What Is Online Marketing? Developing a Competitive Strategy

Traditional marketing, like print, broadcast, or direct mail, has increasingly given way to online marketing—also known as digital marketing—which meets customers where they are: on their smartphones, laptops, and tablets.

Using a variety of online channels, such as web, e-mail, and social media, online marketing pursues a number of goals, including promoting products and services, driving sales, and increasing brand awareness. Additionally, online marketing also generates a wealth of data so marketers get more immediate insights into their customer base. By tracking marketing analytics, marketers can learn more quickly what's working and what's not.

In this article, we'll explain more about online marketing, how it works, and provide guidance about producing a data-driven strategy in five simple steps. At the end, you'll also explore flexible, cost-effective courses that can help you develop critical online marketing skills today.

What is online marketing?

Online marketing is the practice of using digital channels and platforms to sell and promote brands, products, or services to potential and existing customers. It's typically part of a larger marketing strategy, and involves developing the right digital messaging for your target audience by understanding their needs more specifically and using the appropriate channels to address those needs.

Online marketing includes the following:

• SEO marketing and content marketing

• Pay-per-click (PPC)

• Display advertising (text, image, video, and shopping ads)

• Email marketing

• Social media marketing

• Website design

• Affiliate marketing

Along with the above, online marketing includes any marketing that reaches customers on electronic devices, such as podcasts, electronic billboards, phone apps, and SMS texts.

Learn more: Marketing Careers: 6 Areas to Explore

How online marketing works

Online marketing spreads brand messaging through images, text, or video, and offers an opportunity for brands to engage with their customers through a variety of platforms.

What's more, the data collected from marketing analytics like clickthrough rates (CTRs), purchases, and other actions can help marketers monitor success and modify their content at a much faster pace. For example, if you see that CTRs for a recent email are significantly lower than others you've distributed, there's a good chance that the included content or messaging didn't resonate with your audience and should be revised.

Learn more: Omnichannel Marketing: Definitions, Examples, and Strategy

Examples of online marketing in the real world

Whether you've realized it or not, you've undoubtedly interacted with online marketing many times before. While some digital marketing might be glaringly obvious – like flashy banners that flank the side of online articles – others may not even register as marketing at all. Content marketing, for example, often focuses on generating free online content, like articles, blog posts, and videos, with the intent of raising brand awareness and engaging a particular target market.

There are countless creative ways to use online marketing today. At a glance, here are some of the many different ways marketers use it to actually attract customers online today:

• Patagonia sends out emails to consumers, highlighting new clothes and videos showcasing outdoor enthusiasts who use their products.

• Language learning app Duolingo leverages its social media, including TikTok, Instagram, and LinkedIn pages, to reach potential users on the channels they spend their time.

• The New York Times' Wirecutter provides reviews and independent testing of products online, which also sometimes includes links that pay them a commission for any purchased items.

Online marketing benefits

There are many benefits to online marketing for brands and consumers alike. While brands can leverage online marketing channels and analytics to reach consumers who are actually interested in their goods or services, consumers are better matched with products and content they actually like.

This helps reduce costs for marketers and increases the likelihood that consumers will make a purchase. Furthermore, online marketing also makes it easier for brands to re-engage previous consumers, which improves their chances of making a sale again and deepening customer loyalty.

Analytics also make it easier for brands to target specific kinds of ads to particular consumer groups. For example, a marketer may create different email campaigns for various target audiences, which can be sent out in email blasts to specific consumers using their demographic information.

As machine learning and generative AI advance, there are likely many more ways that marketers will be able to reach their ideal consumers online in the coming years.

Crafting a data-driven marketing strategy 

These days, it’s become common for companies to use a multi-pronged strategy to reach diverse audiences across multiple channels. The online marketing strategy you develop will depend on your goals—and your audience.

Sometimes, brands curate an integrated strategy that involves a robust online presence including website, blog, and social media, in addition to using a constant stream of targeted ads and email newsletters to draw users to these sites. Other times, an Instagram post on Sunday night detailing a list of events for the week ahead is enough.

Crafting an online marketing strategy that is right for your business or organization tends to require some trial and error. However, if you're tracking the data you accumulate as you test your strategy, you'll develop real-time insights to help refine your work more quickly.

Here’s how to use data to craft an online marketing strategy. 

1. Create personas.

As with any marketing strategy, it is necessary to cultivate an understanding of your target market. Based on market research or previous sales data, you can create personas to build fictional representations of consumers by elaborating on their unique needs. Ask yourself: Who uses your product and why? What need does your product fulfill? Segment out each persona type by need.

