A Guide to Digital Marketing Part 1 – An Overview

9 July 2008
Part 1 of a three part guide to digital marketing. An invaluable guide for anyone looking to initiate an online marketing campaign or those who wish to improve their current online offering.

Just when you thought traditional media was safe!
It’s back, it’s digital and this time it’s personal!

Earlier this month, the UK’s Internet Advertising Bureau predicted that online ad spending would overtake that in national newspapers by the end of this year. It has already overtaken Radio and Outdoor advertising.

In August, industry regulator Ofcom also released a report showing ‘a dramatic shift away’ from traditional media in the UK. In 2006 Trinity Mirror Chief Executive Sly Bailey indicated to shareholders that Newspaper advertising was down over 28% and as a defensive measure Trinity Mirror spent over £50m purchasing a number of on line companies such as Hotgroup.

With the seemingly daily addition of new television and radio channels consumer choice has never been better (or worse dependenat upon your viewpoint ) and for advertisers sky plus and TivO present major challenges.

Traditional media spend is in decline as major brands have turned increasingly to digital spend. In many instances much hand wringing is taking place regarding the purpose and legitiamicy of this spend – newspapers on-line for example. What is most probably true is that traditional media agencies will be unable to make as much profit from their on line clients as their traditional media ones.

Digital is not new The first wave died in the internet boom/bust of 1995-2001. Probably with the smirk “told you so!’ on the lips of many a traditional media shop! But like the Hydra – its back and this time its personal!

Broadband is one of the major driving forces behind the resurgence of digital marketing. National Statistics Online reports that in April 2006 57% of homes now have access to to the internet. 69% of those accessing the internet from home now have broadband. It took over 30 years for television to reach such penetration levels - the Internet has achieved this in less than 10!

The past year has seen an even greater shift with the advent of free broadband services, led by the Carphone Warehouse and BskyB. Carphone Warehouse announced yesterday(12/10/2006) that they received 625,000 applications between April and October this year. Describing themselves as “a victim of their own success” (or stupidity – the british public like the word- free!) it is estimated that it’ll now cost them £20million more than they had initially forecast. Just as well their core business is so profitable!

Another significant impact of broadband has been in television. Initially, it had been thought that internet style services would bolt on to existing cable and satellite tv services but quite the reverse has happened. A recent Google survey suggests that the average Briton now spends 164 minutes online every day, compared with 148 minutes watching television. The BBC is now trialling tv content online and as more tv content providers move in this direction it certainly signals increasing challenges ahead for tv advertising.

The most startling figures come from the under 25 age group. A recent Ofcom report suggests the “reach” of television for this age group (“reach” is defined by the number of people turning on for more than 15 minutes per day) that has declined by 3% in recent years.

Under 25s are spending their time interacting with Web 2.0 applications and it is no coincidence that some small startups are changing hands for big money. In 2005 MySpace was bought by Newscorp for $580 million and only recently Youtube was purchased by Google for $1.65 billion. Insane move/overpriced move the debate will run especially as in the first .com boom the advertising model for generating web revenue was dismissed as unviable But Google have demonstrated that huge revenues are there to be won online as they usurp Yahoo! As the dominant online brand.

As the first full internet generation starts to reach adulthood, there’s no denying that the digital advertising model is one the principal cornerstones of Web 2.0.

What is Digital Marketing?

Digital Marketing may be defined as marketing that uses digital technologies- Email, the Web, Viral, Pay Per Click/Call, Blogs, Wikis – as a channel for attaining the marketing objectives – customer retention, profit, customer interaction satisfaction - of the client.

What makes Digital different?

Digital is easily measurable.
With Digital especially Pay Per Click/Pay Per Call it is possible to accurately measure the ROI (Return On Investment) of a campaign. With Traditional Media measurement is possible – via connected coupon tags, 0800 numbers but the accuracy is not the same.

With email marketing it is possible with exceptional accuracy how many were opened and where the potential customers went on your site and who they were. This is simply not the case with traditional mailers. Indeed today the message tends to be printed on the front of the envelope as so many will be discarded unopened!

Digital creates a personalised relationship

With Digital the relationship with the customer can be that of one to one rather than one to many. Personalisation is possible. MY Account and MY Profile are common features on web sites now as is the customers capability of deciding what they wish to receive (and through which channel – email, sms, telephone - and – more importantly – what they don’t! Critically this enables easier profiling of customers and the ability to report on a campaigns success – or otherwise!

Constant communication can be a turnoff with customers. RELEVANT communication can, however, be powerful!

British Airways maintains more than 70 LISTSERV®lists. Currently, the airline is focused on furthering the development of its customer relationships. British Airways has recently been running targeted personalized campaigns offering customers special discounts and promotions. So far, these emails have proven popular with recipients – delivering real ROI.

In an effort to make billing information more accessible; British Telecom and other Telco’s send monthly bills via e mail to opt in customers. This also gives them the opportunity to provide links for special promotional offers and other incentives

Digital delivers cost savings

The advantages of using Digital includes achieving the cost savings associated with the elimination of printing and mailing as well as the time and cost savings of having returned data already in a digital format.

The cost of sending opt-in emails can be as little as 1p per email. Significantly cheaper than direct mail -average£1- and telemarketing-average -£1.50 (source Forrester Research)

Digital creates faster responses

Interestingly over 80% of email messages are responded to within 48 hours. Traditional direct mail sees an average of 6-8 weeks (Source -Jupitor Research)

Digital drives web site traffic

Digital is an effective way of driving recipients to your Web site. Links may be embedded within messages, quickly directing customers to your site. With any luck, this increased Web site traffic will then lead to increased Web site registration. You may then follow up by providing your customers with personalised and targeted content.

Digital can save you time

According to the Association for Interactive Marketing, member companies that use email marketing to administer campaigns rather than traditional direct mailings save 60% in time costs.