context of buying decision models such as Google’s ZMOT
and the McKinsey Loyalty Loop.
●● Mini case study on Ecomom added to give a recent example of an e-retail failure with

serious consequences.
●● Business model canvas introduced. A useful new tool for students to review online

­business models for case studies and assignments. Section on portal types deleted.

Chapter 3 – The online macro-environment

●● Structure of chapter retained with some discussion of updated laws for cookies, native

advertising and distance selling.

Chapter 4 – Digital marketing strategy
●● The latest approaches to strategy development including implementing digital

­transformation programmes and content marketing strategy.

Chapter 5 – The impact of digital media and technology on the marketing mix
●● New section on co-marketing with the Napster case study replaced by a new case on

Spotify.
Chapter 6 – Relationship marketing using digital platforms
●● We introduce terms used to describe CRM in modern marketing including Marketing

Automation, Big Data and predictive analytics.

●● We have extended the section on social CRM and the concept of Loyalty Loop is

described.
Chapter 7 – Delivering the online customer experience
●● Change in emphasis from online customer experience to managing digital experiences

on other platforms including mobile, social media and in-store retail.

●● Explanation and example of DevOps and growth hacking added to the agile develop-

ment section.
●● Government Service Design Manual used as a reference to describe the process for

­developing online services through Discovery, Beta, Alpha and Live stages (also used in
many commercial projects).
●● Coverage of mobile site design issues has been extended in a section ‘Mobile design

considerations and techniques’.

Chapter 8 – Campaign planning for digital media

●● New coverage of ‘Always-on’ communications and real-time marketing and PR

­including campaign examples from Burger King, Evian and Metro.

●● New analysis tools, the Content Distribution and Content Marketing matrix added for

reviewing and prioritising content marketing and digital media investments.

Chapter 9 – Marketing communications using digital media channels

●● An update on the latest changes in search ranking factors including a review of the

­importance of Google’s algorithm updates like Panda, Penguin and Hummingbird.

●● A discussion of the marketing effectiveness of social media in the box ‘Is social media

‘mostly a waste of time’ and an ‘infantile delusion’?

●● New content on co-marketing, programmatic ad buying and emotions that influence a

viral campaign.

Chapter 10 – Evaluation and improvement of digital channel performance

●● Change in emphasis from measuring and managing websites to managing digital

­experiences on other platforms including mobile, social media and in-store retail.
●● New discussion of the need for digital agility to update different content types ­illustrated

by a retailer.
 Preface xvii

Chapter 11 – Business-to-consumer digital marketing practice

●●New and updated examples.
Chapter 12 – Business-to-business digital marketing practice
●● New and updated examples.

A new series of cases ‘Digital marketing in practice – Smart Insights interview’ is included
at the start of each chapter. These are presented in question-and-answer format and focus
on the practical challenges and opportunities facing practitioners working in digital media:
●● Chapter 1 Nick Dutch of Domino’s Pizza Group
●● Chapter 2 Michael Welch of Blackcircles.com
●● Chapter 3 Fred Bassett of Blue Latitude
●● Chapter 4 Sajjad Bhojani of Dunelm
●● Chapter 5 Roberto Hortal of EDF Energy
●● Chapter 6 Guy Stephens of IBM
●● Chapter 7 Ben Jesson and Karl Blands of Conversion Rate Experts
●● Chapter 8 Mike O’Brien of the Jam Partnership
●● Chapter 9 Kate Webb of Vision Express
●● Chapter 10 Avinash Kaushik of Google.
All interviews are available online at: www.smartinsights.com.

Table P.1 In-depth case studies in Digital Marketing, 6th edition

Chapter Case study Themes

1 Introduction eBay thrives in the global Business and revenue model, proposition, competition,
marketplace objectives and strategies, risk management
2 Micro-environment Boo Hoo – learning from the largest Assessing a consumer market, business models,
European dot-com failure marketing communications
3 Macro-environment Zopa launches a new lending model Companion vision, branding, target market,
communicating the proposition, challenges and
reasons for failure
4 Digital marketing Tesco online development strategy Business models, proposition and online product
strategy supports global expansion range, target market strategy
5 Digital marketing Spotify streaming develops new Peer-to-peer services, revenue models, proposition
mix revenue models design, strategy, competition, risk factors
6 Relationship Dell gets closer to its customers Influence of website design on conversion, retention
marketing through its social media strategy marketing, personalisation, e-CRM, RFM analysis
7 Online customer Refining the online customer Strategy, proposition, site design, on-site search
experience experience at i-to-i.com capabilities
8 Campaign planning A short history of Facebook Ad revenue models, privacy
9 Digital media Innovation at Google Technology, ad revenue models, innovation
channels
10 Evaluation and Learning from Amazon’s culture of Strategy, measurement, online marketing
improvement of digital metrics communications, personalisation approach
channel performance
11 Business-to- ASOS reinvents fashion retail Online consumer profiles, purchasing behaviour and
consumer marketing expectations and e-retailing
12 Business-to- Covisint – typical history of a B2B B2B trading environment, business markets, trading
business marketing marketplace? partnerships and digital marketing strategies
B2B adoption of the Internet:
Inspirational Cosmetics
xviii Preface

The structure and content of this text

The text is divided into three parts, each covering a different aspect of how organisations
use the Internet for marketing to help them achieve competitive advantage. Table P.2 shows
how the text is related to established marketing topics.

Part 1 Digital marketing fundamentals (Chapters 1–3)

Part 1 relates the use of the Internet to traditional marketing theories and concepts, and
questions the validity of existing models given the differences between the Internet and
other media.
●● Chapter 1 Introducing digital marketing considers using the Internet as part of cus-
tomer-centric, multichannel marketing; it also reviews the relationship between Internet
marketing, digital marketing, e-commerce and e-business, and the benefits the Internet
can bring to adopters, and outlines differences from other media and briefly introduces
the technology.

Table P.2 Coverage of marketing topics in different chapters

Chapter
Topic 1 2 3 4 5 6 7 8 9 10 11 12
Advertising ✓ ✓
Branding ✓ ✓ ✓ ✓ ✓
Consumer behaviour ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Channel and market structure ✓ ✓ ✓ ✓ ✓ ✓
Communications mix ✓ ✓ ✓
Communications theory ✓ ✓ ✓
Customer service quality ✓ ✓ ✓ ✓ ✓
Direct marketing ✓ ✓ ✓
International marketing ✓ ✓ ✓ ✓ ✓ ✓
Marketing mix ✓ ✓ ✓ ✓
Marketing research ✓ ✓ ✓ ✓
Evaluation and measurement ✓ ✓ ✓ ✓ ✓ ✓
Pricing strategy ✓ ✓ ✓
Promotion ✓ ✓ ✓ ✓ ✓
Public relations ✓ ✓
Relationship marketing ✓ ✓
Segmentation ✓ ✓ ✓ ✓ ✓ ✓
Services marketing ✓ ✓
Strategy and planning ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Technology background ✓ ✓ ✓ ✓
Note: A blue tick ✓ indicates fairly detailed coverage; a black tick ✓ indicates a brief direct reference or indirect coverage.
 Preface xix

●● Chapter 2 Online marketplace analysis: micro-environment reviews how digital media

and technology changes the immediate environment of an organisation, including the
marketplace and channel structure. It describes the type of situation analysis needed to
support digital strategy by examining how customers, competitors and intermediaries
and the interplay between them can be evaluated.
●● Chapter 3 The online macro-environment reviews the impact of social, technological,
economic, political and legal environmental influences on digital strategy and its imple-
mentation. The emphasis is on privacy and data protection regulations and managing
technology innovation.

Part 2 Digital marketing strategy development (Chapters 4–6)

Part 2 describes the emerging models for developing strategy and provides examples of the
approaches companies have used to integrate the Internet into their marketing strategy.
●● Chapter 4 Digital marketing strategy considers how the digital strategy can be aligned
with business and marketing strategies and describes a generic strategic approach with
phases of situation review, goal setting, strategy formulation and resource allocation
and monitoring.
●● Chapter 5 The impact of digital media and technology on the marketing mix assesses
how the different elements of the marketing mix can be varied in the online environ-
ment as part of strategy formulation.
●● Chapter 6 Relationship marketing using digital platforms details strategies and tactics
for using the Internet to build and sustain ‘one-to-one’ relationships with customers.

Part 3 Digital marketing: implementation and practice

(Chapters 7–11)

Part 3 of the text explains practical approaches to implementing a digital marketing

strategy. Techniques for communicating with customers, building relationships and facili-
tating electronic commerce are all reviewed in some detail. Knowledge of these practical
techniques is essential for undergraduates on work placements involving a website, and for
marketing managers who are dealing with suppliers such as design agencies.
●● Chapter 7 Delivering the online customer experience explains how an online presence
is developed to support branding and customer service quality objectives. The stages,
analysis of customer needs, design of the site structure and layout, and creating the
site, are covered together with key techniques such as user-centred design, usability
and accessibility design. It also covers different service quality models used to assess
experience.
●● Chapter 8 Campaign planning for digital media describes the novel characteristics of
digital media, and then considers different aspects of marketing communications which
are important for developing a successful online campaign.
●● Chapter 9 Marketing communications using digital media channels. Among the tech-
niques covered are banner advertising, affiliate networks, promotion in search engines,
co-branding and sponsorship, email, online PR, viral and word-of-mouth marketing
with particular reference to social networks.
●● Chapter 10 Evaluation and improvement of digital channel performance reviews meth-
ods for assessing and improving the effectiveness of a site and communications in deliv-
ering business and marketing benefits. The chapter briefly covers process and tools for
updating sites.
xx Preface

Part 1
Chapter 1
INTRODUCTION Introducing
digital
marketing

Chapter 2
Chapter 3
Online market-
Online macro-
place analysis:
environment
micro-environment

Part 2 Chapter 4
STRATEGY Digital
marketing
strategy

Chapter 5 Chapter 6
The impact of digital Relationship
media and technology marketing using
on the marketing mix digital platforms

Part 3 Chapter 7
IMPLEMENTATION Delivering the
AND PRACTICE online customer
experience

Chapter 8 Chapter 9 Chapter 10

Campaign Marketing Evaluation and
planning for communications improvement of
digital media using digital digital channel
media channels performance

Chapter 11 Chapter 12
B2C B2B
digital digital
marketing practice marketing practice

Figure P.2 Structure of the text

 Preface xxi

●● Chapter 11 Business-to-consumer digital marketing practice examines models of mar-

keting to consumers and provides case studies of how retail businesses are tackling such
marketing.
●● Chapter 12 Business-to-business digital marketing practice examines the different area
of marketing to other businesses and provides many examples of how companies are
achieving this to support international marketing.

Who should use this text?

