Fundamentals of Digital Marketing

DMEC515

Hailemariam Kebede(PhD)
Course description
• In this course, we will examine the fundamentals of digital marketing.
The course will provide a solid foundation for students to understand
digital marketing, including the strategies, tools and tactics that digital
marketers employ. You will learn how to research customer interests,
integrate these tools to create buzz, drive communications and
marketing goals, forecast and evaluate the achievement of business
objectives. Topics include the Digital Environment, Introduction to
Digital Marketing, Customers for Digital Marketing, Digital Marketing
Channels, and Campaign Management in Digital Marketing.
Course objectives
• The objective of this course is to provide you the fundamental
understanding for digital marketing skill sets. The goal is therefore to
help you inherently understand how the various digital marketing
channels complement each other and contribute to the overall
marketing goals. We will delve into the tactical as well as strategic
issues. At the conclusion of the course, you will be able to understand
concepts such as, Digital Marketing, Customers for Digital Marketing,
Digital Marketing Channels, and Campaign Management in Digital
Marketing.
 Evaluation
• Assignment ----- 20pts
• Assignment/project-------20pts
• Assignment/project -------20pts
• Final exam -----40pts
Text books and references
References
• Farrar, M. (2010). Understanding digital marketing. In Manager.
• Hsu, H. (2022). Book Review “Digital and Social Media Marketing: Emerging Applications and Theoretical
Development.” In Information Technology & Tourism (Vol. 24). https://doi.org/10.1007/s40558-021-00217-2
• Kotler, P., Kartajaya, H., & Setiawan, I. (2017). MARKETING 4.0( moving from traditional to digital)
PHILIP KOTLER. In by Philip Kotler, Hermawan Kartajaya, and Iwan Setiawan. All rights reserved.
• Nyikos, B. R. (2020). Digital Marketing: A Practical Approach. In Gazdaság és Társadalom (Vol. 13).
https://doi.org/10.21637/gt.2020.3-4.08
• Simon, K. (2016). Praise for Digital Marketing Strategy - An Integrated Approach to Online Marketing.
• Wicaksana, A. (2016). 済無 No Title No Title No Title. In Https://Medium.Com/. Retrieved from
https://medium.com/@arifwicaksanaa/pengertian-use-case-a7e576e1b6bf
 Course Content
• Chapter one: The Digital environment
• Chapter two: Introduction to Digital Marketing
• Chapter three: The Consumer for Digital Marketing
• Chapter four: Digital marketing channels
• Chapter five: Digital marketing campaign
management
 Chapter one
The Digital Environment
Chapter Objectives
After completing this chapter students will be able to:
• Understand the concept of Digital transformation
• Understand the concept of Programmatic marketing
• Comprehend the concept of Artificial intelligence
• Understand the concept of Virtual and augmented reality
 What is Digital environment?

• A digital environment is an integrated communications environment

where digital devices communicate and manage the content and
activities within it.
• As organizations see their daily activities within a digital environment,
the integrations between the various activities generally become
stronger and intentional.
• Digital environment in an organization includes systems of email
servers, storage/data servers, accounting software programs, web-
based applications, customer relationship management (CRM)
applications and websites.
 Digital environment enablers in business
1. Digital Transformation
• Although the term digital transformation has been around since the
birth of the commercial Internet, it has previously been used to
describe how organizations, industries or markets adapted to the
digital world.
• Obvious examples are e-commerce (the sale of goods online) and the
impact of digital technologies on the printing and music industries.
Digital Transformation…
• In attempting to define digital transformation, Fitzgerald et al. (2013)
suggest it encompasses the use of new digital technologies to enable major
business improvements (such as enhancing customer experience,
streamlining operations or creating new business models).
• Customer service writer and practitioner Gerry McGovern is more specific,
saying that: ‘Digital transformation is about organizing around the current
customer.
• It is about putting the customer at the center of the universe.’
• In a warning to those organizations that follow a trend rather than fully
committing to digital transformation, McGovern has also said that ‘Digital is
the transformation agent, not the transformation.’
 Digital domains: Digitization, digitalization, and digital
transformation
• Digitization is the technical process of converting analogue signals to digital
signals (Tilson, Lyytinen, & Sørensen, 2010). This process permits the decoupling
of form, function, and access, and it is a fundamental precondition for
everything from smartphones to artificial intelligence.
• Digitalization is the sociotechnical process of leveraging digitized products or
systems to develop new organizational procedures, business models, or
commercial offerings (Brynjolfsson & McAfee, 2014). While the words
“digitization” and “digitalization” are often used interchangeably, there are
important conceptual differences.
• Digital transformation is the sociocultural process of adapting firms to the new
organizational forms and skill sets needed to remain viable and relevant in a
digital landscape. It goes beyond earlier conceptions such as change enabled
through information technology (IT) (Benjamin & Levinson, 1993) or through
business-process reengineering (Grover, Jeong, Kettinger, & Teng, 1995), which
seek to improve upon existing processes.
Digital Transformation…
• It is agreed, however, that for any organization to digitally transform,
that transformation has to:
• Be organization wide
• Be understood by everyone in the organization
• Involve everyone in the organization
• Be cultural and not forced
• Have no end date.
Digital Transformation…
• An effective digital transformation cannot be undertaken by one area
or department of the organization.
