Digital Marketing: What It Is and How It Works
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| Digital Marketing: What It Is and How It Works |
Digital Marketing: What It Is and How It Works
SMS from a bank or a QR code in a newspaper are tools of digital marketing. We'll tell you about its features, advantages, disadvantages, and how it differs from online advertising.
What is digital marketing and why is it needed?
Marketing, in a broad sense, is the study of customer needs, creating advertising with an appealing message to buyers, and obtaining a desired action to increase company profits.
Digital marketing is based on traditional marketing, which specialists implement through digital communication channels. For example, this includes advertising that can be seen on social media and websites. Digital marketing tools are used when viewers are offered to go to social media platforms to participate in a contest or scan a QR code and win a prize.
A street billboard turns into a digital tool if it has a QR code.
Digital marketing differs from traditional marketing by the platforms through which marketers promote products and by a wider range of tools for evaluating results. For example, in advertising accounts, it is possible to accurately determine how many users have viewed the advertisement and clicked on the ad, how much the advertiser paid for each click, and even which combination of image and text attracted the desired customers.
Before the advent of digital television, it was practically impossible to verify how many people were watching TV and seeing advertisements. Marketers were unsure about the extent to which product sales increased due to television advertising, as well as the impact of in-store displays or promotions. With the emergence of digital television and digital marketing tools, TV advertising integrated with other digital channels. Now advertisers offer viewers to scan QR codes or enter a promotional code on social media, and based on this data, they track purchases and the effectiveness of advertising.
Features of digital marketing:
1. Measurability of results:
An internet marketer can determine how many people viewed an advertisement or opened a newsletter, and identify those who took the desired action, such as subscribing, placing an order, or making a reservation. This helps to fine-tune targeting in advertising accounts to attract an interested audience and save on impressions. If everything is set up correctly, a resident of Voronezh won't see advertisements for a new restaurant in Yekaterinburg, and Android users won't be shown accessories for iPhones.
2. Automation:
In digital marketing, specialists can delegate routine tasks to chatbots, freeing up time for creative tasks. For example, automation services for email campaigns and algorithmic ad buying help streamline work processes.
3. User habits:
Users no longer want to spend too much time on their purchases. If in the past, one had to go to a store to buy cat food, now it can be ordered in a matter of minutes through an app. Internet marketers need to quickly adapt to changing user habits. For example, service websites increasingly offer self-booking forms for appointments with doctors or hairdressers, instead of using banners with callbacks. This way, users don't have to be interrupted by phone calls, and reminders about appointments can be sent via SMS or messenger.
Pros and Cons of Digital Marketing:
Companies offer marketers an interesting job that combines creativity and analytics. However, it is not without stress and high competition among professionals. Let's examine other pros and cons.
Pros of Digital Marketing:
Ability to target advertising to specific audiences. Marketers use targeting to ensure that an advertisement for a traveler's debit card is seen by someone who frequently flies to different countries, while discounts on children's products are seen by mothers.
Accurate performance metrics. Digital marketing introduced the ability to evaluate the results of advertising campaigns in detail, from reach to the cost of purchase.
Budget-friendly communication channels. It is possible to launch advertising campaigns with as little as 500 rubles in your account. Television advertising costs hundreds of thousands of rubles.
Quick response. Digital marketing provides instant communication with users through social networks, email, messengers, and website chats.
The ability to revolutionize industries. Marketers can make everyday things more convenient and technologically advanced. For example, in the past, social media comments were occasionally answered by an SMM specialist, but now customers can chat with a virtual support assistant at any time of the day.
Cons of Digital Marketing:
Need to be prepared for changes and adapt quickly to platform innovations. Often, everything can break down simply because a platform introduces restrictions on ad display. In such cases, marketers have to quickly change their strategies. For example, VKontakte (a popular social network) prohibited the use of emojis in the ad text, and some brands built their entire customer communication on that.
Adblockers. A portion of the audience is lost because some users impose restrictions on ad display in their browsers. IT specialists, for example, often employ this practice, and they are a financially desirable audience for many companies.
Data protection restrictions. If a user does not consent to cookies, marketers receive significantly less information about the user and their interactions.
Main Channels of Digital Marketing:
A marketer must be able to align the needs of potential customers with the product that needs to be sold. The main goals of marketing are to understand people's pains and desires and find the right product for them to increase company profits. These goals can be achieved through various channels. Let's explore the most popular ones.
Content Marketing:
This involves creating content for publication on a company's blog or brand media. By regularly publishing interesting content that appeals to the audience, there is a chance to attract attention to a product or service.
Websites and Blogs:
Useful materials can be published on your website or start a blog on a third-party platform. A blog is an important channel for brand recognition and preparing the audience for a purchase.
