Digital Marketing Technologies
Digital Technology
Technologies are means of production. They are tools that help in the production of goods and services. Technologies help firms achieving economies of scale1 and scope2. Recent technological developments have made possible for firms to offer technologies as products and services. To understand impact of technology on digital marketing, we consider technology under the broad umbrella of digital technology.
Digital technologies have changed the nature of interactions between buyers and sellers. In traditional marketing, typically the a firm communicated with its costumers through mass media, giving it a form of monolgue. However, digital technologies enable customers to interact and communicate with the firm mutually, giving it a form of dialogue.
Furthermore, firms and customers can now interact with each other, enabling a form of communication that can be characterized as trialogue. In such a complex communication environment, firms need to understand the role of technologies in shaping consumer behavior. It is a hyper-connected world that has given rise to the concepts of connected consumers3 and connected marketing4.
Technologies used in Digital Marketing
A broad term `Internet Technology’ will be used to refer to the technologies that are used in digital marketing. These technologies include:
- Web Technologies
- E-commerce (multichannel, omnichannel)
- Search Engine (SEO, SEM, Pay-per-Click)
- Social Media Technologies
- Social Media Marketing (Advertising, Listening)
- Content Marketing
- Viral Marketing (Influencer Marketing, Livestreaming)
- CRM Technologies
- AR/VR
- Personalized Marketing
- Email Marketing
- Analytics Technologies
- Web Analytics
- Social Media Analytics
- Marketing Automation
- Mobile Technologies
- App Marketing
- Mobile Payment Technologies
- Cloud Technologies
- Blockchain Technologies (NFTs, Cryptocurrencies)
- IoT Technologies
- Wearable
- AI Technologies
- Machine Learning
- Deep Learning
- NLP
- Robotics Technologies
- Drones
- Autonomous Vehicles
- Voice Technologies
- Digital Advertising Technologies
- Programmatic Advertising
- AdTech
- MarTech
- Retail Media Tech
- Online Display Ads
These Internet technologies represent enablers of connection, communication, and collaboration between firms and customers. They are used to create, communicate, deliver, and sustain values using information in bits and bytes in digital form. These technologies also help in the collection, storing, and processing of customer data, which is used to understand customer behavior and preferences.
Internet technologies have fundamentally changed the marketing strategies executed using 4Ps - product, price, place, and promotion - in response to the shift in human behavior and interactions caused by these technologies.
Business Models enabled by Digital Technologies
Business to Business (B2B): Businesses that sell their products to other companies, such as manufacturers and wholesalers or wholesalers and retailers, are considered B2B e-commerce companies. Businesses like these provide the services or products that other businesses need to grow. Unlike consumer e-commerce, business-to-business e-commerce does not directly involve consumers. And, the average order value is higher and recurring purchases are more common in B2B companies.
Business to Consumer (B2C) When people hear the term “eCommerce business,” they tend to think of B2C. When you buy a product from an online retailer, you are doing business with the consumer, which often means that the sale occurs between the business and a consumer.
Consumer to Consumer (C2C): E-commerce involving consumer-to-consumer transactions refers to the sale of goods or services from one consumer to another. C2C eCommerce includes sites for buying and selling old items. A third party usually handles these transactions by providing an online platform. Customer-to-customer (C2C) transactions may not have the same impact on businesses as other types of transactions, but they remain essential. As an intermediary, a third party facilitates these types of transactions. The best example of the C2C model is OLX. Despite not buying or selling goods, OLX provides a service to its users.
Consumer to Business (C2B): Like a sole proprietorship serving a large corporation, C2B involves an individual consumer selling to a business or company. Consumers create product value and business value in consumer-to-business relationships, unlike in other models. This whole process of selling and buying is reversed with this eCommerce business model. In this model of e-Commerce businesses, consumers sell products or services to businesses, as opposed to the traditional business-to-consumer model.
Algorithm Aversion
Algorithm aversion is the tendency for people to avoid or not want to follow specific, evidence-based rules (algorithms) when making decisions, even though research shows that algorithms consistently produce better judgments and forecasts.
Mistakes Drive Aversion: People are often willing to use an algorithm until they see it make a mistake. Once they witness an algorithm error, they become much less willing to use it.
Algorithms Are Held to a Higher Standard: People expect algorithms to be perfect. They are much less forgiving of a computer’s mistake than a human’s, even if the algorithm makes mistakes less frequently and of a smaller magnitude than a person would.
The Solution is Giving Up Control: The most effective way to get people to use an algorithm is to give them a small amount of control over its final output.
- Only a Little Control is Needed: Researchers found that giving people the ability to adjust a model’s forecast by just a small amount (e.g., 5%) significantly increased their willingness to use it. Giving them more control did not further increase their buy-in.
Limited Control Improves Performance: This finding is crucial because when people adjust algorithms, they almost always make the result worse. By giving them only limited control, they can only make the judgment slightly worse, but they become highly likely to use the algorithm, leading to massively improved judgments overall.
Avoid an “All-or-Nothing” Approach: In real-world applications (like hiring, admissions, or even self-driving cars), models should not be presented as a “black box” that must be followed 100% of the time.
Frame Algorithms as Advisory or Human-in-the-Loop: People are more amenable to using algorithms if they are framed as an advisory tool, where the user has the discretion to make small changes or exceptions. Over time, this builds trust, and users tend to lean on the model more and more.
These insights are based on article by Dietvorst, Simmons, and Massey (2018).
References
Footnotes
Economies of scale refer to the cost advantage that arises with increased output of a product.↩︎
Economies of scope refer to the cost advantage that arises with the production of a variety of goods and services.↩︎
Connected Consumers are shaping brands today. They are digital natives and internet savvy, these consumers are motivated by three things: freedom, acceleration and intimacy (GfK 2016).↩︎
Connected Marketing is a marketing strategy that focuses on creating a seamless experience for consumers to interact with the brand across all channels. It is a customer-centric strategy that aims brands to meet their audience wherever they are.↩︎
Social Technology
Some of the examples by category are as follows:
Slack (messaging platform enabled by Internet)
Social Interactions Facilitated by Slack:
This demonstrates how Slack’s communication capability (Internet-based messaging) enables multiple types of social interactions—professional collaboration, informal bonding, knowledge sharing, and real-time problem-solving—within a specific organizational context.