Influence of Digitalization on Marketing : Part V

In the previous part of Influence of Digitalization on Marketing (Part IV), under the “Digitalization in the field of marketing” sub-header we discussed about the components of Marketing mix i.e. Product policy, Pricing policy, Communication policy and Distribution policy. In this part, we will discuss about the Marketing Channels. In marketing, the attention, interest, desire, action (AIDA) principle still applies, but this has not changed digitalization in the field of marketing, however, numerous marketing channels have been added, which also refer to each other. You can no longer survive by interrupting strangers with a message they don’t want to hear, about a product they’ve never heard of, using methods that annoy them. Consumers have too little time and too much power to stand for this any longer. The conclusion is clearly recognizable. Potential customers no longer have enough time to listen to every advertising message, so a company must carefully consider which marketing channel they use to broadcast which content, so as not to incur enormous costs and reach customers at all. Each target group of customers, for example young people aged 13-19 or retirees, uses the individual media with different intensities. The core problem of media planning is the selection of suitable advertising media and the determination of the required frequency for the message to be filled. The individual channels in this section are structured according to the frequency used and supplemented by another marketing channel, viral marketing.

Website

A company’s own website is the most commonly used marketing channel. The website is the central point of most marketing mechanisms. Most of the customers get through sooner or later through a switched TV spot, a newsletter, hit list in search engines or price portals or similar to the website of a company. As a result, the external image that the company achieves with its own website is very high.

But for a long time, the requirements for your own website for companies have not only been attractive, but other criteria have also played a major role here. The goals of the company website can, for example, be to provide customers with specific information, gain new customer segments and increase brand awareness and brand image.

Email and newsletter

By sending electronic sales letters, a single consumer is to be targeted. A legal provision here states that the registered customer must have given his prior consent. A question of what would be possible: Is email and newsletter outdated as an advertising medium? According to a study, email marketing is in second place among the most frequently used marketing channels with 80.5 percent of the 1002 respondents. So directly behind homepage marketing with 91.5 percent, the company’s own presentation in Word Wide Web. E-mail marketing achieved a higher level of acceptance than pure display advertising.

Display advertising on the Internet comprises all advertising media that are displayed using pictures, videos or animations. The most common format is banners. Newsletter marketing is a fast and inexpensive way to provide customers with the latest information and news.

In order to avoid creating a negative image among consumers with a newsletter or an email, many companies are cleaning up their databases with a so-called Robinson list. This includes consumers who actively exclude themselves from advertising measures and also offers everyone the opportunity to register themselves.

Search engines

Search engines deliver almost 37 percent of the visitors. Search engine marketing (SEM) is divided into the following 3 groups: search engine advertising (SEA), search engine optimization (SEO) and marketing via price search engines or price comparison portals.

SEA is a keyword-related placement of commercial ads on search engines such as Google Adwords, Bing Ads or Yahoo! Search Marketing. With Google Inc. on the search market clearly number one ranking with almost 89 percent, and in the opinion of the author poses the greatest relevance.

Google Inc. started SEA in the fall of 2000 and generated 16.41 billion of its annual turnover in 2007, which at that time represented 99 percent of the total turnover of Google Inc. Revenue has since risen to 67.39 billion in 2015 and was 90.4 percent. Thus, the SEA still accounts for the largest percentage of the total sales of Google Inc. Today, the advertisements of the individual commercial customers at Google are provided with keywords. If a search request is now started on Google, it compares the search query with the keywords of the advertisements of its customers and outputs the appropriate advertisements and the search results. Every advertisement that is actually clicked costs the customer money. The customer pays for the positioning of the Adwords according to an auction model. Higher click rates on a keyword usually mean higher costs. In order not to exceed the costs for the customer, it is possible to define a daily or monthly limit. In order to really understand which clicks generated sales and which only attracted visitors to the website, it is possible to link the Google Adwords account with a Google Analytic account.

A good positioning in search engines is usually only possible through another form of SEM. The goal of SEO is to improve optimization measures for the position of a website in the search engines for certain search terms. This includes the keyword search, optimization of the website and link building to other websites. Google itself now updates the search algorithm every month, so SEO is not a one-off process, but requires constant support. The support for this can be given to an agency. The quality of these agencies is checked in some countries and confirmed with a certificate. However, in many of the countries there is no control.

Marketing via price search engines or price comparison portals is the last form of SEM. Price search engines connect different dealers or service providers and compare their prices. Statistics from the top 10 shopping comparison portals worldwide show the estimated monthly visitors in the USA. The total number of visits to the top 5 portals is approximately 95 million. In the eyes of the author, this high representative number clearly shows the importance that price search engines and price comparison portals have now taken on.

