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Module 1 The opportunities of digital marketing

Here’s a summary of the key learning points from this module. Keep a copy of this
sheet in your study notebook as a helpful reminder, and to assist your revision for
exams:

Topic 1 The challenges of digital marketing

1 The six core activities involved in managing digital marketing are:

1. Acquisition
2. Conversion and proposition development
3. Retention and growth
4. Strategy and planning
5. Managing relationships
6. Supporting processes

2 The seven organisational challenges in McKinsey’s 7S model are:

1. Strategy
2. Structure
3. Systems
4. Staff
5. Style
6. Skills
7. Super-ordinate goals

3 The five stages of organisational ecommerce maturity, in order, are:

1. Unplanned
2. Diffuse management
3. Centralised management
4. Decentralised operations
5. Integrated and optimised

4 The five criteria by which ecommerce capability maturity can be measured are:
1. Strategy process and performance improvement process
2. Structure: location of ecommerce
3. Senior management buy-in
4. Marketing integration
5. Online marketing focus

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Topic 2 Digital marketing defined

5 The definition of ecommerce reminds us that digital marketing is about electronically

facilitating different types of transaction – not only financial but also a range of
informational transactions.

6 The two types of ecommerce transaction are buy-side and sell-side.

7 Ecommerce embraces all electronically mediated exchanges, whereas ebusiness is the

transformation of key business processes through the use of internet technologies.
Emarketing is the use of electronic technologies to achieve marketing outcomes, while
internet marketing is narrower than emarketing, being the use specifically of internet
technologies.

Topic 3 An introduction to digital marketing planning

8 Digital media will not be effective without a planned approach that is supported by the
organisation’s implementation and development processes.

9 The organisation’s hierarchy of plans is as follows, with each step informing and
framing the next step:
1. Corporate plan
2. Marketing plan
3. Communications plan
4. Digital marketing plan

10 Without a digital marketing plan there may be an insufficient allocation of resources to

continuous activities such as search marketing etc.

Topic 4 What goes into a digital marketing plan?

11 Four main activities make up the stages of the digital marketing plan, and are similar
for both annual and campaign plans:
1. Situation analysis
2. Objective setting
3. Strategy definition
4. Implementation

12 Database – and customer relationship management applications built on these – are

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vital to deliver relevance through digital communications. It follows that your digital
marketing plan should also specify how these technologies are managed as part of
permission marketing.

13 With reference to digital marketing, an ‘applications portfolio’ is the mix of software

applications used in an organisation or department to support digital marketing.

14 CRM and other website-related technologies are crucial to providing an effective online
customer experience. Most organisations will need to specify, introduce and manage
an applications portfolio of different types of marketing and CRM technologies.

15 A digital marketing plan gives structure to your annual plans and campaign planning. It
& ensures:
16 1. Proper review of your context or situation
2. Clear objectives
3. Strategies to achieve your objectives
4. A feedback loop whereby the plan can be monitored and controlled

Topic 5 The digital marketing planning process

17 For digital marketing plans to be effective, organisations must develop an effective

strategy development process. This will be effective if it can generate, as its output, a
digital marketing plan that is aligned with the business strategy.

18 For digital marketing planning, you can learn from well-established principles of
business planning.

19 A four-stage generic strategic planning model can be applied to any type of digital
marketing plan:
1. Strategic analysis
2. Strategic objectives
3. Strategic definition
4. Strategic implementation

20 Business strategy development commonly falls into two approaches: Predictive

strategy and Emergent strategy.

Topic 6 Digital communication tools

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21 The four main types of online presence are:

1. Transactional ecommerce sites
2. Services-oriented relationship-building sites
3. Brand-building sites
4. Portal or media sites

22 The four transactional alternatives between businesses and customers are:

1. B2C (Business-to-customer)
2. B2B (Business-to-business)
3. C2B (Customer-to-business)
4. C2C (Customer-to-customer, also known as P2P or peer-to-peer)

23 A portal is a website that acts as a gateway to information and services available on the
internet.

24/ The different types of portals and their characteristics are:

25  Access portal: Associated with ISP
 Horizontal or functional portal: Offers a range of services; for example search
engines, directories, news, recruitment, personal information management,
shopping
 Vertical portal: Covers a particular market, such as construction, with news and
other services
 Media portal: Main focus on consumer or business new or entertainment
 Geographical portal: May be horizontal or vertical
 Marketplace portal: May be horizontal, vertical or geographical
 Search portal: Main focus is on search
 Media type portal: May be voice or video and delivered by streaming media or
download of files

Topic 7 The impact of digital marketing on business

26 The four essential ways of assessing the importance of digital marketing are:
1. Customer connectivity
2. Customer channel usage
3. Online results
4. Marketplace impact

27 The benefits or reasons for adopting the internet for marketing as expressed in the 5Ss
are:
1. Sell

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2. Serve
3. Speak
4. Save
5. Sizzle

28 The Ansoff 2x2 matrix plots the options for traditional marketing (market and product)
development, and is equally relevant to digital marketing development.

29 These are the four Ansoff strategies and examples of how they might relate to digital
marketing:

Ansoff strategy Description

Market penetration The internet can be used to sell more existing
products into existing markets
Market The internet can be used to sell into new
development markets such as new geographic markets, new
customer segments or a different emphasis in
targeting
Product New products or services can be developed for
development delivery by the internet, such as information
products like market reports, and which can be
purchased using electronic commerce
Diversification New products developed for sale into new
markets

30 Four significant risks of adopting digital marketing that you must carefully consider and
addresses are:
1. Service quality risks
2. Channel conflicts
3. Implementation risks
4. Organisational strategy

Topic 8 Similarities and differences between digital and traditional

marketing communications

31 Although these terms are frequently used by marketers, they are often used loosely
and ambiguously. In particular, channel and medium are used synonymously despite
their clear distinction!

1. Channel: A route or pathway through which things are distributed, such as

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products and services. Confusingly, traditional marketers also use ‘channel’ to

describe the routes through which communications are distributed – most
notably advertising and sales communications! It is common for marketers to
refer, for example, to the ‘advertising channel’ and the ‘sales channel’.

2. Medium: The environment through which something is carried or conveyed,

such as a message, and can often be considered the actual carrier (vehicle).

3. Discipline: A defined endeavour or body of craft, based on specific concepts,

processes and methods, and using specific tools and techniques to attain a
recognised standard of outcome (e.g. best practice).

4. Tool: Any instrument or device (physical, conceptual or virtual) that is employed

in achieving a task.

32 Chaffey and Smith (2005) assert that “Emarketing can identify, anticipate and satisfy
customer needs more efficiently.”

33 Chaffey et al (2008) identify eight key changes in communications characteristics as

marketers move from exploiting traditional to new media:
1. From push to pull
2. From monologue to dialogue
3. From one-to-many to one-to-some and one-to-one
4. From one-to-many to many-to-many
5. From lean-back to lean-forward
6. Form of tools changes
7. Increase in communications intermediaries
8. Integration becomes more challenging

34, Interactive tools for customer self-help can help collect intelligence. Clickstream
35 analysis reported by a web analytics tool can help build valuable pictures of customer
& preferences. If you profile customers, placing them into different segments, you can
36 build a detailed picture of their needs and characteristics and use these to refine your
products and offers.

37 There has been a proliferation in communications intermediaries, with many new

media owners. The need for integration has become more challenging, with many
buying decisions now involving a multi-channel purchase.

Topic 9 Building customer relationships online

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38 CRM (customer relationship management) is a vital discipline in modern marketing,

especially digital marketing.

39 The four generally recognised elements of CRM, in order, are:

1. Customer selection
2. Customer acquisition
3. Customer retention
4. Customer extension

40 eCRM cannot be separated from CRM. However, while it needs to be seamlessly

integrated with other CRM, some organisations do have specific eCRM initiatives and
staff responsible for it.

41 Seth Godin defines permission marketing as ... anticipated, relevant and personal.

42 The four-step IDIC model was suggested by Peppers and Rogers for building customer
relationships online:
1. Identify
2. Differentiate
3. Interact
4. Customise

43 The four key opt-in options, selected by tick box, are:

1. Content – news, products, offers, events etc.
2. Frequency – weekly, monthly, quarterly or alerts etc.
3. Channel – email, direct mail, phone, SMS etc.
4. Format – e.g. text vs HTML

44 Chaffey’s six principles of emarketing are:

1. Consider selective opt-in to communications
2. Create a common customer profile
3. Offer a range of opt-in incentives
4. Don’t make opt-out too easy
5. Watch don’t ask
6. Create an outbound contact strategy

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Module 2 Understanding the online marketplace

Here’s a summary of the key learning points from this module. Keep a copy of this
sheet in your study notebook as a helpful reminder, and to assist your revision for
exams:

Topic 1 Micro and macro environmental analysis

1 The three main corporate environments that are scanned in digital situation analysis
are:
1. Micro environment
2. Macro environment
3. Internal

2 The desired outcome of online marketplace analysis is an in-depth assessment of the

organisation’s strengths, weaknesses opportunities and threats (SWOT). The SWOT
drives a summary of the key issues that must be addressed in order for an
organisation’s digital marketing strategy is to succeed.

3 A deep meaningful micro/macro environmental analysis requires an ongoing

commitment to scanning key elements in the organisation’s environment and an
organised approach to insight generation and dissemination.

4 Situation analysis enables you to be realistic about what you can achieve from online
marketing and prioritise strategies and campaigns to optimise your results.

5 Micro environment analysis leads to actionable insights and should be tackled before
macro environmental analysis.

6 Typically, legal, informational and technological issues are the most significant macro
environment factors.

7 The micro environment consists of five key elements:

1. Competitors
2. Customers
3. Suppliers
4. Intermediaries
5. Other stakeholders

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8 Moore’s Law Describes advances in the speed of digital technology, in particular

microprocessors.

Metcalfe’s Law Relates the value of a digital network to the number of its
connections (or users or members).

Zipf’s Law Can be applied to describe the decrease in popularity of preferences

for using or purchasing from a range of items.

Murphy’s Law If something can go wrong, it will!

Topic 2 Micro environmental analysis – the marketplace

9 Porter’s five forces are the five competitive forces that shape a company

10 The ‘actors’ subject to competitive forces in the online marketplace are customers,
suppliers, competitors and intermediaries.

11 Porter’s five forces are:

1. Bargaining power of suppliers
2. Bargaining power of buyers
3. Threat of substitutes
4. Barriers to entry
5. Rivalry among existing competitors

12 Digital technology has led to disintermediated market transactions, removing the need
to compensate intermediaries and agents in the supply chain, while simultaneously
facilitating an expansion of trading relationships.

13 It is important to recognise new opportunities and threats resulting from these

changes, especially identifying all your transacting partners and the direction of each
relationship.

Topic 3 Micro environmental analysis – the actors

14 An organisation’s ability to meet a customer’s needs is a key factor in determining that

customer’s attractiveness to the organisation.

15 Most customers aren’t using the web primarily to research or buy. Many people go

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online to ‘have fun’ or ‘socialise’.

16 There are many different models to assess online customer behaviour. You need to
decide which are the most appropriate for your business:
 Information/experience seeking models
 Hierarchy of response buying process models
 Multichannel buying models
 Trust-based models
 Social communications models

17 Of the five online consumer behaviour models, the hierarchy of response model is the
most potentially useful to understand consumer behaviour in terms of which
communication channels to use to influence potential customers.

18 Keyphrase analysis is the crucial starting point for both search engine optimisation and
pay per click marketing.

19 Integrated communication channels reflect and support mixed-mode buying.

20 The differences between online and offline customers can be useful in developing
tactics to suit the online audience and encouraging offline audiences to migrate online.

21 Social networks are problematic to manage and offer little of real value to digital
marketers.

22 Customer search behaviour should be a focal point in customer analysis because search
behaviour can generate valuable insights on customers, brand and market position to
guide both acquisition and retention activity.

23 A person can exhibit different behaviours in one session or between different sessions,
although most of their behaviour is likely to be consistent with one or two main
‘characters’.

24 Intermediaries are typically independent organisations that fill a skills gap or create an
online environment to bring buyers and sellers together.

25 Competitor benchmarking is a crucially important activity in digital marketing.

Competitive advantage can be rapidly gained or lost across a wide range of areas, such
as search, website design, partnerships to products and services.

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26 Determining whether or not and how an intermediary adds value to your proposition
are the key factors in deciding whether or not to involve them in your digital activity.

27 The key online ad revenue models are:

 Subscription access to content
 Pay per view access to documents
 CPM display advertising
 PPC display advertising
 Site section or content sponsorship
 Affiliate revenue
 Subscriber data access for email marketing
 Customer access for online research

28 Search content networks are one of the biggest online marketing secrets – they
generate over a third of their revenue through their ad delivery networks.

Topic 4 Macro environmental analysis – DEEPLIST

29 Environmental scanning should focus on the competitiveness and service delivery

drivers that most influence digital marketing success; i.e. technology, legal and
information.

30 Consideration of an organisation’s macro demographics s is intrinsically and strongly

linked to an organisation’s micro demographics.

31 Demographics can affect access-levels to different digital platforms, how often a

particular digital channel is used and also channel preference.

As a result, it is very important to understand the demographic factors that are likely to
affect your online target markets.

32 In digital marketing practice, the two most influential areas of legislation are data
protection and privacy and intellectual property (IPR) rights.

33 Integration and access to digital information are the two main imperatives driving the
continued adoption of new technology.

