Select your language

Suggested languages for you:
Log In Start studying!
StudySmarter - The all-in-one study app.
4.8 • +11k Ratings
More than 3 Million Downloads
Free
|
|

All-in-one learning app

  • Flashcards
  • NotesNotes
  • ExplanationsExplanations
  • Study Planner
  • Textbook solutions
Start studying

Digital Marketing

Want to get better grades?

Nope, I’m not ready yet

Get free, full access to:

  • Flashcards
  • Notes
  • Explanations
  • Study Planner
  • Textbook solutions
Digital Marketing

Digital marketing has become one of the most popular forms of marketing in recent years. As more and more people have access to digital devices, marketing through digital platforms is a must for all businesses. Let's take a look at how companies can use digital marketing campaigns to increase brand awareness and influence customer purchase decisions.

Digital Marketing Definition

First, let's examine the definition of digital marketing.

Digital marketing is the act of promoting a product or service using the Internet and digital media.

The rise of digital marketing not only brings changes to how market research is carried out but also influences the marketing mix:

  • Data: The Internet allows businesses to gather information about their customers quickly.

eCommerce websites can observe past shopping behavior to recommend similar items customers are likely to purchase.

Platforms like Youtube and Facebook can track your activities and provide advertisers with data to create customized ads.

  • Price: Thanks to the Internet, businesses can adjust prices based on the time of order or user history. This ability to change prices according to various factors is called dynamic pricing. One typical example is when buying a flight ticket. You'll see an increase in the price by visiting a site too many times.

  • Promotion: The Internet also affects the way products and services are promoted. For example, content marketing and social media marketing are common ways businesses attract customers on the web. Digital marketing also makes it possible for companies to target specific segments and involve customers in the marketing process (for example, through product reviews or social media marketing).

  • Distribution: Companies in the digital age don't need a physical presence to operate. An entrepreneur can easily set up an eCommerce store on platforms such as Shopify and Etsy to distribute all sorts of products. The Internet allows businesses to sell directly to customers instead of via an intermediary.

  • Product: Many products today only exist in digital forms, such as ebooks, online courses, newsletters, etc. They can be downloaded directly from the web rather than collected from a physical store.

  • People: While the Internet has grown significantly, it hasn't been able to replace humans in customer service and personal selling. However, it provides customers access to sales representatives and support teams anytime, anywhere.

  • Process: The buying process can take place more smoothly on digital channels than brick-and-mortar stores. With a few clicks, people can locate an item they need on an online store and make instant payment with a card.

  • Physical appearance: Physical appearance, in the literal sense, physical appearance is no longer required to establish a business. Most businesses nowadays would instead invest in web design to increase customer experience on the web.

Types of Digital Marketing

Digital marketing is a big umbrella term that can be split into several sub-categories. These categories are the different types of digital marketing.

Digital Marketing: Search engine optimization (SEO)

The goal of SEO is to drive organic traffic to the company's website and transform that traffic into potential sales.

SEO is the combination of all activities to help a site rank higher on a search engine.

SEO practices are grouped into two categories:

  • On-page SEO includes activities that focus on improving on-page elements of a site, such as keywords, internal links, page speed, and images.

  • Off-page SEO includes activities that happen "off the page" to improve a site's ranking. For example, you can write guest posts, build backlinks, and create social media posts to drive traffic to your website.

Check out our explanation of SEO marketing to find out more.

Digital Marketing: Paid search

Paid search involves paying the search engine for ad space on the SERP (Search Engine Results Page).

These ads often work on a PPC (Pay per click) basis where you only pay when people click on your ads. You can find info on a keyword's competition level and pricing via SEO tools such as Ubersuggest, Moz, or SEMRush.

Digital Marketing: Content marketing

Content marketing is creating and sharing online materials (such as articles, videos, infographics, social media posts, podcasts, etc.) to attract, engage, and retain an audience. This strategy's key is delivering the right content at each stage of customer awareness.

Take a look at our content marketing explanation to find out more.

Digital Marketing: Social media marketing

You might already be familiar with social media sites like Instagram, Facebook, Twitter, or TikTok.

Social media marketing refers to the act of promoting a product or service using social media platforms.

Companies engage with various audiences on social media, including potential customers, journalists, employees, influencers, and the general public. One common aim of social media marketing is encouraging user-generated content such as product reviews or comments.