Students

This text has been created primarily as the main student text for undergraduate and post-
graduate students taking specialist marketing courses or modules which cover e-marketing,
Internet and digital marketing, electronic commerce and e-business. The text is relevant to
students who are:
●● undergraduates on business programmes which include modules on the use of the Inter-
net and e-commerce. This includes specialist degrees such as Internet marketing, elec-
tronic commerce, marketing, tourism and accounting or general business degrees such
as business studies, business administration and business management;
●● undergraduate project students who select this topic for final-year projects or disserta-
tions – this text is an excellent supporting text for these students;
●● undergraduates completing a work placement in a company using the Internet to pro-
mote its products;
●● students at college aiming for vocational qualifications such as the HNC or HND in
Business Management or Computer Studies;
●● postgraduate students taking specialist master’s degrees in electronic commerce or
Internet marketing, generic MBAs and courses leading to qualifications such as the Cer-
tificate in Management or Diploma in Digital Marketing or Management Studies which
involve modules on electronic commerce and digital marketing.

Practitioners

Previous editions have been widely used by digital marketing practitioners including:
●● marketing managers or specialists such as e-commerce managers or digital marketing
managers responsible for defining digital marketing strategy and implementing and
maintaining the company website;
●● senior managers and directors wishing to understand the potential of digital marketing
for a company and who need practical guidelines on how to exploit this potential;
●● technical project managers or webmasters who may understand the technical details of
building a site, but have a limited knowledge of marketing fundamentals and how to
develop an Internet marketing strategy.

What does the text offer to lecturers teaching these courses?

The text is intended to be a comprehensive guide to all aspects of using the Internet and
other digital media to support marketing. The text builds on existing marketing theories
and concepts, and questions the validity of models in the light of the differences between
xxii Preface

the Internet and other media. The text references the emerging body of literature specific
to Internet marketing. It can therefore be used across several modules. Lecturers will find
the text has a good range of case studies, activities and exercises to support their teaching.
Website links are given in the text and at the end of each chapter to provide important in-
formation sources for particular topics.

Student learning features

A range of features has been incorporated into this text to help the reader get the most out
of it. Each feature has been designed to assist understanding, reinforce learning and help
readers find information easily, particularly when completing assignments and preparing
for exams. The features are described in the order in which you will find them in each
chapter.

At the start of each chapter

The ‘Chapter at a glance’ page provides easy navigation for each chapter. It contains:
●● Main topics: the main topics and their page numbers.
●● Case studies: the main cases and their page numbers.
●● Learning objectives: a list describing what readers can learn through reading the chap-
ter and completing the exercises.
●● Questions for marketers: explaining the relevance of the chapter for practitioners.
●● Links to other chapters: a summary of related information in other chapters.

In each chapter
●● Definitions: when significant terms are first introduced the main text contains succinct
definitions in the margin for easy reference.
●● Web references: where appropriate, web addresses are given to enable readers to obtain
further information. They are provided in the main text where they are directly relevant
as well as at the end of the chapter.
●● Case studies: real-world examples of how companies are using the Internet for market-
ing. Questions at the end of the case study are intended to highlight the main learning
points from the example.
●● Mini case studies: short features which give a more detailed example, or explanation,
than is practical in the main text. They do not contain supplementary questions.
●● Activities: exercises in the main text which give readers the opportunity to practise and
apply the techniques described in the text.
●● Chapter summaries: intended as revision aids to summarise the main learning points
from the chapter.

At the end of each chapter

●● Self-assessment exercises: short questions which will test understanding of terms and
concepts described in the chapter.
●● Essay questions: conventional essay questions.
●● Discussion questions: these require longer essay-style answers discussing themes from
the chapter. They can be used either as topics for individual essays or as the basis for
seminar discussion.
 Preface xxiii

●● Examination questions: typical short-answer questions of the type that are encountered
in exams. These can also be used for revision.
●● References: these are references to books, articles or papers referred to within the
chapter.
●● Further reading: supplementary texts or papers on the main themes of the chapter.
Where appropriate, a brief commentary is provided on recommended supplementary
reading on the main themes of the chapters.
●● Web links: these are significant sites that provide further information on the concepts
and topics of the chapter. This list does not repeat all the website references given within
the chapter, for example company sites. For clarity, the website address prefix ‘http://’ is
generally omitted.

At the end of the text

●● Glossary: comprehensive definitions of all key terms and phrases used within the main
text, cross-referenced for ease of use.
●● Index: all key words and abbreviations referred to in the main text.

Support material

Free supplementary materials are available at Dave Chaffey’s website at www.smartinsights

.com/book-support to support all users of the text. This regularly updated website contains
advice, comment, support materials and hyperlinks to reference sites relevant to the text.
There is a password-protected area for lecturers only to discuss issues arising from using
the text; a­ dditional examination-type questions and answers; a multiple-choice question
bank with answers; additional cases with suggestions for discussion; and a downloadable
version of the Lecturer’s Guide and OHP Masters.

References

Porter, M. (2001) Strategy and the Internet, Harvard Business Review (March), 62–78.
About the authors

Dave Chaffey BSc, PhD, FCIM, MIDM

Dave is CEO of Smart Insights (www.smartinsights.com), an online publisher and analytics
company providing advice and alerts on best practice and industry developments for digital
marketers and e-commerce managers. The advice is also created to help readers of Dave’s
books. The most relevant information is highlighted at www.smartinsights.com/book-support.
Dave also works as an independent digital marketing trainer and consultant for Marketing In-
sights Limited. He has consulted on digital marketing and e-commerce strategy for companies of a
range of sizes from larger organisations like 3M, Barclaycard, HSBC, Mercedes-Benz, Nokia and
The North Face to smaller organisations like Arco, Confused.com, Euroffice, Hornbill and i-to-i.
Dave’s passion is educating students and marketers about latest and best practices in digital
marketing, so empowering businesses to improve their online performance through getting the
most value from their web analytics and market insight. In other words, m ­ aking the most of
online opportunities and avoiding waste.
He is proud to have been recognised by the Department of Trade and Industry as one of the
leading individuals who have provided input and influence on the development and growth of
e-commerce and the Internet in the UK over the last ten years. Dave has also been recognised
by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ worldwide who have
helped shape the future of marketing. He is also proud to be an Honorary Fellow of the IDM.
Dave is a visiting lecturer on e-commerce courses at different universities including
­Birmingham, Cranfield, Derby, Manchester Metropolitan and Warwick Universities. He is also
a tutor on the IDM Diploma in Digital Marketing, for which he is senior examiner.
In total, Dave is author of five best-selling business books including Digital Business
and Ecommerce Management, Digital Marketing: Strategy, Implementation and Practice,
eMarketing eXcellence (with P.R. Smith) and Total Email Marketing. Many of these books
have been published in new editions since 2000 and translations include Chinese, Dutch,
German, Italian and Serbian.
When offline Dave enjoys fell-running, indie guitar music and travelling with his family.

Fiona Ellis-Chadwick PhD, BSc, PGCE

Fiona-Ellis Chadwick (www.ellis-chadwick.com) is a Senior Lecturer at Loughborough Univer-
sity School of Business & Economics, where she is the Director of the Institute of Consultancy
and Research Application and is an active researcher, lecturer and author. As part of her role
Fiona is a leading researcher in the field of online e-commerce in retailing and is an active mem-
ber of the Town Centre Research Interest Group. She is a leading thinker in the development of
innovative blended-learning for undergraduate and postgraduate teaching in the subject areas
of retailing and marketing, having built her expertise working with leading international pub-
lishers and universities, particularly The Open University over the past 20 years. She had a suc-
cessful commercial career before becoming an academic and completing her PhD. Having made
a significant contribution in the area of online retailing she continues to focus her research and
academic publications in the areas of strategic adoption of the Internet. Her work on these top-
ics has been published in Industrial Marketing Management, Journal of Business Research, Eu-
ropean Journal of Marketing, Internet Research, International Journal of Retail Distribution
and Management, plus additional textbooks and practitioner journals. She is also a member of
the Independent Standards Board for The Retail Ombudsman. Fiona is passionate about how
technology and education can help business development in the future.
Acknowledgements

I am fortunate to have shared my journey of understanding how best to use digital market-
ing with thousands of students and marketing professionals and I thank you for sharing your
experiences with me. I’d particularly like to thank all the practitioners who have shared their
experiences on applying digital marketing in the opening case study interviews in each chapter
and on SmartInsights.com.
Likewise, I appreciate the effort made by the digital marketing specialists who have shared
their knowledge as expert commentators on Smart Insights including Mike Berry and Richard
Sedley (marketing strategy), Dan Barker, Ben Jesson and Pritesh Patel (analytics), Dan Bosom-
worth, Paul Fennemore, Katy Howell and Marie Page (Social media marketing), Rene Power
(B2B marketing), Rob Thurner (mobile marketing), Chris Soames, James Gurd and John New-
ton (search marketing), Mel Henson (copywriting), Paul Rouke (usability) and Mark Brown-
low, Kath Pay and Tim Watson (email marketing). Also to the many occasional contributors
who have shared their expertise and experiences.
The authors would like to thank the team at Pearson Education in Harlow for their help
in the creation of this text, especially Tom Hill, Eileen Srebernik (our acquisitions editors) and
Tim Parker who managed the text through the production process.
As always, special thanks go to my family for supporting me in the ongoing updates.
Dave Chaffey

Publisher’s Acknowledgements

The publishers are grateful to the reviewers of this book for their valuable comments.

