IDM #2 – The Impact of Digital Marketing on Business

I’m currently revising for my IDM exams and thought a good way to learn was by creating posts on my blog, I hope you find them useful. Disclaimer: most of the ideas and opinion to follow comes from the IDM course literature & tutors themselves.

The impacts of the internet and digital media differs dependant on the products or markets. For instance the low cost travel market (easy jet, Ryan Air) realise almost 90% of their revenue online.

I quote Antony Mayfield in saying “The internet is like an expanding sphere disrupting and absorbing everything it touches” at the moment it’s touching our lives and relationships, which we call social media.

It has barely touched other areas, but no doubt will. For instance consumer products such as groceries – most supermarkets achieve less than 5% of their turnover online each year. Tesco the UKs largest supermarket only receives 4% of its revenue online.

Browsing Vs Buying – This is market and product dependent.  Higher value items tend to be browsed online and purchased offline. There are exceptions though, take the sale of art on EBay for instance.

In comparison low value and standardised items tend to be purchased online much more.

5 Benefits of the Internet on Business; To Sell (Grow Sales, Serve (add value), Speak (get closer to customers , Save (Costs) and Sizzle (Extend the brand online).

Source: 5 S’s (Smith and Chaffey 2005)

Digital aims to achieve direct response and is directly measurable and strategic, although even digital has some distinct measurement challenges (Attrbution etc).

Digital gives greater opportunity to achieve brand awareness and favourability, inform the buying decision, measure how recipients interact more precisely with your communications and test and optimise creative, offers and targeting.

Issues
Although digital has lots of benefits there are some draw backs that need to be considered;

• Service quality
• Channel conflicts
• Implementation
• Organisational digital strategy

Chaffey et al. (2003) identify eight key changes in communications characteristics as marketers move from exploiting traditional to new media:

1. From push to pull
2. From monologue to dialogue
3. From one-to-many to one-to-some and one-to-one
4. From one-to-many to many-to-many communications
5. From ‘lean-back’ to ‘lean-forward’
6. Form of tools changes
7. Increase in communications intermediaries
8. Integration becomes more challenging

Image Credit
Expanding Sphere: Flickr user  TopTechWriter.US
Audience: Flickr user Stig Nygaard

Resources
Dave Chaffey.com
The IDM

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