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The perfect starting point for anyone entering the world
of online marketing. Truly impressive.
Stafford Masie, Google South Africa Read more reviews 
This is the final draft of the our new chapter: eMarketing Strategy. I'm publishing it here to get any feedback or comments you may have, so please don't hold back! Have a read through and please make suggestions in the comments.
Introduction
A strategy is a long-term plan of action aimed at achieving a particular outcome. Tactics refer to the immediate actions taken to execute a strategy. While most of the chapters in this textbook refer to the tactics that the Internet has afforded to marketing, the essential first step to executing any online campaign is in the planning: strategy.
Strategy comes from the Greek stratēgos, which itself is derived from two words:
- stratos for army, and
- ago for leading.
Tactic also comes from Greek: taktika for deploying or arranging.
In wars and business, a strategy usually intends the same outcome: winning.
Treatises on strategy abound. "The Art of War" was written by Sun Tsu in the 6th century BC, and this ancient Chinese text on military strategy today often forms the foundation of business strategy. Move forward a few millennia, and a course in marketing will include Porter’s five forces, McCarthy’s 4 Ps and Humphrey’s SWOT analysis. At the time that the framework for the Internet was being researched and developed, economists and academics were laying the foundation for principles still leading marketing thought today.
How the Internet has changed the world we market in
The connected Internet has had a far greater impact on marketing and business than the ubiquitous email newsletter and the need for search engine optimisation. It is not only the way in which products and services can be marketed that has changed, but new products and services are being developed. It has changed the types of products that can be sold, changed the market for products in terms of geography, had a huge impact in the way products are sold and marketed, and importantly has seen a significant shift in the balance of power between businesses and consumers. Where marketing once was seen as a one way broadcast channel, with customer wants and needs driven by focus groups, today effective marketing is based on a two-way conversation that happens person to person.
However, the Internet does not necessarily mean throwing out the rule book of marketing and business foundations and principles. Instead, the Internet provides a new environment in which to build on these principles. Profit is still revenue less cost. The Internet does not change that.
The Internet and the Marketing Mix
McCarthy’s four Ps of marketing are Product, Price, Placement and Promotion. Developing technology, naturally, has an effect on all of these, and the Internet in particular has seen fundamental shifts not only in the means available to promote products, but also in the placement, or distribution of products. Although tools for research, retention, distribution and product creation have changed dramatically, the fundamental principles of marketing still guide strategy.
Products and Services
Products and services are what a company sells. From fast moving consumer goods to digital products such as software to services such as consultancy, the Internet has allowed for a plethora of new products.
Technology allows for mass customisation of products, seen in a growing trend of letting customers customise goods online before they are created. For example, NIKEiD and Converse both allow customers to create their own trainers based on a number of preset options, that will then be manufactured to the customer requirements. In a similar fashion, computer products can be built to specifications, as the costs of offering this type of service to customers is reduced by the Internet.
Digital products can exist because of the Internet. The very framework of the Internet allows for products such as software and digital music to be distributed. The Internet as a distribution medium is what makes these products possible.
Price
With customers able to easily access pricing information from a number of suppliers with relative ease, the Internet is growing a market of near perfect competition (Porter, 2001). The prevalence of search engines and of shopping comparison websites, such as www.pricerunner.com and www.nextag.com, make it easy for customers to compare product prices across a number of retailers. The temptation for companies to differentiate themselves on price has lead to decreased prices for many commodities, from the regularly reduced pricing of books on Amazon.com to ticket prices on low cost airlines such as EasyJet in Europe.
Placement or Distribution
Particularly for digital products and services, the Internet gives companies access to a global marketplace. Product distribution and markets no longer have to be dictated by location. With efficient delivery and shipping channels, products that are not digital can also benefit from a far wider market place. The Internet allows the basic foundations of mail order businesses to flourish online with a catalogue that is cheaper to produce and update, and cheaper to distribute: a website. In the travel industry, travel agents stopped issuing paper tickets as of 31 May 2008. Nearly all aeroplane tickets are now e-tickets.
Technology such as APIs, SOAP services, RSS and XML allow information and services to be distributed throughout the world. For example, the API for a hotel reservations database, Starfish Luxury Travel Distribution, allows a diverse range of websites to offer instant online bookings for hotels in the inventory. Partners with booking engines include http://starfishinteractive.com/, http://www.spaworld.tv/ and http://www.timesonline.co.uk/.
[note: An API is an Application Programming Interface. Essentially, an API gives instructions and rules for communicating with another programme or database. This allows, for example, different companies and developers to build different front-end systems that all communicate with the same database.]
