What Is Digital Marketing And How Does It Work?

Ben Tippet

Digital marketing has been around since the 1990s, but it has evolved significantly since then. If you’ve been scratching your head wondering precisely what digital marketing is and how it works, we are here to answer all your questions!

By the end of this article, you’ll have a firm grasp of digital marketing and could easily give a lecture to a rapt audience about its inner workings.

The Definition of Digital Marketing

Digital marketing uses online technologies and media to promote a brand’s products and services. These technologies include computers, smartphones, and tablets. The list of media involved in digital marketing is long and ever-growing. It includes, but is not limited to:

  • Email
  • Social media
  • Search engines
  • Websites
  • YouTube media
  • Mobile apps
  • SMS messaging
  • Reputation management

A digital marketing strategy often includes a central website hub that is the digital home of a business. A successful digital marketing strategy will use advertising and organic content to drive traffic to the website to generate leads and sales.

Why Digital Marketing Is Important

We live in a digital world, and if a company wants to reach its audience, it has to go online. After all, that’s where everyone is hanging out! Here are some statistics from the Statista Research Department  to put things into perspective:

  • 86.5% of Australians are online daily
  • Nearly 26% of the population is online multiple times throughout the day
  •  59% of Australians confess to checking social media as the first thing they do in the morning
  • Facebook is the go-to social media platform for 56% of Australians

These statistics demonstrate how ubiquitous the Internet is. Though digital marketing will probably never replace traditional forms of marketing like newspapers, television, magazines, and direct mail, it cannot be ignored. Wondering which companies use digital marketing? The answer is that virtually all companies that exist today use digital marketing in some form.

For many companies, digital marketing initiatives make up the bulk of their marketing budgets.

Understanding the Various Forms of Digital Marketing

A successful digital marketing strategy will integrate various forms of digital media into a cohesive network of touchpoints that drives a customer from a stranger to a raving fan.

We can’t emphasise enough that every company will have its own way of doing things, and specific strategies may vary by industry, niche, and target audience.

You can think of planning and executing a digital marketing strategy kind of like having a well-stocked toolbox and choosing the tools you want for a specific job.

Digital Marketing Tools and How They Work

The tools in any competent digital marketer’s toolbox include both the latest innovations in digital marketing as well as the original greats that have been around since the 1990s.

Like a five-star chef, a competent digital marketer will blend these ingredients into a cohesive strategy that skyrockets the growth of a business while gaining recognition for the company and building brand loyalty. In addition to choosing the right blend of ingredients, a marketer must know how to implement them to achieve an award-winning strategy.

The list of marketing tools is not meant to be exhaustive, but it does cover the bulk of what’s available to the modern digital marketer.

SEO (Search Engine Optimisation)

Most people turn to search engines (especially Google) to discover a product or service or do research about a solution. A marketer’s job is to ensure that it’s their company or client that appears at the top of the search engines for those relevant keywords.

SEO is the process of ranking a website for a pre-determined set of keywords so that it ranks as high as possible on Google. The ideal goal is to make it to position one on page one, but the actual position may vary depending on the competitiveness of the keyword, the relevance of the keyword to the product or service, and the specific niche.

Search engine optimisation is incredibly powerful because it helps a business attract the right people at the right time. By ensuring your website appears at the exact moment someone is looking for the product or service you provide, you’ll attract qualified traffic to your website that resulting in leads and sales.

Social Media Marketing

With more than 80% of Australians reporting active social media use, social media platforms are ideal for reaching a target audience quickly and at scale.

Social media platforms include:

  • Facebook
  • Instagram
  • Twitter
  • TikTok
  •  Pinterest
  • Reddit
  • YouTube
  • LinkedIn
  • Snapchat
  • Tumblr

In all, there are approximately 40 social media platforms, and the list continues to grow.

The key to success in social media marketing is to post engaging content on the channels where your target audience is hanging out. It’s also important to incorporate a posting schedule that provides consistent content without overwhelming your audience.

