CHAPTER 1

INTRODUCTION

Marketers are learning how regular contacting affects the building and sustaining of

customer relationships. The dominant logic of marketing is shifting from the exchange of

goods toward service, interactivity, connectivity and ongoing relationships.

Technological innovations, new channels, and changing media environments facilitate

this shift and the question of how firms should interact with their customers is gaining in

importance, especially as firms consider the cost differences between traditional

communications media, such as television and sales forces, and electronic media, such as the

Web and email.

The cost efficiency and interactivity of digital channels facilitate ongoing dialogue

between the enterprise and the customer. Marketers can now be in touch with their customers

on a more frequent basis and increase the level of personalization and interactivity with low

or non-excessive cost.

Being frequently in touch with customers should help achieve positive effects on

customer loyalty. For instance, customers can be offered additional information and brand

communication when buying products or when using them. This can include newsletters,

maintenance and repurchase reminders, help for keeping their products up-to-date, and tools

for interacting with friends and peers.

For being regularly in touch with customers is also one of the central ideas of CRM

(Customer Relationship Management). Recent studies have found that the relational

information processes of CRM (regular communication, information collection, etc.) play a

vital role in enhancing an organization’s customer relationship performance.

Furthermore, the use of CRM applications is positively associated with improved

customer knowledge and improved customer satisfaction. While email is substantially

cheaper to send than conventional direct mail, research also suggests that in some cases it can

deliver significantly better response rates.

From a company point of view, digital channels offer cost efficient opportunities for a

brand to keep frequently in touch with customers which not only improves marketing

performance, but particularly customer loyalty.

With such prospects in mind, it is not surprising that the use of digital channels in

marketing is becoming an essential part of strategy in many companies. Car manufacturers

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use the Internet and email to launch new models, as well as engaging their customers into

interaction on their websites and with email. BMW uses a mobile portal to distinguish itself

from its competitors, providing customers pictures of new models, games, and service. Nike

targets the youth segment by launching a digital spring fashion show, which allows

consumers to use the brand’s latest fashion catalogue online to create their own looks and

photos, and a virtual identity. Similarly Puma had launched an event in Mumbai where in

they gave people the opportunity to design their own shoes and the winners would actually

get their designs on a custom pair of Puma Shoe. Canon iMage Gateway helps consumers

share their digital photos with friends online. Such interaction and low cost communication

with customers increases the effectiveness compared with traditional direct marketing efforts

that publishers have used to win orders. Interactivity in digital media offers customers better

options to search for information, work as initiators, and get help. Interactivity also offers

customers new ways to spend time with a brand, like playing games, participating in an

activity on a website, or learning about the product or service they are using.

This is what Canon pursues with iMage Gateway service, which can lead to improved

customer involvement and satisfaction. Interactivity also provides marketers with more

information about customer needs, preferences and interests.

Interactive and virtual brand communities, like those built by Harley Davidson and

Ducati, bring consumers with specific interests together from different geographic areas to

strengthen their brand loyalty. McDonald’s uses online channel to reinforce brand messages

and relationships. They have focused their online community building on communities for

children, such as the Happy Meal website with educative and entertaining games.

L´Oréal’s CRM initiative aims to enhance personal communications with customers

by analytical profiling, segmentation, database build and design, and bolstered data gathering.

This way L´Oréal seeks to increase the return on investment and capitalize on their customer

insight for the long term.

Digital channels also contain opportunities and tools for personalization. By using

digital channels, customers can actively create or shape the form of communication, for

example by stating their channel and content preferences. Likewise, marketers can create

more personal communication based on customers’ behavior and preferences, which can

increase the effectiveness of communication by making customers, perceive it as more

relevant and interesting, and wanting to maintain a relationship with the marketer.

Relationship marketing (RM), customer relationship management (CRM), as well as brand

management and service literature emphasize the importance of building and managing

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customer relationships, and offer useful models. Also consumer behavior, advertising, direct

marketing, and e-marketing literature give insight into how digital channels can be used to

enhance customer loyalty.

Before we move into any more details lets understand what digital marketing is all

about and how it plays a major role in affecting the customer loyalty.

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CHAPTER 2

LITERATURE REVIEW

For a better understanding on the topic I had pulled data from different books, reports,

articles. These helped me in understanding the different views of different authors over the

same subject which is Digital Marketing (DM) and how it affects customer loyalty. Below

mentioned are few such materials which helped me in this project.

A new way to measure word-of-mouth marketing - Jacques Bughin, Jonathan

Doogan, and Ole Jørgen Vetvik

The book speaks about how the power of word-of-mouth marketing has grown in the

last few years. Digital revolution has amplified and accelerated a customer’s reach to the

point where word of mouth is no longer an act of intimate, one-on-one communication.

Today, it also operates on a one-to-many basis: product reviews are posted online and

opinions disseminated through social networks.

Four ways to get more value from digital marketing - David C. Edelman

The book speaks about how the companies have started shifting their focus towards

customers. Through his study he found that the most successful digital marketers focus on

managing four core sources of value. First, they coordinate their activities to engage the

consumer throughout an increasingly digital purchase journey. Second, they harness interest

in their brands by syndicating content that empowers the consumer to build his or her own

marketing identity and, in the process, to serve as a brand ambassador. Third, they recognize

the need to think like a large-scale multimedia publisher as they manage a staggering increase

in the content they create to support products, segments, channels, and promotions. Finally,

these marketers strategically plot how to gather and use the plethora of digital data now

available.

The New Rules of Marketing and PR(Second Edition) –David Meerman Scott

The book speaks about how powerful the new channels of communication are and

also how marketers should use these channels for maximum benefit to the organization. The

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new channels being Social Media Websites, Blogs, New Releases, Online video and Viral

Marketing.

It also speaks about how companies can instantly get into existing markets, connect

with customers quickly, and create products that grow ones business.

What Google would do? - Jeff Jarvis

The book speaks about how to reverse-engineer your companies working. It also

speaks about the success of the fastest growing company in the history of the world i.e.

Google, the one company that truly understands how to succeed in the internet age, and then

take those lessons and apply them to a number of industries, companies, and institutions.

Waiting For Your Cat to Bark? - Bryan & Jeffrey Eisenberg.

Evolving from the assumption that customers have always behaved more like cats

than dogs, Waiting for Your Cat to Bark examines how emerging media have undermined the

effectiveness of prevailing mass marketing models and created an unprecedented opportunity

for businesses to redefine how they communicate with customers by leveraging the power of

increasingly interconnected media channels.

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CHAPTER 3

OBJECTIVE OF STUDY

Despite the growing use of digital channels in marketing and the evolving research

around it, there are few theories to explain the mechanism of how Digital Marketing

Communication or DMC works from a relationship marketing perspective, especially for

enhancing customer loyalty.

Hence, in this project I would mainly be focusing on understanding:

How is Digital Marketing different from the traditional marketing?

The communication functions of digital marketing.

Do Social Networks provide the trigger to improve the potency of advertising across all

forms of media?

Study the Growth of internet usage and e-commerce

Study how Advertising on the Internet helps and how to gain Trust of the customers by using

various Internet Marketing Techniques.

How Digital Marketing helps enhance the loyalty of the customers towards a particular brand

or product.

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CHAPTER 4

DIGITAL MARKETING

The use of digital channels to strengthen customer loyalty has received surprisingly

little attention, despite the obvious opportunities for using these channels to keep in touch and

serve customers cost-effectively. It seems like the concept of “digital marketing” has been

used more operationally, while the theoretical understanding and comprehensive approach of

how and why to use different digital channels are still developing. The various medias used

that promote Digital Marketing are :

Digital marketing is a term that has been around for quite some time, but hasn’t been

very well defined, encompassing things like banner advertising, search engine optimization

(SEO) and pay per click. Yet, this is too narrow of a definition.

“Digital marketing uses the Internet and information technology to extend and

improve traditional marketing functions.” This is a broad definition, concerning all of the

traditional 4 P’s, and both customer acquisition and retention.

Other terms like “interactive marketing and “e-marketing” are close to digital

marketing, but neither of them are defined very precisely.

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Advertising Guru’s Coviello, Milley and Marcolin have defined digital marketing as

“using the Internet and other interactive technologies to create and mediate dialogue

between the firm and identified customers.” They also consider digital marketing as a subset

of e-commerce. In their view, more than creating discrete transactions, digital marketing is

focused on managing continuous IT-enabled relationships with customers by creating

dialogue and interactivity.

The world of digital media is changing at a phenomenal pace. Its constantly evolving

technologies, and the way people are using them, are transforming not just how we access our

information, but how we interact and communicate with one another on a global scale. It’s

also changing the way we choose and buy our products and services. People are embracing

digital technology to communicate in ways that would have been inconceivable just a few

short years ago.

The global online population was around 1.3 billion at the end of 2007 it’s now more

than 1.8 billion as of December 2010. In the developed world internet access is becoming

practically everywhere, and the widespread availability of always-on broadband connections

means that people are now going online daily to do everything from checking their bank

statements, to playing games, to shopping for their groceries. Hence companies have started

realizing the importance of Digital Marketing.

At its heart, digital marketing centers around the Internet, which have become both a

communication vehicle and a very powerful marketing medium. The Internet can be used

both to “push” a message to someone through email, IM, and voice broadcast, as well to

“pull” content serving a banner Ad and Pay Per Click search terms. Digital marketing,

therefore, can be thought of as the combination of push and pull Internet technologies to

execute marketing campaigns.

People are far more likely to 'Google' their needs as a first port of call than go

anywhere else for information. And the business person always has to go where the people

go. The differences between traditional methods and digital marketing really lie in

effectuality, ease and cost. The costs are certainly lower with digital marketing and the effects

of online promotions are more far-reaching and have a higher impact.

Being regularly in touch with your customers in one of the central ideas of every

business these days and recent studies have shown that Digital Marketing more specifically

the Internet plays a vital role in doing so.

As the times are changing people are shifting from the traditional forms of marketing

to digital marketing. Not because they weren’t effective or successful but because they do not

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offer instant feedback and report. Sure, some people may respond to a call to action from an

advertisement in one of these mediums but there is no way to know the exact number of

people who saw or heard it. Such data is collected long after the initial ad impression is made.

Yes, convergence has made television at bit more interactive, with devices such as TiVo able

to record viewer statistics like those for Web sites, but there is still a long way to go. With

digital marketing, however, we’re already there.

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4.1. 7 P’S OF DIGITAL MARKETING

The four P's - Product, Price, Place and Promotion have long been associated with

marketing, but things have changed on the Internet. So along with a change in the nature of

the four P’s there are three new P’s which are relevant to digital marketing.

The Product on the Internet is usually quite different as the user experiences it

electronically, in the form of text, images and multimedia.

Physical goods are usually presented in the form of a detailed online catalogue that

the customer can browse through. Technology allows the user to virtually touch and feel the

product on the Internet - rotate it, zoom in or zoom out and even visualize the product in

different configurations and combination.

The example of the above can be seen at dell.com where the company offers the user

to virtually feel every aspect of their product before they go into a buy decision.

Several automobile companies also create a virtual model of their vehicles be it a car

or a motorcycle. They give their customers the liberty to view the entire model up close by

zooming in and out of the different parts.

To be able to attract the customers and retain them, the company will have to provide

new and distinct products that force the net users to purchase and come back for more.

The Price has been drastically changed over the Internet. Also it gives the buyers

information about multiple sellers selling the same product. It leads to best possible deal for

the buyers in terms of price.

Sites like eBay and Naaptol.com allows the users to view the same product being sold

by different people at different prices and then lets the user themselves decide which deal

they want to go for.

The Place revolves around setting up of a marketing channel to reach the customer.

Internet serves as a direct marketing channel that allows the producer to reach the customer

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directly. The elimination of the intermediate channel allows the producer to pass the reduced

distribution cost to the customer in the form of discounts.

Dell Computers have used this strategy very effectively and hence they have been

able to reduce their prices of their laptops drastically and reaped huge profits.

Promotion is extremely necessary to entice the customer to its website, as there are

currently more than one billion web pages. Promoting a website includes both online and

offline strategies. Online strategies include search engine optimization, banner ads, multiple

points of entry, viral marketing, strategic partnership and affiliate marketing.

Presently, the cyberspace is already cluttered with thousands of sites probably selling

similar products. For the customers to know of the Company’s existence and to garner

information on the kind of products or services that the company is offering, promotion has to

be carried out. There can be traded links or banner advertisements for the same.

Also the traditional mediums like print, outdoor advertising and television can be used

to spread awareness. Email campaigns and spamming the Chat rooms on almost every server

has been exploited to the maximum for the cause of promoting their website.

The Presentation of the online business needs to have an easy to use navigation. The

look and the feel of the web site should be based on corporate logos and standards. About

80% of the people read only 20% of the web page. Therefore, the web page should not be

cluttered with a lot of information. Also, simple but powerful navigational aids on all web

pages like search engines make it easy for customer to find their way around.

The principle of K.I.S.S (Keep it simple stupid) is the most important factor that has

to be considered while presenting the online business.

The Processes Customer supports needs to be integrated into the online web site. A

sales service that will be able to answer the questions of their customers fast and in a reliable

manner is necessary. To further enhance after sales service, customers must be able to find

out about their order status after the sale has been made.

For e.g. FedEx (www.fedex.com), the overnight Courier Company allows its

customers to keep track of the parcel and they are well informed about the present

whereabouts of their package. Similar variants have been used by the Government of India

for its Speed post and Registered Ad services where you can keep a track of your post by

entering the code that has been issued to you.

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Personalization Using the latest technology in software be it PHP, Flash or

Photoshop it is possible to customize the entire web site for every single user, without any

additional costs. The mass customization allows the company to create web pages products

and services that suit the requirement of the user. A customized web page does not only

include the preferred layout of the customer but also a pre selection of goods the customer

may be interested in.

