Is Digital Marketing a Force for Good or Evil - Essay Example

Is digital marketing a force for good or evil?” Introduction The evolution of marketing and the modern developments in technology are intricately interconnected. Since from the inception stages of marketing, technology reinforced key milestones in the annals of marketing. Innovative marketing strategies will always employ the power of emerging new technologies to communicate and connect with their customers or audience. As of today, technology has become mainstream for marketing and is being employed as a standard marketing mechanism. The invention of the printing press in the renaissance age, radio, television and the Internet are all illustrations of key innovations in technology that finally transformed the connection between consumers and marketers for ever, that too on the global level. Until 1877, the telegraph was the medium of communication and acted as a marketing tool. Later, telephone grabbed the place and became strong marketing devise (Ryan &Jones 2014:3). This research essay will analyse how the digital marketing is now transforming the business and how it has been used by the modern businesses to expand their operations globally by analysing both the advantages and disadvantages of the digital marketing in detail. “Definition of Digital Marketing” Since the product which is offered through the on-line store is always available for the access to the consumer for twenty-four hours a day , seven days a week and three hundred sixty-five days a year. Further, there is no geographical limitation or restriction and a customer from any part of the world can visit and buy products from the online store provided there is an efficient digital marketing campaign is carried over. Further, the overall cost of digital marketing is much less as compared to other traditional marketing strategies. Contacting the customers through the email about the new products, about the improvements in the new products which can be carried over through email instead of contacting them through the letter either with the help of the postal or courier system. Further, the business can update their subscribers’ list instantaneously through emails (Flores 2013:1). “The Annals of Digital Marketing” In 1965, researchers in Massachusetts Institute of Technology in USA were able to connect two computers by employing “packet-footed information transmitted through a network. 1n 1960s, the introduction of the Internet’s killer application namely, e-mail which changed the marketing concept totally. ARPANET introduced advanced e-mail technologies in 1983 employing the TCP / IP protocol which was regarded the true birth of Internet saga (Ryan & Jones 2014:4). The middle of 1990s witnessed an upsurge in the new online businesses as ground-breaking entrepreneurs, utilising the mushrooming potential of this new medium who vied each other to stake a claim on this virtual new frontier. There were only 18,957 on-line websites in August 1995, and it soared to 342,081 by August 1996. In these periods, many famous digital marketing brands like Yahoo!, Amazon, eBay and Google Inc came into existence (Ryan & Jones2014:4). Digital media comprise the convergence of communication and information technologies. Information is being rapidly transferred from one computer, to another computer mainly through digital media. Nowadays, the information receiving devises may be a smart phone, a TV receiver, a smart card or mobiles. Digital marketing is intending at accomplishing profitable gaining and retaining of customers through a multi-channel customer life cycle and purchasing process. It is endeavouring to enhance the knowledge about customers through their profiles, demeanours, loyalty and value drivers and then, transforming integrated aimed messages or communications and offering online services that fit their individual requirements (Housden & Thomas 2011). How Internet has side-lined the other marketing tools? It is to be remembered that it took nearly twenty-two years for television to reach 50 million homes whereas for Internet, it took only just five years to attain the same magnitude of penetration. 2011 2012 2013 2014 2015(estimated Amount in Billions “Ad Spending –Online” 80.2 94.2 106.10 119.80 132.10 “Ad Spending –Total” 496.90 529.50 552.50 579.80 603.10 Source- “http://www.go-gulf.com/blog/online-ad-spending/” As per the Internet Advertising Bureau of UK (2006), Internet advertising amounted to 10.5% of the aggregate spend thereby exceeding outdoor advertising (5.1%), consumer magazines (4.5%),” radio “(3.5%) and trailing to the national press advertising (11.4%) (IAB.net 2006). Internet age has helped for the faster adoption of technology, which is influencing consumer demeanour as networked digital technology is facilitating the consumers to interconnect with each other more instantly mainly through instant messaging (IM) , e-mail, SMS through mobiles and web-oriented social networking mechanisms like LinkedIn , Facebook , Twitter , MySpace ,etc. Building new virtual communities and reinforcing social networks are possible now through the peer-to-peer interaction (Wertime &Fenwick 2011:10). How Businesses are benefitted from Digital Marketing? Proctor & Gamble and Unilever can be said to be the pioneers of digital marketing as they made extensive research about their new products, tests marketed it and then, introduced with brand advertising, mainly through television. Thus, earlier , television became the strong media as it offered incomparable reach to market and also offered very minimal CPT (cost per thousand) (Housden & Thomas 2011). With the help of digital marketing, companies are now able to differentiate their products. For instance, IKEA’s “Dream Kitchen” digital marketing strategy is a ground-breaking navigation structure which is offered through their dedicated website, which is specially designed to support a targeted online campaign to induce visitors to their websites to have a journey of their various modular