CHAPTER 10
Digital Marketing and Social Networking
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Video Case 10.1
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Case 10.2
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Strategic Case 4
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PURPOSE AND PERSPECTIVE
In this chapter, we focus on digital marketing strategies—particularly communication channels such as
social networks—and discuss how consumers are changing their information searches and consumption
behaviors to fit with these emerging technologies and trends. Most importantly, we analyze how
marketers can use new media to their advantage to connect with consumers, gather more information
about their target markets, and convert this information into successful marketing strategies.
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LECTURE OUTLINE
I. Defining Digital Marketing
A. Digital media are electronic media that function using digital codes.
B. Digital marketing uses all digital media (including the Internet and mobile and interactive
channels) to develop communications and exchanges with customers.
C. Electronic marketing, or e-marketing, refers to the strategic process of distributing,
promoting, pricing products, and discovering the desires of customers using digital media and
digital marketing.
II. Growth and Benefits of Digital Marketing
A. The Internet allows marketers to communicate with consumers, reach new markets previously
inaccessible, and target markets more precisely.
B. Internet marketing has been integrated into strategies that include all digital media, including
television advertising and other mobile and interactive media that do not use the Internet.
C. Marketers are using the term digital marketing as a catch–all for capturing all digital channels
for reaching customers.
D. One of the most important benefits of e-marketing is the ability of marketers and consumers
to share information. The Internet has changed how marketers communicate with consumers,
suppliers, and employees.
E. For many businesses, digital marketing is essential in attaining and retaining a competitive
advantage.
F. Digital media is different from traditional marketing because of five key characteristics:
addressability, interactivity, accessibility, connectivity, and control (see Table 10.1).
III. Types of Consumer Generated Marketing and Digital Media
A. Digital media are more consumer–driven than traditional media and are changing marketing.
B. Two major trends have caused consumer-generated media to gain in importance.
1. The increased tendency of consumers to publish their own thoughts, opinions, reviews,
and product discussions through blogs or digital media. As a result, the environment has
become more interactive.
2. Consumers’ tendencies to trust other consumers over corporations. Consumers often rely
on the recommendations of friends, family, and fellow consumers when making
purchasing decisions.
C. Understanding where online users are likely to express their thoughts and opinions can help
marketers use these forums to interact with consumers, address problems, and promote their
firms.
D. Social Networks
1. A social network is a website where users can create a profile and interact with other
users, post information, and engage in other forms of web-based communication.
2. Today’s social networks offer a multitude of consumer benefits, and marketers are using
these sites and their popularity with consumers to promote products, handle questions and
complaints, and provide information to assist customers in buying decisions.
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3. As the number of social network users increase, interactive marketers are finding
opportunities to reach out to consumers in new target markets.
4. Internet users join social networks for many reasons, from chatting with friends to
professional networking.
5. As social networks evolve, both marketers and the owners of social networking sites are
realizing the incredible opportunities such networks offer—an influx of advertising
dollars for social networking owners and a large reach for the advertiser.
6. Facebook
a. Internet users create Facebook profiles and then search the network for people with
whom to connect.
b. Facebook is the most popular social media site and appeals to a broad demographic.
c. Many marketers are turning to Facebook to market products, interact with consumers,
and take advantage of free publicity.
(1) Users can become a “fan” of products and companies they like.
(2) Companies are using Facebook to help consumers feel more connected to their
products. This is a form of relationship marketing, or the creation of relationships
that mutually benefit the marketing business and the customer.
7. Twitter
a. Twitter s a hybrid social networking and micro–blogging site (users can “tweet” status
updates of up to 140 characters).
b. Some companies have become experts at using Twitter in their marketing strategies.
c. Twitter is being used to enhance customer service and create publicity about
products.
d. Marketers can pay Twitter to highlight advertisements or company brands to a wider
range of users while they search for specific terms or topics.
e. Twitter is expanding into video with its acquisition of the mobile application Vine.
Vine allows users to display up to 6 seconds of video and share them with other
users.
E. Google+
1. In 2011 Google launched its Google+ network, a social media site intended to rival
Facebook and identify users across Google’s various services.
2. To get more people using Google+, if you use a Google service (like Gmail or YouTube)
you have to have a Google+ account.
a. Integration between the different Google platforms means users can no longer post
reviews or comments anonymously.
3. Google+ gives digital marketers an opportunity to capitalize on its growing user base.
a. Because Google+ is linked with search results on Google, sharing a firm’s information
on Google+ could push the firm up through the ranks of Google search results.
b. Although Google+ does not yet have the same influence as Facebook, marketers are
discovering a number of possibilities to engage users with Google+.
