· d.

Intro ·• to
..:ucbon · o· . I.
. •tgita
•-- t":,. ina
Marl(e . "

Lea.r ning Objectives

After reading this chapter, you wil,!'~~-'4bl~
► Know what digital marketing is ,.
' '
► Understand the role of digital marketi:tig) n '~arketing ·s trategy
► Outline the differences bet'feen traditic,:rd~l n.i_a r~.e•ti:rig and digital marketing
► Explain some conceptual framewor],{.s· o{ dig1:tal macrketing
► Discuss the context of Internet behavio,r u'of ·user$······

INTRODUCTION
Digital marketing is revolutionising the marketing scene. As consumers spend more and more time online,
marketers are shifting their budgets to digital marketing to communicate with the consumers. Some of the
defining characteristics of digital marketing are as follows 1:

Two-way Communication
In digital environment, consumers decide which brands they wish to interact with. It is not a marketer
controlled message but consumers co-create the brand and content.

Targeting of One
The marketers can precisely target their audiences based on multifaceted ways - age, location, gender,
seniority, income, interest, behaviour, lookalike, CRM data, remarketing, device, etc. The communication can
be highly personalised and interactive. Targeting on digital platforms is very sophisticated using algorithms
and technology to precisely reach the intended a·udience. It is targeting of one and not many.
 -- Digit a l Marketing

Hence, unlike spray and pray approach of mass media where we hope that some consumers ~¥ill be in the
market to buy our product, in digital marketing we precisely know how many consumers a~e_m th e 11:arket
to buy and how to target them . Hence, while mass media focuses on minimising waste, digital medrn has
no wastage.

Level Playing Field

Digital marketing creates a level playing field for all marketers. It does not require big budgets, an~ he~ce
small and medium businesses can also leverage it. It does not have huge costs as an entry bamer like
traditional advertising.

Measurability
Digital marketing has given power back to marketing as it enables measurement of performance and calculation
of return on investment which bas always been the holy grail of marketing. With digital marketing, marketers
can close the loop as they precisely know how many people saw the ad, how many people clicked, how many
visited the website, how many registered and how many bought.

Push and Pull

Within digital marketing, marketers have the choice to go for either push or pull medium. Whereas 'search' is
more of pull medium, banner ads on websites chosen based on context is push marketing. Digital marketing
enables brands to do both strategic brand building marketing and tactical sales-oriented activities. On one
hand, marketers can form communities on soc ial media. thus nurturing relationship with consumers; on the
other, they can generate leads and sales.

Real-time
Marketers get instant feedback in digital marketing that enables them to optimise their campaigns. They
know what is working and what is not, and hence can tweak the campaign mid-way. This improves the
Return on Investment (ROI) of digital marketing. Since marketers must modify the plan based on feedback,
digital marketing requires short planning cycles. The plans should be short-term and flexible so that one can
improvise on them based on real-time metrics.

Zero Moment of Truth

In marketing, there are moments of truth which are instances when a customer interacts with a product or
service to form an impression about it. In earlier times, the first moment of truth was the point of sale, the
second moment of truth was when the consumer bought the product and third was when a consumer used
the product. The Internet has preceded all these moments of truth and has become zero moment of truth as
consumers look for information or reviews about a product or service on a search engine, social networks,
websites and forums before they visit a store. Hence, it is imperative for marketers to be present on digital
marketing sites as consumers start their journey there.

1.1 DIGITAL MARKETING

Digital marketing is also called ' Internet marketing' , 'web-marketing' or 'online marketing'. Digital marketing
may be defined as the promotion of brands or products through different forms of electronic media. These
forms could be website, biogs, social media, mobile, applications, search, banner ads, etc. Philip Kotl er
delines dig ital marketing as:
 Introduction to Digital Marketing :. .

' . .. a form of direct marketing which links consumers with sellers electronically using interactive
technologies like enwils. websites, online forums and newsgroups, interactive television, mobile
communications, etc. '

1.1.1 Origin o.f Digital Marketing

The origin of digital marketing can be traced to 1994 when the first banner ad appeared on the first commercial
web magazine, HotWired (now Wired.com).
Figure 1.1 shows the look of the first banner ad 2 .

Have you ever clicked ~ vou

your mouse right HERE?~- WILL
FIGURE I. I First banner ad 'you will';

Since then, the digital advertising market has evolved, and in 1996 the United States' digital advertising
market was worth $301 million. A year later, the market experienced phenomenal growth touching the figure
of $1 billion. Around 1997, companies began thinking about placing advertisements on related websites
and linking their web pages to the banners. In 1998, HotWired started selling banner advertising space to
3
companies and achieved a sensational 30 per cent click through·rate .
Search engine, Yahoo!, adopted this idea by offering-advertising space on its homepage. Yahoo! acquired
Overture Services (formerly_G0To:c0m) in 2003 for placing ads _o n its search engine results which allowed
Yahoo! to provide advertisers an option to select a bid amount and compete with other bidders to rank
their ads higher. Another search engine named Googl~, had already launched its advertising platform called
AdWords in the year 2000 to provide advertisers a sponsored link of their website and a description natively
in its search engine results page. ,
The year 2002 saw the launch of Linkedln, the year 2004 witnessed the launch of Face book, and in 2006
Twitter was launched. Hence, the year 2010 was-th~ decade of social media which attained penetration
worldwide. Alongside, revolution was happening iri mobile with smartphone prices dropping sharply,
enabling greater penetration among masses. The penetration of Internet also increased dramatically during
the period. Hence, while the decade of 1990s was fueled by display advertising, the early part of the decade
of 2000 was fueled by search advertising and later part by social media, and the decade of 2010 was fueled
by mobile.

1.1.2 Traditional versus.Digital Marketing

Digital Marketing is very different from traditional marketing in multiple ways (as shown in Table 1.1 ). While
traditional marketing is spray and pray, wherein a marketer spreads the message among many audiences
and hopes that some wiJI be in the market to buy the product, digital marketing can be targeted to specific
~udiences who have interest in the product and hence are already in the market to buy those products. There
is _a s~ying in mass media - 'Half of advertising is waste. But I don't know which half'. Digital overcomes
this limitation of mass media as it eliminates wastage. .
Digi_tal marketing is about maximising efficiency. Since it is possible to measure performance of digital
marketmg in real time, there is ample scope to tweak the campaigns and improve ROI. Marketers can do
A/B testing to find the most effective messages, images, ads, targeting, and layout. In digital, there is always
scope for improvement.

