Onlinemarketing
Thesis
Topic:
Marketing
Assumption:
Traditional marketing is becoming more and more obsolete.
Prior knowledge:
Online marketing contains everything internet. Such as search engines, webshops or social media.
Question:
Has traditional marketing become obsolete?
Sub Questions
How is online marketing defined?
What is traditional marketing?
What methods of online marketing are there?
2017 the Neue Zürcher Zeitung publishes an article about the increase of online advertisements. It displays an over all growth of more than 10% in net sales of internet advertisements. In relation to the general decrease in promotional spending, a remarkable trend. How do these figures relate to the thesis defining question:
Has traditional marketing become obsolete?
Project description
The interdisciplinary project (ger. Interdisziplinäre Projekt Arbeit - IDPA) is a paper, every student of the computing college Aarau needs to write in the third year of the apprenticeship. The goal is to create a reference between the theoretical part learned in Aarau and the professional work done in the internship. The focus lies upon two specific classes of the vocational studies. In this project those are; major subject economics & law and history & politics. Topic of the project is general marketing, immersed into online marketing. The ultimate goal of the paper is to answer the thesis.
Motivation
Since middle school I am interested in the effects of marketing. As I deeply value organisation and planning, it is intriguing to take a better look at all marketing contains. From creating a concept for an efficient production to promotion and finally distribution. However, the promotion always fascinated me most. I wondered how Ads, which stimulate sales through intelligent and detailed presentation of a product, do it. How the human psyche is an open book to marketing specialists, truly an amazing, multilayered subject I want to learn more of. I want to understand how the different marketing concepts affect sales. I also want to take a look at the past and future strategies and compare them to each other. Since starting my junior year at the computing college, I continue to gain interest in the promotion process in the web, specifically how software engineers manipulate online marketing.
Project management
The IPERKA (ger. Informieren, Planen, Entscheiden, Realisieren, Kontrollieren und Auswerten) model, divided into six sub categories, is a brilliant way to partition a project. The first of these categories, the Informieren one, is used to become familiar with the environment, approach and the overall project. On one side this is where needs to be specified what the project contains, on the other the entire topic needs to be clarified and further divided. The second step, the Planen, lists what needs to be done in the project and milestones are defined. It also contains a provisional timetable. The third category, Entscheiden certifies the planned. The decision of what is remarkable, important information happens in this step. After that, the most important step follows; Realisieren. This step contains the entire project. Everything planned is now realised and implemented. The fift category, Kontrollieren has the purpose to take a second look at the entire project, and control its integrity. If the projects nears its completion, the last step, Auswerten, comes into action. It contains a reflection of the author on the project, including a critical look at what might went bad and how to do it better next time.
The project does also contain different project related methods, which have the purpose of either gathering information or processing it.
In Realisieren there is a SWOT analysis, processing gathered information by listing Strengths, Weaknesses, Oportunities and Threats. It is a visualisation of the different aspects of a online marketing tool. The method is a brilliant way to reference when a pro v. con list assertion is made. To find the benefits of a marketing method, the utility analysis is created. The, in a table displayed method, contains the name of the marketing method and the weighed as well as regular score. This way the most useful marketing method can be determined, logically.
Marketing
Marketing is not easily defined, as there are countless interpretations. The general public treats it as a synonym to ads, although ads and promotion make a big part of marketing, it is more than that.
Marketing are the activities, institutions and processes, which have a worth to customer, partner and the entire firm in creating, communicating, distribution and exchange of goods.
> - American Marketing Association
Active marketing
Known as active marketing is marketing, which requires action from a company. It takes skill to master and is what the general public thinks of when hearing marketing.
Passive marketing
In contrast to active marketing requires passive marketing action from the customer. The company sells itself before the demand exists in the first place. The goal is the creation of a demand in the customer.
Traditional marketing
According to cambridge "traditional" means "following or belonging to the customs or ways of behaving that have continued in a group of people or society for a long time without changing". Forbes Business Magazine describes traditional marketing as promotion using newspapers, magazines, telephone directories, radio and tvs. Therefore these very methods are tested in the thesis.
Variants of online marketing
Online marketing is no niche product and recognisable in most marketing concepts. Sadly the proper use and what it is about most people do not know.
