What is Digital Marketing? An Executive Overview
Nov 26, 2021|Read time: 16 min.
- Digital marketing is a subset of marketing that leverages technology, the internet, and electronic devices to promote products and services and engage with consumers.
- Digital marketing isn’t about being louder. It’s about being relevant and ready when your customers take action.
- There are many types of digital marketing to consider, including SEO, content marketing, paid search, display advertising, native advertising, email, affiliate marketing, and more.
As a marketing executive, it’s vital to have a basic, high-level understanding of all the various components of digital marketing. Regardless of what industry you’re in or what demographic you serve, your customers are online.
But how do you reach them effectively? How can you invest in digital marketing in a way that amplifies brand awareness, wins new customers, and strengthens your brand?
This article breaks down everything you need to know as a business leader to make the right investments.
What is digital marketing
Digital marketing is a subset of marketing that leverages technology, the internet, and electronic devices to promote products and services and engage with consumers.
In order to fully understand what digital marketing is, and why it’s the best way to reach your target audience, you need to know how technology shaped consumer attention over the last 50 years.
Afterall, digital marketing is about delivering your message to the right audience. And technology dictates the rules of the game — for better or for worse.
So, let’s take a look at the world before digital marketing.
The rise of digital marketing
In 1971, most Americans huddled in front of a handful of television channels during prime time viewing hours. This pool of concentrated consumer attention allowed brands to reach a massive, captive audience with their marketing messages. However, demographic segmentation was inefficient.
If we leap forward 35 years to 2007, the majority of Americans had broadband internet which allowed mobile devices, tablets, and laptops to become the new gateways to information and entertainment. Constant access to online streaming services, websites, and YouTube gave consumers the courage to cut the cord with cable. As a result, advertising dollars fled from cable networks and fueled the rise of digital marketing as we know it.
Digital marketing promises to reach individual consumers at an unbelievable scale.
Today, brands don’t compete with a few networks for a couple of hours for consumer attention. They compete with billions of voices, 24 hours a day, all shouting for attention.
But, digital marketing isn’t about being louder. It’s about being relevant and ready when your customers take action.
Digital marketing channels are growing
87% of consumers start their buying journey onlineSalesforce
90% of consumers use online search before visiting a storeThink with Google
82% of smartphone users consult their phones in-storeThink with Google
As you can see from those statistics, digital marketing channels are crucial throughout the customer journey. Whether folks search Google for solutions, or they use social media to engage with customer service, or they shop online and pick up in stores, digital marketing plays a role at each step in the buying process.
I’m not just talking about ads. Digital marketing is about engineering a strategy to be first when your audience is ready to act. It’s about creating a seamless, cohesive customer experience — both online and offline — that builds trust, amplifies engagement, and fosters loyalty.
There are many different digital marketing tactics and strategies to consider, for instance:
- Search engine optimization (SEO)
- PPC / Google Adwords
- Online PR
- Content marketing
- Video marketing
- Social media
- Display ads
- Native ads
- Search engine marketing (SEM)
- Email marketing
- Influencer marketing
- Mobile apps
- Affiliate marketing
- Conversion optimization
- Podcast sponsorships
Instead of attempting to use every single strategy, find the ideal mix for your customers and business needs.
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Non-digital marketing channels are shrinking
Conversely, the number of viable non-digital strategies is shrinking. According to Zenith’s Advertising Expenditure Forecast, advertising spend across traditional marketing channels, including TV, radio, newspapers, and magazines, will continue to erode as dollars pour into digital marketing.
Zenith estimates that U.S. online ad spend will reach 59.8% of all advertising outlay by 2022.
Furthermore, eight of the top ten media channels for CMOs are digital, according to Nielsen data.
Benefits of digital marketing
This is an executive’s guide, so I won’t run down a massive list of every metric you should track. Instead, I’ll explain the importance of digital marketing from a high-level business benefits perspective.
- Brand awareness
- Brand sentiment
- Customer loyalty
- Revenue growth
Digital marketing amplifies brand awareness
One of the many advantages of digital marketing is that it’s exceptionally good at attracting and engaging new audiences. In fact, some of the best content marketing you’ll find isn’t intended to sell products. Rather, it exists to entertain and educate folks while also building brand awareness.
Brand awareness doesn’t instantly translate into sales. However, the cumulative effect of repeated interactions with your company amplifies brand recognition and establishes trust. So, when your audience is ready to act, you’ll already be on their shortlist.