You can find more details in our explanation of social media marketing.

Digital Marketing: Email marketing

If you've ever provided your email address to a company or brand, in-store or online, you have engaged with email marketing.

Email marketing involves informing customers of a business's products and services via email.

It is also an important activity to nurture leads and generate sales. One example of an email marketing campaign is to send a weekly newsletter to inform your audience of the latest industry news. This allows your brand to establish itself as a trusty source of information and encourage people to do business with you in the future.

Digital Marketing: Affiliate marketing

Affiliate marketing is a form of advertising whereby companies pay others to promote their products or services.

It can range across many industries and product types. One example is bloggers who review Amazon books with an affiliate link for people to buy. The affiliate marketer earns a commission when someone purchases the book through the link.

Digital Marketing: Mobile marketing

With mobile making up more than 50% of total web traffic, mobile marketing has grown to be an indispensable part of all digital marketing strategies.

Mobile marketing includes reaching the audience on smartphones through emails, SMS, websites, and social media.

Digital Marketing Tools

There are a variety of tools digital marketers may use to facilitate the marketing process. One such example is marketing automation.

Marketing automation involves using automated technology to streamline your marketing activities and make them more effective.

For example, you can schedule social posts with Hootsuite, set up an automated onboarding email series with Mailchimp, or install an automated chatbox on your website to answer FAQs.

Digital Marketing Strategies

As with traditional marketing, marketers have to develop digital marketing strategies.

A digital marketing strategy is a set of planned actions to help your business reach its goals.

Figure 1 below illustrates the six steps of developing a digital marketing strategy:

1. Research and define goals

2. Collect customer information

3. Create leads

4. Nurture leads

5. Retain existing customers

6. Build marketing automation

Step 1: Research and define goals

This step includes researching your competitors and collecting customer feedback to identify your business' online position. Once the research is gathered, the next step is to set a goal to help you realize your digital marketing goals.

You can increase your website's SEO ranking by setting goals such as creating quality content, building quality backlinks from authoritative websites, and improving page speed.

Step 2: Collect customer information

The next step is to collect data about your target groups. Marketers can do this by creating a buyer persona, including your customer's preferences and behaviors online. A tool like Google Analytics can help you collect real-time customer data and create more relevant content marketing campaigns.

Step 3: Create leads

This step is about collecting your audience's personal data for future contacts. The most common way to generate leads for websites is to give away free ebooks or coupons in exchange for customer emails. Other popular methods include target ads display, search engine optimization, social media, and influencer marketing.

Step 4: Nurture leads

Once the leads are generated, the next step is nurturing those leads into long-term relationships and potential customers. How can this be done? The best practice is to educate your customers about your business and service in a "non-salesy" way. In other words, to add value to their life.

One example of nurturing leads is to develop an email course to help people solve a nagging problem or keep them informed of industry news.

Step 5: Retain existing customers

In the long run, marketing should turn one-time buyers into loyal customers. Once you have convinced the hard-earned lead to make a purchase, it shouldn't be the end of the relationship. Try to turn them into repeat buyers with smart customer retention campaigns.

Some ways to nurture relationships with existing customers include:

  • Send a thank you note

  • Ask for feedback

  • Develop customer loyalty programs

  • Cross-sell related products through email newsletters

  • Disclose your plan for future product development.

Step 6: Build marketing automation

You don't have to do the same thing over and over time. Technology makes it easy to automate workflow so you can focus on more critical tasks.

Set up an onboarding email automation and chatbox to answer your customers' FAQs.

What is the job of a digital marketing agency?

If you don't want to conduct digital marketing on your own, one alternative is to outsource it to a digital marketing agency. Most agencies are well-versed in industry know-how, the latest trends, tools, and strategies. They can help to drive organic traffic, expand business reach, and generate sales with little effort on your side. You may choose a full-service agency that performs A to Z digital marketing campaigns or a specialized agency for one digital marketing area (inbound marketing, SEO, email, social media, or content marketing).

Digital Marketing Examples

Before you head off, let's take a quick look at a digital marketing example through the company ASOS.

Digital Marketing Digital marketing to boost engagement StudySmarterFig. 2. Digital Marketing Analytics Example

ASOS uses a variety of digital marketing techniques to increase engagement and awareness and convince consumers to purchase its products. Some of the digital strategies ASOS follows are:

  • Mobile marketing by sending customers who have downloaded the app notifications anytime there is a sale or a limited-time-only event.

