Lecture 2: The online revolution, data and databases

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Analyzing the digital marketing environment

Digital Marketing
Associate Professor Bruno Schivinski
 Lecture content

• The online revolution: the Internet, AI, social media

• Data
• Databases
• Customer Relationship Management
A short history of the Internet (according to IDM)

• 1960s – first mentions of networked computers, ARPANET developed by

Advanced Research Projects Agency (ARPA), first network of four computers
• 1970s – e-mail programme is invented, first international connections (UK and
Norway)
• 1980s- 1990s – WWW developed
• 1995 – Pizza Hut accepts first pizza order over the Internet
• 1996 – commercial users outnumber public sector users, amazon.com is
established
• 1998 – amazon.com
• 2000 – nearly 20 million websites online
Internet users
worldwide
2024 – 5.5 billion
Internet users
worldwide

China, India and

the USA are the
top ‘users’ of the
Internet
Goods and services ranked by share of individuals who
purchased online in Great Britain in 2018
E-learning material

Medicine

Computer hardware

Telecommunications services

Video games software, other software

Electronic equipment

Food and/or grocieries

Books, magazines, newspapers

Films, music

Tickets for events

Travel arrangements

Holiday accomodation

Household goods (furniture,toys etc.)

Clothes and sports goods

0% 10% 20% 30% 40% 50% 60%

Goods and services ranked by share of individuals who
purchased online in the US in 2024
 Mobile commerce
(part of e-commerce)
• Mobile ecommerce sales account for 38.5% of total
ecommerce sales in 2024, and that number is
growing (USA)

• M-commerce (mobile commerce) is the buying and

selling of goods and services through wireless
handheld devices: smart/mobile phones.

• Next generation e-commerce

• M-commerce enables users to access the Internet

without needing to find a place to plug in

• Opportunities for data collection?

• Mobile apps as part of digital marketing strategy

What is data?
What is data?

Data
A necessity for almost any enterprise to carry out its business. Consists
of raw facts, and when organised may be transformed into information

Database
A collection of data organised to meet users’ needs

Database management system (DBMS)

A group of programs that manipulate the database and provide an
interface between the database and the user of the database or other
application programs
Customer database

“An organised collection of comprehensive data about individual customers

or prospects, including geographic, demographic, psychographic, and
behavioral data.”

• any collection of information/data about customers (filing cabinet)

• computerized library systems
• flight reservation systems Customer database is the foundation
of digital marketing
Types of data

CONSUMER DATA LIFESTYLE DATA BUSINESS-TO-BUSINESS

DATA
• Name
• Address - • ACORN • Business type
business/home (https://acorn.caci.co.uk/) • Industry
• Age • MOSAIC • Company size
• Marital status (https://www.experian.co. • Age
Language uk/marketing- • Transactional
• Mobile & phone services/data/mosaic- information
details uk/) • Main contacts/decision
• Email • AXCIOM makers
• Household (https://www.acxiom.co.u
composition k/)
• Transactional
information • - Linked to address/post
code
Where does data come from?

External sources
• Third party databases
• Electoral Roll
• Lifestyle databases Data capture system – how is data
• Credit reference houses captured, stored and used?
Internal sources
• Credit card transactions
• Loyalty cards
• Shopper accounts
Primary marketing research
• Qualitative
• Quantitative
 Where does data come from? – example

• Customer goes to
www.boden.com
• Types in email
• Email is saved in a database
 Where data come from – example

Customer logs in/creates an account

 Where does data come from?
• A customer calls to ask about an order
• A customer emails to ask about an order All interactions are saved in a
database
Last
order
Name DOB Gender date Items ordered Value of order last login? replied to catalogue
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 250 May-21 Yes
Steven
Blue 10 April 1998 M May-21 dress, dress, skirt, 120 May-21 Yes
Anna shoes, tshirt, trousers,
Green 12 January 1990 M May-21 dress 345 May-21 Yes
Thom shoes, tshirt, trousers,
red 18 May 1987M May-21 dress 100 May-21 Yes
Sofia shoes, tshirt, trousers,
Flago 18 April 1980 M May-21 dress 234 May-21 Yes
Anna shoes, tshirt, trousers,
Pink 03 May 2000M May-21 dress 200 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 370 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 560 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 1560 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 10 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 35 May-21 Yes
Alan shoes, tshirt, trousers,
Smith 18 May 2000M May-21 dress 80 May-21 Yes
 Where is data kept?
Data is often kept in the ‘cloud’

Cloud is only a word that describes

an actual physical warehouse/data storage and cables that connect us
Customer Relationship Management (CRM)

One of the uses of data and databases is to manage

relationships with customers

Customer Relationship Management: a company-wide

business strategy designed to optimise profitability, revenue,
and customer satisfaction by focusing on highly defined and
precise customer groups.
Customer Relationship
Management strategy
Organize the company around customer segments

Encourage and track customer interaction with the company

Foster customer-satisfying behaviors

Link all processes of the company from its customers

through its suppliers

Allows companies to tightly focus in on their target markets

Capture customer data Data is only useful if consistent
and accurate.

