SUMMARY ALL ARTICLES Digital Marketing Intelligence - MADS RUG
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Course
Digital Marketing Intelligence (EBM079B05)
Institution
Rijksuniversiteit Groningen (RuG)
Summary of required articles of the course DMI at the RUG (): - Digital marketing: A framework, review and research agenda (Kannan & Li, 2017)
- Exploring the effects of what (product) and where (website) characteristics on online shopping behavior (Mallapragada et al., 2016)
- Path to purpose?...
SUMMARY DIGITAL MARKETING ANALYTICS ARTICLES 2021-2022
WEEK 1
DIGITAL MARKETING: A FRAMEWORK, REVIEW AND RESEARCH AGENDA – KANNAN & LI
(2017)
Digital marketing is defined as an adaptive, technology-
enabled process by which firms collaborate with
customers and partners to jointly create, communicate,
deliver, and sustain value for all stakeholders. The
adaptive process enabled by the digital technologies
creates value in new ways in new digital environments.
Processes enabled by digital technologies create value
through new customer experiences and through
interactions among customers. Digital marketing itself is
enabled by a series of adaptive digital touchpoints
encompassing the marketing activity, institutions,
processes and customers.
Key concepts and elements of the framework are:
Digital technologies are rapidly changing the environment within which firms operate, specifically they are
reducing information asymmetries between customers and sellers.
- Consumer behavior is changing as a result of access to a variety of technologies and devices both
in the online and mobile contexts. Customers can influence other potential buyers through online
reviews, social media, etc., during both the pre-purchase and post-purchase stages. The
customer decision journey often spans across digital as well as traditional offline environments.
However, multichannel customers are not necessarily more valuable than single channel users.
Reduced search costs and more efficient purchase processes in digital environments are very
important. Also trust is an important element that influences customers’ selective information
gathering and search behavior in the digital environment.
- Social media & user generated content (UGC) entails digital technologies’ facilitation of
customer-customer interactions through online media. People contribute on social media
because of two types of utility that a contributor derives from social media: (1) intrinsic utility,
the direct utility of posting content and (2) image-related utility derived from the perception of
others. It is important to identify the influential individuals in a social network, since an individual
is more likely to adopt if she is connected to more adopters or if the density of adopter
connections is higher in her group. Furthermore, negative reviews have a stronger impact than
positive ones.
- Platforms are institutions created through digital innovations which facilitate customer-to-
customer interactions for ideation in new product/service development, those that connect
customers and sellers in platform-based markets and those that leverage two-sided markets for
their revenue generation. They are collaboration enablers that connect a firm to its market using
digital technologies. Network effects, that is, more users/buyers will increase the number of
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, advertisers/sellers of the two-sided marketplace, are important for platforms. As a result of the
network effects of a two-sided market, the profits from advertising may decrease at a higher
level of competition, but the content profits could still increase.
- Firms have to contend with search engines as both collaborators and platforms on which they
compete with other firms in acquiring customers. They allow customers to acquire free
information on products and services and identify firms and brands that fit their search criteria.
Search engines provide organic listings of websites as well as paid search listings in response to
the keywords that users type in. Search engines are an effective selection mechanism to identify
high-value customers as well as understand the effectiveness of a firm’s paid search advertising.
Paid search advertising is more effective than offline advertising, and its impact is more enduring
than that of e-mail. There are three players involved in search engine marketing: (1) the search
engine, (2) the advertiser/firm and (3) the customer.
The interactions of digital technologies with different contexts of geography, privacy and security,
regulation and piracy, and their implications for digital marketing are the contextual interactions
examined. Three contextual elements that could have a significant impact on the effectiveness of digital
marketing:
- Geography and location: Online customer preferences and choices are a function of geography.
- Regulations on privacy: Data collected by companies helps them better understand when, where
and how to fulfill a customer’s needs but customers’ concern for their privacy is rising.
- Regulations against the piracy of content: Weaker copyright protection could serve as a
coordination device to reduce price competition. Even when there’s a presence of strong
network effects, stronger copyright enforcement by a firm could serve as a coordinating device
to reduce price competition. Download piracy might actually decrease when firms allow legal
DRM-free downloads and it can also increase the demand for legitimate products as well as a
willingness to pay for them.
Within the company:
- Digital technologies are changing the concept of product in three ways in order to provide
customers new value propositions: (1) augmenting the core product with digital services, (2)
networking of products using digital technologies to release the dormant value inherent in the
products, and (3) morphing products into digital services. At the heart of this augmentation and
transformation is an effort to provide new values to consumers that foster the creation of new
business models.
- The developments in digital product lines and tailored offerings to customers lead to pricing
challenges for firms. The reduction in menu costs associated with digital technologies also leads
to opportunities for dynamic pricing and yield management in product and service categories
traditionally sold with list prices.
- The digital environment provides new means to reach customers and promote products and
services via e-mails, display advertisements, and social media (promotion).
- There are also new channels for customer communications and promotions, including sub-
channels such as social channels, search engines, and e-mail that help firms to provide significant
value to customers as well as acquire the right customers and increase customer value. Due to
these new channels, it is much easier to get data on specific touchpoints within firms. Browsing
behaviors differ depending on the medium.
