Digital

Marketing
Management
DMM - Session 5

Digital Marketing Strategy (Part 2)

 Digital marketing strategy - definition

• Definition of the capabilities and strategic initiatives to support marketing

and business objectives an organisation should deploy to harness digital
media, data and marketing technology to increase multichannel
engagement with their audiences using digital devices and platforms.
Where DM stands
 The SOSTAC® planning framework

• Situation analysis - where are we now?

• Objectives - where do we want to be? This can include a vision for digital channels,
and also specific numerical objectives.
• Strategy – how do we get there? Strategy summarises how to achieve the
objectives.
• Tactics - defines the usage of tactical digital communications tools. This includes
specific details of the marketing mix.
• Actions - action plans, change management and project management
• Control - looks at the use of management information
 Types of strategies

Prescriptive strategy Emergent strategy

The three core areas of strategic Strategic analysis, strategic
analysis, strategic development and development and strategy
strategy implementation implementation are interrelated and
are
are linked together sequentially.
developed together in a more agile
fashion.
 Situational Analysis
Assessment of internal capabilities,
resources and processes of the Investigation of the wider
company environment in which a company
and a review of its activity in the operates,
marketplace. Consideration of the including economic development,
immediate competitive environment government regulations, legal issues
(micro-environment) including and
customer demand and behaviour, taxation, social and ethical issues,
competitor activity, marketplace e.g. data protection and consumer
structure privacy. (Macro-environment)
and relationships with suppliers and
partners. (Micro –environment)
Digital Marketing capability model
 Internal Audit for Digital Marketing
• Review current contribution of digital marketing activities within the
organization.
• Assess effectiveness, performance measurement, and web analytics.
• Business Effectiveness:
• Financial or commercial contribution from digital channels.
• Online leads, sales, profit, and offline-influenced leads and sales.
• Cost-benefit analysis of digital experiences and communications.
• Marketing Effectiveness:
• Review of leads, sales, customer retention, satisfaction, and loyalty.
• Online market share, brand enhancement, and customer service.
• Digital Marketing Effectiveness:
• Measures of digital media against volume, quality, value, and cost.
• Evaluation of audience profile, experience, and customer satisfaction.
Internal Audit for Digital Marketing…
• Key Performance Indicators (KPIs) for Online
Presence
• Unique visitors.
• Total numbers of sessions or visits.
• Repeat visits per individual.
• Duration of visits.
• Conversion rates.
• Attrition rates.
• Churn rates.
 Customer Research:

• Quantitative demand analysis is not the sole focus.

• Qualitative research on existing customers offers strategic insights.
• User profiling delves beyond demographics to capture core characteristics.
• It encompasses customer needs, attitudes, experiences, and digital abilities.
• Customer profiles significantly impact digital channel engagement and
marketing strategies.
 Resource Analysis
• Financial Resources:
• Assessing cost components for online presence, including development and promotion.
• Utilizing tools like Hit wise and Net ratings to evaluate online market share.
• Technology Infrastructure Resources:
• Evaluating website performance and service-level agreements with ISPs.
• Assessing the need for additional applications to enhance customer experience.
• Data and Insight Resources:
• Reviewing data quality and analysis tools for understanding consumer behaviour.
• Implementing multichannel attribution to measure the effectiveness of digital channels.
• Human Resources:
• Evaluating availability of service and fulfilment resources for customer queries.
• Addressing recruitment or reskilling needs for managing online marketing activities.
• Structure:
• Defining responsibilities and control mechanisms for coordinating internet marketing across departments.
Analyse customer profiles
See also, Competitor and
intermediary analysis
Never under estimate the SWOT
Setting goals and objectives for digital marketing
• Vision: High-level statement outlining digital marketing's contribution to
the organization.
• Goals: Broad aims demonstrating how the business benefits from digital
channels. Focus on growing sales, audience communication, and cost-
saving.
• Objectives: Specific, SMART objectives providing clear direction and
commercial targets.Used for tracking performance against targets.
• KPIs (Key Performance Indicators): Specific metrics used to monitor
progress and ensure alignment with objectives. Also known as performance
drivers or critical success factors.
• Metrics and Measures: Additional measures referenced but not typically
included in high-level reporting.
 The relationship between
vision, goals, objectives and KPIs
 There are many other factors

