How digital marketing works

 

What is digital marketing?

Digital marketing, also known as online marketing, refers to advertising delivered through digital channels to promote brands and connect potential customers using the internet and other forms of digital communication such as: 

• Search engines
• Websites
• Social media
• Email
• Mobile apps
• Text messaging
• Web-based advertising

In-short, if a marketing campaign is using any of the above online media channels, it is digital marketing.

Consumers today rely heavily on digital means to research products. Some 77% of customers research a brand online before engaging with it, according to HubSpot Research. Meanwhile, 51% of consumers say they use Google to research products before buying.

 

How does digital marketing work?

Digital marketing uses a range of strategies to reach customers, whether the aim is to tempt them into making a purchase, increase their brand awareness, or simply engage with your brand. Modern digital marketing comprises a broad system of channels, including: 

• Social media
• Content marketing
• Website marketing
• SEO (search engine optimization)
• PPC (pay per click) advertising
  
  

To achieve the true potential of digital marketing, marketers must dig deep into today’s vast and intricate cross-channel world to discover strategies that make an impact through engagement marketing.

Engagement marketing is the method of forming meaningful interactions with potential and returning customers based on the data you collect over time. By engaging customers in a digital landscape, you build brand awareness, position yourself as a thought leader, and place your business at the forefront when the customer is ready to buy.

 

Why is digital marketing important?

By implementing an omnichannel digital marketing strategy, marketers can collect valuable insights into target audience behaviors while opening the door to new methods of customer engagement.

Additionally, companies can expect an increase in retention. According to a report by Invesp, companies with strong omnichannel customer engagement strategies retain an average of 89% of their customers. Compare that to companies with weak omnichannel programs and they have a retention rate of just 33%. 

Digital marketing continues to evolve. For example, the increasing variety of wearable devices available to consumers affords new opportunities to market to them. Forbes also forecasts that social media will become increasingly conversational in the B2B space, video content will be refined for search engine optimization (SEO) purposes, and email marketing will become even more personalized.

 

“Digital is at the core of everything in marketing today — it has gone from ‘one of the things marketing does’ to ‘THE thing that marketing does.’”

Sanjay Dholakia, Former Chief Marketing Officer, Marketo

  

The differences between B2B and B2C marketing.

You’ve almost certainly heard of B2B and B2C, but do you know the differences between them? B2B is business-to-business, while B2C is business-to-consumer, so your marketing activity needs to be adjusted for and targeted to each audience.

Language and messaging.

With B2B marketing, you’re focused on reaching out to other businesses directly and trading with them, while with B2C you’re marketing to consumers and customers instead.

For example, with B2B marketing you’re more likely to focus on messaging to educate your potential prospects, with language that is professional and uses industry terms — you can be formal and direct. With B2C marketing, the focus may be on enticing customers, creating brand awareness and telling a story.

Decision-making.

Another key difference is the decision-making process. With B2C, the customer could make a relatively quick decision to buy from you. Of course, you first need to earn their trust through your digital marketing strategy.

But one person is often the sole decision-maker, especially if you’re retailing an item like clothing or kitchen gadgets. Things can become more complex with bigger ticket items like vacations. But the purchase journey is quicker and less complicated.

With B2B marketing, a business may have to convince several stakeholders — you could be selling building materials directly to large construction companies and in competition with similar providers.

Ultimately, it’s all about knowing your target customers, and tailoring your marketing accordingly.

 

The benefits of digital marketing.

Digital marketing can help you get to know your audience, learn important information about them, and provide metrics that will give your marketing team credibility. The benefits of digital marketing include: 

1. You will get to know your audience.

Digital marketing offers the perfect way to get to know and connect with your audience. You can test offers and messages and get an insight into the peak times they visit your website. If you have a social media strategy — and you really should — you can build relationships with them faster and more easily. Attune yourself to your audience and you’ll build credibility that can set you apart from the competition. 

2. It doesn’t cost much.

Compared to traditional marketing methods, digital marketing is cheap. There are fewer overheads. You can create a slick, professional website for a relatively small cost, using one of the many templated systems or paying more for a bespoke creation. You can create social media accounts for free, and partner with an email newsletter provider for a competitive price. Relatively cost-effective, digital marketing is suitable for even the smallest of businesses.

3. You can market to anyone, anywhere.

With digital marketing, your potential reach is huge. You can connect with customers on the other side of the world, in multiple time zones, as seamlessly as though you were taking out an ad in the local newspaper (easier, in fact). You can expand your market reach and grow your business in ways that would have seemed impossible before.

4. Digital marketing is adaptable.

Withdigital marketing, you can be fast, fluid and nimble in your approach. Trial different strategies, assess the results, and try something different the following month — or week. Get access to real-time data to help inform your business decisions — there’s no need to wait weeks to see the results of a campaign.

