Digital Marketing: A First Overview PDF

Digital Marketing, a first Overview Marketing as an operational activity (sales) Marketing as a strategic function (department) Marketing as a normative corporate purpose (customer orientation) 11 Digital Platforms The development...

Digital Marketing, a first Overview Marketing as an operational activity (sales) Marketing as a strategic function (department) Marketing as a normative corporate purpose (customer orientation) 11 Digital Platforms The development of digital platforms is driven by technology (i. e. band-width), globalization (i.e. ubiqutous availability), the pandemic (social physical isolation) and conflict resolution (i. e. arab spring). These are leveraging the fundamental psychological desire for communication, i. e. appreciation, information transparency, being included in social (performance) processes. A platform is a business system enabling value-creating interactions between suppliers and customers (e. g. b2b and b2c) 13 Digital Platforms Digital platforms provide an open and participative environment and infrastructure. Purpose is the exchange of products, services, information, stocks, currencies and social currencies (i. e. the value of social influence). Creating value for all involved (win win). Digital infrastructure expands the reach, velocity, convenience and efficiency substantially. 14 Digital Platforms Digital platforms rarely have own resources in the field they are brokering: AirBnB and booking.com have (had) no real estate Facebook, Instagram and TikTok rarely produce own content Uber and Freenow have (had) no own mobility 15 Multi-sided Platforms (MSP) 16 Success Factors for Digital Platforms Transactions Aligning interests of users of digital infrastructure who would have otherwise not found or communicated with each other. Digital Platforms and Virtual Marketplaces can be accessed from literally everywhere and any time („always on (online)“-attitude) Simple and intuitively navigable search functions allow to browse relevant information according to its relevance. 17 Success Factors for Digital Platforms, continued Attraction (Anziehungskraft) The utility of digital platform depends mainly on transactions (see above). Basic condition for this are a large number of users using the platform. This leverages the „network effect“ (utility of information exchange) 18 Success Factors for Digital Platforms, continued Scalable Virtualization allows for an exceptionally wide (global) reach. Geographic proximity and technical equipment play (almost) no role anymore, given certain basic conditions (stability, connectivity etc.) Exponential growth of a platform enabled by „everything-as-a- service“ (EaaS, Xaas) 19 Customer Segments For whom are we creating value? Who are our most important customers? By what criteria do we create the segments? 25 Customer Segments What is the context and the specific situation of these customers? What are their mind-set, taste, behavior & typical preferences? 26 Value Proposition What value do we deliver to the customer? Which one of our customers’ problems are we helping to solve? 27 Value Proposition What bundles of products and services are we offering to each customer segment? Which customer need are we satisfying? The value proposition is closely linked to a company’s vision & mission. 28 Customer Relationships How can you create an adequate customer relationship? What customer relationship does each of our customer segments expect us to establish and maintain with them? 29 Customer Relationships How much more value can we create by a deeper relationship? What depth of relationship does your customer want? 30 Customer Channels Through which channels can we reach our customer segments? Are channels integrated and consistent? 31 Customer Channels Which ones work best for the customer? Which ones are most cost efficient? How do they fit the customers habits and processes? 32 Revenue Streams What are our customers really willing to pay for? For what and how (much) are they currently paying? What could be price schemes and differentiation? What payment conditions are adequate? 33 Key Resources What key resources do you need to deliver your value proposition? What is the „input“ that you need to produce your offering? Material, facilities, machines, other tangible assets. Staff: the “human resources” with definite profiles and skill sets. Information systems are another key resource for most businesses. 34 Key Activities What Key Activities do our Value Propositions require? How do you orchestrate your resources to create value? What are the structured business processes you follow? How do you organize your value creation? 35 Key Partnerships Who are our key partners? Who can best deliver what we need? Focus on the core activities, leave the context to partners? Make or buy decisions. Who are strategic partners, what are commodities? 36 Cost Structure What are the most important costs inherent in our business model? Where and when do they occur? Which key activities are most expensive? For which suppliers do we spend the most money? Do the sources for costs contribute to customer value? 37 What is a Business Model? 39 Value Categories for Digital Plattforms „Digital Value Categories“ Combinatorial Disruptions: Amazon, Apple, Alibaba, Google, Uber [Global Center for Digital Business Transformation, 2019] 55 Value Categories for Digital Plattform „Digital Value Categories“ Combinatorial Disruptions: Amazon, Apple, Alibaba, Google, Uber [Global Center for Digital Business Transformation, 2019] 56 Value Categories for Digital Plattform „Digital Value Categories“ Combinatorial Disruptions: Amazon, Apple, Alibaba, Google, Uber [Global Center for Digital Business Transformation, 2019] 57 Starting Points: Customer Segments and Value Prop. 60 From Business Model Canvas to Value Proposition Design 61 Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs 64 Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs What causes negative Emotions? Help to avoid! Undesired Situations Risks (in private or professional situations) „Pain“/Inconvenience (undesirable experiences) 65  Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs What causes positive Emotions? Help to create and enforce! Describe advantages and applications Create „happy“ experiences and situations What would surprise customers positively („latent needs and desires“)? 