3.2 Digital marketing defined.
3.3 Reasons to use digital marketing.
3.4 Search engines and being found.
3.4.1. Using Google to reach customers.
3.4 Using social media to engage.
3.4.1. Using Twitter as a communication tool
3.4.2. Using Facebook as a communication tool
“There are no barriers to access. Today’s shoppers carry access in their pockets.”
Jim Lecinski,
Author of ZMOT, Winning the Zero Moment of Truth.
3.1 Introduction
In recent years the number of online shoppers has grown; in 2021 more than one out of every four people in the world has shopped online. 73% of all people (older than 12) living in the EU-27 has bought online at least once in the previous year. The Netherlands has the most people buying online (91%), followed by Denmark (90%) and Germany (87%). Outside the EU-27, the UK counts 92% shoppers online[1].
Figure 3.1 – Percentage of people buying online EU and UK (Lone, 2021)
The age group 26-35 years old has the largest percentage online buyers (90.2%) but also in the age group 65 years and older many people have shopped online. Both men and women buy the same types of products online, except men shop slightly more than women. Only a few types of services and products are more popular for men (computer and gaming related stuff) where more women (percentagewise) buy shoes, and accessories. As a nuance to this stereotype… the top four products and services bought online by men and women alike are the same and men too most often buy shoes, clothing and accessories online (table 3.1).
Figure 3.2 – Percentage of people shopping online (CBS, 2021)
Table 3.1 – buying behavior of men compared to women (CBS, 2021)
According to 56% of the respondents in this survey of Statistics Netherlands (CBS) online shopping is not without hassle though. With a number like that, you would expect business owners to jump into this market as soon as they could to offer better value to customers. The interesting thing is that the numbers have worsened in the last couple of years; in 2017 the number of shoppers with difficulties was 39%! The top three problems these online buyers encounter stayed the same: the number one issue they have is late delivery (40%, was 23% in 2017), difficulties ordering or paying online (19%, was 12% in 2017), and receiving incorrect or damaged items (13%, was 9% in 2017).
It makes you wonder, right?
Figure 3.3 – contents of websites
In a 2017 survey (see figure 3.3) it is found that in the Netherlands more than 90% of all companies have a website but the number of businesses that actually offer goods and services online is much less (35%). Websites are more like a signpost to let potential customers know that the company exists. Hopefully this has changed in 2022…
The introductory quote by Jim Lecinski, vice-president US Sales & Service at Google, makes it clear that online business – even using a mobile phone – is getting more and more important (box 3.1). So a quick peek into digital marketing is the least we can do in a book on entrepreneurial marketing. In this chapter we will define digital marketing and look at the similarities and differences between digital marketing and (entrepreneurial) marketing. We will discuss five reasons companies use digital marketing and then focus on the use of search engine marketing and social media marketing as one of the tools SMEs can use.
Box 3.1 – The first device to ‘call’
Google’s Chief ZMOT Evangelist Jim Lecinski, did research on customer behavior and wrote a book on what he calls the Zero Moment of Truth: what is the absolute first device customers consult when they are looking for more information… their mobile phone. If they are not able to find you there you have lost the customer before they even reached a shopping location.
Video: The Zero Moment of Truth
3.2 Digital marketing defined
Digital marketing is more than just using the Internet to advertise your products or services. In previous chapters we have learned that marketing is about enabling sales through thinking about who the customer is and what he or she needs and wants and then using different tools to offer value to the customer. So digital marketing is also more than a Facebook ad on a timeline or a Google advertisement in the list or search results.
Digital marketing, in this book, is the use of digital tools in order to “sell more products or services, to more customers, more often, for more money, and at the same time being more efficient in order to create more profit.” For each step along the way businesses can use digital tools; the product or service itself can be digital, the pricing strategy can be digitized, the place to find and buy the product or service might be online, and the promotion can focus on using digital channels.
| Digital marketing mix elements | Examples: |
| Digital products | e-books, streaming music services, mobile apps, e-tickets, etc. |
| Digital price | Auction pricing |
| Digital place | Webshops, Internet channels (to upload or download), Internet listing (search engine results), etc. |
| Digital promotion | Online banners, popups, search engine ads, social media ads, branded apps, location-based promotions, etc. |
The words digital, online, Internet and social media marketing are often used interchangeably. This is not correct though; digital can be anything that is not analogue and does not have to be online/ on Internet. A digital camera is not an online camera, so a digitally filmed advertisement screened in a cinema isn’t either. Not everything online is social media; a company’s website is not a social media channel (unless the company is called Facebook). In figure 3. 4 this is visualized, each type of marketing is part of a larger type.
Figure 3.4 – three types of marketing
If we have three types of marketing, we might need three definitions. Digital marketing has just been defined as
“Selling more products or services, to more customers, more often, for more money, and at the same time being more efficient in order to create more profit using digital tools.”
Online marketing is connected to the possibilities of the Internet and so the easiest way to define it is:
“Selling more products or services, to more customers, more often, for more money, and at the same time being more efficient in order to create more profit through the Internet.”