Source: http://www.wired.com/20 J 0/ J 0/ J 027hotwired-banner-ads/. Retrieved 011 rebruary 2, 20 17.

 . . Digi t al Ma rketi ng
While mass media is priced on rate card basis for
10 second spot on TV or_ c?lumn .centimeter for
newspaper, digital is priced based on auction. Instead of
fixed r~te c_ard , _mar~eters bid m auction a~d price is
determined based on bid as well as quality score. Henc
e, there 1s fair pnce discovery that happens m digital.
Digital marketing creates a level playing field for all
marketers as it does not distinguish between small
and large businesses. The entry barrier is low as one can
engage in digital marketing even with little budget.
The media rates are same for small as well as big busin
esses.
The cost of failure is low in digital marketing. Even
if the campaign does not work, you will know
immediately and can take corrective action. You may
lose only a small amount if your plan fails. Hence, it
is a smart strategy to be bit edgy and try new ideas and
different mediums of digital marketing to check out
what works for you and what does not.
Digital marketing is like walking in the fog. Visibility
is there only for the first l O metres. If you want
more visibility, you must walk the first 10 metres to be
able to see the next 10. Hence, instead of waiting for
the perfect plan or blueprint, you should start digital mark
eting and learn on the go. Instead of perfecting your
strategy from day one, it is better to make 1 per cent impr
ovement every day and at the end of the year you
will have 365 per cent improvement.
In digital, you should go slowly; commit small resou
rces to an idea or campaign or content. If it works
then put more resources behind it. Hence, instead of firing
cannon balls, you should fire gunshots in digital
marketing and test the waters. Some more differences
are highlighted in Table I. I.
Table 1.1 Differences between Traditional Marketing and Digital Mark
eting
Tradition11l Marketing Digit,,alHZll,
Type of Marketing p'
Structured and clear
Unstructured and unclear
advertising campaigns, service hotlines
Status updates, ad campaigns, biogs, posts,
comm ents, social media, etc.
Direction of Unidirectional (one to many)
Communication Multidirectional (many to many)
Information spread by company (active)
Both comp any and consumers talk and listen
Consumers only listen (passive)
(both active). Consumers can also creat e con-
tent, like or post.
Scheduling
Long-term Short-term ;,,
Ad campaigns are planned both over and for a Ad
long period of time camp aigns are not planned in detai l but
Communication reactions to comm ents and requests given
Private
with Consumer Public
Communication only between company and
consumer (via email, phone); discussion is Reactions to comm ents are public; anyo ne can
kept secret read and join a discussion
Availability During working hours
No direct support beyond regular working All the time (24 x 7)
hours (9 to 6) ConSlant readiness to respond to nega tive
Language Formal, legally safe comm ents and cons umer requests
Official Genuine, direc t
Response time personal respo nses and short answ ers
Long . er; even if somebody is interested aft er
seemg an . . ad in print or on TV they cannot see Quickly; as soon as they see the ad, the
th e add1tlonal ~form ation
at that instant, they consu
. fi mers
. can c 1·1c k t he 1·mk and can get more
need longer time for gathering information m ormation so decision can be taken quick
ly
about the product
 Introduction to Digi ta l Ma r ke ting' . .

1.2 INTERNET USERS

Internet users are individuals who use the Internet via co mputers, mobil e phones, tablets, digital TVs, etc. In
20 17, 3.5 billion people were on line which is 47 per cent ofth~ world's population (F igure 1.2).

Internet Users and Penetration Worldwide, 2014-2018

c=Jlnternet Users (billions) -+-%change ......- % of Population
3.7
35
3.3
3.1
2.9

47% 49%
43% . 45%
41%
- - - -
- - -
8%2014 &. 7 0% 2015 s. 9o% 2016 5.80% ~017 s. 70% 2018

FIGURE 1.2 Internet users and penetration worldwide;;

I
Figure 1.3 shows the surv~y conducted by eMarketer to find the number of Internet users country-wise.
th
Interesting thing to note is that Brazil has overtaken Japan to become 4 largest Inteniet population in the
nd
world, and India has overtaken the US to emerge as the 2 largest Internet user population. Indonesia is in
the top fi ve, overtaking Japan in the number oflnternet users.

Top Country Ranked by number of Internet

755 users, 2017 (millions)

429

273

123 113 105 94

78 64 54

China India US Brazil Indonesia Japan Russia Mexico Germany UK

FIGURE 1.3 Country ranks by number of Internet users;;;

i'. . Source: eMarketer, July 20 1S, used with permiss ion .

'" Source: eMarketer, 20 16, used with permission.
 . . Digital Marketing

1.2.1 Internet Users in India

Internet user base in India has been steadily increasing, as shown in Table 1.2. With the increased sales of
4
smartphones, it has become easier for individuals to access the Internet •
Over 429 million Internet users indicate penetration of Internet among 34 per cent of Indian population.
There are more than I billion mobile connections in India which means healthy mobile penetration among
the population. But many users have dual SIMs and the number of unique mobile users is about 731 million.
5
Out of the number of mobile phone users, 37 per cent have smartphones .

Table 1.2 Internet behaviour in lndiaiv

Internet User Growth(%) 39 18 15 12

Internet Users (million) 315 373 429 479
Internet Users (% of population) 25 30 34 37
Mobile Connections (million) 986 1019 1047 1071
Mobile Connections (% of population) 79 81 82 83
Mobile Phone Messaging App Users (million) 107 133 158 181
Mobile Phone Messaging App Users(% of mobile phone users) 17 20 22 23
9 11 12 14
Mobile Phone Messaging App Users(% of population)
638 684 731 776
Mobile Phone Users (millions)
51 54 57 60
Mobile Phone Users(% of population)
Mobile Phone Internet Users (millions) 237 288 331 378
Mobile Phone Internet Users(% of mobile phone users) 37 42 45 49
Mobile Phone Internet Users(% of population) 19 23 26 29
Smartphone Users (mi.llions) 184 224 267 306
Smartphone Users(% of population) 15 18 21 24
Smartphone Users(% of mobile phone users) 29 33 37 39
Tablet Users (millions) 49 58 67 75
Tablet Users(% of population) 4 4.7 5.3 6
Digital Buyers (millions) 93 130 180 224
Digital Buyer~ (% of population) 10 14 19 23
Digital Buyers(% of Internet users) 37 44 52 58
Social Network Users (millions) 163 193 223 250
Social Network Users(% of population) 13 -----------15 17 19
Social Network Users(% oflnternet users) 51.9 51.9 52.1 52.4
Facebook Users (millions) 114 135 156 175
I Facebook Users(% of population) 9 11 12.2 13.5
Facebook Users(% oflntemet users) 36.1 36.1 36.3 36.5
i Tv,,itter Users (millions) 9 10 11 12
Twitter Users(% of population) 0.7 0.8 0.9 0.9
1
Twitter Users(% oflntemet users) 2.8 2.7 2.7 2.7
--•----•R-

i, Source: eMarketer. used with permi ss ion.