For e.g. Yahoo! (www.yahoo.co.in) entered the Indian cyberspace and started its

personalized services. A registered user of Yahoo can now personalize the front page with all

the information he needs. He can read the news of the world, add a tax calculator, see the

weather forecasts of his city and listen to his favorite songs and all this simultaneously.

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4.2 CHANGING PATTERNS OF MARKETING –

TRADITIONAL MARKETING V/S INTERNET MARKETING

Marketing over the years more so recently has started being used interchangeably

with advertising. Now since the explosion of the internet; advertising paradigms have been

constantly changing.

The first Web advertisement was placed on the Hot Wired web site in October 1994.

AT&T, MCI, Sprint, Volvo, Club Med, ZIMA were the first to try it out and the Internet

advertising has come a long way since then. Here, I would attempt to compare Internet

Advertising with Traditional Advertising:

Traditional Advertising:

Traditional advertising is static.

Space is a problem, as regards size of the banners etc.

The proportion of advertising to editorial is high sometimes

Does not evoke immediate action.

Response to the action is not immediate.

Advertisements are passively received.

Advertising does not always target a much focused audience.

Internet Advertising:

It is dynamic with multimedia- supporting text and graphics video sound all together.

Space is not a restricting factor

A web page would be 91% editorial and 9% advertising.

Invokes immediate action as you at-least need to click on the ad.

First response is immediate as when the user clicks, the person is directed to other web page

with more details.

The user has high attention level and concentration while using the net, and hence they notice

the ad. (please refer the chapter)

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This can be much more focused.

Advertisements catch users when they are on the lookout for something. For e.g. The search

is for travel on a search engine there are ads of travel agents on the net.

Thus we see that advertising is changing and so are the rules for advertising on the

internet. So while designing or formulating any advertising strategy for a brand on the

internet a manager has to take in to account factors like: -

1. The Internet has made a huge impact on advertising. Companies should be careful as

regards joining the IT bandwagon. They should not advertise on the net just to project

themselves as a techno savvy company or maybe because their competitor is doing the same

thing. It should be a well-planned campaign full of specific information and attention

catching.

2. The 'net' charges are on the higher side (though there has been a steep decrease in the

rates in the last few months). Hence people would be wary of the fact that ads consume a lot

of online web time and hence they avoid clicking on average ads. Therefore, advertises

should be designed in such a fashion that they attract attention and induce people to click on

the net.

3. One more thing would be to generate 'search' specific advertising. This would mean

that if I give a search for books on the search engine, the ads displayed would be related to

the books.

4. Generally, people perceive the ads to be time consuming and full of unwanted

information. Care should be taken to design the ads in such a way that the information they

provide or the hyperlinks they provide to a site gives adequate and specific information.

5. The ads and the subsequent information on the web site should be constantly updated

and highlighted in the ads and thus induce repeated clicks on the add

6. Last but not the least; the ads should be designed so as to attract attention of

maximum number of people and inducing them to click, failing to do so the advertiser ends

up defeating his own purpose. 

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4.3. GROWTH OF INTERNET USAGE AND E-COMMERCE

IMRB recently came out with a research where they said that India’s internet

community grew by 42% in 2009 from a year ago, spurred by a rash of cheaper devices and

affordable broadband plans that helped sidestep snags such as buttoned up PC sales and a

shrinking spread of cyber cafes.

The country’s total number of internet users grew to 71 million last year, according to

an annual survey by market research agency IMRB and Internet and Mobile Association of

India, available exclusively with ET. The survey has traced users who have used the internet

at some point in time, an indication of the number of Indians who have gone online at least

one in a life time.

Four out of five computer users and English-speaking persons in urban India are now

hooked to the Web, said the survey that was conducted among 19,000 households, 68,000

individuals and 500 cyber cafes. “The growth came from reduced prices of cheap access

devices like netbooks that are now available at around Rs 20, 000,” says Internet and Mobile

Association of India president Subho Ray.

The study also says India’s active user base — comprising people who access the

internet at least once a month — grew by 18% to 51 million from a year earlier. However,

the survey also offers salient data that are a counter against getting carried away by the other

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glowing trends. The number of users who possess an internet connection remains strikingly

low at 14.6 million. Also, internet penetration is still measly compared to that of countries

such as the US. China has over 360 million internet users followed followed by US at 227

million and Japan at 95 million.

Similarly, internet additions continued to be eclipsed by mobile subscriber additions

that were ticking at 10 million a month last year. Users who access internet via mobile

phones remains a meager 2 million due to slow download speeds. Here, users who access

online WAP portals pre-burnt into SIM cards are counted out in the survey

Still, in many households, internet usage rose 70% to 15.7 hours a week from a year

earlier, a pointer to the growing popularity of social networking websites such as Facebook

and Twitter.

“Proper laws governing cyber cafe industry will promote further adoption of internet in

the country,” says Amrita Choudhary, Director at Cyber Cafes Association of India.

According to the research report of Goldman Sachs, India has emerged as the second

largest Internet market in Asia after China in 2009. It estimates that Indian Internet Users will

increase by 130% compounded annual growth rate (CAGR) at the end of 2012. Also the

figures of the number of Internet Service Providers (ISPs) are expected to increase by leaps

and bounds and March 2012 sees at least 70 private international gateways. As per

preliminary findings of the NASSCOM survey, the total volume of E-commerce transactions

in India was about Rs.225 crore in the year 2007-2009. Out of this volume, about Rs.32 crore

were contributed by retail Internet or Business-to-Consumer transactions, and about Rs.188

crore were contributed by Business-to-Business transactions. The survey also revealed that E-

Business transactions in India are expected to exceed Rs.300 crore during 2010-2012. Out of

this, about Rs.50 crore could comprise of retail transactions.

For Business-to-Business transactions, Indian industries are expected to reach online

penetration of 12% by 2012 and 25% by 2015.

4.3.1 Effectiveness of the Net in Reaching Out to the Masses

The reach of Internet may not yet be as wide as that of other mass media, but given its

unique advantages, it is undoubtedly the communication medium of the future. Marketers

around the world have from time to time tried to reach their target audiences through various

media. Scientific and technological advances have and will continue to create newer media to

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improve communication, and marketers will try to use the same to effectively address their

audiences. Internet is one of the latest to join the list of such media inventions.

4.3.2 Internet Fame with the Indian Audiences

Let us first take a quick look at the audience that this medium is trying to reach. The

top 8 metros of the country, the scope of the Internet as a medium to reach out to a large

number of people is presently limited. However, some of these limitations can be addressed.

Internet is available in regional languages also. Even today this medium is largely confined to

only those who are literate in English. Various initiatives of companies like ITC and HLL

like E-choupal and i-Shakti have given a considerable boost to vernacular usage of internet

Internet is accessible though other media also and not only through telephone lines. In the

current scenario, the usage of internet can happen through telephone lines, broadband and

cable.

Government policies are aimed at broadening and strengthening the infrastructure required

for Internet accessibility.

There could be several other modes to increase the reach of the Internet. However,

with the current limitations, the projections on Internet usage appear to be unhurried.

4.3.3 Current Media usage habits of the Indian audiences

TV, print and cinema have penetrated the most. Internet in the media terms is

expected to make an impact and show its true calibre, but is yet not taken as a serious

medium. Does that mean that Internet is not an effective tool for reaching out to people? Or is

it likely to work very well under certain conditions?

To understand this better, let us compare Internet and other traditional media, first

from the customer’s point of view. Current media options serve two broad benefits to the

customer:

1. Information

2. Entertainment

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The reach or popularity of any media is related to -

1. The extent of benefits perceived to be delivered

2. The cost of acquisition of the media itself

In short, the reach is related to the net value perceived by the customer about that

particular medium.

Internet has brought with it a very high degree of control to the media user. Not only

are there a plethora of sites catering to every imaginable need, there is also a high degree of

flexibility in what the user is able to do. All of this makes Internet a highly interactive media

but also an expensive one.

If the internet is treated and used exactly like any other medium, it is unlikely to yield

major benefits to the marketer. Its effectiveness is dependent not only on the target audience

one is talking to, but also largely on the ability of the marketer to make use of the real

advantages of the Net like interactivity, flexibility, ability to monitor and the like.

Next, one can also evaluate Internet as a media from the marketers’ point of view by

way of a similar classification. If evaluation as per the above classification is done, the

Internet does not appear to be a very advantageous option either in terms of reach or in terms

of cost-effectiveness.

Internet however has various other advantages over the traditional media which

cannot be neglected. These stem mainly from the ability of this medium to allow a far more

focused targeting as compared to other media.

To quickly summarize the advantages of the Internet as seen from the point of view of

the user as well as the marketer:

To the user:

Internet gives more control in choosing content. It offers customization of the content, the

way the user wants to view it. It offers a variety of options for information and entertainment.

It offers a wide range to choose from for the user.

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It offers tremendous convenience to the user not only in delivery of information, but also in

allowing him to transact — often in a seamless manner.

The best example of giving control of content is the My Yahoo!! Service offered by the

Internet giant, Yahoo Inc. It gives the user the choice of content for various topics ranging

from news to stock options to entertainment to sports and just about everything.

To the marketer:

The Internet offers several options to a marketer trying to target a particular community

It serves not only as a channel of information, but also of product distribution

It offers a highly interactive medium that sometimes (e.g. chats, forums, VoIP) is almost

equal to one-to-one interaction with the audience.

It offers a higher level of identification of the user to the marketer.

It allows the marketer to actually link his spends to action, and pay only on action

This action could be a click on the banner or even product purchased or just a banner

impression or per 1000 impressions. In this ability Internet is, in fact, unlike any other media.

Given the payment options and high interactivity, the Internet offers a medium for

high level of experimentation at a low cost.

E.g. One can change the whole look of the advertisement within hours and increase

the effectiveness of the communication on the Internet. Imagine doing the same with a

television advertisement. Therefore, though the Internet with its present limitations may not

be able to match other media in actually reaching out to large numbers of people, the benefits

of this highly customizable and interactive medium can be used effectively to target niche

audiences.

4.3.4 Overview of the Indian Internet Users

Indian internet users use the internet for 3.5 hours a week, clocking an average of 26

minutes a day, according to a study by IMRB International and Internet and Mobile

Association of India (IAMAI). The study shows that women spend lesser time (25 minutes)

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online as compared to men during weekdays and the time spent online on weekends is lower

for both men (22 minutes) and women (23 minutes)

It was also found that activity on social networking sites increases gradually during

the week reaching a peak on Fridays, increasing by over 12 per cent. The study also

highlighted that while bank sites are accessed by more people during weekdays, those who

accessed bank sites on the weekends spent a much longer time on these sites.

These are the initial results of the new Internet Audience Measurement (IAM) system

soon to be launched by IMRB International in association with IAMAI. According to IMRB

International, the initiative goes beyond technical jargons, and measures internet use in a

currency that is commonly understood and accepted in India.

4.3.5 Advertising options available on the Internet

The Internet offers a variety of options for the marketer to advertise her/his

products/brands. These include

1. Banner ads and their variations

2. E-mailers and their variations

3. Sponsorships

4. Search Engines

5. Affiliate marketing

In India, banners still remain the most popular option. However, wider options are

now available to the marketer which, even at the cost of being intrusive, serves to enhance the

visibility and effectiveness of the banner

Given the highly interactive nature of the Internet, and the also fact that unlike other

media it offers a higher level of identification of the user, simple direct marketing tools such

as email can also be used more effectively.

Then again there are sponsorships, which can be effectively used to increase brand

salience and even change image.

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The other tool on the web with enormous potential, and which has possibly not been

used to its optimal level yet by marketers in India, is the search engine. Marketers can own

either popular keywords or make use of meta-tags (these are similar to the keywords which

the search engines uses to catalogue various websites/products) in order to go higher on the

search lists.

The above is used by the search engine giant Google.com and it has reaped profits so

much so that it is viewed as a threat by the computer giant Microsoft Inc.

4.4 UNDERSTANDING THE CUSTOMERS

Now to be able to use the seven P’s effectively in order to achieve the predefined

goals of any organization it is imperative to understand the customers. Customization will

only be truly effective if we understand our customers and their true needs.

Before adapting marketing practices to the Internet, the marketer needs to

understand the characteristics of the online customers. The Net users can be classified

into five categories depending upon their intention of using the Internet.

The five categories of users are –

Directed Information Seekers: They require specific, timely and relevant information

about the products and services being offered.

Undirected Information Seekers: These users require something interesting and useful.

Something that can give them an edge, advantage, insight or even a pleasant surprise.

Bargain Hunters: They are of two kinds. One who look for free items on the internet and

other who are seeking better deals, higher discounts etc.

Entertainment Seekers: they see the Web as an entertainment medium of vast breath

and potential and want to explore the medium before the mass gets there.

Directed Buyers: They want to buy something - now. They are sure what they require

and just log on to the Web to purchase the item.

4.4.1 The Evolving Value Propositions

The value propositions of goods and services offered in the physical world differ

pointedly from those in the digital world. The ultimate aim of the universal marketer is to

provide a complete end-to-end consumer experience---right from the promise to satisfy his

need to its delivery. But the physical world offers only “Point Solutions” which is basically a

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solution of his needs in terms of functional benefits. A credit card, for instance, allows

consumers to satisfy the immediate necessity of setting a transaction. But today’s consumers

are also looking for process and relationship benefit---book referrals at no extra cost or e-

mail reminders. The physical world is not able to deliver these benefits because of gaps in

time, space and memory. The web, on the other hand provides all of these and more (“reverse

marketing, for example, where consumers seek out vendors rather than the other way

around”) by giving the company the ownership and control over all interactions with the

consumer.

4.4.2 The Evolving Risk Profiles

The on-line customer is not a fickle customer, but he is a risky proposition

nevertheless. This is because all his online experience will influence consumer perceptions

about the brand. If a consumer buys a product from a retailer and is involved in an unhappy

purchase experience at the store, he will punish the store. But if the same experience were to

occur to him at the company’s web site, the consequences would be disastrous for the

company if he were to share his experience though different user communities using a

combination of chat rooms and electronic mails.