The impact of digital technologies on outcomes could span across different dimensions – in creating value
for customers and in extracting the value for the firm. The outcomes are a reflection of how the firm has
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, been able to benefit from the opportunity provided by digital technologies to create value for their
customers and also create value for themselves.
Marketing research focuses on the acquisition and processing of information generated as a result of the
use of digital technologies to understand the specific elements of the environment, actions and outcomes
that inform the marketing strategies of the firm. Clickstream analysis as well as social interactions in social
networks are widely used for market research.
There are issues related to marketing strategy that are partly captured in one or more of the elements or
interfaces. The introduction of new channels, new shopping devices, and new customer interactions calls
for an updated understanding of the customer management and brand management and requires firms
to re-define their marketing mix and CRM metrics. The focus with regard to brand management is on
understanding how the brand is created, modified and strengthened in and by the digital landscape.
PATH TO PURPOSE? HOW ONLINE CUSTOMER JOURNEYS DIFFER FOR HEDONIC VERSUS
UTILITARIAN PURCHASES – LI ET AL. (2020)
With the proliferation of electronic commerce, examining the role of various information channels during the
customer journey is becoming increasingly important. A customer journey is the series of actions a customer takes
to arrive at the moment of purchase. These actions include an examination of various information sources and the
evaluation of alternatives before the purchase decision.
The H/U perspective emphasizes the bidimensional consumer attitudes toward brands and consumptions that
stem from affective and instrumental motives.
Hedonic consumption is based on the consumer’s experience of shopping, emotional attachment,
focusing on fun, playfulness, enjoyment, excitement, and the need for surprise. It is a more goal-
ambiguous, emotional experience. Consumers are more likely to rely on simple cues and heuristics rather
than deeper information processing to reach their purchase decision. Consumers could have a strong
“affective attachment” to brands and may process information more holistically. They could spend less
time on searching and comparing, but they may engage in guilt-reducing justification behaviors by
spending more time in the search process. They could also engage in a variety-seeking behavior due to
considerable product differentiation in hedonic purchases.
Utilitarian consumption is often more goal-directed and pertains to the need to complete specific tasks
efficiently and effectively. The objective is to make the best purchasing decision. The purchase is often
deliberate and planned, with well-defined dominant attributes that are easy to compare. This ease of
comparison reduces brand differentiation and increases price sensitivity. Consumers tend to prefer
information channels that allow for product attributes and prices across various alternatives so as to
optimize purchasing decisions.
The same product category can have varying H/U perceptions across different retailers and the same
retailer can have different H/U characteristics for its product categories.
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, Results:
For retailers selling hedonic products such as toys, two actionable insights are:
1. Embrace social media: social media is extensively used at the beginning of the journey, so
retailers could deploy special coupons with features that serve both the experiential and
justification needs of hedonic purchases.
2. Monitor on-site product page views: on-site product pages are leveraged extensively at the
beginning of the journey and start to reduce one week before the purchase. Given the
affective nature of hedonic purchases, retailers should constantly improve the experiential
features of the product pages on their sites to convert more hedonic purchases. Retailers can
also monitor their page vies and reach out to heavy browsers with promotions with a longer
redemption time.
For retailers selling utilitarian products such as office supplies, two prescriptions are:
1. Benchmark price and product: retailers should employ price and product benchmark analysis
to understand whether their price is above or below the market price and what potential
customers see and experience when searching for similar products, since consumers tend to
visit third-party review sites and deal sites as well as browse product pages on competing
retailers’ sites.
2. Prioritize search engine marketing (SEM): consumers tend to use search engines more toward
the end of the journey. SEM is more effective in driving conversions at the bottom of the
funnel, so retailers should prioritize SEM over search engine optimization. They should also
choose paid keywords that are more related to product features and benefits, provided that
utilitarian purchases usually involve more product comparisons.
Consumers’ utilization of various path-to-purchase channels differs across the retailer-category hedonic and
utilitarian characteristics of purchased products:
Consumers making hedonic purchases seek fun in their shopping process; prefer social media; and are
more likely to browse product pages on the target retailers’ website.
Consumers making utilitarian purchases prefer channels that facilitate convenient and efficient search
across alternatives. They prefer leveraging search engines, reading more reviews on third-party review
sites, comparing prices on deal sites, and browsing more product pages on competing retailers’ websites.
Because channel usage changes dynamically throughout the customer journey, the H/U effect also varies:
For hedonic purchases, social media is used as early as two weeks before the final purchase.
For utilitarian purchases, third-party review sites are engaged two weeks before the final purchase, and
this effect is attenuated toward the purchase day. Search engines and deal sites are utilized to a greater
extent closer to the day of a utilitarian purchase. The H/U effect on product page views decreases over
time, suggesting a consideration set narrowing process.
The analysis of unconverted sessions demonstrates a different H/U effect:
For hedonic purchases, social media is only used by hedonic purchases closer to the end of the journey.
Deal site visits and product page views on competing retailers’ sites increase, indicating a possible guilt-
justification demand commonly shown in hedonic consumption.
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