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The Effects of Digital Marketing on the
Advertising Industry
A Report by Andy Baker

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Table of Contents
Page 3-4 – Introduction and A History of Digital Marketing
Page 4-5 – Advantages of Digital Mediums
Page 5 – Advantages of Traditional Mediums
Page 5 – Disadvantages of Digital and Traditional Mediums
Page 6 – Integrated Marketing Techniques
Page 7-9 – Digital Marketing Trends Moving Forward in 2014
Page 9-10 – Moving Forward and Conclusion

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Newspapers and magazines began to sell advertising space in 1880, making way for the
first forms of advertisement. Movies were produced in the 1910s, allowing movie theater
advertising to become a medium to reach consumers. Radio began employing advertising in the
1920s. Televisions were not an advertisement medium until 1945 (Pakman, 2005). Digital
marketing began with the Web 1.0 revolution started by the Internet in the 1990s. 1993 gave
way to the first banner ads on websites, which sparked the digital marketing revolution. Shortly
after in 1996, the Internet gained new technology which gave birth to the phenomenon of
search engines and social networking sites. Specifically, Google was brought into the fold, which
paved the way for improvements in internet search engines. After a couple of years of
operation, Google eventually incorporated AdWords and AdSense to increase their marketing
potential and reach. The first cookie followed and marked the beginning of the tracking of user
browsing history. Each of these phenomena on their own may not seem like much, but put
them together and you have the foundations for the Web 2.0—the Digital Era.
The Internet is not a new concept. It has existed since the early 1970s, however it was
not commissioned for commercialized use until the late 1980s. Dan Lynch first presented the
concept and what it could do for companies in 1985 at a three day workshop with the Internet
Architecture Board (IAB). Lynch’s workshop helped spark a decade-long discussion about the
use and practicality of such technology in not only the workplace, but for the personal use of
consumers as well. The Internet started becoming available commercially around 1991-92, but
did not get a formal definition until October 24, 1995, when the Federal Networking Council
voted to give it a formal definition. The agreed upon definition of the Internet is quite
extensive, so in Layman’s terms it can be defined as the first globally linked information system.
Finally, the world welcomed Web 1.0 into the world (Leiner, 1996).
Web 1.0 brought with it a whole new realm of possibilities and excitement. Companies
slowly began to embrace the idea and started to place their own websites online for consumers
to browse. One website in particular, HotWired, can be credited for the birth of advertising on
the Internet, specifically in the form of banner advertisements. On October 27, 1994, HotWired
ran banner ads on their website from fourteen different companies, among them Volvo and
AT&T. This date can be viewed as the unofficial beginning of digital advertisement on the
Internet (Singel, 2012).
Search engines were the next objective after banner ads. Search engines had existed
since 1990, but it was not until 1994 that search engines brought results in real time and were
available to everyone. This web innovation gave rise to the idea that companies could track
what users searched for, and from keywords within the search could target specific
advertisements to consumers. Yahoo! Search was one of the first implementers of this
technology, but it wasn’t until two years later, in 1996 when it was utilized by newly-created
Google Search, that it came to be an integral part of the digital marketing strategy for most
companies. Google had the art down to a science and implemented one of the best systems for