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4.5. BRAND COMMUNICATION

Brands and branding are of great importance in today's marketing. As a key

component of branding, brand communication determines whether a brand is successfully

established and eventually turns a profit. Conventional forms of brand communication via

advertising, and public relations have achieved great success in the past, but their

effectiveness is declining dramatically in today’s more customer-dominated business climate.

The Latest Brandz global brand study by MilwardBrown shows that Google is

suddenly worth more than $66,434,000 as compared to Coco Cola which is worth

$44,134,000.

# Brand Brand Value($m) Brand Value Change (%)

1 Google 66,434 77%

2 GE 61,880 11%

3 Microsoft 54,951 -11%

4 Coca Cola 44,134 7%

5 China Mobile 41,124 5%

6 Marlboro 39,166 2%

Source: http://www.scribd.com/doc/9662780/Brand-Communication

Why this sudden change in the position for brand leaders? It is seen that this sudden

change in brand value has only happened due to newer techniques being used to improve

brand communication which are Personalized Brand Communication, Interactive Brand

Communication and Other moderating variables.

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4.5.1 Personalized Brand Communication

Personalization is expected to be an element that can work to boost customer loyalty

by creating more personal, interesting and relevant brand communication, and better service.

In the literature different terms are used when talking about personalization.

Kotler’s idea of personalization is that the ultimate level of segmentation leads to

segment of one, customized marketing, or one-to-one marketing.

The goal is to differentiate customers individually and customize marketing messages

to each customer’s needs. This is also the basic idea of personalized brand communication.

For example, the timing of brand communication could be different for different

customers, based on their purchase frequency, need for assistance, etc. Or if a marketer would

know at what time and where a customer would like to have his/her coffee, a local café could

send a personalized offer to the customer’s mobile phone. This would comply with the recent

theory, which suggests that advertising is most effective when it occurs close to the time

when consumers are ready to buy.

In addition, mobile location services could be used to detect the customer being near

his favorite café and he would automatically receive an invitation to visit. Thus, the

marketing communication would have the potential for a stronger effect on boosting sales

and customer loyalty because of using personalization.

For example, Tesco, the UK’s largest grocer, has over 8 million different message

configurations, and offers tailored mailings to specific audiences.

The rational for personalization is already recognized in earlier studies on advertising

and consumers’ information processing, which show that when the personal relevance of a

message is high, people spend more time processing it, generate more product-relevant

thoughts, and spontaneously draws more conclusions about the product. Thus, when

customers perceive brand communication relevant and the substance is meaningful the

messages are likely to be more effective.

Personalization can also be initiated by the customer, for example by selecting

interesting topics for a newsletter. This way personalization also builds continuance

commitment by creating customer exit barriers. For example, the time devoted by the

customer to give information or personalize his own service may feel like an investment, a

great effort that is not easy to do all over again with another service provider.

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There is support that personalization in digital channels is important to customers. A

study sponsored by the CRM vendor Kana found that almost 75% of respondents cited

personalization as a major contributor to their most satisfying purchasing experience, online

or offline.

Personalization capabilities in this study included self-service, personalized voice or

email interactions, the ability to track purchases and requests, and knowledgeable customer

service representatives who are educated in the customer's history. Personalization can also

improve response rates for brand communication. Research has found that response rates

could be increased by 62% if the email’s design and content are personalized.

Another example, eBay, was able to increase average revenue per recipient by 187%

by finding the optimal timing for email messages, i.e. sending them to consumers on the same

day of the week and time of day as they had originally opted-in. They could therefore get

their messages through the clutter, and were able to reach people when they had more time to

shop. With optimal timing customers may perceive conditional value.

Situational factors can also be regarded as triggers, factors or events that change the

basis of a relationship. Situational triggers alter customers’ evaluations of an offering based

on changes in their lives or in something affecting their lives (e.g. demographic changes in

the family, changes in job situations, and changes in the economic situations)

Personalized brand communication can be used to make messages more relevant to

specific situations, and thus create extra value for customers (e.g. children’s health insurance

offer when a child is born)

Marketers can create more personal brand communication based on customers’

behavior and preferences, which can increase the effectiveness of brand communication by

making customers, perceive it as more relevant and interesting, and hence want to maintain

their relationship with the marketer. This way the substance of messages is meaningful to

customers and they are likely to perceive additional value from communication.

In addition to personalizing the substance and timing of messages, channels of brand

communication are also important. Customers’ channel preferences and perceived channel

benefits vary individually, and change according to information search and purchasing stages.

Therefore it is critical to identify the customers’ current and future channel

preferences and benefits and provide an optimal channel combination in order to make brand

communication more effective and more valuable to customers. However, customers’

preferences may sometimes conflict with company’s business view. For example, a bank

customer may favor personal service at the counter whereas self-service technologies such as

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teller machines, interactive voice response or e-banking facilities are much more cost-

efficient for the bank.

To conclude, there are three main elements that can be personalized in brand

communication: substance, timing, and channels.

Personalizing the substance of brand communication - Positively moderates its effects on both

behavioural and attitudinal customer loyalty

Personalizing the timing of brand communication - Positively moderates its effects on both

behavioural and attitudinal customer loyalty

Personalizing the channels of brand communication - Positively moderates its effects on both

behavioral and attitudinal customer loyalty

4.5.2 Interactive Brand Communication

The digital environment offers cost effective and convenient opportunities to convert

communication from one-way into interactive and give customers access to information and

communication. When customers can easily search and find desired services or support, and

filter out the information they need, they see this as a convenience and as better service. In

effect, companies increasingly offer customers interactive tools to make better decisions

about financial issues, purchases, health care, and other complex issues.

Interactive functions enable a search process that can quickly locate a desired product

or service, thereby replacing dependence on detailed customer memory. Interactivity also

increases the amount of information that can be presented to a customer. This can increase

brand knowledge and thereby customer loyalty.

Interactive functions also offer consumers new ways to spend time with a brand. They

no longer need to go to stores to see the products and to talk with sales people. Over the

Internet, consumers can access a vast amount of product information, view 3D-images and

test different product variations, as well as play games and interact with other brand users.

For example, Nokia has invented an annual game event. Nokia Game is an interactive

multimedia adventure provided by Nokia since 1999. In Nokia Game, players are called upon

to collect and act on a series of clues, delivered via a host of channels – including the

Internet, newspapers, magazines, radio, email, mobile phone and TV. All media are closely

linked to one another. The player that interprets all information best and excels in the online

games wins. Gaming keeps consumers interacting with the Nokia brand for 10 to 25 days. In

2003, the game was running in 35 countries at the same time, and there were over 6 million

visitors to its home page (www.nokiagame.com). In 2005 Nokia’s new online and multi-

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channel game 20Lives entertained almost 750,000 registered users from 21 countries

(www.nokia.com/20lives).

Marketers are encouraged to create brand communities in which consumers share

ideas and feelings without geographic and social barriers, because customers belonging to

them are more loyal than others; they are less apt to switch brands and more motivated to

provide feedback.

Active community members can also be considered as opinion leaders who can be

used to test new ideas and concepts, and hopefully to spread positive information by word of

mouth. Recommendations are very effective, as in some cases they can double sales or

response rate views. Under this view interactivity is realized when messages are contingent

upon previous messages. Key elements include responsiveness, two-way communication,

reciprocity, exchange, and participation.

In this process, planned communication and dialogue potentially lead to value-

enhancing interactions. The firm is not always the party that starts the interaction or dialogue;

instead customers often act as initiators. Customers’ activity may have positive effects on

their purchases and loyalty.

Interactive communication enables marketers and customers to connect in ongoing

learning relationships, where individual customers teach the company more and more about

their preferences and needs. The more customers teach the company the better it becomes at

providing what they want. Relationship performance can be improved through relationship

learning. For instance, visitors to a website learn to be more efficient at using that website the

more often they use it, which increases the probability of purchase. It has also been found that

the higher the bidirectional communication between the customer and supplier, the higher the

purchase frequency.

Interactivity is no longer entirely based on personal communication from the

marketer’s side. Digital channels like email make it easier and less expensive to carry out life

cycle automation than in the offline world. Life cycle automation times each message so that

each recipient gets a message at time most appropriate for them. Also, the state of customer

relationship and changes in it could be used as interaction triggers. Lifecycle automation has

the potential to increase interaction between customers and companies, as sending the

messages is not dependent on the employees’ memory and response times. This can create

more value for customers.

4.5.3 Other Moderating Variables

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Although personalization and interactivity are the main variables that moderate brand

communication, there are other moderating variables which affect customer loyalty through

digital marketing.

Customer Characteristics

All customers are not equally responsive to DMC or willing to engage in it. It is

useful for a company to know which customers have the most future potential, and which are

more likely worth the investments in extensive communication and relationship building.

It is seen that customers have four primary needs and motivations, which drive their

behavior and relationship orientation.

Best-deal customers seek for lowest price, and there is no value in a relationship for

them.

Novelty seekers are innovators, whose driving force is curiosity. They seek variety

and take risks.

Involvement customers want to belong, to be recognized and to be regularly in touch

with the marketer.

Certainty customers avoid risks and do not want any surprises. They want continuity

but do not actively seek a relationship with the supplier.

Although this classification is a broad generalization, it would be useful in a similar

way to examine what motivates different customers to engage in a relationship with a

marketer in the digital environment.

Recently there was a survey done on different Internet users which explored consumer

attitudes, Internet experiences, demographics, and personality traits that may potentially

influence consumers’ online purchasing, and the type of purchases they are willing to make.

In the study it was found that gender (male), high income, and opinion leadership

increase the odds for online purchases. Furthermore, it was found that consumers’ web

purchasing may not be considerably enhanced by their mere exposure to Internet advertising.

Instead, online consumers’ buying behavior may be rooted in their self-generated interests

with the subjects of the web before they surf the online marketplace.

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It is important to examine what drives consumer attitudes towards using online and

other technology-based services. They identified ease of use, performance, and fun to have

direct effects on attitudes toward using the services, and self-efficacy (level of confidence to

use technology- based self-service), inherent novelty seeking, need for interaction (with a

service employee), self-consciousness, perceived waiting time, and social anxiety (discomfort

through perceived crowding) to be moderating variables. Similarly, consumers’ tendency to

engage in web communities and other relational activities varies a lot, depending on their

communal, exchange, and relationship orientation traits.

These findings suggest that in order to enhance customer loyalty marketers should

develop and promote different factors of DMC depending on customer characteristics.

Involvement

Different products and services can be differently suitable for digital marketing, and

the opportunities for relationship building can also be diverse. Involvement concerns an

ongoing commitment on the part of the consumer with regard to thoughts, feelings, and

behavioral responses to a product. Product involvement affects consumer’s relationship

proneness.

For example, cosmetics, cars and clothes are high involvement products to many

consumers. In the case of low-involvement products, brand choice is less connected with the

consumer’s lifestyle and variety seeking is increased; it is therefore easier to attract

consumers to switch brands with promotions.

Involvement affects the way in which customers process marketing communication.

When involvement is high, consumers devote more attention to advertisements, exert greater

cognitive effort to understand them, and focus more attention on product-related information.

A consumer’s involvement also affects how different media evoke responses. Retrieval

media (print and Internet) are more effective under high product involvement, whereas

delivery media (television) are better suited for influencing uninvolved consumers. On the

web, those with high product involvement are more interactive with product-related content

than those with low involvement. When involvement is high, buyers are more likely to value

customization of the marketing mix, interaction with the company representatives, and an

ongoing relationship with the firm. We expect that when involvement is high, the effects of

DMC on customer loyalty are stronger.

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Relationship

Customer relationships tend to be very heterogeneous; they differ in duration,

strength, interactivity, and in many other aspects. Customer relationships also change

dynamically over time, and are shaped by different stages and incidents. There are a number

of factors embedded in the relationship between a marketer or a brand and the customer that

have an impact on how DMC affects loyalty.

Brand Familiarity and Loyalty

Brand familiarity reflects the extent of a consumer’s direct and indirect experience

with a brand, familiar and unfamiliar brands differing in terms of the knowledge regarding

the brand that a consumer has stored in memory.

It has been found that communication effectiveness depends on the prior familiarity of

the brand: repetition wears out is postponed when the brand is familiar to the consumer.

Communication from a trusted source is also expected to influence attitudes more strongly

and feel more personal than from unfamiliar sources which may be disputed and thus not

have as less impact on attitudes.

In effect, it is seen that DMC works better with customers that are already familiar

and/or loyal with the brand.

Switching Costs

Over a series of transactions, customers build switching costs through the

development of personal relationship and the accumulation of firm-specific knowledge and

sunk costs.

Customers will be more likely to engage in relational behaviors when they perceive

that the monetary and nonmonetary switching costs are high. Product categories where

switching costs are high include insurance, child care, and financial services.

As a term, switching cost is related to perceived risk. Consumers are more brand loyal

and willing to engage in long-term relationships with products that they perceive as high-risk.

Risks can be functional, physical, financial, social, psychological or time-based.

High-risk product categories include airlines, clothing, medicines, and financial

services. Consequently, products and services with high risks are also in many cases those

where the switching costs are high. Switching costs are likely to moderate the effects of

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digital marketing communication on customer loyalty. For example, if financial and

relational switching costs are low, regular marketing communication could have little or no

effect on customer loyalty. An example of this is the fierce price competition between mobile

phone operators, which has made differentiation among them difficult and lowered the

switching costs perceived by consumers.

4.6. DIGITAL MARKETING TACTICS

There are many different technologies to facilitate your Internet marketing strategy.

Some of the most common and effective tools are:

Search Engines: Search engines are one of the most popular means of finding web

sites, second only to following links on web pages.

