Advertising vs Digital Marketing

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Computer devicesIt’s been known for a while now that I have taken on the role of CTO of The Linus Group. It has been said at the time about this that I am changing my area of expertise, since I left Magnetic / Cognitive Match who were clearly focused on online advertising to join a company which operates in digital marketing space. This statement is something which I disagreed to from the beginning, as I don’t see this as a change of direction on my side at all (on the contrary!) — so I’m setting off to shed a bit of light into this matter in this post. I’m going to make a bit of a side-by-side comparison in between the online advertising and the digital marketing and see how much they are alike to each other as well as complement each other.

To start with, let’s look at who is a heavy user (and by user I mean someone who buys advertising inventory not just consume it, the way any web user nowadays does) of online advertising. It turns out it’s exactly digital marketers! These guys are looking at ways to increase brand awareness, develop a regular user base or increase their sales by using all sorts of channels, one of these channels being online advertising. The concept is very simple: you buy advertising to attract users to your website — with a view in mind to sell them a product/service, have them join the ranks of your regular users and so on. It’s the typical sales funnel with the advertising at one end and sales at the other end. The thing that one might not be aware of working in online advertising is that most of the online advertising budgets come as a result of a marketing strategy — and as such are approved by marketers.

This might not be a huge revelation after all, even if you didn’t know this before, however it does have a pretty big impact on online advertising because everything that a digital marketer tracks on-site needs to be trackable in an online advertising campaign. As well as any mechanisms needed by a digital marketer need to be available in the online advertising ecosystem. Pretty much in fact, the two areas drag each other forward: if something becomes available in the advertising world, marketers will want to implement it on their site and vice versa.

For instance, back in advertising world, we build user profiles. These help us decide which advertising campaigns the user is more likely to react to. The same is being done in digital marketing: each website wants to build user profiles so they can decide which user is more likely to be interested in a new product or service or offering the company has. The more interesting aspect is that in online advertising we steer clear of PII (personally identifiable information) so we don’t compromise any user identity since a lot of the information gathering is without explicit user consent etc. However, that issue goes away in the digital marketing segment: most of the times we ask the user to explicitly register and/or give us their email address (via some landing page or sign up form) — which makes user tracking even easier. Also, there’s no issues about 3rd party cookies since the user is on our site — so there’s less concerns about popup blockers, cookie blocking policies and so on. This makes it somewhat easier to build a user profile while the user is on-site, however, as I said the same principle applies about building a user profile in the interest of better targeting the user with information and services. Also, in an online advertising solution, the user profile can be built by the user visiting any website we run our cookies on — as such we are looking at huge numbers of users and huge volume of traffic, which is what makes online advertising systems so interesting for a techie due to the vast volumes of data encountered daily. When dealing with tracking users on-site, the volume is much smaller — your average website (I’m not talking Facebook, Twitter, Amazon here!) is probably looking at maybe 10k – 100k visits per day. As such your profiles are much smaller as well as the rate of incoming data is much smaller.

In advertising world, we then use this data to decide which advert or campaign to target the user with — in on-site world, this user profile can trigger all sorts of targeting: you can present “recommendations” (which is basically the same thing, see my previous post about advertising vs recommendation) to the user throughout their journey on the website. Or you can enroll your user in an email marketing campaign if you run any marketing automation and keep them engaged via email. Again, the principle is the same: the user profile dictates what we target the user with and how.

The other thing which has gained a lot of traction in advertising recently is retargeting — we track the pages the user visits and based on that we “follow” them around with offers for the product they looked at, or alternatively try to advertise alternative products based on products they looked at. And the same thing applies to on-site in marketing: when a user looks at a certain product, we want some triggers to kick in; be it to start showing the product to the user, email the user updates about offers involving that product, or show a newer / better version of whatever they were looking at.

The list goes on and I will follow-up on this thread with more, but to circle back to the initial point, this is not a change of direction for me at all. It seems to me that digital marketing and on-site marketing techniques is really just small-scale advertising. The principles are the same, the scale is different.