Topic 5 Internal environment

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34 Key challenges revealed by the research include:

 Gaining buy-in and budget consistent with audience media consumption and
value generated
 Conflicts of ownership and tensions between a digital marketing team,
traditional marketing, IT and finance/senior management
 Co-ordination with different channels in conjunction with teams managing
marketing programmes elsewhere in the business
 Managing and integrating customer information about characteristics and
behaviours collected online
 Achieving unified reporting/analysis/actioning throughout the business
 Structuring the specialist digital team and integrating into the organisation by
changing responsibilities elsewhere in the organisation
 In-sourcing vs outsourcing online marketing tactics, i.e. search, affiliate, email
marketing, PR
 Staff recruitment and retention, since there is a shortage of emarketing skills
given the rapid growth in demand for these skills (which gives great
opportunities for everyone studying for this qualification!)

35 Applying a capability maturity model has several benefits in digital marketing.

Modelling capability maturity enables you to:
 Review current approaches to identify areas for improvement
 Benchmark against competitors in the same/different market sectors or
industries
 Identify best practice from more advanced adopters
 Set targets and develops strategies for improving capabilities

Topic 6 Specific micro/macro environment modelling and analysis

techniques

36 The four approaches to situation analysis are:

1. Benchmarking
2. SWOT analysis
3. Environmental scanning
4. Marketplace mapping

37 When conducting an environmental scanning exercise, it is vital to begin with the

internal environment.

38 E-marketplace mapping identifies the sites that are most effective at capturing search
traffic. You can then develop strategies to either form partnerships with these

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intermediaries or plan to capture a percentage of their search traffic, for example, by

purchasing key search terms through PPC advertising.

39 A recognised and trusted brand with a well-established legacy of customer loyalty or

brand recognition are in a good position online because it is more likely that would-be
visitors will be able to locate their website.

40 The SWOT process builds on the findings from micro, macro environment and internal
analysis, analyzing the information and categorizing it to enable key issues to be drawn
out.

41 Every factor must be considered in relation to the organisation’s competitors in order

to allocate it to its correct place in the SWOT.

42 It is vital that SWOT findings are used in the formulation of strategic digital marketing
plans. The most effective marketing strategies use Strengths to take Opportunities or
counter Threats.

43 Benchmarking identifies successful competitors and non-competitors with high

performing business and marketing processes, enabling you to adopt the most suitable
to improve your own organisation’s performance.

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Module 3 Digital marketing strategy development

Topic 1. Introduction to digital marketing planning activities

Lesson 1. Context for digital marketing objectives
Effective planning involves devising strategies that will be successful in the future because
they are based on a reliable analysis of the changes in your trading arena.

In the dot.com boom, many companies suffered from a lack of strategic planning, which
ultimately caused their businesses to fail (Porter, 2001).

Case example: Arzoo.com.

Lesson 2. Different types of tactical digital marketing plan

 Website design and build
 Website launch or re-launch plan
 Plan for online marketing element for a traditional campaign
 Specialist online marketing communications plan

Depending on the scope and content of your plan, it might be necessary to break it down
further. For example, search marketing planning for a large e-retailer may necessitate
separate plans for search engine optimisation and pay per click, as well as continuous
marketing activities that take place all year round.

Lesson 3. Generic planning frameworks

Regardless of context, strategic development involves certain generic, sequential steps
(Jobber, 2004; McDonald, 2002; Smith, 1999).

Diagram. Generic process model for strategy development

The ‘strategy development process’ follows a generic framework that includes:

1. Environmental analysis
2. SWOT
3. Objective setting

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4. Core strategy
5. Tactical actions
6. Implementation
7. Evaluation and control

Lesson 4. Flexibility and emergent strategies

The rigidity or flexibility of your planning process is a critical issue. It impacts the process of
objective setting.

Strategic planning (Chaffey et al., 2003) can either be prescriptive or emergent.

The dynamic nature of the digital marketing trading arena means that a flexible and
responsive approach towards strategy development and objective setting is required.

Implementation
Development
Analysis

Offer
Vision
Strategy

Resources:
Required / Available

Diagram. Pathways through the strategic maze - showing the dimensions of strategic formulation and the
platforms that shape the development process.

Lesson 5. Organisation impact on choice of online objectives

Internet technology usage is influenced by:
 Maturity
 Business integration
 Marketing applications
 Category of adopter

Chaffey (2002) identified types of online presence and related business models; each with
different marketing objectives:
 Transactional e-commerce websites
 Service-orientated relationship-building websites
 Brand building websites
 Portal or media websites

Levels of internet adoption

The following organisational traits will influence the level of adoption:
 Operating in an appropriate market sector

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 Has visionary leadership

 Has an internet strategy
 Has a suitable technology infrastructure

Refer to your online course to view the ‘Levels of website development’ table describing
online development and its strategic contribution.

In order to understand the context in which to develop your planning goals and objectives,
you need to:
 Determine your approach to strategy development
 Classify your level of technology adoption

The advantages arising from digital technology adoption aren’t always clear. Tjan (2001)
proposes a matrix approach that uses metrics to assess digital enhancements in relation to
viability and fit.

Topic 2. Objectives for digital marketing plans

 The strategic context provides the environment for objective setting.
 Efficiency and effectiveness provide the focus.
 Activity level sets the parameters.
 Outcomes determine the time-frame.
 Business models define the orientation.
 Operational type sets the specifics and brings objectives to the point of becoming
operational.

Lesson 1. SMART objectives

An objective articulates what you want to achieve. It should be a clear, concise, tangible
statement of intent; i.e.:
S (pecific)
M (easurable)
A (ctionable)
R (elevant)
T (imely or time-oriented, as historical analysis)

Lesson 2. Efficiency and effectiveness objectives

Efficiency is concerned with inputs and outputs. An efficient organisation or marketer does
things economically and, in so doing, does things right.

Digital marketing plans should engender efficiency. The E-performance scorecard helps to
assess profitability by evaluating key variables for measuring attraction, conversion and

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retention (Agrawal et al., 2001) using measures such as clickthrough and conversion rates
and cost per click.

Effectiveness is about operating in the right markets, creating relevant products and services
for customers; i.e. doing the right things.

Effectiveness metrics indicate the contribution that digital marketing makes to your
organisation. Online effectiveness measures include campaign response rates, cost per
acquisition, customer satisfaction and lifetime value. If digital marketing is run as a profit-
centre, you will need to establish effectiveness measures to assess how well this centre uses
its funds. Digital marketing will have its own balance sheet to determine revenue, cost and
profitability.

Customer satisfaction and loyalty: key concerns impacting effectiveness and the ability to
achieve other objectives. You’ll also need to know the impact of digital channels on the
loyalty of your customers. Particularly for e-retailers, the conversion of first-time customers
to repeat customers is a key indicator of success. Case example: eTailQ

Wolfinbarger and Gilly (2003) used the premise that quality relates to consumer
satisfaction and retention in both product and service settings in their work to
establish the dimensions of e-tailing.

They developed a scale for measuring e-tail quality, ranking four key factors that
affect levels of online customer satisfaction: website design, fulfilment/reliability,
customer service and privacy/security.

The eight loyalty variables (Srinivasan et al, 2003) relevant to online consumer markets are:
1. Customisation
2. Contact interactivity
3. Cultivation
4. Care
5. Community
6. Choice
7. Convenience
8. Character

Lesson 3. Revenue and value

Providing value is the essence of customer centricity. There are many ways of providing
customer value, for example, information content, brokerage, incentive and entertainment.

Online revenue contribution objectives can be:

 Specified for different types of products, customer segments and geographic markets

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 Set for different digital channels such as web, mobile or interactive digital TV
 Assessed for the overall business and for specific markets or products

Lesson 4. The balanced scorecard – a holistic framework for digital business

performance
The balanced scorecard is a helpful tool for translating vision and strategy into quantifiable
objectives. The scorecard assesses whether a strategy and its implementation are successful:

Balanced scorecard Efficiency Effectiveness

Sector
Financial results  Channel costs  Online contribution (direct)
(i.e. business value)  Channel profitability  Online contribution (indirect)
 Profit contributed
Customer value  Online reach (unique visitors  Sales and sales per customer
as % of potential visitors)  New customers
 Cost of acquisition or cost per  Online market share
sale  Customer satisfaction ratings
(CPA / CPS)  Customer loyalty index
 Customer propensity to defect
Operational  Conversion rates  Fulfilment times
processes  Average order value  Support response times
 List size and quality
 Email active %
Innovation and  Novel approaches tested  Novel approaches deployed
learning  Internal e-marketing education  Performance appraisal
(i.e. people and  Internal satisfaction ratings review
knowledge)

Table. An allocation of internet marketing objectives within the balanced scorecard framework for a
transactional e-commerce site

Lesson 5. Operationalising digital marketing objectives

The operational business type defines digital marketing objectives. There are three principle
operational types that can be combined:
1. Transactional
2. Transitional
3. Communication objectives

Measurement frameworks focus on key performance indicators to improve organisational

performance throughout the customer lifecycle (Neil Mason, Applied Insights). The same
metrics can be operationalised for campaigns or over-arching annual plans.

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Metric Visitor acquisition Conversion to Conversion to sale Customer retention

opportunity and growth

Tracking  Unique visitors  Opportunity volume  Sales volume  Email list quality
metrics  New visitors  Email response quality
 Transaction churn rate
Performance  Bounce rate  Macro-conversion  Conversion rate to  Active customers %
drivers  Conversion rate: rate to opportunity sale (site and email active)
(diagnostics) new visit to start and  Email conversion rate  Repeat conversion
quote; micro-conversion rate for different
efficiency purchases
Customer  Cost per click and per  Cost per opportunity  Cost per sale  Lifetime value
centric sale (lead) (CPA)  Customer loyalty
KPIs  Brand awareness  Customer satisfaction  Customer satisfaction index
 Average order value  Products per customer
(AOV)  Advocacy (net
promoter score)
Business  Audience share  Order  Online originated  Retained sales growth
value (n, £, % of total) sales and volume
KPIs (n, £, % of total)
Strategy  Online targeted reach  Lead generation  Online sale generation  Retention and
strategy strategy strategy customer growth
 Offline targeted reach  Offline sales impact strategy
strategy strategy  Advocacy
Tactics  Continuous  Usability  Usability  Database / list quality
communications mix  Personalisation  Personalisation = opt-out/churn rate
 Campaign  Inbound contact  Inbound contact  Targeting
communications mix strategy (customer strategy (customer  Outbound contact
 Online value service) service) strategy (email)
proposition  Merchandising  Personalisation
 Triggered emails
Table. An example of an online performance management table for an e-retailer
(Adapted from Neil Mason’s acquisition, conversion, retention approach
www.applied-insights.co.uk)

Topic 3. Strategy formulation

Lesson 1. What is digital marketing strategy?
The focus of digital marketing strategy is deciding how the digital channel can be used to
support existing marketing strategies, how its strengths can be exploited and its weaknesses
managed and its intrinsic value as part of a multi-channel strategy.

Digital marketing strategy is a channel strategy that should define how to:
1. Communicate the benefits of using digital channels
2. Prioritise audiences or partners targeted for digital channel adoption
3. Prioritise products sold or purchased through digital channel

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4. Achieve digital channel targets through tactics for online customer acquisition,
conversion (engagement) and retention

Digital marketing strategy components checklist

Specific segments and target markets to prioritise for digital communications
Specific positioning and propositions
Online marketing mix, particularly place (partnerships) and service levels
Optimum media mix of tactical digital media channels
Dynamic dialogue and permission marketing contact strategies to retain and
grow customers based on an integrated customer database
User-generated content, community and social networking tactics for own
site and third-party sites.
Online brand reputation management, positive and negative, with a focus on
social networks through online PR tactics; particularly if engaging in user generated
content (whether reviews, ads, product ideas or just discussions)

Cummings (2001) has applied Tsun Tzu’s 10 military strategies to e-marketing.

Lesson 2. Alignment of digital marketing strategy with corporate plans

Some organisations restrict digital marketing to increasing the effectiveness of promotional
activities; others set online sales targets for particular target markets.

The digital marketing plan normally sits between the communications plan and detailed
campaign briefs in the planning hierarchy.

Digital communications objectives can focus on different activities and operate at different
levels of strategy and tactics, for example:

1. Online targeted reach strategy

Objective To reach relevant audiences online to achieve communications objectives such
as building brand awareness or favourability, driving online purchase,
increasing offline purchase intent, list-building or migrating existing customers
to online channels.
Focus New customer acquisition.
Strategy To communicate with selected customer segments online through media buys,
PR, email, viral campaigns and sponsorship or partnership arrangements.
Driven by objectives of online audience share and number of website visitors
in different segments. The strategy might involve:

Driving visitors to the website

Achieving brand awareness
Interactions on third-party websites.

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Building brand awareness, favourability and purchase intent on third-party

websites might be a more effective strategy for low-involvement FMCG brands
where it will be difficult to encourage visitors to the website.

2. Offline targeted reach strategy

Objective To encourage potential customers to use the online channel, i.e. visit
website and transact where appropriate.
Focus New customer acquisition and migration of existing customers online.
Strategy To communicate with selected customer segments offline through direct
mail, media buys, PR and sponsorship. Driven by the objectives of online
audience share and number of website visitors in different segments.

3. Offline sales impact strategy

Objective Use online communications to achieve sales through offline channels.

Focus Integration of the digital channel into the marketing process. Achieving
sales offline (new or existing customers) and converting interest into
sales.
Strategy Defines how online communications through the website and email can
influence sales offline, i.e. by phone, mail-order or in-store.

4. Online sales efficiency strategy

Objective To convert website visitors to buy.

Focus Achieving sales online (new or existing customers).
Strategy For transactional e-commerce websites, the strategy will be to
encourage website visitors to buy online, through merchandising,
promotions, etc.