 Introducti on to Digital Marketing . .

You may be curious to know what per cent of Internet users access social media? About 52.1 per cent
of Internet users are on social media which is quite good. Facebook is the most popular social media site
with 36.3 per cent of Internet users using it. It is interesting to note that the gap between number of users
of Facebook and Twitter is huge. Figure 1.4 shows that 52 per cent of Internet users shop online. Due to
aggressive discow1ts by e-commer ce companie s, there is a healthy penetration of online shopping among
Internet users in India. The key take away from the data is that mobile, social and online shopping are the
growth drivers for future.

Percentage of Internet users, India, 2017

Twitter Users(% of Internet users) 0 2.70%

Facebook Users(% of Internet users) 1 - - - - - - - - ~I 36.30%

Social Network Users _(% of Internet users) I 52.10%

i,
!------ ---•,:
----~
Digital Buyers
1---- ----- --~I 52%

FIGURE 1.4 Percentage of Internet users in India, 20 I 7v

Figure 1.5 shows penetration among the population. The penetration of Internet, social media, online
shopping appears small. India, hence, has a long way to go for digital revolution to penetrate the masses. This
is also a drawback of digital marketing that the reach is limited.

82% Percent of Population, India, 2017

(/)
~ a> en a>
C

-- C C '-
Q).Q a> en
Q)
O ~ 0
.c
<I)
....
.c
·-
.0
(.)
Q)
=::::::>
.0 Q)
a..:::::, 0.Q)
Oc 0 C Q) Q)
- ten
«l ::::::,
:::::EC :::::E 0 '.30 .$E E
.c
8 a.. ::::E E
Cl)

FIGURE I .S Internet behaviour as percentage of population vi

v Source: eMarketer, used with permission.

vi Source: eMarketer, used wi.th permission.
. . Digital Marketing

1.2.2 Types of Internet Connection

There are various types of Internet connections that we are potentially exposed to for accessing Internet
services. Dial-up and broadband are the two major categories that are formed when we look at the transmission
technologies 6.
The dial-up connection was the first technology invented to access the Intern~t. It is, however, losing its
presence across the globe. This type of connection essentially uses .a telephone lme to connect a PC to the
Internet. It requires a modem to setup the dial-up connection. This modem works as an interface between the
PC and the telephone 1ine.
On the other hand, broadband connection is becoming more popular. It can be seen in different forms
as follows:
• DSL (Telephone Line): Digital Subscriber Line is a form of broadband connection that provides
connection over ordinary telephone lines. However, it is usually faster than the dial up connection.
• ISDN: Integrated Services Digital Network establishes connection using phone lines that carry
digital signals instead of analogue signals.
• Wireless Internet Connections: This type of connection makes use of radio frequency bands to
connect to the Internet and offers high speed. Wireless Internet provides a connection that can be
accessed from anywhere if the user is geographically within a network coverage area.
• Mobile Internet: Telephone Service Providers (TSP) provide Internet plans to access Internet
services. Depending on the type of mobile, Internet connection speed varies; it is the lowest in the
case of 2G and higher in 4G connections. People even create hotspots with mobile phones to give
access to other devices that uses Internet.
• Satellite Internet: Here, one gets the Internet access by a satellite dish as the signal gets beamed to a
satellite, which in turn beams the signal to users.
The adoption of broadband is increasing exponentially while that of dial-up connection is reducing
significantly. Dial-up connection has the speed of about 56 kilobits per second and broadband connections
are typically in megabits per second. With broadband, people can use the Internet to seek information
immediately when they want to. Because of it, the time spent on the Internet is increasing. The more time
people spend on the Inten;iet, the more likely they are to buy online. However, rural areas in the country still
face challenges in getting:fast Internet connection due to the cost of the ~Internet. However, with the entry of
new telecom players such as Jio in the market, intense price war is happening among players to provide data
packs at low cost to attract subscribers.

1.3 DIGITAL MARKETING STRATEGY

In this section, we will examine some of the consumer behaviour aspects that can help shape the dioital
marketing strategy. b

1.3.1 The Consumer Decision Journey

In today's w_orld: consu_me~s, even after the ~urchase, rem~in enga~ed and promote the purchased product
amongst t~elf fne1:ds , fa1~Il~ or collea~ues if they are satisfied with the product. The basic AIDA model
of marketmg appltes to d1g1tal marketmg too, for consumer decision process . AIDA. 1·.s an acronym t h at
 Introduc tion t o Digit al Marketing . .

stands for A-Awareness, I-Interest, O-Desire, A-Action. The consumer moves through successive stagns in
the buying process 7. ·: . :
I

