Powerpoint and Lecture Notes - 3.0 POWERPOINT AND LECTURE NOTES 3.1 Introduction to Digital Marketing The Internet provides individual users with

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Unformatted text preview: 3.0 POWERPOINT AND LECTURE NOTES 3.1 Introduction to Digital Marketing -­‐ -­‐ -­‐ -­‐ -­‐ The Internet provides individual users with convenient and continuous access to information, entertainment, and communication. Communities form around shared photos (Flickr), videos (YouTube), and individual or company profiles (Facebook). The digital environment enhances processes and activities for businesses. Societies and economies are enhanced through more efficient markets, more jobs, and information access. D-­‐marketing will always have its unique models, concepts, and practices. (Including: Online search, Online data collection, Online marketing strategies) Web 2.0 technologies connect people with each other through social media, which have created opportunities and challenges for marketers. • Power shift from sellers to buyers; Consumers trust each other more than companies; Market and media fragmentation; Cultural shift (participatory, open, autonomous); New opportunities and new risks for marketers; Internet adoption matures; Online retail sales reach 7%-­‐10% of all sales; Search engines are now reputation engines; Improved online and offline strategy integration; 60% broadband adoption at home Power Shift From Companies To Individuals (sellers to buyers): The Future: Web 3.0 -­‐ Lines between traditional and new media are blurring. -­‐ Appliances are converging and becoming “smart.” -­‐ Wireless networking is increasing. -­‐ Semantic web will provide worldwide access to data on demand without effort. Long-Tail -­‐ Demand is fragmented and niches are where there is opportunity -­‐ The Head: Not enough resources to everything to everyone (before the Internet); followed the 80/20 rules (20% of a business’s products accounted for 80% of its sales, and usually 100% of its profits) -­‐ The [Long] Tail: Companies focus on offering a range of niche products; technology has dramatically reduced the costs of reaching niches (on a cumulative basis, small numbers of sales of large numbers of niche products generates enormous revenues and profits) • Democratizing the tools of production greatly expands the universe of content • Democratizing distribution greatly reduces the costs of consumption By: Jessica Gahtan Connecting supply and demand by lowering search costs of finding niche content drives demand down the tail. The lesson: People are curious about a lot of different movies." Long tail in holiday music, for example • -­‐ -­‐ Summary • In virtually all markets, there are far more niche goods than hits • The cost of reaching those niches is now falling dramatically. • Simply offering more variety does not shift demand by itself. Consumers must be given ways to find niches that suit their particular needs and interests. A range of tools and techniques—from recommendations to rankings—are effective at doing this. • Once there’s massively expanded variety and the filters to sort through it, the demand curve flattens. There are still hits and niches, but the hits are relatively less popular and the niches relatively more so. • All the niches add up. Although none sell in huge numbers, there are so many niche products that collectively they can comprise a market rivaling the hits. • Once all of this is in place, the natural shape of demand is revealed. That shape is far less hit-­‐driven than we have been led to believe. 3.2 Online Consumer Behaviour -­‐ -­‐ -­‐ Consumers are multi-­‐taskers, attending to different media simultaneously There are FIVE things that people do online: Connect, Create, Enjoy, Learn, and Trade Challenges for marketers in the 21st century include: • Fragmentation of channels and attention – makes reaching and keeping the attention of your consumer harder. Web 2.0 communication shows that consumers like to talk and to interrupt. • This changes your relationship from ‘selling to customers’ to hosting guests and from ‘controller’ of communication (teller of stories) to enabler of communication (resource for stories told by others) • In this attention economy, consumers are tuning out or completely skipping messages o 61% of consumers say that marketers and advertisers do not treat them with respect o 69% are interested in products or services that would help them skip or block advertising • Poor info/metrics on effectiveness D-Marketing Map Consumer Marketer • • • • • • • • • • Search Email Twitter Company-­‐Owned product evaluation sites (beta) Blogs/Online forums/Twitter Feedback sites Link building News releases Blogs/Online forums Twitter Marketer • • • • • • • • • • • • • • Social search Third party and retailer evaluation sites (e.g. epinions.com) Blogs Wikis Twitter Social networking sites Retail sites Twitter Banner ads/Links Email/Spam News Releases Blogs/Online forums Search Engine Optimization Viral/social marketing Consumer