Social Media Marketing:
helps attract traffic or audience attention through social media platforms. This promotional channel aids in finding a loyal audience, obtaining feedback about the product, and increasing user engagement to make the product or service more recognizable and appealing.
Performance Marketing:
Specialists in this channel are responsible for acquiring reach and targeted user actions. It includes contextual advertising, targeted advertising, and CPA networks.
Contextual advertising is closely related to user queries in search engines. A list of keywords is formed from these queries, and algorithms select and display relevant ads to specific individuals.
Usually, users see such ads right below the search bar, which can be in the form of a gallery with images or a text ad message.
Targeted advertising allows ads to be shown to a target audience with specific parameters due to detailed settings in advertising accounts. This type of advertising is typically placed on social media platforms. For example, targeting can be set to those who have already purchased and even completed a C++ programming course, offering them the opportunity to learn how to successfully pass interviews.
CPA networks are internet platforms where advertisers and webmasters collaborate. It includes advertising in mobile applications that users must view, for example, to receive an additional life in a game.
CRM Marketing:
This area of digital marketing is closely related to user data. CRM marketers are responsible for communication with the audience, such as sending newsletters and push notifications, engaging in SMS marketing, and making calls to potential clients.
Push notifications help retain existing audiences. For example, if a user adds a product to their cart but does not complete the purchase, they may receive a push notification as a reminder after an hour.
Email marketing involves brand emails that users receive in their email inboxes. These emails can be about brand products, or promotions, or contain useful or entertaining content.
Some companies maintain a friendly communication style with customers, sending newsletters in the first person, sharing funny life stories, and inspiring readers.
SMS marketing and calls help promote company products or services through short text messages or direct phone conversations.
Subscribers receive information about promotions and special offers, tariff changes, invitations to participate in contests, or requests to provide feedback on a product or service.
SEO:
Digital marketing helps generate traffic from search engine results. The more people visit a specific website based on their search queries, the higher its traffic. The visibility of a website in search engine results depends on several factors, such as the accuracy of the technical aspects of the task (e.g., no errors in HTML code, language markup of the website) and whether the content meets user queries, ultimately building trust in the product and company.
Partner Marketing:
Partner marketing involves exchanging partner links, conducting joint promotions, and advertising campaigns to reduce marketing costs and increase audience reach. For example, if a user makes purchases in an online store, they may receive a discount coupon or promo code for another service.
In the Tinkoff app, customers are offered discounts, cashback, or promo codes for purchases from the bank's partners.
Influencer Marketing:
People trust bloggers whose stories they watch daily on social media platforms and podcast hosts they listen to during their runs. Advertising with influencers helps attract a highly loyal audience.
Each channel has its advantages and disadvantages. The key is to determine which one solves a specific task and define the promotion strategy. This requires considering various factors: tactical and strategic business goals, digital marketing resources, and, of course, audience and product characteristics. For example, an electronics and home appliances store may actively promote gaming consoles through bloggers while using contextual advertising and SEO for selling industrial refrigerators.
How to evaluate the effectiveness of digital marketing
Here are some key indicators that help determine whether a specific ad is performing well and calculate the cost of reach or purchase:
- CTR (Click-Through Rate) measures clickability. CTR shows how often users who see an ad click on it. It helps evaluate how appealing the offer is to the audience.
- CPC (Cost Per Click) indicates the cost of each click. It shows how much each click from an ad to a landing page costs. It helps marketers assess the cost per click in different advertising channels.
- CPA (Cost Per Action) measures the cost of a specific action. This metric helps evaluate the cost of a call, application, form submission, or chat communication.
- CAC (Customer Acquisition Cost) is the average amount spent on acquiring a new customer. While CPA can consider any action, for CAC, it always refers to a purchase. Therefore, only customers who have purchased a specific product or service are included in the calculation. Marketers calculate CAC to understand the effectiveness of a campaign and find ways to reduce advertising expenses.
At different stages and depending on the goal, companies can choose different key metrics. For example, if Sberbank decides to launch a brand campaign to promote a new service, marketers will focus on reach because purchases are not the main goal at this stage. The priority is to make as many people as possible aware of the new service. In targeted advertising, specific actions, such as the number of people who applied for a credit card after viewing the ad, will be the determining factors.
Expert Advice:
An advertising message should be concise and clear. A person may come across marketing activity on their way home after a workday, but they are unlikely to want to read a long read about the meaning of life at that moment. It's better to abandon the role of all-knowing Yoda and try different approaches. At least once a year, it's important to evaluate existing channels and conduct new tests, even for well-established campaigns.
A marketer's work is influenced by many external factors, and they all need to be taken into account. If a campaign has been unsuccessful, it's important to analyze whether the sales department contacted all potential customers, whether the tracking tags on the website remained intact, whether there were any off-putting words in the brand's message, and whether there were any other important news event in the world.