Presentation about the impact of internet on marketing. 1st November, 2016 Joni Salminen PhD, marketing

1. Joni Salminen
PhD, marketing
Email: joolsa@utu.fi
“HOW HAS THE INTERNET
TRANSFORMED
MARKETING”
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2. Who am I?
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Joni Salminen
PhD, marketing
• Dissertation 2014: Startup
dilemmas – Strategic problems of
platform startups on the Internet
• Master’s thesis 2009: Power of
Google – A study on online
advertising exchange
• Bachelor’s thesis 2007: Search-
engine marketing on the Internet
Experience:
• Teaching digital marketing at the Turku
School of Economics (2012–2016)
• Digital marketing manager in
ecommerce company Elämyslahjat.fi
(since 2011)

3. Why does ’digital’ matter?
• Individuals’ time spent on media
and companies’ marketing budgets
are moving more and more into
digital media.
• Digital marketing tends to be the
fastest growing form of marketing
– there is a need for experts (job
opportunities, skills).
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4. The end for mass media?
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Not yet!

5. Budget gap in advertising spend
(Flurry Analytics, 2012)
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0
5
10
15
20
25
30
35
40
45
50
TV Printti Netti Radio Mobiili
%
Ad spend vs. media consumption
Mainospanostus
Vietetty aika
Marketing investments do not follow
customers instantly and perfectly!
TV Print Online Radio Mobile
Ad spend (firms)
Time spent (people)

6. Influence of digital in consumers
(Järvinen, 2015)
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7. Strategic grid of social espionage
(Salminen & Degbey, 2011)
Engage Not engage
Spy
Full pot
“Machiavellian
payoff”
Not spy
“Sucker’s payoff” Empty pot
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”For example, if a competitor suffers from technical problems, a possible
reaction would be to launch an opportunistic marketing campaign (…).
Therefore, the process would aim to (1) detect competitor’s problem, (2)
respond rapidly by offering alternative, (3) win new customers. It is critical
that the common pitfall of (…) delayed action is avoided – (…), the window
of opportunity is easily lost as customers take adaptive behavior. (…) there
is a common bullwhip effect that hinders big corporations’ ability to leverage
real-time information efficiently. A possible solution involves removing the
firm’s CI unit and instead empowering operational units to take direct action
based on their proprietary judgment.”

8. AIDA vs. IADA (Salminen, 2012)
Traditional advertising
follows the AIDA model.
• Attention
• Interest
• Desire
• Action
Search advertising, however,
follows an IADA model.
• Interest
• Attention
• Desire
• Action
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What are the implications? Instead of imagining the customer as
the “target” of advertising, firms should understand their active role
in searching for information, and tendency to ignore advertising that
is not relevant for the task at hand (cf. “banner blindness”).
Moreover, if the process begins from an endogenous interest,
exogenous advertising loses its ability to persuade (or manipulate)
customers. Finally, advertising is delivered by request, or pull,
instead of pushing. This contextual advertising is more likely to have
immediate utility to the customer because it uses more advanced
proxies to capture likely interests than before. Because interest, not
attention, is the driving force of the sales funnel, firms are no longer
forced to persuade potential customers through advertising but,
instead, other elements of marketing.

9. Example of IADA: Search-engine marketing
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intent
solution

10. Different paradigms and path dependency
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AIDA IADA
1st reaction “seems interesting” • go to Google
• go to community
2nd reaction click (curiosity) click (intent)
3rd reaction ? ?
P
A
T
H
Which is more likely to
convert?