Display marketing
The technical term for the advertisement, which is immediately seen on the internet. It is about in any shape or form visible promotion. Also known as banner advertisements contains the display marketing pop-ups and banners.
| Strengths | Weaknesses |
|---|---|
| Cheap Individual Creative Great Reach Unlimited Space |
Banner Blindness Semi Effective Inexact Statistics |
| Opportunities | Threats |
| Customer Binding | Disturbing Scandalous |
Content marketing
Content marketing is compared to banner advertisement an online exclusive method. Internet searches answer a specific question. In content marketing the goal is to be the answer of the search. If someone for example searches for the birthday of Barack Obama, the answer needs to be the: "Birthday calendar of influential people". The distribution of content takes place in every possible channel such as videos on social media or optimisation of search entries in search engines as well as private websites and products.
| Strengths | Weaknesses |
|---|---|
| Discrete Fast Spread |
Time Effort Expertise No Insurance |
| Opportunities | Threats |
| Customer Happiness Regional Outperform Competition |
Exploitation |
Social Media marketing
All measurements a company takes regarding social media, be it for promotion or distribution, fall under the category of social media marketing. This domain of online marketing is the most popular method and with about three quarters of all companies investing in it also the biggest. In combination with influencer marketing it even created new, unorthodox career possibilities. Facebook leads the market with a 23% share with facebook itself and a total market share of 42% in the combination of facebook and instagram. Far off on the second place, there is odeos twitter possessing a market share of 16%. Additionally all the companies bearing a combined market share of 99.5% are american. Of those 87.5% are californian. Evidence of the growth of social media marketing portrays the indian media producer, T-Series, it gained the top spot for most subscribed channel on youtube. In the fifteen year old history of the video platform a company became the biggest channel ending an era.
| Strengths | Weaknesses |
|---|---|
| Cheap Great Publicity Access to core demography |
Time Effort |
| Opportunities | Threats |
| Brand Recognition Brand Loyalty Trendsetting |
Scandalous Security Concern |
Influencer marketing
This method is one of the few in which no matter if traditionally or in the modern way, the company accesses the social reach of a private person. In the rise of this method there were even new laws written, which state that ads must be displayed as such. The interesting part is, it is the first ever law which binds the law of a single country through the nationality of a company to the entire world. An example of influencer marketing is the cooperation between the most popular non-corporation youtuber PewDiePie and the energy drink company GFuel.
| Strengths | Weaknesses |
|---|---|
| Cheap Great Publicity Access to core demography Individuality |
Risk |
| Opportunities | Threats |
| Brand Recognition Brand Loyalty Trendsetting |
Scandalous Brand Damage |
Affiliate marketing
Popular in the context of social media marketing, the affiliate marketing, as the name already suggests, has the goal of affiliating a product or a company with something or someone. In the best case scenario this is already achieved by the proper use of influencer marketing. But especially when the company is not well known or is hardly identifiable with the product, it is necessary to use the popularity of another company or person. It is possible to use discount codes, which the influencer publishes. This way the customer affiliates the product to the influencer and is therefore more likely to buy the item. The marketing strategy of the video game producer "Paradox Interactive" displays an example of affiliate marketing. The company uses the influencers, who already play its games to promote new content or even new games.
| Strengths | Weaknesses |
|---|---|
| Cheap Access to core demography |
Risk |
| Opportunities | Threats |
| Brand Recognition Customer Binding |
Scandalous Brand Damage |
E-Mail marketing
E-mail marketing is underestimated by most, as in the year 2020 3.9 billion people use e-mail for communication. A gigantic market, which is not even surpassed by the search engine giant Google, who controls a grand total of 1.7 billion people. This confirms, that the by far cheapest online marketing method, reaches the most people. Among other things, newsletters and info mails belong to e-mail marketing. Sadly e-mail marketing is often not worth it for legal reasons, as a company cannot just send a newsletter to all 3.9 billion users, but has to follow strict privacy rules.
| Strengths | Weaknesses |
|---|---|
| Cheap Great Publicity Time Effort |
Low Efficiency Privacy law Uncertain reach of demographic |
| Opportunities | Threats |
| Brand Recognition Customer Binding |
Privacy infringement Scandalous |
Viral marketing
Viral marketing sounds daunting at first, but it is the best thing that can happen to a company. Viral as well as affiliate describes the method perfectly. Viral, as an adjective, describes the origin from a virus. The good thing about it is the epidemic spread. The virus is shared with others so often and so quickly that soon every internet user is familiar with the phenomenon and possibly also the product it is associated with. A famous example of the success of this marketing method is the company Vans. In 2016, it offered the then 15-year-old Daniel Lara and his schoolmate Joshua Holz Vans sneakers for life, because they were associated with the viral video "Damn Daniel" and the slogan "Back at it again with the white Vans".
| Strengths | Weaknesses |
|---|---|
| Free Great Publicity Fast Spread Time Effort Possibility of negative marketing |
None |
| Opportunities | Threats |
| Brand Recognition Brand Loyalty |
Brand Damage |
Comparison
In order to compare online marketing with traditional marketing, we determine which aspects are comparable and how important they are for good marketing. To define good marketing effectiveness, customer satisfaction, brand recognition customer loyalty. Not to forget costs, time, risk, speed of dissemination, audience, dissemination speed, audience size and demographics accessibility must be considered as well.