• Furthermore, digital transformation is not about technology, it is
about the strategic use of technology.
• Key components of the digital transformation include: big data,
reverse marketing, mobile applications, the Internet of things and
the automation of business processes. Let’s consider each in more
detail.
Big Data
This is the collection of a wealth of data from and about everything
internal and external to the organization and its interpretation to help
make the business run more efficiently and improve customer service.
It facilitates the ability to track customers and their communications
across every channel, which can help measure and manage the
customer experience the sum of all the experiences a customer has
with a business. In turn, this can:
• Help improve customer service levels
• Enhance customer retention
• Improve overall customer lifetime value
• Be used to deliver personalized services.
Reverse Marketing
• Reverse marketing is the concept of marketing in which the customer seeks
the firm rather than marketers seeking the customer. The customer has
become the marketer, that is, the roles are reversed.
• In the traditional means of advertising, such as television advertisements,
print magazine advertisements and online media the seller finding the right
set of customers and targeting them, reverse marketing focuses on the
customer approaching potential sellers who may be able to offer product.
• On social media, customers tell their friends (and the rest of the world)
what they think about organizations, brands or products. And because they
no longer trust marketing messages, customers trust other customers
more. This can be by way of:
• Simple conversation on platforms such as Facebook
• Posting reviews on platforms such as tripadvisor or retailer websites.
Mobile Applications
• If ever there was a subject to exemplify the advances in, and acceptance
of, technology it is in the development and adoption of mobile devices –
specifically, the smart phone.
• However, this does give us a chicken and egg consideration: was the rise
of the mobile Internet a result of consumer behavior, or was consumer
behavior changed by the technology?
• Digital marketing practitioner and writer Gord Hotchkiss is more
succinct; he said in 2010 that ‘Technology doesn’t cause our behaviors
to change, it enables our behaviors to change’.
• It was the convenience that smart phones enabled that was behind their
adoption, not their technology.
The Internet of things (IoT)
• Essentially, this involves computers talking to each other to perform
tasks without intervention from humans. Although the concept goes
back to the early 1990s, and the term to 1999, it is only recently that
the theory has become readily available as a usable – and saleable –
reality.
• Internet-connected fridges that order more milk via a shopping app
when you are running low is a popular example, though wearable
devices that are used to monitor health, wellness or athletic
performance are a better illustration of IoT in reality.
The automation of business processes
• Perhaps the most long-standing aspect of an organization transforming to the
computerized world – the digital revolution – is the use of technology to automate
processes. Examples include robots building cars and computer software doing jobs
that once required an office full of clerks.
• However, an illustration of the advantages of automating business processes to better
satisfy customers comes from Richard Fain, CEO of Royal Caribbean Cruises Ltd (RCCL).
At the Mobile World Congress in Barcelona (February–March, 2016), he said that:
• ‘Digital has transformed our business. We are still a very personal business, but the
technology has freed our crew and our guests from many of the mundane tasks that
keep us from human interactions.’ He went on to say that ‘… digital/mobile helps
companies remove the crap out of customer experience’, citing the example of RCCL
having reduced the on-boarding process from 1.5 hours to 10 minutes with the use of
their Smart Check-in app,
• Once again, the technology is here – marketers should be looking for how its
application can meet customers’ wants and needs.
2. Programmatic marketing
• Programmatic marketing describes the use of software to replace
humans in the purchase and delivery of digital marketing content,
predominantly advertising (it is estimated to represent around 75 per
cent of all online advertising).
• However, as has been the case with many – if not most – terms used
in digital marketing, no one is sure there is an absolute definition.
• Programmatic comes – presumably – from the fact that functions are
programmed. It was more commonly referred to as automated
marketing or automated advertising (a term favored over
programmatic by the Interactive Advertising Bureau).
Programmatic marketing…
• Then there is the term data-driven marketing, which seems to be the
same thing as programmatic. This is evident in the Wikipedia entry for
programmatic media, which does not differentiate programmatic
media, marketing or advertising – effectively suggesting all three
terms refer to what marketers recognize as being advertising, and not
marketing.
● AdSense is part of the Google Display Network – and refers to text, image,
video and rich media adverts that are delivered on third-party sites and are
relative to the site’s content and audience.
● Google AdWords is part of the Google Search Network – and refers to the ads
that appear on the Google SERP and other third-party sites and are relative to
the search term used in a search.
3. Artificial intelligence
• According to Russell and Norvig in their best-selling book Artificial Intelligence: A Modern Approach (2003)
– ‘the study of intelligent agents: any device that perceives its environment and takes actions that
maximize its chance of success at some goal’. The same authors, in a later edition of their book, added that
‘the term artificial intelligence is applied when a machine mimics cognitive functions that humans
associate with other human minds, such as learning and problem-solving’.
• Although it is a popular buzz phrase, not only has the concept been a reality for some time, but such are
the advances in technology that actions once classed as AI are now demoted to being the mundane; for
example, the character recognition used in scanning documents and voice recognition software such as
Apple’s Siri and Amazon’s Alexa. Other examples include:
• Personalization of marketing messages – predominantly on websites.
• Since late 2015, Google has been using its RankBrain, an AI system, to interpret some search
queries.