Search engines help people find relevant information on the Internet. Major search

engines maintain huge databases of web sites that users can search by typing in keywords or

phrases.

Advertise your message. Web directories/search engines are information, gateways

that have high traffic and are good for displaying advertisement banners. They are used to

find Internet information and for this reason, appeal to broad target groups.

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E-zines (Online magazines): These publications are focused on specific topics and

may be a way to reach a target audience interested in that subject. Some companies have

gathered the e-mail addresses of potential customers and used these lists to send out product

information specific to client interests.

E-mail: Ethical methods of gathering e-mail addresses are through on-line

registration built into your corporate Web sites, or requests for information forms that request

submission to your opt-in lists.

An alternative is to purchase lists of customer e-mail addresses indexed by special

interests from a private company such as 'Postmaster Direct'.

Online customers are becoming increasingly selective about their relationships, the

brands they trust, and what they consider relevant. While most marketers are aware of

privacy issues and the risks of Spam, there is still need for improvement. Email marketing

campaign management is still fairly unsophisticated even at the largest of organizations.

Affiliate Marketing: Affiliate Marketing enables you to increase online sales by

promoting your products and services through a network of Affiliate sites on a payment-by-

results basis.

It also provides the opportunity to generate additional revenue by exploiting your

site's own content to promote the products and services of other online Merchants.

A Merchant recruits content sites to partner with them as Affiliates in exchange for

commissions. A common third party provider such as Commission Junction can be used.

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The Merchant provides their advertising banners and links to their Affiliates and

assigns a commission for each click-through to their site, subscription to their service, or

purchase of their products that is generated from those links.

Affiliates place the tracking code for these ads and links on their Web sites. This

allows click through's to be tracked online and commissions to be calculated. If a product or

service is purchased, the customer pays the Merchant directly and the Affiliate is paid a

commission for that transaction.

Banner Advertising: Banner advertising can play an extremely important role within

your website strategy. One can use banner advertising as a means of promoting its own

products and services, raising awareness, or as a way of generating revenue by selling

advertising space on your own website.

There are currently two widely recognized methods of purchasing banner advertising.

The rates for these are usually quoted on a cost per thousand basis or (CPM). The rates you

pay can vary tremendously as there is currently no standard price model.

Pay-Per-Impression: This method of purchasing banner advertising is based on a

charge for the number of times someone sees your banner. There are no guarantees as to how

many visitors will come to your site as a result of seeing your banner; you are simply paying

for the number of times your banner is displayed.

Pay-Per-Visitor: This method of purchasing banner advertising is based on a charge

for the number of times someone visits your site as a result of clicking on your banner. This

is a better method of purchasing banner advertising as you are only paying for results,

although expect to pay a premium.

The revenue model of the Internet giant google.com has its very own service which

offers certain share of the profit that it makes by the pay-per-click function that a website

generates from its Adsense codes. The revenue model is known as Google Adsense and

almost every successful website uses this model to make profits. The Google Adsense ads can

be seen on websites like Times of India, Moneycontrol.com, ManagementParadise.com and a

lot many other reputed websites.

Rich Media Advertising: Looking for ways to make online advertising more

compelling, and hopefully thereby more acceptable, marketers have increasingly been turning

to streaming advertising.

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In effect another kind of rich media advertising, streaming advertising comes in two

basic forms.

First, it can either be part of a streaming audio or video program on the web. With

many people now listening to web radio or watching web broadcasts, this makes perfect

sense. After all, everyone is accustomed to getting commercials on their TV or car radio.

The other channel for streaming advertising is essentially an infomercial. Consumers

can download a streaming clip for a product or service from a marketer's website.

Public Forums: These are often community-based or interest-based sites that allow

visitors to communicate with one another. An opportunity for small businesses to reach to

their intended target group via these forums is by posting messages or by sponsoring such a

forum. E-mail based forums appeal to a wider audience due to the greater use of this

application over Web-based forums. Web based forums are advantageous for their superior

display of advertising images/messages.

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4.7. ADVERTISING ON THE INTERNET: EMERGING ISSUES

Internet might be a catchy advertising medium. But, there are quite a few issues that

need to be sorted out.

Advertising on the Net is slowly catching on. In developed economies, advertising on

the Net accounts for anything between 10 and 15 per cent of the total advertising cake. Fine,

how large is online advertising in India?

Various estimates put the size of online advertising in India between Rs 40 crore and

Rs 50 crore, which is much less than 10 per cent of the total advertising cake. Why is online

advertising so small in India? Why aren't the advertisers putting their money on Net

advertising? For instance, Hindustan Lever’s advertising budget is upwards of Rs 700 crore

and out of this; the company spends not more than Rs 50 lakhs on online advertising. Is this

because Net penetration in India is not deeper? Yes, to an extent.

4.7.1 Slow motion

However, this might not be the case for long. For, initiatives are on to increase the

number of Internet users. It is estimated that Internet subscribers will increase to around 50

million by 2012 from the current figure of 10 million.

Not only that, a drive is on to make Internet more affordable. For instance, the

Reliance group is planning to set up 7,800 cyber kiosks in Madhya Pradesh and BSES is

planning to put up 1,000 cyber kiosks in Bombay. And the UK-based WorldTel, in

partnership with the Reliance group, is working at building 1,000 community Internet centers

in Tamil Nadu.

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There is a question here, however. If numbers are the only factor, then how is that Net

advertising has picked up in Hong Kong, which boasts of 7.5 million Net users compared to

some 10 million in India. So, there are other reasons why online advertising is going through

a slow motion in India.

Apurva Purohit, media director with the Mumbai-based FCB-Ulka Advertising says,

"While television has two people meter services, Tam (IMRB) and Intam (ORG-MARG),

there is no possible mechanism to enable working out optimized schedules on the basis of ad

viewer ship rather than programme viewership."

Only such a mechanism can help to track ad viewership patterns much more

accurately and monitor television advertisements effectively. The very reason that ad

viewership in online advertising are not monitored and audited is making quite a few

corporate advertisers go slow in latching on to the Internet medium. Says B Venkataramanan,

group media manager of the Mumbai-based Hindustan Lever: "I am sceptical about the kind

of figures most dot-coms come up with. So, we will be going about online advertising in a

planned way."

All these might become things of the past with quite a few studies on online

advertising in the pipeline. For instance, AC Nielsen is looking at rating Net advertisers and

ORG-MARG is planning to kick off its research on Net advertising.

4.7.2 The cost factor

Many advertisers are not aware of the benefits online advertising can offer over the

traditional media. What needs to be done? The advertising industry should take efforts to

educate potential Net advertisers about the advantages of advertising on the Net.

Some steps have already been taken in this direction. For instance, advertising

networks such as Media2Net, Rightserve and Mediaturf are doing their bid to fuel online

advertising in India. Rightserve of Hughes Software is said to be spending nearly Rs two

crore on seminars, advertisements and road shows for creating awareness about the online

advertising concept.

There is another reason why advertising on the Net has not really picked up. And that

is the perception that advertising on the Net is expensive. Is this perception right?

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Compare the cost of a banner advertisement on the Net with a television commercial.

Though the cost of an advertising campaign on the Net could be anywhere between Rs

15,000 and Rs 1.5 lakh, advertising in the press or television will cost upwards of Rs 50 lakh.

Does this not make advertising on the Net cheap? No. For, whether advertising on the Net is

cost-effective or not depends on the value per advertising Rupee.

That means, it is essential to express advertising costs on the Net in terms of cost per

thousand (CPT). Here is what Amardeep Singh, a Mumbai-based media consultant with

Mediaturf.com, has to say: "A thirty- second television commercial will cost between Rs 250

and Rs 300 per thousand, while a ten-second banner on a reputed site such as Rediff.com will

cost as much as Rs 500 to Rs 1,000 per thousand."

The implication: value per Rupee spent on advertising is higher in the case of

television. That is efficiency is higher in the case of television advertising, while in absolute

terms advertising costs are lower as far as the Net is concerned.

Fine, but how are rates fixed for advertising on the Net? It is a difficult poser

considering the fact that rates for advertising on the Net have no rationale behind them. For

instance, Rediff.com just adopted the international rate charged by Yahoo.com. Other

websites in India just took the Rediff.com's rate as a benchmark and adjusted their rates

accordingly. But, the issue here is this: since the number of Net users in India is limited now,

these Indian rates are not justified.

What are the emerging trends as far as cost of online advertising is concerned?

Currently, rates for a simple banner advertisement on the Net needs to come down. Already,

Mediaturf is working in this direction. It wants to bring down the cost of Net advertising at

least by 50 per cent. Mediaturf believes that when the rates come down, volumes should go

up.

4.7.3 The wastage factor

There are other reasons why advertising on the Net is not currently seen by advertisers

as cost-effective. One of them is the quality of desired responses. In many cases, sums spent

on advertising on the Net have not been deployed properly. There are instances where

advertisements have just been lifted and put on the banner. Though there are many early

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adapters in India, there is a big gap between these adapters and the mainstream users. And

most advertisers have too small budgets for advertising on the Net to be bothered about

wastages.

There could be wastages in online advertising, but one should not forget that

interactivity is the hallmark of online advertising and here it is possible to target the audience

by demography, psychography and technography. So, advertising agencies need to take into

account these factors while developing strategies.

But, wastages can be eliminated and online advertising can be made more effective

through various strategies. Some of them are: strategic tie-ups, sponsorships and banner

exchanges.

For instance, the FMCG major Colgate-Palmolive has entered into a strategic tie-up

with the Calcutta-based FirstNet Solutions' portal Yantram.com for promoting its Fresh

Energy Gel toothpaste on the portal. And Coca-Cola has appointed Hungama.com, an Indian

portal for promotions and contests, as its e-marketing partner. Coca-Cola has gone ahead and

launched a new Web promotion dubbed Maaza Puzzle to promote its popular brand Maaza

and has also kicked off a series of other e-promotions.

4.7.4 Targeting imperatives

Accurate targeting is another strategy to eliminate wastages in online advertising.

Currently, such targeting based on parameters such as geographic location and search

keywords is possible.

Moreover, targeted advertisements based on the profile of users are also possible. To

make this possible, it is essential to have lists such as registered e-mail users and such lists

can offer profiles of users. But the question is how many sites in India have a large base of

registered users?

Another way wastages can be eliminated is by having advertisements based on the

content of the site. Consider the example of an advertisement from Toyota Motor Sales on the

weather site Intellicast.com. This website for outdoor recreation enthusiasts has been running

a campaign for Toyota Motor Sales and this campaign depends on the weather. If the weather

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is sunny, the solara is shown with the top down, and if it is cloudy or raining, the top is

shown up. How many such ads are visible on Indian websites?

Profiling tools too should help in cutting down wastages in online advertising.

Mediaturf has gone a step further by beta-testing an advertisement in a bid to gauge a user’s

behaviour, the number of times he views an advertisement and his preferences in terms of

content when he is surfing on a site. Other waste-eliminating strategies for online advertising

are: contextual selling using demographic and psychographic data to match ads with content

that fits and dynamic customization or click stream analysis that helps to modify

advertisements in real-time.

4.7.5 Online Constraints

As efforts to eliminate wastages in online advertising take off; efforts are also needed

to eliminate the attendant constraints. In online advertising, one can stream audio and video

technologies together with faster bandwidths and delivery channels in a bid to present the

same idea with the use of sound, music and visual imagery and make interactions with the

banner possible.

Despite the bandwidth constraint, companies do have such ads for their products

online. Anyway, with massive investments coming in bandwidth, there could be a glut soon.

Sure, India has an advantage in online advertising, thanks to the fact that online advertising

depends so much on technology and software programming.

But, effective online advertising calls for skills in consumer and relationship

management. And with the right use of digital marketing companies cannot just have

monetary benefits but can also enjoy lasting customer loyalty.

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4.8. BUILDING TRUST

Bringing the element of trust to your digital value proposition, though leads to deep,

trusting relationships is not always easy. It comes through a step-by-step process in which the

consumer and marketer exchange value. Each time the consumer volunteers some personal

information, the marketer rewards the consumer with a more personalized service. This

mutual give-and-take eventually leads to an advanced collaboration based on trust.

The research has identified four stages of trust building:

1. Attraction

At the first stage, the consumer browses the site and even makes a transaction. No real

relationship exists between the marketer and the consumer, and none may be necessary. The

best strategy is to provide the consumer with information, without demanding any in return.

At first blush, this may seem like an imbalance between what marketers give and what they

get back. But what the consumer is giving the marketer is something quite valuable: time and

attention, along with a view of how the site is traversed.

2. User-Driven Personalization

At the second stage, consumers start shaping Web pages to their specific tastes. For

example, CDnow customers can personalize their home pages with favourite artists and wish

lists. The company shows that it is willing to deliver some value to the consumer before

gaining financially. Some websites allow their users to not just track stocks but also get

customized sports news, weather information, daily horoscopes and even cartoons.

3. Marketer-Driven Personalization

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In the third stage, marketers begin using insights provided by consumers to beam

information back to them. Thus, cdnow uses its knowledge of consumers—developed at the

earlier stages of trust—to suggest products they might like which consumers then rate as

either on- or off-target. As the process continues, cdnow learns consumers’ preferences and

zeroes in on what they really like. It is worth emphasizing that marketers should rein in their

urge to make immediate use of data and personalization technologies. This approach takes

patience, a trait lacking at many marketing organizations. Too often they bombard consumers

with promotional offers as soon as they get their hands on an e-mail address. A gradual

approach would be best, as nothing aggravates many internet users more than unsolicited e-

mail.

4. Trust-Based Collaboration

At the final stage, the marketer and the consumer work together closely. The

consumer gives the marketer access to the most sensitive personal information and in turn

gains customized experiences and consultative problem-solving assistance. Very few on-line

marketers have reached this level of trust with their consumers.