Other types of website might aim to increase conversion rates to leads.

As part of this strategy, options to convert visitors to action, or reduce
attrition rates, are explored, e.g. first-time buyer promotions, website
design improvements, home page and landing page optimisation. Event-
triggered, automated emails also can be used to convert interest to
sales.

5. Online customer engagement / CRM strategy

Objective To engage customers online throughout their lifecycle.

Focus Developing personalised communications or contact strategies to
deliver relevant communications and experiences to new and existing
customers.
Strategy To specify a focus for digital marketing for each aspect of the online

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customer lifecycle, i.e. acquisition, retention, advocacy, reactivation and

customer insight.

Integrating digital communications objectives into wider strategic aims

The four aspects of strategic focus are all highly interdependent and must be integrated with
wider strategic aims:
1. The strategy must present a clear vision of the website’s value proposition
2. The strategy must be explicitly aligned with the corporate strategy
3. The strategy must establish the need for organisational change
4. The strategy must have an implementation focus.

(Doherty and Ellis-Chadwick 2004)

Lesson 3. Strategic orientation and formulation

Digital marketing strategy is concerned with how digital technologies can be used to achieve
competitive advantage. Business strategy is underpinned by an organisation’s strategic
orientation (Venkatraman, 1989) which is also likely to influence digital marketing plans.

Types of strategic orientation and subsequent behaviour include: aggressiveness, analysis,

defensiveness, futurity, proactiveness and riskiness.

Strategy formulation is about choices concerning alternative approaches to achieving

organisational goals.

Successful online businesses create a differential advantage using innovative features of

digital channels for communication and delivery. Other businesses cannot exploit digital
technology, or adopt a ‘do nothing’ approach that uses digital channels to replicate the
existing, offline marketing mix.

Lesson 4. Market and product development strategies

Strategy development should consider all opportunities presented by digital channels, not
just the sale of existing products to existing markets.

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Diagram. Strategic thrust options using Ansoff’s Matrix

Lesson 5. Digital marketing mix

Consider to what extent digital channels might alter the traditional elements of price,
product, place and promotion and the ways in which this can create a competitive and
differential advantage.

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Diagram. Digital marketing and the marketing mix

(After Jobber 2004)

Lesson 6. Target marketing strategy

Segmentation is the technique of identifying groups of consumers or businesses that have
similar needs or wants within a given population.

Diagram. Segmentation variables for organisational (B2B) markets

(After Jobber 2004)

Micro segmentation characteristics

 Choice: criteria used for product/service selection

 Decision making unit structure: and role and status of individual members of
buying unit
 Decision making process: duration of decision making, investment risk
 Buy class: straight re-buy, modified re-buy or new task
 Purchasing organisation: centralised or decentralised, innovation
 Organisational innovation: willingness to buy into new products and new ideas

For a list of consumer segmentation variables describing behavioural, psychographic,

profile and online characteristics, refer to your online course notes.

Selective targeting
Selective targeting is applied to an organisation’s existing segments. The segments
are sub-divided and then preferentially targeted with specific online offerings.

Examples of commonly targeted, online B2C segments include:

 Customers who are difficult to reach using other media

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 Customers who are brand loyal can be offered support services

 Customers who are not brand loyal can be offered inducements

The same principles can be applied to B2B markets:

 Larger customers could be offered preferential access through an extranet
 Smaller companies might be offered additional services to enhance buyer
supplier relationships

Online transactions, internet-based EDI and specialist portals can be used to provide
business customers with detailed information to meet their different needs and support
their buying decisions.

Positioning and differentiation

Positioning and differentiation are fundamental tenets of all marketing.

Successful positioning requires clarity, consistency, credibility and competitiveness in

relation to differential advantage (Jobber 2004).

New online characteristics that help to enhance positioning are (Chaston 2000):
 Product performance excellence
 Price performance excellence
 Transactional excellence
 Relationship excellence

Online differentiation options can be used where products are not appropriate for
sale online, such as high-value and complex products, or FMCG brands sold through
retailers.

Value can be added to the brand or product by providing online services and
different types of experience.

Re-positioning
Sometimes a product or service must be re-positioned, having failed in its current
market position or the business strategy might demand a change requiring image,
product or intangible repositioning.

Topic 4. Business and revenue models for online channels

Lesson 1. Business models and digital marketing planning
A digital business model aims to take advantage of the internet’s specific properties, and
build linkages between the organisation’s activities (the 5 Cs), its trading environment and its
business performance.

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Diagram. Internet properties: the 5-Cs and business models

(After Afuah and Tucci 2001)

Lesson 2. Taxonomy of business models

An organisation might combine several business models as part of its overall online business
strategy (Rappa, 2005) including: brokerage, advertising, infomediary, merchant,
manufacturer (direct), affiliate, community, subscription, utility.

To achieve strategic objectives, the adopted business model must address questions relating
to: customer value, scope, pricing, revenue source, connected activities, implementation,
capabilities and sustainability (After Afuah and Tucci 2001).

Online contribution to revenue

Chaffey (2003) highlights the importance of assessing the contribution of internet
revenue to the total revenue of an organisation.

Online revenue contribution is the direct contribution of the internet or other digital
media to sales, usually expressed as a percentage of overall sales revenue.

Online promotion contribution (reach) is the proportion of customers (new or

retained) who use the online resources and who are influenced as a result.

Lesson 3. Value and value creation

Customer value is “…an offer defined in terms of the target customers, the benefits offered
to these customers, and the price charged relative to the competition.”
(Knox et al. 2003)

Rayport and Jaworski (2004) suggest that online value proposition (OVP) construction
requires consideration of target segments, focal customer benefits, resources to deliver the
benefits and packaging superior to that of competitors. Branding also has the potential to
add intangible value.

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The elements of the online value proposition (OVP) (Chaffey, 2004) are:
 Content
 Customisation
 Community
 Convenience
 Choice
 Cost reduction

The online value proposition (OVP) also details informational and promotional incentives
used to encourage trial and continued purchase, for example:
 “Compare. Buy. Save” (www.kelkoo.com)
 “Earth’s biggest selection” (www.amazon.com)

Agrawal et al. (2001) suggest that the success of leading e-commerce companies is often due
to matching value propositions to segments. It is important to constantly check and refine
your OVP to ensure that it is delivering the right experience.

In developing such propositions managers should identify:

 A clear differentiation of the online proposition compared to the company’s
conventional offline proposition.
 A clear differentiation of the online proposition from competitors based on cost,
product innovation or service quality.
 Target market segment(s) that the proposition will appeal to.
 How the proposition will be communicated to website visitors and in all marketing
communications. Developing a strap line can help this.
 How the proposition is delivered across different parts of the buying process.
 How the proposition will be delivered and supported by resources – is the
proposition genuine? Will resources be internal or external?

Use a simple feedback button on the website to determine whether your customers are
happy or not with your offer.

If your online presence is highly integrated with your organisation’s wider activities you’ll
need to monitor and interpret many other KPIs.

Case example: Citibank, eBay

Topic 5. Implementation, monitoring and control

Lesson 1. Budgeting for your digital marketing plan
When investing in online communications, you are faced with three key areas of decision-
making: investment areas, balancing investment and investment tactics.

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Detailed website costs are likely to include: domain name registration, hosting, creation,
promotion, maintenance, software and applications.

To estimate the size of the required digital budget, you must understand how web-based
activities are likely to influence sales. The scale of the digital marketing budget should be
informed by market demand for online services, competitor activity and modelling returns
from digital marketing.

Of the eight methods for estimating internet marketing costs proposed in The Internet
Marketing Plan (Bayne 2000) the following four are most appropriate:
 Reallocation of marketing budget
 What competitors are spending
 A graduated plan tied into measurable results
 A combination approach

Tangible business benefits can be broken down into sources of increased (incremental)
revenue online and cost reductions and intangible business benefits such as reduced time to
market and improved customer satisfaction.

Four significant areas of cost should be considered:

 Physical
 Planning
 Implementation
 Operational.

Budgeting models
Key costs, metrics and ratios to include in – and guide – your budgeting and target
setting are:
 Website reach and visitors
 Attraction efficiency %
 Site conversion efficiency %
 Leads
 Lead conversion efficiency %
 Offline sales multiplier
 Repeat customer multiplier
 Average value per outcome
 Cost of acquisition per visitor
 Variable and fixed costs

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Content and management

When first embarking on digital marketing, an organisation will normally operate
within the existing company structure, perhaps using outsourcing.

As digital marketing’s contribution grows, new organisational structures and working

practices may need to be adopted.

The ease with which an organisation can adapt will depend on whether a prescriptive
or emergent approach is adopted.

Four growth stages are recognised for a ‘digital marketing organisation’:

1. Ad-hoc activity
2. Focusing the effort
3. Formalisation
4. Institutionalising capability

Control of website creation and maintenance

Successful control and maintenance requires clear identification of responsibilities
for different aspects of updating the website (Sterne 2001).

The questions you must answer are “Who owns the process, the content, the format
and the technology?”

A table can be created, detailing website technologies and standards that need to be
managed.

Content management systems (CMS)

Content management tools are software suites or applications for managing the
process of maintaining website content, permitting multiple authors to contribute
web content, while an administrator keeps control of the format and style of the
website and the approval process. CMS tools are used to organise, manage, retrieve
and archive information content throughout the life of the website.

For more complex websites, content management tools will help you with tasks such
as: structure authoring, link management, input and syndication, versioning,
publication, tracking and monitoring, navigation and visualisation.

Lesson 2. Monitoring and control

Monitoring involves analysing digital marketing effectiveness to establish whether your
online activities are achieving your strategic targets. Monitoring identifies drift, enabling you
to put measures in place to get things back on target. It is essential that a culture of
measurement is developed by senior managers.

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Case example: Amazon – measuring ecstasy

Performance measurement systems support four distinct tasks:

Diagram. Key questions for different stages of marketing and control

Key aspects of monitoring and control include performance measurement frameworks,

online measurement frameworks and their tools and techniques. Real-time or near real-time
analyses of performance data has the potential to change organisational behaviour and
enhance profit at an accelerated rate.

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Diagram. Linkages between performance measurement, digital marketing

and corporate strategy

To assess performance, business strategists identify and benchmark key performance

indicators (KPIs) across the organisation, including digital marketing.

Having applied the performance management framework (PMF) to actual results,

adjustments can be made. In a digital marketing context, corrective action might include
updates to website content, design and associated marketing communications. The cycle is
then repeated, with modified goals if appropriate.

Performance measures for digital marketing

Chaffey (2000) suggests organisations should define a measurement framework using
groupings of specific macro- and micro-level metrics to assess internet marketing
performance.

A PMF for digital marketing should be able to:

 Assess the impact of digital marketing on the satisfaction, loyalty and contribution of
key stakeholders (customers, investors, employees and partners).
 Assess different forms of digital marketing activities, e.g. B2C, B2B and not-for-profit
markets; transactional e-tail, CRM-oriented or brand-building; types of objectives
from transactional through to communications.
 Facilitate comparison of performance of different e-channels with other channels.
 Facilitate benchmarking practices

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Diagram. Five steps of diagnostic categories for e-marketing measurement

(From the framework by Chaffey 2012)

Analysing results
Performance diagnosis will help to ensure that your digital marketing plan is on
target. Your choice of performance management tool will vary according to three
levels of strategic planning:
 Operational
 Strategic
 Tactical

Controlling the drift

Strategies designed to pursue communication objectives can drift overtime.

It’s important to regularly review performance and act on the results in order to
maintain strategic equilibrium.

The creation of a table, setting out reviewing frequency and responsibilities for key
performance metric diagnosis and corrective action, will help to ensure that timely
reviews take place.

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Module 5 Using the digital channel to add value to brands

Topic 1 Key digital marketing mix and branding issues

Lesson 1 The traditional marketing mix

Lesson 2 The digital marketing mix

Regardless of your own approach to the mix, it’s important that your plans focus on
customer needs and satisfaction.

Your choice of mix should help to develop relationships:

 Relationship marketing – Means keeping customers happy for life

 Strategic alliances and partnerships – Are all about relationships
 Supply chain management – Is increasingly built on relationships, on sharing data,
systems and budgets
 The trends towards consolidation – Customers are choosing fewer suppliers and
commoditisation (competition producing similar products and competing on price) ill
continue

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Topic 3 'Product' in a digital marketing context

Lesson 1 Product management

Lesson 2 Digital products

To identify the opportunities for enhancing your offering online and adding value, you
should ask:

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 How can I modify the core product for the information environment?
 What information-based aspect of products/services would a customer really value?
 Which of these services can be produced cost-effectively and better than
competition?

Topic 4 'Price' in a digital marketing context

Lesson 2 Pricing methods
Break even analysis:

The price of the product or service needs to be in line with the marketing strategy to ensure
alignment between the impact of marketing decision and price setting.

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Lesson 3 Digital pricing

The argument that electronic markets will move towards perfect competitive pricing has to
be considered in light of the counter argument – that once online customers locate their
preferred suppliers, they become less price sensitive and more loyal by habit.

Lesson 4 Online auctions

The eBay example in the courseware clearly demonstrates how buyers enjoy purchasing in a
situation where prices are highly flexible.

For the digital marketing manager who adopts an ‘auction strategy’ for his or her offering,
there is no need to establish set prices.

Topic 5 'Place' in a digital marketing context

Lesson 1 he internet as a place of purchase
The internet provides a medium through which marketing messages can be communicated.
Moreover, it provides a channel where transactions can take place and, in some situations,
products and services can be distributed.

The internet has distinct advantages over traditional channels in reducing barriers to entry.