Awareness The consumer is aware of a brand, has heard of its name. The goal of the marketer at this stage is
to get to the top of the mind recall. Awareness is the first step in the buying process and the most important.
Without awareness, the consumer will not consider the brand for purchase. Digital marketing can play an
important rol e in creating awareness and some channels of digital marketing are more apt for it. There is
display advertising on websites, social media such as Facebook, Linkedln and YouTube.
Interest It is not enough for a marketer that a consumer is aware of the brand. Consumers must be interested
in the brand. They must want to know more about the brand, be intrigued by it. This is only known as
' consideration stage ' . Consumers must consider the brand for purchase and it must be included in their
consideration set. In the funnel model, 'interest' stage has large number of brands. Consumers consider the
brands that they have heard about in traditional channels or on social media or have seen their friends using it.
Interest can be sparked by running highly creative campaigns that break the clutter and stand out. Interesting
posts highlighting the unique benefits of the brand can also spark interest. Highly emotional messaging can
8
also create emotional connect triggering interest .
Desire New media makes it easy for consumers to evaluate the competing choices using inputs from
reviewers, peers, retailers, influencers, specialists, marketer and competitors. Smart marketers assist
consumers in the evaluation process by providing comparative analysis, economic value calculations,
collecting feedback, reviews and ratings and guiding consumers to the channels which can help them in
making choices. De Beers, for example, educates consumers about what criteria to look for while selecting
diamond. It emphasises on four Cs - Carat, Colour, Clarity and Cut. Some digital channels that are more apt
for this stage are community forums, biogs and review rating sites. Based on evaluation of different brands,
consumers develop preference for certain brands and they become part of the choice set. This set has much
fewer numbers of brands than awareness set or consideration set.
Action In this stage, consumers purchase the product that they desire and prefer. This stage generates
revenues for the brand and is the outcome every marketer desires. Having conveniently located retail outlets
or online purchase facility will help the consumers in making the purchase. The website should have smooth
navigation so that consumers can easily find products that they are looking for at the right price and at the
right time. Consumers may drop off at any stage as they may not like the design of the site or it may be
slow to load or they may not find the right variant ofthe product or may be seeking discounts or payment
may not go through. Marketer must ensure that a11 hurdles are removed. In the digital marketing, marketers
have a plethora of channels to choose from - search engines, websites, biogs, social networks, mobiles,
applications, forums. Depending on the stage of the consumer buying cycle, marketers can choose the most
appropriate channels.
Marketers have traditionally put more emphasis on 'desire' and 'action' stages of the journey. In this
process, they end up aJlocating more resources for building awareness through advertising, incurring huge
costs and encouraging purchase with retails promotions. Traditional AIDA model has only four stages as
marketers have not given importance to post purchase but with the advent of digital marketing 'advoc~cy '
stage has become important in influencing other consumers and building loyalty. Hence, it is the fifth ~tage
• I
m the consumer buying funnel. ·,
I '· •

Advocacy Consumers experience satisfaction ·or di ssati sfaction after purchase. They may share their
experience on social media and spread word r f mouth. If consumers are highly satisfied, they may develop
tll!JI", ,D :igJta:1 Marketing _
, · l r er quantities. They may purchase __ _
a bond with the brand and become loyal and purchase repeatedl~ or tn ~ ~ t t cor advocacy and word
• • s
again without undergoing all the stages of dec1s1on process. oc
,al media
· · 1s mos ap 11

9
of mouth post purchase • • E ro e and the US by stages
10 h '. d.
A study by eMarketer of the leading channels _
lever aged by CM Os u _P
. d' d. ·tal channe Is sue · as soc1a1 me ta,
of customer experience (Table 1.3), ~hows that unlike mass ~e ia, 1g1 Whereas TV is good mostly for
email and website are good across different stages of the buymg process. f d. 't ket· 't .
· ·ts a h uge st ren gth o 1g1 a1 d mar
t . mg. as
_ 1 ts
d
the awareness stage, social media is good for all stages. This
· d bl'ng
1 purchase an nggenng wor
etlective in creating awareness as well as developmg preference an ena
of mouth.
vii
Survey of GMO for Leading Channels by Stage of Purchase Process

Social 38.4 37.4 39.4

Website 32.3 30.3 28.3
29.3 28.3 19.2 26.3 15.2 20.2
Search and Display ads
Email 30.3 35.4 31.3 35.4 32.3 33.3
Events 20.2 19.2 19.2 19.2 20.2 19.2

Apps 14.1 22.2 25 ,3 21.2 18.2 23.2

Newsprint 14.1 13.1 14.1 12.1 14.1 12.1

Video 14,1 ~5.2 , 13:t· 15.2 13.1 11.1
TV 13.1 4.0 3.0 3.0 4.0 6.1
Radio 9:I .7.f ,: 1.L: 7.1 7.1 7.1

Key: % = percentage of respondents

1.3.2 The P-O-E-M Framework

A good framework that can help you organise your digital marketing strategy is Paid, Owned, and Earned
Media.
• Paid media includes sponsored advertisements in different channels of digital marketing such as
search engines, websites, Facebook, Linkedln and Twitter. They include campaigns run through
different platforms such as Google AdWords and Campaign Manager of Facebook, Linkedln, and
Twitter. It also includes campaigns run through ad networks or Demand Side Platforms (DSPs).
• Owned media is like an asset of the company i.e., the company has the ownership of these media.
It includes company's official website, microsite, and social media pages such as Facebook page,
Linkedln page, YouTube channel and Twitter handle. It also includes mobile apps or biogs, and also
the original content created by the company such as videos, images, infographics and posts.
• Earned media is organic and unpaid. It includes publicity that is generated through recommendations
and word of mouth. It also includes social media engagement such as likes, shares, comments, replies,
retweets, favourites, etc. Earned media is generated by users and hence is more credible and has the
power to give exponential reach to the marketer. Earned media accrues only when users like the
content and engage with it.

vi i Source: eMarketer, 2015, used with permission ,

 Introduct ion to Digital Marketing . .

The combination of ' owned, earned, paid media' is regarded as one of the best practices in digital
marketing. There should be a balance between all media and it should not be lopsided towards one. It means.
as a brand, you should not focus only on one media and ignore others. For instance, it is not a good strategy
to depend largely on paid ads and not focus on earned media. Focus is related to budget allocation. A simpl e
thumb rule is to divide the budget equally between paid and owned/earned media. This is a best practice
which means that you must allocate 50 per cent of your digital marketing budget to create content for your
digital assets and getting engagement, and remaining 50 per cent on running paid ads. Though the owned and
earned media are organic, and hence more credible and provide higher quality traffic, they take longer time
to show results. Hence, owned and earned media should be part of your long-term strategy.
Paid media, on the other hand, will increase your reach, impressions in the short term but once you
stop running paid ads, you may not get repeated engagement or traction. Hence, the best practice is to
strike a balance between long-term and short-term mediums. Moreover, while marketer may not have
control on whether fans will engage with content or not organically, paid media guarantees certain reach and
impressions. Typically, in India, marketers tend to focus more on paid media and less on investing in creating
quality content; and budget is sometimes as high as 75 per cent for paid media. The distribution of budget is
also a function of the stage of the brand in its lifecycle. If the brand is in the introduction stage, it needs more
awareness which requires more reach and impressions and that too within a short period as the brand cannot
wait for long to build awareness . Hence, more budget can be allocated at the introduction stage to paid media.
However, if the brand is already known and is in the maturity or growth stage, it will have steady stream of
customers engaging and buying, and hence need not rely on paid ads to great extent. Thus, more budget can
be allocated to owned/earned media to drive engagement and loyalty.
Another interesting aspect is the convergence of the three medium. ls Facebook a paid media or an owned
media or an earned media? It is all three! The content that you create on Facebook is your owned media which
becomes earned when it gets likes and shares, and when you make it sponsored, it becomes paid.