To grow your presence on a particular platform, it’s essential that you’re “present.” This means replying to comments on your content, engaging in other accounts, utilising hashtags where appropriate, and doing outreach.

Social media marketing can also include a paid advertising element where you can either repurpose your best content as ads or create new ads that target current and new audiences.

PPC (Pay-per-click) Advertising

Advertising is also a key part of traditional marketing, but it works differently in digital marketing. Instead of placing ads in magazines and newspapers, on television, or on billboards, digital marketers place ads on websites, on social media, and on search engines.

Also, unlike traditional advertising, PPC advertising allows you to focus your budget on specific demographics and segments. For example, Google PPC advertising allows you to structure an ad so that it is only shown to people who match specific requirements, such as:

  • Females
  • Between the ages of 25 and 45
  • Living in Perth
  • And who entered the search term vegan leather handbags

Depending on your advertising channel, you can also specify that your ad only shows to people who have specific interests. You can also exclude demographics and traits from your audience.

Content Marketing

Content marketing includes creating blog posts, ebooks, whitepapers, landing pages, and case studies that communicate your brand message and provide value to an audience.

For example, if you own a landscaping business, you might create content that helps people with DIY projects, flower planting schedules, materials to avoid that are toxic to kids and pets, etc. Content marketing can also go hand-in-hand with SEO because sprinkling your copy with relevant keywords will naturally help your website climb the ranks of the search engines.

Affiliate and Influencer Marketing

You already know that word of mouth is a great form of advertising and that having satisfied customers sing your praises can have the effect of attracting new customers in droves.

Affiliate and influencer marketing is a digital form of word of mouth. Instead of telling a neighbour about a new product they discovered and had a great experience with, an influencer or affiliate will turn to channels like social media, blogs, YouTube videos, etc.

Often, a company will pay an influencer a fee for “sponsored content,” while affiliates receive a percentage of sales. Sometimes an influencer can receive compensation in fees and affiliate commissions. As a digital marketer, you can negotiate a deal that works best for everyone.

Email Marketing

The first email “blast” was sent in 1978, and it resulted in $13 million in sales USD. Today, that would be the equivalent of USD $78.8 million. The email list included only 400 names, so it goes to show that you don’t need a big list to get rich!

Email marketing is known to have a high ROI, with an average return on investment of 4,200% The reason for the high returns is that emails cost relatively little to produce, and once you have an email subscriber, you can continue to sell to them until they unsubscribe. Contrast this to an ad, where you have to pay each time someone sees it or clicks on it.

6 Benefits of a Well-Executed Digital Marketing Strategy

Even though traditional marketing avenues still have a prominent place in a successful strategy, the benefits of digital marketing are undeniable. The top six include:

  1. Speed: A digital ad, social media post, or blog can be created in a matter of minutes or hours. Contrast this to a print ad in a magazine that might go through several iterations, and digital marketing wins for speed every time.

By being able to iterate and test quickly, digital marketers can collect data in a low-stakes environment and continue to make improvements. A print ad, for example, might be a total failure that results in zero sales, but it can take a month to realise it.

  1. Automation: Digital marketing technologies allow for several processes to be automated. For example, you can set up email flows based on user behavior, automatically adjust PPC bidding, and schedule blog posts to be published in advance.

By reducing the number of mundane tasks a digital marketer has to do, they can focus on more important tasks that drive a company forward.

  1. Cost: Television commercials, billboards, and magazine ads can cost thousands, and they might not result in a single conversion. Digital marketing, on the other hand, costs pennies on the dollar. Compare the cost of mailing a print catalogue to someone with the cost of emailing a digital version.

We’re not saying to never mail something physical, but we are saying that you can save money by converting some of your traditional marketing to the digital realm.

  1. Targeting: Earlier, we discussed the benefit of being able to create a specific audience for Google PPC ads and social media ads. The ability to hone in on your exact customer avatar gives a digital marketer unprecedented control of ad placement and targeting.