  • An online blog and style feed that increases its SEO traffic.

  • The company has amassed millions of followers on its social media pages, including Instagram, Twitter, and Facebook, creating high engagement rates with customers. ASOS also advertises its products heavily on paid social media platforms.

Due to such digital strategies, the company has become one of the largest online fashion retailers in the world.

Digital Marketing - Key takeaways

  • Digital marketing includes promoting a product or service using the Internet and digital media.
  • Some types of digital marketing are SEO, content marketing, social media marketing, email marketing, paid search, mobile marketing, and marketing automation.

  • A digital marketing strategy is a set of planned actions to help a company improve its online presence. The strategy is split into six steps: research and define goals, collect data about the target audience, generate leads, nurture leads, retain existing customers, and set up automation.

  • Companies can either conduct digital marketing on their own or resource it to a digital marketing agency.

Frequently Asked Questions about Digital Marketing

Digital marketing is the act of promoting a product or service using the Internet and digital media.

An example of digital marketing can be observed through eCommerce websites. eCommerce websites can observe past shopping behavior to recommend similar items customers are likely to purchase. 

There are many types of digital marketing. Digital marketing is a big umbrella term that can be split into several sub-categories including SEO, paid search, content, social media, email, affiliate, and mobile marketing. 

The 4Ps of digital marketing are people, platforms, processes, and performance. These four Ps allow digital marketers to cater their strategies to customers online more effectively, in a more customized manner, than through the traditional 4Ps of marketing.

Digital marketing has become one of the most popular forms of marketing in recent years. As more and more people have access to digital devices, marketing through digital platforms is a essential for all businesses.

Final Digital Marketing Quiz

Question

What is PED?

Show answer

Answer

Price elasticity of demand (PED) measures how responsive demand is to a change in price. In other words, it measures the extent to which demand for a product or service changes if the price of that product or service changes.

Show question

Question

How do you calculate PED?


Show answer

Answer

PED can be calculated by dividing the percentage change in quantity demanded by the percentage change in price.

Show question

Question

What does it mean if the absolute value of PED is greater than one? 


Show answer

Answer

If the absolute value of PED is greater than one it means that demand is elastic.

Show question

Question

What does it mean if the absolute value of PED is smaller than one? 


Show answer

Answer

If the absolute value of PED is smaller than one it means that demand is inelastic.

Show question

Question

What does it mean if the absolute value of PED is equal to one?


Show answer

Answer

If the absolute value of PED is equal to one, it means that demand is unitary.

Show question

Question

At the beginning of the year Product A was selling at £5 and demand for Product A was 15,000 units. The next year Product A was selling at £6 and demand for Product A was 12,000 units. Calculate the price elasticity of demand.


Show answer

Answer

Change in quantity demanded = (12,000-15,000) / (15,000) = -0.2 = - 20%


Change in price = (6-5) / (5) = 0.2 = 20% 


PED = -20% / 20% = 1 


A PED of 1 implies that demand is unitary. 

Show question

Question

What is YED? 


Show answer

Answer

Income elasticity of demand measures how responsive demand is to a change in income.

Show question

Question

How do you calculate YED? 


Show answer

Answer

YED can be calculated by dividing the percentage change in quantity demanded by the percentage change in real income.

Show question

Question

What does a YED larger than 1 imply? 


Show answer

Answer

If YED is more than one, it implies income elastic demand. This means that a change in income will result in a proportionally larger change in quantity demand.

Show question

Question

What does a YED that is smaller than 0 imply? 


Show answer

Answer

If YED is smaller than zero, it implies a negative elasticity of demand. In other words, when consumers' average income increases, they demand less of the product.

Show question

Question

What does it mean when YED is between 0 and 1?


Show answer

Answer

YED is between 0 and 1 for normal goods. It implies that an increase in income will lead to an increase in the quantity demanded.


Show question

Question

What is an inferior good? 


Show answer

Answer

An inferior good is a product that consumers demand less of when their income increases.

Show question

Question

Name an example of a normal good.

Show answer

Answer

Clothing.