• Chatbots – think of them as offering intelligent responses to questions which lead the user
through a series of further questions, with each subsequent question being based on the answer to
its predecessor.
• Dynamic pricing is common in some industries and markets – budget airlines being one
example. Using AI price trends can be correlated with sales trends, and then aligned with other
factors such as inventory management.
4. Virtual and Augmented reality
• Quite probably to the chagrin of those who work in the fields, people are
combining these two subjects into one, mainly because
(a) they use similar types of technology, and
(b) both aim to provide the user with an enhanced or improved experience.
According to industry website augment.com, ‘virtual reality (VR) offers a
digital recreation of a real-life setting, while augmented reality (AR) delivers
virtual elements as an overlay to the real world’. In further differentiating the
two, the site goes on to say that ‘VR is usually delivered to the user through a
head-mounted, or hand-held controller. This equipment connects people to
the virtual reality, and allows them to control and navigate their actions in an
environment meant to simulate the real world’ whilst ‘AR is being used more
and more in mobile devices such as laptops, smart phones, and tablets to
change how the real world and digital images, graphics intersect and interact’.
Virtual and Augmented reality…
• Not only do both have numerous applications in the likes of
entertainment, medicine and training, their marketing applications
are not so wide ranging.
• This is more so for VR as it is usually delivered via a head-mounted
or hand-held controller. While consumers still do not seem to be
convinced of the value proposition for VR, they have accepted AR
more readily, particularly as it is delivered on a PC or – more
commonly – a mobile device.
• Indeed, AR is already being used by millions of consumers to change
how the real world and digital images interact on smart phone apps.
Virtual and Augmented reality…
• In pure marketing terms, perhaps the current most useful application
of VR – but more so, AR – is through so-called immersive ads, which,
as the name suggests, allow the user to be immersed into a scenario
presented by the advertiser.
• As an indication of what is available, see Figure 1.3, which shows the
results of research into the use of AR and VR in advertising by Vibrant
Media (2017), who asked respondents: ‘How compelling would the
following VR and AR immersion ads be to you?’ However, these same
subject areas are equally suited to use on websites selling similar
products.
Virtual and Augmented reality…
Virtual and Augmented reality…
 Reading assignment
• THE INFLUENTIAL DIGITAL SUBCULTURES
• Youth for Mind Share,
• Women for Market Share, and
• Netizens for Heart Share
 Reading assignment
• THE PARADOXES OF MARKETING TO CONNECTED CUSTOMERS
• Online vs. Of line Interaction,
• Informed vs. Distracted Customer, and
• Negative vs. Positive Advocacy
 Chapter Two
Introduction to digital marketing
Chapter objectives
After studying this chapter, you will be able to:
• Explain the evolution of digital marketing
• Define digital marketing and differentiate it from traditional ‘e-models’
like e-business and e-commerce
• Describe the structure of digital marketing, opportunities, applications,
business modes and challenges
• Understand key components and application of ASCOR Digital Marketing
Framework across multiple stakeholder scenarios
Evolution of digital marketing
• Marketing as a discipline has undergone radical changes over the past
few decades.
• Since 1450, when Gutenberg’s printing press began its operation,
leading to mass production of flyers and brochures, till the present
time when automated posting of online advertisements has become
very common, marketing has kept up incredibly well with changing
technology.
Evolution of digital marketing
To understand how and why the original marketing concept and its orientations have shifted, let us go through the various stages of
evolution termed as ‘Marketing Eras’
• Trade era: products were handmade; hence, supply was limited
• Production era: products were mass produced and consumers focused on features like low cost and availability
• Product era: focus moved from quantity to quality and consumers laid more emphasis on quality, performance, and innovative features
• Sales era: with increasing competition companies were compelled to emphasize on aggressive selling and promotion, commoditization of
products, leading to saturation of consumer demand
• Marketing era: marketing emerged as a practice as consumers started demanding better products; differentiators like pricing,
distribution, and promotion became important
• Relationship era: customers started getting valued to build a long-term orientation
• Digital era: also called the social/mobile era, the focus is on real-time and social exchange- based marketing where communication and
social interactions play a prime role
Advent of Modern Marketing Techniques
• Modern marketing involves the following platforms and techniques:
• Search marketing: using search technology towards marketing
• Online advertising: placing ads across websites/digital platforms
• E-mail marketing: sharing commercial messages with people
• Social media marketing: using social media platforms/networks for marketing
• E-commerce: selling/trading goods and services on any online platform
• Digital on traditional mediums: integrating digital technologies with
traditional marketing mediums to improve interactivity (set-top box for TV can be
integrated with internet-enabled features to support digital sales)
• Although modern marketing is surging ahead, traditional marketing
methods have their own importance while targeting niche customers and
high-end groups who are more used to personalized and value-added
targeting.
Rise of the Internet: The Dotcom Era
• The transition from traditional to modern marketing has occurred
over a period of time on the basis of fundamental technological
changes impacting marketing.
• Most of them, undoubtedly, have been the invention of the internet
and its wide application to business marketing.
• The concept of internet which began with development of electronic
computers in the 1950s in United States impacted the basic manner in
which information would be stored and distributed globally through
the concepts of communication protocols and internet networking
(wherein multiple separate networks could be joined to a network of
networks).
