Chapter 1: Overview of Digital Marketing

Compiled By: Dr. Rishi Dwesar

This material has been compiled from various online sources which may own the respective
copyright. It is only for reference and not for further distribution.

Contents
Digital Marketing vs. Traditional Marketing ............................................................................. 2
Digital Marketing vs. Online Marketing .................................................................................... 3
History & Evolution of Internet ................................................................................................. 3
Web 1.0, 2.0 & 3.0 ..................................................................................................................... 5
Web 1.0 .................................................................................................................................. 6
Web 2.0 .................................................................................................................................. 6
Figure 1.1: Transformation of Web ....................................................................................... 7
Web 3.0 .................................................................................................................................. 7
DotCom Boom & Burst ............................................................................................................. 7
The Buildup ........................................................................................................................... 7
The Burst ................................................................................................................................ 8
Figure 1.2: DotCom Bubble and Burst .................................................................................. 9
Digital Marketing Channels Overview ...................................................................................... 9
Figure 1.3: Digital Marketing Channels .............................................................................. 10
Chapter 1: Overview of Digital Marketing
Digital marketing is the strategy and processes that connect advertisers with their audiences
across digital channels. An advertisement itself is a piece of creative shared via digital
inventory - the space a publisher makes available for advertisements on its platform.

Digital refers to a number of different channels, all used to uniquely engage audiences and
tackle various goals of the conversion funnel. The digital channels include display, search,
mobile, social, and video among others.

Thanks to digital's vast amounts of targeting technology and capturing of personal data,
marketers are able to reach both large audiences and more granular segments without
compromising scale. This includes being able to target by specific attribute including
demographic, behavioral, psychographic, and more. Not only can marketers target groups of
people, they can also target specific devices and even individual users regardless ofwhat device
they may be using.

Additionally, digital marketers are especially determined to measure success of campaigns. A

number of user engagements can be tracked such as impressions, clicks, website hits, leads,
and actual purchases. In as much, digital makes it easier than traditional media to track Return
on Investment (ROI), helping marketers to see the efficacy of their campaigns and make better
decisions for optimization and the future.

Digital Marketing vs. Traditional Marketing

Traditional refers to linear TV, print, radio, direct mail, and out-of-home (often known as
billboards) advertising. A key differentiator of these media is that the messaging is a one-way
conversation. This defines traditional as "Outbound Marketing" in that it reaches out to
consumers, but consumers do not communicate back.

Moreover, traditional marketing used targeting which is much broader as it is defined by only
an estimate of viewership. If an advertiser wanted to execute more granular targeting by
coupling different demographic and behavioral attributes, they would be unable to, as publisher
audiences are more loosely defined with traditional media.

The final major difference - which is often times used as a point of argument among the two
sides, is traditional marketing’s lack of measurement methods. If a potential customer views
an ad on linear TV and later buys that product in-store - it is impossible for marketers to
precisely connect the action back to the advertisement. What marketers are able to do instead,
is measure sales lift prior and post campaign. Another method is including a specific phone
number or email address in advertisements whenever possible, so that conversions can be
directly attributed.

Despite digital marketing’s advantages, traditional media channels are still largely popular for
consumers and the two can be seen interacting as media convergence becomes more prevalent.
Media convergence is the blending of media forms into one platform for purposes of delivering
a dynamic experience. A recent report by eMarketer concluded that in 2019, digital ad spend
will account for 51.1% of the total ad spend worldwide, which is 4.8% higher than 2018.
Traditional ad spend will account for 30.4% of the total ad spend worldwide in 2019, which is
2.6% lower than 2018. OOH, Print, and Radio ad spend will see a decline in 2019.1

Digital Marketing vs. Online Marketing

The term “digital marketing” is often used interchangeably with “online marketing” or
“Internet marketing”. While they share some similarities, there are key differences to be
considered in your marketing strategy. Digital marketing is an umbrella term that includes
anything that requires the use of an electronic device, including online marketing. Examples of
this include broadcasting, digital OOH advertisements, Bluetooth and near field
communication (NFC) based marketing, podcasts and e-books. Digital marketing has been
growing with the dominance of digital platforms in the 21st century, replacing traditional
marketing.