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targeted marketing, which is why it is today a global conglomerate in technology and
innovation markets (Kim, 2010).
A major factor in Google’s success was its use of ‘cookies’. Traditionally, a cookie in the
technology sense is a piece of data held by an intermediary party (Internet Cookies, 2012). By
using cookies, Google could track the search histories of users and could provide the end user
with a more personalized experience that can better help them find what they are looking for.
This concept is now huge in helping provide a customized, more personal web experience for
users.
The combination of each of these items has helped shape digital marketing and the Web
2.0 into what it is today. These bricks are the steady foundation upon which innovations in
digital marketing have been constantly built on for the past twenty years, and while there is
quite a bit piled on top of the foundation today, these pieces are still there to help keep Google
atop the search engine marketplace and to allow Facebook to advertise to you based on your
interests. With the abundance of creative possibilities available on the Internet, and the decline
of the print and radio industries in modern culture, all signs point to digital marketing becoming
the new generation of ‘traditional’ media (Marketing Technology for Growth, 2012).
There are so many more ways to reach people on the Internet than with traditional
mediums, and it is essentially cheaper too. A marketer doesn’t have to worry about printing
costs and distribution costs when advertising online (Faulkner, 2013). This is a huge advantage
as marketers can allocate more of their time and money towards digital mediums, which are
very cost-efficient and reach a larger audience. A company can literally target the world if they
wanted to, as a single online campaign put into practice effectively can be found by anyone in
any location (Faulkner, 2013). With traditional media, there is a lot more research that has to
be performed before marketers can choose the best mediums to use to reach their target
audience. Factors such as population, age, and even weather need to be taken into
consideration before deciding to target a product to a specific group of people. This adds to the
cost and additionally the hassle involved in marketing through traditional media.
Another advantage to digital media over traditional is the fact that it is not very intrusive
(Faulkner, 2013). Most mediums, especially television, are obnoxious and drive consumers to
the point of frustration at times. This is a negative for any product with a commercial on TV that
has this effect on consumers. Not only is the exposed consumer frustrated or ‘put-off’ by the
advertisement, but now he or she has a perception of the brand that they will be more than
willing to pass on to friends and other consumers. This has the potential to start a negative
snowball effect for the product in question and can severely hurt sales due to negative word-of-
mouth started by traditional mediums.
Digital outranks traditional mediums in measurement and engagement as well. Through
digital social sharing sites such as Facebook and Pinterest, consumers can share interesting
content about new products or can invite friends to join them in a sweepstakes contest giving

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away a free or discounted product. This kind of buzz marketing excites consumers and gets
them engaged with the brand, which is a huge strength of advertising digitally (Faulkner, 2013).
Before digital mediums came about, consumers would use face-to-face interaction to
implement word-of-mouth sharing over TV, newspaper, and radio advertisements. This was the
only way that consumers could ‘share’ close to twenty years ago. Brands had to hope that they
had created something original that could stand out from the clutter of these traditional
mediums and could be spread through the grapevine by consumers. Now, digital sites allow
users to share content with fellow consumers by simply clicking a button. This paved the way
for greater levels of interaction between the consumer and the brand, sparking an engagement
factor that never existed before digital. Consumers can now interact with brands one-on-one
and provide instant feedback, which is invaluable to companies who are constantly innovating.
While digital mediums provide heighted senses of interaction and engagement with
brands and their consumers, traditional media should not be left in the dust completely.
Traditional mediums are still widely popular today, chief among them being television and radio
(Higuera, 2014). Many households still own a television set (96.7% of American households as
of 2011), and the phenomenon of Internet radio sites such as Pandora and Spotify is just
beginning to take off (Stelter, 2011). While yes, Internet radio is technically a digital medium, it
still falls under a traditional mindset during the creation process. Many more people are apt to
trust traditional mediums as they have been around longer than digital methods, causing them
to be viewed as more trustworthy (Higuera, 2014). Also, more people have easier access to
traditional mediums over digital options. It is easy to access a newspaper due to cheap costs,
and televisions are being placed in more locations outside of the home anymore that it is hard
to find a location without one. While this is great for exposure, this leads back to the intrusion
factor of traditional media. Some individuals may not be too keen on having Nicki Minaj
advertising for Pepsi on a TV screen right over their shoulder in a public restaurant.
In terms of creativity, both traditional and digital mediums serve as hotspots for the
most talented minds in the industry. Through television, advertisers are able to provide a
‘Show-and-Tell’ effect which essentially does exactly as the namesake suggests: the audience is
show a product and is then either told or shown through demonstration how the product works
(AllBusiness.com, 2014). This is never as easy as it seems however, and it usually takes brilliant
creative to break through the clutter that is clogging the pores of traditional avenues. Good
copywriters for TV scripts are few and far between in today’s mainstream culture, making
advertisements come across as cheap and outdated (AllBusiness.com, 2014). It is also hard to
stand apart visually on TV. Many ideas have been done, and are consistently repeated each day.
Creatives have an easier time creating sharing campaigns and hashtag campaigns as these
concepts are relatively new and the idea possibilities are still being explored. It is also easier to
engage with consumers through social media and brand interaction campaigns. Consumers like
to have a personal connection with a brand, and social media allows for that interaction to take