Rise of the Internet: The Dotcom Era…
• More important were the advancements which led to the creation of e-mail and
World Wide Web (WWW), which brought out the power and influence of the
internet and related it to common man’s needs for communication and
information.
• E-mail started in 1965 as a way for multiple users of a time-sharing mainframe
computer to communicate with each other. In 1989, Tim Berners-Lee, a scientist
at CERN, with his invention of the World Wide Web ensured that the practical
application of this technology would be made available to all.
• This, followed by the inventions of web browsers like Mosaic and Netscape, made
sure that sitting in any corner of the world one would be able to access data and
receive information from any other part of the globe.
• It liberated the way information would be shared and marketing would be
promoted in the coming years.
World Wide Web Leading to an Explosion of
Information Share
• The invention of the internet led to a large-scale economic boom
never witnessed before.
• The evolution of WWW brought with it the development of HTTP
(Hypertext Transfer Protocol) which is the foundation of data
communication for the World Wide Web.
• HTTP functions as a request–response protocol in the client–server
computing model.
• Typically for any particular data to appear on any web page, a request
is placed by the client to the server using an HTTP protocol.
Emergence of Websites and the Concept of
URL
• World Wide Web started facilitating the display of text and images
through websites which were a set of static web pages containing
information useful for their target audience.
• A website is typically hosted on at least one web server and is
accessible through an internet address known as the Uniform Resource
Locator or the URL.
• All the websites together constitute what we call the World Wide Web.
• Websites contain web pages which are typically documents in plain text
with specified formatting instructions of Hypertext Markup Language
(HTML).
Dotcom Era and the Phenomenon of Modern
Marketing
• Modern marketing began to create and use web pages to build virtual
information centers for their products and brands primarily for
information dissemination and also to become the first movers to
adapt technology as a part of their marketing activities.
• In that period, the entire scale of activities and reach of internet for
marketing was still not well established, even difficult to envision. A
unique phenomenon that occurred with the rise of WWW related to
what we call the dotcom era, or more popularly referred to as the
Dotcom Bubble.
Dotcom Era…
• On 11 March 2000, Nasdaq, the key stock index for Wall Street witnessed
a tumble of technology shares’ valuation, following which the net worth
of a large of number of dotcom companies started to fall rapidly.
• Nasdaq experienced big falls as the business community realized that
most of these technology companies were merely bubbles waiting to
burst and blew away billions of dollars with them.
• This led to the era which we now commonly known as the dotcom bust,
post which a lot of companies understood that digital was to play a
supportive role in marketing and sales would primarily be driven through
physical models, a thought that would eventually change in the
subsequent decade.
 Post Dotcom: Creation of Internet Business
Models
• As discussed in the last section, even while the dotcom bubble was
taking technology stocks down, a lot of positives were being
registered on the internet timeline.
• In 1995, Amazon.com bookstore had appeared; Netscape IPO was
launched; and Sergey Brin and Larry Page were planning the future
Google.
• Microsoft Internet Explorer appeared in 1996 and Hotmail came up as
the first web e-mail site whereby internet started to impact the daily
lives of its consumers laying the foundation of business to consumer
(B2C) as a prominent online business model.
Growth and Impact of Search Technologies
• The biggest impact which internet had on marketing can be clearly
attributed to the rise of search technologies.
• The main aim of a search engine is to organize the internet and
provide a coherent structure for easy access to information on
specific keywords.
• Research on search computing had begun as early as 1990 with the
launch of WebCrawler, the first full-text web search engine, in 1994.
• Before WebCrawler only web pages were searched and this was the
first search engine which was ‘all-text’ crawler based and allowed
users to search for any word on any web page.
 From Web 1.0 to Web 2.0: The Changing
Nature of Web
• With the emergence of multiple technology streams beyond the dotcom era, it is
important to trace how the nature of web transformed over the years and how it
impacted internet commerce and marketing.
• The term Web 2.0, which was coined by Darcy DiNucci in 1999, was popularized by Tim
O’Reilly at the O’Reilly Media Conference in 2004. It came to signify the cumulative
changes in the manner web pages were made and built from their earlier avatar in the pre
dotcom era.
• Web 1.0 came to be known as the era when a vast majority of users simply acted as
consumers of content and content creators were few (Cormode and Krishnamurthy, 2008).
• The shift from Web1.0 to Web2.0 and now even extending to Version 3.0, has had a major
impact on how marketing through the internet has evolved and continues to do so, thus
opening newer avenues to reach out to and meet the ever-changing demands of the
consumer
 Areas of Comparison Web 1.0 Web 2.0

(a) Information Discovery Read-only web Read-write web

Search and browse Publish and subscribe
Stickiness Syndication
(b) Information Retrieval Transactional Relationship
(c) Information Aggregation Commercial aggregators Micro-aggregators
Web forms Web applications
Directories (Taxonomy) Tagging (Folksonomy)
(d) Marketing and selling Push; Contextual Conversational; Personal
Page views Cost per click
Low targeting Individual targeting
(e) C o ntent C o ntrol Publishers C o ntent auth ors
Singularity C ollab oratio n
Portals Really simple syndication
(f) Content Structure Domain and pages Tagged objects
Static site Dynamic site
Growth of ‘E’ Concepts: from E-Business to
Advanced E-Commerce
• The rapid rise of internet and its effects on business at large can only
be appreciated once we understand the influence, extent, and impact
of multiple technologies at the business value chain level.
