The Impact of Technology on Marketing and Advertising

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With the introduction of the iPhone in 2007, to the present day, “e-commerce would be transformed yet again by the rapid growth of online social networks, widespread adoption of consumer mobile devices such as smartphones and tablet computers, and the expansion of e-commerce to include local goods and services,” say Laudon and Traver (2013, p. 73). “Marketing is transformed by the increasing use of social networks, word-of-mouth, viral marketing, and much more powerful data repositories and analytic tools for personal marketing” (Laudon & Traver, 2013, p. 73). Never before has marketing been so accurately measured, which before, could only be estimated using traditional methods.

With so many different marketing strategies being implemented over digital channels and on the Internet, it is important to understand what defines the difference between digital marketing and Internet marketing. Digital marketing revolves around the Internet, which is why the two methods are often confused; however, they are different (Myles, 2011). Internet marketing falls under the umbrella of digital marketing and encompasses digital marketing services such as search engine marketing (“SEM”), search engine optimization (“SEO”), social media, display advertising and email marketing (Myles, 2011). Digital marketing methods that do not fall in the Internet marketing category include wireless text messaging, mobile instant messaging and mobile apps; hence, “digital marketing refers to mobile marketing, digital telephony, and digital voice records as well” (Myles, 2011).

Online Advertising

The Internet provides opportunities for marketers to distribute text, display and video content to users globally at a fraction of the cost of traditional advertising methods (Berger, 2013). And, online advertising is delivered at a speed that has no competition from traditional media. Online advertising is expected to be the fastest growing form of advertising and will be the second largest, if not the first largest advertising channel by 2016 (Laudon & Traver, 2013).

There are a number of digital forms of advertisements, which include display ads (banners and pop-ups) and video ads that are delivered through search engine advertising, mobile advertising and social advertising methods (Laudon & Traver, 2013). The Interactive Advertising Bureau has established voluntary industry guidelines for online advertising, which many publishers follow to give consumers a consistent experience across websites (Laudon & Traver, 2013). A banner ad displays an advertisement in a rectangular box at the top, bottom or sides of a website. Banner ads come in a variety of sizes, with the most desirable size and position typically being the leaderboard (the long, horizontal position at the top of a web page). Banner ads can display Flash video or animated GIFs, which will rotate through different images to create an animated effect (Laudon & Traver, 2013).

Pop-up banner ads appear over the top of a web page. Pop-under ads appear under a web browser where a user typically isn’t aware of their presence until they exit their browser (Laudon and Traver, 2013). Laudon and Traver (2013) say these types of ads typically cause negative user sentiment and that “online consumers rate pop-ups right next to telemarketing as the most annoying form of marketing communication” (p. 470). Another seemingly unpopular type of online ad is the interstitial ad, which is a type of advertisement that appears as a full-page and temporarily blocks a user from reaching their intended destination, typically for up to 10 seconds (Laudon and Traver, 2013). In a study conducted by Baron, Brouwer and Garbayo (2014), it was found that consumers respond negatively to interstitial ads, stating they are “intrusive” and “annoying;” however, in this same study, it was concluded that these types of advertisements offer a powerful way to influence consumer attitudes towards a brand and its products. Their findings indicate consumers enjoy high-impact advertisements; however, if marketers choose to interrupt them with an interstitial ad, consumers should be offered something of value in return such as presenting engaging, highly interactive elements (Baron, Brouwer & Garbayo, 2014).

Video ads are one of the fastest growing forms of online advertising, which is expected to triple to $8.0 billion by 2016 (Laudon & Traver, 2013). “The explosion of online video content across major news and entertainment sites, web portals, and humor and user-generated sites has created huge opportunities for brand marketers to better reach their target audiences,” say Laudon and Traver (2013, p. 471). Multisystem operators such as Comcast, DirectTV, and Time Warner Cable are increasingly providing options to bundle TV advertising with video advertising on their websites and apps (Rick, 2014).

As the online video advertising industry continues to grow, creativity will become more vital, especially with branded content appearing where the brand wants to be seen, but not be overt (Rick, 2014). One way in which brands may become more creative is through the use of viral video advertising. “Viral video advertising may be the most popular manifestation of viral marketing phenomena,” says Dafonte-Gómez (2014, p. 200). “Viral video is produced by a brand with a direct or indirect commercial goal and is achieved by a high number of views through means such as video recommendations on YouTube or the amplifying effect of TV broadcasting” (Dafonte-Gómez, 2014, p. 200) While video ads are never guaranteed to become viral (the speed and popularity of it being viewed), understanding how videos become viral can help achieve this goal. Dafonte-Gómez’s (2013) analysis of results across various surveys makes note that the presence of humorous content and feelings that evoke surprise and happiness are among the most successful viral videos.

Search Engine Marketing

Search engine marketing (aka search engine advertising) has become a multi-billion dollar business and one of the biggest forms of online advertising (Zenetti et al., 2014). Advertisers use paid search engine marketing to target users by bidding on keywords to deliver their text advertisements onto search result pages, and display and video ads onto websites. SEM leverages a user’s queries (the searches they conduct online) and interests (the types of websites they often visit) to deliver targeted advertisements. In addition, SEM uses remarketing to deliver advertisements to a user based on websites they’ve visited or apps they’ve used.

Advertisers can track and measure the effectiveness of any SEM campaign by reviewing

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