Digital marketing improves brand sentiment
67% of customers are influenced by online reviewsMoz
A strong employer brand can reduce cost per hire by up to 50%Glassdoor
Reputation drives 63% of a company’s market valueWeber Shandwick
One of the most important purposes of digital marketing is to shape brand perception. The reason it’s so critical is because brand sentiment directly influences whether customers make a purchase, applicants apply for a job, or investors buy your company’s stock.
For instance, Moz claims that 67% of customers are influenced by online reviews. Glassdoor states that a strong employer brand can reduce the cost per hire by as much as 50%. And Weber Shandwick found that reputation accounts for 63% of a company’s market value.
Digital marketing improves brand sentiment in more than one way. For instance, it engages potential customers across social media networks to reinforce your company values. It also expands your audience reach through content distribution. And most importantly, it uses SEO to influence which content is visible in Google Search.
In fact, a commissioned study by Forrester Consulting found that 70% of executives believe SEO improves brand perception.
Digital marketing reduces customer acquisition cost
Advertising is about paying someone to deliver your content to their audience. Traditional ads factor in time and location. For example, you pay to run a TV spot during a certain program. Or, you pay to display a billboard from November through December.
That means you pay for the ad even if your audience doesn’t see it.
Digital advertising, on the other hand, lets you show your ad to a specific audience and only pay when someone clicks on it. It sounds like a marketing utopia, right?
But, as an informed marketing executive, you probably already know that programmatic digital advertising has lost its luster.
The combination of anemic click-through rates, rampant fraud, and inaccurate data drives advertising costs through the roof. The problem has gotten so bad that many notable brands turned off hundreds of millions of dollars in digital advertising spend and saw no revenue declines.
Organic search promises much more sustainable, compounding results.
Through search engine optimization, Terakeet reduces customer acquisition costs (CAC) by an average of 87.41% compared to paid advertising. That cost reduction means we’re able to deliver up to a 12.2x ROI on marketing spend.
Terakeet reduces customer acquisition costs by an average of 87.41% compared to paid adsTerakeet
Organic search has such a low CAC because after you gain traction, your content performs even when you shift your budget elsewhere. That’s the power of SEO.
Digital marketing increases customer loyalty
Most new marketing strategists tend to view digital media through the lens of infographics, templates, or social media posts to share on LinkedIn or Twitter. But, those are just tactics — fancy lures to get some attention. They don’t engender a sense of loyalty, let alone foster meaningful connections.
However, brands that truly understand digital marketing learn to leverage it to build entire communities.
These communities develop into echo chambers of brand love where users interact with each other as well as the brand. As a result, marketing professionals gain access to the hearts and minds of their audiences.
They can extract insights to drive marketing initiatives, encourage dialogue, and amplify loyalty in ways that a direct mailer or email never could.
Digital marketing drives revenue
Marketing ROI isn’t always straightforward to measure. But, at some point, you will need to ring the cash register. And digital marketing is phenomenal at driving revenue because it’s incredibly versatile, agile, and user-focused.
In fact, Here’s what the CMO Council says:
87% of B2B buyers say online content has a major or moderate impact on vendor selection.
But, what about the impact for B2C companies?
Terakeet helped an online bank increase monthly organic account enrollments by 553% through SEO. Sure, we also increased monthly organic search traffic by close to 700K during that time. But, what matters most to the business is revenue. And the more accounts they secure, the higher their revenue.
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Types of digital marketing
Although there are dozens of different types of digital marketing, I’ll focus on the most impactful strategies for this guide.
Search engine optimization (SEO)
SEO is special because it’s the one digital marketing vehicle with the deepest insight into your audience’s mindset. SEO reveals their thought processes and unlocks meaningful connections. It’s the keystone of your digital marketing process that amplifies and unifies all of your marketing and digital channels.
Beyond that, it’s hard to beat the ROI of SEO.
Terakeet’s partnership with a leading mortgage company earned us a 2021 Titan Business Award and led to the following results:
Grew Google organic market share by 265%Terakeet
Delivered 12.2x return on investmentTerakeet
Grew business value per blog visit by 429%Terakeet
Today, the organic search channel is more central to any business’ performance. CEOs frequently discuss their SEO strategy during quarterly earnings calls, and they understand how organic search impacts the business overall.
For example, Cars.com often points to their domination of the search engine results pages (SERPs) as a reason for increased leads and financial results when talking with investors.
Content strategy & content marketing
Content strategy is the high-level plan for reaching your audience through content. And content marketing is your step-by-step roadmap for distributing that content through your digital marketing efforts.
As you might expect, there are dozens of different types of content marketing you can deploy to reach potential customers. The format you choose depends upon which platform you plan to publish on, the purpose of your content, marketing timelines, and so much more.