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place. TV certainly has the potential to make this connection as well, but needs a little bit of
help to make it happen.
Integrated marketing techniques are being highly integrated into today’s marketing
strategies. Brands need to be more of a presence online if they want to be relevant in the
mainstream market. However, companies cannot overlook the benefits traditional media still
present marketers today if they are integrated with online strategies. With roughly 96.7% of
households having a TV, marketers need to make sure that they tap into that market to get
maximum exposure for their brand. By advertising with a 30 second spot on television and then
promoting a hashtag or other social media campaign at the conclusion of it, marketers can
make sure that they hit all aspects of what makes a good integrated campaign today (Severson,
2013).
In order to make sure that an integrated campaign is executed to perfection, each of its
parts must be moving in the same direction. By that, I mean that both the traditional campaign
and the social media movement (or call-to-action) for the same campaign have to correlate and
must be able to be easily recognized across either medium as the same campaign. By ensuring
that the content of the site is updated regularly and by providing consumers engagement, a
company can implement a flawless integrated campaign (Severson, 2013).
Digital marketing has already delivered some great campaigns and exposure for many
companies, some whom have been around for generations. A great example of a social media
campaign that did really well in 2013 is Dove’s Real Beauty Campaign. In this campaign, Dove
Company had professional forensics artists draw faces of women while they described
themselves (Cassinelli, 2013). The forensics artists were of course blind to the subject they were
instructed to sketch. Upon finishing the sketch, the artists would ask a stranger to come into
the room and describe the same women. This campaign sparked a lot of conversation amongst
consumers as it had the power to both convey the inner beauty within each woman, but also
was able to justify the importance of physical beauty in today’s society (Cassinelli, 2013). The
campaign had over 114 million viewers, making it the most viral video advertisement to date
(Cassinelli, 2013).
What Dove did well was integrate. Not only did they integrate their TV spots onto social
media sites to integrate the campaign, but they also had real women take part in their ‘drawing
experiment’. This shows that Dove cares about their customers and is willing to go out of their
way to be caring towards consumers concerns and needs. This is huge for any brand in today’s
ever-digital market. By being able to reach out to consumers and directly ask what they would
like to see from a product, they can create more value that can be shown in their products and
the brand image.
Many more companies will be taking after Dove’s example last year and will be stepping
up their game to bring the most innovative social media idea to the forefront of everyone’s
mind in 2014. We saw the digital marketing creative avenues explode from 2012 to 2013, and

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one can only wonder what the transition from 2013 to 2014 will bring. Many predictions are
being made as to what we will see in the next year as far as digital advertising trends. Many of
these trends are right on par with some of the creative work we are seeing currently. However,
new innovations in technology and logistics allow marketers to pick and choose from a wider
range of options to reach consumers.
In 2014, expect to see a lot of ingenuity in the mobile advertising market. Search engine
marketing will be one of the major players in the mobile market this upcoming year. In 2014
alone, experts expect search engine traffic to come from a mobile device 35% of the time, while
mobile search advertising in general is expected to jump by 76%. Search engine optimization
(SEO)—the act of a company making their webpage search engine friendly (able to be more
easily targeted through quality website maintenance)—and search engine marketing (SEM)—
the act of doing anything to get a webpage higher on search engine sites—will be more
optimized for mobile devices in 2014 and will be able to offer more great options for
advertisers to reach consumers (Karr, 2014).
As far as social sharing sites such as Facebook and Pinterest are concerned, content will
need to be more eye-catching and will need to break through the already-mounting clutter of
content advertising already in play. To do this, companies must have content that houses
videos, customized content, and stunning visual content in the form of photos and more videos.
Videos within posts statistically attract three times more clicks than do regular text posts.
Custom content has been a growing fad in the past few years and is slated to make a big run in
2014. Everyone wants to feel that they are able to have an interaction with a brand, and by
running customizable content, brands are able to provide just such an experience. The use of
photos and videos to attract attention has been known for a while, and is predicted to once
again be a key part of success on social sharing sites, especially Pinterest which is the most
prevalent photo and video sharing site (Karr, 2014).
Email marketing has been around since the early days of the Internet. It is not a huge
medium for advertisers much these days due to the high clutter rates and people using SPAM
mailboxes to automatically take care of ‘pesky’ advertisements. However, email marketing still
plays a major role in business to business marketing. According to Douglas Karr’s marketing
trends infographic, businesses will use email marketing 47% more in 2014 in order to reach out
to other companies for business. That being said, not all consumer-based email marketing is
dead. Many more emails come preloaded with content-sharing buttons that will automatically
link consumers to their favorite social sharing site in order to advertise new things about a
brand or product that is coming out in the future. This helps boost the click through rate (CTR)
for companies who are trying to get more people to share their content on social sites. In fact,
it is predicted that in 2014 CTR will increase approximately 150% for companies who include
social sharing buttons in their emails. This will be huge for the 77% of consumers who are
receptive to email blasts (Karr, 2014).