• Volume, Quality, Value, Cost measures

• Detailed objectives
• Performance Drivers
• Leading and lagging performance indicators
• Balanced scorecard (A framework for setting and monitoring business
performance. Metrics are structured according to customer issues, internal
efficiency measures, financial measures and innovation.)
Strategy formulation for digital marketing
Key Decisions;
1. Market and product strategies
2. Business and revenue model strategies
3. Target marketing strategy
4. Positioning and differentiation
5. Customer engagement and social media strategy
6. Multichannel distribution strategy
7. Multichannel communication strategy
8. Online communication mix and budget
9. Organisational capabilities and governance to support digital
transformation
 Market and product strategies
• Market Penetration:
• Increasing market share within existing market segments.
• Utilizing existing products and services to attract more customers.
• Market Development:
• Expanding into new market segments or geographical regions.
• Leveraging existing offerings in untapped markets.
• Product Development:
• Introducing new products or services to existing markets.
• Enhancing existing offerings to meet evolving customer needs.
• Diversification:
• Entering entirely new markets with new products or services.
• Spreading risk by expanding into unrelated industries or markets.
 Business and revenue models strategies
• Constant Innovation:
• Evaluate new models to defend market share.
• Companies like Facebook and Google innovate through acquisitions and R&D.
• Strategic Agility:
• Establish Skunkworks or digital innovation centers for ongoing R&D.
• Ensure readiness to adapt to market shifts and emerging technologies.
• Exploring Revenue Models:
• Consider less radical changes to revenue models in the digital realm.
• Examples include selling advertising space, offering white-labeled services, and leveraging
affiliate arrangements.
• Skunkworks:
• A group focused on researching and developing innovative opportunities. Enables
experimentation and rapid prototyping to drive business benefits.
Target marketing strategy
Customer lifecycle segmentation
 Positioning and differentiation strategy
(including the marketing mix)
• Positioning Definition: Defines how a company competes, determined by market
segmentation, target market, and product/service differential advantage.
• Connection with Customers' Minds: Focus on brand association in customers'
minds to establish market position. Promote familiar brand features to create
initial connection and build positioning.
• Differential Advantage Definition: Aims to develop unique attributes not
matched by competitors, critical for market differentiation.
• Alternative Positioning Strategies: Differentiation beyond price: quality of brand
experience and service crucial for standing out online.
• Online Value Proposition (OVP): Statement of online benefits, reinforcing core
brand proposition and differentiating from competitors. Communicate OVP across
various touchpoints to create a customer-centric website.
• Benefits of Clear OVP: Distinguishes site from competitors, provides marketing
focus, enhances PR, and aligns with company/product propositions.
Alternative positionings for online services
Customer engagement and social media strategy
• Challenge of Engaging Consumers Online: Millions of daily social media updates
and content publications pose a significant challenge in engaging consumers.
• Importance of Customer Engagement Strategy: Essential for every company's
digital marketing approach. Aims to create compelling content and experiences to
meet commercial objectives.
• Customer Engagement Strategy Definition: Encourages consumer interaction
and participation through content and experiences. Linked closely to content
marketing and social media strategies.
• Shift towards Social Presence: Engaging consumers is often more effective
through social networks like Facebook, Twitter, and LinkedIn.
• Social Media Optimization (SMO): Process to enhance the effectiveness of social
media marketing by improving content and communication quality
 Multichannel distribution strategy
• Definition of Distribution Channels: Refers to the pathway of products from
manufacturers to end customers. Involves the movement of goods and information
between organizations.
• Players in the Supply Chain: Retailers, suppliers, intermediaries, third-party
logistics providers, and transportation companies. Provide services like
warehousing and distribution management.
• Types of Distribution Strategies: Clicks and Mortar: Combines online and offline
presence.
• Clicks-only (Internet Pureplay): Primarily operates online without offline
channels.
• Strategic Decision: This decision shapes investment in promotion and
infrastructure, determining if the internet fundamentally changes communication
and sales methods.
 Influences on customers of
multichannel decision making
Matrix for evaluating digital marketing business
investment alternatives
 Multichannel communications strategy
• Definition of Customer Communications Channels:
• Channels influencing customer product and supplier selection through inbound and outbound
communications. Integral to digital marketing strategy for integrating with other communication channels.
• Types of Customer Contact Channels:
• In-store, contact centre, web, outbound direct messaging. Channels may involve various media (e.g., contact
centre includes phone, email, chat).
• Key Strategies for Customer Contact:
• Inbound sales-related enquiries (acquisition/conversion). Inbound customer-support enquiries (customer
service).
• Outbound contact strategy (retention and development).
• Considerations for Strategy Development:
• Efficient mix and sequence of media to achieve short-term conversion objectives. Long-term objectives of
customer loyalty and growth. Balancing customer and organization channel preferences.
• Complexity of Consumer Behaviour:
• Channels and media have become sophisticated and diverse. Understanding customer behaviour requires
segment identification, profiling, and suitable channel selection.
 Influences on customers of multichannel decision making
• Consumer Decision-Making Factors:
• Figure highlights dimensions impacting consumer
decisions.
• These dimensions guide organizations in channel and
communication strategy planning.
• Implications for Planning:
• Channel dimensions inform key decision areas for
organizations.
• Factors like accessibility and interface flexibility
shape strategy development.
• Customer Influence on Channels:
• Personal characteristics influence customer channel
preferences.
• Understanding these influences aids in effective
channel selection.
• Marketing Strategy Considerations:
• Goals and objectives play a vital role in channel
selection.
• Marketers align channel decisions with broader
marketing strategies.
 Channel coverage map - preferred strategy for communications
with different customer segments
• Communication Options:
• Multichannel strategy defines customer communication choices.
• Channels tailored for specific customer segments.
• Complex Decision-Making:
• Selecting optimal channels poses challenges.
• Example: Mobile phone purchases involve varied touchpoints.
• Critical Multichannel Management:
• Crucial for customer retention.
• Experiences influence decisions beyond price.
• Retention Factors:
• Experience impacts customer loyalty.
• Outbound communications play a key role.
• Optimizing Channel Mix:
• Balancing cost-effectiveness and customer value.
• Understanding customer channel preferences.
 Online communication mix and budget
• Spending Allocation and Mix:
• Decision linked to focus of online communications. Mix includes search engine, affiliate, email,
and online advertising.
• Communication Focus:
• Decisions hinge on customer acquisition, retention, or relationship building.
• Customer Lifecycle Scorecard:
• Components: Attraction, Conversion, Retention. Measures include acquisition costs, conversion
rates, revenue per customer.
• Performance Drivers:
• Determine business and marketing objective success. Critical for evaluating effectiveness of
online communications.
• Campaign-based Strategies:
• Executed for specific events like website or product launches. Duration and scope tailored to
campaign goals.
• Adapting to Digital Landscape:
• Companies invest in skilled staff for digital channels. Established brands must evolve to succeed
online.
 Organisational capabilities and governance to
support digital transformation

