Effects of online marketing compared to traditional marketing.

Introduction

In the modern world, as technology advances, we are confronted with many freeways on how,

what and when we can consume for our personal needs. We are consciously and subconsciously

stimulated to be aware of what may be the best choice for us to consume. Our options are

limitless, everything we may need, want or desire is at the tip of our fingertips. We have the

luxury to use our smartphones, Ipads, television and computers to aid us to buy and consume

more. It is very easy to get caught up in the mass frenzy of consumption. The marketing industry

alone is rivalling amongst each other to offer and gain more. The primal television marketing

industry and the new advanced digital marketing industry are trying their best to promote their

business. They are making life much easier for the consumer as well the companies. When we

think about the way our world around us works today, one of the most significant concerns of

our society is the way we use and are exposed to marketing in general.

Furthermore, this paper will focus on the following questions:

What is marketing and why is it important?

What types of marketing are more common and frequently used?

What are the effects of online marketing?

This research paper will discuss how marketing has changed over time, the differences between

traditional marketing and online marketing. Adding to that, the paper looks deeper into how

online marketing is effected by consumers, which one is more convenient and profitable.

Finally, it is compared to see which marketing stradegy is more effective.

What is marketing and why is it important for businesses?

Marketing is the process of engaging potential clients and customers in services or products.

Marketing is a social process by which individuals and organisations obtain what they need and

want through creating and exchanging value with others. The process by which companies

create value for customers and build strong customer relationships is the value they get from

customers in return.(Kotler and Armstrong 2010). Marketing is the management process for

identifying, anticipating and satisfying customers requirements profitably.(The Chartered

Institute of Marketing (CTM), Accessed 2012). Dr Philip Kotler defines marketing as "the

science and art of exploring, creating, and delivering value to satisfy the needs of a target market

at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and

quantifies the size of the identified market and the profit potential. It pinpoints which segments

the company is capable of serving best, and it designs and promotes the appropriate products

and services." (Marketing Management Analysis Planning and Control,7th.ed 1991). Marketing

is not only about selling the right product or even knowing what to sell. It is imperative for a

company to understand what kind of consumer they are targeting for their product. If the

company is not promoting their product to the right audience, it may not have the results they

are anticipating for. By creating the product for the target consumer, you will satisfy the

customers and therefore, the profits will be higher.

Marketing is considered as selling and promoting. This system of business plans, promotes and

distributes products to satisfy and achieve organisational objectives. Marketing differs from

selling according to Harvard Business School's, retired professor of marketing Theodore C.

Levitt "Selling concerns itself with the tricks and techniques of getting people to exchange their

cash for your product. It is not concerned with the values that the exchange is all about. And it

does not, as marketing invariable does, view the entire business process as consisting of a tightly

integrated effort to discover, create, arouse and satisfy customer needs." In other words,
marketing has less to do with getting customers to pay for your product as it does develop

demand for that product and fulfilling the customer's needs.(Marketing Myopia 1960 issue of

Harvard Business review). When you consider these facts, you may come to realise that not

only is marketing crucial for the companies to keep their businesses running, but it also shows

us that as the consumer you are reliant on these relationships with the marketing industries.

Without them, we would be lost in a sea of advertising. Having what is a structure as marketing,

may be one of the reasons the consumer finds it so easy to relate and personalise the experience.

As computers have grown smaller and more powerful, simultaneous television and internet

consumption has increased rapidly (Lin, Venkataraman and Jap 2013). Numerous studies have

reported substantial increases in media multitasking; amongst them, Nielsen (2010) claimed

that 34% of all internet usage time occurred simultaneously with television consumption.

Meanwhile, television usage has not fallen, with Americans still watching about five hours per

day. In fact, time spent with television and the internet are positively correlated at the household

level (Nielsen 2011).

What types of maketing are more common and are frequently used?

Digital methods of advertising are relatively new in the comparison to traditional methods of

advertising. In the Journal of Business Administration Research, it states " Digital advertising,

on the internet and mobile gadgets, has outpaced the traditional media advertising and for the

first time in 2013 generated more advertising spending than television advertising. Digital

advertising is believed to be an effective way to target potential customers in the global market.

Evidence shows that businesses have increasingly switched their advertising focus from

traditional to digital media.”(Journal of Business Administration Research 2014.) In today's

society, we have seen that our family, friends and loved ones all use technology-based

equipment when buying or selling products. It has become accustomed to our lifestyle, we have

become dominant to the marketing whether it be traditional or digital methods.

