DIGITAL MARKETING – A WIDE ANGLE SNAPSHOT

What is digital marketing?: It  is an umbrella or wrap-up  phrase  for marketing / promotion of products and services using digital media primarily by using internet.Evolution  and recent past:

EVOLUTION  AND RECENT PAST:

Though technically commenced in early 1990s digital marketing attained some threshold size only in the last decade when internet ( particularly broadband), smart phones usage and e-commerce started growing in multiple double digits.

Some major milestones along the path of digital marketing growth trajectory can be summariesas  follows:

  • Past  2010, web replaced TV as main entertainment medium for youngsters.
  • By 2014, Mobile phone users  surpassed desktop  users
  • Wearable devices which started ‘sprouting’ around 2011 hasbeen growing at a CAGR of 35 % of late – implying doubling itself in size in 3 years time.

Though prevalent internet usage has been the primary trigger for the growth of digital marketing, growth in e-commerce( which by the way was also facilitated by internet) acted as a catalyst or force-multiplier in spreading the growth. This is  corroborated by the fact that in B2C space ( which is volume connector and where impulsive buying is maximum)  the e-commerce grew at a CAGR of 20% between 2012 and 2015. This is significant since this period has, otherwise been constrained by slow global growth in developed economies, after emerging from the troughs of global recession.

Further, it is also reported that :

  • The growth in on-line ad spend will be double than the rest of the media
  • Proportion of US ad spend in digital is going to increase from about 30% to 45% by the turn of this decade.
  • Spread of smart phones predict Mobile ad spend is going to grow at double the overall digital ad spends and five times the aggregate spends across all media put together.

ONLINE ‘WARS’ :

The most famous ‘war’ is between Google and Facebook – in 2015, the market leader Alphabet group( Google, Youtubeetc)  has garnered about 2/3rd of the US internet ad revenue( ie: about a third of global gross)  while FB could grab about 15%.  But considering that social media reach has been expanding at feverish pitch, FB is expected to garner more ads in the coming years.

According to one estimate, by 2020, 70% of all on-line ad spend will be cornered by Google group and FB – unless of course a new disruptor suddenly emerges.

‘NOW AND HERE’ TRENDS :

  • Customer-is-Queen (or king!)  : This is driven in a buyer’s market driven by fierce competition.  Sensing the advantage of digital marketing as a growth tool, more andmore Cos are jumping into the bandwagon. Seamless  availability of data and fast search facility are nowadays considered as ‘given’ by the customers and any drag on this pulls the customer away to the next ‘groom’ ! Entry barriers getting lowered has been by far the most significant result of digitization.
  • On-line Videos : Using on-line videos with superior  resolution like 4K has now become the norm for simulating a real-life experience for customers.
  • Using gaming :This is another arena where a lot of action is being created. Product or service placements that are meticulously crafted is predicted as a powerful tool for marketers in B2C space.
  • Wearable Devices and IoT :These together can provide valuable insights into customer behavior and hence facilitate profiling and segmentation and are accordingly being targeted by marketers. Spin-offs like usage of products and consequently tweaking product customization are being made possible with the information generated.
  • Business Intelligence thru  Data Analytics : This is an exponentially expanding arena and has immense possibilities integrated with IoT. In fact, many e-commerce sites already use this for segmented  promotion of products for customers by trend analysis using IP addresses and other tools for customer mapping. This – in the process –  has also resulted in tweaking the classical CRM model.

SWOT ANALYSIS :

  • Internal ( Strength and Weakness) : This is about the organization itself primarily about the USP of the products /services it intends to market  and  resources – intellectual and material (financial/logistics). In practice, these things boil down to quality of the website, team cohesion etc.
  • External ( Threat and Opportunities) : These relate to the business environment – how wide is the business opportunity,  CAGR growth during immediate past and projections from multiple independent consultants, how strong is the competition, cost of surmounting the entry barriers, likely number of simultaneous entrants  in immediate future etc.

PITFALLS :

While digital marketing has its multiple advantages and is the ‘in-thing’ today, there are a few pitfalls that has surfaced of late. A few ‘mine-fields’:

  • Unleash : This is to paraphrase attempting to connect to too many people at a time thinking targeting everyone will get more business. In reality, this could be counter-productive many times since every business has certain category of target customers and the idea should be to first identify them by segmentation/ intelligent filtering. Next step is to find out what they are looking for and then try to customize the promotion.
  • Living in vintage mindset : Well, Rolls Royce sells more cars today than, say 5 decades ago , but even THEY have evolved with time and try to customize their product and service levels  for the PRESENT DAY  customers. So there is no rewards for living in past glory when change has been happening at feverish pace – Hybrid technologies, Big  data analytics, Cloud etc are being embraced by savvy marketers just to stay relevant.
  • Living in vintage mindset : Well, Rolls Royce sells more cars today than, say 5 decades ago , but even THEY have evolved with time and try to customize their product and service levels  for the PRESENT DAY  customers. So there is no rewards for living in past glory when change has been happening at feverish pace – Hybrid technologies, Big  data analytics, Cloud etc are being embraced by savvy marketers just to stay relevant.
  • Customer engagement : Barring rare exceptions, even with the best of products, today many Cos fail or product and services fall into the ‘dog’ category ( that animal from  BCG matrix ) because the customer engagement fell  below expectations.

GOING FORWARD :

So where is digital marketing heading ? Digital marketing is nascent, relatively speaking. As a medium, it is perhaps yet to unleash its full potential. With data integration – using business intelligence, cloud and IoT – major disruption is round the corner in respect of how business and society manage themselves. Hence digital marketing can definitely leverage such opportunity.

But like all fields, the viability of this also could be related to the economies of scale. Hence consolidation by way of mergers and acquisition are very much likely in this arena also.