66  Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs What causes positive Emotions? Help to create and enforce! Describe advantages and applications Create „happy“ experiences and situations What would surprise customers positively („latent needs and desires“)? 67 Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs Example: 68 Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Proposition Customer Needs Relieved Pain: Customers cannot spend time anymore browsing bookstores „do I get what I ordered“? → two months return right 69  Generating Value Propositions Professional Jobs Social Jobs Personal Jobs Value Propositions Customer Needs Created Gain: Niche products (i. e. specialized book topics) can be found quicker Presents: can be purchased on short notice and any time If pre-decision has been made: Transaction online and quick 70 An integrated View of all three „Roles“ of Marketing Marketing as a key activity Marketing as an operational activity Marketing as an integrated philosophy: The corporate purpose is satisfying customer needs 77 What are the „Four Ps“ in Marketing? What (who?) is missing? 78 The „Five Ps“ of the Marketing-Mix 79 The 5 Ps in International Context 80 Extentions: The 7 Ps in the Marketing Mix 81 The 7 Ps (mostly in Services Marketing) in Detail 82 84 Relevant Categories of Digital Communication Policy Can be grouped into micro and macro functions 86 Microeconomic Functions Order of activities: Recipients are informed about a certain fact (e. g. product properties) This leads to an influencer function, causing ideally a desired behaviour (e. g. emotion, attitude, preference, conviction, purchase) To ensure continued success it is important to confirm and reassure the receiver in his behaviour (e. g. strengthening of interests, stabilization of attitudes, concretion of intentions to act) 87 Macroeconomic Functions Differentiating from competitors Achieving competitive advantage Influencing structure and dynamics of the societal value system Allowing customers to compare companies, brands and products Social media allowing for entertainment and leisure Influencing feelings of customers as well as their perception of the world, changing their behaviour in society 88 Building a Corporate Strategy 92 Building a Corporate Strategy, continued The mission describes with which purpose the company is acting to produce value added for its stakeholders. The values describe which ethical principles the mission and internal and external activities of the company are built on. Values inspire the corporate culture and corporate identity. Long-term strategic goals make the strategy future-oriented. 93 Building a Corporate Strategy, continued Strategic goals can be increasing sales introducing new products entering (or creating) new markets reaching new target groups differentiate from competition increase popularity increase brand value improve image develop long-term customer relationships 94 Building a Corporate Strategy, continued Digital communication and promotion must be in harmony with the mission and values of the company 95 Steps in Customer Behaviour: AIDA 98 Fields for AI in Digital Marketing Machine Learning (ML): enhancing personalization, automating processes, enabling data-driven decisions for boosting customer engagement, retention and conversion rates providing tools and techniques for optimizing strategies, improve customer/user experience (UX) 102 Fields for AI in Digital Marketing Propensity Models predictive algorithms estimating probabilities for particular outcomes key components: historical data, features, algorithms common types: propensity/intent to enroll/sign-up, engage, purchase 103 Fields for AI in Digital Marketing AI Applications personalized marketing and recommendations chatbots and conversational AI predictive analytics ad targeting content creation and curation email marketing optimization 104 Overview AI in Digital Marketing 105 Structure for Digital user-centric Strategies 1. Executive Summary 2. Business Idea 2.1 Founders 2.2 Description of Innovation 2.3 Project Plan 3. Market Analysis and Competitors 3.1 Market Situation (Market Volume, Customer Segments, Market Growth, Potential) 3.2 Unique Selling Proposition 3.3 Competitors 3.4 Market Entry 4. Corporate Planning 4.1 Financial Planning (Revenues, Expenses, for the first two years; Pricing Model) 4.2 Organization (Legal Entity; Organigram) 4.3 SWOT-Analysis 5. Summary 110 Instruments for Digital Marketing Display Advertising eMail-Marketing Search Engine Optimization Search-Engine Advertising Social Media Marketing Content Marketing Affiliate Marketing 114 Market Participants for Digital Performance Marketing Advertiser The company advertising its products and services using selected instruments. Using different digital communication channels to reach potential customers and relevant stakeholders. 117 Market Participants for Digital Performance Marketing Publisher The company offering advertising space to the advertiser. Service providers (for instance video content providers) can be involved. 