Q: I always hear about the success of web companies like MySpace. Should I be focussing my marketing spend on online activities or ramp up my media advertising? 

Many small businesses spend what little budget they have on traditional advertising, yielding few sales results.  

There are many reasons for why your advertising is underperforming, but specifically regarding the question above, your customers and competitors are changing and so too should your marketing – why are you advertising on the radio when 45% of Australian adults listen to MP3 players? Why pay for letterbox drops that only get a 2% readership, when you could sms coupons to mobile phones and get a 94% open rate?  

Digital marketing involves the use of digital communication channels like banner advertising, mobile phone, web 2.0, email and digital television to reach customers and prospects in a more meaningful, cost effective and timely manner.  

Increasingly, smaller businesses are gaining traction from employing digital elements in their marketing mix with greater cost efficiencies, campaign flexibility, creativity, personalisation, real time results tracking as well as an ability to test and tweak campaigns at a minute’s notice.  

Advances in technology are also enabling businesses to form new relationships with customers that were once not possible. Not only can your brand contribute to someone’s sense of identity and social status (ie. Jessica has just joined the Facebook group “I love fishing and Dominos Pizza”), but now consumers are contributing back.  

Interactivity allows consumers to engage with your business on a more personal level with their creativity and skills feeding the power of your product or brand. The infamous “Mentos and Diet Coke” video initially started as a playful backyard experiment that was posted on YouTube and has since had around 4.5 million viewers. Mentos encouraged more of such videos to be made, resulting in over 9 thousand similar videos on Youtube and soaring sales, all for next to zero cost. 

Whilst technology opens up many opportunities for creative and cost effective marketing, caution must be exercised. The Chevy Tahoe campaign asked consumers to create their own advert from official footage. What Chevy didn’t take into account was the consumer backlash against its poor driving performance and fuel guzzling amid climate change concerns. This resulted in many satirical adverts being posted on the web.  

Thus, if you want to get maximum results for your marketing dollar then you should embrace technology as part of your marketing mix. Finding new ways to create meaningful dialogue and relationships with your clients is essential in such a competitive environment. However, professional advice should be sought to ensure you avoid the traps.  

By Vanessa Tsui

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