Digital Marketing - Benefits & Limitations
Introduction
Digital marketing is increasingly gaining popularity amongst marketers and scholars alike given its numerous benefits such as cost efficiency, empowering effect, and interactivity. Todor (2016) defines digital marketing as a blanket term used in reference to the measurable, interactive, and targeted marketing of services and goods via one or more digital technologies with the goal of reaching out to consumers and converting them into loyal customers. According to SAS Institute Inc. (2017), digital marketing is defined as 'the promotion of products or brands via one or more forms of electronic media' (n.p.). The rapid and constant evolution of digital media technology has completely transformed how we communicate and interact with people and the way we access information (Ryan & Jones, 2009). For this reason, companies are increasingly embracing digital media to gain more information on consumer behaviour and target their products and services to more specific market segments. In particular, companies are relying on huge data sets (or "Big Data") which can be computed and analysed to provide human behavioural patterns and trends (Barsby, 2016) to develop specific marketing strategies as they seek to gain a competitive advantage in the market. However, this also raises the issue of user privacy. The premise of this essay, therefore, is to explore the benefits and limitations of digital marketing with a view to determining whether it is a force for good or evil.
Benefits of Digital Marketing
In order to acknowledge the growing importance of digital marketing, there is a need to take into account some key figures and facts about consumers' online behaviour. Coughlan (2016) estimates that on average, Britons, and especially young people, spend less time watching television compared to the time spent online. This, coupled with the upsurge in the sales of smartphones and the fact that over 200 million people in the United States have access to Facebook (Moss & Walmsley, 2014) is a clear indication to businesses that the future is online.
The Concept of Big Data has also proved beneficial to digital marketing. The three main reasons why companies use Big Data are with a view to understand customer insights; enhancing product promotion campaigns; and improving the supply chain (Mahmood, 2016). The main sources of Big Data include search information; mobile phone; web mining; crowdsourcing; and social media (Barsby, 2016). Big Data is valuable to digital marketing because it enables companies to engage their customers more intimately; gain customer loyalty and retention, and optimize marketing performance (SAS Institute Inc., 2016).
Data-driven marketing is essential for customer engagement as it provides the management of an organisation the opportunity to enhance its market growth and at the same time increase customer satisfaction (Barsby, 2016). Forbes Insights (2015) reports that company executives have identified data-driven marketing as a vital ingredient that gives companies a competitive advantage in terms of customer engagement. In this case, companies have developed effective data-driven strategies whose focus is on customer engagement. Such strategies involve the use of marketing approaches that attend to customer-specific needs and personalise and segment customers.
One of the main benefits of digital marketing over transitional marketing is the ease of access. Digital communications have now made it possible to access information instantly (WSI, 2013). For example, users connected to the internet can have access to a wide range of digital media, including YouTube, Facebook, and e-mail, among others. This also ensures the sending and receiving of information. The highly interactive nature of digital marketing also enables marketers to initiate a conversation with the target audience regarding their brands or products (Halligan, Shah and Scott, 2009), something that conventional modes of marketing may not provide.
The use of digital marketing as a platform to create awareness of brands also acts as a competitive advantage to the company (WSI, 2013). This is because the use of such tools as a social media page (for example, Facebook), enable businesses to develop a system that identifies consumers' behavioural patterns and feedback on their preferences and needs.
One of the benefits of digital marketing for the supply chain is that it offers consumers a broader assortment of products to choose from. A good example of this is Amazon.com, where consumers have a wide range of books to choose from on the company’s website, thereby alleviating the trouble of moving from one retailer to another in search of a specific product (Digital Training Academy, 2017).
Digital marketing is also an essential tool in creating brand awareness among consumers. Lundahl (2011) has acknowledged the growing significance of digital marketing as a key element of the marketing mix of brands. The inclusion of such tactics in search engine optimization (SEO) that demands that users to websites include keywords to increase the efficiency of their searches or offer links to digital advertisements like YouTube videos has taken the concept of innovation marketing a notch higher. For example, in 2006, Doritos developed a digital marketing campaign dubbed "Crash the Super Bowl". It became an instant hit, grabbing the no. 1 spot for the most-viewed Super Bowl commercial on YouTube. The campaign increased Dorito's brand awareness, leading to increased sales and enhanced brand image (Lundhahl 2012).
Digital marketing also enjoys a global reach of the mass audience, not to mention the ability to retain an audience. What this means is that companies are no longer limited by geographical or physical constraints in terms of targeting consumers (WSI, 2013). The only things that a consumer needs are access to a smartphone and the internet and they have access to a wide range of digital media tools with which they can sample the products offered by a retailer who has an online presence. Besides, digital marketing also encourages consumers to become co-creators and to take active participation through interactive forums with the marketer, including asking queries or sharing comments regarding the features of a product (Lundhahl, 2012). All of this is in keeping with the modern-day marketing concept, in which marketers view interactive dialogue as a vital tool for building relationships (Lundhahl, 2011). This means that anyone from anywhere in the world can reach your website as long as they have internet access. Consequently, the company locates new markets and gets to compete with other global brands at a very minimal cost.