Show question

Question

In 2004 consumers were earning on average £19,000 and demanding 1 million units of Product A. In 2005 consumers were earning on average £22,000 and demanded 500,000 units of Product A. Calculate the income elasticity of demand. What could this YED signify?


Show answer

Answer

Change in quantity demanded = (500,000 - 1,000,000) / (1,000,000) = -0.5 = -50%


Change in income = (22,000 - 19,000) / (19,000) = 0.16 = 16% 


YED = -50% / 16% = -3,125


A YED of -3,125 implies negative elasticity of demand. This could signify that the good is inferior. 

Show question

Question

Name the five basic primary research methods.

Show answer

Answer

  • Surveys 

  • Focus groups 

  • Interviews 

  • Observation

  • Field experiments 

Show question

Question

What is one of the advantages of using surveys? 


Show answer

Answer

Surveys are a useful tool for conducting quantitative research.

Show question

Question

What is one of the disadvantages of focus groups? 


Show answer

Answer

Focus groups can lead to issues with bias if certain participants do not feel comfortable with expressing their true opinions.

Show question

Question

What is a moderator? 


Show answer

Answer

Focus groups and interviews involve a moderator who asks the group/individual questions and guides the discussion.

Show question

Question

Name two examples of field experiments. 


Show answer

Answer

Test marketing, and A/B testing.

Show question

Question

Name two different types of interview styles. What is the difference between them? 


Show answer

Answer

Interviews can be structured with a list of specific questions the moderator asks the interviewee. Interviews can also be semi-structured where the interviewer asks a set of predetermined questions and then proposes a topic and lets the interviewee decide what they want to talk about, regarding the topic.

Show question

Question

Which of the following statements is correct? 


  1. Observational research is useful as it lets researchers know the actual behavior of customers. 

  2. Surveys are useful for quantitative research. 

Show answer

Answer

Both statements are correct. 

Show question

Question

What is the first step of the marketing research process?

Show answer

Answer

Defining the research problem and objectives.

Show question

Question

What are the steps you would take during the second phase of the marketing research process? 


Show answer

Answer

During this step (step 2: developing the research plan) the researcher would decide whether they are going to be collecting primary or secondary data and the type of research method they are going to use (surveys, focus groups, etc.). This step also involves coming up with a sampling plan.  

Show question

Question

Name three different types of sampling methods. 


Show answer

Answer

  • Random 

  • Stratified 

  • Convenience 

Show question

Question

What would you do during steps 3 and 4 of the marketing research process?


Show answer

Answer

During step three you collect the data. In step four, you analyse the data.

Show question

Question

What is the fifth step of the marketing research process? 


Show answer

Answer

Presenting your findings. During this step, you would format your analysis and data into detailed insights. You would translate your data into useful recommendations for managers.

Show question

Question

What is the last step of the marketing research process? 


Show answer

Answer

During the last step (step 6) you are going to be making your decision. This is where your organisation decides how to tackle the problem you were researching with the findings you presented. The step could also involve a decision on whether you launch your new product or not.

Show question

Question

What is a positioning map?  

Show answer

Answer

A positioning map is a visual representation of market positioning. It represents a range of positions a product has or could have in the market. The positioning map is represented on a scatter plot diagram and it maps the positioning of competitors in relation to the brand.

Show question

Question

What is an example of the dimensions that could be used to map a market? 


Show answer

Answer

Example: Price and Quality. High price/low price,  and high quality/low quality would make up the four quadrants.

Show question

Question

What does a positioning map tell you about competition? 


Show answer

Answer

The positioning map tells you how your brand compares to competitors' brands. It shows how your business's brand is positioned in relation to similar brands offered by competitors.

Show question

Question

Name two benefits of a positioning map. 


Show answer

Answer

The positioning map can be used: 

  • To analyze competition and competitors' positioning. 

  • As a tool that helps market researchers.

  • To understand the product positioning aspect of the market mix.

Show question

Question

Name two limitations of a positioning map. 


Show answer

Answer

  • Just because you have identified a gap in the market does not mean that the product will be successful.

  • The scale or dimensions that you have used might not be the most effective ones for the market or industry you are trying to examine. 

Show question

Question

How would you create a positioning map? 


Show answer

Answer

To create a positioning map you need to first decide which product or brand your business would like to compare to its competitors. You then need to decide which dimensions you are going to use for your diagram. A positioning map always has to feature two different dimensions. You then have to plot your brand and competitors' brands on the scatter plot diagram; this will become your positioning map.