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Social media will again be a huge player in 2014 for most companies who are relevant in
today’s business world. Nearly 100% of all business decision-makers implement social media
into their work routine in order to gain a more reliable estimation about market trends and
consumer needs and wants. Social media also acts as a great relationship building tool for
consumers and businesses alike. Consumers can actively learn about new products and can give
feedback about current offerings that they may not have heard of otherwise. For companies
who are invested in reaching out to other businesses, they must have a social media campaign
in place. Many businesses network to each other over social sites such as LinkedIn, Twitter, and
Facebook. By having an active presence on each of these mediums, businesses have a higher
chance of finding interested clients (Karr, 2014).
Social media is also a great way to engage consumers through the use of promotions
and discounts. These discounts can be given to a consumer if they ‘like’ or share content that is
related to the brand offering the discounts. Offering incentives is a very effective way to obtain
headway in the digital realm, and more companies are starting to do it more and more,
especially in 2013. This growth in the past year helps to shape the prediction for 2014, in which
discounts and other incentives on social media platforms are expected to take off and clog the
pores of the social sharing market. While some companies may not like the idea of offering an
incentive to gain a good customer base, it is hard to argue against the fact that they do work
and consumers are very receptive to companies who offer them (Thompson, 2014).
Social media can be tricky though, and companies must have protocols in place to
prevent against negative reactions to their brands and overall image (Sandilands, 2014). In a
recent incident in 2013, a Manhattan, Kansas woman named Meagan May was fired for a
belligerent post on Facebook in which she criticized the United States Military. Carmike
Cinemas, her employer at the time, was very adamant that they had no involvement
whatsoever in the comments May posted. However, Carmike will always be associated with
‘that one woman’ who made an ignorant comment on a social sharing site (Mabry, 2013).
In addition to these enhancements to the already stable digital mediums, there will be
opportunities for new levels of interaction between consumers and brands. An exciting new
trend to look for in 2014 will be interactive video displays. These types of displays allow
consumers to interact with a screen that has some connection to a brand. I recently saw an
example in the Seattle Tacoma International Airport of just such a phenomenon. On the way to
grab some food between flights, I noticed a huge display of connected monitors that had a
matching game displayed on it. There were about twenty squares in total (it was an impressive
display) and each had a piece on it that the person interacting with could touch and reveal like a
normal matching game. The game was sponsored by a hotel company in Washington and had
matching pieces that corresponded to things that one might associate with hotels, such as
pillows or a pool. It was a great interaction tactic and was able to attract a large amount of
people, generating huge exposure for the company (Burciaga, 2014).