1.3.3 Segmenting and Customising Messages

One of the strengths of digital media is the enormous data that is collected about customers. This data
enables rich segmentation based on geographic, demographic , psychographic and behavioural variables.
Segmentation is dividing heterogeneous population into smaller homogenous groups which are similar in
characteristics. The targeted segment should respond better to marketing stimuli than general population as
the marketing mix will be more customised for the chosen segment. Hyperlocal targeting can be useful for
local businesses and for retailers and outlets who wish to attract customers in the vicinity. Another popular
method of targeting is behavioural, wherein the intent of the user is tapped based on online behaviour to
determine if the user is in the market to buy a product or not. Another upcoming method of targeting is your
CRM data targeting, wherein you target database of leads or customers you have generated. These customers
are more likely to purchase your brand as they have engaged with your brand in the past. An objective of
targeting CRM data could be to cross-sell or upsell. Marketers are hiring data providers to add layers of social
media data and other demographic and geographic data to their CRM data to make it richer, thus enabling
more customised messages. A new method of targeting which is gaining popularity is lookalike targeting.
To reach out to more people, you target users who are like your best customers (your CRM data). Lookalike
modeling is done using sophisticated algorithms to find similar users. Figure 1.6 lists the targeting methods
used in digital marketing. \ -
I
 Digital Marketing
'->,

F,15•35
------.. ? Demographic ~ _ _ _ ______

Visitors to portal and Behavioural Geography Bengaluru

Booked travel onllne

/
Existing~ Remarketing Website
Customers ~ visitors

I \
Similar to
registered users Look Alike EMusic

\ )
1Phone7 EJ [ Language ] Tamil

Cooking Tips
'B ..
moneycontrol.c:- [
Placement
B
r . Travel Buffs

FIGURE 1.6 Find your customers onlin_e

1.3.4 The Digital Landscape

Digital marketing consists of different channels such as search engines, social media, mobile marketing,
influencer marketing, Digital PR, etc. Search engine marketing done either through paid advertising or search
engine optimisation is good for customer acquisition. You may be wondering why! This is because search
engines capture the intent of the user, and hence are more of pull medium, thus getting higher click-through
and conversion rates than other mediums. User is interested in finding out information about a product or
service, and is hence typing a query on search engine. This user is more likely to click and take the desired
action. The click-through rates of search engines are among the highest of all digital channels as shown in
Figure 1.7.
Popular portals and websites such as Yahoo!, Indiatimes and YouTube are very good for brand building.
Do you know why? This is because the first step in brand building is creating awareness. These websites or
mobile applications have millions of unique users and page views per month, and hence have huge reach.
If you place banner ad on these websites then it will reach large number of users thus creating awareness. A
standard banner ad is more like a push medium, unless it is remarketing to visitors of the website or doing
behavioural targeting.
 Introdu c tio n to Digital Marketing -

Google
Bing
Yahoo

Google analytics Youtube.com

Digital
Webtrends Yahoo.com
Analytics
Omn iture lndiatimes.com

Prnewswire
Bloomberg
Blogadda Linkedln
Radian 6 Facebook
Simplify360

Twitter

FIGURE I .7 The digital landscape

Social media is very apt for customer engagement as it is about building a community and nurturing a
bond with members. It is not so apt for generating sales or conversions as users do not come to social media
to buy products or services but to engage with friends. Marketers sometimes are disappointed that they are
not getting enough leads or conversions from social'media. You must understand that each medium of digital
marketing has its own unique strengths and characteristics, and hence marketing objectives must be aligned
to each medium's unique characteristics.
Micro blogging platforms such as Twitter are apt for disseminating information rapidly. They are more
about ' what's happening?' They are good for trending and for spreading word of mouth. This is because they
are open networks where users can fo11ow anyone without seeking any permission and one can view tweets
of any other user even without following the user. The 140-character limit makes it easy for the user to share
current events and happenings.
Another strategic area of digital marketing is 'online reputation management' (ORM) which is about
listening and understanding consumer sentiments and proactively shaping the brand attitude. Many social
listening tool s are available such as Radian 6, Simplify 360 that identify the influencers, brand associations
and sentiments. Another aspect of ORM is the Digital PR which is fast replacing tht! traditional PR. Many
newswires have come up online where marketers can submit news for dissemination to different media and
journalists. Influencer marketing is another important area as in digital world anybody can be an influencer.
Identifying influ.encers, building relations and seeding content with them rnquires an understanding of
the process.
DigitaJ marketing generates lot of di gital analytks and metrics. Mct1surah ility is one of the strengths
of digital marketing. Looking at the metrics and improvising on your di gital marketing strategy helps in
improving the ROJ. Many tool s arc available fr>r digital analytics through which pt!rformance of each
campaign can be measured and optimi sed.
-- Digital Marketing

1.4 DIGITAL ADVERTISING MARKET IN INDIA

As Internet penetration in India is low at only 34 per cent of the population , most of advertising spending still
goes tmvard traditional media . But as India is the second most populous country in the world, it still has got
a huge number of Internet users. Since television and vernacular print have higher reach and are entrenched
medium, large part of the marketing budget is devoted to them. While television advertising garnered 39.4
per cent of the total adve11ising budget, newspaper s got 34 per cent of the advertising budget in 2017. Digital
got 15 per cent of the advertising budget in 2017 while radio and out of home got 5 per cent each, as shown
in Table 1.4.