Safko and Brake (2009) opine that a properly planned and executed digital marketing campaign enables the marketer to reach a wider range of right customers in a more cost-effective manner than say conventional marketing techniques. Besides, digital marketing enables you to undertake effective personalization of your promotional messages. By linking your website to your customer database, you can direct targeted offers to customers who visit the site. Increased purchases from such customers allow you to refine your customer profile so that you can market to them even more effectively. This is likely to create consumer brand loyalty.
Businesses that engage in digital marketing activities have a competitive advantage over those that are still reliant on traditional marketing strategies. For example, companies like Amazon do not have to invest in brick-and-mortar stores and can also reach a wider target market across the globe at a minimal investment cost (Pride & Ferrell 2016).
The digital revolution has brought with it the Big Data concept, which involves the use of various data analytic methods such as behaviour analytics or predictive analytics to enable companies to make crucial consumer decisions. The use of behaviour or predictive analytics
Today, marketers rely on such Big Data to derive trends and patterns of specific target consumers, as opposed to the mass market, to enable them to identify the right channel to use in reaching out to the target consumers. In other words, Big Data allows marketers to gain useful insights into the consumer behaviour of a target audience and hence make effective strategic decisions. This enables marketers to serve consumers with more useful content. An increasingly larger number of firms leverage data from different sources to enhance their marketing campaigns which have turned out to be more effective in comparison with conventional mass advertising.
Mahmood (2016) reports that companies are shifting from large-scale mailings of offers and catalogues to personalised phone directories or purchased mailing as they take advantage of the knowledge of individual consumer preferences in the target audience. For instance, Amazon is able to promptly give extra purchase opportunities to customers going by similar purchases made by other individuals. Amazon can also target individuals who have previously purchased a certain product or individuals searching for a specific topic. Another company that has embraced Big Data in a big way is Google. The company allows marketers to offer related advertisements to individuals going by their documented search habits. Companies can target larger markets by improving their tools for collecting and analysing Big Data. Mahmood (2016) notes that digital marketing integrates push-and-pull Internet technologies with a view to implementing marketing campaigns. For example, using such software vendors as Adobe, customers can realise layered digital transactions, and this enables the company to see in real-time the performance of a specific advertising campaign. This includes what the customers are viewing, the duration of time spent viewing each item, purchases made, and response rate. Such information is crucial for marketers as they can in turn make a real-time decision.
Limitations
Despite all the aforementioned benefits of digital marketing, it also comes with certain limitations as well. For example, while big data provides significant insights into consumer lifestyles, behaviours, and preferences, it has also been implicated with serious privacy issues (Pride & Ferrell, 2016). Many consumers are against the idea of having their behaviours or purchases tracked, while the use of big data by companies for purposes of marketing their brands had led to conflicts. Moreover, collecting the personal information of target consumers against their will may amount to an invasion of their privacy. Another key concern for digital marketing is the use of copyright. In this day and age of increased hacking activities, competitors could easily copy internet marketing campaigns, logos, and trademarks and defraud unsuspecting customers. Also, internet marketing demands that the user has an online presence. In the case of slow internet connections or complex websites, a customer may take more time than they had anticipated before accessing your products, and this could lead to the loss of a prospective customer.
Increased hacking activities have also seen some customers shy away from digital marketing as they would have to rely on electronic methods of payment in order to make a purchase. Other users have also lost trust in online marketing owing to the large number of fraudulent online promotions reported globally (Mahmood, 2016). This ends up affecting honest companies as their reputation of quality and image could suffer irreparable damage. The over-dependence of digital marketing on technology does not also appeal to some customers considering that it is prone to errors. Safko and Blake (2009) also report that companies may take some time before realising measurable outcomes when utilising digital marketing strategies.
Conclusion
In sum, digital marketing is a double-edged sword in that it is associated with numerous benefits for both the retailers and the consumer, and at the same time, there are also various risks involved in its use. Besides creating brand awareness and customer loyalty, digital marketing also enables marketers to reach a larger customer base in a cost-effective manner, and this affords the company a competitive advantage over its rivals. More importantly, digital marketing allows marketers to send more specific marketing campaigns based on their study of consumer behaviour. However, the use of big data has raised various ethical concerns, including the idea that companies could have access to consumer's personal information from third-party agencies without user consent. There is also the risk of growing hacking incidents and fraudulent online promotions which are also a concern to consumers. They could also affect the reputation and image of legitimate companies.
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