What Digital Marketing is
Digital marketing is the overall act of promoting products and services through the internet and online-based channels. These channels include email, landing pages, mobile devices, websites, search engines, social media, etc. Basically, digital marketing is any form of marketing involving the use of electronic devices connected to the internet in order to connect with potential customers. To some extent, digital marketing relies on the same principles as traditional marketing.
With the advent of the internet, most companies consider digital marketing as an improvement of traditional marketing and a new way of approaching consumers to understand their behavior and connect with them.
This write-up looks at the intrinsic details of digital marketing to help you understand how it works. This includes a brief history, the comparison between digital marketing and traditional marketing, how technology has impacted digital marketing, the users, ups and downs, where the market stands today, the future of digital marketing, and more. Let’s start with a brief history of digital marketing.
History of Digital Marketing
Digital marketing dates back to 1971 when an American programmer known as Ray Tomlison sent the first email. However, the proliferation of digital marketing came in the 1990s after the advent of the internet. This was the same time the Archie search engine was created as an index for FTP as well as the birth of the Web 1.0 platform.
Although Web 1.0 could allow people to search for information, it did not permit them to share it over the internet. As a result, marketers were unsure about Web 1.0 and its ability to be used as a marketing platform.
However, due to the popularity of personal computers, companies started using strategies like database marketing instead of a list broker. Database marketing is a type of direct marketing.
The first clickable online banner came into the limelight in 1993 and was purchased by AT&T on HotWired.com in 1994 for their advertising. As a result, new technologies such as Alexa, HotBot, and LookSmart entered the marketplace, which increased the number of internet users. It also prompted companies to optimize their websites in a bid to rank higher in search engines.
1994 is the same year Yahoo came into being. The web service provider received almost 1 million hits in its first year of development. After the birth of Google in 1998, Yahoo introduced the “Yahoo web search,” while Microsoft launched the MSN search engine.
The emergence of the iPhone in the 2000s led to an increase in the number of people searching for products and making decisions before consulting salespeople. However, a drastic change in the digital marketing industry took place in 2007 when market automation was created. This helped companies to automate their standard marketing processes, launch multi-channel marketing, and personalize customers’ information.
With the proliferation of social media sites such as MySpace, Twitter, and Facebook, companies started to realize that they could market their products and brands through these platforms.
Market Size of Digital Marketing
Digital marketing is usually determined by the compound growth annual rate (CAGR). Marketers are keen on taking advantage of digital marketing because they know it represents the future of their businesses. According to a 2022 survey by CMO, marketers were ready to allocate 57% of their budget to digital marketing. Moreover, the global digital marketing software was valued at $65.33 billion in 2022 and is projected to record a CAGR of 19.4% between 2023 and 2030.
In 2022, the global digital marketing size hit $321 billion, and it is projected to reach $671.68 billion in 2028, which is a growth of 13.1% CAGR. These numbers are expected to be high due to the surge in the population of content creators and consumers using digital channels.
Mobile advertisement expenditure is driving the digital marketing industry. Experts expect the global mobile advertising market to record approximately $289 billion between 2023 and 2026 due to the increased usage of smartphones.
Digital Marketing vs. Traditional Marketing
Traditional marketing has existed for ages, while digital marketing gained traction a few years back. These two types of marketing are unique in their own ways and play important roles in the marketing industry.
Their main difference lies in how they convey marketing messages to the target audience. This segment looks at the most common digital marketing and traditional marketing channels.
Channels Used by Digital Marketers to Pass Messages
Channels used by digital marketers have evolved with time to help them deliver their messages successfully. Here are the most common channels used today by digital marketers to promote products:
- Pay-Per-Click Advertising: In this advertising model, the advertiser is required to pay the publisher each time an advertisement is clicked. PPC adverts can be set up on platforms like Twitter, Bing, Facebook, Linkedin, or Pinterest.
Besides, platforms such as Facebook Ads or Google Ads allow advertisers to segment the target users based on demographic, including age, location, particular interests, and gender.
- Website Marketing: A website is a powerful digital marketing tool by itself. It can be used to execute various online marketing campaigns. For instance, it can be used to represent a service, product, or brand. Websites are usually made easy to use and optimized to fit various devices.
- Email Marketing: Email marketing is a form of direct marketing. It is among the most powerful marketing tools since it allows companies to get in touch with their potential consumers directly.
- Content Marketing: This method involves creating and sharing online materials, including blogs, photos, social media posts, and videos, to stimulate interest in a certain product.
The method does not explicitly promote a brand. It aims to reach potential customers through content creation. The content can be promoted through email marketing, social media, or search engine optimization (SEO) using content marketing tools like blogs, online courses, ebooks, podcasts, webinars, and infographics.