We are grateful to the following for permission to reproduce copyright material:

Figures
Figure 1.1 from www.google.com/about/corporate/company/history.html Google. Google
and the Google logo are registered trademarks of Google Inc., used with permission; Fig-
ure 1.3 from chiefmartek.com, Scott Brinker; Figure 1.4 from http://www.youtube.com
/watch?v=fGaVFRzTTP4, Tesco Stores Limited; Figure 1.8 from Digital transformation: Why
and how companies are investing in the new business models to lead digital customer ex-
periences. Brian Solis., www.altimetergroupdigitaltransformation.com, The Altimeter Group.
2014; Figure 1.11 from Emarketing Excellence, Planning and optimising your digital market-
ing, Routledge (Chaffey, D. and Smith P.R. 2008) Taylor and Francis; Figure 1.12 from http://
novaspivack.typepad.com/nova_spivacks_weblog/2007/02/steps_towards_a.html., Nova Spi-
vack; Figure 2.4 from http://www.smartinsights.com/marketplace-analysis/consumer-buying-
behaviour/what-influences-purchase/attachment/consumer-decision-journey/. Published with
permission from Digital Marketing advice site SmartInsights.com curated by Dave Chaffey;
Figure 2.6 from Googling the Present, Economic and Labour Review, Office for National Sta-
tistics (Chamberlin, G. 2010) ONS, Source: Office for National Statistics licensed under the
Open Government Licence v.3.0.; Figure 2.10 from New GfK ROPO study with Vodafone,
Published on Google Barometer Blog October 20th 2010, Google. Google and the Google
logo are registered trademarks of Google Inc., used with permission; Figure 2.12 from Goog-
ling the Present, Economic and Labour Review Office for National Statistics (Chamberlin, G.
2010) Office for National Statistics, Source: Office for National Statistics licensed under the
xxvi Acknowledgements

Open Government Licence v.3.0; Figure 2.13 from Online Customer Experience: A Review of
the Business-to-Consumer Online Purchase Context International Journal of Management
Reviews, 13 (1), 24-39 (Rose S., Hair N. and Clark M. 2011), © 2010 Rose S., Hair N. and
Clark M. International Journal of Management Reviews © 2010 British Academy of Man-
agement and Blackwell Publishing Ltd., Reproduced with permission of Blackwell Publish-
ing; Figures 2.19 and 2.21 from www.bowencraggs.com, Bowen Craggs & Co.; Figure 2.26
from www.SmartInsights.com, Published with permission from Digital Marketing advice
site SmartInsights.com curated by Dave Chaffey; Figure 3.3 from Smart Insights (Market-
ing Intelligence) Limited (2014); Figure 4.3 from EMarketing Excellence: Planning and
optimizing your digital marketing., 3 ed., Butterworth Heinemann, Oxford (Chaffey, D. and
Smith, P.R. 2008) Copyright © 2008 Elsevier B.V. All Rights Reserved; Figure 4.9 from www
.arenaflowers.com, Arena Flowers; Figure 6.2 from Social CRM: The New Rules of Relation-
ship Management, Whitepaper published April 2010, Editor Charlene Li; Figure 6.19 from
Case Study: Applying RFM Segmentation to the SilverMinds Journal of Direct Data and
Digital Marketing Practice, 5 (3), 269-275 (Patron M. 2004), Palgrave Macmillan Copyright
© 2004, Macmillan Publishers Ltd; Figure 7.2 from Succeeding with brands on the internet,
Journal of Brand Management, 8 (3), 186-95 (de Chernatony, L. 2001), Palgrave Macmillan;
Figure 7.6 from http://www.webpagetest.org/, Google, Google and the Google logo are registered
trademarks of Google Inc., used with permission; Figure 7.13 from www.apps.ft.com, Finan-
cial Times, © The Financial Times Limited. All Rights Reserved; Figure 8.6 from Millward
Brown Qualitative; Figure 8.13 from www.centreforintegratedmarketing.com, CODAR is a
registered trademark of Stepping Stones Consultancy Ltd; Figures 1.18, 8.12, 8.14, 9.1, 9.12
published with permission from Digital Marketing advice site SmartInsights.com curated by
Dave Chaffey; Figure 9.14 from Blog post, www.amnavigator.com/blog/2011/09/12/back-to-
affiliate-cookie-duration-return-days-question/ E Prussakov; Figure 9.18 from The Hitwise UK
Media Impact Report, Hitwise (2006) Hitwise; Figure 10.5 from The Multichannel Chal-
lenge Butterworth-Heinemann, Oxford, UK (Wilson, H. 2008) © 2008 Butterworth-Heine-
mann, Oxford, UK reproduced by permission of Taylor & Francis Books UK; Figure 10.9
from National Express; Figure 10.10 from Test reports courtesy of Maxymiser Content Intel-
ligence, www.maxymiser.com, Maxymiser Ltd; Figure 11.1 from Global perspective on retail:
online retailing, Euromonitor, http://www.cushmanwakefield.com, © Cushman & Wakefield
Inc; Figure 11.5 from 20th anniversary of first online sale: how we shop on the web, The Tel-
egraph, 11/08/2014 (Spence, P.), The Telegraph, copyright © Telegraph Media Group Lim-
ited 2014; Figure 12.8 from Implementing e-value strategies in UK retailing, International
Journal of Retail and Distribution Management, 33 (6), 426-43 (Nicholls, A. and Watson,
A. 2005), International journal of retail & distribution management by EMERALD GROUP
PUBLISHING LIMITED. Reproduced with permission of EMERALD GROUP PUBLISH-
ING LIMITED in the format Republish in a book via Copyright Clearance Center.

Screenshots
Screenshot 1.5 from http://www.tatucouture.com/, Tatu Couture; Screenshot 1.8 from https://
www.travelrepublic.co.uk/apps/, Travel Republic; Screenshot 1.17 from www.travelrepublic
.co.uk, Travel Republic; Screenshot 2.15 from Google (2015), Google and the Google logo
are registered trademarks of Google Inc., used with permission; Screenshot 2.20 from
www.taobao.com, AllThingsGreen; Screenshot 4.14 from www.ideastorm.com, © 2015 Dell
Inc. All Rights Reserved.; Screenshot 4.16 from http://www.ap.dell.com/content/default
.aspx?c=sg&1=en&s=gen. © 2015 Dell Inc. All Rights Reserved; Screenshot 5.8 from www
.google.co.uk, Google and the Google logo are registered trademarks of Google Inc., used
with permission; Screenshot 5.11 from www.spotify.com, Spotify AB, Spotify does not con-
trol the rights to the photograph of the women in the screenshot; Screenshot 6.1 from http://
about.zappos.com/our-unique-culture/zappos-core-values, © 2013 Zappos.com, Inc. or its
affiliates; Screenshot 6.6 from Smart Insights (Marketing Intelligence) Ltd; Screenshot 6.13
from www.ctshirts.co.uk, Charles Tyrwhitt LLP; Screenshot 7.11 from www.csszengarden
.com, CSS Zengarden; Screenshot 7.17 from www.i-to-i.com, itoi; Screenshot 8.2 from www
.threadless.com, Threadless; Screenshot 8.5 from twitter.com, Twitter, Tweet and Twitter Bird
Logo are trademarks of Twitter, Inc. or its affiliates; Screenshot 8.18 from www.oktopost.com,
 Acknowledgements xxvii

Oktopost.com; Screenshot 8.22 from www.lynxeffect.com, reproduced with kind permis-

sion of Unilever PLC and group companies; Screenshot 8.24 from http:developers.facebook
.com/docs/plugins, Facebook; Screenshot 9.3 from www.Google.com, Google, Google and the
Google logo are registered trademarks of Google Inc., used with permission; Screenshot 9.4
from Google, Google and the Google logo are registered trademarks of Google Inc., used
with permission; Screenshot 9.8 from https://majestic.com/, majestic.com; Screenshot 9.10
from You tube Video, Gatorade Co; Screenshot 9.11 from http://www.smartinsights.com/,
published with permission from Digital Marketing advice site SmartInsights.com curated by
Dave Chaffey; Screenshot 10.8 from Hootsuite social and media management dashboard Cus-
tom Analytics, Hootsuite Media Inc; Screenshot 11.6 from https://www.shopdirect.com/, Shop
Direct; Screenshot 12.4 from http://socialmedia.cisco.com, Courtesy of Cisco Systems, Inc.
Unauthorised use not permitted; Screenshot 12.5 from www.leadforensics.com, Lead Forensics

Tables
Table 1.2 from E marketing Excellence, Planning and Optimising Your Digital Marketing 3ed.,
Elsevier (Smith P.R. and Chaffey D. 2008) © Elsevier (2008); Table 2.1 from Googling the Pre-
sent, Economic and Labour Review Office for National Statistics (Chamberlin, G. 2010) Office
for National Statistics, Source: Office for National Statistics licensed under the Open Gov-
ernment Licence v.3.0.; Table 2.4 from Multi-channel experience consistency: Evidence from
Lexus, Journal of Direct Data and Digital Marketing Practice, 6 (4), 317-25 (Stuart-Menteth
H., Arbuthnot S. and Wilson H. 2005), Copyright © 2005, Macmillan Publishers Ltd; Table
2.5 from Understanding Influence, and Making It Work For You: A CNET Networks Study,
The Associated Press/YGS Group (2007) The Associated Press/YGS Group; Table 5.1 from A
comparison of time-varying online price and price dispersion between multichannel and dot-
com DVD retailers, Journal of Interactive Marketing 20 (2), 3-20 (Xing, X., Yang, S. and Tang,
F., A 2006), Copyright © 2006 Direct Marketing Educational Foundation, Inc. Originally pub-
lished in [2006] by Wiley Periodicals, Inc. Published by Elsevier Inc. All rights reserved; Table
8.4 from School of Computer Science web research summary, University of Manchester, www
.cs.manchester.ac.uk/research/vicram/studies/eyetracking.php, Harper, S. (2006); Table 8.7 from
www.iab.net/xmos, Interactive Advertising Bureau; Table 10.1 from ABCE (www.abce.org.uk);
Table 11.3 from Allegra Strategies (2005); Table 12.2 from An empirical study of the uptake of
performance measurement by internet retailers, Internet Research, 18 (4), 361-81 (Gunawan,
G., Ellis-Chadwick, F. and King, M. 2008), Emerald Publishing

Text
Interview on pages 9-10 from Nick Dutch Head of Digital at Domino’s Pizza Group Lim-
ited in the UK& ROI. Published with permission from Digital Marketing advice site Smart-
Insights.com curated by Dave Chaffey; Case Study 1.2 published with permission from
Digital Marketing advice site SmartInsights.com curated by Dave Chaffey; Case Study 1.3
from http://www.travelrepublic.co.uk/help/pressReplace_003.aspx, Travel Republic; Inter-
view on pages 57-59 from Michael Welch, published with permission from Digital Mar-
keting advice site SmartInsights.com curated by Dave Chaffey; Interview on pages 121-2
from Fred Bassett of Blue Latitude, published with permission from Digital Marketing ad-
vice site SmartInsights.com curated by Dave Chaffey; Interview on pages 182-4 from Sajjad
Bhojani, Head of Dunelm Direct Trading at Dunelm, published with permission from Dig-
ital Marketing advice site SmartInsights.com curated by Dave Chaffey; Interviews on pages
252-5, pages 360-1, pages 422-4, 9 and pages 551-3 published with permission from Digi-
tal Marketing advice site SmartInsights.com curated by Dave Chaffey; Interview on pages
304-7 from Guy Stephens Social Customer Care consultant at IBM, published with permis-
sion from Digital Marketing advice site SmartInsights.com curated by Dave Chaffey; Inter-
views pages 252-5, pages 360-1, pages 422-4, 9 and pages 551-3 published with permission
from Digital Marketing advice site SmartInsights.com curated by Dave Chaffey; Case Study
9.1 from www.buzzparadise.com/case-studies/pr-2-0-event-for-renault-le-web-2010/, Buzz
Paradise; Case Study 12.3 adapted from Excerpt from Transforming Strategy One Cus-
tomer at a Time, Harvard Business Review (R. Harrington and A. Tjan 2008), Copyright
© 2008 by The Harvard Business School Publishing Corporation; all rights reserved.
Part 1
Digital marketing fundamentals

