How Does Digital Marketing Work?
Three Keys to Digital Marketing:
- The Technology
- The Tracking
- The Benefit
“Digital marketing is the component of marketing that utilizes internet and online based digital technologies such as desktop computers, mobile phones and other digital media and platforms to promote products and services.” – Wikipedia
Digital marketing reaches you everywhere. Streaming services, podcasts, social media, websites, and even billboards are using technologies to ensure the ads you see are relevant to you and the things you care about. It’s also there when you’re there. Gone are the days of being tied to a screen to see an ad or to be exposed to a brand’s message.
From morning and checking the phone, to the commute and listening to digital radio or podcasts, to the ads we see on the web, the searches we do for dinner recipes, and even family time – digital marketing is using what it knows about you to create a relevant ad experience.
1. The Technology
Here’s what a digital marketing experience looks like. You visit the web on a specific device. Maybe you’re in a store and look up a specific item or scan a price code, with programmatic ad technology a brand will instantaneously present you with an ad relevant to what they believe they know about you.
The technology to do this is based on the device you’re using, the site you’re visiting, and how you’re accessing the Internet.
Your devices all have individual IDs, called a device ID. This ID is what the data uses to create a profile about your digital habits. This ID will also tie into other devices in your home and your work network.
This creates the experience of shopping for an item on your phone. Later you arrive home and you open up your laptop and you see a similar recommendation in an ad based on what you searched on your phone. Or you watch an ad on streaming TV and then later see a similar ad on your phone. This is how cross-device browsing begins to collect your data.
Now, what happens with the data? How do they track you? Are your phones really listening to you?
2. The Tracking
Websites use 1st party data and 3rd party data to track your digital habits. Most websites will ask your permission to track your data, but the big tech discussion about privacy is changing how available your data is to marketers and others.
1st Party Data – this is the data you directly give to a website. Examples of 1st party data include:
- Information you give to a site: name, email, zip code, phone number
- Information collected by what you visited and interacted with on the site
- Information from site surveys you filled out
3rd Party Data – this is the data marketers collect about you from other sources outside of their own digital interactions with you. Examples of 3rd party data include:
- Purchasing an email list
- Partnering with a company that has a persona database
- Programmatic targeting
These data components all surround your digital fingerprint and create a robust network of data points about what the Internet believes are the products you buy, things you care about, and things that motivate you to action.
So how do these systems differ between which site owns your digital fingerprint and which site is purchasing access to your data?
The previous method was a piece of code called a cookie. This has been used as the most common tool in tracking your data, but with current technologies changing, we’re preparing for a cookieless future.
3. The Benefits
The key benefit of digital marketing is that you are exposed to ads you care about. The data collected about you isn’t always perfect, but it is getting smarter, so the ads you see should feel natural and unintrusive.
For small businesses, digital marketing is also incredibly affordable to reach new clients that care about what they’re selling or the services they provide.
Relevant Links
If you’d like to learn more about how digital marketing can help your company grow and reach new audiences, we want to hear from you.