The traditional approach for acquiring data from

customers is through channel interactions.

Store visits (online & offline)

Conversations with salespeople

Interactions via the Web/Mobile Apps

Traditional phone conversations

Wireless communications
A simple flow model of the Customer Relationship
Management system

Identify customer relationships

Leverage customer Understand interactions

information with current customer base

Capture customer data

Identify best customers
based on interactions

Store and integrate

customer data using IT
Common CRM marketing
database applications
Reinforcing customer
Campaign management
purchase decisions

Retain loyal Inducing product trial

customers by new customers

Increasing effectiveness
Cross-selling other
of distribution channel
products and services marketing

Designing targeted Improving

marketing communications customer service
Digital Marketing campaign management

Developing customized
offerings for appropriate segment

Pricing these offerings

attractively

Communicating offerings in a way

that enhances customer relationships
Retaining loyal customers - online
Retaining an additional 5 percent of customers can
increase profits by as much as 25 percent

Improving customer retention by 2 percent can

decrease costs by as much as 10 percent

Loyalty programs reward loyal customers for

making multiple purchases

Loyalty programs provide information about

customers and trends
 Cross-selling
other
products and
services
• Match product profiles and
consumer profiles to cross-
sell products matching
customer characteristics

• Use product and customer

profiling online to reveal
cross-selling opportunities
while customers browse
company Web sites (data
driven approach)
Designing targeted digital marketing
communications

Infrequent Offer direct incentives, such

Users as a price discount

Moderate Offer more reinforcement of

Users past purchase decisions

Heavy Design around loyalty and

Users reinforcement of purchase
 Reinforcing customer online purchase
decisions

• Thanking customers for purchases and telling them

they’re important (both online and offline)

• Updating customers periodically on order status

• Offer customer service opportunities with post-sale e-

mails
Inducing product trial

• Use of marketing database

to identify new customers
• Best customer profile can
be used to profile
potential customers

• Overlay demographic and

behavioral data on existing
customer data
Increasing effectiveness of
distribution channel marketing

• Use Web sites to stay connected with customers

and gain information about them

• Use multichannel marketing to monitor

purchases of customer shopping both in-store
and online

• Use RFID (radio-frequency identification i.e.,

tracking, real time monitoring) technology to
improve distribution
Improving customer service

Examples of online tools used to get customers

to return include:

• customer wish lists

• recommendations based on purchase and
search behavior
• one click purchasing
• shipment tracking
Effective applications of direct marketing
Services/products that are bought by customers on regular basis but not too often
Customers need reminders
• Insurance: car, home, pet
• Veterinary services
• Dentists

Niche marketing where only a specific segment is interested in a product/service and where
repeat use is common
• Museums
• Galleries
• Community organisations
 Emerging issues How is data used ?

• AI
• The Internet of Things (IoT) – Smart meters e.g., gas, electricity
• SMART Cities
• Loyalty cards and the use of data
• Social media and the use of data (The Great Hack – watch it if you can)
• Is data-driven marketing always so accurate? – what online ads do you see
on your computer?
• Dash Buttons (e.g., Amazon.com)
What do we do on the Internet?
 Daily time spent on social networking by internet
users worldwide from 2012 to 2024 (in minutes)

3 Overview
Number of monthly active mobile social media users in Europe as of January 2021, by country (in
millions)
Monthly active mobile social media users in European countries 2021

Number of monthly active mobile social users in millions

0 20 40 60 80 100 120

Russia 99

Germany 66

United Kingdom (UK) 53

France 49.6

Italy 41

Spain 37.4

Poland 25.9

Ukraine 25.7

Netherlands 15.1

Romania 12

Belgium 8.83

Sweden 8.32

Portugal 7.8

Greece 7.4

Czech Republic 7.39

Note(s): Europe; January 2021

Further information regarding this statistic can be found on page 65.
5 Source(s): We Are Social; Hootsuite; DataReportal; ID 299496 Overview
Social media advertising revenue in selected countries in Europe in 202 4 (in million U.S. dollars)
Digital Market Outlook: social media advertising revenue in European countries 202 4

Revenue in million U.S. dollars

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

United Kingdom 9,025

Germany 2,767

France 2,398

Italy 1,593

Spain 1,342

Netherlands 1,176

Sweden 775

Switzerland 714

Denmark 601

Norway 598

Belgium 466

Austria 436

Finland 416

Ireland 338

Portugal 161

Note(s): Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom; 2024
Further information regarding this statistic can be found on page 66.
6 Source(s): Statista; Statista Digital Market Outlook; ID 461963 Overview
Percentage of companies using social media in Europe in 2023, by country
Share of companies using social networks in Europe by country 2023

