Published: 18 June 2024
Contributors: Molly Hayes, Amanda Downie
Digital marketing refers to the use of digital technologies and platforms to promote products, services or concepts to potential customers. It encompasses a wide range of marketing techniques that are intended to increase brand awareness, drive website traffic, generate leads and increase customer conversion rates.
Digital marketing is often the first point of contact in the customer experience. It uses various strategies and tools to reach and engage targeted audiences or organizations through the internet and electronic devices. These channels include, but are not limited to:
- Websites
- Social media channels
- Mobile apps
- Online advertising
- Augmented reality (AR) and virtual reality (VR)
- Search engines
- SMS text messages
While specific practices might look slightly different depending on an organization’s model, both business-to-consumer (B2C) and business-to-business (B2B) companies rely heavily on digital marketing.
Generally, B2B commerce involves a longer decision-making process and might involve a broader team of stakeholders. B2C commerce, by contrast, tends to be more personal and its consumers more impulsive. Nonetheless, Gartner has estimated that by 2025, 80% of commerce between businesses will take place digitally (link resides outside ibm.com). Given this, digital marketing is essential for lead generation and customer retention for B2B organizations.
Since its emergence in the 1990s, digital marketing has changed the way brands advertise across channels and what consumers expect from those brands. In the modern digital landscape, big data analytics tools are typically used to accurately and efficiently identify potential audiences. Concurrently, advances in artificial intelligence (AI), machine learning and associated technologies have transformed the digital marketing landscape, paving the way for more advanced personalization practices and intelligent digital marketing campaigns. Today, businesses use marketing automations, AI-assisted virtual agents and generative content products to attract customers and nurture potential leads.
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The evolution of digital marketing is closely interwoven with the development of the internet and online technologies. Where traditional marketing relied heavily on individual salespeople, mass advertising practices like billboards and tactics like cold calling, digital marketing efforts have matured to center around personalization and customer convenience.
In the early days of the internet, digital marketing pioneers like AT&T created the first clickable digital ads1. As search engines proliferated through the mid- to late-1990s, businesses began optimizing their web pages to gain visibility and drive traffic to their websites. These were the first instances of search engine optimization (SEO).
In the 2000s, social media platforms became a crucial tool for real-time advertising, generating opportunities for further interactivity and collaboration between individuals and brands. Google Ads (formerly Google AdWords) was founded in 2000, introducing a pay-per-click (ppc) model that allowed businesses to bid on keywords, only paying when their ads were clicked.
With the mass adoption of smartphones, mobile marketing became essential, offering opportunities for more targeted advertising and consumer engagement. This was accompanied by a new frontier in big data as organizations gained the ability to analyze large swaths of data to create personalized advertising campaigns. Concurrently, in the 2010s, programmatic advertising enabled automated, real-time bidding on advertising, increasing the efficiency and precision of online ads. During this period, more sophisticated social media channels enabled marketing campaigns like influencer marketing and, eventually, live social marketing on platforms like TikTok.
Today, digital marketing is omnipresent. Rather than focusing on a single channel of communication such as social media or email marketing, large organizations tend to be active across dozens of integrated channels concurrently. Technological advancements such as AI, advanced sentiment analysis, interactive content and voice search-enabled smart devices have been infused into existing digital marketing practices to create a complex and dynamic modern marketing ecosystem.
There are many forms of digital marketing; typically, an organization engages in several forms concurrently, crafting cohesive messaging that’s tailored-made for each channel or campaign. Organizations also combine digital marketing strategies into hybrid marketing plans.
For instance, a digital content marketing campaign might take advantage of SEO practices. and solicit customer feedback on social media channels. This is to ensure that its material is relevant and more likely to be viewed.
Search engine optimization is the practice of optimizing webpages to rank as high as possible in a search engine results page (SERP). The goal is to increase the quantity and quality of organic (unpaid) traffic to a website from search engines. This involves researching keywords specific to a search term and relevant to consumers, and then using techniques involving headings, titles, backlinks and metadata to help the content rank highly.
Search engine marketing is similar to SEO in that it aims to increase the number of internet users who come across a piece of content when using a search engine. However, unlike SEO it is a form of paid advertising. Google Ads, which allows organizations to buy search results based on keywords and displays them at the top of a page in a designated advertising module, is a prominent example of SEM.