This is both a huge opportunity and a huge challenge for businesses. On the one hand, it can allow niche products and markets to flourish in a global space. On the other hand, it can be tempting for a marketer to try to reach too many markets at once. A global market place is also not yet fully supported by national banking and tax legislation.
Promotion
The Internet as an information and entertainment medium naturally lends itself to be used to promote products. The online promotional mix is an extension of the offline, but with some significant differences: online promotion can be tracked, measured and targeted far more sophistically than offline. Advertising, personal sales, promotions based marketing and public relations can all be conducted through the online medium. These tactics are developed further in this textbook.
New Ps and New Marketing
Well known marketing guru Seth Godin says that marketing is actually about five elements
But Seth Godin is not the only smart marketer challenging the 4 Ps. Iris Mootee put forward 4 new Ps for marketing in the connected environment:
Personalisation
Databases and the use of cookies to remember web visitors allow for online experiences to be tailored to particular web visitors. Amazon makes use of personalisation to recommend books to customers based on their past purchases.
Participation
With the growth in social media and consumer generated content, customers are demanding, and taking, a stake in the brands that they use. Savvy companies can encourage participation through onsite reviews and allowing customers to upload images and video, and all companies should be aware of the many ways that consumers are participating.
Peer-to-Peer Communities
Peer-to-peer communities can be seen to work with customer participation. Through social media, existing customers can be a company’s greatest asset, or greatest detractor. Equipping an engaged and active customer base with the tools to spread a message should be an integral part of a long-term eMarketing strategy.
Predictive Modelling
The connected nature of the Internet allows for every action online to be tracked, measured and stored. Huge amounts of data, both anonymous and identifiable, are being stored daily. Analysis on this data can provide insight into solving marketing problems. For example, in PPC advertising, data is gathered that over time will indicate the optimal keywords and max CPC bids for effective bidding.
Godin’s five marketing elements are reminiscent of The Cluetrain Manifesto’s premise that “markets are conversations”, and both highlight the importance of marketing as people talking to people. This is not a new phenomenon brought on by the World Wide Web. Instead, the Web has served to act as a global focus group, with participants eager to share their thoughts, discoveries, likes, dislikes and any other sentiment.
Mootee’s 4 Ps focus on what technology brings to the original marketing mix. Technology has allowed for mass customisation, not just in marketing messages, but in content and product creation. It has seen brands that allow customer participation in spreading and even creating their messages and products succeed. The growth of social networks online, and the recognised importance of product reviews in the buying cycle is reflected in peer-to-peer communities. Lastly, the Internet is useful in tracking and gathering data, which can be mined and analysed for opportunities for growth.
What recent approaches to marketing strategy have in common is one growing theme: customer centric marketing.
The strength of the Internet is demonstrated in the way it underlines connections. The very fabric of the Internet is based on hyperlinks – being able to link from one document to another. These technical connections are mirrored in the need for marketing to appeal to customer’s feeling of connection in the social sense.
Customer centric marketing
Customer centric marketing infers that by understanding the needs of the customer first and foremost, business outcomes will be achieved. Looking at the marketing mix from a customer centric perspective should result in products and strategies that are meeting the needs of potential customers, as opposed to a need to invest in expensive, interruptive advertising to convince customers of a need that they do not have.
Products
Products and services should be designed from a customer perspective, based on their needs.
Price
When considering pricing from a customer perspective, it is tempting to believe that lowest price is best. While that can attract customers in the short-term, focusing on the value of the product and the services offered with it is a better strategy for long-term growth. The customer approach to pricing considers value. The key is to build a long-term cost advantage.
Placement
The customer centric approach to placement recognises that you cannot dictate the manner in which customers find you online: from the search engine and keywords they could use to find your service, to the browser and device they are using when accessing your website.
Promotion
The Internet was not created as a marketing tool: it was created to share information. The number of people accessing the Internet, the amount of time spent online and the commerce that takes place online make it an attractive marketing environment.
eMarketing Strategy: developing a marketing plan
An eMarketing strategy should not be created in isolation to an offline strategy. Instead, marketers need to take a holistic view of all business objectives and marketing opportunities. Offline and online activities should complement each other, both having the potential to reach different audiences in different ways. However, the Internet is exceptionally useful as a research and information tool in the strategy process.
Step 1: Know yourself and know your market
The starting point for any business and marketing strategy is to know who you are. “You” refers to the organisation as a whole (although, of course, a little bit of self discovery is always advised). While this can, and should, be re-addressed periodically, start by looking at what the business problems are right now, so that a strategy can be developed that solves these problems.
Step 2: Strategic Analysis
With a solid understanding of where the organisation is right now, further analysis systematically evaluates the organisations environmental and social context, objectives and strategies so as to identify weaknesses and opportunities.
