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.
Advertising Guru’s Coviello, Milley and Marcolin have defined digital marketing as
“using the Internet and other interactive technologies to create and mediate dialogue

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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
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

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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
directly. The elimination of the intermediate channel allows the producer to pass the reduced
distribution cost to the customer in the form of discounts.

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 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.

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

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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)
 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.

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 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
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

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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
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.

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 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

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

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 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.
 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.

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 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)
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

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 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.

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

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 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
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-

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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.

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.

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 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.
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

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 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
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

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 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-
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

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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

Although personalization and interactivity are the main variables that moderate brand
communication, there are other moderating variables which affect customer loyalty through
digital marketing.

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 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.
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

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 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.

 Relationship

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

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

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 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
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

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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.
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.

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 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.
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.

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

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 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.

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

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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 attractive to

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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.

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  The tone of advertising must be more authentic
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 active

display 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

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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.
 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.

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  China: A Different Culture
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.

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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 –
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.

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4.9.13. What can publishers do?

 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

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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
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.

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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,
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.

6.5 Research Tool

A questionnaire was used as a research tool to conduct the study. The questionnaire
majorly consisted of close ended questions.

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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?
Local
Home Work 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.

Question 2

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 Age group How often do you use the internet in a week?
Alternate Whenever
Everyday Days Weekends 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.

Question 3

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 Age group Which of these following aspects do you use the most?
Social
Email 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 Shopping at local
Online 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?
No internet Lack of Not
Null Not Secure Access Info 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?
Newspaper/ Shopping
TV Radio Hoardings 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?
Newspaper/H Friends/Famil
TV Internet Radio oardings y
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.

Age group * Rediff shopping Cross tabulation

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 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.

Age group * Orkut Cross tabulation

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 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.

Age group * MSN Cross tabulation

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 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.

Age group * Yahoo Cross tabulation

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 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.

Age group * Techtree Cross tabulation

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 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.

Age group * eBay Cross tabulation

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 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.

Age group * Nike Cross tabulation

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 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.

Age group * Amazon Cross tabulation

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 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.

Age group * Puma Cross tabulation

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 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.

Age group * Google Cross tabulation

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 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.

Age group * Naaptol Cross tabulation

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 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.

Age group * Futurebazaar Cross tabulation

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 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.

Age group * Croma Cross tabulation

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 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.

CHAPTER 8
CONCLUSION

When the dominant logic of marketing is shifting from exchange of goods toward

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 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
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

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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.

CHAPTER 9
RECOMMENDATIONS

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 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.
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

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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.
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/

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  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_m
easure_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_Digit
alMarketing.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

CHAPTER 11
ANNEXURE

11.1 QUESTIONNAIRE

OBJECTIVE: To study customer perception about digital marketing.

Name: ____________________________________________________

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 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

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

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7) Where do you prefer watching advertisements –
a) TV
b) Radio
c) Newspaper / Hoardings.
d) Shopping Malls
e) Online (Websites/Email)

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.

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 Execution
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.

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 Spirit of Ganging
 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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