And so, social media marketing is just one small tweak to the definition:
“Selling more products or services, to more customers, more often, for more money, and at the same time being more efficient in order to create more profit using social media platforms.”
3.3 Reasons to use digital marketing
The main reasons companies use digital marketing are to grow sales, to add value to customers, to get closer to customers, to save costs, and to extend their brand online (Chaffey and Smith, 2017: 23; Taiminen and Karjaluoto, 2015: 643). Chaffey and Smith call this the 5 S’s of digital marketing: sell, serve, speak, save, and sizzle (figure 3.5).
Figure 3.5 – Five reasons to use digital marketing (Chaffey and Smith, 2017)
Recent research found three groups of SMEs, each group being more immersed in digital marketing, in particular social media marketing. The first group only uses the social media tools to sizzle, extend the brand and company presence online (52% of respondents[2]). The second group uses social media tools to sizzle and save, to be present online and reach its communication objectives at lower costs (28% of respondents). The third group uses social media tools to sizzle, serve and sell, they are present online to add value for the online customers they have in order to sell more products and services to them (20% of respondents). None of the groups embraced all five objectives and none actually focused on using social media to speak with customers; to create a two-way dialogue with its customers and/or learn more about them by monitoring them online.
3.4 Search engines and being found
The largest and most dominant search engine – at the moment – is Google with almost 80% of all searches on desktops and 96.1% on all tablets and mobile devices (netmarketshare.com). Google is most probably the customer’s first place to look for information and therefor a company’s ‘zero moment of truth’ occurs here. In this paragraph we will learn more about using Google as a communication tool.
3.4.1. Using Google to reach customers
Read and watch the following links:
- Overview
- Benefits
- How it works
- Costs
https://www.youtube.com/user/learnwithgoogle
3.4 Using social media to engage
Kaplan and Haenlein define social media as ‘a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content.’ Kietzman et al. define social media as ‘mobile and web-based technologies to create highly interactive platforms via which individuals and communities share, co-create, discuss, and modify user generated content.’ So it seems that social media is all about Internet related applications that make it possible for users to create and share content.
More and more SMEs are using the tools offered by companies like Twitter, Pinterest, Instagram, and Facebook. In the coming years even more possibilities will arise like using WhatsApp, Snapchat, or maybe even playlists on Spotify. Social media are personal and impersonal communication channels businesses can use in order to obtain their business objectives. This paragraph refers to online resources SMEs can use to learn more about these the communication tools of Twitter and Facebook.
The basic similarity between all these tools is that the business owners can set up the campaigns, determine the budgets and monitor the results themselves. The costs of the campaigns are based on results like click-through-rates and the bidding for the keywords by the competition.
3.4.1. Using Twitter as a communication tool:
Read and watch the following links: Twitter Business basics
- Overview
- Create a profile
- Build content
- Grow the number of followers
- Measure the results
3.4.2. Using Facebook as a communication tool:
Read and watch the following links: More about Facebook
- Overview
- Setting up ads
- Targeting the ads
- Optimizing the ads
3.5 Conclusion
Digital marketing is not a completely new form of marketing, it is mainly a new set of tools in order to grow sales, to add value to customers, to get closer to customers, to save costs, and to extend their brand online. The fact that digital tools make it relatively cheap and easy to reach a large group of customers might account for the interest many business owners have them. At the same time we see that many companies do not use the tools to their full advantage. This might be the reason that smaller companies still cannot win from larger, less resource constrained competitors at the zero moment of truth.
References
Chaffey, D., & Smith, P. R. (2017). Digital Marketing Excellence: Planning, Optimizing and Integrating Online Marketing. Routledge.
Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons, 53(1), 59-68.
Kietzmann, J. H., Hermkens, K., McCarthy, I. P., & Silvestre, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business horizons, 54(3), 241-251.
Lone, S., Harboul, N., & Weltevreden, J. W. J. (2021). 2021 European E-commerce Report.
Meer, P.O. van der, J. de Jong and D. Smetsers (2017). Zakelijk Gebruik van Social Media Marketing. Kamer van Koophandel and Utrecht University School of Economics.
Meeuwes, P., “Nooit meer de deur uit.” Het Financieele Dagblad. (2 januari 2016 zaterdag ): Date Accessed: 2017/05/14.
Taiminen, H. M., & Karjaluoto, H. (2015). The usage of digital marketing channels in SMEs. Journal of Small Business and Enterprise Development, 22(4), 633-651.
https://www.netmarketshare.com/search-engine-market-share.aspx?qprid=4&qpcustomd=1
https://longreads.cbs.nl/nederland-in-cijfers-2021/wat-kopen-we-online/
[1] Due to the use of different surveys (Lone/EU versus CBS), the numbers don’t always match. It is an indication of the size of the effects though.
[2] The survey of the Utrecht University School of Economics and Dutch Chambers of Commerce was sent to 4091 business owners. 1879 responded (45.9%) and 1519 of these said they used social media (80.1%) (Van der Meer et al., in press)