Lesson 3 A review of online trading locations

Different places for representation in the virtual marketplace:

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Topic 6 'Promotion' in a digital marketing context

Introduction
The growth in the number of communications media means that an integrated approach is
needed if your message is to be ‘heard’ in an increasingly ‘noisy’ marketplace.

Lesson 2 The digital communications mix

Digital marketing facilitates a different style of communications, with some unique
characteristics:

The internet today is a hugely important marketing communications tool. Consumers and
business users are frequently browsing for information to inform their purchasing decisions.

When using the internet as part of a marketing communication strategy you can send
permission-based emails, regular bulletins containing information about the latest product
features and promotional offers, all of which your prospects and customers have the
opportunity to agree to accept.

This communications mix can be used effectively to build long-term online relationships.

Lesson 3 Integrated digital communications strategies

Chaffey at al (2011) suggest ways in which to integrate online and offline communication
tools into the digital marketing strategy that will drive customers towards a website:

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Promotional planning for ecommerce start-ups is more difficult because of the dual task of:
 Benefits
o Communicating the benefits of using the organisation’s online facilities
 Awareness
o Creating awareness of the website address and online services

Lesson 4 Integrated marketing communications in the mix

The key point is that your marketing mix is a powerful communicator and should be well
defined and supported if your digital marketing communications are to be effective.

Integration can take place at different levels. The higher and more strategic the level of
integration, then the greater the requirement for organisational resources and senior
management commitment.

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Topic 7 Service mix

Introduction
Some of the key issues for improving online service delivery have been summarised by
Rayport et al. (2005). These questions for senior executives and managers were identified to
enable managers to ascertain the optimum combination of technology and human
assistance for service delivery:

1. Substitution
Deploying technology instead of people or vice-versa, e.g.:
 Frequently Asked Questions
 Onsite search engine
 Interactive sales dialogue recommending relevant products based on
 human response
 Avatar offering answers to questions as in the Ikea's 'Ask Anna' feature
 Automated email response or a series of welcome emails that educate
customers about how to use a service
 Using video to demonstrate products online
 Location-based and other push technology allows web-based content to
 be delivered to users automatically, based on their location and other
 personal data
2. Complementarity
Deploying technology in combination with people, e.g.:
 Callback facility where the website is used to set up a subsequent call from a
contact centre
 Online chat facility allowing the user to chat via text while on site
 An employee using a WiFi-enabled handheld device to facilitate easy rental
car returns
 Service delivery through Facebook, Twitter and YouTube

3. Displacement
Outsourcing or off-shoring technology or labour, e.g.:
 A fast-food chain centralising drive-through order taking to a remote call
centre
 Online chat or callback systems can be deployed at a lower cost through
outsourcing

When operating online, one of your ‘people considerations’ is to work out whether it is
strategically sound to replace or automate the people part of your service offer. The options
are:

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 Autoresponders – Automatically generate a response to an email or online form.

 Email notification – Automatically generated to update customers on the status of

their order, for example: Order received, item now in stock, order dispatched.

 Callback facility – Customers fill in their phone number on a form and specify a
convenient time to be contacted.

Dialling from a representative in the call centre occurs automatically at the appointed
time. The company pays for the call (which is popular)!

 Frequently asked questions (FAQ) – The art is in compiling and categorising questions
so that customers can easily find the question and a helpful answer.

 Onsite search engines – Help customers find what they’re looking for quickly and are
popular when available.

Some companies have improved conversion to sale greatly by improving the clarity of
the results the search returns. Site maps are a related feature.

 Real-time live chat – A customer support operator in a call centre can type responses
to a website visitor’s questions.

A widely deployed technology is LivePerson (www.liveperson.com).

 Co-browsing – The customer’s screen can be viewed by the call-centre operator in

combination with call-back or chat.

 Virtual assistants – Come in varying degrees of sophistication and usually help to guide
the customer through a maze of choices.

 Social media service – Delivered via social presence or third-party sites like Get
Satisfaction. See this case study from Dell: http://www.slideshare.net/Dell_Inc/i-
strategy-dell-social-media-case-study-the-evolution-of-dell-on-twitter

 Mobile apps – A vast range of mobile app services is available and growing daily, such
as convenient personal banking and ‘intelligent’ products based on your consumption
patterns. For example, Editions by AOL delivers a daily personalised ‘magazine’ based
on recipients’ observed subject preferences.

A key measure of the effectiveness of your inbound contact strategy is the average number
of contacts required to resolve an issue.

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Many questions will not be answered by the first email. You will need to decide whether the
best strategy is to switch the customer to phone or online chat to resolve the issue rather
than bouncing multiple emails between customer and contact centre.

Two-way, real-time media such as voice, online chat and co-browsing, will be more effective
at resolving complex issues quickly.

Topic 8 Branding for digital media

Introduction
This topic explores the specific issues of brand sites. Remember that these principles can be
applied to all types of site and social media presence.

Lesson 1 Key issues for online branding

Negative sentiments about a brand can be expressed on third-party sites and, in particular,
interactive social spaces. This aspect of online branding must be managed.

It is important for customer engagement that brand sites encourage participation or co-
creation of content. For example, brands can encourage users to share and submit their
stories, photos or videos.

Lesson 3 Internet branding

Summarising the elements of online branding, de Chernatony (2001) suggests that successful
online branding requires delivering on three brand aspects:

1. Rational values
2. Emotional values
3. Promised experience (based on rational and emotional values).

Lesson 8 Assessing an online brand's health

There are different ways of connecting the customer to the brand, including symbols,
imagery and personalities.

Typically, offline brand associations are replicated online. Visiting the websites of the top
brands in the 2006 Interbrand survey such as Coca Cola, IBM and Intel produces instant
familiarity based on traditional offline brand associations.

However, for organisations with fewer or less well marshalled resources, there is often a
mismatch between the online and offline representation of the brand.

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Module 6 Gaining customer knowledge and insight

Topic 1 Understanding consumer psychology and attitudes

Lesson 1 An overview of consumer insight for communications planning
For a brand to understand its customers, the characteristics of each segment must be
studied to establish:

1. Identity
Who are they? Can they be named and described, e.g. demographics, lifestyle and
life stage, role and responsibility, influence? How do they see themselves and how
does this relate to the brand?

2. Significance for the brand

What is their importance to the brand, e.g. their financial value or their significance
for the mission?

3. Attitude and behaviour

What are their current knowledge, attitudes and behaviour with respect to the brand
and its mission? What is the link between attitudes and behaviour? What attitudes
would need to change for them to do what you would really like them to do? What
do you need to do to achieve that? What is it that you would like them to do? What
is their current experience of the brand and its communication? How do they behave
online/in other channels?

4. Values
What matters to them? What creates value for them?

5. Attitudes to communication
What would make communication work better for them? Do you know anything
about what happens when they receive a communication or are online? When does
it happen? What mood are they in at the time? When will they be most receptive?
And what are their attitudes to (marketing) communications in general?

6. Contact details
Do you have their home or email addresses or know how to contact them? For
example, what media do they read, which websites do they visit?

7. What's the big idea?

Is there a big idea that works that could provide coherence for all communications?

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Lesson 2 Aspects of customer psychology that influence marketing communications

planning

Thoughts, feelings and intentions constantly interact with each other, but each attitudinal
aspect has a different role to play in human mental processes and in life.

Some of the important research questions to ask about your customers' attitudes are:

 What attitudes are most characteristic of your best customers?

 How do attitudes vary between customer groups?

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Brand:
 Awareness
 Familiarity
 Purchase intent
 Advocacy

Lesson 3 How ‘value’ and ‘need’ influence consumer purchasing

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Table. The Stellar value planning tool (Centre for Integrated Marketing.)

The advantages of the value planning tool are that it:

 Clearly shows the relationship between the customer’s core need and the solution
so...
o research can focus on establishing the deep motivation for the solution the
brand is offering so that the process of developing the solution is well
informed and rigorous.

 Does not confuse emotional and functional needs so...

o new product development and communication planning can develop clear
insights that are derived from recognising both kinds of need.

 Supports communication planning thus...

o developing an understanding of the core need and its emotional cost as well
as the value or emotional benefit to provide a clear creative development
brief.

Lesson 4 Designing the customer experience

Experience design has two aspects:

1. Tangible, functional

What is the difference between an MP3 player and an iPod?

There will be tangible or functional differences between an iPod and any given MP3
player and these might be important. For example, the iPod has a particular way of
interfacing using a click wheel.

2. Intangible, quality and style elements

Does the quality of the experience delivery correspond to the brand essence and
personality or style?

A really important and intangible experience difference concerns ‘style’.

For example, Apple is cool. Producing such an intuitive interface as the click wheel, or
using particular materials and colours are partly why Apple has this style and
coolness.

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The goal of brand planning, customer knowledge management and insights is to use such
frameworks to understand the current customer response and what changes you might
need to achieve your business and communications goals. Follow up evaluation and
comparison can then assess your success in achieving these.

Topic 2 Profiling and segmentation

Lesson 1 A reminder of the principles of segmentation
Segmentation is the process of dividing a group of prospects or customers into identifiable
segments.

Direct marketing segments differ from conventional marketing’s target audiences in that
they are based on individual data. Successful digital marketing strategies and campaigns are
founded on effective segmentation, because segmentation is a main driver of TICC.

Segments and segmentation are the generally accepted marketing terms used to describe
the process of differentiating and dividing your customer population or market according to
available and selected criteria.

It is possible to identify and analyse segmentation on three levels based on increasing levels
of attitudinal, lifestyle and behavioural understanding:

1. Segments – slices of the market or customer base

Segment based analysis consists of groups of customers differentiated on the basis of

practical and useful marketing criteria intended to drive marketing development and
communication.

Segments of people are defined by criteria such as:

 Buyers and non-buyers
 Age
 Spend amount
 Spend frequency
 Geography

2. Clusters – groups of people who have something in common

Differentiated groups are profiled to provide marketing insight based on statistically

valid internal correlations or customers’ own nominations.

Statistical modelling techniques are developed and cluster analysis carried out using
behavioural and other database data and/or research.

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3. Communities – a detailed ethnographic understanding of people who would

recognise their affinity with each other

Communities are differentiated statistically robust groups who would recognise each
other as kin. Rather than demographics, these groups tend to be differentiated by:
 Need
 Attitude
 Ethnology

Communities have shared needs in relation to the brand and an affinity with each
other in their affinity with this brand – although not necessarily with all brands.
Members of the community would find the same universal values in the brand as
other communities but would not approve or agree with some of the other
communities’ attitudes or behaviour.

Lesson 2 An overview of B2C and B2B segmentation

The most meaningful criteria for market segmentation, distilled from decades of leading
direct marketing experience, are:

 Customers vs. non-customers

 Most valuable customers vs. least valuable customers
 Heavy vs. medium vs. light users
 Acquisition source
 Customer typologies (deduced by combining performance with attitudes)
 Recency, frequency, value (RFV)
 Reasons for purchase: Benefits/offers/communication medium
 Types of purchase

Personas are representations and descriptions of archetypal users of a brand that represent
the needs, lifestyle, behaviour and attitudes of larger groups or communities of users. They
reflect and enact real users and help to guide decisions about online functionality and
design.

Lesson 5 Scoring models for segmentation

Scoring models will help you identify segments for many different purposes – to evaluate
credit risk, lifetime value, likelihood of lapsing and so on.

Lesson 7 Applying segmentation

Segmentation benefits the marketer and the organisation as a whole through enabling:

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1. Sharpened customer focus

Segmentation can give valuable insight to the characteristics of customers whose

needs are being met.

If segmentation reveals that the most valuable segments are at variance with the
original targeting strategy, this leads to greater effectiveness of spend and approach.

Segmentation of online customers will support decisions concerning website content

development, to attract the most profitable segments.
2. Situation analysis

Your company’s competitive strengths and weaknesses can be illuminated through

an examination of how well it is meeting the needs of its key market segments.

3. Product development

To meet the needs of a diverse online magazine readership, an editor can produce
journals in several editions to appeal to readers’ special interests.

4. Customer management

For example, resourcing and stocking up for anticipated customer needs.

5. Revenue prediction

For example, a charity needs to predict its income in order to plan expenditure and
will identify and assess donor segments using donation RFV.

6. Customer profile development

This is one of the most important applications of segmentation in direct marketing.

Having identified segments among your customers, you then apply proven statistical
techniques to build an identikit picture of the characteristics that go to make the
segment what it is (and then use this profile to locate prospects who fit the mould).

7. Marketing communication plans

Customers often buy identical products or services for quite different reasons. If you
can segment them by their beliefs and attitudes as well as their behaviour, you are
more likely to present them with appropriate messages.

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This is why experts advocate that segments are compiled partly on the basis of
observed behaviour and partly from research into attitudes, beliefs, aspirations and
needs.

8. Personalisation

Personalisation is not the same as customisation.

Personalisation allows your organisation to increase customer loyalty by matching

products, content and offers with the right buyers.

Website personalisation can be used to create a unique offering and provide a

defence against the threat of commoditisation.

Personalisation comes into its own in situations where the customer’s needs and
wants are relatively consistent and easy to interpret via automation.

9. Corporate positioning formulation

Understanding your database segments should make a huge contribution to the

formulation of corporate and product positioning strategies.

But beware, corporate positioning and segmentation positioning can conflict with
each other. Here are two examples:

 P&O European Ferries’ corporate positioning was captured by the strap line;
“Why sail across when you can cruise across?” Following the strap line launch,
analysis and research identified a very negative reaction to the ‘cruise’
positioning from an important, high spending segment of business customers.
These frequent travellers wanted to hear about speed, schedules and
connections, not cruising!

