Digital marketing is the promotion of goods and services via the internet and mobile apps. It's the online counterpart to traditional marketing programs that use television, radio, and print to distribute information to prospective customers. This article explores digital marketing, including the types of programs available, the challenges digital marketers face, and the privacy issues associated with online campaigns.

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Understanding digital marketing

Understanding digital marketing

Digital marketing usually centers on an online property like a website or mobile app. Typically, marketers want to drive more people to a website or app designed to promote products and services. Users may have the option to buy directly from there or may be encouraged to call or visit a location to continue the sales process offline.

The mechanics of measuring digital campaign success depends on the goal. If online sales is the aim, the marketer may analyze the gross profit generated relative to the campaign cost. Marketers may also evaluate the number of leads produced and the rate at which those leads are converted into customers.

Lead Generation

The process of finding potential customers who may be interested in a product or service.

The analysis can be more complex if the business's typical customer makes repeat purchases. In that case, the marketer might look at the average cost of acquiring a new customer relative to the average profit generated by a customer over time.

Different types

Types of digital marketing

The main types of digital marketing programs include the following:

  • Content marketing. Content marketers create and publish articles, videos, e-books, podcasts, and other information to attract and engage a certain audience. Content can be published on a business's own digital properties or elsewhere.
  • Search engine optimization. Search engine optimization (SEO) is the practice of updating a website so it receives consistent and relevant traffic from Bing, Alphabet's (GOOG 9.96%)(GOOGL 10.22%) Google, and other search engines.
  • Pay-per-click marketing. Pay-per-click (PPC) campaigns display ads on search engines, social media platforms, and other websites. The marketer pays a fee each time someone clicks on the ad.
  • Email marketing. Email marketing delivers content and promotional messages via email to individuals who agree to accept them.
  • Affiliate marketing. Affiliate marketing pays commissions to online publishers who refer customers and prospects. The publisher promotes a link with an encrypted code so the referrals can be tracked.
  • Social media marketing. Social media marketing is a subset of content marketing. It involves sharing content on Meta's (META 0.43%) Facebook and Instagram, on TikTok, and on other social media platforms.
  • Influencer marketing. Influencer marketing compensates people with large social media followings and/or relevant website traffic to promote products and services.
  • Mobile marketing. Mobile marketing sends promotional messages and content to customers and prospects via text messages. As with email marketing, message recipients must opt into this service.

Social Media

Social media are internet platforms that facilitate the creation, sharing, and discovery of user-generated content.

Challenges for marketers

Challenges for digital marketers

The field of digital marketing has evolved over the last 30 years -- from new technology with few options to an increasingly complex discipline. That evolution has introduced challenges for digital marketers.

That's especially true for smaller businesses with fewer resources. These challenges include competition among advertisers, a large and fragmented set of platform options, messaging fatigue among audiences, and increasing privacy restrictions.

Competition among advertisers

In the early days of digital marketing, small marketing budgets could compete for the same audiences alongside large ones. That is not the reality today.

All types of digital marketing now require resources to pay specialists, buy ad space, and produce engaging content for websites, emails, social media channels, and text messages. Big budgets can hire the best people, buy more ads, and produce more (and sometimes better) content.

Many platform options

Marketers can place ads on Google, Facebook, YouTube, TikTok, Pinterest (PINS 4.04%), LinkedIn, Snap's (SNAP 27.63%) Snapchat, X, mobile apps, and more. They can also pay for email and mobile messaging platforms, content creators, SEO analysts, and developers.

Understanding how to create an effective marketing strategy that allocates funds across these options is challenging. It typically requires experimentation and subsequent data analysis, which can be cost-prohibitive for smaller marketing organizations. The growing field of marketing analytics seeks to address this challenge.

Marketing Strategy

A plan that a business uses to reach potential customers and promote products or services that might be interesting to them.

Messaging fatigue

Internet and mobile app users are presented with many marketing messages daily. Social media platforms and gaming apps are particularly heavy on ads. Amid all that messaging noise, it's difficult for marketers to create engaging, memorable content.

Privacy restrictions

Governments in the U.S. and worldwide are increasingly passing privacy regulations that affect digital marketing practices. These regulations require marketers to be more transparent about how they collect data and allow users to request their data be deleted.

Digital marketers must update their practices to keep pace with the increasing regulatory focus on user privacy. This is discussed in more detail below.

Privacy concerns

Digital marketing and privacy

Digital marketing relies on user data to put content in front of the right people. The placement of PPC ads, for example, has historically relied on users' digital activities as tracked by small data files stored by their internet browsers. Those data files are called third-party cookies.

Cookies provide user data that makes advertising more effective. A car dealership, for example, sees better results when showing its ads to locals who are already car shopping versus someone in another state who's shopping for kids' bicycles online.

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However, tracking for the purposes of advertising is increasingly controversial. Several web browsers already restrict this activity.

The holdout has been the Google Chrome browser, which has a 64% market share. After several delays to its stated schedule, Chrome started testing the phaseout of third-party cookies in January 2024. Google's parent company, Alphabet, has said it would complete the transition by year-end.

Digital marketers will have to adjust to that phaseout. Alternative strategies include collecting user data directly through opt-ins and targeting ads to relevant website content rather than user activity.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Pinterest. The Motley Fool has a disclosure policy.