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F. Blogs and Wikis
1. Blogs (weblogs) are web–based journals through which authors can editorialize and
interact with other Internet users.
a. Blogs give consumers power over companies because companies cannot control what
bloggers write.
(1) Although companies have filed lawsuits against bloggers for defamation, they
usually cannot prevent the blog from going viral.
(2) A positive review of a product or service posted on a popular blog can result in
large increases in sales.
(3) Thus, blogs can represent a potent threat to corporations or an opportunity for
them.
b. Some businesses use blogs to answer consumer concerns or defend their corporate
reputations.
c. Many major corporations have created their own blogs or encourage employees to
blog about the company.
2. Wikis are a type of software that creates an interface that enables users to add or edit the
content of some types of websites.
a. Wikipedia is the most famous wiki.
(1) The site is expanded, updated, and edited by a large team of volunteer
contributors.
(2) For the most part, only information that is verifiable through another source is
considered appropriate.
(3) Because of its open format, Wikipedia has suffered from some high–profile
instances of vandalism in which incorrect information was disseminated.
b. Wikis on controversial companies like Walmart and Nike often contain negative
publicity about the companies.
c. Some companies have begun to use wikis as internal tools for teams working on a
project requiring lots of documentation.
d. Monitoring wikis provides companies with a better idea of how consumers feel about
the company.
3. Marketers who want to form better customer relationships and promote their company’s
products must not underestimate the power of these two tools as new media outlets.
G. Media–sharing Sites
1. Media–sharing sites allow marketers to share photos, videos, and podcasts.
2. Media–sharing sites are more limited in scope in how companies interact with consumers.
a. While firms can promote their products through videos or photos, they usually do not
interact with consumers through personal messages or responses.
b. At the same time, the popularity of these sites provides the potential to reach a global
audience of consumers.
3. Photo–sharing Sites
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a. Photo–sharing sites allow users to upload and share their photos with the world. Well–
known photo sharing sites include Flickr, Picasa, Shutterfly, Snapfish, and Instagram.
b. Flickr is owned by Yahoo! and is the most popular photo-sharing site on the Internet.
A Flickr user can upload, edit, organize, and share images without having to e–mail
bulky image files or send photos through the mail.
c. Photo sharing represents an opportunity for companies to market themselves visually
by displaying snapshots of company events, company staff, and/or company products.
4. Video–sharing Sites
a. Video–sharing sites allow anybody to upload videos to the Internet. Some of the most
popular video-sharing sites include YouTube, Metacafe.com, and Hulu.
b. Video–sharing sites give companies the opportunity to upload ads and informational
their products, and encourage customer loyalty.
H. Virtual Gaming Sites
1. Virtual gaming sites are three-dimensional worlds that have their own economies and
currencies, lands, and residents. Virtual sites include Second Life, Everquest, FarmVille,
2. Real–world marketers and organizations have been eager to capitalize on the popularity of
virtual realities.
3. Other businesses are looking toward virtual worlds to familiarize consumers with their
products and services.
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1. Mobile devices such as smartphones, mobile computing devices, and tablet computers
allow customers to leave their desktops and access digital networks from anywhere.
2. Mobile marketing has proven effective in grabbing consumers’ attention, especially
through advertising.
3. Many brands have yet to take advantage of mobile marketing opportunities by making
mobile–compatible websites and e-mails.
4. Some of the more common mobile marketing tools include SMS messages, multimedia
messages, mobile advertisements, mobile websites, location-based networks, and mobile
applications.
a. Mobile applications are software programs that run on mobile devices and give users
access to certain content.
b. Businesses release apps to help consumers access more information about their
company or to provide incentives.
J. Applications and Widgets
1. The most important feature of apps is the convenience and cost savings they offer to the
consumer.
2. Mobile technology is changing the shopping experience.
a. Shoppers can use apps to tally up purchases and pay through their smartphones.
b. Mobile payments are also gaining traction. With apps like Google Wallet, the shopper
can tap the phone at the point of sale for the transaction to be registered.
3. Widgets are small bits of software on a website, desktop, or mobile device. Marketers
might use widgets to display news headlines, clocks, or games on their webpages.
a. Widgets downloaded to a user’s desktop can update the user on the latest company or
product information, enhancing relationship marketing between companies and their
fans.
b. Widgets are an innovative digital marketing tool to personalize webpages, alert users
to the latest company information, and spread awareness of the company’s products.