Table 1.4 Advertising Spending in lndiaviii

Magazine Ad Spending (US$ million) 128 132 137 141

Magazine Ad Spending( % of total media ad spending) 2 1.9 1.7 1.6

Magazine Ad Spending Growth (%) 4.6 3.8 3.5 3.4

Newspape r Ad Spending (US$ billion) 2.4 2.6 2.7 2.8

Newspape r Ad Spending( % of total m~dia ad spending) 38 36 34 32

Newspape r Ad Spending Growth(% ) 8 6 5 4

Out-of-Ho me Ad Spending (US$ million) J51 372 395 415

5.6 5.4 5 4.8
Out-of-Ho me Ad Spending( % of total media ad spending)
Out-of-Ho me Ad Spending Growth(% ) 7 6 6 5.2

Radio Ad Spending (US$ million) 294 331 378 423

Radio Ad Spending (% of total media ad spending) 4.7 4.8 4.9 5

Radio Ad Spending Growth (%) 13 12.8 14 12

Digital Ad Spending (US$ million) 696 933 1213 1528

10
Digital Ad Spending (% of total media ad spending) 12 13 15 17

Digital Ad Spending Growth(% ) 34 30 26

TV Ad Spending (US$ billion) 2.5 2.8 3 4

TV Ad Spending (% of total media ad spending) 38.90 39 39.40 40

TV Ad Spending Growth(% ) 12 11 .90 13 14

6.5 7 8 9
Total. Media Ad Spending (US$ billion)
Total Media Ad Spending Growth (%) I l.60 ll.50 12 l l.70
-- - --·- - -

viii Source: eMarketer, used with permi ssion.

 Intro d uction to Digital Marke ting -

Advertising Spending
(% of total media ad spending), India, 2017

Magazine
2%

Newspaper
TV 34%
39%

5%

FIGURE I .8 Advertising spend as per cent of total media ad spendx

1t is interesting to note that digital advertising has grown the fastest at 30 per cent in 2017 . Magazine and
newspapers are growing at a decreasing rate. Also. the growth rates of magazine, new spaper and outdoor
advertising are very less as compared to total media ad spendi ng growth rate. Another interesting thing to
note is that tel evision and radio are growing at a healthy rate of more than 11 per cent p.a. (F igure 1.9).

Advertising Spending Growth, lndla, 2016-2017

34%
30% ~ 2016 □ 2017

12.8% 14%
11.9% 13% 11.5% 12%

6% 5% 6% 6%
3.8% 3.5%

MagzineAd Newspaper Ad Out-of-Home Radio Ad Digital Ad TV Ad Total Media

Spending Spending Spending Spending Spending Spending Ad Spending
Growth Growth Growth Growth Growth Growth Growth

FIGURE I •9 Advertising spending growthx

In marketing, the simple mantra is to fish where the fishes are. This means that marketers would allocate
marketing budget to medium where consumers spend more time. According to eMarketer, consumers spend
more than two hours on an average watching television. The time spent on newspaper is about 15 minutes

i~ source: eMarketer, used with permission.

~ Source: eMarketer, used with permission.
- ·. '•Di$fital .M:arketing

per day (Table 1.5). It is to be noted that multiple medium can be consumed at the same time (like accessing
smartphone while watching TV). In Table 1.5, we can see that time spent on digital medium includes time
spent on laptop Internet, on mobiles (non-voice), smartphones and tablets.

Table 1.5 Media Usage in lndiax 1

Desktop/Laptop Internet: Time spent per day 0:19 0:22 0:25 0:27
Digital: Time spent per day 0:58 l :07 1: 17 1:25
Magazines: Time spent per day 0:03 0:03 0:03 0:03
Mobile (non-voice): Time spent per day 0:39 0:46 0:53 0:59
Newspapers: Time spent per day 0:15 0:15 0:15 0:15
Print: Time spent per day 0:16 0:16 0:16 0:16
Radio: Time spent per day 0:12 0:13 0:13 0:13
Smartphones: Time spent per day 0:21 0:27 0:33 0:38
Tablets: Time spent per day 0:03 0:04 0:04 0:05
TV: Time spent per day 2:02 2:03 2:03 2:03
-Total Media: Time spent per day 3:27 3:37 3:47 3:55

It is interesting to compare time spent on media with ad spend share for India and then compare it with
other countries. In India, consumers spend 56 per cent of the total media time on television and 31 per cent
on digital, which is a significant amount. Ifwe compare the time spent on television with ad spend, we realise
that while consumers are spending more time on television, proportionately less advertising budget is allotted
to it. This skew is even more for digital. While 31 per cent of the time is spent on digital, only 14 per cent of
the advertising budget is spent on the digital medium. Hence, digital is highly under leveraged. On the other
hand, although consumers are spending less time on print media, proportionately high budget is spent on print
and hence it is over leveraged. What do you think are .the reasons for this skew? Marketers are comfortable
with print and television media and continue to spend heavily out of habit. Most of the decision makers in
marketing belong to the old school of thought and have been slow in adapting to digital media.
Another reason could be that reach of television and print is much higher to more than 70 per cent of the
population, whereas digital is limited to 30 per cent of the population and hence marketers spend more money
on medium which gives them reach. Another reason could be that historically television and print have been
used for strategic advertising to build brand awareness and equity. Television is powerful as it has audiovisual
capability and so can have an emotional narrative unfold on the screen with lot of impact. On the other hand,
digital has historically been used for tactical advertising for generating sales or leads. Marketers are looking
at digital from ROI and measurability viewpoint, and hence are more sensitive to returns than mass media.
Marketers are willing to pay premium prices for medium which can build brand awareness and equity as
compared to tactical medium aimed at offers or sal es.

xi Source: eMarketer, used with permi ssion.

 lntroduotion to Digital Marketing --

Another way of looking at it is that digital is more cost-efficient as compared to mass media and hen~e
fewer budgets are devoted to digital. Over time, we may see some correction in the skew and money may
flow from over leveraged medium to under leveraged medium.
It will be interesting to compare Indian data with that of the US. A thing to note is that whereas in India
only 15 per cent of the advertising budget is going to digital; in the US, 37 per cent of the advertising budget
is going to digital. Hence there is a huge upside potential for digital in India. In the US, less per cent of
the budget is spent on print unlike India. If you look at China, digital is commanding 59 per cent of the
advertising budget and is the largest medium, much ahead of television which is much under leveraged
getting only 27 per cent of the advertising budget (Table 1.6).