Hyper-choice and the choice paradox -­‐ Online, consumers experience (1) too many choices and (2) information and cognitive overload By: Jessica Gahtan -­‐ We think more choice is better, but too many choices impacts an individual’s ability to choose and their satisfaction with their choice (Jam experiment – fewer choices -­‐> more people purchased and felt more satisfied with choice) Curating & Subscription Models -­‐ New businesses and new business models are emerging (Search; Curating and Subscription models – S-­‐ commerce) -­‐ Subscription Commerce and Curated Commerce: • Balancing the risk of consumers’ cognitive overload with a need to offer choice through experts in a certain field carefully selecting a limited and manageable choice of products -­‐ S-­‐Commerce and Curated Experiences: • Curation: Simplicity, Convenience, Personalization, and Discovery • Subscription models combine convenience, curation, and the pleasure of being surprised and taken care of -­‐ S-­‐Commerce: Curate and subscribe e-­‐commerce sites; cater to a wide range of consumers’ needs) Consumer Behaviour Key Takeaways -­‐ Consumers become active, their attention becomes fragmented and reaches its limit, new value propositions like curation and subscription models are created 3.3 Marketing in the Age of Fragmentation -­‐ -­‐ Mapping Digital Marketing Media What can we learn from this YouTube/eBay/Facebook world? 3.4 BP Oil Spill Challenge Exercise: What to do when it flows? -­‐ We had to play stakeholders and decide how to react to the BP oil spill online as things like BP, the government, Greenpeace, etc. -­‐ My team was Greenpeace -­‐ Strategy: to avoid future instances, use of activism to change government policy -­‐ Message to U.S. citizens: Telling them that there need to be stricter regulations for companies that hire contractors regardless of domestic or international contracts. They need to pressure their governments. -­‐ Why did this happen? Because there were not appropriate standards for corporations to protect the environment from negligent misconduct -­‐ Social Media Actions: 1. Facebook Page + Twitter account – Share VIDEOs and other examples of similar corporate negligence – to show that this event does not exist in a vacuum 2. Create an online petition to pressure the government to take action against corporations – share on social media accounts 3. YouTube – Platform for video posting, sharing, and commenting. -­‐ Justification: Raise awareness using digital media as a platform to gain support about our stance on environmental issues and problems -­‐ Other stakeholders: -­‐ BP • Get the word out! – Customers (could have chosen other stakeholders – make a choice), “reassure” (because crisis), Reassure customers that the environment will be clean. • Analyst or boss – Have to have a goal when making a plan – to evaluate the quality of actions – know what need to accomplish • Recommendations: Start a hashtag on twitter #cleaningthegulf (aim: We could respond to their message) – Relates to the strategy • Wouldn’t only get hashtags from customers – this would hit everyone • Social media tactics specific to these people • Youtube – shows BP fixing – more control (not totally open convos) By: Jessica Gahtan -­‐ New York Times • Goal: Deliver 24/7 news to customers and non-­‐customers – want to deliver accurate & efficient news • Use social media to provide fast and accurate info to audience – a 24 hour online newsfeed – if wanted to be more focused – most things on site are paid – could have open only to paid subscribers • Other possible strategy: Use the event to draw readership to the NYT 3.5 Online Branding Communication and Branding in the Networked Economy -­‐ A key marketing challenge in today’s multi-­‐channel, multi-­‐device world is the integration of digital marketing opportunities into the traditional marketing mix. -­‐ Leveraging the capabilities of the Internet’s network connectivity and interactivity to drive revenue is of paramount importance to today's marketer. Brands -­‐ What is a brand? Do we need brands? Who creates brands? How do you create a brand? How do you value a brand? Branding In The 21st Century: Brand Immersion -­‐ What is brand immersion? -­‐ What makes a medium or environment immersive? It needs to be: Persistent, Interactive, Socially networked, Experiential, Emotional, and Affective -­‐ Immersion via Ambient Communication: Festivals, Pub talk, Street stunts, and/or Online chat rooms/games/Social Network Sites Why Advergaming (=turning “brick” brands digital)? -­‐ Advergames blur the distinction between entertainment and advertising. -­‐ Web audiences can be drawn in long enough for marketers to deliver their messages. -­‐ More importantly, message appears „un-­‐pushed“ -­‐ Advergaming used in conjunction with a competition for prizes and product promotions stimulates a whole new realm of peer-­‐to-­‐peer marketing. -­‐ A viral explosion occurs as users share the game competition with friends and ultimately bring others into contact with your brand. What We Know