IKEA kitchens around the globe (Aldrich 2014 :3). Digital transformation of marketing connotes that customer communications with a brand which develop niche relationships, which are tracked, optimized, and improved throughout the customer lifecycle and experiences of the customer which has a clear approach and is being evaluated on a continuous basis. “As per recent survey carried over by adope.com, about sixty-eight percentage of marketers are of the opinion that businesses cannot prosper unless they embrace digital marketing stratagems” (Aldrich 2014 :3). As per MIT Sloan research study, leaders in the digital transformation are on average earning 26% higher revenues and are able to have a 12% higher market capitalization (Aldrich 2014:3). “Attaining Success through the Digital Marketing” Sears Holding Company is a giant business conglomerate as it is owning hundreds of stores and brands in USA. The company is of the strong opinion that data-driven business decision-making is crucial to digital transformation. Thanks to the digital marketing as loyalty members of Sears Holding Corporation is now contributing of 69% of its total sales and multi-channel, and its online sales are soaring 10% per annum. About three-fifth of Sears’ revenue is being generated through its “Members of the Shop Your Way scheme” (Aldrich 2014:3). About 70% of personal insurance offered by Suncorp Group of USA, which comprised of fifteen banking and insurance brands in Australia is being offered through the online now and 20% customers’ access mobile banking for making insurance premium now(Aldrich 2014: 4). Digital marketing transformation was started in Malaysian airlines in the year 2011. In marketing, customer experience and profitability, the airline was lagging behind its competitors as it had not made substantial investment in digital marketing for many years. Malaysian airline management realised the significance of digital marketing when it incurred more than $600 million as loss of revenues and customers. It realised that TV advertising alone could not raise its customers’ base and decided to carry a strong advertisement campaign through the digital platform as they have realised now that emerging digital atmosphere could help its customers to establish and engage relationships with brands. As a result, today Malaysian airlines is having more than million Facebook followers which is 200% higher as compared to a year before. It is able to generate Internet revenues to the tune of USD2 million per day, and it has more than 2.5 million loyalty members as of date (Aldrich 2014:3). With the help of digital marketing, Malaysian airline is able to double its site visits by its customers, tripled its Internet profits and doubled its market penetration. UK supermarket giant Tesco is able to side line its main competitor Sainsbury by leveraging through digital marketing. Tesco used its customer’s data bases to know about their buying decisions, their preferences and their tastes which other supermarkets’ chains in UK failed to do so. Tesco’s digital strength is coming from its dedicated, informative website, and they are also in the business of Internet service provider (ISP) thereby able to offer free internet access for its customers. These digital marketing strategies made them as the largest online retailer in UK (Bird 2007: 191). ASOS is an UK based supplier of more than 65000 fashion products and is now having international presence, thanks to the digital marketing. It is vigorously engaged in digital marketing and due to this, its revenues have grown astonishingly across the globe. Digital marketing has helped it to enhance their customer profile, removed roadblocks in global markets and always worked for improving the efficiency across the business. Its active customer base increased to 7.1 million as of 31 August 2013 from that of just 5 million as of 31 August 2012. It is able to able enhanced technology platforms particularly offering local language mobile sites as its mobile division accounts for more than 30% if the aggregate traffic. Its net revenue rose to £ 769.4 million in 2013 from that of £ 403m in 2011. “It reported as of 31st August 2013 2,60,000 likes in Facebook, 2.2 million Google Plus followers, 1 million Instagram followers and 540k Twitter followers. The company is shipping its products to more than 237 nations around the world and regions, and it attained 44% international growth in 2013” (ASOS Annual Report 2014:18). ASOS invested heavily on digital marketing, which includes affiliate marketing, pay per click, and in nation-specific advertisement campaigns. ASOS is targeting its marketing expenditure, which is aimed at US, UK, France, Australia and Germany. It also engaged in marketing campaigns of its peak “Best Night Ever” advertisement propaganda in US, UK and Australia and also with local magazine business associates in Germany and France. Impacts of ASOS digital marketing efforts are now visible through its vibrant worldwide growth in sales and its active customers in the year 2013 as compared to earlier years. ASOS has built around is core marketing competence in digital marketing channels as it has pushed its international sales growth. At the same time , ASOS also developed a strong digital marketing team to deliver stable , content-led marketing across social media in each of its key regions , and increasing customer engagement (ASOS Annual Report 2014:18). UK government in 2013 established the Tech City UK Cluster Alliance, mainly to develop and nourish digital business across UK. UK government is aware that digital industry is growing very fast and is ushering employment opportunities , about 47,200 digital companies functioning in UK and about 98% of digital companies are small business. Presently, digital companies are offering 1.46 million digital jobs in UK. As per Future Fifty Company Adzuna, presently, about 45000 digital jobs are being advertised in the UK (Techcityuk.com 2015). As per recent survey, preponderances of UK