 A large mobile phone operator positioned itself at the forefront of technology

and took every opportunity to hold forth on the amazing attributes of WAP
technology and the snazzy handsets and associated user benefits. This was
completely lost on, and highly irritating to, a large, loyal, conservative
segment who displayed a less than cutting edge attitude towards their mobile
phones!

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Topic 4 Third-party data sources

Lesson 2 Panels - A comparison
Panels have the ability to begin to link an understanding of who users are with what they do
online. There are two main types of panel:

1. Audience measurement panels (aka media panels or internet audience panels) –

primary purpose is to establish the size and profile of an audience to a website.

2. Access panels – designed more for allowing surveys to be run on specific target
groups.

Topic 5 Gaining insight into online customer experience

Lesson 2 Touchpoint mapping the customer journey, delivery and service
The following activities all feed into a touchpoint mapping process:

1. Pre-/post sales analysis

Reveals the presence or absence of customer interaction opportunities.

You might be surprised by how many or how few there are in each case.

2. Critical incidents analysis

Typically in-depth qualitative research focused on:

 Customers’ experiences of specific incidents

 The relative importance of these incidents to the customer
 The good and bad aspects of the experience from a customer (and brand)
viewpoint

For example, Hewlett Packard carried out a critical incidents analysis of the
customers’ experience when opening a new printer, and hotel chains examine
exactly what happens when a guest checks-in.

3. Cloverleaf mapping

This tool identifies each touchpoint’s fundamental characteristics in terms of:

a) Tangibles/performance
b) Process

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c) Knowledge/know-how
d) Relationship
e) Brand personality/experience

4. CODAR planning

A tool that defines each touchpoint’s communication objectives.

5. Satisfaction research

Identifies elements in relation to the customer’s experience; for example:

 Customer happiness
 How closely the experience matched their expectations
 How the experience compares with competitor/ alternative offerings

6. Channel analysis

An approach that examines which channels customers use to interact with the brand
and make purchases. For example, customers may research the brand online but
purchase the product in-store, or the other way around.

Channel analysis determines:

 What customers look for from each channel
 How channels conflict with or support each other to win the customer

This analysis feeds directly into channel strategy.

7. Touchpoint data analysis

Identifies for each touchpoint:

 The information customers expect you to have
 The information you would like to have
 Information collection opportunities that will support other activity

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8. Event trigger analysis/planning

Aims to define responses to each customer event.

For example, phone a prospect three days after they’ve received a brochure or send
an email four weeks before a service is due to expire.

9. Usage occasion analysis

Analyses the situations or moods in which customers are most likely to use the
product or service.

10. Mood analysis

Determines the most likely customer mood at a particular media or touchpoint

event.

For example, research shows that:

 People watching TV are passive receptive/emotionally responsive, in contrast
to cognitive online information hunters.

 People can be in different states on different days of the week or times of

day: e.g. ‘Thank God it's Friday’ versus ‘Monday blues’. In business to business
selling, many key customers are at their most receptive at the end of the day
after most people have left the office, while others want to use this period of
relative tranquillity as their own quiet time.

The customer’s mood state at the time they receive your communications has huge
implications for communications planning.

11. Behaviour analysis

Behavioural analysis defines what do people actually do at each touchpoint and

establishes how different segments behave.

Media analysis

Determines different media penetration regarding the target audience; i.e.

 Which media do target segments interact with?
 How much does it cost to reach them?
 What type of communication works most effectively in each medium?

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12. Media receptiveness

This involves understanding the relative importance to customers – and customer

receptivity to – different media in different categories.

Integration MCA has developed a very powerful and useful research tool that
produces comparative statistics on market categories.

TNS offers a powerful research tool that produces comparative statistics on market
categories: http://www.tnsglobal.com/what-we-do/new-markets.

Lesson 3 Customer insight from relationship modelling

To achieve communication and knowledge integration across all touchpoints requires:
 A smart CRM management system
 Knowledgeable systems
 Clear processes
 Self-learning and improvement feedback loops

Lesson 9 Measuring customer experience online

Improvements in customer satisfaction are measured in the form of satisfaction indices, and
should take into account:

1. Customer satisfaction

2. Customer priorities

3. Customer loyalty

4. Non-respondent bias

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Module 8 Managing integrated marketing

communications

Module introduction
The four key reasons for orchestrated communication programmes are:

1. A mix of communications is a more effective way to reach a range of customer

communities. Ongoing investment in a single medium, say, TV, progressively
increases the cost of marginal reach and effect.
2. Customers and prospects will normally interact with your brand in a variety of modes
and channels. You must avoid confusing the customer and reinforce key messages
through harmonious and consistent interpretations. A strong, clear, consistent and
differentiated brand and brand messaging is the basis of marketing success.
3. Recent discoveries concerning the potential of communications and the nature of the
customer communications experience reveal that the traditional practice of dividing
communications objectives in two separate boxes is likely to sub-optimise
performance. Digital channels have been at the forefront of providing compelling
evidence of this communication planning principle.
4. There is an (albeit only partially explicable) effect that emerges from co-coordinated
communication. When customers experience harmonised communication from a
variety of channels there is an enhancement known as the media-multiplier effect.

All leading marketing is now planned around a mix of integrated marketing communications
(IMC) aimed at maximising efficiency and optimising effectiveness. Even specialist
practitioners need to be able to frame their actions within an IMC setting.

Integrated marketing communications are concerned with the optimisation and

harmonisation of marketing communications across media, disciplines and channels.

Topic 1: What are integrated marketing communications?

Lesson 1. IMC process and customer insight: The NSPCC’s FULL STOP initiative
IMC is based on insight. The fundamental question is “Who do I need to communicate
with?” and it should be answered from a practical, job management point of view.

Optimising, interconnecting and integrating or harmonising diverse communications is a

complex task. Many of the in-house and external agencies will have very similar questions,
perhaps focusing on particular segments and each requires specific insights about their
target audience(s).

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To meet the communication challenge the audience must be segmented to an appropriate

level and the characteristics of each segment need to be fully understood. Depending on the
level of granularity, the sub-groups can be further broken down. The decision regarding
segmentation complexity has to be a pragmatic one, trading cost and implementation
difficulty against the potential for achieving enhanced effectiveness and results. Without
genuine knowledge and insight to guide operational implementation a great deal of money
can be wasted through inaccurate targeting.

In reality, the level of sophistication required to deliver the right message to the right person
at the right time is impossible in any normal marketing situation However, what you can
achieve is a gradual improvement of your results.

With the help of a good database, supported by research, the NSPCC’s efficiency is greatly
improved.

Planning should be based on leading, intermediate and lagging indicators of success

Lesson 2. IMC and integrated marketing

“IMC is the co-coordinated planning of communication for each customer community
or public to achieve creative harmony of messages, customer interest and marketing
objectives across media at each touchpoint and over time.”
Angus Jenkinson for the IDM (2002)

Integrated marketing is about organising and managing the whole organisation to create
value for customers, focusing on the communication elements. Optimising communication
depends on understanding customer groups, managing customers on a lifetime value basis
and deploying a universal planning and evaluation framework, as well as the quality of
leadership (Jenkinson, Mathews and Sain. 2005).

The focusing principle behind integration is the core identity of the brand. This expresses
itself in different forms:
 Customer motivations and needs
 Vision, cultural values, unique competence, purpose
 Positioning, brand essence, brand personality
 Product design values, business model, integrated scorecard
 Organising idea

Two key diagnostic areas will drive your profits and are of importance to leaders:

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Diagram. Integrated marketing performance

(Winning with Customers. Jenkinson et al. 2005)

Research by the Centre for Integrated Marketing has determined that the typical scale of
benefit for marketers adopting integrated marketing was a 10 – 25 percent enhancement in
business performance. The gain is achieved from a number of inter-related factors.

Case examples: SEEBOARD Energy and IBM ‘Codernaughts’.

Lesson 3. IMC is about ‘mix’

Integration is first and foremost about inclusive strategy. IMC involves optimising both
efficiency and effectiveness:
 Efficiency is increased by the choice of the media mix. It is also enhanced by the
synergy that appears to be achieved when communications work in harmony.
 Effectiveness is enhanced by the power of the message and creativity in the choice of
media.

Genuine integration happens at both a media and a strategic level. Integration is not just
about a mix but about the best combination of media within that mix. As a result, an
integrated campaign might use just one medium.

Lesson 4. Why do digital marketers need IMC?

Three major factors are changing the face of today’s marketing communications:
1. Mass markets have fragmented (Kotler et al. 2001)
2. Improvements in computer information technology (Kotler et al. 2001)
3. Growing consumer wisdom.

Conflicting messages can create confusion and dissonance. To seriously explore integration,
an open, fact-based outlook must be applied to a range of communications with the likely
effect that:
1. Increasing effort to explore contact opportunities with customers leads to new
concepts of media or a much wider view of the communications channels.

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2. The media and tools (or communication disciplines) are more ‘neutral’ and open in
their potential than conventional taxonomies indicate, and can be blended to
enhance effectiveness.
3. The effort to make customers more valuable – clearly an aim of communication –
depends on customers experiencing more value.
4. The ‘advertising message’ works best when built on a core truth of the brand that
represents value to people – and is thus trustworthy and appreciated.

A wider outlook represents a considerable widening of your marketing responsibilities. It

moves the challenge from ‘integrated marketing communications’ to ‘integrated marketing’:
1. Marketers now have to define their scope as anything that touches the mind of the
customer
2. Marketers have to be concerned with value and truths

Topic 2: Media neutral planning

Lesson 1. What is media neutral planning?
“A rigorous process for the selection of communication options which combines facts and
imagination in order to drive continual improvement to overall ROI.”
The Media Neutral Planning Group

Excellence in MNP depends on pre-requisites, such as knowledge of customers, good brand

insights and appropriate value propositions. MNP has five essential aspects:

1. The concept of media is revised:

ANY
M ETHOD

ANY ANY
OBJECTIVE(S) M EDIUM

2. Optimised communication planning is based on a best mix of communication media

and activities conceived as a creative, harmonious and efficient whole, rather than a
series of isolated or even parallel communication activities.
3. New concepts of communication potential replace prior attitudes to planning that
have included significant dysfunctional biases.
4. MNP replaces a series of disconnected (and often flaccid) communication objectives
with a universal and powerful framework.

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5. The best way to make this work depends on a competent, re-organised and
committed client working with agencies as a team through an integrated
media/creative process.

MNP explicitly includes the full range of customer touchpoints (360-degree planning)
(Jenkinson and Sain, 2004).

Lesson 2. De-bunking current media planning assumptions

Marketing communications can be defined by response device, accounting structure, media
and the four Ps. Each communication discipline has its own metrics.

The concepts that underpin some marketing communication tools are inadequate for the
contemporary challenge and marketers often acquire dysfunctional or sub-optimal skills.

Lesson 3. Defining media, disciplines and channels

The Media Neutral Planning group created definitions for media, channel and discipline.
MNP explicitly encourages an innovative approach to communications planning, as well as
extending the scope of existing or conventional media.

MNP case example: YouTube and the 2008 presidential elections

Topic 3: Objective setting and IMC evaluation

Lesson 1. Objectives and evaluation
To achieve good evaluation you first need to set good objectives that include what you want
to measure. The IMC Equity Objectives planning model consists of three sets of ‘equity
frameworks’ that define leading, intermediate and lagging objectives to be achieved by a
marketing strategy and the inter-relationships between them.

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Diagram. IMC equity objectives model

(Centre for Integrated Marketing)

Breakthroughs in evaluation lead to the reinterpretation of potential. Creative/channel

evaluation needs to take place at two levels - mix and touchpoint:

These two types of evaluation need to be complemented by further evaluation:

1. The effectiveness of the particular communication in meeting immediate
business/organisation objectives.
2. How effective the communication is in building brand loyalty/relationship equity.

Lesson 2. From jigsaw planning and evaluation to open planning

Traditional communication planning approaches used jigsaw planning; communication
planned and created in convenient, stereotypical silos, so each communication element can
be assembled like so many pieces of a jigsaw to form an ‘integrated plan’.

Such stereotypes are unlikely to optimise resources and communication.

Fragmented objectives mean you can measure each technique in isolation but it is harder to
measure the mix. You are also less likely to get the best from each of your channels.

Research results have revealed that:

 The extent to which non-broadcast ads (in particular non-TV and radio ads) gain
attention has been systematically undervalued.
 There is about a 70 percent correlation between how much people like a website
based on an experience lasting less than one tenth of a second and the overall
success of that website (e.g. Tesco, Amazon, petfoods.com).
 People who do not remember seeing an ad are still being influenced by it; i.e. the low
attention advertising processing model
 The way the human mind processes experiences and is influenced by them is much
more complex than was previously thought. Neuroscience is revealing that emotion
generates behaviour.

Neuroscience has identified three functional brain areas for:

1. Conscious cognition
2. Affect/emotion
3. Behaviour/action

All communication is processed by all three areas of the brain (conscious cognition,
affect/emotion and behaviour/action) so marketers need to target them all.

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Lesson 3. The IMC objectives planning and evaluation framework

IMC practice aims for a ‘common currency’ approach to setting objectives for all marketing
communications. The marketing team uses the same framework to plan and evaluate,
irrespective of channel.

The CODAR model/tool provides an IMC planning and evaluation framework. The five IMC
planning and evaluation dimensions involved in every channel and communication at all
levels of the planning hierarchy are:
1. Experience
2. Thoughts, beliefs
3. Emotion, engagement, feelings
4. Help, service
5. Intention, desire

Delivering what the customer wants might require a communication approach that is
rational, emotional, visual, verbal or a combination of these approaches. There is no such
thing as a purely rational or emotional communication.