Chapter 1 introduces the opportunities and challenges of digital marketing and

­explains the different types of digital marketing platforms and media channels
available to engage audiences online. It also introduces a planning framework that
can be used to structure digital marketing strategies and case studies. Chapters 2
and 3 provide a foundation for developing an integrated digital marketing strategy
by reviewing how the online marketplace of an organisation can be assessed as
part of situation analysis.
1 Introducing digital marketing 4
●● Introduction – how have digital technologies transformed marketing?
●● Definitions – what are digital marketing and multichannel marketing?
●● Introduction to digital marketing strategy
●● Introduction to digital marketing communications

2 Online marketplace analysis: micro-environment 54

●● Situation analysis for digital marketing
●● The digital marketing environment
●● Understanding customer journeys
●● Consumer choice and digital influence
●● Online consumer behaviour and implications for marketing
●● Competitors
●● Suppliers
●● New channel structures
●● Business models for e-commerce

3 The online macro-environment 118

●● The rate of environment change
●● Technological forces
●● Economic forces
●● Political forces
●● Legal forces
●● Social forces
●● Cultural forces
Chapter 1
Introducing digital marketing

Chapter at a glance
Main topics
●● Introduction – how have digital technologies transformed marketing? 6
●● Definitions – what are digital marketing and multichannel marketing? 11
●● Introduction to digital marketing strategy 16
●● Introduction to digital marketing communications 29

Case studies
Digital marketing in practice
The Smart Insights interview: Nick Dutch, Head of Digital at Domino’s Pizza Group Limited shares the
approach used to help plan digital strategy development 9
Case study 1: eBay thrives in the global marketplace 46

Learning objectives
After reading this chapter, you should be able to:
●● Explain the relevance of different types of digital platforms and digital media to
marketing
●● Evaluate the advantages and challenges of digital media
●● Identify the key differences between customer communications digital
marketing and traditional marketing.
Questions for marketers
Key questions for marketing managers related to this chapter are:
●● What are the options for digital marketing to grow our business?
●● What are the key benefits of digital marketing?
●● What differences do digital media introduce compared to existing marketing
communications models?

Scan code
to find the
latest updates
for topics in
this chapter

Links to other chapters

This chapter provides an introduction to digital marketing, and the concepts
­introduced are covered in more detail later in the book, as follows:
●● Chapters 2 and 3 explain marketplace analysis for digital marketing planning
●● Chapters 4, 5 and 6 in Part 2 describe how digital marketing strategy can be
developed
●● Chapters 7, 8, 10 and 11 in Part 3 describe strategy implementation
●● Chapters 11 and 12 in Part 3 describe B2C and B2B applications.
6 Part 1 Digital marketing fundamentals

Introduction – how have digital technologies transformed marketing?

The Internet, the web and digital media have transformed marketing and business since
the first website (http://info.cern.ch) went live in 1991. With over 3 billion people around
the world regularly using the web to find products, entertainment and friends, consumer
behaviour and the way companies market to both consumers and businesses have changed
dramatically.
To succeed in the future, organisations will need marketers, strategists and agencies
with up-to-date knowledge of how to apply digital media such as the web, email, mobile
and interactive TV. The aim of Digital Marketing: Strategy, Implementation and Practice
is to support students and professionals in gaining and developing this knowledge. In the
text, we will show how traditional marketing models and concepts can be applied to help
develop digital marketing strategies and plans and where new models are appropriate. We
will also give many practical examples and best practices for applying online communica-
tions tools to effectively market an organisation’s products and services using the Internet
and other digital media.
For the authors of this book, digital marketing is an exciting area to be involved with,
since it poses many new opportunities and challenges yearly, monthly and even daily.
Innovation is a given, with the continuous introduction of new technologies, new business
models and new communications approaches. For example, Google innovates relentlessly.
Its service has developed a long way since 1998 (Figure 1.1) with billions of pages now
indexed and other services such as web mail, pay-per-click (PPC) adverts, analytics and
social networking all part of its offering. Complete Activity 1.1 or view Table 1.1 to see
other examples of online startups showing the rate at which new innovations occur.

Figure 1.1 Google timeline

Source: Google Corporate Timeline: www.google.com/about/company/timeline/
 Chapter 1 Introducing digital marketing 7

Activity 1.1 Innovation in digital marketing platforms

Purpose
To introduce some of the most important platforms used for digital marketing today and
to illustrate innovation in online business models and communications approaches.

Questions
1 Think about the innovation you have witnessed during the time you have used the
Internet, World Wide Web and mobile platforms. What would you say are the main
sites used in your country which have changed the way you spend your time o­ nline?
Table 1.1 shows the sites that we believe have had the biggest influence on online
business models in the US and Europe, with more emphasis on the most recent
ones.
2 What do these sites have in common with the ones that you have selected and what
do you think has made them successful?

Table 1.1 Timeline of online services indicating innovation in business model or

marketing communications approach

Year founded Company/service Category of innovation

1994 Amazon Retailer
1995 (March) Yahoo! Directory and portal
1995 (September) eBay Online auction
1995 (December) Altavista Search engine
1996 Hotmail Web-based email
Viral marketing (using email signatures to
promote service)
Purchased by Microsoft in 1997
1998 GoTo.com First pay-per-click search marketing
Overture Purchased by Yahoo! in 2003
1998 Google Search engine
1999 Blogger Blog publishing platform
Purchased by Google in 2003
1999 Alibaba B2B marketplace with $1.7 billion IPO
on Hong Kong stock exchange in 2007
(see case in Chapter 2, p. 94)
1999 MySpace Social network
Formerly eUniverse Purchased by News Corp in 2005
2001 Wikipedia Open encyclopedia
2002 Last.fm A UK-based Internet radio and music
community website, founded in 2002.
On 30 May 2007, CBS Interactive
acquired Last.fm for £140m (US$280m)
2003 Skype Peer-to-peer Internet telephony VOIP –
Voice Over Internet Protocol
Purchased by eBay in 2005
2003 Second Life Immersive virtual world
8 Part 1 Digital marketing fundamentals

Year founded Company/service Category of innovation

2004 Facebook Social network applications and groups

2005 YouTube Video sharing and rating
2006 Paypal Paypal offers first mobile payment service
2007 iPhone Apple launches the iPhone
2008 Groupon A group-buying service based on use of
discounted gift certificates
2009 Foursquare and Foursquare was a location-based
Kickstarter social media website designed for
mobile access through ‘check-ins’
Kickstarter launches to give momentum
crowdsourcing
2011 Snapchat A mobile photo messaging service where
images are deleted after a set number of
seconds
2012 SmartThings Internet of Things service, connects
everyday objects — from ovens to
thermostats to the Internet
2013 Apple iBeacon and iBeacon uses low-energy Bluetooth
CloudTags to notify shoppers of items of interest.
Cloudtags gives shoppers in-depth
information about products via tablets
The Future Digital innovations and Innovation drives the digital
business propositions economy and is set to continue
into the future. Digital has become
mainstream and although there are
opportunities, displacing existing global
incumbent platforms will be rare. For the
latest developments see:
www.thenextweb.com

The challenge for marketers is to assess which innovations are

most relevant to their organisation and to seek to gain advantage
through introducing them to a company such that the digital mar-
keting techniques integrate effectively with traditional marketing
communications.
This text will take you through the questions to ask and potential
solutions step by step to enable you to develop appropriate strate-
gies. In this introductory chapter, after an initial scoping of digital
marketing, we review two main aspects of managing digital mar-
keting. In the first part of this chapter, we review the main strate-
gic challenges and opportunities of digital marketing that must be
managed by organisations. We then go on to introduce the com-
munications techniques for promoting companies online through
digital technology platforms such as desktop, tablet and smart-
phone devices (for example, search engine marketing (SEM), and
social media and display advertising) using the unique characteris-
tics of digital media. The following practitioner interview with Nick
Dutch, Head of Digital at Domino’s Pizza Group, highlights some
of the challenges and opportunities of marketing an online business.
 Chapter 1 Introducing digital marketing 9

Digital marketing in practice The Smart Insights interview

Nick Dutch is Head of Digital at Domino’s Pizza Group Limited in the UK and
Republic of Ireland. In this interview he shares the approach used to help plan
digital strategy development.

Digital strategy development at Domino’s Pizza

Q. Please outline your role and how your team is structured

My role combines all aspects of the online customer experience from media to
­conversion, both on the desktop site and in mobile. So, I’m responsible for all ­online
marketing activity that drives people to the site and interactions on the customer
journey whether on our desktop site, mobile sites and apps and our communities on
­social media sites which are also part of how the Domino’s brand is presented in the
­digital space. From a strategic point of view, I’m responsible for developing the long-
term strategic roadmap for digital and ensuring it contributes to and complements the
­overall business strategy.
We have six in our digital team in total, with three other manager roles for the three
key activities: an e-Commerce Marketing Manager, Digital Campaigns Manager and
CRM Manager. The e-Commerce Marketing Manager’s remit is performance-based
with a focus on generating value through search, affiliate and display marketing and
also maximising conversion on-site. They work closely with the Digital Campaigns
Manager – imagine the intersecting Yin and Yang of Digital Marketing. The Digital
Campaigns Manager ensures integration with broader brand marketing initiatives and
is tasked with bringing the brand to life online, so they’re responsible for branded digi-
tal content on- and off-site. The CRM Manager works with an E-CRM exec and they
manage automated triggered email predominantly and in future increased SMS and
personalisation anywhere 1:1 communications, including Push notifications on mobile,
digital display and of course the website itself. They’re also supported by a database
marketing analyst.
Our team is relatively small since we’re supported on the technical side by the com-
mercial systems team responsible for the development and maintenance of all our
e-commerce platforms (in IT services), we’re their client. We work with them closely on
new features and applications, conversion rate optimisation and they manage ­on-site
product content updates. There are also business analysts in this team who provide
­reports and insights to support CRO.

Q. How do you set the vision for the long-term contribution of desktop+mobile
channels for Dominos?

Our vision for digital is centred on how we can provide convenience to the customer
across different channels – convenience has to be platform agnostic.
The rate of consumer adoption of digital technologies informs this vision, so we
went into mobile first, because we were already seeing that mobile platforms were
popular for customers. We will be tracking take-up of newer technologies like NFC
payment options and will add them to a longer-term three-year roadmap based on
when we see them entering the mainstream. Then there is a hard roadmap for the next
12 months. What we identify two years out may fall by the wayside if there isn’t a clear
customer imperative.
We prioritise new developments based on a combination of how it will impact
­customer convenience and commercial returns through increased conversion rate or
average order value. It doesn’t have to always be a scientific prioritisation; decisions
can be more brand-related: for example, connected TV – opportunity to partner with
10 Part 1 Digital marketing fundamentals

TV manufacturer – may be more brand related – innovation is a key element of our

brand DNA so we’ll always consider those things that may not be 100 per cent com-
mercially viable also.

