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What is digital marketing?


Digital marketing is a kind of practices to promote products and serves through digital communications, then
it can be a timely, relevant, customized and cost savings way to communicate with customers. Digital marketing
includes many technologies and practices of online marketing, but the digital marketing also includes other
communication channels which do not have a relationship with the internet. (Lexicon)

Example:

"One successful digital media campaign was by Pizza Hut, which created an app that allowed customers to create
their own pizza by dragging their chosen toppings onto a graphical pizza base. The iPhone would then determine
which of the chain's thousands of locations the customer happened to be nearest. The company advertised the
new app online, in print, and on television - even winning a placement in Apple's own iPhone commercial.
Within two weeks, the Pizza Hut app was downloaded 100,000 times and within three months iPhone users
ordered $1m worth of pizza. The app now has millions of users across the iPhone, iPad, and Android platforms." (Lexicon)


Two types of digital marketing


There are two types of digital marketing, they are “pull” and “push”. (Pamela S., 2013)

“Push”

In the push marketing there are marketers and users. For example e-mail, SMS and RSS Feed ad so on.
In these examples users can receive information, and marketers must send information to users. (Pamela S., 2013)

  • Advantage:
  1. Customizable - The information which is received by users can be targeted and accuracy as standard has been selected.
  2. Detailed tracking and reporting - Markers can know how many people see the information, and they can also know the details of customers.For example, the name of customers, demographic and psychographic.
  3. May bring high input-output ratio - There will be new profits.

  • Disadvantage:
  1. Compatibility Issues - There are different rules, less restrictive in RSS, strict control in e-mail.
  2. Need system which can send contents - Marketers must use system to send information.
  3. Send information may be blocked - If marketers do not send information with rules, there will be some mistakes and cannot send information to customers.

“Pull”

Pull marketing can make users find and direct crawl information. For example, website, video and audio.
In these examples users can use special URL to find information. (Pamela S., 2013)

  • Advantage:
  1. Do not need system which can send contents.
  2. There is no limited in content and form.
  3. There is no process of opt-in

  • Disadvantage:
  1. Need a large of market investment, then users can find information which they want to know.
  2. Limited tracking ability - Can only get the information of number of downloads and number of page views.
  3. Cannot be customized - Everyone can get the information which is same.

"Pull marketing also requires a greater investment in time, but it gives you more ability to entertain your customers and educate them about your company." (Pamela S., 2013)

Feature of digital marketing


  1. Personalized service: Provide personalized products with demands of customers, and recommend related products through tracking the sales habits and hobbies of each customer. Promotion which is on the internet is a low cost and humane marketing.(HOOXIAO.COM,2012)
  2. Richer product information: Internet can provide detailed specification, technical specifications, warranty information and usage method etc. of current product, even solve common problems. Customers can easily find products, price and brands etc. on the internet.(HOOXIAO.COM,2012)
  3. Greater choice: There is no limit of shelf and stocks in the digital marketing, and customers can have almost limited choice.(HOOXIAO.COM,2012)
  4. Lower cost: The price of online ads is limited; To sell products directly to customers can shorten distribution chain. Any people can obtain release of information on the internet, then it can broaden the scope of sales. So it can decrease the cost of promotion, and the cost of product can be decreased, then produces can be more competitive. Most visitors are interested in the products as customers on the internet, so it can avoid to transfer much useless information.(HOOXIAO.COM,2012)
  5. More flexible market: The species, price and marketing tools of products can be timely changed according to demand of customers, competitive environment or inventory.(HOOXIAO.COM,2012)
  6. Optimization services: One-to-one service can make customers have more space to consider and compare. Online services can be 24 hours and faster. Companies can provide services when customers buy products to help customers to finish buying behavior.(HOOXIAO.COM,2012)


Current situation of digital marketing in China


When digital economy is becoming to be mature in China, it shows the distinctive features ----- faster development, greater vitality
and more integrated in offline industry. Although the start is later, the China internet development has been far more than the West as
the rapid development of mobile internet. Nowadays China mobile internet users are nearly 90% of total internet users, and the value of
the number is only 60% in the United States.(Yingsheng, 2014)
At the same time there must be larger internet companies, and there also must be a lot of small companies, then it can stimulate the
development of the digital economy, and China internet industry has certain advantages. For example the profit of China internet is
lower than the West in 2013, and the profit of the internet companies which are top 3 in the United States are 20% of total internet
economy. But in China the value is only 5%, and there is enough room for small companies in market.(Yingsheng, 2014)
Now the internet is becoming to 4G from 3G in China, some data shows that 90% of Chinese netizens will choose 4G in the short term.
And there is a report which is “Digital Universe”, it estimates the total of global data usage will be 35.2ZB. The data of internet
behavior of users, relational data, UGC and location data in the internet are the very important resources for constituting large data.(Adquan, 2012)
Overall the digital marketing is only a prototype in China, and the development of digital technology will be about internet in ten years in the future.(Yingsheng. 2014)


