MARK 430 INTRODUCTION The impact of the internet on marketing Week 1.

MARK 430INTRODUCTION

The impact of the internet on marketing

Week 1

What is internet marketing?

• Online marketing/ eMarketing / digital marketing / web marketing / internet marketing?

• The application of the internet and related digital technologies in conjunction with traditional communications to achieve marketing objectives

……Dave Chaffey

http://www.smartinsights.com/digital-marketing-strategy/online-marketing-mix/definitions-of-emarketing-vs-internet-vs-digital-marketing/

Why study internet marketing?

• Over the past 20 years traditional marketing practices have been transformed– October 27, 1994 – first banner ad– Digital marketing continues to grow and attract marketing dollars– The influence of Web 2.0 in the late 90s and early 2000s, product

digitization, and now the impact of mobile computing– Continuing strong growth in business-to-consumer and business-to-

business eCommerce

• New skills, knowledge and strategies in high demand in the business world – very strong demand in this area

• Marketers need to understand technology and collaborate with IT colleagues

TECHNOLOGIES

Technologies used in marketing• Web (HTML 5 / CSS 3)• Instant messaging• SMS (Text messaging)• “over-the-top” messaging via data (eg. Viber, WhatsApp)• Voice and Video over IP (VOIP)• eMail• P2P file exchange / streaming technologies• Location-awareness / location based services (LBS)• Mobile Apps (native to mobile operating systems)• Augmented Reality (AR)• Near-field communication (NFC)• iBeacon and Bluetooth Low Energy• Virtual reality (VR)• Voice and image recognition

Consumer Devices• Mobile– Cell phones and smart phones– eReaders– Tablets– Wearables (glasses, watches, rings, bands, tattoos etc)

• Desktop– Personal computers (desktop and laptop)– Gaming consoles– VR/AR headsets and motion detectors

• Internet of Things (IoT)

THE 4PS IN TRANSITION

The impact of the Internet on the traditional marketing mix framework

• Product – new products, the rise of the “prosumer”

• Price – dynamic pricing, comparison pricing, bidding……..FREE!

• Place – direct distribution of digital products, supply chain management, channel integration

• Promotion – new social and communications media, measurable advertising

• Strong trend towards personalization and away from the mass (undifferentiated) market affecting all the elements of this framework

• The Six “I”s Framework– Interactivity– Intelligence (market)– Individualization– Integration– Industry restructuring– Independence of

location

MacDonald and Wilson. The New Marketing, 2002

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Interactivity• The internet is not TV

• Conversation rather than broadcast

• Pull (inbound marketing) rather than push (outbound marketing)

• Active rather than passive (lean-forward medium)

• Social Networking / User Generated Content

Source: eMarketing eXcellence. 2012. Smith &Chaffey

[Market] Intelligence

• By the very act of using the internet, we are “telling” marketers what we want:• Passively • Clickstream data• Web analytics

• Actively• Social network updates, photos, videos, reviews, forum

postings etc

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Individualization

• The market of one: based on the information about customers that we provide, and that is collected automatically and monitored constantly

• Amazon for example

Traditional media

Same message to all customers or segments

New

media

Message tailored to each customer or micro-segment

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Integration

• Online marketing is very readily integrated into a marketing communications strategy

• Internet channels complement and integrate with offline marketing channels

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Industry restructuring and Independence of location

INDUSTRY RESTRUCTURING• Disintermediation –

traditional intermediaries used by marketers disappearing

• Re-intermediation new intermediaries (eg. PayPal)

• Business models challenged

LOCATION INDEPENDENCE

• Increased reach to global markets

• Increased exposure

• Increased competition

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Product trends online

• Digital value – adding value to products through online means

• Digitization – product or place?

• Personalization – individualized products and the “prosumer”

Product

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Digital goods distribution

• Any product that can be digitized can be delivered over the Internet

• Online distribution costs are significantly lower– No inventory problems– No product depletion

• Completely new business models based on digital distribution methods

• Internet becomes a direct substitute for an offline distribution channel eg. online banking

Place

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Some industries that are undergoing rapid change due to Internet forces affecting

product and place

• Recorded Music industry• Video/DVD rental industry• Newspaper and magazine publishing• Banking• Book publishing• “Sharing economy” industries (Taxis, hotels)

• Forces for change:– Digitizable product– Self service – Direct to consumer shift– Personalization

Place

Product

Pricing

• Internet influences – buyer and seller perspectives of price

• Moving from free to fee (and freemium)• LinkedIn• Shockwave.com (casual games)• Newspaper “paywalls”

• Price comparisons / transparency• Dynamic pricing

Price

Source: eMarketing eXcellence. 2012. Smith &Chaffey

Online promotion

• We will look at the many new techniques available to marketers to promote goods and services online

• The big value of internet marketing– Ability to measure results (performance based)– Ability to use unmediated data about customer

behaviour and preferences

Promotion

Source: eMarketing eXcellence. 2012. Smith &Chaffey

OWNED, EARNED, AND PAID MEDIA

Owned, earned and paid media• Definitions from Dave Chaffey

– Paid media: “media where there is investment to pay for visitors, reach or conversions through search, display ad networks or affiliate marketing.” (online and offline)

– Earned media: “publicity generated through PR invested in targeting influencers to increase awareness about a brand. Of course, it’s still an investment. Earned media also includes word-of-mouth that can be stimulated through viral and social media marketing and includes conversations in social networks, blogs and other communities.”

– Owned media: “media owned by the brand. Online this includes a company’s own websites, blogs, mobile apps or their social presence on Facebook, LinkedIn or Twitter. Offline owned media may include brochures or retails stores.”

http://www.smartinsights.com/digital-marketing-strategy/customer-acquisition-strategy/new-media-options/

Owned, earned & paid media (Chaffey)

http://www.smartinsights.com/digital-marketing-strategy/customer-acquisition-strategy/new-media-options/

Owned, earned and paid media: role, benefits & challenges

http://www.smartinsights.com/digital-marketing-strategy/customer-acquisition-strategy/new-media-options/

The internet

marketing toolbox

Blogging

Mobile

General social

networks

Niche social networks

Search engine optimization

AR, VReMail

Search advertising

Twitter

Interactive display

advertising

Video