5. You can personalize by channel.

Your marketing must deploy cross-channel functionality from teams with multiple skillsets to engage customers where they are in that precise moment. For example, each social media platform includes different audiences and expectations, so marketing may look different for each. This includes tone, imagery, offers, and scheduling of your posts.

6. You can measure campaigns and set KPIs.

Digital marketing supports a vast universe of metrics that can be utilized to determine the effectiveness of your marketing. Start by setting your goals for each channel and the metrics you want to see for them. You can track the number of conversions and leads, visits to your website, and much more — giving you plenty of valuable insight to help grow your business.

 

Types of digital marketing.

Digital marketing spans a massive network of digital touchpoints that customers interact with many times a day. To properly utilize each of these channels, you need to understand each one.

Paid search. 

Paid search — also known as pay-per-click (PPC) advertising — typically refers to the sponsored result on the top or side of a search engine results page (SERP). These ads charge you for every click and can be tailored to appear when certain search terms are entered.

Advantages. Essentially, your ads are targeted to audiences seeking a particular product or item. As such, these ads can be extremely effective, as they rely on data gleaned from individuals’ online behavior and are used to boost website traffic by delivering relevant ads to the right people at the right time. These ads also involve retargeting, meaning that marketing automation tools can craft unique, personal cross-platform ads based on the customers’ actions.

Disadvantages. The cons of PPC include cost and labor. Though you can choose to spend what you like, costs can add up quickly. Campaigns can be heavy on time investment, too, and often need to be monitored and optimized.

Read more about mistakes to avoid when creating PPC advertising campaigns.

Search engine optimization (SEO). 

SEO is the process of optimizing the content, technical setup, and reach of your website, so your pages appear at the top of a search engine result page for a specific set of keyword terms.

Advantages. Organic online traffic earned through SEO has enormous influence on search rankings and, by extension, organic site traffic. By using keywords and phrases, you can use SEO to massively increase visibility and begin a lasting customer relationship. SEO is defined as increasing a website’s ranking in online search results, and therefore its organic site traffic, by using popular keywords and phrases. Strong SEO strategies are hugely influential in digital marketing campaigns since visibility is the first step to a lasting customer relationship. 

Disadvantages. You can deploy an SEO strategy on your website and not see much change immediately, so patience is required. Google algorithm updates can also affect your rankings — which could mean having to change your strategy.

If you’re thinking of outsourcing your SEO to an external company, check out these 12 questions you need to ask before hiring anyone.

Content marketing. 

Effective content marketing is not outwardly promotional in nature, but rather serves to educate and inspire consumers who are looking for information. When you offer content that’s relevant to your audience, it can establish you as a thought leader and a trustworthy source of information.

Advantages. Content marketing gets three times more leads than paid search advertising, so it’s well worth the additional effort — whether that’s creating blog posts, informational guides, whitepapers, or any other type of content.

Disadvantages. The challenges for many businesses are multiple — finding the resource, creating something that stands out from competitors, and maintaining momentum.

Read more about content marketing here.

Social media marketing. 

Social media is everywhere, so your business must be active on several different platforms. However, the key to effective social media marketing goes far beyond simply having a few social media accounts.

Advantages. You must use your social channels properly and effectively — the more your audience is inspired to engage with your content, the more likely they are to share it, potentially inspiring their peers to become customers as well.

Disadvantages. It’s worth varying your content on different platforms — what works well on Twitter might not be as effective on Instagram, which is more visual. A common mistake for a business using social media is to fail to post frequently or get the tone of posts completely wrong. Again, know your audience, and what they want.

Read more about social media marketing here.

Email marketing. 

After more than two decades, email is still the quickest and most direct way to reach customers with critical information. Today, successful email campaigns must be incredibly engaging, relevant, informative, and entertaining to not get buried in your customer’s inbox.

To succeed, your marketing emails should satisfy five core attributes. They must be: 

• Trustworthy
• Relevant
• Conversational
• Coordinated across channels
• Strategic

Timing and scheduling are important — don’t bombard customers’ inboxes with repetitive or irrelevant messaging, or they could hit the unsubscribe button.

Here's our blog on why email marketing still rules.   

Mobile marketing. 

Mobile devices are kept in our pockets, sit next to our beds, and are checked constantly throughout the day. This makes marketing on mobile incredibly important — two-thirds of consumers can recall a specific brand they have seen advertised on mobile in the last week — but mobile is also very nuanced considering its intimate nature.

Advantages. SMS, MMS, and in-app marketing are all options to reach your customers on their devices, but beyond that, you must consider the coordination of your marketing efforts across your other digital marketing channels.

Disadvantages. Privacy remains an issue — be careful with how you treat customer data.