Most brands understand the benefits of content marketing by now, which include:
- Connecting with your audience
- Delivering a captivating user experience
- Projecting your brand personality
- Driving engagement
- Influencing perception
- Increasing online sharing
- Generating conversions
As you can see, content marketing extends far beyond blog posts.
You could produce case studies to boost customer acquisition. Or, you might create more engaging product videos to increase ecommerce sales. You could also develop a content hub that’s filled with expert guides, white papers and reports.
There are practically limitless content marketing examples brands can use to bolster their digital marketing efforts.
Social media marketing
Statista reports that by 2022, brands are expected to spend more than 56 billion dollars on social media advertising. And that figure doesn’t even account for the cost of managing social media teams to organically engage with audiences.
Most of that massive budget is expected to have a positive return on ad spend (ROAS) through purchases. But, some of it is allocated to growing brand awareness through audience targeting.
Stop for a moment.
That should raise a big flag if you remember how inaccurate user targeting data is on social media.
Instead, brands should leverage social media marketing for its power to organically engage with audiences.
- Create content that triggers emotions, draws in users, sparks virality, encourages conversation, and gives folks a reason to click the follow button.
- Tap into your audience’s passions and implement a feedback loop with the broader marketing team to develop, iterate on, and amplify other marketing initiatives.
Digital advertising (PPC)
Digital advertising is a broad field that commands a humongous slice of the marketing budget. Among the many different types of digital advertising, the most prominent are: display, social media, native, video, and paid search.
Let’s walk through each one quickly.
Display ads perform the worst. They have an abysmal click-through rate (CTR) as low as 0.35%, and most of those clicks are due to accidents and bots. Most internet users have developed banner blindness, and they completely ignore display advertising.
Display ads are like the billboards of digital advertising. They float invisibly in the background while users subconsciously ignore them.
Social media advertising
Social media advertising, as we already discussed, is riddled with accuracy issues that will only get worse as privacy laws, ad-blocking technology, and consumer awareness increase.
Native advertising (a paid promotional placement within content) can be effective if it’s high quality. However, most attempts miss the mark or get buried in the murky quagmires of classified sections on websites.
Video ads — in this case I mean ads that play during video streams such as YouTube — are incredibly disruptive to the user experience. Think about it, how often do you hover your finger over the skip button on YouTube? And how many times have you intentionally clicked on a YouTube ad?
Marketers often argue that these ads impact brand awareness. But, when they frustrate users, is that really the type of awareness you want to drive?
Search engine advertising
That brings us to paid search advertising.
Google Adwords is the most reliable form of digital advertising because it leverages user search behavior. In other words, rather than targeting a 30-year-old male during the winter, you could show your ad to people who search “best downhill skis”. In that case, it doesn’t matter who you target. All that matters is what they want.
As more brands accept the reality that the pandemic jolted consumer shopping behavior into the digital age, they’ll shift more of their marketing budgets into paid search.
In fact, eMarketer expects advertisers will spend $99.22 billion on search by 2024. That exceeds their pre-pandemic forecast, accounting for the shift in shopping behavior.
Advertisers will spend $99.22 billion on search by 2024eMarketer
So, what’s the problem with paid search ads? Several things, actually.
Firstly, although paid ads deliver quick, short-term sales, they’re not a sustainable revenue stream for online marketing. As soon as you turn them off, your visibility vanishes.
Secondly, search ads are expensive. In general, the ROI on a PPC campaign is about 2x vs a 5x return on SEO. In contrast, Terakeet delivers an ROI as high as 12.2x, and acquires customers for 87.41% less than paid ads.
So, although paid search certainly has its place in a comprehensive digital marketing plan, it is often most profitably used in a highly targeted manner or for a short-term campaign.
Email marketing might feel like a relic compared to other digital strategies, but it’s alive and thriving. In fact, email marketing generates $38 for every $1 spent, which means it produces the highest ROI of practically every other digital marketing channel.
On the B2B side of things, email is the top source for B2B leads and has the highest return on investment (ROI), according to Chief Marketer’s 2020 B2B Marketing Outlook Survey.
The digital marketing success of email is no surprise because it’s much easier to mobilize existing fans than to capture new customers. Furthermore, it’s incredibly scalable when powered by marketing automation tools. A single digital marketing specialist can effectively manage multiple campaigns simultaneously.
Email marketing provides your brand a one-to-one channel with your audience. Through effective audience segmentation, you can control the marketing message that reaches each buyer persona.
While awareness-driven strategies at the top of the funnel are critical to your business’s success, don’t neglect the low-hanging fruit of email marketing.
Native advertising matches the form and function of the platform on which it appears. Some examples include sponsored in-line content, feed-based social media ads, and video-based YouTube ads.