businesses (65%) are employing social media for their digital marketing tool, as it offers brand awareness (83%), gaining confidence and followers (55%) and boosting social sharing (56%) (CMO Council .org 2014). YouDrive Mercedes advert 2013 is one of the best illustrations how digital marketing can offer creativity in the automobile industry. As per Mercedes, there have been 3.8 million views of the YouDrive campaign in their YouTube marketing drive in the 21 days immediately after the uploading YouTube advertisement (epratrust.com 2013). Audi, a famous automobile manufacturer in 2012 introduced Audi City virtual showroom in Beijing and London, thereby offering their customers an opportunity to see the life-size symbolisation of their new cars on big wall-sized screens (Audimediaservices.com 2013). “Social Media & Digital Marketing” Those businesses which want to have a great advertisement through digital marketing, then, it is a must for them to be present in the social media. For instance, through Facebook which is a centre of peer-to-peer discussion where buyers are discussing about the selection, they are going to make or are about to make, when they have to make huge investment. Likewise, Twitter also offers discussion facility for deliberating about advantages and disadvantages of the products where a consumer can make an informed decision over it. Likewise, Pinterest is a famous for being aspirational brand – where a consumer can maintain the images of the product which they want, which cannot be overlooked in the customer’s journey in the product selection (Hallam Internet Ltd 2014). “Darker Sides of the Digital Marketing” The negative side of the digital marketing is that it requires heavy investment. A business has to invest huge amount on infrastructures like the cost of software, website design, hardware, maintenance costs of the website and the distribution time and cost through online. These costs have to be added into the cost of the product or services offered (Chafey & Dave 2008:200). On-line businesses can collect the information about the personal data of the consumer very easily from their websites. As the online transactions are always recorded, it is very simple to establish an online profile of the consumer and can employ them to forward targeted advertisements. However, everyone will consent that the collection of personal data about the buyers can be construed as an interference on a buyer’s right to privacy, which is highly controlled in many nations. Thus, small businesses which are intending to start online business are required to be aware of the laws that are applicable as any infringement can land them in payment of huge fines and may result in loss of customer loss of trust (McHale 2012:21). Further, digital marketing may induce on-line buying, which may involve identify theft and credit card frauds. Online business owners should take into risks involved in electronic transactions through online and should try to secure their systems to the highest safety norms which again will involve huge investment and finally end in an increase in the cost of product sold or service offered (Breaux 2007:54) . Online stores which involved in digital marketing may have greater sales returns as the buyer when purchasing through on-line might not have seen the product personally while buying. Further, the majority of the online buyers may be influenced by the impulse or fascination, and at the time when they see the product but when it reached them, they may change their mind and may return the product to the seller as the on-line buying contract facilitates easy return policy. For the giant on-line sellers like Tesco, this may not pose an issue but for a small business, this may raise considerable issues (Business Resources 2011). However, the 2012 social media blunder by Volkswagen which hit the press after eliminating adverse observations from their Facebook wall, ending in a great public relation counterattack organised by Greenpeace. Thus , this illustration shows how an automobile manufacture failed in their comprehension of social media best practice affecting on their digital marketing strategy for months afterward (Hallam Internet Ltd 2014). Conclusion With the help of digital marketing, companies are now able to differentiate their products. Those businesses which want to have a great advertisement through digital marketing, then, it is a must for them to be present in the social media. As per recent survey carried over by adope.com, about sixty-eight percent of marketers are of the opinion that businesses cannot thrive unless they embrace digital marketing stratagems. With the help of digital marketing, Malaysian airline is able to double its site visits by its customers, tripled its Internet profits and doubled its market penetration. Impacts of ASOS digital marketing efforts are now visible through its vibrant worldwide growth in sales and its active customers in the year 2013 as compared to earlier years. Presently, digital companies are offering 1.46 million digital jobs in UK. The negative side of the digital marketing is that it requires heavy investment. Online marketers should employ adequate safety standards against identify theft and credit card frauds. List of References Aldrich, S. (2014) Marketing in a Digital World. [online] available from http://www.mktgsensei.com/AMAE/Internet%20Marketing/Markeitng%20in%20a%20Digital%20World.pdf > [accessed 22 March 2015) Asosplc.com. (2014) Annual Report 2014. [online] available from < http://www.asosplc.com/~/media/Files/A/ASOS/results-archive/pdf/annual-report-2013.pdf> [accessed 21 March 2015] Audimediasercices.com. (2013) Germany First Virtual Show Room. [online] available from < https://www.audi-mediaservices.com/.../germany_s_first_virtual.html> [accessed 21 March 2015] Bird, D. (2007) Common sense Direct and Digital Marketing. London: Kogan Page Breaux, M. (2007) Identity Theft. London: Zondervan Business Resources.com. 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