Think strategically about the role of each media type.
As companies move more aggressively into, for
instance, owned and earned media, the role of paid media should change: it may be used to drive consumers
toward a company’s owned media or, more sparingly, as a “booster” for new-product launches and other
promotions. That may require tighter coordination with ad agencies regarding the design and placement of
marketing content. To reflect the influx of traffic to owned media, companies may also need to change their
budgets and operations.
Rebalance time and resources. Owned media require patience, cultivation, and sustained engagement.
Like the products of any good online publisher, a marketer’s owned media need a steady stream of traffic-
building programs, fresh content, and optimized design. Focused management, sufficient budgets, and
appropriate performance metrics are needed to build owned-media platforms, whether they’re foundational
search or social-media efforts, site hubs, alerts, or feedback-gathering communities, to name a few possibilities.
Develop a clear community or social-networking strategy. Companies need an agreed-upon set of rules
and principles for managing and responding to single or coordinated attacks against the brand. It’s imperative to
appoint an experienced community or social-networks manager who knows in advance how to coordinate with
marketing, public relations, legal, and other relevant units and has the required authority and decision-making
rights. The cost of failing to respond effectively can be high. One multinational company, for example, responded
to accusations about its business practices by arguing with its accusers on its Facebook page, even blocking and
deleting posts. That move only heightened public interest in the dispute, in effect hijacking the page until the
company apologized.
Improve both the art and the science of marketing. Debates among pundits of marketing typically focus
on whether it is an art or a science (and thus on the relative importance of creativity and analytics). Actually, the
bar is rising for both art and science, and a third dimension—execution—is growing in importance as the
complexity of marketing escalates and its practitioners seek to deliver a richer consumer experience. This goal
calls for teams that can design campaigns for a number of very different kinds of channels, from TV to social
networks to search optimization. Data must be used more effectively to reach decisions and to apply them.
Technology must make the spending of each dollar more efficient in the face of greater complexity. Quality must
be defined and measured, and risks mitigated and managed
In addition to established online tools such as e-mail, information-rich Web sites, and display advertising, survey
respondents show a lot of interest in the interactive and collaborative technologies collectively known as Web 2.0 2
for advertising, product development, and customer service (see sidebar, “What are emerging vehicles?”).
What are emerging vehicles?
Blogs (short for Web logs) are online journals or diaries hosted on a Web site.
Online games include both games played on dedicated game consoles that can be networked and “massively multiplayer” games, which involve
thousands of people who interact simultaneously through personal avatars in online worlds that exist independently of any single player’s activity.
Podcasts are audio or video recordings—a multimedia form of a blog or other content. They are often distributed through aggregators, such as
iTunes.
Social networks allow members of specific sites to learn about other members’ skills, talents, knowledge, or preferences. Commercial examples
include Facebook and MySpace. Some companies use such systems internally to help identify experts.
Virtual worlds, such as Second Life, are highly social, three-dimensional online environments shaped by users who interact with and receive
instant feedback from other users through the use of avatars.
Web services are software systems that make it easier for different systems to communicate with each other automatically to pass information or
conduct transactions. A retailer and supplier, for example, might use Web services to communicate over the public Internet and automatically
update each other’s inventory systems.
Widgets are programs that allow access from users’ desktops to Web-based content.
Wikis, such as Wikipedia, are systems for collaborative publishing. They allow many authors to contribute to an online document or discussion.
Interactive media is likely to revolutionize marketing for many consumer companies because it allows marketers
to deliver real-time, personalized services and content, one consumer at a time. It is what we call digital
marketing. Digital marketing leverages the unique and powerful characteristics of interactive media: it is
addressable, meaning that each user can be identified and targeted separately; it allows for two-way interaction;
services can be tailored for each individual customer; and purchases can be made and influenced on line.
However, to capture the benefits of digital marketing, companies must integrate interactive media into their
existing businesses and marketing programs. And that is difficult to achieve.
Several broad types of attractive digital marketing opportunities already exist, and there is evidence that
marketers who aggressively pursue one or more of these opportunities are starting to make profits.
First, marketers can use interactive media to provide better service at lower cost by delivering information
about a product or service. UPS, for example, uses an Internet-based service to allow customers to track the
whereabouts of their packages (Exhibit 1).
A second opportunity is to build relationships with on-line consumers. Interactive media can be used to
identify attractive users or prospects (an automotive company can learn the names of interested car buyers and
forward them to the closest dealer); it can enhance customer loyalty by providing extra services; and marketers
can use what they learn about their consumers to cross-sell new products or services.
Third, marketers can use interactive media as a new channel. In 1995, Hot Hot Hot, a small company that
produces sauces, generated some 30 percent of its revenue from sales through its Web site. And using interactive
media, airlines are increasingly bypassing travel agents to sell tickets, thus saving significant commission costs.
For example, United Connections, a disk-based service allowing travelers to make their own bookings, is
estimated to save airlines up to $50 for a typical $500 round-trip fare.
The digital marketing model that has been developed is based on a pragmatic assessment of what seems to work,
and what does not, in the interactive age. It is built around five apparent factors for success: (1) attracting users,
(2) engaging users’ interest and participation, (3) retaining users and ensuring they return to an interactive
media-based service, (4) learning about their preferences, and (5) relating back to them to provide the sort of
customized interactions that represent the true "value bubble" of digital marketing (Exhibit 3). This last point is
critical as in most cases it will require marketers to make their digital marketing initiative part of the existing
business system. This presents important internal and external challenges, such as how to integrate the digital
marketing initiatives with existing marketing programs or information systems, or how to manage potential
channel conflicts with the salesforce or traditional distributors.
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