11. Target or not to target, that is the question!
Do demographics matter any more?
– If you think that men and women / different age groups
response in different ways  demografic paradigm
– If you think that a 13-year-old boy and 80-year-old
woman can be interested in your message  intent
paradigm
• When you are targeting, you think the message will find the
right people
• When you do inbound marketing, you think that the right
people will find the message
• Both are ways to solve the matching problem… but which
one is more efficient?
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12. Inbound marketing (Karjaluoto, 2015)
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Inbound marketing Outbound marketing
Content marketing ”Interruption model”
Customer-initiated contacts Firm-initiated contacts
Content, SEO, social media Traditional channels (cold
calls, paid ads, face-to-face)
Focus on those who are
already interested
Focus on selecting the
”right” target audience
”Soft” selling ”Hard” selling

13. The failure of campaign-based marketing
“This is the search graph for Kodak – Successful campaigns, yet no
gained growth. You can see that regardless of their marketing efforts,
their growth is negative.” (Åström, 2013)
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14. Continuous marketing process
(’elämyslahjat’)
• A marketer wants the development of interest to be
steadily increasing, and not regressive
• The importance of seasonal dynamics depends on
the nature of the business
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15. Marketing moves from campaigns to
process (=continuous optimization)
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16. Claude Hopkins,
1866–1932
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Download for free:
www.scientificadvertising.
com/ScientificAdvertising
.pdf
• Testing is like in the
1920s but today...
• we can test hundreds
or thousands of ad
combinations for tens
or hundreds of target
groups à 2€
• and the results are
ready the same day.

17. Everything you know from marketing
can be applied to the digital context
Consumer psychology has not changed
(people are still people)
”…even if the medium had changed, basic human needs
have not. And, indeed, it turns out that there are a lot of
lessons from 1982 that are still quite useful for a 2007
search engine marketer.”
─David Rodnitzky
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18. …however, we can question the role of
humans!
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implications of machine learning to
marketing:
• humans: creativity
• machines: optimization

19. Digital marketing funnel (Salminen, 2012)
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Before click After click
click
Do not focus only
on this…
…but to the
entire funnel
Conversion :)
No conversion :(
• conversion
optimization
• marketing automation

20. Digital marketing funnel
(Salminen & Piippo, 2016)
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After
conversion
Relationship No
relationship
Before click After click
click
Do not focus only
on this…
…but to the
entire funnel
Conversion :)
No conversion :(
• conversion
optimization
• marketing automation

21. Marketing properties (cf. Pyhäjärvi, 2013)
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Target
website
Organic and
paid
marketing
Properties
Campaigns
1. Marketing
permission
2. Lead nurturing
3. Conversion
• Email subscribers
• Fans, followers
• Custom audience
(Facebook, Twitter)
• Remarketing (Google,
Youtube)

22. ”Hub strategy” (Balegno, 2011)
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In the center of strategy there is
the website (conversion point),
to which different sources feed
traffic and which leads to
specialized content platforms
The purpose of so-called
perifery profiles is to
build communities, store
content and communicate
with customers and
stakeholders
Each perifery profile
has its own plan and
they are guided as
parts of a unified
architecture.

23. Pecularities of online business
strong pressure to give free products as a result of
1) hyper-competition, and
2) minimal cost of digital distribution
user is not synonym to customer
→ pressure to find indirect monetization models
(usually advertising)
Ergo, digital influence is pervasive to business
logic, not only marketing.

24. Digital transformation (Järvinen, 2015)
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• Companies have hired specialists to manage
change, but the success is influenced by top
management understanding
• There are both success stories (e.g. Schibsted)
and failure stories (e.g. Sanoma)

25. In the future…
• There is no ”digital marketing”, there is only
marketing.
• There is no ”ecommerce”, there is only
commerce (omnichannel).
• There is no ”mobile analytics” and ”Web
analytics”, there is only analytics.
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26. However, there is strong fragmentation.
The (currently) dominant areas of digital
marketing:
1. Online advertising
2. Search-engine marketing
3. Social media marketing
4. Content marketing
5. Blogger reachouts
6. Affiliate marketing
7. Email marketing
8. Marketing automation
9. Conversion optimization
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27. Strategic development of digital marketing
competences (Tekula, 2012)
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Broad knowledge (generalists)
Deep
knowledge
(specialists)
Applies to both
individuals and agencies
General broad +
Selective deep =
”T-shaped” digital
marketer

28. Thank you!
Joni Salminen
PhD, marketing
joolsa@utu.fi
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