- Affiliate marketing: This advertising model involves paying commissions to third-party publishers to generate traffic to your products and services. It is among the oldest forms of marketing that has been improved by the advent of the internet. Companies like Amazon spend millions of dollars each month on websites that sell their products.
- Search engine optimization: This method aims to increase the organic search engine rankings of your website. It helps capture demand, build awareness, and drive traffic to your website.
In SEO best practices, brands seek the services of SEO agencies to acquire link-building services. Such agencies manage links in your content and leverage relevant keywords to generate unpaid, organic traffic.
- Social media marketing: The main aim of social media marketing is to build a brand’s awareness. Social media can help your company build customer relationships to boost audience engagement and establish trust. Usually, brands and companies alike rely on social media marketing strategies such as promoted tweets and posts to generate leads.
- Video marketing: this is another huge digital marketing channel popular today. Around 86% of digital marketers use video marketing to pass their messages.
YouTube is among the biggest video marketing platforms today. Due to its popularity, people turn to YouTube videos to learn new things or make a decision before buying something.
Other platforms that accommodate video marketing include Instagram, Facebook, and TikTok. You can reach a broader audience in your marketing campaigns by integrating video marketing with SEO.
The channels mentioned above rely on Key Performance Indicators (KPIs) to measure their performance. KPIs are quantifiable methods used by PR agencies to measure a company’s long-term performance. Some of the most commonly used KPIs today by PR firms include;
- Clickthrough rates
- Conversion rates
- Website traffic
- Traffic on social media
Channels Used in Traditional Marketing
Although traditional marketing doesn’t rely on the internet, it is a crucial part of many enterprises. Usually, businesses rely on traditional marketing depending on the target demographic and business model. Here are some of the commonly used traditional marketing communication channels:
- Broadcasting: This method involves transmitting information through mediums such as Television or radio. It is one of the most common traditional marketing channels used today because it can effectively reach a local audience. It requires marketers to create compelling commercials to increase awareness of their brands.
- Print media: As the name suggests, this type of marketing involves advertising products and services through channels like magazines, newspapers, books, and journals. Public relations campaigns leverage print media methods, such as fashion magazines for women, to target a certain demographic.
- Out-of-home marketing: This marketing channel involves communicating to customers outside their homes. The communication channel mainly relies on visuals rather than words to pass a message. Excellent examples of out-of-home marketing channels include billboards and poster signs.
- Direct mail: This type of direct marketing involves sending commercial literature to potential customers by postal mail. The information is directly sent to specified target audiences to create and build awareness about a brand or a product. Examples of direct mail marketing methods include letters, catalogs, brochures, and flyers.
- Telemarketing: This method involves marketing products and services over the phone. Companies hire public relations specialists to help in marketing activities, including making phone calls. Besides, marketing products and services telemarketing can be used to gather data for lead generation purposes.
Digital Marketing vs. Inbound Marketing
Inbound marketing uses marketing campaigns that can attract customers. This marketing methodology relies on precise steps and best practices to create valuable content and experience that can lead to customers engaging with your brand.
In this case, you don’t have to contact consumers directly but instead focus on earning their trust. Excellent examples of inbound marketing include blogging, whitepapers, podcast, webinar, content marketing, SEO, and opt-in email marketing.
On the other hand, digital marketing is a broader term used to refer to digital elements that help brands connect with their customers. This can be graphics, visual overhauls, or logos.
The opposite of inbound marketing is outbound marketing. This marketing strategy relies on traditional paid media to pass marketing messages.
How Technology Has Impacted the Digital Marketing Industry
Various businesses have different goals in the digital marketing space. And since marketers must remain top-of-mind for customers, they have to keep up with the latest technology developments. Here are three ways technological advances have disrupted the marketing world:
1. Artificial Intelligence (AI) has Helped Companies Personalize Customers’ Experience
Artificial intelligence has helped many companies boost their revenues. AI allows advertisers to optimize digital marketing campaigns, market performance, channels, and audience.
Companies use AI to tailor results to individual consumers. Personalized efforts help deepen the business-consumer relationship. Luckily, AI can help collect customer data and identify what a certain demographic is more likely to purchase. In fact, around 91% of customers would prefer to shop with companies that provide relevant recommendations.
Through the help of AI, a brand like Thrive Market, which is an online grocer, divides its products into different categories, i.e., gluten-free, vegan, and low-glycemic.