Share of companies
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Iceland 75%

Malta 84%

Norway 76%

Denmark 75%

Ireland 71%

Netherlands 74%

Cyprus 73%

Sweden 72%

UK 72%

Finland 71%

Belgium 71%

luxembourg 62%

Austria 60%

Spain 43%

Greece 55%

Note(s): France; 2023

Further information regarding this statistic can be found on page 67.
7 Source(s): Eurostat; ID 1090015 Overview
Share of respondents using online social networks daily in EU 28 countries in 2022
Daily social networking penetration in European countries 2019

Share of respondents
0% 10% 20% 30% 40% 50% 60% 70% 80%

Malta 68%

Denmark 65%

Sweden 65%

Cyprus 63%

Portugal 60%

United Kingdom 59%

Finland 58%

Netherlands 57%

Lithuania 57%

Belgium 56%

Latvia 55%

Ireland 55%

Estonia 55%

Bulgaria 54%

Greece 53%

Note(s): EU; 2022; 15 years and older; 32,543 respondents; respondents represent the whole territory of the countries surveyed.
Further information regarding this statistic can be found on page 69.
10 Source(s): European Commission; ID 453745 User Demographics & Behavior
Reach of selected social networking websites in Great Britain (GB) from 2014 to 2020
Reach of selected social networking websites in the Great Britain 2014-2020

Facebook Instagram Twitter LinkedIn WhatsApp Snapchat

80%

70%

60%
Share of respondents

50%

40%

30%

20%

10%

0%
February 2014 February 2015 February 2016 February 2017 February 2018 February 2019 February 2020

Note(s): United Kingdom (Great Britain); February 7-16, 2020; 15 years and older; 1,004 respondents
Further information regarding this statistic can be found on page 51.
4 Source(s): Ipsos; Ipsos MORI; ID 269788 Reach
Leading social networks by share of website visits in the United Kingdom (UK) as of May 2024

Share of visits
0% 10% 20% 30% 40% 50% 60%

Facebook 56.05%

Twitter 23.79%

Pinterest 8.44%

Instagram 5.53%

YouTube 2.98%

Reddit 1.33%

Tumblr 0.78%

Other 1.1%

Note(s): United Kingdom; May 2021; includes desktop, mobile, tablet and console use.
Further information regarding this statistic can be found on page 52.
5 Source(s): StatCounter; ID 280295 Reach
Share of respondents who had their own social network profile in the United Kingdom (UK) from
2015 to 2020, by age*
Social network profile ownership in the United Kingdom (UK) 2015-2020, by age group

16-24 25-34 35-44 45-54 55-64 65-74

100%

90%

80%

70%
Share of respondents

60%

50%

40%

30%

20%

10%

0%
2015 2016 2017 2018 2019 2020

Note(s): United Kingdom; 2015 to 2020; 16 years and older; 2,166**; All who go online
Further information regarding this statistic can be found on page 53.
7 Source(s): Ofcom; ID 271879 User Demographics
Share of respondents who had set up their own social network profile in the United Kingdom (UK)
from 2010 to 2020, by gender*
Social network profile creation in the United Kingdom (UK) 2010-2020, by gender

Male Female

90%

85%

80%

75%
Share of respondents

70%

65%

60%

55%

50%

45%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Note(s): United Kingdom; 2010 to 2020**; 16 years and older; 2,776 respondents; Those who go online
Further information regarding this statistic can be found on page 54.
8 Source(s): Ofcom; ID 271892 User Demographics
Which one of these social networking sites or apps do you use most often?
Main social networking site preference in the United Kingdom (UK) 2024, by age

Share of respondents

Facebook WhatsApp Instagram TikTok YouTube Snapchat Twitter LinkedIn Pinterest Reddit

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Aged 16-24

Aged 25-34

Aged 35-44

Aged 45-54

Aged 55-64

Aged 65+

Note(s): United Kingdom; 2024; 16 years and older; 2,166 respondents; those with a social media profile or account on any sites or apps.
Further information regarding this statistic can be found on page 57.
11 Source(s): Ofcom; ID 308712 User Demographics
 Where to find information about
relevant consumer behaviour?

• https://www.statista.com/
• https://www.mintel.com/
• Official government statistics (Office for
National Statistics)
Homework

Explore Linkedin Advertising features: https://business.linkedin.com/marketing-

solutions/ads

Explore Linkedin Ad Targeting: https://business.linkedin.com/marketing-solutions/ad-

targeting

ESSENTIAL READING: Hanlon (2020), Chapter 2: The Digital Consumer & Chapter 3:
Email, Websites, SEO and Paid Search