Marketing models and future trends

26We look at Internet marketing business models, Revenue models, and the most common ways to buy online advertising, Online Marketing terms and future trends such as an increased focus on inbound marketing. We learn that local marketing will become mainstream, and that there will be an increase in the importance of second screen –that is , people using smartphones, laptops and tablets while they are watching TV.

Digital Marketing models

There are a number of Internet marketing business models; –

E-commerce: goods and services are sold online to a consumer or business.

Lead-based websites: a model which enables a company to generate value by acquiring sales leads from its website. An analogy would be to walk-in customers on the High Street. These are often referred to as organic leads.

Affiliate marketing: a product or service developed by one company is sold by other active sellers for a share of revenue profits. The company that owns the product may provide some marketing material (e.g., sales letters, affiliate links, tracking facilities, etc.). Most affiliate marketing relationships come from e-commerce businesses that offer affiliate programs.

Revenue models

The most common ways to buy online advertising are; –

CPM (Cost per Mille) or CPT (Cost per Thousand Impressions) Advertisers pay for exposure of their message to a specific audience. “Per mille” means per thousand impressions, or loads, of an advertisement.

CPV (Cost per Visitor) advertisers pay for the delivery of a Targeted Visitor to the advertiser’s website.

CPV (Cost per View) advertisers pay for each unique user view of an advertisement or website (usually used with pop-ups, pop-under and interstitial ads).

CPC (Cost per Click) or PPC (Pay per click) advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on.

This system allows advertising specialists to refine their searches and gain more information about their market. With the Pay per click pricing model, advertisers pay to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing, which links directly to their website.

CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.

Pay-Per-Click Search Engine Advertising (PPC) is the most targeted advertising money can buy, because it uniquely allows you to place your advertisements in front of prospects precisely when they’re searching for your type of product or service. You do have to pay per click so there are advertising costs involved.

Within an hour of set-up, your PPC campaign can be launched on Google Ad Words and you can see results immediately.

PPC also gives you control over the landing pages to which your visitors are directed. So you can give them the most targeted message or the exact product they are searching for.

Google Ad Words allows you to use “Conversion Tracking” tools to see exactly which keyword phrases are producing sales and profits. This enables you to optimize your campaign and website to provide the best results.

CPA (Cost per Action or Cost per Acquisition) or PPF (Pay per Performance) advertising is performance based and is common in the affiliate marketing sector of the business.

The publisher takes all the risk of running the ad in this payment model. The advertiser pays only for the number of users who complete a transaction, such as a purchase or sign-up.

The following are common variations of CPA:

CPL (Cost per Lead) advertising is identical to CPA advertising. It is based on the user completing a form, registering for a newsletter or some other action that the merchant specifies to lead to a sale.

CPS (Cost per Sale), PPS (Pay per Sale), or CPO (Cost per Order) advertising cost is based on each time a sale is made.

Fixed Cost: The advertiser pays a fixed cost for specified campaign dates without any reference to performance.

Cost per conversion describes the cost of acquiring a customer, usually calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of “Conversion” varies depending on the objective: it is sometimes considered to be a lead, a sale, or a purchase.

Here are some Online Marketing terms you will probably come across; –

Display advertising uses web banners or banner ads placed on a third-party website or blog. These are designed to bring traffic to a company’s website, increase product awareness, and sales.

Search engine marketing (SEM) is a form of marketing that promotes websites by increasing their visibility in search engine result pages (SERPs). This can be achieved in a number of ways – paid placement, contextual advertising, paid inclusion, or through the use of free search engine optimization techniques (Free SEO is also known as organic result)

Search engine optimization (SEO) improves the visibility of a website or a web page in search engines via the “natural” or free (“organic”) search results.

Email marketing uses electronic mail to directly market a commercial message to a group or database of people.

Referral marketing promotes products or services to new customers through referrals, often by word of mouth.

Affiliate marketing is a marketing practice in which a business rewards affiliates for each visitor or customer brought to them by the affiliate’s own marketing efforts.

Content marketing involves creating specialized content such as eBooks, info graphics and blog articles to attract more customers.