2. Cross-Platform Tracking
Cross-platform tracking or cross-device tracking refers to a set of technologies that work together to match activity across different devices to the same user. It helps monitor the behavior of users as they switch between platforms such as website browsers, mobile devices, desktop computers, etc. based on the device you are using, you are more likely to switch between devices 21 times per hour.
As such, marketers leverage the cross-platform tracking technique to optimize advertising campaigns. Based on the device a person is using, brands can track the same user across different devices to vary their messaging strategies. It helps brands collect data and know which marketing campaign strategies are doing well and the ones that need to be changed or altered.
3. Privacy Updates are Disrupting Social Media Advertising
There is a need for market campaign management professionals to understand the correlation between technological advancement and consumer expectations. AI is rapidly changing and reshaping how marketers utilize various strategies.
For instance, Apple iOS 14.5 update allows users to turn off ad tracking within its apps. Therefore, marketers relying on the cross-platform technique will have to make new adjustments in the future to keep their advertising campaigns afloat.
6 Industries that Need Digital Marketing to Scale them Higher
In the current competitive market, the impact of digital marketing spreads across almost every industry. Therefore, it is essential to leverage the attention of your target audience to stand out from the crowd. Here are the industries that can use digital marketing to achieve greater heights.
- Healthcare: There exists a need for credible health information online. According to NCBI, a considerable amount of people google their symptoms online. That means you can monetize this problem via digital marketing channels and interact with your future clients.
- Food: Food channels on YouTube record around 280% growth every year. Food content is both entertaining and informative. Therefore, you can use digital marketing to generate leads for your brand through various online marketing strategies.
- Entertainment: Data-based approach in online marketing can help the entertainment industry become more aware of customer needs. For instance, Netflix collects data and analyzes consumer behavior to generate customized offers to them via email. Besides, search companies can use social media to create a buzz when promoting movies and music.
- Education: The pandemic proved that the education sector could rely on web marketing to stay afloat. For instance, educational institutions can create content outside their curriculums to educate people about appropriate careers. Besides, universities and colleges can rely on social media platforms like LinkedIn to connect with potential clients and broaden their reach.
- Ecommerce: Digital marketing can help the ecommerce industry to continue thriving. There are no limitations to the number of strategies players in the e-commerce industry can leverage to promote their products.
For instance, you can pair your web page and social media to your startup business in order to stay ahead of your competitors. You can also rely on techniques such as retargeting and Google ads in your e-commerce startup when advertising products to customers.
- Real estate: For the longest time, the real estate industry has relied on word-of-mouth recommendations. However, realtors can leverage digital marketing tools to promote their products and be ahead of the curve in the real estate space.
Ups and Downs of Digital Marketing
Although digital marketing has helped scale many industries higher, it has a few inherent drawbacks. Let’s look at the most significant advantages and disadvantages of digital marketing in 2023.
Advantages of Digital Marketing
- Lower marketing costs
- Increased engagement between brands and customers
- Global audience outreach
- Improved market analysis due to measurable and trackable results
- Improved conversion rates
- Personalization of customer needs
Drawbacks of Digital Marketing
- It requires training in digital skills
- Cut-throat competition
- It can be time-consuming
- Security and privacy concerns
- Negative feedback and complaints
Where the Digital Marketing Market Stands Today
According to a 2022 Statista report, the average daily social media usage of internet users globally is around 147 minutes per day. With the increased number of people spending time online, there is an increase in the number of devices connected to the internet. As such, more businesses are focusing on their web stores to meet the growing demand for tech-savvy customers.
According to Business Town, around 50% of mobile searches result in purchases. However, digital marketing is yet to reach its full potential considering the fact that technology is still evolving.
The Future Growth of Digital Marketing
In the coming years, content creation will continue to grow richer, which means the future of digital marketing is seemingly bright. Technology will also continue reshaping the marketing scene since it is an ever-growing landscape. Therefore, savvy marketers must keep up with these developments by creating new strategies rather than succumbing to successful digital marketers.
Besides, there are high chances innovations such as Virtual Reality and Augmented Reality will reshape digital marketing. By leveraging artificial intelligence alongside other technologies, businesses will be able to offer a more immersive e-commerce experience to consumers. This will also help them realize more growth and bring in more revenue. Last but not least, digital marketers will be able to predict the future needs of their customers.
Although the marketing industry is yet to reach its full potential, digital marketing channels have changed almost every part of it. There is no doubt digital marketing is here to stay.
Public relations specialists are working hard to keep up with the ever-evolving technology to scale their businesses higher. To succeed in digital marketing, they have to accept that change is a constant factor. Therefore, they must navigate the industry with every resource at their disposal. Read more about the big 9 digital marketing trends here.