Q. What is your process for making investment decisions in media?

The starting point is based on integrating with business priorities, which are based on
a classic campaign marketing planning process – based on new product introductions
for example – so online campaign activities are aligned with these.
At a top level, we make an investment-split decision for search marketing, affiliates
and display based on previous performance trends comparing the previous year to dif-
ferent quarters and of course our current business targets and forecasts. We need to
use the best mix of media to attract customers who are exhibiting different behaviours
in their buying decision. So some customers will be in the process of getting pizza in
tonight and are looking for the best deals right now. Affiliates are significant in driv-
ing that decision. But others may be considering eating in a few days; display can
be important here and we do see a halo-effect of display ads prompting searches for
Domino’s, so it’s important to balance performance and brand investments.
At a practical level, like all e-commerce sites, we look at our year-on-year perfor-
mance carefully – all decisions are based on beating year-on-year performance men-
tality. Detailed decisions are involved here – for example around search, we may have
a search budget where we have to balance investment in paid and natural search to
get the best efficiency. Likewise, depending on the market factors, we will change the
balance of targeting different terms in Adwords; some terms are demand creation such
as generics, whereas others mop up demand such as brand or local search terms.
Adjusting the media mix month by month is always an ongoing activity because
of four factors. First, competitor action such as a promotion or competing on a brand
term or other media activity. Second, new marketing options we may want to test
to gain advantages – for example, the current targeting options in Gmail or custom
audiences in Facebook. Then there are changes to business needs such as weather
­affecting demand – we have to generate more demand which can be mean upweight-
ing generic or local search targeting for new customers.
Finally, our analysis techniques or tools of which media are effective will improve –
for example, we have been looking more recently at purchase attribution and this has
given emphasis on display budget against more ‘mopping up channels’.
I haven’t mentioned social media yet since it’s not so important from a direct-sales
point of view. That said, we do use content marketing where bespoke content is
­developed around our audience’s passion, for example to associate us with football. But
it’s critical for other aspects such as community management on the social networks
where we create and share content continuously around this. We do offer social sign-in
through Facebook Connect, for example, but that isn’t used to a significant degree. Of
course, social media is also important for customer service where we have to manage
this proactively. We use some outsourced services for different social media activities.

Q. How do you manage conversion rate improvements and the implementation of

new features on your sites?

We now continually optimise, there has been a change in mindset as sales from the
online channels have increased. It was more of a static site originally, but we are now
able to review more regularly, for example on a fortnightly or monthly review process.
We use Google Analytics as a performance tool for reviewing customer journeys and
we use multi-device attribution, but can use journey analysis, e.g. through ad serving
to give us something similar.
 Chapter 1 Introducing digital marketing 11

Definitions – what are digital marketing and multichannel marketing?

Digital media The use of the Internet and other digital media and technology to support ‘modern
Communications are
facilitated through
marketing’ has given rise to a bewildering range of labels and jargon created by both
content and interactive academics and professionals. It has been called digital marketing, Internet marketing,
services delivered by e-marketing and web marketing. For the fifth edition we changed the title of this text from
different digital technology
platforms including the Internet Marketing to Digital Marketing since it shows the use of a range of digital plat-
Internet, web, mobile forms to interact with audiences and for other reasons explained in the preface. Of course,
phone, interactive TV,
IPTV and digital signage.
what is important within a company is not the term, but the activities that comprise digital
marketing, which must be prioritised according to their relevance. So in this chapter we
Digital marketing
The application of the focus on introducing these different digital marketing activities.
Internet and related Digital marketing can be simply defined as:
digital technologies
in conjunction Achieving marketing objectives through applying digital technologies and media.
with traditional
communications to
achieve marketing
This succinct definition helps remind us that it is the results delivered by technology
objectives. that should determine investment in Internet marketing, not the adoption of the technol-
Online company ogy! These digital technologies include the desktop, mobile, tablet and other digital plat-
presence forms introduced later in the chapter.
Different forms of online
media controlled by a In practice, digital marketing includes managing different forms of online company
company including their presence, such as company websites and social media company pages in conjunction with
website, blogs, email
list and social media
online communications techniques introduced later in this chapter, including search engine
presences. Also known as marketing, social media marketing, online advertising, email marketing and partnership
‘owned media’. arrangements with other websites. These techniques are used to support the objectives of
Electronic customer acquiring new customers and providing services to existing customers that help develop
relationship
management (E-CRM)
the customer relationship through E-CRM. However, for digital marketing to be successful
Using digital there is still a necessity for integration of these techniques with traditional media such as
communications print, TV and direct mail as part of multichannel marketing communications.
technologies to maximise
sales to existing The role of digital platforms in supporting integrated multichannel marketing is another
customers and encourage recurring theme in this text and in Chapter 2 we explore its role in supporting different
continued usage of
online services through customer journeys through alternative communications and distribution channels. Online
techniques including channels can also be managed to support the whole buying process from pre-sale to sale to
database, personalised
web messages, customer
post-sale and further development of customer relationships.
services, email and social
media marketing.
Multichannel marketing
Customer communi-
cations and product
Paid, owned and earned media
distribution are supported
by a combination of digital To develop a sound digital strategy today involves understanding a more complex, more
and traditional channels
at different points in the competitive buying environment than ever before, with customer journeys involving many
buying cycle. different forms of online presence. To help develop a strategy to reach and influence
Customer journeys potential customers online, it’s commonplace to refer to three main types of media chan-
The sequence of online nels marketers need to consider today (Figure 1.2):
and offline touchpoints a
customer takes during a
1 Paid media. These are bought media where there is investment to pay for visitors, reach
buying process or broader
customer experience. or conversions through search, display ad networks or affiliate marketing. Offline,
Online this may include a traditional media like print and TV advertising and direct mail remain important,
range of digital platforms,
communications media, accounting for the majority of paid media spend.
websites, pages and 2 Owned media. This is media owned by the brand. Online this includes a company’s own
engagement devices.
websites, blogs, email list, mobile apps or their social presence on Facebook, LinkedIn
or Twitter. Offline owned media may include brochures or retail stores. It’s useful to
think of a company’s own presence as media in the sense that they are an alternative
investment to other media and they offer opportunities to promote products using simi-
lar ad or editorial formats to other media. It emphasises the need for all organisations
to become multichannel publishers.
12 Part 1 Digital marketing fundamentals

Advertising
Paid search
Display ads
Affiliate marketing
Digital signage

Paid
Atomisation Paid
media
of content placements
into ads

Digital properties Partner networks

Website(s) Publisher editorial
Blogs Owned Earned Influencer outreach
Mobile apps media media Word-of-mouth
Social presence Social networks

Atomisation of conversations
through shared APIs
and social widgets

Figure 1.2 The intersection of the three key online media types

Paid media 3 Earned media. Traditionally, earned media has been the name given to publicity generated
Also known as bought through PR invested in targeting influencers to increase awareness about a brand. Now
media, a direct payment
occurs to a site owner earned media also includes word-of-mouth that can be stimulated through viral and social
or an ad network when media marketing, and conversations in social networks, blogs and other communities. It’s
they serve an ad, a
sponsorship or pay useful to think of earned media as the sharing of engaging content developed through
for a click, lead or sale different types of partners such as publishers, bloggers and other influencers including cus-
generated.
tomer advocates. Another way of thinking about earned media is as different forms of
Owned media conversations between consumers and businesses occurring both online and offline.
Different forms of online
media controlled by a
company including their
We will see at the end of this chapter that content marketing has become a core inte-
website, blogs, email grated modern marketing approach which involves communications across paid, owned
list and social media and earned media.
presence.
You can see in Figure 1.2 that there is overlap between the three different types of media.
Earned media
The audience is reached It is important to note this since achieving this overlap requires integration of campaigns,
through editorial, resources and infrastructure. Content on a content hub or site can be broken down (some-
comments and sharing
online.
times described as microcontent) and shared between other media types through widgets
powered by program and data exchange APIs (Application Programming Interfaces) such
Application
Programming as the Facebook API.
Interfaces
Method of exchanging
data between systems
such as website services.
The growing range of digital marketing platforms

If you think of the options to reach and interact with audiences when they are online, we have
traditionally used digital media channels like search, social media or display ads on media
sites accessed via desktop or laptop-based hardware platforms. The desktop access platform
has been dominant for years and remains so for now, but the number of mobile smartphone
and tablet visitor sessions now exceed desktop Internet sessions for many ­consumer busi-
nesses. Combining with these hardware platforms, there are also different software platforms
which marketers can use to reach and interact with their audience through content ­marketing
or advertising, so let’s look at the range of options that are available:
 Chapter 1 Introducing digital marketing 13

Desktop, laptop and notebook platforms

1 Desktop browser-based platform. This is traditional web access through the c­ onsumer’s
browser of choice, whether Internet Explorer, Google Chrome or Safari.
2 Desktop apps. We don’t hear this platform talked about much; increasingly users
are accessing paid and free apps from their desktop via the Apple App Store or the
­Microsoft equivalent, like Gadgets. This gives opportunities for brands to engage via
these platforms.
3 Email platforms. While email isn’t traditionally considered a platform, it does offer an
opportunity separate from browser and app-based options to communicate with pros-
pects or clients, whether through editorial or advertising, and email is still widely used
for marketing.
4 Feed-based and API data exchange platforms. Many users still consume data through
RSS feeds, and Twitter and Facebook status updates can be considered a form of feed
or stream where ads can be inserted.
5 Video-marketing platforms. Streamed video is often delivered through the other plat-
forms mentioned above, particularly through browsers and plug-ins, but it represents
a separate platform. Television channels delivered through streaming over the Internet
(known as IPTV) are related to this platform.
It could be argued that the major social networks Facebook, LinkedIn and Twitter also
provide a form of platform, but these really exist across all of these technology platforms
so they haven’t been identified separately.
Mobile marketing
Marketing to encourage Mobile phone and tablet platforms
consumer engagement
when using mobile The options on mobile hardware platforms are similar in many ways to the desktop. Since
phones (particularly
smartphones) or tablet
they can be used in different locations there are many new opportunities to engage con-
devices. sumers through mobile marketing and location-based marketing. The main platforms are:
Location-based
marketing
1 Mobile operating system and browser. There are mobile browsers which are closely
Location or proximity- ­integrated with the operating system.
based marketing is mobile 2 Mobile-based apps. Apps are proprietary to the mobile operating system, whether
marketing based on the
GPS built into phones or Apple iOS, Google Android, RIM or Windows. A big decision is whether to deliver
based on interaction with content and experience through a browser and/or a specific app which provides an im-
other local digital devices.
proved experience. If you check the latest research you will see that the majority of
Mobile-based apps
Designed to run on
mobile media time is app-based.
smartphones and tablet
computers, apps provide
users with rich mobile
Other hardware platforms
content by deploying the
handset’s multiple native Apart from desktop and mobile access, there are a host of other and growing platforms
capabilities. Apps are through which to communicate with customers. For example:
available for download
from app stores hosted 1 Gaming platforms. Whether it’s a PlayStation, Nintendo or Xbox, there are increasing
by the mobile operating
systems (e.g. iTunes for ­options to reach gamers through ads or placements within games, for example in-game ads.
iOS, Google Play for 2 Indoor and outdoor kiosk-type apps. For example, interactive kiosks and augmented
Android, Microsoft App
Store, BlackBerry App
reality options to communicate with consumers.
World). 3 Interactive signage. The modern version of signage is closely related to kiosk apps and
Software as a may incorporate different methods such as touchscreen, Bluetooth or QR codes to
Service (SaaS) ­encourage interactive. Mini Case Study 1.1 gives a futuristic example.
Business applications
and software services are
4 Wearables. Smart watches such as the Apple Watch and smart glasses such as Google Glass.
provided through Internet
and web protocols with
the application managed Software platforms for managing modern marketing
on a separate server
from where it is accessed There is a bewildering range of software, services and systems available today for manag-
through a web browser on ing marketing. Many are now available as SaaS platforms which have made services to
an end user’s computer
with data stored within
manage marketing more affordable for smaller businesses and easier to manage for all
‘The Cloud’. since no installation is required.
14 Part 1 Digital marketing fundamentals