With a content marketing strategy, an organization creates relevant content distinct from an advertisement. Such as a white paper, podcast, infographic or blog—to attract a specific audience, encourage engagement and build trust. With content marketing, a company can promote brand awareness, establish thought leaders and industry experts from its employees and remain top-of-mind when consumers are looking to buy.
Social media marketing uses various social networks—for example TikTok, Instagram or LinkedIn—to promote an organization’s outlook and engage followers.
Typically, successful social media marketing campaigns do more than advertise goods and services. With an effective social media strategy, a brand can remain in ongoing conversations with its followers. It can also stay on top of trends in real-time and analyze performance metrics to build trust and continuously optimize its customer-facing practices.
When the term 'mobile marketing' was first in use, this referred to marketing conducted over a mobile device using simple text messaging. Since the advent of smartphones, mobile marketing refers to more than basic text messages. It includes sophisticated SMS and MMS communications, the use of apps and app push notifications, and mobile-only promos and commerce opportunities. While simpler than other forms of digital marketing, it is considered highly effective as a marketing channel that can reach consumers in a way they are accustomed to communicating every day.
PPC advertising is a form of digital marketing where advertisers pay a fee each time a consumer interacts with an ad. These ads can be video advertisements, ads displayed in a search engine, or embedded content on a social media platform. As this form of marketing is paid rather than organic, organizations typically closely track metrics such as the click-through-rate to ensure that PPC advertising is meeting key performance indicators (KPIs).
Though one of the most enduring forms of digital marketing, email marketing has significantly evolved since the first organizations sent messages to consumers advertising a set of goods or services. Today, email marketing, assisted by automation and generative AI, can create personalized content for individual customers based on their preferences and purchase histories. Common types of email marketing campaigns include postpurchase follow-ups and reminders after a customer has abandoned an item in a shopping cart. Content marketing strategies might also be deployed over email, encouraging customers to sign up for an email newsletter or listen to the latest episode of a podcast.
Affiliate marketing is a performance-based marketing strategy where organizations reward partners, or affiliates, for driving traffic or sales through their promotional efforts. Typically, an organization recruits an affiliate with an established platform to promote their business to a relevant audience. Using a unique code or URL, the organization can track how many conversions result from the content, paying the affiliate a rate based on how many items were sold.
Influencer marketing is similar to affiliate marketing, but rather than engaging in a profit-sharing agreement based on conversions, an influencer is typically paid a flat fee. An influencer might craft a sponsored post to promote a singular good or service. They could also post a paid product review on a platform like TikTok, or continue an ongoing relationship with an organization as a brand ambassador. Typically, organizations engaging with influencers research extensively to ensure the individual advertising their goods has a following that significantly overlaps with their target audience.
In chatbot marketing, automated computer programs interact with potential customers. They can be integrated into nearly any website, social media platform or mobile app, turning any point of contact into a marketing platform. They can also be deployed over text message to reach a customer wherever they are most engaged. Chatbots are programmed to answer commonly asked questions and provide information about a product or service. They can also provide personalized recommendations based on previous conversations with a potential consumer, engaging a lead and ushering them through the moment of conversion. While still effective, these basic chatbots are rapidly being replaced by more high-functioning AI-powered virtual assistants.
Conversational AI powers marketing technologies similar to chatbots, but that have the ability to understand more complex queries and learn over time.
These virtual agent technologies (VAT) combine natural language processing, intelligent search and Robotic Process Automation (RPA) to deliver highly personalized experiences and facilitate higher conversion rates. These technologies can be deployed to enhance sales funnels and improve lead generation, typically by qualifying leads and completing transactions in a retail environment.
Some potential use cases for these technologies include:
- Virtual assistants suggesting personalized packages, such as travel arrangements that include airfare and hotel, based on consumer criteria
- Lead-generation chatbots that engage website visitors in real-time, explain the value of a product in natural language or help customers find a specific product based on their questions
As in other aspects of the customer experience, over time digital marketing has embraced personalization. Generative AI–artificial intelligence that can create original content–has had a significant impact on digital marketing.
Using generative AI, organizations can now rapidly create specific messages to resonate with a singular audience. This might include using AI to write website copy, email newsletters or other digital marketing materials.
Algorithms are also used to surface particular goods and services an individual may be interested in purchasing, or recommend customized products based on a natural language search.
By intelligently creating personalized messaging for consumers, organizations can generate leads and engage potential customers more efficiently and at a lower cost than in the past.
Digital marketing automation allows organizations to manage routine tasks across channels by using software.