IV. Changing Digital Media Behaviors of Consumers
A. Consumers now have a greater ability to regulate the information that they view as well as
the rate and sequence of their exposure to that information.
B. The Internet is sometimes referred to as a pull medium because users determine which
websites they are going to view; the marketer has only limited ability to control the content to
which users are exposed, and in what sequence.
C. Some companies are using the power of the consumer to their advantage.
1. While negative ratings and reviews are damaging to a company, positive customer
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feedback is free publicity that often helps the company more than corporate messages do.
2. Because consumer-generated content appears more authentic than corporate messages, it
can go far in increasing a company’s credibility.
3. Marketers can also use the same sites to get information on the consumer—often more
information than could be garnered through traditional marketing venues.
4. They can examine how consumers are using the Internet to better target marketing
messages to their audience.
5. Marketers increasingly use consumer-generated content to aid in their own marketing
efforts.
6. Marketers are also using the Internet to track the success of their Internet marketing
campaigns.
D. Online Consumer Behavior
1. Marketers must constantly adapt to new technologies and changing consumption patterns.
2. Digital media channels have a high attrition rate; it is hard to stay on top of the latest
technologies and trends.
3. Marketers may find new digital media daunting, but it is essential to learn how
consumers interact with them and how digital media are changing their behaviors.
4. Forrester Research developed a classification system to help marketers understand how
different groups of consumers use social media. The Social Technographics Profile
classifies consumers into seven groups (see Table 10.2):
a. Creators are those consumers who create their own media outlets, such as blogs,
5. Marketers who want to capitalize on social and digital media marketing will need to
consider what portion of online consumers are creating, conversing, rating, collecting,
joining, or simply reading online materials.
V. E-Marketing Strategy
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convenience to consumers.
D. Product Considerations
1. Digital media provide an opportunity to add a service dimension to traditional products
and to create new products that could only be accessible on the Internet.
2. Some companies use advertising campaigns and contests to develop better products;
1. The digital marketing is a new distribution channel that helps businesses increase
efficiency.
2. Distribution involves a push–pull dynamic, with companies pushing to get products to
consumers and channel members pulling to find each other and products.
3. These changing distribution patterns are not just limited to the Western world. Businesses
around the world are choosing to sell products over the Internet, which represents a
revolutionary shift in countries like China.
F. Promotion Considerations
1. Promotion is one of the best applications for digital media and social networking.
2. Marketers that choose to capitalize on these opportunities have the chance to boost their
firms’ brand exposure.
3. Consumer consumption patterns are changing, and marketers must adapt.
4. Most traditional promotions can be enhanced by using digital media.
G. Pricing Considerations
1. Price is the most flexible element of the marketing mix.
2. Digital media marketing facilitates both price and nonprice competition because Internet
marketing gives consumers access to more information about costs and prices.
3. Digital connections can help the customer find the price of the product available from
various competitors in an instant.
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license distributed with a certain product or service or otherwise on a password–protected website for classroom use.
1. One of the most significant privacy issues involves the personal information that
companies collect from website visitors. Privacy concerns include:
a. Companies collecting personal information from website users
b. Hackers stealing information stored by companies
c. Malware targeting mobile devices
2. Many of these breaches occur at banks, universities, and other businesses that contain
3. Facebook, Google, and other social networking sites have also come under fire for
privacy issues, leading to mandatory privacy audits.
4. Consumers and the federal government alike are considering an online privacy “Bill of
Rights” to protect consumers from having their information tracked without permission.
5. The Federal Trade Commission is considering enacting legislation that limits the
information companies can gather online.
6. Web advertisers see regulation as a threat and are attempting self-regulation in order to
stay ahead of the game.
D. Online Fraud
1. Online fraud includes any attempt to conduct fraudulent activities online, such as by
deceiving consumers into releasing personal information.
a. Cybercriminals are increasingly using online social networking sites and other digital
2. Organizations and social networking sites are seeking to develop ways to combat
fraudulent online activity.
3. Consumers must always be careful what information they give when online and only give
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password–protected website for classroom use.
1. Intellectual property can be ideas and creative materials, songs, movies, books,
electronics, etc. that is developed to solve problems, carry out applications, and educate
and entertain others.
2. It is generally protected by patents and copyrights, but these can be hard to enforce in a
global marketplace.
3. YouTube has often faced lawsuits on intellectual property infringement. With millions of
4. The software industry is particularly hard-hit when it comes to pirating of materials and
illegal file sharing.
5. Many consumers rationalize the illegal sharing of digital content.
6. All users of digital media must make an effort to abide by ethical practices.