The Power of Digital Marketing
The goal of marketing has always been to develop new customers and enhance business relationships through targeted messaging. Marketing firms study the mix of product, pricing, promotion and place in great detail in an effort to produce a profitable offering.
Once an idea for a new product or service has been developed it is handed over to a marketing team to sell. The first step in most marketing projects is to determine a pricing structure. This is a function of cost to provide the service and what the market will bear. Once the first two P’s of the marketing mix are established then it is time to create the promotion and display it in the correct place.
Usually people consider two different approaches for reaching the targeted market, direct marketing and display marketing. Direct marketing is the process of contacting individuals with a targeted marketing message. Some examples are direct mail and telemarketing. Display advertising sends out a message to a broader audience. Examples of this are TV, Radio and billboards.
The advantages of display advertising is reaching a large number of eyes and ears. The disadvantages is your message is seen by people who may, or may not, be interested in the service being offered. A marketer pays a high cost per targeted customer. Another problem for display advertising is the media market is rapidly evolving and fragmenting. Viewers are leaving the networks, radio and newspaper en-masse. It is increasingly difficult and expensive to reach a broad target.
To combat the high cost of display advertising, many marketers turn to direct marketing. For small companies with limited marketing budgets this is often the only available form of marketing. Like display marketing, direct marketing is a numbers game. Send out enough pieces of direct mail, count on a one percent response rate and then calculate if the campaign is profitable.
Savvy marketers have always known that to get the most for your advertising budget there is nothing more important in the marketing mix than place. If you can contact people who are your best prospects you are not wasting money on deaf ears. Even better would be if you could market to prospects that have already identified themselves as interested in your product. This hyper-targeted marketing is called digital marketing.
Historically, digital marketing was done through the yellow pages. Find people looking for you and then target your message. This worked for decades; however, the internet has replaced the yellow pages as the primary source of information.
Buyers even prefer digital marketing because they are not bombarded with offers when they are not interested in hearing. Once they are actively looking the marketing message is now information and not noise.
Businesses love digital marketing because it delivers immediate buyers. These buyers result in a very high close rate. The cost per acquisition is a fraction of either display or direct marketing.