Social media

Social media is a generic term for media on the Internet, in which people exchange experiences, opinions, impressions or information and collect knowledge. These media include forums, weblogs and Micro-blogs (e.g. Twitter, Tumblr) social networks (e.g. Facebook, Xing, LinkedIn) social bookmark portals and wikis such as Wikipedia, information portals, photo, music, video or document sharing portals (e.g. Pinterest, Instagram, Youtube, last.fm) as well as rating portals (e.g. Yelp).

The importance of social media has increased enormously in recent years. This development arises among others in social media is that more and more as a marketing tool in companies established. According to a study by IBM, 73 percent of consumers in the age group 46 years and older, a profile on a social network, in the age group 18 to 35 the figure is as high as 89 percent. The largest social network is Facebook, 85 percent of the page views on social media pages in February 2016 was of Facebook. Facebook has 1.090 billion daily users. From the point of view of companies, the various social media platforms are important communication channels, since these are the preferred communication and information medium for many consumers today and in many cases have a very high reach. These social media channels can be used to place simple advertisements or to announce new products or to offer discounts. Companies use social media channels to increase customer loyalty or to attract new customers. In 2015, around 73 percent of the companies surveyed in various industries said that their main reason for using social media was to increase awareness and increase customer loyalty. Some companies are already using these channels very successfully. Some companies were also learned the dangers of social media. Social networks are often used as complaints offices. Customers quickly let out their displeasure, the so-called “shit storm” arises. In order to act correctly in such a situation, companies need well-thought-out crisis management. Digitization is making the company more transparent. Among other things, social media ensures that the company becomes more transparent. This means that every (wrong) decision is immediately visible to the public, competitors and the press, who can be welcomed, criticized and commented on. When using social media, the impact and reach should not be underestimated, but whoever refuses to use social media misses opportunities.

TV

The market for television advertising changed dramatically with the introduction of private television in the mid-eighties. If it was previously provider-driven in the time of the public monopoly, it quickly turned into a market for consumers. The topic of “second screen” has come to the fore on television. Television is no longer the sole primary attraction for the consumers. From 2001 to 2010 the number of parallel use of television and the Internet for 14 to 49 year old rose from 16 to 40 percent and in 2014 and 2015 to 75 percent.

This makes it increasingly difficult for companies to reach consumers with their actual advertising. In order to benefit from this development, hardly any television broadcast today can do without a social media page. TV is also subject to the risk of short-term switching during advertising blocks. Television serves only one purpose and that it provides a framework for advertising. They are organizing an editorial program that initially serves only one purpose, to create a framework for advertising. The programs should attract an audience whose attention can be sold to the advertising industry in between.

Viral Marketing

The term was first used in a case study in the USA in 1997. At that time, Hotmail had a very small advertising budget and put under every email that was sent with the email service “Get your free email at Hotmail.com ”. Every user who received an email from a user from Hotmail.com knew that he could get free and functional email access at Hotmail.com. The main goal of Hotmail.com was not to make a profit here, but to draw customers’ attention and build a relationship with them. Hotmail.com is a good example of passive viral marketing. Passive because the user does not take any active action to recommend the product.

In addition to passive viral marketing, there is also active viral marketing. From the word active it can already be concluded that the user is taking active action to recommend the product. The two terms viral marketing and word-of-mouth marketing are often used interchangeably.

Viral marketing is meanwhile carried out, among other things, by electronic mail (email, newsletter), websites, forums, weblogs and entertainment sites such as youtube.com. YouTube has more than a billion users – this corresponds to almost a third of all Internet users. Videos with a total duration of several hundred million hours are played on YouTube every day and billions of views are generated. Due to the number of users, this fact alone shows the enormous importance of entertainment sites. Coupled with the fact that Youtube has more users between the ages of 18 and 49 than any other cable network in the US and watch time increases by at least 50 percent annually.

Influencer Marketing and Sponsored Content

Influencer marketing is a form of product placement from influencers with an expert level of knowledge in their field. These third parties or value-added influencers, such as bloggers, journalists, and professional advisers avoid the direct impact of so-called “shit storm” on social networks. Fake influencers have been around with genuine counterparts with bot-generated followers, Like or Retweet. In recent years, a form of native advertising is sponsored content. Sponsored content has a requirement of the desire for transparency and built up trust between consumer and content producer.

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