The range of options have been ably summarised by Scott Brinker, who publishes a
summary of the marketing technology landscape each year. The six main categories of
system he recommends marketers review for the range of technologies available are:
1 Marketing experiences. More specialised technologies that directly affect prospects and
customers across their lifecycle, such as advertising, email, social media, search e­ ngine
optimisation, content marketing, A/B testing, marketing apps – the ‘front-­office’ of
modern marketing.
2 Marketing operations. The tools and data for managing the ‘back-office’ of marketing,
such as analytics, Marketing Resource Management (MRM), Digital Asset M ­ anagement
(DAM) and agile marketing management.

Activity 1.2 The latest marketing technology landscape

Purpose
To illustrate the range of systems available to support marketers and to explain the
main categories of service available.

Activity
1 Search for Scott Brinker’s latest technology roadmap for the current year on his
ChiefMartec.com site. For each of the six categories of service summarised in
­Figure 1.3, write a layman’s description of how they can support digital marketing
activities by reviewing the proposition as described on the websites of the most
popular services in the category (the most popular are listed first).
2 Make a note to understand the different types of service defined in each category.
3 Choose one or two vendor systems and visit their website to see how they explain
the proposition and explain it to others in your group(s). Alternatively identify the
most popular service(s) in each category.

Marketing
Marketing experiences operations
(Customer experience, digital media channel, voice of
(Digital analytics,
customer, personalisation, chat, sales enable, testing and attribution and dashboards
optimisation) asset management,
audience and market data)

Marketing middleware
(APIs, data management, tag management, identity)

Marketing backbone platforms

(CRM, marketing automation, content management, Ecommerce)

Infrastructure Internet
(Databases, big data, cloud, mobile and web development) (Digital platforms)

Figure 1.3 Scott Brinker’s categorisation of modern marketing technology

options. Digital Platforms include Facebook, Google, LinkedIn
and Twitter
Source: With permission – Chiefmartec.com
 Chapter 1 Introducing digital marketing 15

3 Marketing middleware such as Data Management Platforms (DMPs), tag management,

cloud connectors, user management and API services.
4 Marketing backbone platforms such as customer relationship management, marketing
automation, content management and e-commerce engines. (These are quite different
in their application, so need to be reviewed separately.)
5 Infrastructure services such as databases, big data management, cloud computing and
software development tools.
6 Internet services such as Facebook, Google and Twitter that underlie today’s marketing
environment. (How you integrate with these key platforms.) Complete Activity 1.2 to
review the latest technologies.

Mini case study 1.1 Tesco Homeplus opens subway virtual store in South Korea

In South Korea, Tesco Homeplus operates around 600 stores (including franchise store operations) but
has significantly fewer stores than the market leader E-mart. Based on research which showed that many
­Koreans tend to shop in stores near their homes for convenience, Tesco trialled a virtual store to reach
these shoppers.
And Tesco now operates 22 virtual stores, where virtual displays were implemented in a similar way to
actual stores, from the display to merchandise but with smartphone QR code readers used to shop and the
goods delivered home after checkout (Figure 1.4). This approach enables South Koreans to shop – on-the-go.
Source: Homeplus (2014), www.tescoplc.com/index.asp?pageid=314

Figure 1.4 YouTube video explaining the Tesco Homeplus Virtual Subway Store presence in South
Korea
Source: www.youtube.com/watch?v=fGaVFRzTTP4
16 Part 1 Digital marketing fundamentals

Introduction to digital marketing strategy

The key strategic decisions for digital marketing are in common with traditional business
and marketing strategy decisions. As we will see in Chapter 4, which defines a process for
developing a digital marketing strategy, customer segmentation, targeting and positioning
Positioning are all key to effective digital marketing. These familiar target marketing strategy
Customers’ perception
of the product and brand
approaches involve selecting target customer groups and specifying how to deliver value
offering relative to those of to these groups as a proposition of services and products. As well as positioning of the
competitors. core product or brand proposition, online development of a compelling extended product
Target marketing or online value proposition (OVP) is also important (see Chapter 7). This defines how the
strategy
Evaluation and
online experience of a brand is delivered through content, visual design, interactivity, shar-
selection of appropriate ing, rich media and how the online presence integrates with the offline presence. All of the
customer segments companies referenced in Table 1.1 have a clear, compelling OVP. Strategic decisions about
and the development of
appropriate offers. the future OVP a company offers is a key part of Internet marketing strategy.
Online value proposi-
tion (OVP)
A statement of the
benefits of online
Key features of digital marketing strategy
services that reinforces
the core proposition The interaction and integration between Internet channels and traditional channels is a key
and differentiates from
an organisation’s offline part of digital marketing strategy development. Digital marketing strategy is essentially a
offering and those of channel marketing strategy and it needs to be integrated with other channels as part of multi-
competitors.
channel marketing. It follows that an effective digital marketing strategy should:
● Be aligned with business and marketing strategy (for example, many companies use a
rolling three-year plan and vision), with more specific annual business priorities and
initiatives.
● Use clear objectives for business and brand development and the online contribution
of leads and sales for the Internet or other digital channels. These should be based on
models of the number using the channels.
● Be consistent with the types of customers who use and can be effectively reached
through the channel.
Value proposition ● Define a compelling, differential value proposition for the channel which must be effec-
The benefits or value a
brand offers to customers
tively communicated to customers.
in its products and ● Specify the mix of online and offline communication tools used to attract visitors to the
services. company website or interact with the brand through other digital media such as email
or mobile.
● Support the customer journey through the buying process as they select and purchase
products using the digital channel in combination with other channels.
● Manage the online customer lifecycle through the stages of attracting visitors to the
website, converting them into customers and retention and growth.

Applications of digital marketing

For established multichannel organisations, digital media offer a range of opportunities

for marketing products and services across the purchase cycle that companies need to
review as part of their digital strategy. Consider the example of a low-cost airline. Digital
media and technologies can be used as follows:
● Advertising medium. Display ads on publisher sites or social networks can be used to
create awareness of brands and demands for products or services.
● Direct-response medium. Targeted search advertising enables companies to drive visits to a
site when consumers shows intent to purchase, such as searching for a flight to a destination.
 Chapter 1 Introducing digital marketing 17

●● Platform for sales transactions. Online flight booking is now the most common method
for booking flights both for consumers and business travellers.
●● Lead-generation method. For booking business flights, tools can be provided which help
identify and follow up corporate flight purchases.
●● Distribution channel, such as for distributing digital products. Today, airlines sell more
insurance services than previously, for example.
●● Customer service mechanism. For example, customers may ‘self-serve’ more cost-­
effectively by reviewing frequently asked questions.
●● Relationship-building medium. Here a company can interact with its customers to
­better understand their needs and publicise relevant products and offers. For example,
easyJet uses its email newsletter and tailored alerts about special deals to encourage
repeat flight bookings.

Benefits of digital marketing

The benefits of digital marketing in supporting marketing is suggested by applying the

definition of marketing by the Chartered Institute of Marketing (www.cim.co.uk):
Marketing is the management process responsible for identifying, anticipating and satis-
fying customer requirements profitably.

This definition emphasises the focus of marketing on the customer, while at the same
time implying a need to link to other business operations to achieve this profitability. Chaf-
fey and Smith (2012) note that digital marketing can be used to support these aims as
follows:
●● Identifying – the Internet can be used for marketing research to find out customers’
needs and wants (Chapters 7 and 10).
●● Anticipating – the Internet provides an additional channel by which customers can
­access information and make purchases – evaluating this demand is key to governing
resource allocation to e-marketing (as explained in Chapters 2, 3 and 4).
●● Satisfying – a key success factor in e-marketing is achieving customer satisfaction
through the electronic channel, which raises issues such as: is the site easy to use, does
it perform adequately, what is the standard of associated customer service and how are
physical products dispatched? (These issues of customer relationship management are
discussed further in Chapters 6 and 7.)
In Chapter 4, we show how to quantify different goals as part of developing digi-
tal ­marketing strategy. To introduce the typical types of goals for digital marketing, see
Table 1.2 which gives a basic framework for setting and reviewing different types of goals
for digital strategy development based on the 5Ss of Chaffey and Smith (2012).
A powerful method of evaluating the strategic marketing opportunities of using the
­Internet is to apply the strategic marketing grid of Ansoff (1957), as discussed in the strat-
egy formulation section of Chapter 4. This shows how the Internet can potentially be used
to achieve four strategic directions:
1 Market penetration. The Internet can be used to sell more existing products into exist-
ing markets.
2 Market development. Here the Internet is used to sell into new geographical markets,
taking advantage of the low cost of advertising internationally without the necessity for
a supporting sales infrastructure in the customers’ countries.
3 Product development. New products or services are developed which can be delivered
by the Internet. These are typically digital products.
4 Diversification. In this sector, the Internet supports selling new products which are
­developed and sold into new markets.
18 Part 1 Digital marketing fundamentals

