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Digital marketing

Digital marketing definition

Digital marketing consists of internet-based marketing activities, such as online advertising, websites, social media and emails used to promote a business and learn about customers.

Digital marketing is marketing that uses the Internet to reach customers and learn about them.

Online advertising, websites and emails give businesses a way to connect with prospects and existing customers, gain insights into marketing efforts and learn how well clients’ needs are being met.

Neglecting digital marketing could lead to lost opportunities for your company and potential clients migrating to the competition. “Being online means having your business be where your customers and prospects go,” says David Girolami, Senior Business Advisor with BDC’s Advisory Services who advises companies on online marketing.

“Even if you don’t sell anything online, digital marketing is a cost-effective way to help customers learn about you. It can give you valuable knowledge about what drives them and how to serve them better.”

Digital marketing offers an effective way to learn about and test marketing tactics, get to know your customers and obtain feedback.

What are the different types of digital marketing?

Digital marketing is often divided into the three categories: paid, owned and earned.

1. Paid

Paid digital marketing comprises online ads and other paid digital content. These can appear on a variety of platforms, such as:

  • search engines
  • social media
  • display (the website of another organization)
  • through affiliates and influencers (paying a commission or other remuneration for the marketing of your products)

Online ads are often known as pay-per-click ads because the advertiser pays when the ad is clicked.

2. Owned

Owned digital marketing is marketing through a company’s own online properties or content, such as:

  • websites
  • social media platforms
  • blogs
  • online publications
  • apps
  • emails

An important aspect of owned digital marketing is search engine optimization, which helps your online platform become more visible to existing and potential customers.

3. Earned

Earned online marketing is unsolicited promotion of your business and products by customers, product reviewers and others. “Earned media is a brand’s value gained from customer experience, such as through sharing, reposting or reviews,” Girolami says.

All three types of digital marketing are important for businesses. “No single type of digital marketing tactic guarantees success,” Girolami says. “They must all be used in an integrated, measured and curated approach, and through a marketing strategy.”

Digital marketing overview

The Venn diagram below details what the three types of media that digital marketing offer and where they intersect.

Why is digital marketing important for a small business?

Digital marketing is vital for smaller businesses because the Internet is a crucial way for people to communicate, gather information and buy things.

Non-digital marketing, such as ads and other traditional marketing, is still effective and can play a role in concert with digital marketing. But for companies with limited resources, digital channels can be a cost-effective starting point.

“Digital marketing offers an effective starting point to learn about and test marketing tactics, get to know your customers and obtain product or service feedback for a relatively small cost of entry, timely results and good visibility on the effectiveness of your efforts,” Girolami says. “It’s very useful and accessible for smaller companies.”

A digital marketing strategy tells you how to target the right audience in the right environment, answering the right questions at the right time in the right mindset.

What is a digital marketing strategy?

A digital marketing strategy is a subset of a company’s broader marketing strategy, which in turn should tie into an overall business strategy.

A digital marketing strategy shouldn’t be confused with a digital marketing plan. The latter outlines the specific tactics that will be used to achieve the strategy (see details on digital marketing plans below).

“People often confuse the tactics with the strategy, such as saying something like ‘We need to do social media; that’s the strategy,’” Girolami says. “But you need to ask yourself some questions: ‘Why do we need Instagram for our product or service? Why not LinkedIn or Youtube?’ The strategy tells you how to target the right audience in the right environment, answering the right questions at the right time in the right mindset.

“You should not skip these steps or go straight to sending emails, posting social media or paying for ads online. You risk not reaching, or even pushing away, prospects and customers, and not seeing the return on those investments. Customers and prospects will use those same digital channels to express discontent, or they’ll just block you and not respond at all.”

Your digital marketing strategy describes your target market and competition, how you will address customer needs, the objectives of your marketing efforts and the resources available to them. It builds an essential framework to guide your marketing tactics and should include the following components:

1. Market research

Market research should cover information such as:

  • prospects’ needs, preferences, buying behaviours and price sensitivities
  • competitor strengths, weaknesses and market share
  • emerging trends

2. SWOT analysis

You need to review your own strengths, weaknesses, opportunities and threats (known as a SWOT analysis).

3. Customer profile

Develop profiles of your most important three or four customer segments. Give details on these customer profiles, such as:

  • who they are
  • what they want and how you’ll bring them value
  • how they make purchasing decisions
  • where they’re active online
  • how much they buy and through what channels

“You’ve got to really understand your customers at a granular level and work through their mindset,” Girolami says. “What do they need to accomplish? What are their pain points in trying to accomplish that? And what are their expected gains from finding the right solution or provider for that?”

4. Set goals and resources

Decide on objectives for your marketing strategy, and then set aside an appropriate budget and other resources to achieve them.

The objectives can overlap with the goals in your business strategy and may include targets for:

  • market share
  • number of customers
  • customer retention rate
  • average purchase size
  • digital engagement

How to use digital marketing for your business and create a digital marketing plan

Use your digital marketing strategy (see above) to develop a digital marketing plan that outlines the specific tactics you’ll employ to achieve your goals.

The marketing plan should include:

  • a schedule of marketing activities in each paid and owned digital channel (see below for content ideas)
  • who is responsible for carrying out each activity
  • marketing KPIs (key performance indicators)
  • goals for each activity

Remember to coordinate your digital marketing activities with your efforts in non-digital channels.

Gone are the days of blasting promotional messages. If you provide useful content along a customer’s path—without always expecting it to convert—you’re more likely to attract their interest and begin to introduce your value.

How do you create digital marketing content?

