Digital Marketing Core Concepts: From Web 1.0 to Modern KPIs
The Digital Economy and Web Evolution
Characteristics of the Digital Economy
The digital economy is characterized by the complete digitization of the value chain.
The Concept of Datification
Datification is the generation of data from all digital activities.
The Driver of New Value Ecosystems
Consumers drive the creation of new value ecosystems in the digital economy.
Defining Web 1.0
Web 1.0 is defined by static and one-way communication websites.
Defining Web 2.0
Web 2.0 is defined by two-way communication and user-generated content.
Defining Web 3.0
Web 3.0 is defined as the intelligent and semantic web of services.
Foundations of Digital Marketing
The Cluetrain Manifesto’s View on Markets
According to the Cluetrain Manifesto, today’s markets are conversations.
The Emergence of Online Marketing
Online marketing began to emerge in the 1990s with the first clickable ads.
Digital Marketing and Web 2.0
Digital Marketing was not born with Web 2.0. It started earlier but expanded significantly with the advent of Web 2.0.
What is Digital Marketing?
Digital Marketing is the strategic use of digital tools to create, price, promote, and distribute products online.
The 4 F’s of Digital Marketing
The four F’s of Digital Marketing are:
- Flow: The immersive user experience on a website.
- Functionality: The usability and performance of the digital platform.
- Feedback: The mechanism for two-way communication and user response.
- Fidelity: The creation of loyalty and trust with customers.
Understanding Guerrilla Marketing
Guerrilla Marketing is a strategy that uses low-cost, high-impact creative marketing tactics.
Flexibility in Digital Campaigns
Flexibility in Digital Marketing is the ability to change and adapt campaigns in real time. Its main advantage is that it allows for immediate modifications based on performance data.
Comparing Traditional and Digital Marketing
Key differences include:
- Communication: One-way (Traditional) vs. two-way (Digital).
- Targeting: Limited (Traditional) vs. precise (Digital).
- Medium: Offline (Traditional) vs. online (Digital).
- Measurement: Difficult to measure (Traditional) vs. easy to measure (Digital).
- Cost: High cost (Traditional) vs. low cost (Digital).
Marketing in a Digital World
This concept means that marketing now happens within a fully digital context, not just by using online tools as an add-on.
Objectives, Metrics, and KPIs
SMART Marketing Objectives
Marketing objectives should be SMART:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Quantitative vs. Qualitative Objectives
An example of a quantitative objective is to increase online sales by 25%. An example of a qualitative objective is to improve brand image.
Goals vs. Objectives
Goals are general, long-term ambitions, while objectives are the specific, measurable steps taken to achieve those goals.
Metrics vs. KPIs
Metrics are raw data points that track activity. KPIs (Key Performance Indicators) are the specific metrics that are most critical for tracking progress toward achieving business goals.
Common Digital Marketing Acronyms
PPC: Pay-Per-Click.
SEM: Search Engine Marketing, which refers to paid advertising on search engines.
ROI: Return On Investment, which measures the profitability of an investment.
CPL: Cost Per Lead.
CTR: Click-Through Rate, calculated as (Clicks ÷ Impressions) × 100.
Understanding A/B Tests
A/B tests are used to compare two versions of a webpage, email, or ad to determine which one performs better.
Campaign Strategy and Management
Key Agents in a Digital Campaign
The four primary agents in a digital campaign are the advertiser, the media, the platform, and the agency.
Online Advertising Payment Models
The advertiser (the client) pays for online advertising campaigns. The choice of payment model should align with campaign objectives.
- CPL vs. CPA: With CPL (Cost Per Lead), payment is made for acquiring a potential customer’s contact information (a lead). With CPA (Cost Per Acquisition), payment is made only after a confirmed sale or action.
- Advertiser Preference: Advertisers often prefer CPL or CPA because they are performance-based models.
- Media Platform Preference: Media platforms and advertisers often prefer CPM (Cost Per Mille, or cost per thousand impressions).
- Platform Preference: Platforms also typically prefer CPC (Cost Per Click) over CPM because it generates more revenue from user engagement.
The Role of Search Engines
Search engines are tools that index websites. They are essential for digital marketing because they provide visibility through both organic (SEO) and paid (SEM) results.
Audience and Product Segmentation
Market segmentation divides a broad consumer market into sub-groups based on shared characteristics. Product segmentation involves creating different versions of a product to appeal to different market segments.
Types of Audience Segmentation
Five common types of audience segmentation in digital marketing are:
- Geographic
- Demographic
- Psychographic
- Language
- Time-slot
Note: Behavioral offline segmentation is a type that does not apply to digital marketing.
Actions Measured in Digital Marketing
The three types of actions measured are onsite (on your website), offsite (on other digital platforms), and offline (actions in the physical world influenced by digital campaigns).
Common Digital Marketing Techniques
Five key techniques include:
- Search Engine Optimization (SEO)
- Search Engine Marketing (SEM)
- Social Media Optimization (SMO)
- Content Marketing
- Email Marketing
Industry Insights and Trends
It is false that laptops are for developed countries and smartphones for developing ones; smartphones dominate user access everywhere. It is also false that Spanish companies spend more on TV than digital marketing; digital media investment is now higher.