Online marketing is a subset of digital marketing. Any marketing that requires the internet to
perform is considered online marketing. Websites, blogs, social media and emails are all
methods of online marketing. Online marketing focuses on attracting customers and building
an online presence.

History & Evolution of Internet2

The internet traces its roots to a US defense department project in the 1960s born out of (pdf)
the Cold War, and a desire to have armed forces communicate over a connected, distributed
network. The military’s research arm, the Advanced Research Projects Agency (ARPA), began
work on a communication project, which led to the creation of ARPANET, one of the earliest
iterations of computers talking to each other on a network.

ARPANET relied on leased telephone lines, much like the commercial internet did in the years
that followed. Over the 1980s, a grant from the US National Science Foundation allowed
universities and schools to connect to ARPANET to share information with those who couldn’t
directly connect to the network.

As internet protocols and technologies were standardized, in the late 1980s and early 1990s,
universities, businesses, and even regular people started to connect over the internet. But before
the invention of the World Wide Web, accomplishing anything was a real chore. Information
on the internet was difficult to search for, and almost impossibly dense. The pre-Web Internet
was an almost entirely text-based world.

We may not have moved beyond the internet of the early 1990s were it not for Tim Berners-
Lee, who was looking for an easier way to find and share research. Berners-Lee, who in 1989
was a researcher working at CERN, the Swiss nuclear research facility, came up with the
concept of the World Wide Web, a decentralized repository of information, linked together
and shareable with anyone who could connect to it. He built the first webpage in 1993.

Berners-Lee also created the first website browser (initially called WorldWideWeb and then
renamed Nexus). But it wasn’t until a team of former students at the University of Illinois at
Urbana–Champaign (UIUC), led by Marc Andreessen, created the Mosaic web browser in

1
https://www.mediaocean.com/digital-marketing-guide/overview-history
2
https://qz.com/1705375/a-complete-guide-to-the-evolution-of-the-internet/
1993 that the web started to take off. Andreessen and his team left the research facility at UIUC
to start Netscape, the company that produced the first web browser many people ever used:
Netscape Navigator.

By the mid-1990s, Netscape had about 80% of the browser market in the US and Europe. Its
only real competitor was Microsoft’s Internet Explorer, which first launched with Windows
95. But Microsoft, a huge company even then, was able to iterate its software faster as the web
changed, implementing new technologies like CSS (cascading style sheets—the code that
ensures the web is more than just bland pages of text) before Netscape could.

At the time, internet services, especially in the US, started to become more affordable. Internet
service providers like America Online, Prodigy, Earthlink, and CompuServe, dominated early
access in the US. Subscribers would almost always rely on their existing phone line for
connection to the internet, meaning that no one could use the phone when someone was on
internet. And everyone connecting in the mid-90s through to the mid-2000s likely knew of the
horror that was the dial-up modem connection sound.

At some point in 2004, for the first time ever, there were more people in the US who had access
to broadband internet than dial-up, according to the Pew Research Center. The price of
broadband connections had begun to fall as more users signed up. Broadband modems act a
little differently than their dial-up predecessors in that they do not need to call out over the
phone line to your internet service provider to establish a connection to the internet—they stay
connected unless they’re turned off. In the US today, most broadband connections come into
homes through the same connections used for cable TV, and don’t tend to require access to a
telephone line to connect.

Coupled with the advent of wifi, broadband has revolutionized the way that people connect to
the internet. Before wifi and broadband, accessing the internet was a very static and slow
experience, requiring someone to sit in front of a large computer, physically connected to a
modem, to access the web. But when wifi started to gain popularity, it made the internet
accessible wherever someone had a laptop, tablet, or Palm Pilot and wifi connection.

Broadband speeds are generally faster than dial-up. In the US, the Federal Communications
Commission (FCC) considers a broadband connection—at least for a fixed line, rather than a
cellular connection—one that can achieve speeds of 25 Mbps for downloads and 3 Mbps for
uploads. These speeds helped make the internet what it has become: in the early web years,
loading web pages even with simple graphics could take several minutes. With higher speeds,
websites could load faster, and developers could add more content to their sites without fear
that it would crash their user’s computers. Even streaming videos became possible; YouTube
first launched in 2005. Websites evolved from simple destinations to interactive places where
people could buy things and communicate with each other in real-time.