Trends of digital marketign in China


  1. Mergers and acquisitions increase, Promote industry concentration
    Each industry has the similar development process, and the breadth and depth of competition can promote the upgrading of industry concentration. The industry-leading companies acquire the other companies with their sufficient cash flow and capital, and to use epitaxial expansion to increase scale and market share, then the industry conditions which are large number, strength of the gap is small and homogenization serious will change through integrating and upgrading the endogenous growth.
    In the field of digital marketing merger integration will be more severe, increased industry concentration and local large companies will have some actions in 2015. Because of the digital marketing needs a better understanding of whole society of the business forms, humanity and culture and so on, and fragmentation of spread, expected that local digital marketing company will have the major market share, and 4A companies will have “acclimatized” phenomenon easier, and there will be some problems, for example the reaction of against a social hotspot is slow. Although 4A companies acquire local online advertising company, how to manage these parts of business will be the new problem.
    The digital marketing is ultimately a service industry, the service of the standardization, individuation and scale is a strategic and operational challenge for every company. But there must be rich manner and type in Chinese market, so there will be many digital marketing service providers which have different services.(Jiemian, 2015)
  2. Digital marketing business sinks more quickly
    Almost new internet business and new models have same starting points, they are Beijing, Shanghai, Guangzhou and Shenzhen. So digital marketing is no exception.
    After several years of market development and the fight, although the market potential is still great, the market competition is more intense in these four cities. Market competition will make digital marketing service providers look for new market.
    Through a period of time to train market the digital marketing concepts and cognitive system of new technologies of second and third tier cities will break away microblogging and micro signal and so on. There have been more traditional enterprises which want to try digital marketing except automotive, electrical, game industry. The market demand will make digital marketing service providers be into the second and third tier cities.(Jiemian, 2015)
  3. Increase competition of quality resources
    Really valuable and quality contents still are scarce resources in the era of information overload. Users always choose the services which can provide premium Contents, and advertisers provide services which customers want. So to make binding of premium contents and strong brand has been trend of content marketing development. Successful marketing bundle can promote sales in short time. So the scramble for scarce resources will be intensified, and the price threshold of brand will be higher.
    Internet video is the best hosting as premium contents, and it is not only simple advertising, it also can have more innovative advertising as the development of homemade contents.(Jiemian, 2015)
  4. Beginning of programmatic buying across-screen
    The concept of cross-screen integration has been very famous in programmatic buying, and in the era of cross-screen to use the integration of all channels and medias to make multi-screen integration must be considered by programmatic buying. A complete DSP marketing chain must have a cross-screen DSP integrated delivery chain for advertisers.
    The cross-screen technology will be developed and improved in 2015, and programmatic buying of mobile terminal, PC side, video side and TV side can work in the same platform. But there are some problems. There is no clear standard of cross-screen recognition, and ability of resource integration of digital Marketing companies is different.(Jiemian, 2015)
  5. Digital advertising platform will be transparent
    In the current advertising market DSP has been mature stage. Anti-cheat system and semantic analysis technology which are concerned by brand advertisers will be resolved. There will be more platforms that use open interface. And there will be more advanced techniques, they can make media environment and brand be safer.(Jiemian, 2015)
  6. Third-party monitoring consequent makes ecosystem have benign development
    When the rate of programmatic buying increases, the scope and scale of data fraud of digital advertising has been larger. Due to the high cost of video advertising the rate of false data is very high.
    Demand and attention of advertisers will make digital advertising be standardization. Then the digital advertising market will be sustainable development. To set up more third parties which can monitor market can guarantee market stability.(Jiemian, 2015)
  7. Programmatic buying video advertising will be mainstream
    The video site has had relationship with mainstream DSP platforms, but these mainstream DSP platforms only provide remaining resources. The mainstream selling mode of video advertising likes traditional television, there is no innovation. In 2015 there are more and more brands in programmatic buying video marketing, the programmatic buying video advertising will be mainstream.
    The amount of data and database dimension become to be abundant and video advertising becomes to be more accurate as increased in video traffic. Then there will be more and more quality resources in the DSP platforms. At the same time brand advertisers can control the budget of video advertising and there will be some requires of visibility, relevance and controlled assessment.(Jiemian, 2015)
  8. First-party and third-party camp are clear, there will be polarization
    The first-party and third-party DSP / DMP produce polarization in the market. Some advertising technology companies think the third-party is better. They think to receive all traffic suppliers and provide services to customers independently can guarantee to keep track of the results. The other advertising technology companies think to help large media and advertisers to set up the first-party DSP / DMP platforms is better idea.
    Although data flow needs advertisers, trading partners, the media and third-party data companies, only relying on large customers has data resources under current market conditions. So the first-party DSP platform will reduce profit of the third-party platforms.(Jiemian, 2015)
  9. Beginning of programmatic buying more screens
    Programmatic buying is a very useful tool, and it has been development trend of advertising industry. There is cooperation between digital advertising companies with hardware vendors. There will be more screens in the programmatic buying platforms, for example game consoles, car screen, intelligent outdoor digital screen, smart watches and glasses and so on. So many advertisers want to use multi-terminal cooperation to improve advertising effectiveness.(Jiemian, 2015)
  10. Began to appear trading platform of large amounts of data
    Large data market has been used, and poor development of “data separatism” and “data silos” has been changed. There will be more large data trading platforms as industry organizations, research organizations and academic institutions prepared some projects. Before the price of data is decided the data must be kept privacy and security. Then there will be data exchange market and trading index. But the data monopolies and barriers are still very serious, and it can hinder the development of digital advertising.(Jiemian, 2015)