The pace of value exchange varies by industry and situation. For example, mortgage

shoppers may provide financial information in their very first interaction if they need a quick

answer. In other situations, the process moves more slowly. And because costs rise as

marketers go up the trust staircase, they must decide just how far they need to go to create the

most profitable relationships. Trust building at a basic level may be enough for some

marketers, particularly if greater trust does not bring greater spending by consumers.

Only by sustaining trust can marketers expect to establish enduring relationships with

consumers, and it is by keeping a central focus on that idea that marketers build a value

exchange that delivers consistent and progressive mutual benefits.

With these four building blocks of trust in place, marketers should be able to chart a

course for building great customer relationships.

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4.9. SOCIAL NETWORKING’S NEW GLOBAL FOOTPRINT

4.9.1.The question to be asked over here is that “How social networks are creating a

potentially transformational change in consumer behavior ”

Social Networking has been the global consumer phenomenon of 2008. Two-thirds of the

world’s Internet population1 visit a social network or blogging site and the sector now

accounts for almost 10% of all internet time. ‘Member Communities’2 has overtaken

personal Email to become the world’s fourth most popular online sector after search, portals

and PC software applications. The story is consistent across the world, ‘Member

Communities’ has taken a foothold in every major market from 50% of the online population

in Switzerland and Germany to 80% in Brazil. Facebook has become the largest player on the

global stage, dominant in many countries, yet localised offerings have won the day in many

others. However, the growth in popularity of social networks – and the resultant broadening

audience – is only half the story. The staggering increase in the amount of time people are

spending on these sites is changing the way people spend their time online and has

ramifications for how people behave, share and interact within their normal daily lives.

Consequently, the global media and advertising industries are faced with new challenges

around the opportunities and risks this new consumer medium creates. Social networks

provide competition to traditional publishers for consumer attention and at the same time,

facilitate new ways for publishers and advertisers to connect with their audiences. So how do

they need to change their strategies accordingly?

Consumer engagement within social networks has the potential to change the way consumers

are targeted, not just through the digital medium, but through all forms of traditional media.

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Whilst a few billion dollars of ad revenue can’t be wrong, the prevailing wisdom is that the

current level of advertising activity on social networks isn’t consummate with the size – and

highly engaged levels – of the audience. The social networks and advertising industry

haven’t quite yet found that magic formula to make this happen. The industry is faced with a

real ‘Catch-22’ situation. Part of Facebook’s extraordinary subscriber growth is due to a clean

design with little advertising clutter; consequently, the audience growth hasn’t been

accompanied by a similar surge in advertising revenue. On the other hand, MySpace’s more

customizable entertainment and content-oriented offering – carrying more advertising –

has been more successful at attracting advertising revenue, yet MySpace’s audience is

flattening. The industry will be watching very closely at which one of these fundamental

differences in strategy will prove the most successful in attracting advertising revenue in

2009.

4.9.2.Social network and blogging sites are now the fourth most popular activity on the

Internet

‘Member Communities’ now reach over 5 percentage points more of the Internet population

than it did a year ago – a growth rate more than twice that of any of the other four largest

sectors. The strongest growth has come in Germany where the sector now reaches 51% of

Germans online compared to 39% a year ago – an actual increase of over 12 percentage

points. Large growth has also occurred in the UK, Spain, Italy and Switzerland – the sector

reaching 10% percentage points more of the online population in each of these countries than

it did a year ago.

Fig. Member Community growth twice that of any of the other five most popular sectors

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Fig. Increase in Online Reach

4.9.3.Time spent on social network and blogging sites growing at over 3x the rate of

overall Internet growth

This increase in popularity is only half the story when it comes to the social networking

phenomenon – the time people spend on these networks is also increasing dramatically.

The total amount spent online globally increased by 18% between December 2007 and

December 2008. In the same period, however, the amount of time spent on ‘Member

Community’ sites rose by 63% to 45 billion minutes; and on Facebook by a massive 566% –

from 3.1 billion minutes to 20.5 billion. Facebook’s time is so high due to being the ninth

most popular brand online and having the highest average time per person (three hours 10

minutes) amongst the 75 most popular brands online worldwide.

4.9.4.Consequently, social networks and blogs are eating into the share of time held by

other sectors

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Because time spent on social networks is growing at a dramatically faster rate than the

Internet average, social networks are gaining a larger share of all Internet time. In most of the

countries monitored the share of time accounted for by ‘Member Communities’ has more

than doubled. In Switzerland, for example, the share of time has tripled from 3% to 9.3%.

A year ago ‘Member Communities’ accounted for one in every 15 online minutes globally –

now it accounts for one in every 11. In Brazil alone, ‘Member Communities’ accounts for

almost one in every four minutes. In the UK they now account for one in every six minutes

(up from every 13 minutes a year ago) and in Italy one in every seven (up from one in 14 a

year ago).

Like social networking, the Video and Online Games sectors have also seen strong increases

in share of time and it seems that the biggest casualty of these increases has been Instant

Messaging – another ‘communications’ sector that has struggled to attract ad revenues

consistent with the level of online time it accounts for.

As the online industry matures and the value of online real-estate is increasingly measured by

time spent, rather than pages viewed, a significant shift in advertising revenue from

‘traditional’ online media towards social media could be realised – if the successful ad model

can be found.

Fig. Total Time spent on Facebook increased by 566 %

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Fig. Increase in Share of time accounted for by Member Community Websites

4.9.5.The social network audience is becoming more encompassing

As an entity moves from being niche to a major player the composition, or make-up, of its

audience changes. Social networks online started out amongst the younger audience.

However, as the networks have become more mainstream with the passage of time, it isn’t

surprising to see the audience becoming broader and older. This shift has primarily been

driven by Facebook, whose successful formula opened up the possibilities of social

networking to a much wider audience.

In terms of sheer audience numbers, for example, the greatest growth for Facebook has come

from people aged 35-49 years of age (+24.1 million). Furthermore, Facebook has added

almost twice as many 50-64 year olds visitors (+13.6 million) than it has added under 18 year

old visitors (+7.3 million). Consequently, people under 18 years old are making up less of the

social network and blogging audience, whereas the 50+ age group are accounting for more of

the audience. Facebook started out as a service for university students but now almost one

third of its global audience is aged 35-49 years of age and almost one quarter is over 50 years

old. In the UK, for example, if the average month-on-month audience changes over the last

six months were to continue; by mid-June 2009 there would be as many 35-49 year olds on

Facebook as 18-34 year olds. The changing audience offers advertisers the opportunity to use

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social networks as a vehicle for targeting all demographic groups. In Italy, brands such as

Maserati – traditionally marketed to an older audience – now have fan pages on Facebook.

Fig. Facebook’s growth across age

4.9.6.Challenges facing advertisers on social networks

To realise this opportunity to use social networks as a vehicle for targeting all demographic

groups, challenges have to be overcome. The current level of advertising activity on social

networks isn’t consummate with the size – and highly engaged levels – of the audience.

A key reason why advertising on social networks hasn’t been as successful as on the more

‘traditional’ publishers is because social networkers serve a dual role as both the suppliers

and consumers of content. In the traditional model they simply consume the content supplied

by the publisher. Therefore, members have a greater sense of ‘ownership’ around the

personal content they provide and are less inclined to accept advertising around it. A well

used analogy is that advertising on a social network is like gate-crashing a party. This is

compounded by the fact the content supplied by the social network members is also of a

highly personal nature. This provides another “Catch-22” situation for the social networks in

that personal data is potentially one of their most valuable assets – highly attractive to

advertisers – yet it provides a major obstacle in generating revenue. As the site becomes more

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attractive to advertisers it becomes less appealing to members who see highly-targeted ads as

invading privacy.

A Nielsen Online survey in Australia showed that the challenge could be getting more

difficult because consumers are actually growing less tolerant to advertising on social media.

The study showed that in December 2008, 38% of Australians online considered advertising

on social networking sites to be an intrusion compared to 29% the year before. Furthermore,

those who didn’t mind being served ads if they were relevant to their interests dropped

slightly from 51% to 47%.

4.9.7.What can advertisers and their agencies do?

Work with the networks more closely

The social networks and advertisers have compatible interests. The networks need advertisers

to monetise their audience effectively. Advertisers need the networks as they have to go

where consumers are spending more of their time. Both parties will reap significant rewards

if they can discover the magic recipe for advertising successfully on social networks – but

they will need to work together to develop it.

New approaches to the ad model are required for this challenging and complex arena It will

take time to work out the magic formula for successfully advertising in social networks. The

diversity and personalised nature of the environment means standard ad models – such as

contextual search and standard unit sizes – won’t cut it. Different approaches across ad units

and ad inventory will have to be tried, involving a trial and error mindset. As mentioned

above, a closer relationship between the social networks and advertisers is required to make

this happen.

Advertising must be a conversation rather than a push model

The point that social network members are co-creators of content and, therefore, have a sense

of ownership within the site means advertising should be about participating in a relevant

conversation with consumers rather than simply pushing ads on them. After all, it is social

media. Advertising shouldn’t be about interrupting or invading the social network experience,

it should be part of this conversation.

The tone of advertising must be more authentic

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Messaging within advertising should come from a more authentic, candid and humble

perspective. Social media has, once again, brought word of mouth to the fore as the ultimate

form of advertising at a time when traditional advertising is suffering from a major lack of

trust. Nielsen’s analysis of social media conversations back in 2007 and again in December

2008 showed that ‘false’ was the term most closely associated with “advertising”. Social

media has fanned the flames of consumer distrust about advertisers claims. However, at the

same time social media has provided the motive, opportunity and means for advertisers to

engage consumers in a more open and honest way.

Advertising should be about adding value

Social networks are ultimately about friendships, where members add value to each other’s

lives through interaction. Therefore, advertising should follow the same philosophy of adding

value through interaction and consultation. Fan sites or sponsored groups are, perhaps, one of

the more successful examples of social network marketing that touch on the principles of

interactivity and adding value – such as offers, sneak previews and co-creation of content.

Social networks lend themselves greatly to generating brand affinity for advertisers through

these fan sites, which, in essence, act as advertising. For example, at the time of writing,

Facebook’s “Addicted to Starbucks” group has almost 124,000 members, over 670 discussion

topics and almost 10,000 wall posts. However, the challenge for advertisers is that

discussions within these groups won’t necessarily align itself with the brand-designed

messaging. Much like a friendship, marketing on social networks requires continual

investment – in terms of time and effort as opposed to financial – to be of value to both

parties.

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4.9.8.Generating Ad Revenue – The MySpace Story

Although Facebook has come some way towards delivering a promise of targeted ads within

a mass network, MySpace’s more focused overall offering seems to be proving more fruitful

at the moment. MySpace is smaller globally than Facebook and, outside the US, is considered

more of a niche player because of its more focused targeting towards teenagers and young

adults through the vehicles of entertainment – encompassing music and video – and self-

expression (decoration options allow profi le pages to be highly customisable). Reports

estimate that in 2008 Facebook earned around $US300 million in ad revenue compared to

around $US1 billion for MySpace. If Facebook has made a conscious choice to go for the

quantity vs. quality strategy it has yet to overtake MySpace in the all-important revenue

metric. Whilst part of Facebook’s huge appeal is the simple layout of an interface that carries

very little ad inventory, MySpace’s offering possibly makes its inventory – of which there is

a lot more compared to Facebook – easier to monetize, particularly in terms of immersive

advertising. Bebo, also carrying more inventory than Facebook, has also done well in this

regard by targeting teenagers and young adults through music and celebrity.

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Facebook is more focused on the “traditional” social networking component of

communications, while sites like MySpace and Bebo are more focused on the entertainment

content component. From an advertising perspective, it has been a moot point that monetizing

content is easier than monetizing communications, which gives sites like MySpace and Bebo

an advantage For example, in the UK across 2008, Bebo’s average monthly Unique Audience

(4.7 million) was almost one-third the size of Facebook’s (12.5 million) yet managed to

attract almost one and a half times as many advertisers (639 to Facebook’s 451). At an

arbitrary base level, Facebook attracted 0.36 display advertisers per Unique Visitor, Bebo

attracted 1.37 and MySpace attracted 1.51 advertisers per Unique Visitor.

MySpace has also benefi ted from its acquisition by News Corp and being assimilated into

the Fox Interactive Media stable – together with sites like Photobucket, IGN, Rotten

Tomatoes and AskMen – which has provided MySpace with one of the most mature and

successful display ad models within the social network space today.

In the UK, mobile network operators – such as T-Mobile, O2 and Vodafone – and media

companies such as Sky and Virgin – dominate the most active advertisers on MySpace.

Personal communications and entertainment are extremely relevant for sites such as MySpace

whose audience is ultimately there to communicate and interact with friends in an

entertaining and personalised way.

4.9.9.Facebook has replaced MySpace as the world’s most popular social network

The global rise of social networks in 2008 has primarily been driven by Facebook, which

overtook MySpace to become the world’s most popular social network.

Less than four years after Harvard student Mark Zuckerberg founded Facebook in February

2004, its rapidly soaring popularity saw it included in the 2008 edition of the Collins English

Dictionary (as a noun and a verb). Facebook is now visited by three in every ten people

online across the world. It has been a mixed year for the leading players in terms of their

global footprint. Facebook (168% relative increase) and LinkedIn (137%) have seen huge

increases in reach. Classmates Online has also seen strong growth, whilst Orkut and

MySpace‘s reach has stayed fairly consistent.

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Fig. Comparison between MySpace, Facebook and Bebo

Fig. Mobile Network Operators were the most activedisplay advertisers on MySpace UK in 2008.

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Fig. Increase in Global Online Reach

Fig. Facebook being the Leaders in various Countries

Fig. Countries where Facebook isn’t the leader

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4.9.10.Factors contributing to Facebook’s rapid growth

Design

An organized, simple and easy-to-use interface – with much less advertising

compared to many of its competitors – is likely to appeal to a wider audience.