Native ads are slightly less intrusive because they mimic other content on the page. Furthermore, they tend to engage readers more because they don’t look like ads.
“Viewers spend almost the same amount of time reading native ads as they do editorial content, but they also pay 53% more attention to native advertising when compared to banner ads.
Native advertising may be effective for certain brands as part of the digital marketing mix. The key is to test it across different platforms to see which works optimally with your target audience.
Affiliate marketing is the process of paying a commission to bloggers, social media influencers, and other affiliates who bring paying customers to your business. Similar to PPC, you only pay your affiliate marketers when a sale can be attributed directly to their referral.
For many businesses, this makes it a win-win. Best case scenario, affiliate marketing drives tons of potential customers to your product landing pages where they convert. Worst case scenario, you get no referrals and you pay nothing.
As a digital marketer, there are a few downsides you should be aware of. Firstly, affiliate marketers that run spammy, link-riddled blogs can do your reputation more harm than good. Secondly, heavy affiliate commissions could erode your bottom line.
Before you run a digital marketing campaign with affiliates, do the math and make sure it will support your marketing objectives. Then, be picky about who you work with. Some brands find that it makes the most financial sense to work exclusively with super affiliates.
Affiliate relationships can be a powerful digital marketing asset to cultivate. They’re effective brand ambassadors that could convince a potential customer to choose you over your competitors.
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The Fortune 500 CMO’s guide to content strategy.
3 Most important things to know about digital marketing
These are the three most concepts I hope you learn from this digital marketing guide:
- One plus one equals ten
- Don’t trust user targeting
- Google is your homepage
1. One plus one equals ten
The true power of your digital marketing strategy comes from integrating all of the channels within your marketing mix. When you build a more cohesive strategy, you’ll amplify your results much more than the sum of its parts.
Here’s what McKinsey & Company says about the importance of accumulated brand impressions throughout the buying journey:
Those accumulated impressions then become crucial because they shape the initial-consideration set: the small number of brands consumers regard at the outset as potential purchasing options.
The takeaway? Integrated marketing aligns your resources and initiatives to improve efficiency and amplify results.
2. Don’t trust user targeting
Programmatic ad targeting is disturbingly inaccurate.
One report claims that Facebook’s interest precision in the U.S. is only 41% (and could be as low as 9%). But, the problem is bigger than Facebook. Another report states that even gender targeting is only accurate 42.3% of the time with programmatic advertising. Furthermore, if you combine two parameters, like age range + gender, the accuracy drops to 24%, on average.
In other words, you’d reach the right demographic more often with a spray and pray approach than through programmatic advertising.
The takeaway? Don’t rely on programmatic user targeting. Instead, leverage digital marketing to target user search behavior. (I’ll come back to this point in a bit.)
3. Google is your homepage
Remember those SEO statistics I mentioned earlier?
- 87% of consumers start their buying journey online
- 82% of smartphone users consult their phones in-store before making a purchase
Consumers will eventually encounter the digital version of your brand, and what they find will influence their opinion of your company. Often, their first digital interaction occurs on Google.
When you evaluate your brand’s online presence, ask yourself the following questions:
- Is your online messaging consistent with your offline messaging?
- Does your digital customer experience match your in-store experience?
- Do you control the narrative on the first page of Google?
Even if you don’t have negative content in your search results, the wrong narrative can impact your business.
The takeaway? Google search results don’t just influence shopping decisions. They also impact sales, hiring, and investor relations. So, treat the first page of Google like your website’s homepage.
A brief recap
As you build out your digital marketing strategy, keep in mind the pros and cons for each channel. Nothing is perfect, so it’s critical to mix the right recipe to achieve your business goals.
For example, you can run Google Adwords when you need to target short-term seasonal keywords or while you’re building up topical authority to rank in organic search. Once your content ranks in the top three organic positions, you can shift PPC budget to other keywords.
Use social media to amplify your blog content, have conversations with your audience, and uncover trending topics they care about.
Leverage email marketing to nurture leads, amplify loyalty, prompt action, and promote your content.
Finally, integrate your traditional marketing efforts with your digital initiatives too. There are plenty of ways to use QR codes, custom URLs, and hashtags in direct mailers and in-store signage to more effectively track customer behavior across mediums.
The key to success is to view online marketing as part of your overall digital transformation rather than a separate entity.
Digital marketing FAQs
Digital marketing is a subset of marketing that leverages technology, the internet, and electronic devices to promote products and services and engage with consumers.
Some of the most common types of digital marketing include SEO, content marketing, email marketing, social media marketing, digital advertising, affiliate marketing, and native advertising.