Problems in market & Contemporary relevance of digital marketing


1、Four Problems

  1. To solve the problem of marketing information asymmetry
    Factories usually according to their own subjective imagination to produce products. So many products cannot be satisfied by customers, then the products have to be taken to stocks. At last the factories have to sell them in low price. It will affect the price in the market. (EMKT.com.cn, 2005)
  2. To solve the problem of fakes in market
    Some data can show that counterfeiting increases in China. It is not only the number, but the styles of counterfeiting are also rich. (EMKT.com.cn, 2005)
  3. To solve the problem of limitation of promotions
    Common promotions are that to use invoice to have lottery or some other ways to give cash to customers. It is a simple promotion, but the customers have lost their interesting in this promotion. (EMKT.com.cn, 2005)
  4. To solve the problem of low advertising efficiency
    Rapid economic development makes development of media be quickly and the people’s rhythm of life be quickly, and it also make the rate of advertising accepted be lower. (EMKT.com.cn, 2005)
These four problems are very important in the market in China, and the digital marketing can help companies to solve them.

2、Contemporary relevance of digital marketing


Nowadays the important of e-commerce becomes to be increasingly prominent with the development of internet and mobile commerce. Many companies begin to
set up e-commerce department, and set up websites to start e-commerce and network marketing. But there are many new problems in the industry. The most
important problem is how to promote companies and products with low cost and high efficiency. After that how to make customers really buy products and control
the marketing costs is also an important problem. Then many companies begin to research the digital marketing platform. This situation is also in China.

In China companies should use digital marketing solutions. Based on digital marketing, marketers can effectively search client resources, and make classifications
as different customers have different demand. Then companies can provide better services to customers. Digital marketing also can provide services which is one on
one, it can guarantee special services and keep customers.
Overall the digital marketing will affect the sales model in the world, and the cost of promotion can be reduced. So there will be more profits which will be gotten if the
companies use digital marketing.


References


  1. HOOXIAO.COM (2012) The Features of Digital Marketing [online] Available from: http://www.hooxiao.com/index.php?m=content&c=index&a=lists&catid=70 [Accessed 2 Feb 2015] (Translation Chinese)
  2. Yingsheng (2014) Resolve the status quo of digital marketing in China [online] Available from: http://www.yingsheng.com/pxjg-it/67751.html [Accessed 5 Feb 2015] (Translation Chinese)
  3. Adquan (2012) How to get chance in digital marketing in the future [online] Available from: http://www.adquan.com/post-13-14864.html [Accessed 5 Feb 2015] (Translation Chinese)
  4. Jiemian (2015) Ten Trends: Digital Marketing in China in 2015 [online] Available from: http://www.jiemian.com/article/227321.html [Accessed 10 Feb 2015] (Translation Chinese)
  5. Pamela S. (2013) Push or Pull: Which Type of Digital Marketing is Most Effective? [online] Available from: http://www.ipost.com/blog/email-marketing/push-or-pull-which-type-of-digital-marketing-is-most-effective/ [Accessed 16 Feb 2015]
  6. EMKT.com.cn (2005) What problems does digital marketing solve [online] Available from: http://www.emkt.com.cn/article/224/22473.html [Accessed 10 Feb 2015] (Translation Chinese)
  7. Fit.com/Lexicon Definition of Digital Marketing [online] Available from: http://lexicon.ft.com/Term?term=digital-marketing [Accessed 5 Feb 2015]