Mobile broadband—connecting to the internet through a cell phone—has exploded in

popularity over the last five years. At the end of 2013, there were about 1.9 billion smartphone
subscriptions in the world, and by the end of 2018, there were about 5.3 billion—that’s a jump
of about 180% in five years.

It’s a far cry from the earliest iterations of the mobile internet, like WAP (Wireless Application
Protocol). Introduced in 1999 and seen in such phones as the Nokia 7110 (which
many incorrectly associate with being featured in the year’s smash-hit film The Matrix), WAP
was sort of like the early dial-up of mobile internet. You could look at rudimentary pages of
the internet, to check things like sports scores or news headlines. But getting too deep into the
internet would likely burn through whatever overpriced data plan you had at the time.sThe first
truly useful mobile data standard was 3G in 2003, when radio technology first allowed for more
than calls and texts to be sent over the air. (In the western world in 2019, it’s often the
connection type your smartphone will fall back to when it can’t connect to LTE; in other
countries, it’s still the standard. The mobile web truly took off with the iPhone, however, and
all the devices that aimed to copy it. When introducing the iPhone, Apple founder Steve Jobs
said it was taking on the role of three devices at once: “It’s an iPod, a phone, and an internet
communicator.”

The iPhone was first launched in 2007. Over the last decade, Apple has sold more than 1 billion
iPhones and spurred on competitors like Google, whose Android operating system is now
installed on over 2 billion devices. Suddenly, a device that fit in the palm of your hand could
access the web in (more or less) the same way as a laptop. We now spend an average of four
hours every day on our phones, much of that time going to social media.

According to a recent consumer report, the average smartphone owner in the US currently uses
around 8GB of data each month. The company expects that number to balloon up to possibly
200GB per month by 2025. Mobile devices will likely not look like they do now: In the same
way using a smartphone to access the web in 2019 is nothing like using a laptop to get online
in 2003, or a desktop in 1993, it’s possible a completely new paradigm will be invented for our
super-fast, mobile future. The future of the web will likely be increasingly mobile, but
probably won’t be dominated by the devices of today.

As 5G wireless networks are deployed around the world today, many with the promise of
download speeds over 1 Gigabit per second (compared to LTE, which maxes out at around 25
Mbps in the US), and connections so airtight it’ll feel like you’re in the same room as someone
thousands of miles away. It’s easy to see how the internet could progress from its simple roots,
but not what form it will take.

Web 1.0, 2.0 & 3.0

In today's world of extreme competition on the business front, information exchange and
efficient communication is the need of the day. The web is an increasingly important resource
in many aspects of life: education, employment, government, commerce, health care,
recreation, and more. The web is a system of interlinked, hypertext documents accessed via the
Internet. With a web browser, a user views web pages that may contain text, images, videos,
and other multimedia and navigates between them using hyperlinks.

The web was created in 1989 by Sir Tim Berners-Lee, working at CERN (The European
Organization for Nuclear Research) in Geneva, Switzerland. Since then, Berners-Lee has
played an active role in guiding the development of web standards (such as the markup
languages in which web pages are composed), in recent years has advocated his vision of a
Semantic web.
Web 1.0
In web 1.0, a small number of writers created web pages for a large number of readers. As a
result, people could get information by going directly to the source. The WWW or Web 1.0 is
a system of interlinked, hypertext documents accessed via the Internet. WWW or Web 1.0
The first implementation of the web represents the web 1.0, which, according to Berners-Lee,
could be considered the "read-only web." In other words, the early web allowed us to search
for information and read it. There was very little in the way of user interaction or content
contribution. However, this is exactly what most website owners wanted: Their goal for a
website was to establish an online presence and make their information available to anyone at
any time.