Customers also want a communication or touchpoint to feel very personal and relevant. Just
as a hermeneutics circle applies between the touchpoint and the overall brand, so the
touchpoint, for example, the whole ad or service experience, needs to be satisfied or
explained by the elements within it.

Lesson 4. IMC evaluation: Open planning architecture

Each individual discipline has its own evaluation metrics. Individual techniques are just a
local means to understand the IMC CODAR planning mix. For example, a clickthrough is one
example of an activation metric. Don’t measure just one part of your overall
communications mix.

Open planning architecture

To be truly effective, you should plan using integrated communications objectives.

Evaluation is both the beginning and end of the planning process and must be strategically
linked to goals. It is really important to start the planning process with insights, arising from
evaluation, testing and learning (metrics).

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Business goals, such as market

Business
Business share, which need to be achieved
Goals(s
goal(s) by communications.
)

A planning framework for

Universal
Communicatio communications priorities and
Research
Researc objectives
n planning objectives. This needs to be
hinsights
Insight
priority
s and
framework effective, simple, and neutral across
methods.

Metrics are specific, actionable

Metrics ways of evaluating or testing, such
Metric
as tracking or satisfaction surveys,
s
responses/clickthrough and sales.

Diagram. Open planning architecture tool

(Jenkinson/Media Neutral Planning Best Practice Group)

Common priorities and objectives for communications is the principle at the heart of the
Open Planning IMC/MNP architecture.

To implement common communication priorities and objectives you require:

 Effective tools and a supportive culture.
 A common framework that will allow you to plan, brief and evaluate consistently
across diverse communication channels or media.

Using a universal method enables you to use the same framework to brief a website or
banner ad as you would for PR.

Lesson 5. How to set media neutral universal objectives for IMC

Important principles for IMC are that:
 The framework of objectives for all the different teams (disciplines) should be
standardised.
 Each team (discipline) should understand its own contribution to the whole based on
this common framework.
 Each element of the solution should be assumed to be contributing to each and all of
the communication objectives, e.g. a separation of ‘priming’ for one method and
‘activation’ for another is inappropriate. However, the relative contribution probably
will vary, both within the campaign and from campaign to campaign.

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 The plan should be designed in such a way as to enable differential analysis. This can
be done by comparative testing, for example.

To optimise your IMC team it is crucial to focus on the learning process, in addition to
evaluation. In relation to agency payment, the Media Neutral Planning Best Practice Group
includes two recommendations:
1. Agencies should not be paid on media spend, but directly for their work – separated
into payment for thinking and execution.
2. Pay in two parts. The first payment covers basic costs, the second is performance-
related and paid to the entire team.

Lesson 6. Evaluating the media-multiplier effect

One of the aims of evaluation is to look for the media-multiplier phenomenon. Finding and
optimising it will mean getting more for your money.

Marketers are accustomed to using econometrics to measure activity accurately. A key

econometric methodology is the analysis of comparative differences.

Lesson 7. Cultural issues for IMC implementation

To create an internal and supplier culture that enables IMC, you’ll need to:
 Define more precise communication objectives and priorities.
 Provide a level playing field for every agency, discipline and medium to contribute to
their maximum ability.
 Enable your analysts to benchmark performance in a meaningful way.
 Develop a culture that supports and encourages the practice of team learning.

Topic 4: Planning and scheduling an integrated communications plan

Lesson 1. Integration, wholeness, identity and creative alignment
Brand value is conveyed at every touchpoint. Wholeness is a fundamental, component of
identity (i.e. brand). The challenge for the brand is to be a mature artist! Instead of
‘repetition’ think harmony and variations on a theme. Instead of ‘consistency’, think
coherence or integrity.

Lesson 2. A planning and scheduling framework

Implementing a planning and scheduling framework effectively requires a considerable
investment in infrastructure, process and know-how. Kotler argues that the process begins
with customers not media. However, it also needs to link to strategy and business plan,
which is a kind of step zero.

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IMC planning begins with strategy and integrated competence. Integrated communication
needs to be planned as a mix and from big picture to detail, as a hierarchy.

The CFIM identified that measuring is not enough, unless there is learning. The outline below
(an amended version of Kotler’s original framework) is a useful framework for orientating
yourself in IMC planning:
1. Develop the strategy and integrated competence
2. Identify the target audience
3. Determine the communication objectives
4. Design message hierarchy
5. Choose the media through which to send the message
6. Collect feedback to evaluate and then learn from the project(s).

Lesson 3. The IMC planning process: Strategic frameworks

As a marketer planning and implementing IMC you face a number of strategic choices for
full-scale IMC implementation:
 Customer experience
 Push/pull/profile
 Inside-out/outside-in planning

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Diagram. A ten point framework for organising strategic planning principles

(After Jenkinson)

The elements in the diagram indicate the need to understand customers (their value, needs
and segments) and the brand and to translate this into value propositions and messages
organised in coherent themes.

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Diagram. Key elements of the management tasks to achieve IMC

(Based on research by the Centre for Integrated Marketing.
Copyright Stepping Stones. 2002)

Lesson 4. IMC and the brand DNA

Good IMC practice depends on a thorough understanding of the brand’s DNA. Stellar®, a tool
for defining the strategic DNA of the brand consists of 12 domains arranged in a circle to
define organisational or brand uniqueness.

Lesson 5. The IMC planning process: Communication planning structures

Once the strategic framework has been established, the next step is to plan the
communications. There are two frameworks or models to assist you with your IMC
communications planning: a structural model and a process model.

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Model 1. Fill’s structural model: Closed loop planning process

(Marketing Communications. Chris Fill)

BRAN
BRANDDM
MARKETIN
ARKETING
G REVIEW
REVIEW EVALU
EVALUATIOATION N
M
Modelling,
odelling,
Business task tracking,
tracking,
Provisional budget
effectiveness
effectiveness
CO
COMMM
MUUN
NICATIO
ICATION
NSS REVIEW
REVIEW

Communications strategy
Channel options

CREATIVE
CREATIVE CH
CHAN
ANNNEL
EL
D
DEVELO
EVELOPM
PMEN
ENT
T O
OPTIM
PTIMISATIO
ISATIONN
Iteration

WILSON- DAVIES-JENKINSON M ETHOD

Model 2. Open planning process model

(MNP Group)

Lesson 6. International IMC planning

Some of the issues involved in complex, international IMC planning are:
 An international marketing context increases the range of customer situations and
needs.
 There are more players involved and therefore more chance of disagreement,
misunderstandings and competitiveness. More egos.
 The logistics are more difficult: the timescales are longer and more complex.

One of the critical issues is the extent to which the plans for communication, as well as the
communications collateral, will be created centrally and then distributed.

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Case example: IBM

Lesson 7. Six strategic planning principles

Six principles of effective IMC planning are presented in the form of case studies:
1. Relationship/purchase cycle management: World Rally championships
2. Brand identity and alignment: The National Trust; Asda
3. Community segmentation: Olympus UK; Harley-Davidson
4. Value creation: The Automobile Association
5. Touchpoint planning: SEEBOARD Energy
6. Integrated creativity: Mini; British Gas

Lesson 8. Seasonal campaigns and relationship programmes

IMC is about managing the ongoing relationship with customers in an integrated way in
addition to big campaigns. Research shows that the more customers interact with an
organisation or brand, the higher their commitment to it. In terms of building commitment,
the variety of touchpoints, products and services that customers use is more significant than
usage frequency.

Managing organisational complexity potentially involves millions of customers and many

more moments of truth.

To manage this complexity requires a smart CRM management system, knowledgeable

systems and clear processes.

The concept of dialogue is central to maximising profit from customer data.

The aim of this dialogue is to:

 Move your customers towards purchase
 Keep customers satisfied post-purchase
 Ensure that customers buy additional or replacement products in the future

Identify contact points and triggers for your customers; marketers must specify the rules.
NBA is a process that scores the ‘next best thing’ to do for any given customer. An NBA
approach turns the company sideways and makes it more customer-centric.

Topic 5: Integrating digital communications within IMC

Lesson 1. Does CRM/digital need to be media neutral?
Your IMC management system must integrate across all communications, including product
and service delivery, customer complaints and requests, telephone contacts (both inbound
and outbound), promotional and service mailings, educational and promotional events (e.g.
seminars and previews), and face-to-face meetings or encounters.

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The digital channel has these characteristics:

 It can't thrust its way into the home entertainment environment like TV ads.
 It is not as tangible as mail communication.
 The internet is there 24 hours a day.
 You can easily and frequently click in and out.
 In fact, you are often present as a result of the choice of a customer or consumer.
 The level of detail is scalable, and people can choose how much they want.
 Delivery is typically very cheap.
 Typically, it provides an interactive experience where people can follow their paths of
choice. This last point is certainly important.

Chris Fill suggests that you need to think about a pull, push and profile approach to give a
general context for your strategy.

Case example: (digital integration) The One for me (an Australian telecoms company)

Elements in the communications/media mix:

 TV campaigns are used to support the general positioning of the brand and support
new service launches.
 Press is used to support promotion offers.
 The integrated ONE FOR ME launch used a range of advertising (outdoor, print, TV,
radio etc.) to achieve drive to web and sign-up for the programme; 65% of
registrations came over the web, the balance by telephone and mail.
 Direct mail is used for fulfilment and for communication to customer segments
preferring that medium
 The internet is used for proactive dialogue – this was the first category loyalty
programme driven by the web in the region. For example, the website (www.one.at)
supported push personalised communication by email as well as being a place to pull
customers where they can have fun and learn and get benefits. On the website there
were animations and video cartoons for kids and smart news for grown ups or
business people.
 Sales promotion with points that drive repeat behaviour and reward it as well as
surprises that create an enhanced social bonding effect and add value to the phone.
 Rewards programmes in the form of a points programme provides customer
collateral for new hardware and other rewards with a targeted approach tailored for
gold, silver and bronze tier customers.
 The surprise programme was a platform for co-operation partners, using the phone
as a new media tool to deliver messages, premiums, services, etc.

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Lesson 2. Case study: Amazon

Amazon’s interactive technology allows it to:
1. Service high and low value customers
2. Deliver a personalised service to returning customers
3. Create and deliver value for customers cost-effectively
4. Increase customer engagement and loyalty
5. Generate profitable sales

Amazon’s focus adds up to 3-way equity that’s good for everyone:

1. Developing the brand, knowledge and financial equity for the company
2. Creating fulfilment, development and financial satisfaction for the employee/partner
3. Ensuring that the customer is happy and committed to the brand.

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Module 9 Campaign control and coordination

Topic 1. Campaign objective setting

Lesson 1. Consider the full range of options

Set a range of objectives including acquisition, retention (online and offline), reach, brand
interactions, list-building and learning (collecting customer knowledge). Campaigns must
have a clear focus, especially for acquisition.

The 5S checklist supports objective setting: sell (sales), speak (communications), serve
(customer service and support objectives), save (cost saving) and sizzle (branding).

Balance branding and response goals. Always include specific response goals in your brief.
Set balanced creative goals to evaluate the creative execution. Apply the ‘Do, Think, Feel’
mnemonic to define what you want the communication recipients to do.

Lesson 2. Setting campaign objectives

Create simple Determine if objectives are realistic – ‘bottom-up’ or ‘top-
conversion models down’
Calculate allowable Control campaign costs, maximising efficiency. Costs can be
marketing cost - include defined for different online outcomes, e.g. Cost per
forecast customer LTV acquisition/lead/quote/registration
Set branding objectives  To increase brand awareness
 To encourage interactions with the brand, particularly
for brand loyalists or advocates
 To influence brand favourability, change brand
perceptions
 To increase purchase intent
Monitor engagement Campaign or brand engagement metrics
Review modelling Volume campaigns – review models quarterly
assumptions Tactical actions to stay on track – review weekly
Track digital impact on Establish tracking or research to assess cross-channel
offline sales conversions at different stages of the buying process

Table. Tasks for effective objective setting

If a company is investing millions in digital media, it is worth making a further investment in

sophisticated tracking technology to ensure that the complexities of the customer journey,
and the contribution of different media, are fully understood.

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Lesson 3. Define the response mechanism for the campaign

Online response mechanisms include: focused landing pages, campaign-specific
URL/microsites, personal chat, callback, email or TXT button.

Offline response mechanisms (phone, mail or instore) should also be considered.

Homepages are commonly used for offline campaigns to provide a memorable address but
aren’t as effective for targeted online campaigns. Campaign specific URLs aid response
measurement. Customer journeys from one channel to another should be supported.

Tagging gives much better insights into communication effectiveness than is achievable
through traditional media. Issues with tagging include:
 A large investment in terms of staff time and tracking software is required
 Results are ultimately dependent on cookie deletion (or rather, non-deletion) rates

Lesson 4. Evaluating campaign effectiveness

 Build in tests to learn about which factors influence response
 Monitor responses to build knowledge about customers; track clicks or build profiles
 Bounce rates can determine what’s working effectively as part of a granular analysis
 A/B split and multivariate testing can be also used to evaluate and refine campaigns
 Sophisticated traffic building / campaign response quality assessment incorporates
ROI

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Campaign cost description Total cost

Table. Metrics for assessing traffic building and campaign response quality incorporating
return on investment

Engagement rate % = 100 – Bounce rate % x (100 x Single page visits to a page/site)
(All visits to a page starting on page/site)

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Diagram. Metrics for assessing traffic building and campaign response quality

Topic 2. Campaign targeting strategy

Lesson 1. The importance of targeting
Targeting has the biggest influence on response rates, so select the targeting variables that
are most likely to have a positive influence on campaign response.

