MBA 563 Marketing Technology Introduction 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

Why study internet marketing? Over the past 20 years traditional marketing practices have been transformed – October 27, 1994 – first banner adfirst 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 areavery strong demand in this area Marketers need to understand technology and collaborate with IT colleagues

TECHNOLOGIES USED IN MARKETING

Some 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) 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 ONLINE MARKETING TOOLBOX

The online marketing toolbox. Owned, earned or paid?

The importance of distinguishing between owned, earned, and paid media When selecting tools for a marketing activity we have to look for three distinct aspects of those tools Different purpose and return on investment for each

“Owned” media 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 [etc]” Dave Chaffey Dave Chaffey One of Dell’s twitter accounts Starbucks on Pinterest

“Earned” media Earned media: “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.” Dave ChaffeyDave Chaffey Liking, sharing, and commenting on a Starbucks’ Facebook post Comments posted to the Skyrim Reddit pages (not owned by Bethesda)

“Paid” media Paid media: “media where there is investment to pay for visitors, reach or conversions” Dave Chaffey Dave Chaffey Instagram sponsored post Twitter promoted account Google Adwords PPC advertising

Owned, earned & paid media – the overlaps acquisition-strategy/new-media-options/

Owned, earned and paid media: role, benefits & challenges strategy/new-media-options/

Own Website Analytics, Data management Law, Regulation, ethics Planning and management Demographics Market research Being found Domains, usernames, hashtags Content & technologies Text, video, images, AR, VR Social media (owned & earned) Advertising / messaging The bigger picture of internet marketing

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 Smith &Chaffey

Interactivity The internet is not TV Conversation, not broadcast Pull, not push Active rather than passive (lean-forward medium) Social Networking / User Generated Content Source: eMarketing eXcellence 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 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 Amazon Traditional media Same message to all customers or segments New media Message tailored to each customer or micro-segment Source: eMarketing eXcellence Smith &Chaffey

Integration Online marketing is very readily integrated into a marketing communications strategy Web channels complement and integrate with offline marketing channels – EXAMPLES? Call a customer service rep for assistance Movie trailers on YouTube Source: eMarketing eXcellence 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 Smith &Chaffey

Product trends online Digital value – adding value to products through online means Digitization – product or place? Personalization – individualized products and the “prosumer” Source: eMarketing eXcellence 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 Source: eMarketing eXcellence 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 Textbook publishing Forces for change: – Digitizable product – Self service – Direct to consumer shift – Personalization

Pricing Internet influences – buyer and seller perspectives of price Moving from free to fee (and freemium) Price comparisons / transparency Dynamic pricing Source: eMarketing eXcellence 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 and therefore performance based Source: eMarketing eXcellence Smith &Chaffey