By Manuel Alonso. Professor. IE Business School, published on October 30th, 2007 in the IE FOCUS.
WRONG. The key to success lies in combining old and new methods.
Digital marketing is finally taking its place as the most up-and-coming commercial communication channel. A quick look at the figures confirm this: online advertising is going to increase by 25% in Europe in 2007. According to the Europe Online Advertising Report issued by the Internet specialist consultancy firm eMarketer in France, Italy, Germany, Spain and the UK, this year, advertisers are set to invest $7,500 million in online advertising in five European countries, 25% more than in 2006. The estimated audience for online media in France, Italy, Germany, Spain and the UK stands at 136 million people for 2007. The study shows that the largest market for advertisers on the Internet is the UK, a country that is expected to invest $146 in advertising per inhabitant in 2007, a figure that could rise to $216 by the year 2010.
However, as is usually the case with new technologies (in the digital field and any other), we tend to doubt their effectiveness in the Spanish-speaking market. And the doubt increases in the case of the Internet after reading more than our fill about the fact that buying things without seeing them, touching them and feeling them is not part of the Latin psyche. As a result, in all the countries where this psyche prevails, online shopping has not yet taken off. So, will these new marketing tools, which seem to work so well abroad, actually be effective?
If we take Spain as a reference, we see that, with a growth of 96% in the investments made by the leading advertisers in 2006 (figures issued by the Interactive Advertising Bureau and PricewaterhouseCoopers), no other sector has such a rate of development at present. There are three reasons for this:
(1) its lower cost;
(2) more effective and more specific campaigns; and
(3) the possibility of precisely controlling the ROI and the effectiveness of the actions taken (unlike advertisements in the press or on TV, which depend on estimates).
This forceful appearance of new e-marketing tools has brought about a fragmentation of audiences in all the traditional media, with many more digital and cable TV channels, free newspapers and magazines, etc. The trend is affecting the results of classic advertising formats (such as the press, e.g. the Wall Street Journal, which, for the first time, has had to include advertising on its front cover to compensate its fall in revenue from advertising).
As a result, certain false prophets want to see a marketing revolution and talk about a version 2.0 of marketing that will endanger and, in certain cases, put an end to old formats. Nothing could be further from the truth. It is a great pity that some have not learned the hard lesson of the year 2000: it is not a new form of marketing, but rather the age-old marketing applied with new tools. Indeed, the key consists of integrating these new digital marketing possibilities with the formats and media that have proved their effectiveness year after year.
The combined use of online and offline tools in one single marketing campaign increases the memory-potential of the brandÂ´s values by up to 18%, which presents the Internet as a very profitable and unavoidable medium, but not one that is exclusive for all marketing, advertising and publicity campaigns. The philosopherÂ´s stone therefore comes from a combination of formats that has been labelled as Â´blended marketingÂ´. What is true is that marketing managers are increasingly facing newer, more demanding challenges.
The members of the general public are no longer passive consumers of advertising messages, but rather want to receive more and more information through a medium that offers them the possibility of interaction. As a result, marketing on the Internet currently has the best ROI of all the actions and campaigns included in the commercial plan. However, for it to be successful, the general marketing strategy must not be ignored and e-marketing actions must be developed to fit in seamlessly with the other campaigns. To achieve this, it is vital to dominate the online advertising ecosystem and be familiar with all the types of advertising offered on the Internet, but it is particularly important to gauge and optimise Internet marketing campaigns in order to improve the profitability of any marketing plan.
E-marketing plans must not be developed as isolated concepts, but rather designed to integrate on a line-by-line basis with the general marketing plan to help achieve the general targets. Consequently, the preparation of a companyâ??s digital marketing plan must be based on an analysis of its general marketing plan, from which the main targets and areas of marketing that need to be strengthened must be drawn. An analysis must also be made of the sector, market type and company in order to discover the corresponding digital trends. This must be followed by a study of the targets by product and service line to determine the sub-targets by client group and/or potential clients that may be covered by the digital tools. All these analyses will have laid down the initial bases of the e-marketing plan and the company will then be ready to analyse all the digital tools available in order to discover the most appropriate for the company and its strategy to constitute the best e-marketing mix. Then, all you need to do is develop the general formula for the campaigns and quantify their cost (as well as implement their monitoring and control) to produce an e-marketing plan that can be integrated into the general marketing plan with a full guarantee of success. So, when drawing up your companyâ??s next marketing plan, do not be convinced by extreme opinions. Include the digital format in your marketing mix and make the most of the pioneerâ??s advantage.
However, resist the call of the sirens and keep a good grip on traditional formats. Remember: the boldest pioneers lost their scalps to the Indians.
If you wish to learn more about online advertising and its challenges, have a look on the IE Master in Digital Advertising and Communication.