Inbound marketing involves creating and sharing useful content to convert prospects into customers, and customers into repeat buyers.

Video marketing is creating videos that encourage the viewer to make a purchase, by presenting information in video form and guiding them to buy a product or service. Online video is now very popular among internet users and companies are seeing it as a successful method of attracting customers.

Online Marketing Trends and Future Trends

Recent online marketing trends have been; –

  • The rise of Mobile usage ,with the announcement of Google’s mobile first web index, and mobile internet usage traffic overtaking desktop
  • 2016 e-commerce transactions are up are up 9% year-on-year. Mobile commerce saw growth of nearly 40%.
  • Brands as social influencers, they build huge followings on Pinterest, and Facebook, which develops their influence over consumers.
  • Celebrities endorse free products on Facebook and Twitter. For new product launches and at the luxury end of the market this trend will continue.
  • Big brands focus resources on profitable growth and customer retention
  • Campaigns built around insights gleaned from” Big Data “
  • More Agile collaboration across disciplines and companies
  • Increases in online shopping will continue

Let’s look at some predictions for the next big trends; –

Big data usage Wikipedia defines this as the use of predictive analytics, user behavior analytics, or certain other advanced data analytics methods that extract value from data

Increased personalisation, facilitated in part by use of Big Data, will enable one to one marketing

Immersion marketing. Wikipedia defines this as including traditional advertising, public relations, word-of-mouth advertising, digital marketing, samples, coupons, retail partnerships and other ways of surrounding the consumer with a consistent message about a brand.

Rise of native advertising.

According to Wikipedia , Native advertising is a type of advertising, mostly online, that matches the form and function of the platform upon which it appears. In many cases, it manifests as either an article or video, produced by an advertiser with the specific intent to promote a product, while matching the form and style which would otherwise be seen in the work of the platform’s editorial staff.

Native advertising could erode the public’s trust. If a newspaper publishes a “story” by Microsoft in exchange for money, can that newspaper objectively report on matters relating to Microsoft, or has every mention of the company been paid for?

Live video, with video influencers, sponsorship and product placement

An increased focus on inbound marketing. The growth of social marketing means marketers must invest in adding a new kind of value. Inbound marketing is a type of marketing in which brands spend resources to create content, conversations and valuable resources that draw customers to their products or websites without paid marketing.

Businesses will spend more on great content, beautiful web design and inbound analytics. There will be new software, and upgrades to existing tools, to help business better manage inbound marketing efforts and prioritize developments.

An increase in the importance of second screen. This means mobile devices such as smartphones and tablets. With more than 75 % of the world having access to mobile devices, many companies will exploit the opportunity of offering second screen value for their brands and clients.

Websites developed to be mobile-friendly, which means that they are responsive and easy to use on mobile devices. What value can your brand, product or service offer to a mobile device user? This is about more than ease of use and searching ability. It will include new information, new formats and new resources. For example, imagine the immediate opportunities for last minute offers in your area- the ability to offer last minute discounts to fill an arena or restaurant.

Local marketing will be mainstream. Local companies now have many tools available to improve local search results, engage with customers and measure their success. Sites like Get Listed have made local marketing easy to track and manage, at a price small business can afford. There should be opportunities for more successful small businesses as a result.

More loyalty marketing It is more expensive to acquire a new customer than to retain an existing one. Consumers have never before been so connected, willing and able to share their opinions of purchases and experience, and give ratings and feedback. Marketers will develop creative ways to make customers feel appreciated and involved.

The development of attribution modelling We have seen the rise of analytics packages and solutions but now Marketers are taking a more holistic approach to what’s called attribution tracking — the process of assigning a specific value to a marketing action resulting in a conversion.

Marketers have historically valued the last click, rather than the process that brings the client to that point. We know it’s more complicated than that. So, we will see continued developments in attribution modelling and creative approaches to tracking how channels affect each other. The large analytics providers will continue to innovate on their current offerings and offer them to everyone.

More analytics there are now more marketing channels available and an improved ability to understand how they all integrate. Marketers will look for new ways to prioritize their opportunities. Unlike traditional web analytics — the measurement of how your website is performing — marketing analytics is the measurement and optimization of your marketing activities.