Successful digital marketing content typically focuses on providing value to current and prospective customers. This can include:

  • educational value, such as answers to commonly asked questions, how-to videos or other informative content
  • entertainment value, such as humorous and fun posts
  • motivational value, such as inspiring messages and success stories

Digital content should generally avoid the hard sell. “Gone are the days of blasting promotional messages,” Girolami says. “Online, you should focus less on lead generation, namely converting customers, and more on demand generation—that is, getting people interested in your company.”

Think about the kind of online content that engages you before buying something. “People are very savvy now,” Girolami says. “They can recognize when something’s an ad or when it’s content that has value for them. In the pre-purchase stage, they’re not even thinking about shopping yet. They’re in the discovery phase, just exploring solutions to pain points and needs. If you provide useful content along their path—without expecting it to convert—you’re more likely to attract their interest.”

Here are some other tips to do this:

1. Be strategic

Don’t make the mistake of rushing into online marketing without a strategy and plan. That can not only lead to wasted effort and resources, but also hurt your brand and sales. Instead, develop a digital marketing strategy and tactical marketing plan to guide your efforts (see above).

2. Research existing content

Research what kind of content is already out there. What are your competitors and companies you admire doing? Also, instead of starting from scratch, review existing content you have that can be reused or adapted for online use.

3. Tailor your content

Adapt your content to the platform and audience. “You have to use language that your customers speak,” Girolami says.

“Also, remember that each platform has a unique approach that requires a tailored strategy to achieve success. For instance, TikTok demands creativity and a focus on trends, while LinkedIn is geared toward a professional audience. The type of content you create should match the platform and its intended audience.”

Similarly, people won’t engage with your content if it offers little value to them. “If a company sends me a super-generic email about everything they offer, I’ll either ignore it or eventually unsubscribe,” Girolami says.

4. Foster engagement

Think about ways to encourage audience contributions and feedback. For example, you can ask visitors to post comments, stories, photos and videos on your website and social media pages. You can also attract followers with surveys and contests.

5. Put a human face on your business

Use photos and videos to give people a behind-the-scenes look at your company and events. Have fun and be creative, and find something unique to offer.

6. Stay up to date

The online world evolves quickly. What made sense last year may not today. To stay relevant, it’s important to keep up with the latest trends and technology. Artificial Intelligence (AI) tools and platforms are a current example. You don’t need to jump right into them but you do need to monitor what tools can help you with more efficient ways to execute and manage your digital marketing efforts.

7. Consider social commerce tools

Some social media platforms offer tools for buying products directly from your “owned” social site, instead of having your visitors move on to someone else’s or even your own website such as a Shopify site. Such direct purchases can improve conversion rates

8. Explore a variety of platforms

Don’t limit yourself to the more commonly used platforms like websites, social media and email. Also consider the following:

  • Information portals, such as Quora and Reddit. “By placing meaningful and smart answers to people’s questions on these portals, companies can lead them back to their product or service,” Girolami says.
  • Podcasts that your company can sponsor or develop.
  • Publishing platforms, such as Medium and Substack, to publish or sponsor long-form content on topics relevant to your audience.
  • Video, to which online users overwhelmingly gravitate. Consider offering video content on your online properties and creating a YouTube channel.
  • Chatbots, which are increasingly used as part of “conversational marketing,” answering questions and helping customers resolve issues.
  • Voice SEO. As virtual assistants become more prevalent, companies will need to consider how to optimize for verbal Internet searches.
  • Webinars and other virtual events took over from in-person happenings during the pandemic, and they’ve remained popular. Consider how you can offer or participate in online events such as webinars, virtual trade shows, live forums and Q&A sessions, to connect with prospects and customers.

9. Be patient

Online marketing is a long-term process, not a one-time activity. It takes time and sustained effort to build an engaged community around your business or product.

How to measure the effectiveness of a digital marketing campaign

Measuring the effectiveness of your digital marketing campaigns is essential. The good news is that it’s easier to measure the results of digital efforts than those of conventional marketing.

Your digital marketing plan (see above) should include key performance indicators and goals for each of your activities. Here are some of the most common ways to measure the effectiveness of your activities:

1. Return on investment

You can measure return on investment (ROI) by tracking the cost of different activities and comparing it to the revenues generated from them. This can help you allocate resources for efforts that lead to a greater return. Be sure to include all costs associated with an activity, including time employees spent creating and managing content. Also continue monitoring, since ROI can change as trends and algorithms evolve.

It’s also useful to measure customers’ lifetime value. “You should track whether customers are making repeat or continuous purchases or if they’re becoming interested in other products that you offer,” Girolami says.

2. Website analytics

You can use free or low-cost analytics tools such as Google Analytics to track metrics such as website traffic, bounce rates and conversion rates.

3. Social media metrics

Social media platforms offer a variety of useful metrics to track, such as follower numbers, traffic volume and engagement.

It’s useful to integrate all your marketing data into a single dashboard. For example, customer data platform software can aggregate your marketing performance data with other business data and help you monitor and improve your effectiveness. Businesses also increasingly use AI tools to analyze marketing data and find ways to optimize performance.

Adapting to privacy rule changes

It’s important to be aware of privacy rules when collecting consumer data. Apple, Google and other companies have announced or are considering privacy changes to phase out or restrict cookies and other tools used to track consumer data for marketing purposes.

The changes may make it harder to track the effectiveness of some activities. “As rules evolve, it’s important for businesses to make sure their marketing personnel and outside contractors stay up to date on what activities are allowed in your jurisdiction,” Girolami says. “You may have to change how you gain consent from customers, and capture and use their data.”

You should also keep an eye on your ad performance to monitor for any impacts from rule changes. Businesses can also adapt by harnessing their own customer data and being more resourceful about using it to its full potential.

Next step

Set up your road map for finding and keeping customers with the free BDC Marketing plan template.

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