We have been subjected to advance technology and are aware of the positive and negative

outcomes. Every year, U.S. firms invest approximately $130 billion in traditional advertising

(e.g. television, radio, print, and outdoor) to build their brands and increase sales (eMarketer

2014). Yet, empirical evidence has suggested that firms are gradually shifting their traditional

advertising investments too, for example, social media to pursue similar objectives (eMarketer

2016; Hudson et al. 2016; Statista 2016). Many firms have established a social media presence

by operating pages on social networking sites such as Facebook. Firms post messages on these

pages to interact with consumers by exploiting the network structure and to ultimately build the

brand and stimulate sales (De Vries, Gensler, and Leeflang 2012). We call these posts firm-to-

consumer (F2C) social messages.

Traditional marketing methods are slowly becoming the past whereas Digital marketing has

now started to become the future. Not only is this caused by technology alone, but we also need

to consider the generation ahead of us. Archie was the first search engine in 1990, and our first

clickable banner was in 1993 from then on we only advanced with the technology we are now

using. In the future, this will accelerate and progress even further.

Consumer media preferences have continued to be debated by marketers. As many marketers

have switched from traditional advertising and allocated to digital or have increased their

Internet advertising spending in response to the rising costs of conventional advertising in

comparison (Chao et al., 2012). Although consumer preference does not remain static, research

on consumer media channel preference has been limited (Chao et al., 2012). With 78.6% of the

U.S. population using the Internet ("Internet World Stats", 2014), phenomenal growth has

occurred in digital media. Advertising revenue from the Internet peaked in the third quarter of

2012 with revenues of $9.26 billion, marking an 18% increase over previous years ("Internet

Advertising Revenues", 2012). This growth includes social networking sites like

Facebook.com, Twitter.com, personal blogs, and has fueled the continued digital advertising
growth ("Consumers Driving, 2010"; "U.S. 2010 Digital", 2011). It has apparently become the

norm of the future generation that these figures in the usage of digital marketing will be on the

rise. Why is digital marketing a better method for the consumer? Using digital marketing gives

you the freedom to target an international audience as well as local ones. Digital marketing can

be tailored to specific audiences such as gender, interest, age and locations. We have all been

subject to pop up ads or commercials that engulf our screens on the bases of our past enquiries

on the internet. The consumer has a choice on how they want to receive content. Some might

like to watch Youtube video's while others may wish to read blog posts. Analytic and insight

tools which are offered by social media channels is an easy way in which you can check your

campaigns of choice at any time appropriate for you. You are simultaneously connected to

anywhere in the world at any time you choose.

What are the effects of online marketing?

Traditional marketing methods do not allow you the freedom to do this, it only reaches general

groups or areas. Traditional marketing is less effective on the younger generations. With digital

marketing today, you can see what is or isn't working for your business online. You can

improve your results and adapt very quickly. Unlike traditional methods of marketing, you do

not have to wait for forms or faxes to be returned. You are allegeable to give and receive

information instantly. A manual process is required for traditional marketing, meaning you need

to spend more money and time. For this reason, businesses are converting to digital marketing

because it is cost effective and gives you the means to work with the consumer in a synchronised

fashion.

Consumer-generated media (CGM) such as blogs (a contraction of the term "Web logs") have

witnessed explosive growth in the last few years. For example, the number of blogs worldwide

is estimated to be 184 million with a readership of 346 million (Technorati/Universal McCann,

2008). In contrast, in March 2003, the number of blogs was virtually zero. Other types of CGM
have also seen similar growth patterns, e.g. Facebook, which started in February 2004, now has

about 400 million members worldwide (February 2010 Comscore Media Metrix traffic

estimates). Not only are users of digital marketing comfortable with the reliability and speed

but they have also adapted this to their everyday lifestyle as a necessity.

Many advertisers have either increased their spending on the digital media, or have switched

from the traditional media as they believe interactive advertising on the internet, mobile phones,

and social networks are more effective and efficient, given the rising cost of traditional media.

However, such a shift does not necessarily mean that traditional advertising will fade away in

the near future. Many studies have indicated that digital advertising works in conjunction with

TV, print, and other traditional media to generate the greater increase in marketing effectiveness

(Koetsier, 2014).

A significant factor in digital marketing where companies can hyper-target the customers who

are most relevant to their services and products. In contrast to traditional marketing, digital

marketing can influence and convert new customers efficiently. By using social media

platforms such as LinkedIn, Pinterest, Twitter and digital facebook marketing can target

productive consumers. Furthermore, one other advantage is with SEO (search engine

optimisation), the consumer can look for your service and products online. With this, there are

a few things that need to be considered. For example, if you are anticipating on reaching older

generations, some social media motors like Twitter, for example, might not be the best choice.