| Online marketing | Traditional marketing | ||||
|---|---|---|---|---|---|
| Weight /5 | Points /10 | Weighed Score | Points /10 | Weighed Score | |
| effectiveness | 5 | 9 | 45 | 5 | 25 |
| customer satisfaction |
4 | 7 | 28 | 5 | 20 |
| brand recognition |
3 | 10 | 30 | 9 | 27 |
| customer loyalty |
3 | 9 | 27 | 6 | 18 |
| costs | 1 | 8 | 8 | 3 | 3 |
| time | 1 | 10 | 10 | 4 | 4 |
| risk | 2 | 4 | 8 | 6 | 12 |
| speed of dissemination |
3 | 9 | 27 | 2 | 6 |
| audience | 3 | 10 | 30 | 3 | 9 |
| dissemination speed |
4 | 10 | 40 | 2 | 8 |
| total | 253 | 132 |
Weight
The effectiveness of a promotion is undoubtedly the most important aspect, for no company or person voluntarily invests time and money in an advertisement that does not serve its purpose. Therefore, effectiveness is weighted with the highest possible five. Customer satisfaction is also an important part of a promotion. A customer decides in favour of a product on the basis of his experience and his emotions. The weighting with four points does justice to the importance of these emotions. Recognising a brand is an effective tool to get ahead of the competition before the need to buy arises. If a customer is already aware of a brand that sells the product they are thinking of buying, they are two and a half times more inclined to buy the product from the known brand. Despite the fact that brand recognition is important, there are more important aspects of marketing that require more attention. While appropriate money management is certainly appealing to a company, no company shies away from costs when it comes to getting the product to the market. For this reason, costs are given the lowest weighting. In the same context as costs, no time is spared. Since for many time is also money, this is an additional reason for the same weighting as that of costs. Similar to costs and time, risk is also not shied away from. The difference to the above two aspects, however, is in the outcome. If a risk is taken and a there is a negative outcome, then the result can be potentially catastrophic. The speed of distribution can be both very important and rather unimportant, as the importance of distribution speed depends on the original audience size. If an original audience contains only one person, then the distribution speed must be high. The demographic accessibility is different from the audience size. This describes how many people in the audience match the demographic. This represents the interest in the advertised product, which is why a high reachability is more effective and therefore deserves a higher weighting.
Points
The effectiveness of online marketing is beyond question. On average, a company can average an eightfold ROI. In traditional marketing, this value cannot be tracked as it is generally more difficult to follow the investment. Traditional advertising, however, still meets with enthusiasm. For example, 56% of households say that print advertising is the most trustworthy. However, under 50% of the same communities say they would not visit a shop for the first time after seeing its advertisements. Nor do they visit the website of the company's website or find out more about it. So traditional marketing, although effective, is clearly less effective than online marketing. Although display marketing is also perceived as disruptive and annoying in the online market, it can be offset by advertising on social media that is tailored to the demographic. The same can also be used as an argument against the traditional marketing, as the focus on the target demographics is not as detailed. Brand recognisability is high in both cases, but online marketing must be valued higher as SEO, as SEO can further manipulate recognisability.Loyalty to a brand has been low in the early years of the internet and the market changes very quickly. However, since social media has been used by companies are tying customers to a brand more than ever before. The users feel part of a company when they buy brand related. Costs in traditional marketing are much higher than in online marketing. In addition costs are recurring and not one-off, as are the largest items in online marketing. The amount of time spent on social media is incredibly high, so an employee has to monitor trends on different trends on the various platforms and interact with customers and users, while a television, radio or print ad only has to edit, create and publish. Risk is equal in both methods, if not greater in online marketing, as more audiences are involved. A difference can be made, however, in the way a scandal is handled. In traditional marketing, it is almost impossible to react. On the other hand, online damage limitation can be initiated within minutes. The speed of dissemination of a traditional advertisement is very slow, because after the original spot, word-of-mouth propaganda is used. In contrast, in social media it is up to a viral trend.Google processes seven billion search queries every day. An enormously large audience for advertising. The largest audience that traditional methods can reach is the television broadcast of the World Cup final with 1.12 billion viewers. Reaching this demographic is again very present in online marketing with the help of social media and influencers. In this way, an audience can be reached from which almost 100% can be interested in the product. In traditional marketing, a specific demographic can also be reached through targeted selection of advertising media, but a quota like the one achieved through the use of social media is impossible.
Search Engine Optimisation
Many of the online methods were copied from the traditional marketing manual and adapted to the Internet. But not search engine optimisation from content marketing. The phone book that comes closest to the new method does have significant differences. In it, a company only has the advantage it can achieve on the Internet if it happens to start with the letter A.