Compare this to a magazine or television program where you can potentially narrow your targeting only to a geographic market or a broad interest, and you can see how powerful targeting for digital marketing is.

Trying to promote a luggage brand, for example? Digital marketing allows you to target frequent travellers that have the means to buy your items. You can even specify that you want to target people who have bought from your competitors if you’re going head to head with another brand.

  1. Measurability: There are several ways to measure the success of an ad campaign, including the native reports in the ad platform itself or by using Google UTM parameters.

Without getting too technical, we can tell you that you can track every single lead and conversion down to the specific ad that someone clicked on. This allows you to duplicate success, scale successful campaigns, and pause or edit campaigns that are not immediately successful.

There are limits to measurability given new privacy restrictions, but a smart digital marketer still has infinitely more insights than can be gotten through traditional channels.

  1. Personalisation: Because digital advertising can be targeted so specifically, you also have the power to personalise your ads.

For example, you can create different ads based on someone’s city. Or, you can run different ads for men and women utilising the same platform. To illustrate, consider a shoe brand that runs Facebook ads to women showing a strappy sandal collection while also using Facebook ads targeting men showing casual weekend men’s loafers.

B2B vs. B2C Marketing

You’ve probably noticed that there are a lot of abbreviations in digital marketing! That tends to be true in any specialised industry. Once you get the lay of the land, these acronyms will roll off the tongue, and you’ll have a hard time remembering a time you didn’t know what these abbreviations meant!

The words B2B and B2C stand for business-to-business and business-to-consumer, respectively. These terms are not unique to digital marketing. You will also hear them in traditional marketing, too.

As you probably guessed, B2C marketing involves a business communicating directly to the consumer, while B2B refers to a business selling and communicating directly to another company.

There are general best practices and rules that outline these differences. For example:

  1. Marketing to a business might involve a more logical approach that includes statistics, reports, and evidence that gives the business customer confidence that they’re making the right decision. Consumer-driven marketing might be more about emotions, status, and gratification.
  2. B2B marketing might involve a longer decision-making process. For example, buying a piece of machinery could take months of evaluation, while buying a pack of gum might be based on a 5-second impulse purchase.
  3. Several parties may be involved in B2B purchases. Companies tend to have multiple stakeholders that have to be consulted before buying anything, whether it’s a daily coffee service or a copy machine. Consumers, on the other hand, more often act independently and can buy things without consulting anyone. There are, of course, exceptions for spouses, children, etc.

That being said, B2B and B2C marketing have more in common than one might initially realise. Keep in mind that there is always a person behind every decision. So, even if you are selling something highly technical with a high price tag, the ultimate decision-maker is still a human being.

The lesson here is to always maintain a human element in your marketing and consider what the person wants – not just the company.

The Evolution of Digital Marketing

When digital marketing started, the technology was not as advanced as it is today. As technology continues to progress, the landscape will inevitably evolve. For example, AI (artificial intelligence) is quickly becoming a staple in marketing strategies. AI is currently being used to generate content and recognise user behaviour to recommend products and services.

As technology continues to advance and become more accessible, we can expect it to have a growing influence on marketing strategies and tactics.

Just like new tools are becoming available, old tactics are being sunsetted in droves. For example, keyword stuffing (which involved using the same keywords repetitively in content for SEO purposes) used to be de rigueur, but it’s fallen out of favor since about 2005. Today, a company that engages in this tactic could even find its website banned from Google.

The moral of the story is to never rest on your laurels. Know that a strategy that is successful today might not work in the future as newer and better tools and tactics become available. The way that people use digital technologies is also changing, and it’s essential that you stay on top of trends.

While we are not saying to chase every single shiny marketing object, we are saying that you should strive to always keep learning. It will make you a better, more successful marketer.

Got Questions About Digital Marketing?

This article provided an overview of digital marketing, but there’s still so much underneath the tip of this iceberg. If you have further questions about providing expert services to take your digital marketing to the next level. Are you looking for a digital marketing agency in Perth with a proven track record? Contact our Perth based team of digital specialists to boost your online presence.

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