Digital Marketing

Data becomes a disruptive factor when it can be stored, accessed, analyzed, and (ideally) transmitted outside the device.

Economies of Scale refer to the cost advantages that result from large outputs.

Positive Feedback refers to the positive effect of past adoption of a product or a standard on the current adoption of a product or standard.

Market tipping refers the increasing advantage of one market player that earns an initial advantage enabling it to take over most or all the market

Network Effects are the increase (or decrease) in benefits that a user derives from a good or service when the number of users consuming this product or service increases

Indirect Network Effects are the increase (or decrease) in benefits that a user derives from a good or service from complementary products and standards developed as a result of product adoption.

Indirect Network Effects occur in networks with different types of units (buyers and sellers, two-sided markets), and refer to the benefits a member derives from increasing the number of members of a different type

The value of a network is proportional to the size of the audience, N.

The value of a network is proportional the number of possible connections, which for large N is approximately the square of the number of connected users of the network, N2.

Not all connections are equally valuable. Value of network is better approximated by N . log(N).

he value of a network is proportional to the number subgroups possible, which for large N is close to 2N

A Platform is the set of rules, components, and technologies that creates value by facilitating a network of users to interact, connect, and transact*.

A Two- or Multi-sided Platform is an organization that creates value primarily by enabling direct interactions between two or more distinct types of users.

1. Each group of users is a customer of the platform in a meaningful way

2. The platform enables some direct interaction between the sides

The Open vs. Closed dichotomy describes whether a participants needs to be authorized by a sponsor or a provider to participate in a platform, as well as how strict the rules of membership are.

A business model is a concise description of how an organization efficiently uses its resources to create value for its target customers and capture that value to deliver a return above the cost of capital.

The Long Tail business model is to making a large assortment of niche product available and easily searchable.

The Freemium business model offers vertically differentiated versions of the product, with the basic version being offered at no cost to the customer.

An own digital channel refers to the segmentation of the market into customers targeted via digital (branded) channel and customers targeted via traditional high-touch channels

Unbundling is based on the idea that a business is composed of a few fundamental businesses that need to be coordinated. A digital technology takes over the customer interaction creating a direct relationship. Typically this relationship is scalable because the marginal cost to interact with customers is close to zero. They can then re-create the industry by unbundling the core infrastructure

The sets of interdependent organizations involved in the process of making a product or service available for use or consumption

Disintermediation is the use of a digital medium to remove of one or more intermediaries between a manufacturer or a distributor and its customers.

An aggregator is a business that brings together the offering of multiple business under one site or platform

Omni-channel refers to the synergetic management of the numerous available channels and customer touch-points (online and offline), in such a way that the customer journey across channels and the performance over channels is optimized.

Money is any object that is accepted as payment for goods and services and repayment of debts in a given socioeconomic context.

Functions

§ Medium of exchange § Unit of account § Store of value

Inbound marketing: attracting and engaging customers by creating valuable content and experiences.

Chatbot: an interactive conversational tool that connects and supports customers that navigate a website. They are triggered by keywords, behaviors and other signals.

Paid advertising in digital media that resembles the content of the site.

Pros: Better targeting (cost effective) and less intrusion.

Cons: Confusion, unethical, negative consequences for the publisher.

Display Advertising Contract between advertiser and publisher where the publisher agrees to show a fixed number of impressions (CPMs) to a specific demographic during a specific period of time for a fixed price.

Guaranteed Delivery Contract between advertiser and publisher where the publisher agrees to show a fixed number of impressions (CPMs) to a specific demographic during a specific period of time for a fixed price.

Retargeting Showing display ads to individuals that have potential interest in your product or website because they have browsed or searched for it (pixel retargeting); sometimes retargeting is used when targeting individuals that are part of a specific list, typically subscribers, followers fans (list retargeting)

Search Engine Optimization Maximize the visits to a website by ensuring that the website shows up high on the organic results of a search engine via webpage design, choice of keywords, outgoing links and other technical features.

A/B testing is a marketing experiment used in product design and web analytics to refer to two-sample hypothesis test that compares two versions of a product or advertising message or channel. Typically, it varies one variable at a time, but that is not necessary.

Intent-to-treat

Consumers are assigned to conditions and we compare the two conditions irrespective of whether they saw the ad. Users who do not see the ad do not contribute to the measurement and only add noise.

(multi-touch) Attribution Determining the causal impact of the different communication channels, events, touchpoints, or media on customer responses (e.g. conversion, visits, etc.)

The decrease in effectiveness of additional ads with repeated exposures. (Opportunity cost)

Additional advertising exposure has a significant negative effect

(Business loss)

s “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet.” (Hennig-Thurau et al., 2004)

as websites and internet-based applications that enable users to create and share content or to participate in social networking.

Dispersion: The extent to which product-related conversations are taking place across a broad range of communities (Godes & Mayzlin, 2004)

Influencer as individual or group who built their own audience through social media platforms and influence others.

Influencer marketing as using social media influencers as a communication channel in the marketing mix.

A customer journey is the series of actions a customer takes to arrive at the moment of purchase, and the cognitive and emotional states along those steps (Lemon and Verhoef 2016, Schmitt 1999).

Customer experience refers to the multidimensional construct that involves sensory, physical, cognitive and emotional responses from the customers during the interactions with a company or brand (adapted from Lemon and Verhoef 2016).

Content marketing is the creation of valuable content to entertain, inform, educate and inspire the target audience, in a way that creates engagement, attracts and retains customers and ultimately drive sales.

The General Data Protection Regulation (GDPR) is a comprehensive regulation enacted by the European Union to strengthen and unify data protection for all individuals within the EU, ensuring their privacy rights and giving them control over their personal data.

Principles

1. Lawfulness

2. Fairness and transparency

3. Purpose limitation and Data minimisation

4. Accuracy

5. Storage limitation

6. Integrity and confidentiality (security)

7. Accountability.

‘consent’ of the data subject means any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her;

Algorithmic Bias occurs when an algorithm using individual or group-level information produces outcomes that are disadvantage (or privilege) a certain group of people based on gender, race, class, sexual orientation, religion or age, therefore discriminating against that group. Algorithmic bias can occur even situations where the group identity (e.g., gender) is not included in the algorithm.

Gordon Moore observed that the number of transistors in a dense integrated circuit (e.g. computer chips) doubles approximately every two years.

Representation of analog information such as text, sound or image in numerical format

format: bits (binary digits, commonly 0 and 1).

-> A sequence of 8 bits (0 1 1 0 0 1 0 1 ) is called a byte and it can store one character, e.g. an A

only useful:

§ technological development (computer power / algorithms)

§ infrastructure (interconnection of technology)

§ in order to be stored, processed and transmitted

integration of digital technology into all areas of a business

Cross network effects:

the value of a product for a consumer increases with the number of users of the other user group of this product