Search engine optimisation can be differentiated. There is paid optimisation optimisation and non-paid optimisation. In order to flourish in paid optimisation, it takes money. The highest bidder gets the first place on Google, Bing or Facebook in a search for a topic. The disadvantage of this is that such search results are marked as "Ad". This short word motivates about 40% of Google users to scroll on. Unpaid SEO is again further divided into on-page and off-page optimisation.
Like many things in marketing OnPage optimisation describes its purpose in its name. On-Page aims for the first place in a search engine query such as Google. The difference from the paid method lies in the implementation. The website developer reaches into his bag of tricks to manipulate the algorithms to determine the best search result. Thus a simple <h1> title tag can make a huge difference, as Google assumes that the page is more worth reading than an unprofessionally designed one. The disadvantage lies in the expertise required.
Off-page optimisation is not as easy to implement as its counterpart, but is just as important. An algorithm is not only interested in what can be found on a website, but also how popular it is. For example, how often it is shared or
linked. Much of this topic cannot be manipulated, which is why about 60% of the top 10 search queries are three or more years old. Even a unattractive link also leads to a lower rank on Google. For example, a link from an unflattering website can be unreadable, such as: "nur.zurschau.com/123456789123". Example
of an advantageous link naming is my own old website: "doemuu.live/contact". In the example of my website, Google knows that it must be a contact form. So if the algorithm gets the word contact, form or similar for the search my website will be listed before only.zurschau.com.
Historical development
Unlike today, in the early days of the internet, advertising products was prohibited. The first thing to be discovered was email marketing. As early as 1978, the DEC (Digital Equipment Corporation) employee Gary Thuerk sent out the first newsletter to all internet users on the West Coast of America at the time. With this action he not only hit a milestone in marketing, but also sends the world's first spam mail. It was not until fifteen years after the first spam mail that a market for online promotion began to develop. However, this market developed rapidly after its discovery. For example display marketing begins with a clickable banner of a law firm on GNN (Global Network Navigator). In the following year, Hotwired, an online magazine, also starts with the sale of online advertising space to the tech giant AT&T. Another year later, Yahoo begins to restructure itself into a commercial operation by launching keywords for the first time. Heralding the beginning of search engine optimisation.
The online market appears invulnerable for the longest time and therefore sees large investments between 1990 and 2000. However, this allows a security that is actually worth only value x, be bought at a much higher value. The result is that, after Internet companies start making lower profits, a panic sell-off ensues, which corrects the value of the security to x again. As a result, the online market loses eight trillion USD. After the .com bubble crash, banner advertising is hardly used any more, as it seems no longer to have any effect. So companies are looking for new methods. They see the problem with banner ads, the user simply ignores them, which is why their solution seems simple. Thus comes the use of non-ignorable banners that pop up on websites with one click, or so-called pop-ups. The internet users find this new method too annoying, which leads to the invention of pop-up blockers. These in turn weaken the effectiveness of advertising.
With the advent of social media in the mid 2000s, toes are also being dipped into the water of influencer marketing. At first, only already very well-known celebrities such as Charlie Sheen and Kim Kardashian were recruited as advertisers. They no longer "promote" only a specific product but rather the entire brand. In this way a new brand awareness is created. Later ordinary, smaller influencers also become advertisers. These reach more specific, but smaller demographics. In order to bring banner advertising into the social media ring and at the same time to counter the banner blindness. Platforms are being paid to show videos or even interactive banners.
Social media marketing has also experienced a .com Bubble Crash-like slump. In 2017 the most influencer-friendly social media platform "YouTube" experienced the adpocalypse or advertising apocalypse. This year saw several major and important influencers withdraw from their position. Companies withdrew from the market. This meant that the platform could no longer pay the video makers as usual and many of them had to look for a new livelihoods. This phenomenon has changed the whole online world. Other platforms like Facebook are now deleting posts that could motivate companies to opt out. The family-friendly internet is born.
Glance to the future
Looking into the future is not easy, as marketing is constantly changing and is unpredictable. However, if the past of marketing is taken into account, it can be said that online marketing will play an even greater role than it already does today. With further globalisation, it is imperative that companies escape the regional market and find shelter on the world market. This only works with an intact online presence.
Conclusion
As the first project of this magnitude, I urgently need to improve my organisation for future projects. This means source organisation. Too often I get lost in the references and end up having to redo everything. My initial assumption is that traditional advertising is nothing but a remnant from the old days. In the course of this project, it has become apparent that online marketing is certainly more advantageous than traditional advertising, but it is still far from being replaced. To answer the question;
"Has traditional advertising become obsolete?"
I say: "No! Not at all".
So far.