Porter’s Five Forces Analysis
Porter’s Five Forces Analysis is useful in understanding the attractiveness of the market in which an organisation is transacting. However, this framework for analysis was developed before the Internet, which has disrupted the markets in which we operate.
Production and distribution costs in many industries have been drastically lowered; the barriers to entry and costs of switching are reduced. This means that there are more competitors in the market as the barriers to entry for new organisations is reduced, and that cost is less likely to inhibit customers from switching to a competing product as there are less likely to be high costs associated with doing so. Perhaps most importantly, the bargaining power of end users is increased as they have greater access to information when making a purchase decision.
Often, the Internet migrates competition primarily to price (Porter, 2001). This means that organisations seek to attract and retain customers solely through offering services and goods at a lower price, though this is not necessarily the best strategy for companies to follow. Strategic differentiation comes from the value that a company can provide to a consumer.
Competitors
When analysing competitors, it is not only product and price that lead the discovery process. While there may be obvious competitors in the same industry, an organisation needs to consider what (or who) else may be vying for consumers’ attention and valuable search engine traffic
In identifying competitors, analyse the needs of your customers, and determine how else customers might fulfil those needs. Products and services are not only competing for customers’ money: they are fundamentally competing for customers’ attention.
Considering the customised Converse shoes: the customer needs are not likely to be that they have bare feet. Instead, the shoes are fulfilling a customer’s need for individuality and self-expression. NikeID is an obvious competitor, but so is a service like Face Your Manga that allows Web users to create custom Manga avatars to use online.
Step 3: Set Marketing Objectives
Marketing objectives are the desired outcomes of the marketing plan. What are the specific goals that will indicate the success of the marketing strategy?
These should be unique to an organisation, and are based around the outcomes that will make money for the organisation. This is a strategy, so the focus is on long-term success. Establish milestones that will indicate that the strategy is on the path to success.
Step 4: Generate Strategies and Tactics for Achieving Objectives
It’s time to put into practice the tactics covered in this textbook. Based on your analysis of your organisation and its objectives, consider strategies and tactics that will help you to meet these objectives.
For example, an objective could be the acquisition of new customers. A tactic could be display advertising on content websites that reflect your target market.
If customer retention is the objective, an email newsletter strategy can help to build relationships with an existing interested database of prospects.
Step 5: Evaluate Strategies
After having generated strategies, they need to be evaluated against the needs and resources of your organisation. At this stage, it can be useful to follow Humphrey’s SWOT analysis for a full analysis of the strategies generated.
For each strategy, a SWOT analysis reveals the Strengths, Weaknesses, Opportunities and Threats afforded by a strategy (and of course can be used to evaluate the plan in its entirety).
SWOT analysis will reveal the feasibility and the attractiveness of the strategies generated.
[diagram of SWOT analysis]
The needs of the organisation include:
The resources of the organisation include:
Step 6: Implement
You know what you want, and you’ve made a plan for how to get it. Now do it.
Step 7: Track, Analyse, Optimise
eMarketing’s chief advantage over offline marketing? It uses hyperlinks to spread messages. This means that eMarketing can be tracked, the data can be analysed and this can then feed back into the planning to optimise the marketing strategy.
The Internet allows you to track each tactic on its own, and then intelligent analysis should allow you to consider how these tactics work together.
eMarketing and Marketing
eMarketing refers specifically to marketing using the Internet, but holistic strategies allow companies to make the most of their budget through integrating online and offline activities. eMarketing should not be seen as separate or an afterthought to a marketing strategy. Instead, businesses should focus on their customers, and use the channels most likely to reach their target market based on budget.
The cornerstone of a successful eMarketing strategy is flexibility. With near real-time reporting, the likely success of any campaign or channel can be gauged quickly. Flexibility allows for focus to be shifted as new opportunities and challenges arise.
Online tools for gathering market intelligence
In the chapter on online reputation management, many tools were detailed which allow an organisation to gather information related to their business and those of competitors. These same tools also prove invaluable for market research, especially when keywords monitored are chosen to reflect industry trends.
Search data for both SEO and PPC
SpyFu
Quirk SearchStatus
SEO Book's Rank Checker
Watching competitor activities
ChangeDetection
Google Alerts
BrandsEye
Google Patent Search
Trends and market research
Google Insights
Flickr
Delicious
Google AdWords External Keyword Tool
When researching competitors, never forget the basics: visit their websites! Not only can you gather basic price and product information, but it can be relatively easy to discover information about their marketing initiatives such as affiliate marketing.
eMarketing strategy in action
We need a case study here – can we use the textbook?
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