This should be considered, like other forms of social media like LinkedIn or Facebook which

are preferred methods for this audience could be best. Targeting is a significant advantage for

the companies because, they can hyper-target age, gender, location, past purchasing and also

interests. This also helps companies to get the right message to the right consumer. In turn this

will also help the company understand what would be the best possible way to introduce and

sell their products to the consumer they are targeting.

Although more and more firms realise the importance of leveraging on the Internet to conduct

their businesses, corporate leaders are finding it difficult to keep up with fast-moving markets

and the customer conditions that are the hallmark of the Internet (Teo, 2005).

Are traditional methods of marketing able to match what digital marketing has to offer

to the consumer?

Traditional methods of marketing are finding it difficult to keep up with the digital market,

reason being, the online marketing offers and promotes interactivity between the consumer and

marketer. The consumer can ask questions and receive prompt answers, can have the product

tailored to their personal needs, and if not satisfied with the purchase or the product in general,

can get help using various methods such as; Tweeter, email, Instagram and also the site which

they have used for the purchase. Any form of digital contact gives the consumer the freedom to

express negative or positive feedback instantly. Being able to use these means of technology

enhances the interaction of the consumer and marketer considerably. This connection also helps

the market in question to build on any areas that need to be changed or repaired. Whereas with

traditional marketing methods, the consumer has less freedom to have needs met as problems

may arise. The time it may take to have a formal complaint filed, and a response to be received

is very time consuming. When enquiries are made by telephone, you are confronted by waiting

for lengthy periods of time and furthermore, are in most cases connected to digital recordings.

This is one of the reasons why people prefer to use digital technology because they do not need

or want to waste time. It is vital that the consumer feels they are heard and can easily express

themselves in any manner of emotion.

As digital marketing, or e-marketing, is the primary method used in building relationships with

consumers, an understanding of e-marketing is essential. A digital presence in a global market

place allows marketers to communicate with a more significant segment of the selected target.

Studies have shown that digital advertising efforts that emphasise interactivity are more
successful than non-interactive online advertising formats (Taylor, 2009). Interactivity is used

in relational theory to maintain continuous communication between marketing executives and

consumers, build relationships, and increase customer loyalty (Martin & Todorov, 2010). When

businesses are more aware of what the consumer wants, this makes it easier to build the

relationship and maintain the collaboration between them and the consumer which will most

likely continue. This Interaction between the company and consumer is significant therefore

this avenue must be a priority for all businesses.

Are digital marketing less expensive compared to traditional marketing?

Businesses are well aware of the low cost of digital marketing. A lot if not most companies are

converting to digital marketing instead of traditional marketing mostly to stay cost-effective. It

can be very costly to have advertisements done in print, radio and as well as television.

Furthermore, marketing strategies cannot be measured easily with traditional marketing. This

will take time and more funding from the businesses. Searching newspapers and ads in

magazines or looking at billboards are still very common. The issue with this type of traditional

marketing is, it is only able to reach a local audience. If for example, the company was targeting

a younger audience, this would be nearly impossible reason being, today's generation uses the

internet extensively and does not usually revert to looking for what they may need via billboard,

magazines or newspapers.

Conventional marketing is expensive and most of the time does not produce the effect your

company or business needs. Internet advertising is quick and inexpensive compared to

traditional adverting methods, and future expectations include that digital advertising will

remain a constant part of the daily lives of consumers (Pergelova, Prior, & Rialp, 2010).

Not only are businesses looking for a cheap way to promote their business but, they are also

looking for ways to keep their businesses in the loop of changing trends. Over 170 million
people use social media, and the consumption of digital content is happening on a daily bases.

This means that, if we are not aware of what is happening around us and close ourselves off to

the changes that are occurring, we cannot grow, or a have productive businesses.

Are all ages aware of digital marketing? How frequently is it being used by the consumer?

People around the globe are more aware of what is happening when using digital marketing.

Although there is a major generation gap between traditional and digital marketing, this is only

a formality. Like the generation of today, most adults over the age of 50 are also following the

trend of digital marketing. They are learning fast and taking comfort in what it has to offer to

all ages. Current research shows that digital marketing is used 99% by ages 18-29, 96% by

ages 30-39, 86% by ages 40-49, 66% by ages 50-64, 47% by ages 65 and over. In addition to

this, 35.71% of the students strongly agree that new product launching info via digital media is

more informative and another 52.38% also agrees with the same point. Students with other

views are deficient in number. This figure shows students feel very convenient when new

brands/products communicate through online. This happens because students might not look

into other types of communications such as billboards or printed press. Most of the time they

are busy with their studies, social life or in a digital device like smartphones, pc, tab etc. When

they want to get any news, they try to know it online and at that moment the advertiser can get

their attention (Md.Khairul Hassan 2015). The younger generation of our time is less concerned

with what is out there for them but are more concerned with how fast they can receive and

deliver whatever it may be that they need for themselves, time is not to be wasted, rapidness is

their language. They are very dynamic in this sense and expect the portals they use to be as

productive as they are and when targeting this audience, a business need to keep this in mind.