Of The Game-Marketing Link: -­‐ Games generate high degree of attention -­‐ Games generate comparatively long attention span -­‐ Games generate positive emotions which the player associates with the product / brand -­‐ If additional information about the product / brand is offered, it will be received favorably=> credible source! -­‐ Games decrease the propensity for critical thinking during game-­‐play: the player will not work up counter-­‐ arguments against marketing propositions But brands aren’t just online… Extend Marketing Space -­‐ Healthy Choice has used its online games to drive people to supermarkets to actually buy its products, by offering the chance for customers to print "mystery coupons" -­‐ A Hanes sweepstakes promoted the apparel company's new "tagless" t-­‐shirt by using a tag as the virtual game piece: "Lifting" it with the mouse revealed the visitor's prize. Turning a Digital Brand Physical In the 21st century, this is what your job is all about: -­‐ Making your brand experiential and hence more memorable! • Careful spatial planning • Live, real-­‐time, event-­‐based nature of brand interaction By: Jessica Gahtan -­‐ -­‐ Shift consumers’ perception and practice of what constitutes a marketing ‘space’ – Immersion marketing seeks to achieve a much more proximal relationship between consumers and brands As theorists of the ‘experience economy’ put it: “the more effectively an experience engages the senses, the more memorable it will be” What Influences the effectiveness of online advertising? -­‐ Matching an ad to website content increases purchase intent -­‐ Increasing an ad’s obtrusiveness increases purchase intent -­‐ In combination – these two strategies are ineffective. Ads that match both website content and which are obtrusive do worse at increasing purchase intent than ads that do only one or the other -­‐ Why? Privacy concerns. The negative effect of combining targeting with obtrusiveness is strongest for people who refuse to give their income, and for categories where privacy matters most -­‐ The result suggests a possible explanation for growing bifurcation in internet advertising between highly targeted plain text ads and more visually striking but less targeted ads 3.6 Tools of Marketing in an Online World -­‐ -­‐ -­‐ -­‐ -­‐ -­‐ 2 Strategic Implications for Brand Building: 1. Encourage and valorize social communication. 2. Brand and market leadership through thought leadership • Together these mean: inbound marketing Some Inbound Tools: (1) Communities (brand, support, innovation, etc.); (2) Expert hubs; and (3) Blogs (including Audio, video) There is no simple formula for success. It’s a philosophy: Brand building with e-­‐marketing is inbound marketing The customer is the guest and the marketer is the host/enabler Acquisition and retention comes from authentic thought leadership 3.7 Mobile Commerce Web site Portal Banner Branding Image SMS Campaign MMS Campaign Couponing Acquisition Satisfaction Loyalty Building DM Confirmation Alert Community Satisfaction CRM Product info Contests Promotion Sales Mobile sales site Retail M-Commerce Wireless M-Business -­‐ Identifying the Next Killer Application in Business M-­‐Commerce -­‐ Examples: (1) Wireless Medicine; (2) Mobile Asset Management (ex. Cars) -­‐ What they have in common: By: Jessica Gahtan • • • • Mobile communication is the key! They couldn’t not exist in the hard-­‐wired world They represent either new to the world value Or unlock existing value (by exploiting new efficiencies) 3.8 e-CRM as Customer Branding From mass marketing to relationship marketing Mass marketing -­‐ Discrete transactions -­‐ Short term emphasis -­‐ One-­‐way communication -­‐ Acquisition focus -­‐ Share of market -­‐ Product differentiation Relationship Marketing -­‐ Continuing transactions -­‐ Long-­‐term emphasis -­‐ Two-­‐way communication and collaboration -­‐ Retention focus -­‐ Wallet share -­‐ Customer differentiation 3 Pillars of Relationship Marketing Information (CRM) -­‐ Many CRM goals refer to customer loyalty – an important CRM strategy is to move customers up the relationship intensity pyramid -­‐ But a good d-­‐CRM system also refers to firing customers and un-­‐marketing Experiences (CEM) -­‐ According to Sheth (1995), the basic tenet of CRM is choice reduction -­‐ Many consumers are ‘loyalty prone,’ and will stick wit ha product as long as it promises are fulfilled -­‐ Synchronous and asynchronous technologies can provide automated and human communications that solve customer problems Collaboration (CCM) -­‐ CCM is about allowing your customers to collaborate with you in the production, distribution, and consumption of the product or service Flexible Branding of Customers Success used to be measured in brand recall/equity and now success is measured in accuracy of customer identity production (or rather, customer branding) CRM for Profit -­‐ IT lets firms recognize the customers as an individual with a history, a present, and a future, and be treated as such; IT lets marketers manage customers for