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Behaviour

Targeting variable most

predictive of response
Attitude &
preferences
Lifestyle &
psychographics

Demographic profile data

Unknown

Diagram. Targeting variable capacity to predict response

Sophisticated digital targeting options include, for example: relationship with company,
importance to company, intrinsic characteristics (geo-demo-psychographics), behaviours,
preferences.

Lesson 2. Context-based customer insights

Researching a campaign’s marketplace context is central to successful campaign planning.
Context analysis references and collates information from all existing plans (business and
marketing plans and internal and external information sources) for inclusion in the campaign
brief (Fill 2007).

External data sources include: market, audience, internal customer profile data, previous
campaign results.

Lesson 3. Third-party syndicated research

Third-party syndicated research provides insight into customer/competitor behaviour:
 Site audience reach and composition
 Online buying behaviour and preferences
 Customer search behaviour
 Competitor campaign activity
 Competitor performance

In-depth consumer media usage research (Hussein 2006) enables campaign planners to
identify and understand relevant target markets using detailed lifestyle and behavioural
data.

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Lessons 4, 5, 6 and 7. Targeting for retention email, interactive (display) ads, online
sponsorship and PR, search engine marketing and affiliate marketing
Retention email Search engine/PPC targeting
 List member characteristics (contact  Target a self-selecting audience
information, geo-demographic/lifestyle using: generic product term,
profiling, buying process stage, value) specific product term or a brand-
 List member preferences (email format, term
preferred media, frequency and content)  Further targeting options within
 List member behaviours (email response, click specific phrases (e.g. comparison,
and purchase patterns, timing) intended use, etc.)
 Customer initiated events onsite (e.g.  Keyphrases (broadening these will
customers entering a transaction pathway and increase clickthroughs).
failing to complete an action)  Target PPC using specific phrases.
 Review results: ROI, cost per click,
etc.
Interactive (display) ads, online sponsorship & PR Affiliate marketing
 Content targeting through media placement  Developing the right network.
 Search targeting (according to key phrases  Appropriate placement on affiliate
typed into search engines) sites (fine tuning visitor delivery to
 Time-based targeting encourage super affiliate
 Technology targeting (hardware, software or partners).
ISP)
 Behavioural targeting (interactions) – can also
be used across sites through ad networks
 Geographical targeting

Table. Specific targeting options for ecommunications tools

Topic 3. Campaign creative, offer and messaging strategy

Lesson 1. Campaign creative strategy
Important issues to consider in relation to online campaign creative strategy are:
 That the strength of main concept, offer and message of the campaign are enshrined
in the creative (artwork and copy)
 Creative style and tone
 Key messages must be communicated – clear messaging should be used to capture
awareness and gain interest
 Calls-to-action and how these differ across different media
 Primary offer and message creation should conform to AIDA within the short time
constraints operating in digital channels, i.e. primary offer should be obvious and

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clear supported by the shortest feasible message, a simple clickable call-to-action

and positioning for maximum prominence
 Secondary offer and message should reassure, convince skeptics, appeal to different
primary target segments and exhibit a clear call-to-action
 Response can be boosted by making unique online offers
 Trust is a pre-requisite in the online environment – a trusted brand and a clear OVP
message should be asserted
 Offer and messaging integration across different media should be implemented

Drayton Bird (2007) identified 25 points for consideration before beginning the creative
process, the most pertinent of which to online creative development are:
 What’s the objective?
 Is the positioning clear?
 Who is being sold to?
 What is it and what does it do?
 What need in your proposal does your product or service further?
 What makes it so special?
 What benefits are you offering?
 What do you consider the most important benefit to be?

The Open Planning Group’s (Jenkinson 2003) radar planning model for design and copy
creation helps to plan balanced communication between the elements of: idea formation,
relationship building, sales activation, help and product experience.

Lesson 2. Comparing creative approaches in digital and traditional media

Digital media’s key distinguishing characteristics are that it is participative and interactive.

Apply the digital creative principles of relevance, originality, impact, subjectivity,

engagement and enlightenment to optimise interactivity.

Poor application of technology can inhibit, rather than enhance, communication.

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Image. ROI + SEE creative evaluation

Lesson 3. Offers and messages

Often online communications permit only a fraction of a second to get a message across, but
there’s usually enough space to deliver:
 Primary offer and message: A(ttention) I(nterest) D(esire) A(ction), should grab
attention
 Secondary offer and message: should create desire and action

It is important that your campaign messages are integrated across all media.

Lesson 4. Unique online offers

 Encourage prospect/customer response by incorporating a primary or secondary
offer that is unique to the online medium
 Reinforce audience perceptions of your online service and assert your online value
proposition by positioning your messages carefully
 Even non-transactional campaign objectives still allow you to add value for online
respondents

Lesson 5. Interactive (display) advertising-specific offer and messaging issues

Creative issues to consider for interactive display advertising include:
 Small buttons are ineffective to convey complex messages
 Large formats are more effective to convey messages, generating higher response
rates than smaller formats
 Don’t save the best messages for last in a skyscraper or rotating banner ad format
 Flash animation is more effective than GIF to gain attention/convey a message

Display advertising’s true impact is evident when banners contribute to the halo or media-
multiplier effect as part of a multi-media campaign.

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Newer ad formats, such as expandable banners and video ads, have increased the scope of
online display advertising.

Assess ad performance using interaction rates (IRs) as an indication of higher levels of

engagement.

Lesson 6. Search engine marketing-specific offer issues

Creative issues to consider for search engine marketing include:
 Crafting the SEO offer, including testing
 Title tag should be a convincing hyperlink to appeal to search spiders and people
 PPC allows offer and message control to create relevance to attract the right quality
of visitor and reduce unprofitable clickthrough volume
 Good qualifying copy improves visitor quality while only marginally reducing
clickthrough rates (maintain clickthrough volume for a prominent Google listing)
 Copy relevance is the key to increasing clickthrough rates

Lesson 7. Key issues for email marketing

For email marketing, creative issues to consider include:
 Multiple (primary/secondary) offers are more effective than single offers
 Additional messaging can be used to manage prospects’ perceptions of brand,
company and website
 Keywords ‘free, win, save’ are often used to communicate an offer
 Monitor recipient response preferences

Robert Cialdini’s six weapons of influence can be applied to email marketing are:
1. Reciprocity
2. Commitment and consistency
3. Consensus
4. Affinity
5. Authority
6. Scarcity

Topic 4. Campaign timing and integration issues

Lesson 1. Integrated marketing communications
Digital media are most effective when employed as part of an integrated marketing
communications approach.

Communication integration requires that communications deliver coherence, consistency,

continuity and are complementary to each other, without reducing each channel’s ability to
deliver according to its own particular own strengths.

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Lesson 2. Integration through time

Different media must be integrated over time as part of a campaign or campaigns. General
questions that pertain to integrating communications through time are:
1. Is branding and messaging sufficiently similar throughout the campaign?
2. Are offer, messaging and creative sufficiently varied throughout the campaign?
3. Frequency and interval issues. Is the audience being exposed to the messages
sufficiently, too much or too little?
4. Is the sequencing of communications right – online and/or offline?
5. Do executions occur at the optimal time of day, week or year?

Lesson 3. Special timing and integration issues for interactive advertising

 The banner blindness phenomenon is well known. However, digital marketers need
to know that although not everyone who sees an ad clicks on it, the ad still has an
impact – through the halo or media-multiplier effect.
 The ‘rule of three’ for ad exposures holds as true for online awareness building and
brand messages as it does for offline advertising. However, for direct response the
first ad is likely to generate the highest response with subsequent appearances
plateauing or falling.
 Achieving multiple exposures for an individual can be problematic where media
consumption is split over many websites.

Lesson 4. Special timing and integration issues of search engine marketing

 Avoid PPC advertising budget caps that prevent frequent ad exposure during peak
viewing times. Web analytics can determine periods of maximum visitor volume.
 Day-parting. Site visitors might be more likely to convert at certain times of day and
these times can be optimised using sophisticated search techniques for the best ROI.
 Online PR and social media can make a valuable contribution to any communications
strategy, particularly in the area of link-building.

Marketing’s six step link-building process for digital campaigns:

1. Keywords research
2. Profiling
3. Content development
4. Publishing and distribution
5. Linking
6. Monitoring

Lesson 5. Special timing and integration issues of email marketing

 Emails often work best when received 2 or 3 days after a direct mail piece.
 Email can be effective in gaining an initial response or establishing a level of interest.
Selectively follow-up respondents who have clicked on the initial email.

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 Test to determine the optimum time for email communications. Broadcast emails
following particular events can be very effective, as can teaser and chaser emails.

Topic 5. Media planning and selection

Lesson 1. Media neutral planning
Media neutral planning is non-biased approach that integrates messages across all media,
encompassing customer touchpoints and using real consumer insights (Anthony Clifton).

Tapp (2005) notes the three aspects of planning encompassed by media neutral planning:
channel, communications mix and media planning.

Lesson 2. Key activities in media selection and planning

Clearly defined campaign objectives are the starting point for media selection. The most
important direct response campaign objectives are response volume, quality and cost. For
branding, awareness or engagement campaigns use branding and engagement metrics.

Pickton and Broderick identified the key activities in media implementation as:
1. Target audience selection
2. Media objectives
3. Media selection
4. Media scheduling
5. Media buying
6. Media evaluation

Lesson 3. Selecting the right online vs offline mix

Select the right online vs. offline mix.

In interactive advertising it is commonly a strategic initiative to determine and set this figure.
Brand impact or cross-media optimisation studies determine online media value and its
contribution to:
 Extended reach: adding prospects not exposed to via another medium
 Flattened frequency distribution: reallocation of TV budget to online media
 Reaching different kinds of audience
 Providing unique advantages in stressing different benefits in each medium
 Permitting different creative executions
 Adding gross impressions if other media is cost-efficient
 Reinforcing messages by using varied creative stimuli

Lesson 4. Selecting the right mix of ecommunications tools

Ecommunications tools can be:

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 Continuous: SEO, PPC, affiliate marketing, sponsorship, enewsletters

 Campaign specific: interactive advertising, email and mobile marketing, interactive
digital TV and radio campaigns, viral marketing, online PR

For digital media selection, carry out a structured evaluation that includes each medium’s
ability to influence perceptions and drive response and response cost and quality.

Coulter and Starkis (2005) identified characteristics for media selection: quality, time,
flexibility, coverage and cost. Relative importance and investment in different digital media
depends on budget, product and campaign type (e.g. direct response/branding).

Topic 6. Other key campaign issues

Lesson 1. Testing and improving campaign response
Testing is essential, to take advantage of the potential that the measurability and
accountability of digital media offer to significantly enhance marketing campaign results.

Relevant tests, in three phases (pre-testing, live split testing and post-testing), include:
1. Campaign variables
2. Pre-testing campaign variables
3. Live split testing
4. Live testing and adjustment of campaign elements
5. Pre- and post-testing
6. Execution tests on different platforms

High traffic volume campaign landing pages allow structured analysis (e.g. A/B split,
multivariate testing), to determine the best combinations of messaging and page design.

Lesson 2. Customer profiling and research

Online campaigns offer a wonderful opportunity to capture or update customer details. For
example, often the primary objective of web response TV is to list build by collecting email
addresses. When collecting profiling data as part of a campaign:
 Ensure that collected data includes key profile fields from a defined common
customer profile used for the organization
 Data collection form design should ask the optimum number of questions without
limiting response
 Data collection must comply with local data protection and privacy laws
 Assess opportunities to collect profile data by ‘sensing’ not ‘asking’
 Asking a limited number of research questions can improve brand perception

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Lesson 3. Legal requirements

The main legal issues to be aware of concern:
 Domain name registration, competitor name and trademark use in PPC and meta-
tags
 Accessibility, data protection and privacy legislation
 Adherence to advertising and sales promotion codes of practice

Considerable challenges for policing online trademark infringement arise from:

 The range of online infringement opportunities
 The gap between what the law stipulates and what is technically possible online

Topic 7. Campaign budgeting and lifetime value modelling

Lesson 1. Introducing PPC – a campaign example

The predictive budget models you use to control campaign spend need to be continuously
refined to make them as accurate as possible and to avoid overly simple assumptions.

For a simple PPC campaign the key campaign budget parameters are:
 Sales volume and value
 Allowable cost of acquisition (CPA) or allowable cost per sale
 Acceptable return on investment
 Acceptable lifetime value

Critical success factors and key campaign performance indicators include:

 Volume of response
 Cost of response
 Quality of response (conversion rate)
 Quality of response (average order value)

To avoid inaccurate forecasting models you must include as much detail as possible, allowing
variance for all variables. Realistic revenue estimates (net revenue rather than gross
revenue), should take rejected orders (i.e. credit-checking or bad-debt) into account.

Lesson 2. What is profit?

Revenue less cost = Profit

Profit should always take the cost of the goods sold into account. Some simple search
marketing models don’t take this cost into account. Profit is the most widely used measure
of business success and the basis on which businesses are taxed. It is an ideal way to
calculate the rewards for owners and managers and allocate resources.

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Lesson 3. Return on investment (ROI)

ROI is a vital concept to assess all types of investment because it presents profit relative to
the original investment. The marketing communications formula is:

ROI % = 100 * [Revenue – (Cost of goods sold + Communications cost)

Communications cost

Lesson 4. What is revenue?

Gross revenue is the value of orders received at the selling price.

Net revenue is the amount of money banked at the end of the collection process, with all
returns credited, money-back claims satisfied and bad debts written off. If goods are sold on
a free approval or a credit basis, credit checking will eliminate some orders, distance selling
will result in some goods being returned, bad debts will be attracted to credit offers and
there will be refund requests.