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Another innovation that is starting to become mainstream and began with video game
consoles is the idea of cross-screen marketing. To make sure that everyone is accounted for and
can be reached, it is crucial that companies focus their efforts on making campaigns integrated
across all platforms. This way, consumers who do not have a smartphone can still be exposed to
the same media through TV, tablets, desktops, or, as previously stated, interactive video
screens. This increases market share for a company and the amount of exposure that they are
able to garner in the market (Burciaga, 2014).
2014 will also see the implementation of location-based marketing. Data collection
services on mobile devices and across search engine platforms allow marketers to gain a truer
perspective into the type of consumer they are dealing with. This gives marketers the tools they
need to create a campaign tailored specifically to each individual consumer, once again
providing company-consumer interaction that is crucial in customer retention and relationship
building. While this tactic is very useful to the marketers who employ it, data collection is a
controversial topic among target consumers. Many individuals lobby against the use of data
collection as it invades on their privacy and personal agendas. There is no way to argue the fact
that data collection is indeed intrusive as it collects data we plug into browsers, texts, emails,
calendars, and any other application that stores valuable data about a consumer’s demo- and
psycho-graphics. However, recent events have led to the implication of tighter restrictions on
what types of data can be collected and for which purposes. This has led to increased
receptivity of data collection amongst consumers, and many thoroughly enjoy having marketing
that is personalized for them. It helps consumers find what they are after faster and also
introduces them to new products that they could be interested in purchasing (Burciaga, 2014).
Digital marketing has made big strides since its incarnation in 1993 with the introduction
of the banner ad. Since 2010 alone the economy has seen astronomical growth in technology
innovation and the content of social sharing sites. Moving forward into 2014, there is even
more to look forward to. Data collections will have major implications on the future of SEO and
SEM in digital marketing. Data colleting gives real-time updates on a consumer’s behaviors and
habits, almost eliminating the need for SEO and SEM as advertisers can directly target
advertising that fits each consumer’s needs and personality type. Depending on whether
consumers continue to slowly embrace data collection or not, we may not see SEO or SEM
tactics anymore in digital marketing strategies within the next five years (Marketing Technology
for Growth, 2012).
Content marketing will also become a major cornerstone in the thinking of any good
creative mind. Content needs to be strategic enough to stand apart from the competition, while
not going overboard and luring customers away. Viral videos are a huge staple of any company
looking to gain exposure in the marketplace. Videos are very engaging on social media sites and
have a very high chance of being shared. This viral sharing of videos is essentially free word-of-
mouth advertising for companies. Due to this, look for more companies within the next three to

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five years to implement some sort of viral video marketing strategy. These strategies don’t
always catch on, but when they do they spread like wildfire and can help gain a large portion of
the market share.
Cross-screen marketing and interactive video displays will also be used much more
within the next three years. Already, these types of advertisement are being shown at places
such as the Seattle Tacoma International Airport. Anything interactive will attract attention
when it is located at an area where there is some type of layover or wait, like a subway or
airport. People need something to do while they wait, and an interactive billboard will capture
their attention very quickly. Cross-screen marketing will be very interesting to watch in the
future. By having connectivity and one, flawless campaign run on each medium, no consumer
will be left out and companies can increase the amount of exposure they have in the market.
Traditional media has been overtaken in today’s market by the thrill and extravagance
of the digital marketing world. There are so many opportunities to be creative with social media
through promotions and hashtag campaigns, but it is also important to remember the content
moving forward. Content is key and it needs to be engaging and creative in order to be
dominant in the social sharing market. Not all traditional media is lost, however. As long as
companies can maintain a good integration of both types of mediums—traditional and digital—
then they will be well received by the public and will gain a larger portion of the market due to
that newfound favorability. There is a lot to look forward to in 2014 as far as digital media goes.
Interactive video displays and cross-screen open the doors for whole new realms of
possibilities. In five years, mobile devices could link with interactive advertisements around
towns and in public places such as airports and subways. In twenty years, virtual reality could
be a new way to interact with consumers. In one hundred years…it is hard to say what the
future will be like that far ahead. Digital marketing is expanding though, and it is important to
look out for new trends and more importantly, start them. The only way to stand out is to be
different and to be creative; digital marketing is the perfect platform for that and will be
integral in the future of the advertising industry.

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