Table 1.2 The 5Ss of Internet marketing

Benefit of e-marketing How benefit is delivered Examples of typical objectives

Sell – Grow sales Includes direct online sales • Achieve 10 per cent of sales
and sales from offline online in market
channels influenced online. • Increase online sales for
Achieved through wider ­product by 20 per cent in year
distribution to customers
you cannot readily service
offline or perhaps through
a wider product range than
in-store, or lower prices
compared to other channels
Serve – Add value Achieved through giving • Increase interaction with
customers extra benefits different content on site
online or inform product • Increase dwell-time duration
development through online on site by 10 per cent
dialogue and feedback (sometimes known as
‘stickiness’)
• Increasing number of
­customers actively using
­online services (at least once
per month) to 30 per cent
Speak – Get closer to Creating a two-way dialogue • Grow email coverage to
customers through web interactions 50 per cent of current
like forums and surveys and customer database
conducting online market • Survey 1000 customers online
research through formal each month
surveys and informally • Increase visitors to community
monitoring conversations to site section by 5 per cent
learn about them
Save – Save costs Achieved through online • Generate 10 per cent
email communications, more sales for same
sales and service transac- communications budget
tions to reduce staff, print • Reduce cost of direct
and postage costs. Savings marketing by 15 per cent
also accrue through ‘web through email
self-service’ where custom- • Increase web self-service
ers answer queries through to 40 per cent of all service
online content ­enquiries and reduce overall
cost-to-serve by 10 per cent
Sizzle – Extend the Achieved through providing • Improve branding metrics
brand online new propositions, new such as brand awareness,
offers and new experiences reach, brand favourability and
online including building purchase intent
communities
Source: Chaffey and Smith (2012)

Geyskens et al. (2002) suggested an alternative perspective, that there are three main
forms of demand expansion for an existing company when they adopt direct Internet
channels. These are:
1 Market expansion, which occurs when new segments of customers are reached who
did not previously buy in a category – they give the example of Estée Lauder, which
hopes that the Clinique.com site will attract customers who avoid buying at a cosmetics
­counter because they find the experience intimidating.
 Chapter 1 Introducing digital marketing 19

2 Brand switching, which is by winning customers from competitors.

3 Relationship deepening, which is selling more to existing customers.

For well-established brands with a loyal customer base, price reduction relative to other
channels is not necessarily essential or some web-channel price reductions can be used, but
they note that often competitive pressures may require lower online prices. These a­ uthors
also note the potential benefits of reduction in transactional and distribution costs through
introducing a direct Internet channel once initial startup costs are incurred. However, for
manufacturer brands it important that consideration is given to the advertising expendi-
ture required to move goods through the supply chain once a brand is established online
(Pei et al., 2014). It is essential for brands to plan how they will manage potential channel
conflict when establishing their brands online.
As well as assisting large corporate organisations develop their markets, perhaps the
most exciting potential of the Internet is to help existing small and medium enterprises
(SMEs) expand. Read Mini Case Study 1.2, which illustrates how one manufacturer has
used digital media and technology to build its brand. There is further discussion of the
­opportunities of digital communication at the end of the chapter.

Mini case study 1.2 Tatu Couture expands the reach of its brand online

Tatu Couture designs and manufactures luxury British lingerie which is sold through stockists in the UK, Paris
and New York. Tatu Couture has a unique vision to push the boundaries of design and innovation with its trend-
setting luxury lingerie and designer body wear. All the goods are manufactured and hand finished in the UK.

Overview and digital strategy

Agency Tonica supported Tatu Couture by creating a four-stage strategy to increase digital presence
(­Figure 1.5). In addition to the stockist route, Tatu Couture was keen to increase its own direct sales, so we

Figure 1.5 Tatu Couture (www.tatucouture.com)

20 Part 1 Digital marketing fundamentals

had two simple objectives for the work – to increase visits to tatucouture.com and increase sales from the
site. The steps to develop the reach of the company are explained by the agency as:

Step 1 – Take control

Like many small to medium sized enterprises (SMEs), Tatu Couture had employed a Web Designer to cre-
ate their site, but were unfamiliar with some of the standard tools that could help them track success. In this
phase of work, we focussed on empowering Tatu Couture to take control so that they could cost-effectively
develop their site without spending budget on external resource:
●● Suggesting Tatu Couture gain full account control of their Shopify website
●● Assisting Tatu Couture in having Google Webmaster Tools access in order to access information about the
health of their site
●● Setting up Google Analytics in order to track website performance.

Step 2 – Make the most of your contacts

In this phase, we were keen to ensure that Tatu Couture could conduct their own email campaigns using free
provider, Mailchimp. During this process we also consolidated their contact data into a new Tatu Couture
Mailchimp account, and set up a website ‘sign up’ so that new prospects could be captured.

Step 3 – Promote (for free when possible!)

In addition to the email campaigns, we identified several low-cost or no-cost promotion options:
●● Google Merchant (aka Google Shopping/Google Product Search). In order to increase online presence, we
were keen to feed Tatu Couture products into Google Shopping, particularly as this was still a free service
in the UK (prior to March 2013). Luckily Shopify had a fairly easy integration option for this, so we were able
to activate the integration and add a few settings (such as shipping) for products to be regularly submitted.
●● Google Places – a free local service which helps Tatu Couture stand out regionally.
●● Google Adwords (pay-per-click advertising). Since the launch campaign, low-cost Google Adwords
­campaigns have been used at key events in the calendar, continuing to lower the cost per click, increase
click-through rates and utilise the best performing keywords.
●● We have also used micro-geographic targeting in Google Adword campaigns as a proxy for income – for
example, targeting South Kensington and Chelsea postcodes.
●● Facebook. Tatu Couture is using this investment to reach the most likely recipients to purchase. The chal-
lenge in promoting a luxury product online is reaching an audience likely to purchase and this is where the
beauty of Facebook could help.

By targeting Facebook profiles who already liked other luxury or designer products, our Facebook cam-
paign could reach a more tailored market than using Google alone. During the campaign we were able to
double Facebook likes for Tatu Couture. In the last three months, Facebook has driven 16 per cent of the
traffic to the site.

Step 4 – Search engine optimisation

As well as suggesting search engine optimisation changes along the way, we suggested a more formal search
engine optimisation (SEO) review as Step 4. Tatu Couture have begun to implement these SEO changes in
an effort to drive more organic traffic to the site. The changes included incorporating more keywords into the
product descriptions in addition to the unique Tatu Couture copy.
Source: Smart Insights (2013)

Alternative digital business models

As part of strategy development, organisations require clarity on the type of business

model they will develop.
 Chapter 1 Introducing digital marketing 21

Business and consumer business models

A basic aspect of the types of online business model explored in Chapter 2 is whether the
proposition offered appeals to consumers or business. So digital marketing opportunities
are often described in terms of the extent to which an organisation is transacting with con-
Business-to-consumer sumers (business-to-consumer – B2C) or other businesses (business-to-business – B2B).
(B2C) Reference to the well-known online companies in Table 1.1 initially suggests these
Commercial transactions
between an organisation companies are mainly focussed on B2C markets. However, B2B communications are still
and consumers. important for many of these companies since business transactions may occur, as for
Business-to-business ­example with eBay Business (http://business.ebay.com/), or the B2C service may need to
(B2B)
Commercial transactions
be sustained through advertising provided through B2B transactions, for example Google’s
between an organisation revenue is largely based on its B2B AdWords (http://adwords.google.com/). Advertising ser-
and other organisations vice and advertising-based revenue is also vital to social network sites such as YouTube,
(inter-organisational
marketing). Facebook and Twitter.
Digital media and technologies offer new opportunities for direct-to-customer strate-
gies where brands can communicate directly to their consumers. For example, a publisher
and authors can interact with their readers, or food brands can interact directly with their
purchasers via their websites or social media.
Figure 1.6 gives examples of different companies operating in the business-to-consumer
(B2C) and business-to-business (B2B) spheres. Often companies such as easyJet and BP will
have products that appeal to both consumers and businesses, so will have different parts
of their site to appeal to these audiences. Figure 1.6 also presents two additional types of

From: Supplier of content/service

Consumer or citizen Business (organisation) Government
Consumer or citizen

Consumer-to-consumer (C2C) Business-to-consumer (B2C) Government-to-consumer (G2C)

• eBay • Transactional: Amazon • National government
• Peer-to-peer (Skype) • Relationship-building: BP transactional: Tax – HM
• Blogs and communities • Brand-building: Unilever Revenue & Customs
• Product recommendations • Media owner – News Corp • National government
• Social network (Bebo, • Comparison intermediary: information
Facebook Google+) Kelkoo, Pricerunner • Local government information
• Local government services
To: Consumer of content/service
Business (organisation)

Consumer-to-business (C2B) Business-to-business (B2B) Government-to-business (B2B)

• Priceline • Transactional: Euroffice • Government services and
• Consumer-feedback, • Relationship-building: BP transactions: tax
communities or campaigns • Media owned: Emap • Legal regulations
business productions
• B2B marketplaces: EC21
• Social network (Linked-In,
Plaxo)

Consumer-to-government (C2G) Business-to-government (B2G) Government-to-government (G2G)

• Feedback to government • Feedback to government • Inter-government services
Government

through pressure group or businesses and non- • Exchange of information

individual sites governmental organisations

Figure 1.6 Summary and examples of transaction alternatives between businesses, consumers and
governmental organisations
22 Part 1 Digital marketing fundamentals

Consumer-to-­ transaction – those where consumers transact directly with other consumers (­consumer-to
consumer (C2C)
Informational or financial consumer – C2C ) and where they initiate trading with companies ( consumer-to-
transactions between business – C2B). Common C2C interactions include transactional exchange (e.g. eBay,
consumers, but usually
mediated through a
www.ebay.com), financial services (e.g. Zopa, www.zopa.com) and betting (e.g. Betfair,
business site. www.betfair.com). In the early stages of the evolution of the web, Hoffman and Novak
Consumer-to-business (1996) highlighted the potential importance of C2C interactions; the significance of their
(C2B) findings have been supported by growth of social networks. More recently, Adjei et al.
Consumers approach the
business with an offer. (2010) found how brand communities can be effective tools for influencing sales and retain-
E-government
ing customers and building confidence in new customers.
The use of Internet The significance of C2C interactions is shown by Activity 1.3.
technologies to provide Figure 1.6 also includes government and public services organisations which deliver
government services to
citizens. ­online or e-government services. As well as the models shown in the figure, it has also been
suggested that employees should be considered as a separate type of consumer through the
use of intranets, which is referred to as employee-to-employee or E2E.

Activity 1.3 Why are C2C interactions important?

Purpose
To highlight the relevance of C2C transactions to B2C companies.