• In addition to the eight decisions related to digital business , there are also
decisions related to how the organisation manages changes required by
deployment of digital media. T
• These are related to digital transformation changes outlined in such as
• Managing marketing technology,
• Data and insight
• Changes to structure
• Changes to skills.
 Strategy Implementation

• It is utmost important to identify priorities, and allocate time, effort and

budget accordingly
• It is common that different initiatives will compete for the available budget
 The online lifecycle management
• These are some of the generic digital marketing main strategies related to
this
• Online Value Proposition:
• Defines value proposition for acquisition and retention.
• Includes informational and promotional incentives.
• Establishes value creation through time.
• Online Targeted Reach:
• Aims to communicate with relevant audiences online.
• Utilizes various communication channels like online advertising, PR, email.
• Focuses on driving new customers, migrating existing ones, or enhancing brand
awareness on third-party sites.
 The online lifecycle management..

• Offline Targeted Reach:

• Encourages potential customers to use online channels.
• Communication through direct mail, media buys, PR, and sponsorship.
• Online Sales Efficiency:
• Converts site visitors into leads and buyers.
• Methods include registering for e-newsletters or adding items to the shopping basket.
• Offline Sales Impact:
• Aims to achieve offline sales from new or existing customers.
• Online communications influence offline sales through website and email.
• Please refer the Online performance management grid for an e-retailer
Discussion
 Homework
• Start reading the Chapter 5