118 Display Advertising Display-advertisements, also called banners, are being used to advertise products and services on websites. „Classic“ positioning involves positioning these banners at the top, centre or outer rim of a webpage Content can be static, animated or in video-format 119 Properties of Display Formats Originally, banners showed low degrees of opportunity for interaction Contemporary data-based banners are tailored to specific target groups, even specific personas („mass customization“) 120 Programmatic Advertising Using Data makes Display Advertising programmable Enabling an automatic purchase and sales of advertising banners in real-time The better and more detailed the data, the better customers can be identified and individually targeted 121 Programmatic Advertising, continued Digital technologies make individual customer behaviour measureable: which subpage is a customer visiting which keywords has a visitor searched which products a customer puts in the basket Measure, store and use data 122 Programmatic Advertising, continued If a website-owner collects the data, it is called first party data, for instance names and adresses. Many website owners employ service providers to collect data.If data is purchased from other providers, it is called second hand data Third party data are anonymized user data purchased by and from data brokers, usually via data management platforms. 123 Programmatic Advertising, continued Early display advertising methods focused on the context of the banner, e. g. the website where it was placed. Today, the user/visitor/customer is targeted that is supposed to be reached with a certain kind of advertising. Cookies are tracking, monitoring, recording and document the user behaviour on website, storing for instance which products a visitor has looked at in a webstore 124 Programmatic Advertising, continued Using data in programmatic advertising allows for advertising products like the one the visitor looked at before. This is even possible on different websites that might have not contextual connection whatsoever with but only serve as or make available advertising space Publishers can be owners of a website or a mobile app. 125 Demand-Side-Platforms (DSP) Demand-side-platforms (DSP) advertisers can identify advertising space on which they can reach their desired target-group. With the data collected, DSP can compile and reproduce exact user profiles of the visitors that are exposed to. These profiles can be collated and compared with the criteria the advertiser sets for ad-banners, for instance in certain geographical locations with certain previous browsing behaviour 126 Supply-Side-Platforms (SSP) The data collected by DSP is compared to advertisers‘ criteria using a link or an interface to so-called supply-side-platforms (SSP). The are representing the supply-side of the market, i. e. those who are offering the advertising space. SSP contain information about the available advertising space and information like, for instance (minimum) prices set by publishers. 127 Connecting DSP and SSP Connecting demand side platforms and supply side platforms is the operational process of connecting and matching supply and demand for advertising space on the web. The algorithm of the DSP is identifying matches between the characteristics the advertiser is looking for and the properties of the personas in the offering of the publisher. Once the algorithm identifies a match, a bid is sent by the advertiser. This bid represents the maximum price the advertiser is willing to pay. 128 Connecting DSP and SSP, continued In an automated auctioning process, the advertiser is competing against the bids of other advertisers. The advertiser with the highest bid wins the auction and receives the web banner space and the banner is created and broadcasted by the publisher. This process is fully automated and taking place within less than 100 mili-seconds. 129 Market Participants in Display Advertising 4 3 1 2 1 3 130 Conversion rates evaluate Efficiency and Effectivity Prices traded in display advertising depend on a number of factors The most popular factor is TCP, „thousand contact points“ So the price paid for TCP is the price paid for a thousand „contacts“, i. e. display to visitors 132 Cost per Click and Cost per Action With „Cost per Click“ the advertisers pays each time a user is clicking on the banner. With „Cost per Action“ the advertiser pays each time a user is conducting a certain action after the click, e. g. for instance a purchase in a web-store 133 eMail Marketing 139 Preliminaries eMail marketing is one of the earliest form of digital marketing Marketing-related content is being sent systematically to certain target groups. Even with increasing importance of social media, email marketing is a relevant element of the digital marketing mix. 140 Preliminaries eMail marketing has a potentially wide reach. Responsive Design allows automatic arrangement of elements in an email in a way so that it can be viewed when opened with different email programs. 141 Generating Addresses for eMail Marketing The starting point for every email marketing campaign is collecting email addresses the owners of which belong to a particular target group. Companies can generate (collect) email addresses themselves or purchase them from third-party providers. The most straightforward way to generate emails yourself by offering a membership area on your website or registration for a newsletter, for which visitor can insert their email addresses. 142 Data-Protection: Opt-in and Double Opt-in „Opt-in“ means a person must actively opt in by agreeing to be contacted, for instance when registering for a newsletter. „Double opt-in“ means the user after registration receives and email with a link by clicking on which the user confirms that sHe wants to be contacted or receive a newsletter. 