Some of these tasks include the A/B testing of content marketing headlines, automatically sending follow-up emails to leads, or collect and analyze website metrics.
Using machine learning, marketing departments can also automate such formerly time-consuming processes as SEO keyword research or the bidding process central to pay-per-click advertising. Digital marketing historically involved some routine tasks, such as collating audience data or sending reminder messages. Automation has been instrumental in freeing up digital marketing teams to focus on more valuable and creative work.
Marketing automation software also improves lead generation tasks and drives positive customer experiences.
In recent years, digital marketing campaigns have relied heavily on audience segmentation, a practice in which organizations identify subgroups within a target audience.
This allows businesses to develop marketing plans tailored to highly specific demographics. Using predictive analytics, businesses can merge audience data with third-party datasets to model and forecast consumer behavior, allowing them to more accurately advertise to potential customers.
AI has the capacity to enhance both these practices, more effectively analyzing data to group customers into precise categories and intelligently model future behavior.
Digital marketers use various technologies to run, analyze and optimize digital marketing campaigns. These tools enable marketers to reach their target audiences effectively, measure campaign performance and enhance customer engagement. Commonly used tools include:
Marketing automation platforms use software and technology to manage routine marketing processes and tasks across multiple channels. These platforms can automate repetitive tasks such as publishing social media posts and sending emails to consumers. Examples include Marketo and Watson Campaign Automation.
CRM systems such as HubSpot and Salesforce help organizations manage interactions with potential customers by organizing customer data, tracking points of contact, and automating key follow-up processes.
SEO tools—for example, Google Search Console—perform site audits, provide keyword research and analyze competitors to help marketers optimize their websites to rank higher in search engine results.
CMS tools allow organizations to create, manage and publish digital content—typically without extensive technical knowledge. Examples include Adobe Experience Manager and WordPress.
Analytics tools track and analyze website and campaign performance—such as traffic to a page or conversion rates—to provide actionable insights into user behavior and marketing effectiveness. Examples include Mixpanel and Adobe Analytics.
AI and machine learning are increasingly used as part of an effective digital marketing strategy to enhance personalization, predict user behavior, and automate routine digital marketing tasks. Tools like IBM watsonx™ Assistant help organizations create conversational AI platforms.
An effective digital marketing strategy can dramatically increase conversions, generate new leads, and facilitate enduring customer relationships. Some of the benefits of digital marketing include:
Digital marketing tends to provide a greater return on investment, largely due to its lower cost and precise targeting in comparison to traditional forms of marketing.
Digital marketing tactics both use and generate vast amounts of data, which allows organizations to track campaign performance in detail and make informed decisions.
Advanced targeting and audience analytics allows digital marketers to advertise to granular populations with specific demographics, interests and behaviors, ensuring efforts reach exactly the most relevant audiences.
Digital marketing allows small businesses or local companies to reach a global audience, expanding market potential.
Digital marketing facilitates direct, conversational interaction with consumers through social media, reviews and personalized communication, deepening the relationships between consumers and a brand.
A digital campaign can be rapidly modified and optimized based on performance data, current market conditions or unforeseen variables. This may look like a quick ramp-up with easier scalability, or earlier testing and faster learning in order to gauge the effectiveness of a particular campaign. The agility of digital marketing allows teams to better adapt or flex to current demands.
Digital marketing can involve communicating with consumers over 20 or 30 campaigns, each delivered to different audiences across multiple digital marketing channels. Transparent and open communication is generally required to coordinate between departments and ensure that messaging remains both cohesive and specific to an individual platform and audience.
The digital media landscape is crowded, and consumers make split-second choices about where to turn their attention. In the vast ecosystem of digital marketing departments, many organizations retain social media managers and other professionals with specialized digital marketing skills. Successful organizations stand out by providing the most relevant and unique experiences possible for potential customers and leads.
Particularly in the age of AI and other rapid innovations—for example, augmented realty (AR) and voice search—digital marketing requires constant iteration and agile teams. Marketing managers and organizations at large might find themselves pivoting quickly to respond to new consumer tendencies or emerging platforms.
Today’s digital marketing landscape traffics in vast troves of data—both consumer data and third-party data. Evolving regulations and shifting practices might dictate how this information can be gathered and stored, requiring careful attention to compliance. Also, consumers in this era are more fluent with digital data practices than ever before, and organizations need to do more to earn and keep customer trust.
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Footnotes
1 The first ever banner ad: Why did it work so well? (link resides outside ibm.com), The Guardian, 12 December 2013