Show question

Question

What is a perceptual map? 


Show answer

Answer

A perceptual map is a visual representation of how customers view a business' product or brand. It allows managers to understand which brands are their closest competitors and which attributes of their product or brand play the biggest role in differentiating them from competitors.

Show question

Question

What is the difference between a perceptual map and a positioning map?


Show answer

Answer

A perceptual map shows how consumers view your product, whereas a positioning map is not based on consumer perceptions.

Show question

Question

Name two advantages of perceptual mapping?


Show answer

Answer

  • Help us understand market segments. 

  • Useful for market researchers. 

Show question

Question

Name one of the disadvantages of perceptual mapping.  


Show answer

Answer

It is often time-consuming and expensive to collect this type of data.

Show question

Question

Which of the following is not a characteristic of perceptual mapping?

  1. It provides a visual representation of information. 

  2. It is used by market researchers. 

  3. It helps us understand market segments. 

  4. It is based solely on industry data. 

Show answer

Answer

D.

Show question

Question

What is qualitative research?

Show answer

Answer

Qualitative research focuses on gathering and analyzing data that is non-numerical. This type of research tries to describe certain situations and understand characteristics, opinions, concepts, and experiences.

Show question

Question

What is quantitative research?


Show answer

Answer

Quantitative research is the opposite of qualitative research. This type of research focuses on collecting numeric data which can, later on, be analyzed by the researcher through different statistical measures.

Show question

Question

Which of the following statements is correct about market research? 


  1. The qualitative researcher usually poses open-ended questions. 

  2. Quantitative research involves smaller sample sizes. 

Show answer

Answer

Only statement I. is correct. 

Show question

Question

What are the two types of market research?


Show answer

Answer

The two different types of market research are primary and secondary research.

Show question

Question

What is primary market research?


Show answer

Answer

Primary market research is a type of research that an organization plans itself and involves collecting new data that has not been gathered before.

Show question

Question

What is secondary market research?


Show answer

Answer

Secondary market research is a type of research that involves gathering data that already exists. This can include internet research, examining market reports or government data. This type of information has been collected before for a purpose other than your research.

Show question

Question

What are two advantages of primary market research?


Show answer

Answer

  • It is specific to the business. 

  • It can provide unique insight into the wants and needs, characteristics, attitudes, and behaviors of a business's customers. 

Show question

Question

What are two advantages of secondary market research? 


Show answer

Answer

  • It is less costly than conducting primary research. 

  • It is simpler to gather. 

Show question

Question

Secondary market research can _____________. 


Show answer

Answer

Provide access to industry-specific information

Show question

Question

One of the disadvantages of secondary research is: 

  1. It can be quite costly. 

  2. It can be very time consuming. 

  3. It is available to your competitors. 

  4. It requires specific skills to be carried out. 

Show answer

Answer

C.

Show question

Question

Which of the following is a disadvantage of primary research? 

  1. It can provide data that is less specific to your business. 

  2. You often need a specialized team to conduct the research. 

  3. The information is available to your competitors. 

  4. The data could have been gathered a long time ago.

Show answer

Answer

B.

Show question

Question

Which of the following statements is correct about market research? 


  1. Primary research can take a long time to complete. 

  2. Secondary research can provide access to industry-specific knowledge. 

Show answer

Answer

Both statements are correct. 

Show question

60%

of the users don't pass the Digital Marketing quiz! Will you pass the quiz?

Start Quiz

Discover the right content for your subjects

No need to cheat if you have everything you need to succeed! Packed into one app!

Study Plan

Be perfectly prepared on time with an individual plan.

Quizzes

Test your knowledge with gamified quizzes.

Flashcards

Create and find flashcards in record time.

Notes

Create beautiful notes faster than ever before.

Study Sets

Have all your study materials in one place.

Documents

Upload unlimited documents and save them online.

Study Analytics

Identify your study strength and weaknesses.

Weekly Goals

Set individual study goals and earn points reaching them.

Smart Reminders

Stop procrastinating with our study reminders.

Rewards

Earn points, unlock badges and level up while studying.

Magic Marker

Create flashcards in notes completely automatically.

Smart Formatting

Create the most beautiful study materials using our templates.

Sign up to highlight and take notes. It’s 100% free.