Web 2.0
Currently, we are seeing the infancy of the Web 2.0, or the "read-write" web if we stick to
Berners-Lee's method of describing it. The newly-introduced ability to contribute content and
interact with other web users has dramatically changed the landscape of the web in a short time.
In alluding to the version numbers that commonly designate software upgrades, the phrase
"Web 2.0" hints at an improved form of the WWW. Technologies such as weblogs (blogs),
social bookmarking, wikis, podcasts, RSS feeds (and other forms of many-to-many
publishing), social software, web APIs, and online web services such as eBay and Gmail
provide enhancements over read-only websites. Stephen Fry (actor, author, and broadcaster)
describes Web 2.0 as "an idea in people's heads rather than a reality.

Tim O’Reilly popularized web 2.0 as an expression when he wrote a fairly coherent definition.
Web 2.0 is definitely the next big thing in the WWW. It makes use of latest technologies and
concepts in order to make the user experience more interactive, useful and interconnecting. It
has brought yet another way to interconnect the world by means of collecting information and
allowing it to be shared affectively.
 Figure 1.1: Transformation of Web

Source: https://101blockchains.com/web-3-0-blockchain-technology-stack/

Web 3.0
Web 3.0 is a term that has been coined to describe the evolution of Web usage and interaction
that includes transforming the Web into a database. Web 3.0 is an era in which we will upgrade
the back-end of the Web, after a decade of focus on the front-end (Web 2.0 has mainly been
about AJAX, tagging, and other front-end user-experience innovations.) This in turn leads us
to the rumblings and mumblings we have begun to hear about Web 3.0, which seems to provide
us with a guarantee that vague web-versioning nomenclature is here to stay. By extending Tim
Berners-Lee's explanations, the Web 3.0 would be something akin to a "read-write-execute"
web. Web 3.0 is defined as the creation of high-quality content and services produced by gifted
individuals using web 2.0 technologies as an enabling platform. Web 3.0 is a term that is used
to describe various evolutions of Web usage and interaction among several paths. These
include transforming the Web into a database, a move towards making content accessible by
multiple non-browser applications, the leveraging of artificial intelligence technologies, the
Semantic web, the Geospatial Web, or the 3D web.

DotCom Boom & Burst

The Buildup
The dotcom bubble (also known as the internet bubble), started growing in the late ’90s, as
access to the internet expanded and computing took on an increasingly important part in
people’s daily lives. Online retailing was one of the biggest drivers of this growth, with sites
like Pets.com — you know, the one with the cute sock-puppet mascot starring in the funny ads
— getting big investors and gaining a place in American consumer culture.
With the investment and excitement, stock values grew. The value of the NASDAQ, home to
many of the biggest tech stocks, grew from around 1,000 points in 1995 to more than 5,000 in
2000. Companies were going to market with IPOs and fetching huge prices, with stocks
sometimes doubling on the first day. It was a seeming wonderland where anyone with an idea
could start making money. Refer Figure 1.2 below.

Thus, the dot-com bubble was a stock market bubble caused by excessive speculation in
Internet-related companies in the late 1990s, a period of massive growth in the use and adoption
of the Internet.

The Burst
In March of 2000, everything started to change. On March 10, the combined values of stocks
on the NASDAQ was at $6.71 trillion; the crash began March 11. By March 30, the NASDAQ
was valued at $6.02 trillion. On April 6, 2000, it was $5.78 trillion. In less than a month, nearly
a trillion dollars’ worth of stock value had completely evaporated. Many companies lost
between $10 and $30 million a quarter — a rate that is obviously unsustainable, and was going
to end with a lot of dead sites and lost investments.

Companies started folding. (Pets.com was one.) Magazines, including TIME, started running
stories advising investors on how to limit their exposure to the tech sector, sensing that people
were going to start taking a beating if their portfolios were too tied to e-tailers and other
companies that were dropping like flies. During the 2000 Super Bowl, 17 dotcom companies
had paid $44 million for ad spots, according to a Bloomberg article from the following year.
At the 2001 Super Bowl, just one year after that bonanza, only three dotcom companies ran ads
during the game.3

To summarize, the dotcom bubble was a rapid rise in U.S. technology stock equity valuations
fueled by investments in internet-based companies during the bull market in the late 1990s.
During the dotcom bubble, the value of equity markets grew exponentially, with the
technology-dominated Nasdaq index rising from under 1,000 to more than 5,000 between the
years 1995 and 2000. In 2001 and through 2002 the bubble burst, with equities entering a bear
market.