143 Data-Protection: Opt-in and Double Opt-in, continued Once a person has agreed to opt in, emails are allowed to be sent to her/him. Opting out allows receivers to stop receiving emails. The number of opt-outs depends on the number of emails sent. 144 Data-Protection: Opt-in and Double Opt-in, continued Email addresses can be purchased from vendors who have collected or purchased the addresses. Co-registration allows a partner company to send emails to the user. Co-sponsoring allows a partner company commercial acitivities on your website, for instance offering registrants to take part in a prize or lottery. 145 Forms of eMail Marketing Sending emails allows advertisers to communicate more content Addressees (receivers) are members of a certain target group either members of an existing customer base or having agreed somewhere to receive emails 146 Forms of eMail Marketing The email address of a receiver has either been collected by the company or is purchased from a vendor, i. e. agencies or address brokers. Agencies and address brokers usually dispose of large databases of users who have expressed their interest in certain topics. 147 Market Participants in eMail Marketing 148 Forms of eMail Marketing Many different forms of eMail marketing exist, fitting to different kinds of communication goals and communication content Classic differentiation is between emails for marketing purposes or emails for the purpose of causing certain actions or transactions 149 Forms of eMail Marketing 150 Forms of eMail Marketing 151 Stand-alone eMails A communication goal is reached by sending an email to all receivers in a database There is a central message, like for instance informing about a timely limited price reduction campaign (Rabattaktion) or a prize (Gewinnspiel) 152 Newsletters Being sent in more or less regular time periods Usually containing several topics These can be for instance information about products, activities or events. 153 Trigger-eMails Trigger emails are sent to cause a certain behaviour The data collected as mentioned previously can turn trigger emails into powerful tools for using personalized information for sending individual messages. For instance, gratulating for the birthday of a customer or informing about the balance of a customer account or the expiring validity of vouchers (coupons) 154 Trigger-eMails Trigger emails can also be used for after-sales marketing, in which customers are pointed to additional products or Ask for a product evaluation. 155 Re-Targeting emails Based on recent customer or purchase behaviour. Customers are addressed again after they have conducted a transaction. Additional information can be sent 156 KPIs of eMail Marketing Success of email marketing campaigns can be analysed using various KPI: 01 Reception Rate (Zustellrate) Measuring how many (absolute or in percentage) of the sent emails have actually been received (and not landed in spam or wrong addresses) 157 KPIs of eMail Marketing Reception rate is an indicator for the quality of purchased email addresses 02 Bounce Rate Describing how many emails (absolute or in percentage) have not been received 158 KPIs of eMail Marketing 03 Opening Rate Describing how many emails (absolute or in percentage) have been opened by receivers 04 Click-Through-Rate How many clicks have been made on links included in the email 159 KPIs of eMail Marketing 05 Cancellation Rate How many receivers have used the opt-out function to cancel their membership on a mailing list 06 Spam-Rate How many receivers categorize the received email as spam 160 KPIs of eMail Marketing 07 Conversion Rate How many customers show the desired behaviour when receiving the email 08 Time on Site How much time is spent by receivers of an email on the website it linked to 161 KPIs of eMail Marketing 09 Time to Purchase How much time it took for receivers of an email on the website it linked to to do a purchase. How much time it took after sending the email for the receiver to conduct a purchase. 162 KPIs of eMail Marketing 10 Cost per Lead Comparing the cost of the campaign with the amount of leads/purchases generated with it (and average purchase amount) 11 Return on Investment (ROI) Comparing the amount invested in an email marketing campaign with the amount of turnover generated with it. 163 Advantages and Disadvantages of eMail Marketing Emails can include text, images and other web-based layout elements In particular when email addresses are self-generated (first-party), great reach can be achieved with relatively small costs. Using the different forms of email marketing described above, they can be used for the entire customer life-cycle and in different places of the customer journey. 164 Advantages and Disadvantages of eMail Marketing Emails can help reduce the perceived distance between company and customer if properly personalized and if it is followed-up by individual (real human) customer service It strengthens the bond between company and customer 165 Advantages and Disadvantages of eMail Marketing KPI allow for effective measurement of customer behaviour. Analysing KPI allows to optimize future marketing activities. Collected data allows for further individualization and customization of email marketing campaigns and increasing their effectivity 166 Advantages and Disadvantages of eMail Marketing Too many emails, like in banner blindness, can be overwhelming Overwhelmed receivers might opt out or view the company or a brand less positive If blocked or marked as junk, future messages might not be received and information does not get through Regulation: Double opt in and opt out makes collecting more difficult 167 Placement of Results 174 KPI of SEA Billing models are similar to those in display advertising. Cost-per-click principle as a billing model. The amount needs to be paid only if the user has actually clicked the ad. Also the TCP (Thousand contact price) is paid when an add was displayed 1000 times. 211