In the past, small businesses could not compete with larger or well-known organisations with

traditional marketing. This was mainly because, the small companies did not have the resources

or collateral to be able to organise marketing campaigns. It was nearly impossible to compete

with big businesses. However through digital marketing, a doorway has been opened, so long

as you have a well-thought-out comprehensive marketing strategy and website that looks good

and is working correctly and you are on the same level as the big businesses. With the right

partners and tools, a digital marketing strategy can eliminate costly advertising channels and

can be achieved at a low price, whereas traditional marketing campaigns are expensive and take

time. Furthermore, digital marketing opens a porthole to dual way communication which is

more interactive. Digital marketing also allows the consumer to share, follow and like, retweet

and comment on social media. With traditional marketing, you have no means in which you

can share, comment or follow the marketing in such a short time. Even if you could try and do

this with traditional methods, you would not be able to reach the masses. You could only reach

out to a handful of people at a time. These digital tools would not be available to you which

would, in other words, limit your flexibility in the market.

Some of the major differences between traditional and digital marketing are; Print media,

broadcast media, direct mail, telemarketing. These are the tools that are used for traditional

marketing. Websites, social media, content marketing, display ads, EDM/SMS(electronic direct

mail/short message service), push notifications are the tools that are used for digital marketing.

While traditional marketing has proven long-standing techniques and a history of high success

rates, digital marketing is cost-effective, can reach all audiences, it can be traced and is highly

measurable. With traditional marketing, you do not have the comfort of targeting your

consumer. The product is advertised but, you do not know if it is going to reach the target that

it has been intended for. Furthermore, with digital marketing, you can observe and confirm

what approach is working best for the company. Also with data centralisation, you are

eliminating an extensive amount of work hours.

According Klaassen (2007), the movement toward personalised advertisements gives marketers

a new view of their audience rather than traditional marketing demographics. It is claimed that
as financial institutions seek stronger security measures for online transactions and marketing

firms find more specific data on users for marketing purposes, biometric recognition potentially

gives online companies the edge they need to provide security and help them identify their

users' preferences for personalised marketing ( Journal of Business & Economics Research –

February 2008).

In recent years, there has been an explosion of interest in collecting and analysing television

set-top box (STB) data (also called “return-path” data) (Bachman 2009). As U.S. television

moves from analogue to digital signals, digital STBs increasingly are common in American

homes. Where these are attached to some sort of return path (as is the case in many households

subscribing to cable or satellite TV services), these data can be aggregated and licensed to

companies wishing to measure television viewership ( Journal Of Advertising Research;

December 2009). I believe the main reason for this kind of research is to analyse the major

factors that play a role in the traditional methods of marketing versus the digital methods of

marketing. Needless to say that traditional marketing is not still thriving, but it is gradually

becoming outdated for reasons that technology is advancing.

Conclusion

The new or rather the contextual definition of digital business refers to the way in which

companies are adopting technology platforms for their physical assets to improve processes to

connect internally and to their stakeholders – customers, suppliers, employees, shareholders

and the public at large. Digital is fundamentally changing how companies do business. Enabled

by data and technology, digital is a continuous form of disruption to business models, products,

services and experiences. It has radically changed the way people consume content,

communicate, and access products and services. New companies are popping up overnight even

as existing ones work to gain the required agility to compete in today's increasingly complex

market landscape. How an enterprise responds to the digital challenge will significantly impact
its survival today and its success in years to come. Companies are exploiting opportunities and

managing risks by becoming inherently digital (Imagining the digital future, 2015)

A new world around us is taking shape. We are only just learning how to understand and

communicate with it. In the past, the tools we needed are now considered primitive. The

changes that we have encountered are not going to be the last. Technology is always advancing

and with it comes with new experiences and better ways to enhance our future. Online

marketing is continuing to be a high-growth industry. It has sold out traditional marketing in

the recent years and is continuing to grow. We are now dependent on technology and have

grown accustomed to interacting and engaging with digital marketing to the point of no return.

Current indications show that the technology will drive the business world especially in terms

of advertising which may well result in adapting to internet advertising and deserting the

traditional methods of marketing. The consumer is well aware of the effects of digital marketing

and are very comfortable interacting with these methods. A lot of research has taken place on

the methods, useage, services and experiences of digital marketing, as you will see in my

research.

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