• A value chain is a chain of activities that a firm operating in a specific
industry performs in order to deliver a valuable product or service for
the market.
Growth of ‘E’ Concepts…
• Essentially, as defined by Michael Porter in his understanding of value chains,
there are five key primary activities, (as listed below), performed by any firm
towards reaching its goals of value and revenue creation.
• Inbound Logistics includes relationships with suppliers and all the activities required
to receive, store, and disseminate inputs.
• Operations refers to all the activities required to transform inputs into outputs
(products and services).
• Outbound Logistics includes all the activities required to collect, store, and distribute
the output.
• Marketing and Sales refers to activities that inform buyers about products and
services, induce them to purchase, and facilitate their purchases.
• Service includes all the activities required to have the product or service work
effectively for the buyer after it is sold and delivered.
• To understand and trace the impact of technology on these stages, it is imperative
to map the processes enhanced by technology across each of them.
Figure 1.2. Comparison of e-models
Digital marketing: an introduction
• The definition of digital marketing according to IDM (Institute of
Direct and Digital Marketing) includes ‘the management and
execution of marketing using electronic media such as the web, email,
interactive TV, wireless media in conjunction with digital data about
customers characteristics and behavior.’
Definitions
1. Digital marketing involves reaching out to potential customers through a set
of interactive, intuitive, and advanced electronic devices and platforms which go
beyond the normal web and e-mail to include mobiles, PDAs, interactive TV,
applications, social media, which were earlier not common to marketing online
through ‘e’ models. This explosion of platforms and devices has been possible due
to rapid growth in mobile technologies and successive innovations which have made
instruments like smartphones available in the hands of large audiences with readily
accessible information.
2. Application of marketing to consumer interaction touchpoints that integrate
digital data about customers and their behaviors in a manner which was not
extracted and targeted earlier. This has resulted in a whole new ecosystem of
advanced technologies to target each valued customer customized with messages
and promotions specific to their needs and intent.
Definitions…
3. Introduction of interactive communication channels like search,
display advertising, social media, etc., which have a strong combination
of pull–push marketing rather than the earlier models which were
primarily of push marketing nature.
4. Incorporation of a variety of technological advances in
communication, social integration, machine learning algorithms along-
with their application to multiple devices and platforms, all of which
have made it possible for digital to carve itself as an established area of
marketing.
Pull and Push Marketing
Any type of customer interaction with any digital media can be most simply be divided into
two types depending upon where the contact is initiated:
(a) Medium-initiated contact (Push marketing): This is the traditional type of marketing
where marketing messages are packaged with information pre-configured for a particular
set of users. Take the example of a newspaper, which typically is current information pack-
aged across different verticals like politics, economics, sports, etc., and packaged along with
large ad columns which bring in the revenue (along with the classifieds). In contrast, let us
understand what pull marketing entails.
(b) Consumer-initiated contact (Pull marketing): Pull marketing involves a consumer
placing his intent and specific interest for a particular type of information and being offered
that information along with relevant marketing messages suited to his intent, query, or
profile-based interests. In the same example of a newspaper, as above, consider that the
company decides to provide information in a way that each article of the newspaper is
tagged and categorized based on multiple criteria to be searched upon a digital platform.
Pull and Push Marketing…
Let us understand a few key types of digital marketing areas to see how digital technologies have
been built around the combinations of pull–push marketing concepts:
(a) Search marketing: Search was one of the most pioneering pull–push marketing concepts
which involved providing a technology platform to consumers to help them express their intent
towards finding a particular piece of information and building a push marketing-based business
around that search. (We would cover this particular topic and its technologies in detail in
subsequent chapters and sections).
(b) Display advertising: Similar to print advertisements, display advertising was built on pulling
data from consumers’ readership interests on any particular website wherein display ads were
pushed next to the content being read for consumers to interact, click, and buy on landing pages
created for this action.
(c) Social media marketing: With the power of social networks coming to internet-based
platforms, a marketer could not only use the information pulled from customer intent but also from
the intent of his social networks which would be marketed back to him in the form of sponsored and
native advertisements.
 Understanding Digital Marketing Business
Models
• Moving forward let us look at the key digital marketing business model
types deployed for marketers to earn revenue from their investments
across various digital media types described earlier.
• Largely, there are five different types of digital marketing business
models which are further classified into sub-types based on transaction
and application.
• These are advertising, subscription, commerce, transaction fee, and
social collaboration-based revenue models.
• It should also be noted here that the fulfillment of these models is done
through a variety of platforms and channels, most suited to each
business model.
Table 2.3. Digital business models
 Digital Marketing Types Explained through
REAN Marketing Engagement Framework
• To explain digital marketing types, we first need to develop an
understanding of the historic marketing funnel models and use one of
them as a base to explain how different digital marketing types cater
to each of the marketing funnel stages of that model.
• A marketing funnel model also referred to as a ‘purchase funnel,’
‘customer funnel,’ or ‘sales funnel’ aims to put a structure to explain
how a marketer or consumer goes through the various stages of
marketing and consumption to finally purchase any product or service
online.