Activity
Consult with fellow students and share experience of C2C interactions online. Think of
Direct-to-customer C2C on both independent sites and organisational sites. How can C2C communica-
model tions assist these organisations?
A brand which has
previously communicated
to its customers via
intermediaries such as
media sites or wholesalers
communicates directly
via digital media such as
social networks, email
What is the difference between e-commerce and e-business?
and websites.
Electronic commerce Electronic commerce (e-commerce) refers to both financial and informational
All financial and e­ lectronically mediated transactions between an organisation and any third party it deals
informational electronically
mediated exchanges with (Chaffey, 2014). So e-commerce involves management not only of online sales trans-
between an organisation actions, but also of non-financial transactions such as inbound customer service enquiries
and its external
stakeholders.
and outbound email broadcasts, so you can argue that e-commerce is open to all online
Sell-side e-commerce
organisations.
E-commerce transactions E-commerce is often further subdivided into a sell-side e-commerce perspective, which
between a supplier refers to transactions involved with selling products to an organisation’s customers, and a
organisation and its
customers. buy-side e-commerce perspective, which refers to business-to-business transactions to pro-
Buy-side e-commerce
cure resources needed by an organisation from its suppliers. This is shown in Figure 1.7.
E-commerce transactions Social commerce is an increasingly important part of e-commerce for site owners, since
between a purchasing incorporating reviews and ratings into a site and linking to social networking sites can
organisation and its
suppliers. help understand customers’ needs and increase conversion to sale. It can also involve group
Social commerce buying using a coupon service like Groupon. There is much discussion on the extent to
Social commerce is a which social media interactions between consumers directly influence sales. Digital mar-
subset of e-commerce
which encourages
keting insight 1.1 outlines research hinting at the complexity of understanding this rela-
participation and tionship. We introduce social media marketing later in this chapter.
interaction of customers E-business or digital business is similar to e-commerce but broader in scope and refers
in rating, selecting and
buying products through to using digital technology to manage a range of business processes incorporating the sell-
group buying. This side and buy-side e-commerce shown in Figure 1.7, and also other key supporting business
participation can occur on
an e-commerce site or on processes including research and development, marketing, manufacturing and inbound
third-party sites. and outbound logistics.
 Chapter 1 Introducing digital marketing 23

Social commerce – how much do social networks influence

Digital marketing insight 1.1 purchase?

Research published by the Harvard Business School, quoting Iyengar et al. (2009),
found that in Korea, where social networking and commerce is more established,
­social networks do influence purchase, but the degree of influence depends on the
­usage level and connectedness of a user. In summary, the research shows:
●● For light users of social networks with few connections (48% of users), purchases
are unaffected by social network activity.
●● For moderate users of social networks with average connections (40%), purchases are
influenced by social network interaction, boosting vendor sales for this group by 5%.
●● For heavy users of social networks with a high number of connections (12%),
­purchases are also influenced by social network interaction, but negatively; these
users avoid buying what their friends have bought and are talking about, leading to
a 14 per cent drop in sales from this group for vendors.

We return to this question in Chapter 9, where we explore the effectiveness of differ-

ent types of digital media in the Smart Insights (2015b) article ‘Is this the social media
backlash?’

E-business

Buy-side Sell-side
e-commerce e-commerce

Intranet

Internet and Internet and

extranet extranet

Key
Organisational processes
Suppliers Customers
and functional units

Suppliers’ suppliers Intermediaries Customers’ customers

Figure 1.7 The distinction between buy-side and sell-side e-commerce

24 Part 1 Digital marketing fundamentals

Electronic business
(e-business) or digital
Different forms of online presence
business
Electronically mediated The form of digital strategy developed by a company will depend on the nature of a
information exchanges,
both within an ­business. Chaffey (2014) identifies different types of online presence which each have
organisation and with different objectives and are appropriate for different markets. Note that these are not
external stakeholders
supporting the range of
clear-cut categories of websites since any company may combine these types as part of
business processes. their business model, but with a change in emphasis according to the market they serve.
­Increasingly companies are using their company pages on social networks such as Face-
book, Google+ and LinkedIn to similar purposes. As you review websites and company
social presences, note how organisations have different parts of the site focussing on
these functions of sales transactions, services, relationship-building, brand-building and
providing news and ­entertainment. The five main types of site or site or mobile app
functions are as follows.

1 Transactional e-commerce site

Enables purchase of products online. The main business contribution of the site is through
sale of these products. The sites also support the business by providing information for
consumers who prefer to purchase products offline.
●● Visit these examples: an end-product manufacturer such as Vauxhall (www.vauxhall
.co.uk) or an online retailer such as Amazon (www.amazon.com).

2 Services-orientated relationship-building website

Provides information to stimulate purchase and build relationships. Products are not
­typically available for purchase online. Information is provided through the website and
e-newsletters to inform purchase decisions. The main business contribution is through
­encouraging offline sales and generating enquiries or leads from potential customers. Such
sites also add value to existing customers by providing them with detailed information to
help support them in their lives at work or at home.
●● Visit these examples: B2B management consultants such as PricewaterhouseCoopers
(www.pwcglobal.com) and Accenture (www.accenture.com).

3 Brand-building site
Provides an experience to support the brand. Products are not typically available for online
purchase. Their main focus is to support the brand by developing an online experience
of the brand. They are typical for low-value, high-volume fast-moving consumer goods
(FMCG) brands for consumers.
●● Visit these examples: Tango (www.tango.com) and Guinness (www.guinness.com).

4 Portal or media site

Stage models Provides information or news about a range of topics. ‘Portal’ refers to a gateway to infor-
Models for the mation; it is not in common usage today. This is information both on the site and through
development of different
levels of Internet links to other sites. Portals have a diversity of options for generating revenue including
marketing services. advertising, commission-based sales, sale of customer data (lists).
Brochureware site
A simple site with limited
●● Visit these examples: Yahoo! (www.yahoo.com) (B2C) and Smart Insights (www.smartin-
interaction with the user sights.com) (B2B).
that replicates offline
marketing literature. These different types of sites tend to increase in sophistication as organisations develop
Transactional their Internet marketing. In Chapters 2 and 4 we look at stage models of the development
e-commerce sites
Sites that support online
of digital marketing services and capabilities, from static brochureware sites to dynamic
sales. transactional e-commerce sites that support interactions with customers.
 Chapter 1 Introducing digital marketing 25

5 Social network or community site

These sites or parts of sites focus on enabling community interactions between different
consumers (C2C model). Typical interactions include posting comments and replies to
comments, sending messages, rating content and tagging content in particular categories.
Well-known examples include Facebook, LinkedIn and Twitter. In addition to distinct
­social network sites such as these, social networks can also be integrated into other site types.

Challenges in developing and managing digital

marketing strategy

Some of the challenges in managing Internet marketing strategy which are commonly seen
in many organisations (and should be managed) include:
●● Unclear responsibilities for the many different Internet marketing activities (shown in
Figure P.1 in the Preface).
●● No specific objectives are set for Internet marketing.
●● Insufficient budget is allocated for Internet marketing because customer demand for
­online services is underestimated and competitors potentially gain market share through
superior online activities.
●● Budget is wasted as different parts of an organisation experiment with using different
tools or suppliers without achieving economies of scale.
●● New online value propositions for customers are not developed since the Internet is
treated as ‘just another channel to market’ without review of opportunities to offer im-
proved, differentiated online services.
●● Results from digital marketing are not measured or reviewed adequately, so actions can-
not be taken to improve effectiveness.
●● An experimental rather than planned approach is taken to using e-communications
with poor integration between online and offline marketing communications.
Research by Smart Insights (2014) investigated the challenges of managing digital mar-
keting. It was found that many businesses do face challenges in these areas:
●● Planning. Half (50 per cent) of businesses surveyed do not have a defined digital plan
or strategy although they are active in digital marketing, while nearly half (44 per cent)
also don’t have a defined marketing plan in the business against which to align strategy.
●● Organisational capabilities. Nearly half (43 per cent) of businesses have a well-defined per-
formance improvement process, with 46 per cent having adapted their structure. Many busi-
nesses either already have or are planning to introduce a digital transformation programme,
although a substantial number (37 per cent) of businesses don’t think it’s relevant for them.
●● Integration of digital channels into marketing. Only a quarter of companies (26 per
cent) were happy with their level of integration of digital marketing and traditional
communications. The main barriers to integration are: 1. Lack of integrated strategy
and plans (28 per cent); 2. Teams structured in silos (21 per cent); 3. Lack of skills in
integrated communications (17 per cent).
●● ROI evaluation. A significant proportion (39 per cent) see opportunities from digital
marketing, but find ROI measurement challenging – a key area for managers to address.
Given the future importance of digital marketing, larger organisations have introduced
Digital transformation
A staged programme of
Digital transformation programmes to help manage these challenges. The approach has
business improvements been discussed by many management consulting groups, for example MIT Center for
to People, Process ­Digital Business and Capgemini Consulting (2011) and Altimeter (2014).
and Tools tools used
for integrated digital Altimeter produced a visual proposing enablers and barriers to digital transformation
marketing to maximise (Figure 1.8). It shows how disruptive digital technologies such as social media, mobile plat-
the potential contribution
of digital technology and
forms and real-time marketing should be harnessed to create an effective digital customer
media to business growth. experience.
26 Part 1 Digital marketing fundamentals

Leaders lead
Empowerment is top-down r ∞)
me Xxx
inspiration cascades to
cus (DC
Internal collaboration al ce
git en
Di peri
Behavioral economics ex
Digital opens new
touch-points
Expand market opportunities e
tim
al
Re
Digital darwinism Data paralysis
Adapt to new Actionable insight need
technology or die new support paradigm
e
Culture of innovation bil No common vision
Mo
Digital ethnography Cause-effect
Focus on the new No dedicated
customer journey resources

Hero’s journey ial Competitive disadvantage

c
customers inspire change agents So
Tunnel vision
Silos prevent CX
collaboration

ta Lack of sense of urgency

ive Da
pt y
sru log Education
Di hno
Te
c er Execs need to know
um r
ns vio what they dont know
Co Beha
Broken experience

Digital darwinism Evolution

Figure 1.8 The drivers and barriers to digital transformation

Source: Altimeter (2014)

Applying the 7Ss

The 7Ss are a useful framework for reviewing an organisation’s existing and future
­capabilities to meet the challenges posed by the new digital channels, and some of the
­aspects of this are shown in Table 1.3.
You may have encountered the 7S framework, summarised by Waterman et al. (1980)
and developed by McKinsey consultants in the 1980s. It is often referenced when refer-
ring to the management of a business. EConsultancy (2005) has summarised some of the
­strategic resource management issues that require consideration, as shown in Table 1.3.

Table 1.3 Summary of some of the organisational challenges of digital marketing

that need to be managed in the context of the 7S framework

Element of 7S Application to digital Key issues from practice and

model ­marketing strategy literature
Strategy The significance of digital Gaining appropriate budgets and
marketing in influencing and demonstrating/delivering value and
supporting the organisation’s ROI from budgets. Annual planning
strategy approach
Techniques for using digital marketing
to impact organisation strategy
Techniques for aligning digital strategy
with organisational and marketing
strategy