Broad appeal

Facebook isn’t targeted towards a specifi c demographic like many other players (e.g.

StudiVZ to students or Bebo to young adults) – ironic considering that it started out as

a network for university students.

Activity Focus

Facebook is focused on connecting as opposed to entertainment. It can be used for

multiple networking activities – reuniting old friends, business networking, dating,

sharing photos, status updates. Facebook is Reunion, LinkedIn, Yahoo! Personals,

Flickr and Twitter all in one.

Architecture

Inventive features (including applications, invites, requests) and open architecture -

including the masterstroke to open the platform to applications developers – have

increased word-ofmouth and visitor engagement.

Privacy

Members have more control over who sees their content than in many other networks

where nonmembers can access personal content – a concern for many people.

Media coverage

Facebook’s early momentum was given a huge boost due to the large amount of free

media coverage it received.

4.9.11. First-mover advantage and language have kept Facebook at bay in some

countries

Although five years old, Facebook only came to global prominence in the last two years,

allowing time for other social networks to take a strong hold. Creating a local infrastructure

on the ground to establish a relevant local offering tailored to the nuances of the domestic

market has been enough to keep Facebook at bay in some countries. In Germany, for

example, local player Wer-kennt-wen is twice as popular as Facebook. In Japan, Mixi is

around 27 times more popular than Facebook and, in Brazil, Orkut is 29 times more popular.

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Brazil: the Orkut phenomenon

Named after its creator, Google employee Orkut Büyükkökten, Orkut appeared in 2004 and

students in major Brazilian cities started to distribute invitations for fun to see if they could

make Orkut more popular in Brazil than its native USA – something they succeeded in doing.

Orkut is the most popular social network in Brazil but also the country’s third most popular

site. Half of the Brazilian Internet population visited Orkut in September 2005 and the figure

is now 70% – the largest domestic reach of any social network anywhere in the world.

Facebook barely registers a blip in Brazil compared to Orkut – being visited by just over 2%

of Brazilians online. It’s not inconceivable that if Facebook had started a few months later,

Brazilian students would have taken it on as their pet project and Facebook would have

been the ‘Orkut of Brazil.’ Facebook only launched a Portuguese version for Brazilians in

December 2008.

USA: MySpace’s mass-market appeal

MySpace had already gained a significant following in the US by the time Facebook

appeared on the scene. Furthermore, Facebook earned an early reputation as an exclusive

service due to its birth within the elite northeast college sector. This stalled growth within

the mainstream US market that MySpace appealed to. The US perception of Facebook and

MySpace is a reversal of the situation internationally, where Facebook is perceived as

mainstream and MySpace as being more focused around a younger demographic through

entertainment and self expression. MySpace had established itself as an entertainment portal

rather than just a pure social network. Its music offering, MySpace Music, is a key

differentiator and remains a huge draw in the US, being used by almost every major music

act in the country which keeps the content fresh and people coming back. Music’s importance

for MySpace versus Facebook is shown though an analysis of social media conversations -

music is the biggest difference between topics discussed. It’s mentioned in 20% of posts

about MySpace compared to just 7% in posts about Facebook. This has, so far, managed to

keep MySpace ahead. However, at current audience growth rates, Facebook (145% growth

from December 2007 – December 2008) is set to overtake MySpace (3% growth) in January

2009.

China: A Different Culture

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A host of established domestic social networking players added to the different culture,

language and the regulatory issues of doing business in China are the main reasons why the

US social networks aren’t dominant here. By the time the US networks arrived, local

players such as Xiaonei; the portal QQ and 51.com had achieved dominance in key

demographic groups. Although many of the domestic social networks are very much based on

the US offerings, their success was originally based on having partnerships with the portals

which provided them with an audience base. Succeeding in China takes more than producing

a translated version; it requires investment in a local infrastructure and a mentality of running

a Chinese social network that understands the domestic nuances of social network behaviour

rather than simply rolling out a generic social network in Chinese.

Fig. China’s Most Popular Social Networks

Japan: The Language Barrier

A localised offering is essential to cracking the Japanese market and getting anywhere near

the utter dominance of Mixi. Facebook only launched its Japanese language version in May

2008 and did so without any major form of investment in the country – it didn’t setup a local

office and the translated version was done by volunteer members.

Whilst Facebook has a good following amongst Japan’s international community and its

strength in privacy will appeal to the native Japanese way – Mixi is an invite only system –

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previous US companies have fallen short because of a lack of local leadership and a ‘humble’

mindset that acknowledges being big in the US doesn’t automatically mean being big in

Japan. Furthermore, networks have to be adapted for the enormous domestic mobile Internet

market. Part of Mixi’s dominance is down to the clever integration of its mobile and PC

offering – its mobile version was launched in September 2004 and offers virtually identical

functionality to the PC interface.

4.9.12.Mobile Social Networking is Taking Off

As Mixi in Japan shows, the increasing popularity of social networks has resulted in

increasing demand to access them on the move. Mobile is a natural fit for social networks, as

consumers are used to connecting with friends via mobile calls and text. Using the phone

to access social networks doesn’t require much change in consumer mindset. Subscribers

access social networks on their mobile through three primary means: by browsing over

mobile Web, through downloaded applications and by SMS (text-messaging). UK mobile

web users have the greatest propensity to visit a social network through their handset with

23% of them (2 million people) doing so, compared to 19% in the US (10.6 million people).

The numbers of people doing so are a big increase on last year – 249% in the UK and 156%

in the US. The most popular social networks via PCs/laptops tend to be the most popular

via mobile too. Facebook is the most popular in five of the six countries where Nielsen

measures mobile activity – only Xing in Germany bucks this trend. Mobile applications for

handsets such as Apple’s iPhone are playing a substantial role in the expanded mobile use of

these networks. Soon after the launch of the 3G iPhone, Facebook, with one of the most

popular iPhone applications available, surpassed MySpace in mobile usage in the U.S.

SMS (text message) is the third way users can interact with their social networks on the go.

Primarily used for “status updates,” users can register a phone to send text message posts

directly to their user profile. By the end of 2008, Nielsen estimated that almost 3 million U.S.

mobile users were texting Facebook on a regular basis.

4.9.13. What can publishers do?

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Understand that social networks are an opportunity for everyone

Social networks are a communication channel just like TV, newspapers, radio and the

telephone. Therefore, social networks are just another vehicle by which any company with an

offering, product or service can use to communicate, engage and connect with consumers.

Tap into what makes social networks successful

Publishers have the opportunity to actively participate in the social media revolution. The

growth of social media and consumers’ willingness to generate opinion and co-create content

is a big opportunity for traditional publishers to increase audience and engagement on

their own sites.

‘Internal’ - Increase interactivity within the publisher site

Publishers should instigate functionality that enables communities and conversations to form

within their own sites. This doesn’t mean creating a social network infrastructure but can be

as straightforward as allowing visitors to comment or create content related to material posted

by the publisher. This enables traditional publishers to become part of the wider consumer

conversation rather than just pushing content and sitting back.

‘External’ – Participate in the conversation on social network sites

Just as consumers add content to social network sites, so can publishers. Social networks

offer the opportunity to promote content to a wider audience across the web. Traditional

publishers are amongst the most popular fan pages on Facebook, some having hundreds of

thousands of fans. Instant Messaging has been a casualty of social networking in terms of a

falling share of online time yet Windows Live Messenger, for example, has almost one

million Facebook fans - around which a whole community of discussions take place. It’s

quite feasible that the falling share of time for IM could be more pronounced without this

form of participatory advertising in social networks.

Think about the mutual relationship with social networks and other media

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A Nielsen study published in October 2008 showed that almost one-third of home Internet

use (31%) in the US is accompanied by background TV viewing. Furthermore, more than

80% of Americans who watched TV and used the Internet in September 2008 used both

simultaneously. Although teenagers were the most likely to use both together, adults aged 35

to 54 actually logged the most simultaneous Internet/TV usage minutes.

These early trends potentially indicate that online usage is complementing, not substituting,

traditional television viewing. Social networks and TV, therefore, might be a mutually

reinforcing media as the level of twittering (updates sent through the micro-blogging service

Twitter) during the recent Oscars proved.

Whatever the successful ad model turns out to be in social networks – copy it

Success in social media advertising means overcoming obstacles such as complexity,

creativity and relevance. Therefore, whatever the successful formula turns out to be in terms

of new ad formats and a different approach to ad inventory, the ingredients could form the

‘best practice’ for advertising across all sectors – improving the success of online advertising

everywhere.

4.9.14. Social Networks provide the trigger to improve the potency of advertising across

all forms of media

The social networking phenomenon is dramatically changing the way people behave and,

consequently, offers new challenges and opportunities to the global media and advertising

industry alike. Social network and blogging sites now account for almost 10% of all Internet

time yet remains, with a few exceptions, a largely un-monetised form of media. The industry

is still in its infancy in regards to successfully adapting its traditional ‘modus operandi’ to

take advantage of this fundamental change in consumer behaviour. Whilst social networks

provide significant competition for traditional publishers in terms of consumer attention, they

also provide significant opportunities. Publishers can improve engagement with their own

audiences – by tapping into consumers’ increasing desire to create content – and can use

social media to syndicate their content beyond its traditional confines to a much wider

audience.

The Industry faces a huge predicament. The factors behind Facebook’s stunning growth – a

focus on connecting through a simple and relatively advert-free design – haven’t attracted ad

revenues consummate with the size and engagement levels of its audience. On the other hand,

MySpace’s audience is flattening but its ad model – built around a richer content offering,

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more in line with traditional online publishing – is doing better at attracting ad revenues.

A magic formula to overcome this predicament and effectively monetize online’s most

heavily used sector, hasn’t yet been found. However, a major ingredient will be a

fundamentally new approach to the online ad model in terms of both ad units and ad

inventory. This will involve a substantial trial and error process and is only achievable if the

social networks, advertisers and their agencies work more closely together. Whatever the

successful ad model turns out to be, the messaging will have to be authentic and humble, and

built on the principle of a two-way conversation – not a push model – that adds value to the

consumer. If this magic formula is found, the benefits could be truly incredible, having the

potential to transform the potency of advertising across all forms of media to connect with

target audiences and overcome the current distrust consumers have with advertising.

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4.10. TOOLS TO SAVE TIME ON SOCIAL SYNDICATION

We can use different tools and plugins for our different social platforms to let software

services take some of the key pounding out of online publishing. Here is the summary of

process and the tools we can use.

May be this is not the right way, or only way, just sharing how we tackle sharing our content

via social media to give folks who follow our posts a wide choice in channels for receiving

them.

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Tools for syndicating and tracking your social media interactions :

1. Publish via blog

Recommended tool: Wordpress – The most popular blogging platform which automatically

produces an RSS feed at /feed.

Recommended Tracking method Google Analytics – it’s free and of course shows you the

popularity of your posts, although the stats interface in Wordpress means you don’t have to

go there or there’s a plugin to integrate GA.

2. Syndicate via RSS

Recommended tool: Feedburner – Tell Feedburner your feed address and make it easier for

people to subscribe to your feeds.

Recommended Tracking method With Feedburner you get great stats on “clickthrough

rates” of posts and number of subscribers. It also adds Google Analytics campaign tracking

tags too. It’s been owned by Google for the last few years, so we’re sure they’ll use it as a

positive ranking signal too.

3. Post on Facebook wall

Recommended tool: Networked Blogs – this works well most of the time, but it’s maybe

confusing for Facebook followers to see this on our wall.

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Recommended Tracking method Facebook gives Pages owners its Insights which tell you

about Impressions and interactions for each message on your page, but not the popularity of

individual posts.

4. Post to Twitter

Recommended tool: We can use Twitterfeed which is an online service that needs your feed

address and twitter account and you’re done.

5. Linked In page

Recommended tool: Linked In-Twitter integration – this is now a standard feature. Some

argue that this will pollute Linked In with too many updates, others say you should encourage

key employees to do this in B2B.

Recommended Tracking method – No tracking is done over here although referrers will be

tracked in Google Analytics.

6. Email Newsletter

Recommended tool: There are many choices here for email broadcast.

Recommended Tracking method: This tracking will be provided by your email service

provider who will often provide Google Analytics Email campaign tracking with Google

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4.11. 2010, THE YEAR OF “DIGITAL MARKETING”

For people who kept on wondering whether digital advertisements can grow in India,

the answers were pretty much clear this year. Thanks to social media (specifically,

Facebook) and Mobile (3G is finally here), businesses in India invested a total sum of 1000

crore in digital advertising. But this growth is almost double in comparison to Rs 500 crore

internet Ad spend which happened in 2009.

Not long ago we kept on speculating India’s internet market based on how Google

was doing, and results were pretty disappointing. Google Ads are majorly meant for small

and medium businesses and Indian small and medium businesses are quite skeptic about

internet. Although Google India was profitable this year but total revenues earned were 779

crore (miniscule as compared to their overall ad sale revenues). Big brands in India were not

comfortable using Google Adsense because of its search ability criteria. Hence it only made

sense to advertise on Google when there were high chances of users searching particular

words- say “IPL”. But all of these changes with the big-bang arrival of Facebook this year-

although Facebook was popular for quite some time, but this year they surged ahead of

Orkut.

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Facebook seems to have captured Indian mindset (they seem to have captured whole

world’s mindset, btw) and quite brilliantly. Indians by nature like to converse and that gave

big brands a reason to spend money on Facebook and engage users.

Facebook platform is not a search specific thing hence its easier for brands to

continuously engage users based on their choice rather than their action. Remember that

Google asks you every time what you want to do, but Facebook doesn’t. Today having a

Facebook page is a must for every big brand and not to have a lakh fans on your page is a

matter of embarrassment. So? Advertise more and get a fan following- Facebook has hit the

nail for sure!