 REAN model…
• The one we have used here as a base to explain the multiple digital marketing
types is the REAN (Reach Engage Activate Nurture) model developed in 2006
by Xavier Blanc.
• The author added a Plan Stage before the four stages (to include the set of
activities which involve planning and creation of the marketing material) and
termed it as the ‘Marketing Funnel’ view.
• To explain the concepts further and understand the corresponding impact
and involvement on the consumption side, we have also created a mirror
funnel called the ‘Consumer Funnel’ which replicates the stages of the
marketing funnel to look at consumer inputs and impact on the marketing
cycle across each of the stages, which also impacts the overall digital
marketing types deployed at each stage.
 Explanation of Marketing and Consumer Funnel
Stages
• ‘Marketing Funnel’ as depicted in Fig. 2.3 consists of four REAN model stages
(including the additional added stage of Plan) which can be described as:
1. Plan: Develop marketing plan, content strategy, and branding material which would
be used to conduct marketing across the following funnel stages.
2. Reach: Involves the set of activities to raise prospect’s attention to marketer’s brand
product or service. (This is the stage where prospects are created.)
3. Engage: The gradual, typically multi-channel set of activities needed to engage the
prospects developed during the ‘Reach’ stage (This is the stage where leads are
generated.)
4. Activate: The activities needed for prospects to take the actions marketers want them
to take. (This is the stage which relates to final converts or those who purchase.)
5. Nurture: The activities needed to nurture the customer relationship created in the
activation stage. (This is the stage which relates to creation of loyalists.)
 Interaction Points of Marketing and
Consumer Funnel Stages
(a) Interaction Point A (PLAN-INTENT): Involves integration of
marketer’s activities related to planning and consumer activities
related to pre-marketing intent (towards brands, products, and
services even before they have been exposed to any type of
marketing). Typically, by collating consumer intent-based activities,
marketers can plan better for the search key- words they would
invest in, customer support to be provided during the marketing
cycle, and type of interest-based portals, aggregator sites, blogs
etc., that, their target customer segments are specifically interested
in.
Interaction Points…
(b) Interaction Point B (REACH-AWARENESS): This is the first stage of
digital marketing activities wherein marketers typically invest in the
most basic marketing activities like publishing content on major
platforms, social sites, and most prominent interest portals/ blogs.
On the consumer side, this is the ‘Passive Interaction’ stage wherein
the consumer initially discovers the marketing message but is not
actively looking to interact and purchase. Investment areas for
marketers here include Search Marketing (SEO/SEM/PPC), Display
Advertising, Site Sponsorships, Affiliate Marketing, Social Sites
Promotion, etc., which we will discuss in detail below.
Interaction Points…
(c) Interaction Point C (ENGAGE-INTEREST): This next stage involves
marketers realizing a general interest for their consumer segment
for any of the marketing messages shared and investing further in
the marketing funnel to convert this ‘interest’ into a ‘lead’. The
consumer in this stage shows an ‘active interest’ in the marketing
message which is tailored according to his needs and also starts to
take part in active online and offline discussions and brand/product
site visits to know more about the product for a purchase.
Interaction Points…
(d) Interaction Point D (ACTIVATE-ACTION): In this stage, which involves
conversion of a lead to a final purchase, marketers are fully aware of the
prospect planning to buy a particular product/service and their main task is
to support and entice the customer to complete the last mile so that a sale
is registered at their end. The consumer side, which we have termed as
‘action,’ involves the consumer picking up a specific platform, brand
website, or e-commerce site for purchase and following through all the
stages of plan selection and payment to accomplish the buy action. The
major digital marketing types deployed by marketers here are those
involving a lot more automation and marketing technology like re-targeting
ads and offers, native messages on social platforms used by consumer,
personalized e-mail messages to convert their interest, and so on.
Interaction Points…
(e) Interaction Point E (NURTURE-FOLLOW): This final interaction point
has become most important these days as it has been well
established that the cost of retaining a customer is much lower than
getting new customers (considering the cost involved in going
through and spending on the whole cycle again and again for new
customers). In this regard, marketers have to make sure that they
invest in enterprise-wide customer loyalty management and
interaction systems to not only keep the customer excited on a
continual basis, but also to know and rectify any negative
feedback he/she might have on the product or the experience of
it.
Figure 2.3. REAN model
Customer journey
ASCOR Digital Marketing Framework
• For any type of company to move into digital marketing, be it a
traditional firm with more physical products and services mix or one
that has transformed itself to a large degree to tweak its products for
the internet generation, there needs to be an underlying framework
which helps to map the process and its progress.
• To help large and SMB firms, as well as individual marketers, a
methodical phase-wise plan which is called the ‘ASCOR’ Digital
Marketing Framework where ASCOR is an acronym standing for the
five phases is recommended.
ASCOR Digital Marketing Framework…
Phase 1-Assessment: The first phase involves any firm’s or individual’s assessment and analysis of
their present external/internal marketplace environment to ascertain that they have clearly
assessed their current digital presence to develop high-level digital marketing objectives and review
criteria. This stage involves executing all the necessary market research to assess present market
trends impacting them.
• External analysis:
• Internal analysis:
• Digital presence analysis:
• Objectives development and review:
Phase 2-Strategy: The second phase involves creating the digital marketing strategy roadmap in line
with traditional marketing strategy and objectives.
