Chapter 1 Digital Marketing

Marketing has been a tradition of understanding market behavior that mostly constitutes buyers and sellers. The American Marketing Association (AMA) defines Marketing as:

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

However, technological advancements have always disrupted the traditional marketing activities. Nevertheless the core actors, i.e. buyers and sellers, and core activities, i.e. marketing research to understand market behavior, of marketing have remained the same. AMA defines Marketing Research as:

Marketing research is the function that links the consumer, customer, and public to the marketer through information–information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.

Today the technological revolution brought about by the Internet is transforming the marketing landscape that has a very deep impact on the very two core functions of marketing: buying and selling. Therefore, we need to revisit the various concepts of marketing examining them critically through the lens of recent technological advancements.

The major technological revolution in the market place is brought about by the Internet. First, the Internet has made it possible to create a network of online communities where people can connect and communicate mutually without the limitation of physical boundaries. Second, these online networks have made information accessible to larger segment of people in real time. No wonder the current economic environment is also called Information Economy where the production, dissemination, and manipulation of information is studied in a market context. Thus, information is treated as commodity in this economy. However, whereas the marginal cost of production of information is virtually zero the value to this commodity comes from users’ attention which has become a scarce resource in this information economy. Therefore, this economy is rightly also said Economics of Attention’. Note that the AIDA model1 of marketing communication also starts with Attention. Thus, we summarize that following are the important ingredients of digital marketing:

  • Digital Technologies (Hardware as well as Softwares)
    • Internet
    • Digital computing tools (computers, laptops, tablets, phones etc.)
  • Online Network
    • Digital networks act as Communication media
    • Digital networks act as Distribution channel
    • Digital networks act Connection services
  • Information, Knowledge, Idea, Data
    • Information as a signal of Quality
    • Information as a tool for Price Discrimination
  • Attention

Given the importance of above in shaping digital marketing landscape we can define digital marketing as: ``Digital marketing is the use of networks created from hardware and software in the process of marketing.’’

Information as a commodity in age of the Internet and as an online currency in this attention economy has given rise to various kinds of businesses that cater towards the needs of production, dissemination, and management of the information.

  1. Attention, Interests, Desire, and Action}↩