The other important reason for overall increase in digital ad spends is growing mobile

market; India has 40 million Mobile Internet subscribers now! BuzzCity, a Singapore-based

mobile media company , in its Q3 report for 2010 stated that it served over 3.7 billion banner

Ads on mobile phones in India (can you believe this). With cheaper smart phones this number

would only increase and will increase fast and deep.

It’s just the right time to have 3G services in India. I have learnt that many digital

media companies are now focusing on delivering cutting edge 3G solutions like- “QR-

Codes”, “Artificial Intelligence” and location based advertising solutions to give another

reason for brands to spend more on this space. Although all big companies are spending small

amount (10-20 lakhs) on experimental basis in these new technologies, but the future seems

to be quite bright for Indian digital space.

In my opinion, all Indian internet companies should start thinking of “engaging”

customers to thrive. Time has gone (much before it actually came) to stop relying on Google

ads for revenues. Indian digital space is expected to grow 50% to 1500 crore by next year and

to keep pace with competitors like Facebook and Google, Indian internet companies need to

slog and slog hard!

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CHAPTER 5

HYPOTHSIS

A hypothesis is a preliminary or tentative explanation or postulate by the researcher of

what the researcher considers the outcome of an investigation will be. The hypothesis taken

into consideration is that that the use of digital channels in marketing is an essential part of

strategy in many companies. The various aspects of Digital Marketing, such as web

advertising, attitude toward a site, perceptions of interactivity, and electronic service quality

will be a major marketing activity. Study of Digital Marketing on Customer Loyalty would

help future marketers to make the maximum use of Digital marketing by building stronger

relationships with their customers.

Now that the problem has been stated and the literature study has been defined, now

we can come to a hypothesis that Digital Marketing is one of the important medium of

communication and Digital Marketing will surely have a long lasting effect on Customer

loyalty.

Digital Marketing will deal in Personalization and interactivity and will moderate the

effects of brand communication on customer loyalty. Digital Marketing will help in building

customer loyalty through increased frequency and proper content on the websites and

Information processing triggered by regular brand communication will generate customer

value and commitment.

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CHAPTER 6

METHODOLOGY OF THE STUDY

6.1 Classification of data

The data can be classified in terms of their nature, design, duration and sources. The

data used for this study is both Primary data and Secondary data.

Primary data

This will include the information collected mainly from the Survey with the help of

questionnaires and interviews conducted during the study.

Secondary data

Secondary data will include information gathered from the internet and various other books

and reports.

6.2 Sample Size

A total of 50 respondents were selected for this study which includes both men and

women and different age groups ranging from 17 – 30.

6.3 Sampling Audience

Students

Office Colleagues

Friends & Family

6.4 Sampling Technique

Sampling technique used for this study is convenience sampling. This method is often

used to get a gross estimate of the results, without incurring the cost or time required to select

a random sample.

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6.5 Research Tool

A questionnaire was used as a research tool to conduct the study. The questionnaire

majorly consisted of close ended questions.

6.6 Limitations of the study

As this was an individual project the sample size considered was 50 mainly due to the

time constraint.

The data had to be collected from different types of respondents ranging from

Students to Office colleagues to family members and friends. So the approach had to be

changed accordingly.

6.7 Duration of the project

The project duration was of 3 months approx. starting from December 2010 till

February 2011.

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CHAPTER 7

DATA INTERPRETATION

A sample size of 50 was taken for this study. This consisted of people from different

age groups and different gender.

Age group Gender

Male Female

17-20 7 1

21-23 16 5

24-27 16 3

28-30 0 2

Gender Age Groups

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Question 1

Age group Where do you access internet from?

Home Work

Local

Cybercafe Cell Phone Do not access

17-20 7 0 1 0 0

21-23 13 3 3 2 0

24-27 11 5 0 3 0

28-30 2 0 0 0 0

The results for the 1st question clearly show that almost all the age groups have access

to internet at home. However 66% of the people access the internet at home followed by 16%

accessing the internet at work, 10% via cell phones and 8% visit the local cyber cafes.

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Question 2

Age group How often do you use the internet in a week?

Everyday

Alternate

Days Weekends

Whenever

Needed

17-20 7 0 1 0

21-23 12 1 6 2

24-27 14 0 3 2

28-30 2 0 0 0

The results for 2nd question show that maximum people do access the internet every

day. And few People access internet only on the weekends. This is mainly due to the busy

schedules of studies and classes.

70% of the people access the internet every day, 20% accesses it on the weekends

followed by 8% accessing it whenever the need it and just 2% say they access the internet

every alternate day.

Companies should understand this factor and hence try to build relationships with

their customers as much as possible by using new and new strategies, be it via forums, games

or events.

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Question 3

Age group Which of these following aspects do you use the most?

Email

Social

Networking News Shopping Banking

17-20 3 4 0 1 0

21-23 4 14 1 2 0

24-27 3 12 0 0 4

28-30 1 0 0 0 1

The 3rd question shows that maximum nos. Of people use the internet for social

networking almost 60% of the total sample size. This is a very important finding as it clearly

shows that right marketing over such social networking sites would in fact create maximum

impact.

Companies hence should understand this and try and build better relations with their

customers over social networking websites like Facebook, Orkut, etc.

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Question 4

Age group Would you prefer

Shopping

Online

Shopping at local

stores

17-20 2 6

21-23 6 15

24-27 2 17

28-30 1 1

The 4th question shows that even though digital marketing can create an impact, it is

not at the place it should be. People still find flaws when it comes to shopping online (for e.g.

security issues) and hence they would prefer shopping and local stores and malls.

Hence only 22% of the people shop online and the remaining 78% still prefer

shopping by visiting local stores.

Companies should take an effort and try and promote online shopping as this would

completely remove the mediators between the company and the end user. And this is only

possible by developing better strategies for digital marketing and also by building better

customer relations.

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Question 5

Age group Are you brand loyal when it comes to

shopping?

Yes No

17-20 5 3

21-23 18 3

24-27 16 3

28-30 2 0

The 5th question shows that maximum people are brand conscious when it comes to

shopping and this is the case for all age groups (82% of the people). Hence it’s quite clear

that there is definitely a change in the life style and hence the change in the buying patterns.

Companies can definitely capitalize on this preference change by the right kind of marketing

that includes digital marketing.

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Question 6

Age group Have you purchased

anything online?

Yes No

17-20 2 6

21-23 7 14

24-27 4 15

28-30 1 1

The 6th question shows that maximum nos. Of people are still conscious when it

comes to shopping online. There are several reasons behind this fear of information security,

fear of purchasing the product in the right condition etc.

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Question 6.1

Age group What have you purchased?

Null Electronics Apparels Jewellery Food

17-20 7 1 0 0 0

21-23 14 4 3 0 0

24-27 15 2 2 0 0

28-30 1 0 0 1 0

The 6th question results led to 2 sub questions. The 1st part deals with what has been

purchased maximum online. The results show that out of all the people who preferred

shopping online 17-20 preferred shopping for electronics. 21-23 preferred shopping for

electronics and then apparels. 24-27 preferred both electronics and apparels equally. 28-30

were very skeptical shopping online and only one of them said she purchased Jewellery

online.

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Question 6.2

Age group Why haven’t you purchased?

Null Not Secure

No internet

Access

Lack of

Info

Not

interested

17-20 1 5 1 0 1

21-23 7 5 2 4 3

24-27 4 7 0 4 4

28-30 1 0 0 1 0

The 2nd sub question of the 6th question dealt with reasons why people didn’t purchase

online. People of the age group 17-20 said they felt it’s not secure. 21-23 had the same reason

and also said that there was lack of information about purchasing online. Same results for

people in the age group 24-27.

It is quite clear that almost 34% of the people feel that shopping online is not secure.

Companies should take an effort to build better relations with their customers and also ensure

them that any information shared with the organization would remain confidential and

through no means would be disclosed to anyone else. This might help not just help improve

the sales but also help in building better customer relations.

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Question 7

Age group Where do you prefer watching advertisements?

TV Radio

Newspaper/

Hoardings

Shopping

Malls Online

17-20 6 0 0 1 1

21-23 10 2 1 0 8

24-27 6 3 4 2 4

28-30 0 0 1 0 1

The 7th question shows that TV is still the most preferred medium for watching

advertisements. Age group 17-20 felt TV was the best. 21-23 said TV was the best and then

Online i.e. on the Internet. 24-27 said TV was the best followed by Newspapers/Hoardings

and then Radio. 28-30 said Newspapers/Hoardings were the best.

These results were quite surprising. TV and Internet (Online) both scored similar % of

preference when it came down to watching new advertisements. This goes to show that rather

than just focusing on TV advertisements, organizations need to start focusing on online

advertisements as well.

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Question 8

Age group Where do you get latest information on your favorite brands?

TV Internet Radio

Newspaper/

Hoardings

Friends/

Family

17-20 0 5 1 0 1 1

21-23 0 8 9 0 2 3

24-27 1 5 4 1 5 3

28-30 0 0 1 0 1 0

The 8th question shows where people get the latest information on their favorite

brands. Age group 17-20 said TV was the best medium where they can get latest information

on their favorite brands. 21-23 said Internet was the best source for latest information

followed by TV. 24-27 said TV was the best followed by Newspapers/Hoardings and then the

internet. 28-30 surprisingly felt Internet and Newspapers/hoardings are the best source for

latest information on their favorite brands. Results show that 36% of the people get latest

information on their favorite brands on TV. Followed by 30% who get the information on

the Internet then Newspapers with 18%, Friends/Family with 14% and lastly Radio by 2%.

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Question 9

Age group Do you follow your

favorite brands online?

Yes No

17-20 5 3

21-23 17 4

24-27 13 6

28-30 1 1

The 9th question shows whether people follow their favorite brands online. It was

quite evident that maximum people followed their brands online.

72% of the people followed their favorite brands online either by visiting their official

websites regularly or by joining their Groups / Communities on Social Networking websites

to receive new updates.

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Question 10

Which of the following websites have you accessed?

Age group * Facebook Cross tabulation

Age

Groups Yes No Total

17-20 8 0 8

21-23 17 4 21

24-27 16 3 19

28-30 1 1 2

Total 42 8 50

84% of the people were aware of Facebook. And almost all of them followed their

favorite brands on the website.

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Age group * Rediff shopping Cross tabulation

Age

Groups Yes No Total

17-20 7 1 8

21-23 14 7 21

24-27 14 5 19

28-30 0 2 2

Total 35 15 50

70% of the people were aware of Rediff and its shopping feature. Some of them had

shopped on it before while others had just browsed through the goods to look at the pricing of

different products.

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Age group * Orkut Cross tabulation

Age group Yes No Total

17-20 8 0 8

21-23 18 3 21

24-27 13 6 19

28-30 1 1 2

Total 40 10 50

80% of the people were aware of orkut. Some of them were regular on the social

networking site while others had their ids but were quite inactive, they preferred Facebook

over orkut.

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Age group * MSN Cross tabulation

Age group Yes No Total

17-20 3 5 8

21-23 14 7 21

24-27 7 12 19

28-30 2 0 2

Total 26 24 50

52% of the people visited MSN. Some just to login into their hotmail accounts while

others to view the latest news.

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Age group * Yahoo Cross tabulation

Age group Yes No Total

17-20 3 5 8

21-23 12 9 21

24-27 9 10 19

28-30 1 1 2

Total 25 25 50

50% of the people visited Yahoo regularly. Same as MSN these visits were for either

checking emails or to view latest news and some times daily horoscopes.

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Age group * Techtree Cross tabulation

Age group Yes No Total

17-20 4 4 8

21-23 8 13 21

24-27 8 11 19

28-30 0 2 2

Total 20 30 50

Only 40% of the people had visited techtree previously and that was to get reviews of

new electronic gadgets from Mobiles, Cameras to Computer Hardware equipments.

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Age group * eBay Cross tabulation

Age group Yes No Total

17-20 6 2 8

21-23 10 11 21

24-27 13 6 19

28-30 1 1 2

Total 30 20 50

60% of the people had visited eBay. Some to shop while others just to browse the

goods and check out their pricing.

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Age group * Nike Cross tabulation

Age group Yes No Total

17-20 2 6 8

21-23 11 10 21

24-27 2 17 19

28-30 1 1 2

Total 16 34 50

Surprisingly only 32% of the people had visited Nikes official website. People said

they would rather visit stores and purchase goods like Branded shoes as they would like to

personally try it before they made the purchase.

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Age group * Amazon Cross tabulation

Age group Yes No Total

17-20 5 3 8

21-23 10 11 21

24-27 6 13 19

28-30 1 1 2

Total 22 28 50

As compared to eBay, Amazon was less known in the market. Only 44% of the

people had visited Amazon however people who had visited it previously and who had

purchased goods had a wonderful experience.

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Age group * Puma Cross tabulation

Age group Yes No Total

17-20 5 3 8

21-23 10 11 21

24-27 9 10 19

28-30 1 1 2

Total 25 25 50

50% of the people had visited Puma’s official website to go through their collection of

shoes and clothing. Some to purchase while others were just browsing.

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Age group * Google Cross tabulation

Age group Yes No Total

17-20 8 0 8

21-23 21 0 21

24-27 19 0 19

28-30 2 0 2

Total 50 0 50

100% of the people i.e. everyone involved in this study said that they had visited

Google.com some time or the other in their life time. Be it for images, information, email,

news, etc.

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Age group * Naaptol Cross tabulation

Age group Yes No Total

17-20 3 5 8

21-23 9 12 21

24-27 10 9 19

28-30 0 2 2

Total 22 28 50

Surprisingly in a short span of time, Naaptol.com has created a mark in the minds of

the people. 44% of the people said they had visited the website either directly or indirectly.

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Age group * Futurebazaar Cross tabulation

Age group Yes No Total

17-20 1 7 8

21-23 11 10 21

24-27 4 15 19

28-30 1 1 2

Total 17 33 50

Futurebazaar the online shopping website hasn’t been that popular in the minds of the

people. Only 34% of the people said they had visited the website mainly due to the recent

advertising on cheap electronic goods. However they were very much concerned with

information security.