• Digital strategy definition: developing appropriate OVPs
• Customer development strategy STP.
• Digital marketing mix (the traditional mixes plus the new DM mixes such as programs and performance):
• Digital marketing implementation framework:
ASCOR Digital Marketing Framework..
Phase 3-Communication and Channel Mix: This stage involves a more in-depth communication and
channel mix plan creation for each of the marketing objectives
• Digital media planning:
• Communication program design:
• Channel mix development:
• Budget allocation for channel mix:

Phase 4-Digital Marketing Operations: This is the deployment stage for digital operations and
involves the actual planning, implementation, monitoring, and optimization of campaigns during
the media flight dates so that marketers obtain the maximum impact for their investments during
the campaign run period.
• Digital campaign planning:
• Multi-channel campaign set-up:
• Campaign execution
• Campaign monitoring and tracking:
ASCOR Digital Marketing Framework…
Phase 5-Refinement: This is the final stage of digital marketing wherein
marketers and the campaign team analyze overall ROI for the effort and
investments, create reports and analytics dashboard, and refine
present strategies for further digital marketing activities, based on
customer response and collated data.
• Implementing web analytics:
• Defining measurement framework:
• Marketing implementation ROI:
• Digital marketing refinement:
 Chapter three
The consumer for digital marketing
Chapter objectives
After studying this chapter, you will be able to:
• Explain the evolution of consumer behavior models, key attributes of
online buying behavior and the impact of digital technology on buying patterns
• Understand consumer demand patterns and the ways these can be
analyzed online through web-tracking audits and forecasting
• Describe integrated marketing communications, the channels, and basic
constructs of such communication
Consumer behavior on the internet
• Studying consumer behavior is crucial to
understand the motivations and factors which
lead to a consumer buying any specific brand
over another and choosing certain websites,
platforms, and channels over and over again for
purchases.
• When it comes to online behavior, marketers shall go
through the impact and influence of digital technology
to understand how consumer demand can be
anticipated and managed with available online data,
how traces of consumer footprint can be tracked, and
a fully customized marketing program can be
developed.
 Customer vs. consumer
• First, it is important to understand the difference between two terms
which are often confused and substituted for each other—the
consumer and customer. In marketing parlance, the term customer
refers to the purchaser of the product whereas consumer refers to
the end user of the product or service.
• In several cases, the consumer can also act as a customer, when
he/she is singularly involved in searching, evaluating, and buying the
product, and finally consuming it.
Attributes of Online Buying Behavior
• With a good understanding of the impact of digital technology, let us
now study the key attributes of online buying behavior and what
motivates customers to buy online.
• We had looked at the key value elements which create ‘digital value’
for any online buying. Those included convenience, variety, cost,
aesthetics, communication, and customization. Lewis and Lewis
(1997) in their studies have spotted five different kinds of web users:
Attributes of Online Buying Behavior…
(a) Directed information-seekers: These users look for information about
specific products. Their intention is not to buy but to search for information.
(b) Undirected information-seekers: These users regularly browse and
scan websites by following hyperlinks. They are referred to as ‘surfers’
because they look around the websites to find something interesting.
(c) Directed buyers: These users visit a website with the intention to buy
products online. They search specific products and make the transaction.
(d) Entertainment seekers: These users visit websites that offer
entertainment features, such as quizzes, puzzles, and multi-player games.
(e) Bargain hunters: This type of users search for special offers such as
free samples or discounts.
 Marketing Intelligence from User’s Online Data

• Consumer behavior data typically resides across multiple repositories and

platforms and marketers need appropriate tools and technologies to gather,
integrate, and analyze that data.
• This field, typically termed as web analytics across the marketing fraternity,
includes concepts drawn from large software implementation areas like data
warehousing (relates to data storage methodologies and structures), business
intelligence (methodologies to generate business insight from data), and
advanced analytics (much more in vogue these days and relates to advanced
statistical analysis conducted to develop complex co-relations between multiple
sets of data often in real- time).
• Although web analytics is the core terminology that is used to mention any
exercise towards gathering market intelligence online, these days usage of terms
like big-data is also quite prevalent as it pertains to combining large sets of data
to gather insights not only from online data sources but through a logical
combination of online and offline data.
 Marketing Intelligence from User’s Online Data
Stage 1—Online data collation: Collection and organization of data from
our owned, earned and paid medias.
Stage 2—Consumer data repository creation: This stage involves collating
all the data obtained from the first stage and integrating it into a
consumer data repository.
Once that is accomplished and duplicate data is refined/cleansed (for
accuracy and quality), this dataset is compared and merged with offline
datasets which consists of traditional databases, customer relationship
management (CRM) lists, product/service subscription, retail, events
and promotions, etc.
With a combination of all these data sets, the firm is in a position to
identify each customer individually and build customer segments and
personas related to their area of products and operations.
Marketing Intelligence from User’s Online Data
Stage 3—Consumer segments development: In this stage, consumer
segments are formed along the lines. This segmentation helps
understand the nature of customers who are interacting with the brand
in its various online forms and their attitudes towards these
interactions. Once these segments are built, it is much easier for firms
to decide which products to target to a particular nature of customers,
at what price bands, and across which channels.
