Digital Marketing

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DEFINITION of 'Digital Marketing'

Digital marketing is a subcategory of marketing that uses digital technology to place and sell products. Product promotion is done, not only on the internet, but also via Short Message Service (SMS), Simple Notification Service (SNS), search engine optimization (SEO), electronic or interactive billboards and other online ads (such as banner ads).

BREAKING DOWN 'Digital Marketing'

Digital marketing targets a specific segment of the customer base and is interactive. Digital marketing is on the rise and includes search result ads, email ads and promoted tweets – anything that incorporates marketing with customer feedback or a two-way interaction between the company and customer.

Internet (a.k.a. online) marketing differs from digital marketing. Internet marketing is advertising that is solely on the Internet, whereas digital marketing can take place over the telephone, on a subway platform or in a video game.

In the parlance of digital marketing, advertisers are commonly referred to as sources, while members of the targeted ads are commonly called receivers. Sources frequently target highly specific, well-defined receivers. For example, after extending the late-night hours of many of its locations, McDonald's needed to get the word out. It targeted shift workers and travelers with digital ads, because the company knew that these people made up a large segment of its late night business. McDonald's encouraged them to download a new Restaurant Finder app, targeting them with ads placed at ATMs and gas stations, as well as on websites that it new its customers frequented at night.

Marketing Messages

Digital marketing is used to market more than just products and services. It is widely used to sell people on things such as companies, political parties and ideas. Political parties use digital marketing to target voters with positive SMS messages about their candidates and negative SMS messages about their candidates' opponents, and tailor ads to receivers who frequent particular digital channels, such as Facebook newsfeeds and YouTube channels. McDonald's created a digital "Kick the Trash" campaign to counter negative press in Germany that called the company's outside areas dirty.

Digital Marketing Challenges

Digital marketing poses special challenges for its purveyors. Digital channels are proliferating rapidly, and digital marketers have to keep up with how these channels work, how they're used by receivers and how to use these channels to effectively market things. In addition, it's becoming more difficult to capture receivers' attention, because receivers are increasingly inundated with competing ads. Digital marketers also find it challenging to analyze the vast troves of data they capture and then exploit this information in new marketing efforts.

The challenge of capturing and using data effectively highlights that digital marketing requires a new approach to marketing based on a new understanding of consumer behavior. For example, it may require a company to analyze new forms of consumer behavior, such as likes on Facebook and tweets on Twitter.