3
https://time.com/3741681/2000-dotcom-stock-bust/
 Figure 1.2: DotCom Bubble and Burst

Source: https://flatworldbusiness.wordpress.com/flat-education/previously/web-1-0-vs-web-
2-0-vs-web-3-0-a-bird-eye-on-the-definition/dotcom-bubble/

Digital Marketing Channels Overview

Choosing the right marketing channels help marketers in reaching the right audience and
maximize the marketing ROI. With so many changes happening in the digital marketing
landscape, it is important to use and integrate various digital marketing channels to create
presence and generate sales. As you go ahead, you will learn how to use each of these channels
and what are the advantages of each of these. But at this stage, we just introduce some of the
important digital marketing channels you must be aware about (Refer Figure 1.3 below).

1. Search Engine Optimization (SEO): Search engine optimization is the process of

optimizing web pages and their content to be easily discoverable by users searching for
terms relevant to the website. The term SEO also describes the process of making web
pages easier for search engine indexing software, known as "crawlers," to find, scan,
and index a particular site. The traffic which comes as a result of SEO is free of cost in
comparison to search ads, which are charged on pay per click basis. The SEO results
on the Search Engine Result Page (SERP) are also called as “free,” “organic,”
“editorial” or “natural” results. We discuss SEO in detail in Chapter 2.
 Figure 1.3: Digital Marketing Channels

Source: Author

2. Directories and Listing: Directory marketing focuses on finding relevant directories

for a particular business and claiming listing. There are two parts to directory
marketing: local and industry-specific. Local directory marketing helps businesses with
local addresses and a physical store front (for E.g. Bing Local, Google My Business
Listing etc). Industry-specific listings help you target a specific audience since those
directories target a specific audience (for E.g. Zomato in case of restaurants).

3. Advertising: Commonly known as Pay-Per-Click (PPC) advertising or online

advertising, and sometimes as Programmatic, it is a strategy to deliver promotional
messages to people, worldwide, on a digital platform using Internet. Usually advertisers
pay for every click (thus, the name PPC) or impression. The advertisements can be
served on search engines (called as search engine advertising) or across other content
such as text, games, videos across various platforms such as websites, mobile phone
applications etc. Unlike other marketing endeavors, while doing advertising it is
necessary place an ad (impression) on the publisher’s website for which they would
usually charge on click or impression basis. Advertising is one of the predominant ways
of digital marketing, and we discuss it in detail in chapter 4 and 5.

4. Social Media Marketing: Social media marketing is the use of social media platforms
to connect with audience to build brand, increase sales, and drive website traffic. This
involves publishing great content on business owned social media profiles, listening to
and engaging followers, analysing results etc. The major social media platforms (at the
 moment) are Facebook, Instagram, Twitter, LinkedIn, Pinterest, YouTube, and
Snapchat. We discuss social media marketing in Chapter 7.

5. Publicity & Public Relations: Just like in the offline world, publicity and public
relations is equally important in digital marketing. Online Public Relations (E-PR,
Digital PR) refers to the use of the internet to communicate with both potential and
current customers in the public realm. It functions as the web relationship influence
among the cyber citizens and it aims to make desirable comments about an
organization, its products and services, news viewed by its target audiences and lessen
its undesirable comments to a large degree. The influence could result in a story in a
magazine, article coverage by popular websites, influencers or bloggers. The goal is to
have a lasting high quality impact on the external image of a company or brand. We
discuss about it in Chapter 9.

6. Email Marketing: Email marketing is a form of direct marketing that uses email to
promote your business’s products or services. It helps marketers to make their current
and prospective customers aware of latest products and services, and any current
promotions and discounts. It can also play a pivotal role in teaching folks about the
brand or keeping them engaged between purchases. Email has become such a popular
marketing tool for businesses partly because it forces the user to take some kind of
action; an email will sit in the inbox until it’s read, deleted, or archived. But email is
also one of the most cost-effective tools available, too. In fact, a 2015 study by the
U.K.-based Direct Marketing Association (DMA) found that for every $1 spent, email
has an average return on investment (ROI) of $38.4

4
https://mailchimp.com/marketing-glossary/email-marketing/