Lesson 5. Costs: the Famous Five

Costs estimates should be as detailed as possible:

1 2 3 4 5
Product Fulfilment Promotion Finance Overheads

Table. The Famous Five costs

Lesson 6. The four fundamental characteristics of costs

Cost characteristics:
 Attributable (direct costs)
 Non-attributable (overheads)
 Variable (according sales level – might not be linear)
 Fixed (independent of sales volume)

Lesson 7. An online advertising budgeting example

When working with an agency, agree the measures you require before the campaign begins
and ensure you can track the whole journey through to outcome by adding tracking codes or
quote completion pages.

Lesson 8. What is customer lifetime value (LTV)?

Lifetime value analysis (LTV) helps you to decide how much you can afford to invest to
acquire a new customer by showing future profit contributions (taking account of NPV).

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A process called discounted cash flow (DCF) is used to discount each future payment to take
account of the fact that the invested money naturally reduces in value over time. You should
apply a discount to reflect what you think the interest rate will be over the period.

Lesson 9. Factors affecting customer LTV

Factors affecting customers’ future buying performance include:
 Recruitment method
 Recruitment medium
 Geo-demographic features

Lesson 10. Applying LTV analysis

LTV analysis will help you to:
1. Plan customer acquisition investment strategies
2. Allocate acquisition funds
3. Choose products for customer acquisition offers

Lesson 11. Two approaches to calculate customer LTV

LTV can be calculated using a historical or projected approach.

The essential difference between the two approaches is that the risk involved in projecting
LTV over many years must be offset by increasing the discount rate applied to net profit
forecasts.

Topic 8. Supplier selection for campaign elements

Lesson 1. Your options for digital marketing suppliers
The four principal supplier options are:
1. Full service digital agency
2. Specialist digital agency
3. Traditional agency
4. In-house resource

Supplier capabilities typically include a range of:

 Research
 Strategy
 Creative or content development
 Campaign development and execution, including reporting analysis and adjustment
 Infrastructure (e.g. web hosting, ad serving, email broadcasting, evaluation)
 Analysis

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Lesson 2. Making the choice

Possible advantages Possible disadvantages
Full-service  Convenience – one stop  Lack of specialist skills, e.g.
digital shop – less overhead of usability or search marketing
agency meetings  Higher fees due to larger overhead
 Better economies of scale base
 Better integrated
campaigns
Specialist  More likely to be leading  More expensive for specialist skills,
digital experts who will generate though should be offset by better
agency better results results
Traditional  Potentially more convenient  Likely to lack specialist digital skills,
agency if incumbent agency unless a separate digital unit has
 Better for integrated been set up
communications
In-house  Typically lower capital costs  Difficult to prioritise resource for
resource  Understand business best your purposes (especially IT
 Can be efficient for department)
campaign elements, e.g.  Clear lines of authority are difficult
email, since no translation to manage in practice
of brief needed for agency  Not usually a contractual
relationship (lack of SLA), so
slower/less responsive during
project (These disadvantages are
avoided when these resources
reside within the marketing
department)

Table. Outsourcing options: pros and cons

Your supplier(s) choice will depend on how the exact mix of agency skills meets your
marketing requirements. An ecommunications supplier checklist can be a useful part of a
formal supplier evaluation process.

Lesson 3. Criteria selection checklist

The Ecommunications supplier selection checklist is provided as a printable sheet.

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Module 10 Digital channel management

Topic 1.Challenges of integrating digital marketing into an organisation

Lesson 1. The 7S model
The elements of the 7S model relate to an organisation’s:

 Strategy
 Structure
 Systems
 Staff
 Style
 Skills
 Super-ordinate goals

Lesson 2. Digital management challenges and solutions

The main management challenges concern the three interfaces within the organisation:
1. The senior management team interface
2. The marketing/business interface
3. The IT interface

In addition, the management of two more key groups should be considered:

1. Agencies and external suppliers
2. The internal team

Every research respondent mentioned the need to educate colleagues about the benefits
that ecommerce can bring to an organisation, and the process changes needed to realise
these benefits.

Other major challenges for the organisational integration of digital marketing are:
 Establishment of processes to drive improvement
 Location of ecommerce and its integration with marketing activities
 The development of an online marketing focus
 Recruitment of experienced digital marketing staff

Lesson 3. Capability maturity modelling

A capability maturity model shows the series of common stages that organisations pass
through during their adoption – and increasing refinement – of digital marketing.

In the digital marketing context, ‘capability’ refers to the processes, structures and skills you
adopt for planning and implementing digital marketing.

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Topic 2. Re-structuring your organisation for digital marketing

Lesson 1. Positioning ecommerce within your organisation
Econsultancy research revealed variations in the location of ecommerce within
organisations. The location of ecommerce within an organisation can be considered in terms
of responsibility for strategic direction and operational processes.

Lesson 2. Ecommerce team structure

The structure of – and roles within – the ecommerce team are naturally dependent on the
team’s size and the extent of its decentralisation.

Lesson 3. Personal skills required by digital marketers

The following characteristics were all mentioned several times by employers:
 A great communicator
 A marketing/business background is considered more important than a technical one
 An affinity with technology – specifically, an understanding of how technology
delivers a customer proposition
 Team management skills
 Tenaciousness

Topic 3. Supplier selection for digital marketing

Lesson 1. Resourcing digital marketing
You need to assess the level and type of marketing expertise you require in a supplier:

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Digital supplier Pros Cons

options
Full service Convenience; a one stop shop. Might lack specialist skills, e.g.
agency Might reduce the meeting quota? usability or search marketing?

Better economies of scale?

Better integrated campaigns?
Specialist digital Leading experts may generate Specialist skills might prove more
agency better results? costly than a full-service, but this
might be offset by better results?

Greater overhead for managing a

separate agency?
Traditional More convenient if incumbent Likely to lack specialist skills, e.g.
agency agency usability or search marketing,
Better for integrated unless a separate digital unit has
communications been set up.
In-house Usually lower cost Prioritising/sharing resources can
resource Good understanding of the be problematic, especially if IT
business related.

Can be efficient for campaign The relationship isn’t usually

elements, since no translation of contractual, so service may be
brief is required. slow/less responsive. Typically
this isn’t a problem if the
resources are within the
marketing department.
Table Summary of the pros and cons of different types of digital supplier

One of the most difficult decisions is whether to hire an SEO specialist or PPC specialist, or to
try to combine the skills in one role. SEO and PPC require very different skill sets and will
require management time to co-ordinate them harmoniously.

Lesson 2. Finding suppliers online

Word-of-mouth is the best way to identify suppliers, but this is not always practical. The first
stage of supplier identification can be completed online. For small scale work, jobs can be
posted online.

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Topic 4. Ebusiness tools and their application

Lesson 1. An introduction to ebusiness

Diagram Ebusiness components

Competitiveness drivers Cost-efficiency drivers

Customer demand Increase speed with which supplies can be obtained
Improve range and quality of services offered Increase speed of goods despatch
Avoid losing market share to ecommerce Reduce sales and purchasing costs
based competitors
Reduce operating costs

Table Ebusiness drivers (DTI, 2000)

Lesson 2. Software application selection

When an organisation identifies the need for a new software application, one of the first
decisions is whether to build, buy or rent. The options include:
 Bespoke development
 Off-the-shelf implementation
 Externally-hosted or application service provider (ASP) solution
 Tailored development

Digital marketers often obtain a good deal and superior service by using an ASP. Utility
computing is a concept related to ASP and AHP that involves treating all aspects of IT as a
commodity, where charges relate to usage. This approach uses software and hardware, on a
pay per use basis.

A cloud computing approach to web applications includes the ability to:

 Scale up or down according to the service demand level
 Provide local access to other web applications ‘in the cloud’

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Lesson 3. Ebusiness applications

In the UK, the DTI’s international benchmarking study revealed a range of ebusiness
applications that enable organisations to:
 Identify suppliers
 Check the availability of supplies
 Track order progress
 Make payments
 Use after sales support
 Automate reordering through shared systems
 Collaborate on product design and development
 Collaborate on demand planning and forecasting
 Manage customer knowledge
 Implement CRM

Ebusiness applications reveal a number of new opportunities for sharing information

throughout the customer lifecycle:
 Online marketing project collaboration
 Knowledge management
 eCRM and enterprise resource planning (ERP) systems

Lesson 4. Modelling, optimisation and automation

Modelling
Modelling is supported by research into online audiences. For digital marketing
modelling can include:
 Modelling the size and composition of online audiences in different countries
 Financial modelling of individual online marketing campaigns and annual
budgets
 Researching online customer behaviour in particular sectors

Diagram A simple web-based digital marketing conversion model

Optimisation
Improving the efficiency of your digital marketing means reaching more of your
target audience at a lower cost, and converting more of them to your defined

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outcomes. At a strategic level, optimisation is a continuous, iterative process defining

marketing, performance objectives and performance measurement and diagnosis.

It helps you to understand reasons for variance from plan, take corrective action and
implement alternative marketing solutions. In the context of digital marketing,
optimisation can refer:
 Specifically to SEO and online ad optimisation
 Generally to optimisation of other activities, such as PPC marketing

Optimisation requires:
 Investment of management time and money, prioritising the basis of leverage
(improvement) vs. resource required
 Investment in optimisation tools
 A culture of continuous improvement
 Focus on significant and tangible outcomes
 Process change, so that testing and learning is built into campaigns
 Testing, although this is often resisted because budgets or time are in short
supply (Note: this is a short-termist view that results in long-term
inefficiencies)

Content optimisation can be achieved by using AB and multivariate testing tools.

Multi-channel optimisation means avoiding a digital silo mentality.
 Automation
 Automation is about improving digital marketing performance, in particular
for:
 PPC marketing
 Service delivery

Topic 5. Change management for digital marketing

Lesson 1. The stages of change
Digital practitioners need to learn how to use new systems and applications and adopt new
methods of working.

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Diagram Different forms of organisational change (Nadler et al., 1995)

The scale of change can be incremental or discontinuous/transformational.

Anticipatory change occurs when an organisation makes proactive changes in order to

improve performance or create a competitive advantage. Reactive change occurs in direct
response to a change in the external environment.

Lesson 2. Change modelling

Lewin (1951) recommended three stages of change management:
1. Unfreeze or unlock
2. Move quickly from the present state to the new state
3. Refreeze

Lewin argued that change management is not just about achieving the new state, but also
ensuring behaviour does not revert to a previous or undesirable state.

Individual response to change typically follows this pattern:

Diagram Transition curve showing reaction of staff during change

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An individual will pass through all of these experiences during change. By managing the
process it is possible to reduce the magnitude of the feelings or accelerate parts of the
process (Adams et al. 1976).

Resistance to change
There are many understandable reasons why people commonly resist technological
change:
 Limited perspectives and lack of understanding
 Threats to the power and influence of managers (loss of control)
 Perception that the costs of new system outweigh the benefits
 Fear of failure, inadequacy or redundancy

People may react overtly or covertly against change, manifesting a range of

responses from aggression and projection (incorrectly blaming new practices) to
avoidance and criticism.

Lesson 3. Approaches to managing change

Digital marketers often have the role of ‘change agent’. Jay and Smith (1996) identified four
phases (mirroring models for information system implementation):
 Initial orientation
 Preparation
 Change implementation
 Change support (stabilisation)

Lesson 4. Senior managers and employee motivation

Schein (1992) concluded there are three critical variables in any large-scale organisational
change:
 The degree to which the leaders can break away from previous ways of working
 The significance and comprehensiveness of the change
 The extent to which the organisation’s leader is actively involved in the change
process

Leadership in a change management context involves:

 Articulating the vision in ways that are understood by the people affected by change
(Kotter says this is often “under communicated by a factor of 10 or 100 or even
1,000”)
 Involving people in deciding how to achieve the management vision, thereby giving
them some sense of control
 Supporting people to achieve the vision by being a role model and providing coaching
and feedback
 Providing focus by identifying short-term wins
 Recognising and rewarding success

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Ecommerce leadership
Cope and Waddell (2001) have assessed the role of leadership style in ecommerce
implementations, and distinguish between collaborative, consultative, directive and
coercive approaches.

Kotter (1995) provides eight practical leadership steps that can be applied both by
senior managers and other less senior change agents.

Change agents must motivate employees by ‘getting inside their minds’ and
understanding their issues. Kotter and Schlesinger (1979) identified reasons for
resistance to change:
 Parochial self-interest
 Lack of trust
 Different evaluation of the benefits and costs likely to result from change
 Low tolerance of change, perhaps as a result of culture or previous exposure
to change

They list six approaches for dealing with resistance to change which can usefully be
applied to digital marketing related change:
1. Education and persuasion
2. Participation and involvement
3. Facilitation and support
4. Negotiation and agreement
5. Manipulation and co-option
6. Direction and a reliance on explicit and implicit coercion

Hayes recommended that valued outcomes of change are evaluated before and after
the change, and that they are ranked in importance. He described four characteristics
of communications that should be reviewed as part of employee motivation:
directionality, role, content and channel.

Lesson 5. Strategic agility and how to acquire it

An emergent strategic approach is characterised by interrelated strategic analysis,
development and implementation that occurs on a more or less continuous basis.

Approaches to support strategic agility include all phases of strategic development and
implementation.

‘Digital faddism’ is evident where companies are diverted from the fundamental aspects of
digital marketing to experiment with new technologies. “Release Early and Release Often” is
the mantra of agile development.

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A couple of benefits of adopting an agile approach to digital marketing are:

 Functionality that is less popular with customers, or less effective in meeting business
goals, can be de-prioritised in the customer journey or switched off more readily
 The development emphasis is placed on face-to-face communication defining
requirements rather than detailed requirements specifications and documentation

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