Table 1.6 Time Spent Share versus Ad Spend Sharexii

China
Time Spent share 51 43 3 2.60
Ad spending share 59 27 6 8
India
Time spent share 3{ 56 , 5 8
Ad spending share 14 41 5 36
United States
Time spent share 50 35 12 4

Ad spending share 37 40 8 15

Japan
Time spent share 43 48 5 5

Ad spending share 33 42 3 23
S.outb Korea
Time spent share 47 44 6 3

35 2 . 20.
Ad spending share 43

Note: ages 18+; time spent with ea~~ mediu~ incl~des all ~?1e
example, I hour of multitask on d1g1tal media while ~a~c mg
i~n_tiswicounth t~~e :e1i~:;/;;;1~e:tt~~~~7 1~7~i~:~
0
~

media; ad spending share excludes out-of-home advertlsmg.

. . . . . . p· . 1 11 shows that 58.6 tonper cent

search
Let us now have a look at budget allocation w1thm d1g1tal medmm. igme .
. d •· h . s 35 ·4 per cent ads on spenmedia such
wassocial
of the digital media budget was sperit on r,isplay a vertJSmg w er~a
advertising in 2017. Display advertising includes banner ads on websites as we 11· as .

xii Source: eMarketer, Nov 2016, used with permission .

-- Di gital Marketing

as Facebook, Twitter and Linked In. Mobile ad spending constitutes about 3 7 per ~e~t of digital ~d s?e n <ling
and grew by 11 0 per cent in 2016 (Table 1. 7). It is expected to be 53 per cent of digital ad spend mg m 2018.
Figure 1.1 0 sho,ws digital ad spending growth in India from 2016-2017 • .

Table 1.7 Digital 'Media Ad Spending in lndiiiii

K
I
!'
t
r
Classified Ad Spending (US$ million) 46 61 75 90
Classified Ad Spending (% of total digital ad spending) 6.6 6.5 6.2 5.9
Classified Ad Spending Growth(%) 28 33% 24 20
Display Ad Spending (US$ million) 405 544 710 899
Display Ad Spending (% of total digital ad spending) 58 58 58.6 59
Display Ad Spending Growth(%) 29 34 30 27
Mobile Ad Spending (US$ million) ·118 249 460 805
Mobile Ad Spending (% of total digital ad spending) 17 27 38 53
Mobile Ad Spending (% of total media ad spending) 2 4 6 9
Mobile Ad Spending Growth (%)
12. 110 85 75
Search Ad Spending (US$ million)
245 328 428 539
Search Ad Spending (% of total digital ad spending)
35.4 35.3 35.4 35.4
Search Ad Spending Growth (%)
29 34 · 30 26

Digital Ad Spending Growth, India, 2016-2017

110%
□ 2016 l\ill 2017
85%

33%
24%

Classified Display Mobile

Search

FIGURE 1.1 0 Digital ad spending growthxiv

xiii S
xiv ource: eMarketer, used with permi ssion.
Source: eMarketer, used with permission .
 Introdu c tion to Digital Marke ting --

\ '
Digital Ad spending
(% of total digital ad spending), India, 2017

___.-- Classified Ad
------
, - ---c._ 6%

Search Ad
35%

Display Ad
59%

FIGURE 1.1 I Digital ad spending across mediumsxv

1.5 SKILLS REQUIRED IN DIGITAL MARKETING

Digital marketing is complex and requires different skill sets. It is impossible for one person to possess all
the skills needed to be an effective digital marketer. Marketers should hence build a team which has all the
requisite competencies. Some of them can be in-house (in employees) and some can be outsourced (digital
agencies). We can use the following framework for skill sets 11 :

1.5.1 Think
Digital marketing requires people who can think and conceptualise. They should be able to look at metrics
and analyse the performance and optimise. They should have analytical skills and should be able to run
campaigns on search, display and social media. They should be able to do A/8 testing to know 'what works
and what does not and optimise. They should be able to identify some strategic goals of digital marketing
2
such as testing some product concepts or doing market research for consumer trends 1 .

1.5.2 Feel
This is one of the most important skills in digital marketing. It is the ability to empathise with your customers
by stepping into their shoes and understanding their pain points. This skill will enable the digital marketer to
identify the content strategy that will resonate with their target audiences. Members of the team possessing
these skills will be actively involved in creating content strategy for websites, biogs, forums and social

~\ sourcc: eMarketer, used with pem1ission.

 E\lt Digital MA.rketin g

media . They should analyse the sentiments using li stening tool s so that they know the pul se of the market, the
brand associat"ions and the consumer engagement.

1.5.3 Act
Digital marketing requires lot of execution . You need people who can understand the brand concept and the
co~tent strategy and create creative images and videos. These people should be graphic designers or be from
institutes of design and know software for editing photos and videos. They should not only know how to use
tools and software but should also be artistic and creative. They should also understand bra nd values and
should be able to create images and videos that are aligned with the brand values.

1.6 DIGITAL MARKETING PLAN

The head of digital marketing will have to prepare a digital marketing plan 13 which outlines the objectives,
target audience profile, content strategy, channel strategy, budget and measurement. Let us have a look at
each of the elements in detail.

1.6.1 Objectives
The starting point is to identify the objectives of digital marketing. This can be split into branding and
performance objectives. Both the goals can coexist. Some campaigns and activities may have the objective
of increasing brand awareness and brand recall, whereas others may have the objective of increasing sales or
leads or conversions. It is advisable to identify metrics for measurement of performance alongside objective
setting. If the goal is branding then the metric would be recall. This may be measured by hiring a market
research agency which may do an online or offiine research for top of mind recall, etc. If the objective
is performance, then measurement can be done through metrics such as CTR (click through rate), leads,
conversions and CPA (cost per acquisition).

1.6.2 Buyer Personas

Next step is to identify multiple buyer personas. This should be based on analysis of past data and profile of
your best customers and not based on hunch or assumptions. The more scientific it is, the more accurate it
wi ll be. Another important aspect is that you should develop multiple personas and not one. Rarely customers
would be so homogenous that they can be categorised into one persona. The infonnation that you need about
your best customers can be categorised into three areas:

Who You should identify the age, gender, location, job title, responsibility, education of your custonlers and
make a pen profile.