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Age group * Croma Cross tabulation

Age group Yes No Total

17-20 5 3 8

21-23 12 9 21

24-27 7 12 19

28-30 0 2 2

Total 24 26 50

48% of the people said they had visited the website for shopping online. However

most of them said that they would rather prefer visiting the Croma store than shopping online

mainly because of lack of information on the website.

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CHAPTER 8

CONCLUSION

When the dominant logic of marketing is shifting from exchange of goods toward

service, digital marketing can help marketers improve their return on marketing and

profitability by building stronger relationships with their customers. Digital channels offer cost

efficient opportunities for marketers to keep frequently in touch with customers and improve

customer loyalty.

With such prospects in mind, it is not surprising that the use of digital channels in

marketing is becoming an essential part of strategy in many companies. While parts of Digital

Marketing, such as web advertising, attitude toward a site, perceptions of interactivity, and

electronic service quality have been studied, integrated theories of Digital Marketing are

scarce.

This project with its findings and case studies would hence help future marketers to

make the maximum use of Digital marketing by building stronger relationships with their

customers.

The social networking phenomenon is dramatically changing the way people behave

and, consequently, offers new challenges and opportunities to the global media and

advertising industry alike. If this magic formula is found, the benefits could be truly

incredible, having the potential to transform the potency of advertising across all forms of

media to connect with target audiences and overcome the current distrust consumers have

with advertising.

The study suggests that proper digital marketing can :

Help in building customer loyalty through increased frequency and proper content on the

websites.

It is also seen that Information processing triggered by regular brand communication generates

customer value and commitment. Increases in these; improve customer loyalty, both

attitudinal and behavioural.

Personalization and interactivity moderate the effects of brand communication on customer

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loyalty.

Finally it is seen that customer characteristics, involvement, and relationship can also act as

moderators.

The proposed project report is a primary research; however it has not been done on a

large scale. The sample size taken was only of 50 respondents. Secondary research has also

been done where in information on the subject has been taken from various books and the

internet. In addition there can be several other variables linked to this study that could support

my findings, however that would require a larger and more diversified sample size which in

turn would provide quality data on customers perceived value, commitment, information

processing, etc, and their link to customer loyalty.

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CHAPTER 9

RECOMMENDATIONS

Having observed the evolving paradigms of business in the Internet era, there are five

critical success factors that I would recommend every Digital-Marketer.

Attracting the Right Customer is the first crucial step. Rising digital penetration

would mean that the number of customer visiting particular sites would inevitably go up.

While the number of eyeballs or page views has so far been conveniently used as a

satisfactory measure by most web sites, it would be foolish to cater to the whole spectrum of

digital visitors. Content has to be very target specific. The digital company has to select its

target segment by finding out which section of customers are the most profitable in terms of

revenue transactions and who are the customers who generate the maximum number of

referrals. Here again it is important to note that the majority of online customers are not

seeking the lowest price. Rather they are seeking convenience above everything else. The

power of customer referrals has never been so enormous, since word of the mouse spreads

faster than word of the mouth.

E-Bay attracts more than half of its customers through referrals. Not only do referred

customers cost less to acquire than those brought in by advertising or other marketing tools,

they also cost less to support since they use their friends who referred them for advice rather

than using the companies’ own technical desk.

Delivering Content Value to engage the user’s interest is the critical importance in

retaining customer participation. This is because content serves as a powerful differentiator.

Content would include Product enhancements, personalized interactions, and Problem

Resolution. Integral to the concept of delivering proper content value is innovation.

Delivering proper content to make existing customers in the traditional “brick”

business switch to Web-enabled transactions makes a lot of sense because in every

conceivable case, the cost of Web-Based transactions is an order of magnitude less than the

traditional ways and is decreasing at a faster rate. The cost of an Internet based banking

transaction is less than one-tenth the cost of a human teller transaction.

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Ensuring E-Loyalty is vital to the success of any online venture. This is because

acquiring customers on the Internet is enormously expensive and unless those customers stick

round and make lots of repeat purchases over the years, profits will remain elusive. Contrary

to the general view that Web customers are notoriously fickle, they in fact follow the old

rules of customer loyalty. Web customers stick to sites that they trust and with time

consolidate their purchases with one primary supplier to the extent that purchasing from the

supplier’s site becomes part of their daily routine. The issue of trust is integral to the issues of

privacy and security.

Companies like Amazon.com, which command amazing levels of consumer trust,

have used a variety of encryption tools and simple ethical decisions like not accepting money

for publishers for independent book reviews to maintain the trust of its customers.

E-Learning to facilitate personalized interactions with customers has been the

biggest contribution of the Web to the marketing strategists. In the digital marketplace,

however technology has made the entire shopping experience a transparent process. For

example, if the customer exits the web-site when the price screen appears, he is a price

sensitive consumer. Such minute tracking of customer behavior has major implications for

the world of advertising. The Internet may soon be used as a test bed for testing prototypes of

marketing and advertising campaigns.

By monitoring pages selected, click throughs, responses generated, and other

indicators, the company would be able to discover which parts of a prospective campaign

would work, thus reducing the risk of a potential flop. This would make it possible for the

company to modify its product offerings much earlier than usual in the product life cycle.

Providing Digital value to the evolving consumer through his life cycle has become

possible because of customized interactions and emerging business models. The sectors

where new business models will emerge or have emerged are the music industry, the

financial services industry, the travel industry, the relating segment and the publishing

segment.

Digital value is delivered to the consumer by promising him convenience, allowing the

customer to feel his ownership of the Web experience, and giving the customer a sense of

belonging that traverses the physical boundaries.

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CHAPTER 10

BIBLIOGRAPHY

Websites :

http://www.mckinseyquarterly.com/Marketing/Digital_Marketing

http://headstart.in/2008/09/09/where-is-digital-marketing-headed-to-in-india/

http://en.wikipedia.org/wiki/Digital_marketing

https://www.mckinseyquarterly.com/Marketing/Digital_Marketing/

Four_ways_to_get_more_value_from_digital_marketing_2556

https://www.mckinseyquarterly.com/Marketing/Digital_Marketing/

A_new_way_to_measure_word-of-mouth_marketing_2567

http://zhujian.me/wp-content/uploads/zhujian.me/2010/12/Understanding-Digital-

Marketing.pdf

http://www.ait-uk.com/downloads/ait_digital_marketing.pdf

http://clients.marketingsavant.com/green_bay_business_expo/pdf/

ExpoHandout_DigitalMarketing.pdf

http://economictimes.indiatimes.com/infotech/internet/indian-internet-users-grow-to-

71-million-imrb/articleshow/5703745.cms

http://www.internetworldstats.com/asia/in.htm

http://indiamicrofinance.com/india-online-landscape-2010-internet-usage-statistics-

india.html

http://blog.nielsen.com/nielsenwire/

Books :

A new way to measure word-of-mouth marketing - Jacques Bughin, Jonathan

Doogan, and Ole Jørgen Vetvik

Four ways to get more value from digital marketing - David C. Edelman

The New Rules of Marketing and PR(Second Edition) –David Meerman Scott

What Google would do? - Jeff Jarvis

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CHAPTER 11

ANNEXURE

11.1 QUESTIONNAIRE

OBJECTIVE: To study customer perception about digital marketing.

Name: ____________________________________________________

Age: _________

Gender: __________________

1) Where do you access the internet from?

a) Home

b) Work

c) Local Cyber-cafe

d) Cell Phone

e) Do not access

2) How often do you use the internet in a week?

a) Everyday

b) Alternate Days

c) Weekends

d) Whenever needed

3) Which of these following aspects of the internet do you use the most?

a) Email

b) Social Networking

c) News

d) Shopping

e) Banking

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4) Would you prefer –

a) Shopping online

b) Shopping at local store

5) Are you brand loyal when it comes to shopping?

a) Yes

b) No

6) Have you ever purchased anything online?

a) Yes

b) No

i. If Yes, What have you purchased?

a) Electronics

b) Apparels

c) Jewellery

d) Food

ii. If No, Why not?

a) Not secure

b) No internet access

c) Lack of Information

d) Not interested

7) Where do you prefer watching advertisements –

a) TV

b) Radio

c) Newspaper / Hoardings.

d) Shopping Malls

e) Online (Websites/Email)

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8) Where do you get latest information on your favourite brands?

a) T.V

b) Internet

c) Radio

d) Newspapers / Hoardings

e) Friends and Family

9) Do you follow your favourite brands online?

a) Yes

b) No

10) Which of the following websites have you accessed? (You can Select Multiple Choices)

Facebook Rediff Shopping

Orkut MSN

Yahoo Techtree

eBay Nike

Amazon Puma

Google Naaptol

Future bazaar Croma

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11.2. CASE STUDY

Sunsilk - Gang of Girls

Background

Towards the end of 2002 Sunsilk, which was then sponsoring the Miss India pageant, decided

to establish an online presence for the endeavour.

The success of this activity spawned the idea of developing a portal for young girls and soon

thereafter the Sunsilk Naturals (as the brand was known back then) came into being.

The site at this time was replete with substantial hair and beauty content while prominently

featuring Jawed Habib as hair care expert.

This in turn successfully resonated with the target audience paving the way for an exclusive

all-girl community that is today widely recognized as Gang of Girls.

Strategic Insights

Over the years the website has evolved in its look, tone and core content. However, it has

always operated on certain fundamental principles and with a thorough understanding of its

TG.

Sunsilk gang of girls is an exclusive online community for such like minded girls. The site is

built on the philosophy that girls love to gang together to express what they feel. It is a place

for young urban women to come and say what they mean.

It is founded on three pillars and has been operating on these since its inception. These are

self-expression, interactivity and hair & fashion content.

Today the website speaks to the 20 something urban woman found to frequent malls and

multiplexes with a love of shopping and a tendency to live life to the fullest. The Sunsilk girl

keeps up with the latest fashion and trends and would seek these out in magazines, movies

and peers.

The brand recognizes this and broadly wishes to operate in the space of fashion and style.

Execution

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Platforms for Self-Expression

GOG TV enables girls to upload and share their videos. It has features like the moviemaker

create her own movie by using pre-shot movie clips. It also features the slideshow maker;

where a user can upload pictures and give it various transitions along with background music.

Get Spotted is yet another platform for girls to showcase their talents in performance art,

writing etc. and win prizes based on how other users rate their talents.

Furthermore, the Life Can’t Wait tools give users a unique and creative space wherein they

can express to other users their life’s defining moments as well as their goals and dreams.

The Be a DJ feature in the Rhythm Lounge allows users to express themselves musically –

they can create their own music mixes by mixing and matching pre-recorded instrumental

tracks.

Space to Interact with Other Users

Girl Talk is one of the most active sections of the website. It is a forum that gives girls the

space to discuss everything from hair & fashion to the latest in entertainment.

Ask the girls is a special feature introduced with the understanding that girls often have

questions that only other like-minded girls can answer. The site therefore has given its users

the space to ask around. From fashion to sex to sports the girls can ask questions under

specified categories and get them answered by other girls.

The website in association with MSN India has also introduced its very own mail and chat

service available exclusively to girls on the website.

Interactive Tools & Applications

The Complete Makeover Machine is a breakthrough tool that allows users to give themselves

head-to-toe virtual makeovers by experimenting with the trendiest hairstyles, outfits and

accessories.

The site is further equipped with exciting games that users can play over and over again.

A handy desktop application – the Sunsilk Buddy – keeps users abreast of the latest

happenings on the site and gives them the means to update various sections of the site

through the application itself.

Spirit of Ganging

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Ganging is alive and blazing ahead on the site and this can be seen in the core site sections

that focus on the spirit of ganging.

The Gang Blogs for instance allows users to blog as a gang thereby each blog reflects the

collective opinion of the various gang members that author it.

Gang Wars is yet another fun activity that gangs can partake in each month. Gangs get to

compete against one another in games and the winning gang is awarded exciting prizes.

Gangs are also given the space to seek out new members and website newbie’s can find

themselves a suitable gang by placing classified ads in the classifieds section of our site.

Rich & Informative Content

The site is a rich reservoir of articles on hair styling, hair care, fashion trends, beauty secrets,

relationships and more.

Additionally, the website features blogs by female celebrities giving users insight into the

lives and minds of their idols.

The site is well equipped with the latest entertainment updates presented by MSN India.

The website in association with Astro Life presents users their daily horoscope along with

other astrological insights.

An association with Monster Jobs allows the site to present users with hot career

opportunities for them to explore.

Replicating Success across Asia

The success of Sunsilk Gang of Girls, over the years, has given way to the launch of

Gang of Girls websites for each of a number of countries in South and South-East Asia.

Other Media Used

Towards the end of 2007 Sunsilk Gang of Girls introduced a viral spoofing the then popular

film ‘Chak De India’.

The viral appropriately named ‘Choke There’ features a disgraced & beleaguered hockey

coach in search of his dream hockey team. Some of the hilarious spoofs featured in the viral

include Shah Rukh, Himesh, Mithun, Sholay’s Thakur and more.

Campaign Dates

June 2006 – January 2009

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Campaign URL

www.sunsilkgangofgirls.com

Results

Total Registration – 7,16,621

Average Monthly Page Views – 30,00,000

Average Monthly Hits – 1,20,00,000

Average Monthly Unique Visitors – 97,086

Total Number of Gangs – 42,586

Average Visit Length – 11.06 minutes

Client Testimonial

"The content of the website has evolved over time since its inception, but the

philosophy on which the site was built has remained constant. The site is the place for a 20

something urban girl to come and band together with like-mined girls and express what she

feels. Built on the three pillars of self-expression, interactivity and hair & fashion content, the

website continues to successfully communicate with its TG."

Sumit Mathur,

Brand Manager, Sunsilk

Hindustan Unilever Limited

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