profit, balancing each customer’s value against cost to serve Goal: Manage customer relations toward the diagonal By: Jessica Gahtan CRM Marketer: Service delivery system driven by the customer’s assessed value CRM Summary -­‐ e-­‐CRM manages customers for profit -­‐ Branding is no longer limited to products and services -­‐ Customer branding needs individualized information -­‐ Customer branding becomes the foundation of a revolution in all other elements of the 4Ps! 3.9 Online and Innovation Communities Mass Collaboration and Crowd-Sourcing: How does the Internet help Innovate? -­‐ A user innovation community a user community where information, assistance, & innovations are freely shared. • Open source communities (Apache, Linux, Apple) • Innovation communities: InnoCentive, Kitesurfing • Open source hacker communities (Apple) • Brand communities (Coca Cola, Harley Davidson, LEGO, or Barbie) Instant Messaging is a User Innovation -­‐ By 1987 MIT Lab for Computer Science had thousands of workstations online and difficulties diffusing system admin info rapidly. Developed “Zephyr” instant message system. MIT students begin to use for general instant messaging and by 1990, other universities adopted Zephyr-­‐like programs -­‐ First Commercial Product 9 years later • 1996 Israeli firm Mirabilis put out product ICQ • 1998 Mirabilis acquired by AOL Ongoing evolution of Wi-Fi -­‐ User Activities starting around 2002: Users discover possibilities and begin free sharing of wireless networks; Users Modify Wi-­‐Fi antennas to greatly increase range; Widespread implementation occurs – travelers find “hot spots” as they travel, can get Internet access, send e-­‐mail from the highway etc. -­‐ Traditional Supplier Responses: No one will want it; No network security; We think this might be service stealing… should stop. User and Manufacturer Innovations Differ -­‐ Users tend to develop Functionally Novel innovations: Examples: The first sports-­‐nutrition bar, and the first scientific instrument of a new type -­‐ Manufacturers tend to develop Dimension of Merit Improvements: Examples: A better-­‐tasting sports-­‐nutrition bar; Improvements to an existing type of scientific instrument 3.10 Prosumerism and Co-Creation of Value Consumer Innovation Communities (Pro-sumers) -­‐ Displacing manufacturers as product developers? What are marketers to do? -­‐ Motivation? What are marketers to do? -­‐ Taking Control over experience. What are marketers to do? Effect of Democratized Innovation -­‐ User-­‐centered innovation processes offer great advantages over the manufacturer-­‐centric innovation. -­‐ Users that innovate can develop exactly what they want (no middle agent). -­‐ Individual users do not have to develop everything they need on their own. -­‐ The trend toward democratization of innovation applies to information products such as software and also to physical products. -­‐ The multiple – the social -­‐ Superiority in design and functionality -­‐ Leverages the playful element of consumers By: Jessica Gahtan -­‐ Changes attribution of product/service outcome Customers involvement in the product development process: -­‐ Especially in idea generation, product conceptualization, prototyping -­‐ We know that online user communities allow a firm to leverage the creativity of its customers in all stages of the product development process. There are different types of communities: 1. Virtual customer community • Consumers as consultants • Composed of customers who have experience using your product. • Customers chat online and exchange personal experiences, disseminate news through bulletin boards, and comment on products, services, and even marketing activities (investment communities). • Reputation management • Product and service support • Users’ hidden behaviors (understanding wants and needs). 2. User content collaboration innovation community • Customer as collaborator • A model of a volunteer community of collective creation through networks. • Members don’t have to be tech-­‐savvy • Ex.: Wikis 3. User development community • Customer as collaborator • Allow users to customize your product/service • Allows for the development of supplementary products by others (e.g., iPhone’s software community). 4. User product collaboration innovation community • Not much known about these groups yet. • Difficult to say how this community format may affect company. • Mozilla, Linux, Kitesurfing -­‐ Communities are possible and useful for: Paper manufacturer, Home improvement retailer, Mid-­‐Range Hotel chain, One of your own choosing Fournier on brand community -­‐ Business strategy -­‐ Exists to serve the people in it -­‐ Strong community = strong brand -­‐ Embrace conflict -­‐ Mass participation (not opinion leaders) -­‐ Online networks just one tool, not a community strategy -­‐ If done well, it can’t be controlled 3.11 Pricing Strategy in Fluid Markets Getting the prices right on the web -­‐ Pricing strategy is critical marketing mix variable – a...
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