See how mobile marketing can boost your campaign results.

Marketing automation. 

Marketing automation is an integral platform that ties all of your digital marketing together. In fact, companies that automate lead management see a 10% or more bump in revenue in six to nine months’ time. Without it, your campaigns will look like an unfinished puzzle with a crucial missing piece.

Marketing automation software:

• Streamlines marketing tasks and workflow
• Measures results
• Calculates the ROI of your digital campaigns

Marketing automation can help you gain valuable insight into which programs are working and which aren’t. And it will provide metrics to allow you to show digital marketing’s efforts on your company’s bottom line.

Learn more about what digital marketing can offer in our guide Digital Marketing 101: Key Tools for Engagement Marketing.

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Digital marketing roles.

The digital marketing industry incorporates several different jobs and roles, each requiring contrasting skillsets and characteristics — though some do complement one another. Key digital marketing roles include:

• SEO. Responsible for search engine optimization, analysing the performance of websites, scoring against competitors, creating a data-based strategy to improve rankings.
• Content. Including copywriters to create copy for websites, and strategists to plan campaigns, blog calendars and more.
• Social media. Writing posts for various social media channels, planning and managing a calendar, responding to replies from customers.
• PPC. Managing pay-per-click advertising campaigns, which includes overseeing budget and spend, tracking performance and recommending new approaches.
• Lead Gen. Generating new leads for the business, whether by managing an outbound strategy or dealing with inbound queries.
  
  

ROI of a successful digital marketing program.

Digital marketing ROI (return on investment) involves much more than the up-front payback of standard banner ads. Organic content marketing is also a major player in the digital marketing space. 

• Digital marketing reaches customers beyond advertisements. Some 70% of internet users want to learn about products through content versus traditional advertisements (MDG, 2014). 
• Digital marketing drives content marketing. The top five B2B content marketing tactics are social media content (92%), e-newsletters (83%), articles on your website (81%), blogs (80%), and in-person events (77%) (source). 
• Digital marketing is vital for SEO. The first organic search results on Google account for 32.5% of traffic share for a search term (Chitka)

Learn more about investing and budgeting to maximize ROI with our eBook The Digital Marketer's Guide to Resource and Budget Allocation Across Channels.

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How to plan, implement, and optimize your digital marketing program.

Begin the launch of your digital marketing program by first determining your audience and goals, and then putting in place metrics to ensure you’re always improving.

1. Identify and segment your audiences. 

Today’s buyers expect a personalized experience across every touchpoint. To do this, you must understand their demographic, firmographic, and technographic attributes as well as how to address their questions and pain points. 

2. Establish goals and measurement strategy. 

Use audience information to determine personas and get a clear view of their sales journey to establish your goals and measurement strategy.

Important metrics include: 

• Impressions
• Reach
• Clicks
• Click-through rate (CTR)
• Engagement rate
• Conversions
• Cost per lead (CPL)
• Effective cost per thousand impressions (eCPM)

There are also the back-end metrics like return on investment (ROI), return on ad spend (ROAS), first- and multi-touch attribution, and lifetime customer value (LCV).   

3. Set up your adtech and channels. 

Ad technology can take time to navigate, so make sure you have the right elements in place before you get started, including:

• Data management platforms (DMPs)
• Demand-side platforms (DSPs)
• Supply-side platforms (SSPS)
• Ad exchanges 

Align your team, communicate everyone’s objectives, and show how their channels fit into the big picture of digital marketing.

4. Launch and optimize. 

Digital marketing can be used for acquisition, nurturing, building customer loyalty, and branding. Review metrics regularly, so you know where you are excelling and where you need work to become a leader in this high-impact, high-demand space.

Learn more about how to get digital marketing working for you in our co-authored white paper with Harvard Business Review (HBR), Designing a Marketing Organization for the Digital Age.

If you’re looking for further inspiration, read our guide to 8 Essential Digital Marketing Strategies here.

 

Frequently asked questions about digital marketing.

What skills do you need for digital marketing?

This depends on what job role within digital marketing you’re interested in. Generally speaking, a sharp, incisive mind with an eye for detail is really useful for analytical roles — such as SEO — as is an understanding of data. Creativity and imagination are great for content, social media and strategy positions.

What is a digital marketing strategy?

A digital marketing strategy is the creation of an overarching plan to achieve certain goals and aims for a business. It will draw on cross-channel planning — PPC, social media, content creation, SEO — across a period of time to deliver the best results for your business. It can be flexible if you need to tweak plans.

Why do I need digital marketing?

If you haven’t yet embraced digital marketing, what are you waiting for? Businesses that don’t use digital marketing run the risk of missing out — it’s where your customers are, and definitely where your future customers are. According to research from RetailDive, 87% of shoppers start looking for products online.