What You m~st deliber~te what are the goals of your customers and their pain points that need to be resolved.
What are. thetr areas of mterests, what are their passion points what medi'a do they " .
touch points. , consume, what are the
·
Why Ultimately you must question why will they buy your product what is your tii ·qtie sell ' ..
h · 1 · . ' 11
mg propos1t10n
w at 1s your e evator pitch, and how compelling it is to convince the customers to buy. '
 Introducti on ·to Dig ital Marketing Ell
You can get information to fill your buyer personas by examin ing the social media profiles of your
customers. You can also get useful info rmation from audi ence reports in Google An alytics that explains the
geographic, demographic, device data of your audi ence.

1.6.3 Content
You must prepare content strategy by analysing what worked in the past and what did not. You must analyse
the perfom1ance of each of the content typ1t s such as video, image, infographics, eBooks, webina:s, games,
hov,r to, trends and create more of the variety that performed better.

1.6.4 Channel
As a part of channel strategy, how rnuch would you invest in creating paid, owned, and earned content?
In owned, will you have a website or a microsite? Which social media pages or handles will you have and
bow will you prioritise? For earned media_, will you participate in biogs or forul)l or question answer sites?
What is your content strategy for getting engagement? Will you use contests or promotions or controversy or
emotional appeal? For paid media, which platforms will you run campaigns on? Will you run campaigns on
search engines or banner ads on websites or on Facebook, Twitter or Linkedln?

1.6.5 Timelines
You must prepare a month-wise calendar to record whic~ activities _will be done in which month. You must
further break down content strategy, channel strategy, target audience week-wise so that there is a starting
point to refer to.

1.6.6 Budget
How much budget will you allocate to digital marketing? It depends upon what per cent of the marketing
objectives will be met through digital. It also depends upon the industry and the role of marketing
communications in marketing mix and the role of digital in marketing communicatio ns mix. -For certain
industries such as e-commerce, financial services, automobile and education, digital is very important and
hence higher per cent may be allocated to it. How much budget will you allocate for paid campaigns across
different medium? Hence, how much budget will you allocate as media cost? How much budget will you
assign for content creation? How much budget will you allot for technology development cost such as
developing website or a game?

1.6.7 Measurement
The measurement metrics (Figure 1.12) will be dependent upon the objective. If the objective is branding
then measurement will involve recall, attitude and association studies. You may wish to hire a market research
agency to do it either online or offline. If the campaign objective is performance then measurement is through
CTR, leads~and conversions.

I
I
-- D i g it al~IV~I~a~
r k_e_t_in_g
~------------- ---------

1
Objectives
2
0 0 Buyer
Personas

0 0
6 3
Budget \ Conte nt

4
(J Channels

FIGUR E I.I2 Planning process

Summary
Digital marketing, if compared to traditional marketing, focuses upon
maxim ising effici ency rather than
minimising waste. By adopting digital marketing based practices,
adver tisers are able to reach niche
audiences. Many advertising tools have now developed the capabilities
to have indivi dual comm unica tion
to users based on interest, psychographic, online behaviour, etc. The strong
est benef it of digita l marke ting
is the measurability of campaigns advertisers are running. Digital is not
the silos of social media or search
but a mindset. It is the use of technology for marketing purposes. It can
applications, advergaming, virtual reality, augmented reality. involv e devel opme nt of games ,

Key Terms
Digital Marketing: It is the promotion of products or services of a
brand by
me d.ia One or more fiorms of electr omc
.

Digital Plan: Series of steps taken to prepare a digital marketing plan

POEM: A framework of Paid, Owned, and Earned Media
 Introducti on to Digi ta l Marketing -
Traditional Marketing : It refers to any type of promotion , advertising or campaign that has been in used by
companies for years; it includes advertisements in magazines , newspapers, television. direct mailers. public
relations, personal selling, etc.

Exercises

Concept Review Questions

1. What are the major differences between traditional and digital marketing?
2. Explain P-O-E-M framework in digital marketing strategy?
3. How will you prepare a digital marketing plan?
4. How will you build a digital marketing team?

Critical Thinking Questions

1. How is India's digital marketing different from other parts of the world?
2. Why business context is necessary while designing any digital marketing strategies?
3. Why should you prepare a digital marketing plan but not be bound by it?

Proje ct
1. Think of a digital marketing strategy for a decade-old fas hion oftline cloth store.
a. What are the metrics that should be followed for increasing web presence?
b. To increase sales, is it important for a business to go for digital marketing campaigns? lf yes,
why? If no, why not?

Case Study ·

Ariel Fashi on Shoot 1 4 I

Challenge and Objective

Ariel Actilift had an improved formula that removed tough stains. But the challenge was that consumers
were not interested in such a communication. Most Scandinavian consumers thought there is no
difference between detergent brands. The category showed lack of interest with lot of clutter and noise
in communication.
Research showed that there were more than hundred thousand blog posts in Sweden alone on the
subject of laundry education. Most of these posts were related to removal of tough stains. Ariel decided

(continu ed)
. . Digital Marke ting

(continued)
to focus on tough stains. The objective of the campaign was to prove that Ariel Actilif
t has the power to
remov e tough stains.

Strategy
The strategy was to bring an unexpected stain removal experience to life, onli~e as
wel_l as offli~e.
The big idea was ' Ariel Fashion Shoot' . It was an interactive produc t demonstrat10n of
stam remov mg
capabilities in Stockh olm central station one of the busiest locations, where a kiosk was
set up for six
days with robotic camera. '
People from other Scandinavian countries could also participate in the fashion shoot
throug h the
Facebo ok app. Users had to control the robotic camera either physically or through Facebo
ok app and
take three shots in 30 seconds of clothes stained with chocolate syrup, jams and ketchu
p.
Ariel also did a blogge r outreach campaign to create buzz. They sent high end fashion
appare l to key
blogge rs to e_x perien ce and write.

Result
Over 1000 pieces of designer clothing were stained. People waited for many hours on Facebo
ok to get a
chance to stain. Users shared their pictures with friends leading to the spreading of the buzz.
Clothes were
then washe d in front of users with Ariel Actilift and then shipped to over 1000 winners.
The campaign
reache d 5 million users and 1.2 million installed the app and over 25,000 Ariel fans
participated on
Facebo ok.
Courtesy: Ariel, used with permission. ·

Case Questions
I. Critique the creative strategy of the campaign.
2. Do you think convergence of online and offline media is the future of marketing? Comm
ent.
3. Do you think Ariel was successful in converting low involvement category into high involve
ment?