Stage 4—Application areas identification: Finally, with the customer
target segment decided, marketers can use all the consumer data and
intelligence from their previous interactions to apply it to improve their
digital marketing initiatives and optimize campaigns in the most
effective manner.
The following figure shows how the traditional marketing model could impact the
CDP in a limited manner only and there were not many opportunities that the
marketer had to influence consumer behavior and make it favorable for his/her set
of products and services.
In contrast, if we look at the impact of digital technologies on CDP, we shall see addition of multiple
marketing channels which the marketer now has at his/her disposal to impact a consumer’s behavior
and attitude towards his/her brands. Some of these passive and active influences brought about by
digital technology can be explained as below.
 The ‘Engel, Blackwell and Miniard (EBM)’ Model

• The ‘Engel, Blackwell and Miniard (EBM)’ Model encompasses all

types of need-satisfying behavior for a consumer, including a wide
range of influencing factors and different types of problem-solving
processes. This model has been influential since it has undergone
multiple revisions and has included works of other researchers too.
• The model consists of four key stages:
1. Information input stage:
2. Information processing stage:
3. Decision process stage:
4. Variables influencing the decision process:
Figure 3.1 The ‘Engel, Blackwell, and Miniard (EBM)’ Model
 The three key attributes identified across
major studies done in this area include:
• Price: Price is one of the earlier attributes for online buying.
• It has been studied that consumers started going to internet primarily
to compare prices and see if cheaper versions of the product they
intended to buy were available online.
• With a multitude of price comparison sites available today and several
e-commerce companies leveraging logistics-based savings, price has
definitely become the key attribute for online buying.
The three key attributes…
• Trust: Monsuwe et al (in 2004) had concluded that because internet
was a new way of shopping, initially it was looked at as being risky by
consumers. This was primarily because of the absence of a
salesperson who was their major source of trust, as well as because of
the worry of payments going through and goods (once paid for)
reaching the consumer in delayed time.
The three key attributes…
• Convenience: This much discussed attribute truly has been the
bedrock of online buying, with customers taking advantage of being
able to shop from wherever they like, at a time most suited to them
and in a way which requires just a few clicks. With companies
nowadays even looking to supply essentials like grocery and fruits
through mobile applications, online companies have completely
redefined the concept of convenience to include categories and
services which could not have even been envisioned before.
The building blocks of web experience
(a) Functionality factors: Factors enhancing online experience by presenting
the virtual client with a good functioning, easy-to-explore, fast, and interactive
website. Functionality includes elements of ‘Usability’ and ‘Interactivity’.
(b) Psychological factors: Websites must communicate integrity and
credibility in order to persuade customers to stop exploring them and interacting
online. Psychological factors play a crucial role in helping online customers
unfamiliar with the vendor or with online transactions overcome fears of fraud
and doubts regarding the trustworthiness of the web- site and vendor.
(c) Content factors: Factors referring to creative and marketing mix-related
elements of the website. These factors exercise a direct and crucial influence on
the web experience. They are divided in two sub-categories ‘Aesthetics’ and
‘Marketing Mix.’
The concept of moment of truths
• A moment of truth (MOT) is marketing lingo for any opportunity a customer
(or potential customer) has to form an impression about a company, brand,
product or service. Marketers strive to use moments of truth to create
positive, customer-centric outcomes. The concept itself is very simple if
every customer interaction has a positive outcome, the business will be
successful.
• Although moments of truth can include mass communication, a MOT's
power comes from those interactions in which the communication is
personalized. The value of a moment of truth was first conceptualized in
the 1980s by Jan Carlzon, the CEO of Scandinavian Airlines Systems and
expanded upon by A.G. Lafley when he was the CEO of Proctor & Gamble.
Zero Moment of Truth
• Zero Moment of Truth (ZMOT) was introduced by Google in 2011, The study
discovered that the customer’s journey changes at every moment from field
marketing to online marketing. Assume, you want to purchase something,
what would you do? Most probably you would go to the web, search the
product and check the reviews of those products. With that fact, you’ll have
accurate feedback in terms of what to buy? where to buy?
• The study determined that the customer journey is evolving continuously:
• More than 50% of shoppers use a search engine to investigate a product or
brand online.
• 38% comparison purchased online (referring reviews, prices and so on).
• 35% check out the brand/manufacturer’s website.
• 29% read online endorsements, reviews or suggestions.
First Moment of Truth
• The First Moment of Truth (FMOT) was introduced by the Procter &
Gambler (P&G) in 2005. For FMOT, customer experiences products
from a store or else we can say that a customer confirms and trust to
purchase the product in a store and use it. This micro-moment helps
different brands to run high with best changes in the market.
• If you are having a question that why supermarket moves everything
around, you will now realize that it relies on impulse or unplanned
purchases.
Second Moment of Truth
• In the Second moment of Truth (SMOT), Customer buys the product
and experiences it. This is where your product or service has to fulfill
the promises made by your marketers. If the product is not meeting
promises of SMOT, no one will purchase products.
 Assignment 1
1. Impact of web transformation from Web 1,2and 3 on marketing
practices
2. Online consumer decision process
3. Application of digital business models in ethiopia
4. The application of big data, IOT, programmatic marketing, AI and
AR&VR technologies in marketing
5. The Application of moments of truth using a real world example