Digital Marketing Basics

Why Digital Marketing

In the very first chapter of our crash course, let help you to understand why digital marketing is gaining market share over the traditional marketing ( billboards, Tv, newspapers..etc).

Why Digital Marketing

Rise and Rise of Digital Marketing

Why digital Marketing

Digital marketing has seen it rise, ever since the rise of internet. Way back in 90’s internet used to a Research & development initiative but post 2000’s after the internet bubble blast real monetization power of the internet has been demonstrated by two companies.

One company is google which had its ipo in 2004 with valuation of $23 Billion & other company is facebook which is founded same year.

So, what does these companies has to do with digital marketing? If not for those companies digital marketing wouldn’t be a mainstream profession. These companies had a market Cap over $ 1 Trillion which is almost 1/15 of entire america’s GDP.

So how these companies convinced other companies to spend their marketing budget on their Ads?

If you can’t measure it, You Can’t optimize

Traditional marketing has one problem. You never know which marketing tactic works and which doesn’t. For example, assume that you are the marketing manager in an imaginary burger company NcDonalds. You are tasked with finding which way of marketing works well.

Usually you have plenty of offline marketing options available: billboard ads, Newspaper ads, Newsletter ads, magazine ads, distribution of handouts & food coupons.

You notice whenever your company spend money on marketing, the company has sales increase that month. But one problem, you spend $1 million and you’re sales increases by $2 million compared to other month sales. You’re senior management is convinced with the results. They aren’t happy with spending $1 million to get $2 million additional sales.

Even you knew that not all the marketing efforts will increase sales only some would have done that. For instance you spend money evenly on Billboard ads, Newspaper ads, Magazine Ads, Newsletter Ads, handouts & coupons. But only two things would have worked. But you have no way of know what worked scientifically.

So here’s the math of the traditional marketing :

Billboards = 2,00,000

Newspaper Ads = 2,00,000

Magazine Ads= 2,00,000

Handouts = 2,00,000

Coupons = 2,00,000

Total = 1,000,000   Sales : 2,000,000 Marketing cost to sales Ratio: 1:2

But imagine if a magic happens and you were able to find that, only handouts & coupons increases sales and other marketing initiatives doesn’t you could not spend money those and spend money only on the handouts and coupons. Now the updated marketing looks like

Handouts = 2,00,000

Coupons = 2,00,000

Total = 4,00,000   Sales : 2,000,000 Marketing cost to sales Ratio: 1:5

So with that magic you were able to increase your marketing efficiency by more 2X. This might seem simple with the numbers represented here but companies with largest budget this a real game changer!

Tracking Comes into Play

That magic is nothing but Tracking which works and which doesn’t. Tracking (or) measuring can be a game changer in marketing. So just by tracking which works and which doesn’t you’re able to show 2X improvement.

Sadly for Traditional marketing it is near impossible to track the marketing campaigns scientifically*.

Digital Marketing scores over traditional marketing in this Aspect. Digital marketing has overwhelming tracking options for a marketer to track and get the data. The data can be used to find out which works and which doesn’t.

As a budding digital marketer you now know one strong reason to use digital marketing over traditional marketing.

** Scientifically : Scientifically refers to having a concrete information about the campaigns as who and when. For example traditional marketer can say ballpark estimates what could have worked with plausible assumptions but without any factual data. But digital marketers have that advantage.

About the Author: yathav

I'm very passionate about technology, marketing & analytics. Using WordPress and working on blogging & search engine optimization for almost 8+ years, I'd like to share my thoughts, hacks and best practices about what i do professionally & what I experience.

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