It also helps to understand how customers use the various online channels you'll be messaging through.

Questions for creating personas

Place yourself in your imagined customer’s shoes. Detail how they use the internet by considering these questions, which can form the basis of a survey or focus group:

• Does your buyer use social media? If so, what platforms?

• How often do they use social media? For what purpose? 

• Does your buyer define their identity through social media? If so, how?

• Does your buyer use Google search? What do they search for? How often?

• What websites does your buyer frequent? Do they intentionally go to these sites, or did they click on an ad?

2. Apply the digital sales funnel. 

The digital sales funnel is a smaller version of the sales pipeline—it's a way to visualize converting leads into customers. At the top of the funnel, there’s awareness, then interest, decision, and action.

The online marketing you develop will reach customers along each step of that journey. For example:

• Awareness: SEO and content marketing, social media marketing, paid advertising

• Interest: Landing page, email newsletter

• Decision: Email marketing, promotions on website

• Action: Shopping cart (email reminders), reviews, referrals

Your brand may also have multiple goals in mind. At times, you may want sales conversions, while at other times your goal might be to improve brand recognition. These can occur simultaneously on different platforms, too.

3. Map out your online marketing strategy.

With your buyer personas and digital sales funnel in mind, it’s time to map out your online marketing strategy. Here are some examples of each type of online marketing:

• SEO and content marketing: Improving the quality and quantity of (unpaid) traffic to your website, usually through Google searches. Content marketing, such as articles and blogs written to reach top search results, typically accompanies SEO.

  • Craft marketplace Etsy’s blog is full of easy, do-it-yourself (DIY) ideas to spruce up the home and gifts for friends or family [2].

• Pay per click (PPC): With pay per click, advertisers pay the publisher (search engines or web page owners) each time a visitor clicks an ad. 

  • Global footwear brand Converse increased online engagement with teenagers by using Google AdWords to target search terms such as “first day of summer,” “how to talk to girls,” and “how to kiss” [3].

• Display advertising: Display ads appear on websites or banner ads as text, images, and video, to link to a brand’s website so customers can learn about and buy products (or services).

  • Hewlett-Packard (HP) promotes a printer with a display ad on websites targeting small business owners that says “Make tax season less taxing with the HP OfficeJetPro” [4].

• Email marketing: Using email to send messages to mass groups of potential customers to build brand awareness and loyalty.

  • Language learning app Duolingo emails users with the headline, “Learn a language with only 5 minutes per day” [5].

• Social media marketing: Creating customized content for each social media platform to promote a business and engage users.

  • ILIA beauty brand features older women in their make-up tutorials-turned-sponsored ads on Instagram [6].

• Website design: A website’s user experience and the software and platform used to power the website can be optimized to convert sales. 

  • Virgin Atlantic airlines’ website detects when customers have abandoned their shopping cart and sends an email reminder with their specific desired flight, saying, “[your name], you’re so close…” [7].

Multiple strategies can be used simultaneously on several different channels for an integrated marketing strategy that targets potential customers at every stage of the buying process. 

Based on the six types of online marketing strategies above, think about your online marketing strategy might require. Consider your competitors: How do you compare in terms of price point and value? What are they doing to reach their audience? Are you focused on local geo-targeting, or are you a global brand that will rely on Google ads? Write down the options that suit your brand.

4. Plan and implement your strategy.

A strategy is just ideas without a plan in place. Once you have decided on your online marketing strategy, create a timeline for the various campaigns you'll be using to reach your different audiences. Your plan should include a calendar, the person responsible for executing each campaign, and key performance indicators (KPIs).

You may wish to run A/B testing (experimenting with different parts of a campaign to figure out what will work best), before going forward with implementing your plan. Once executed, it can take a while, up to six months or a year, to see the results of your implemented plan.

5. Analyze and adjust your plan to maximize ROI.

After your online marketing plan has been implemented for a year, analyze monthly sales. Based on data compiled and analyzed from your online marketing efforts, what was the return on investment (ROI)? 

If you used a multi-pronged approach, your team might consider evaluating the ROI of each part of the strategy. For example, you might evaluate the percentage of sales generated from SEO and content, from social media (broken down by platform), and from display ads. Consider conducting your analysis monthly, and troubleshoot as necessary.

Finally, revise your online marketing plan for the following year based on the first year’s data. You can also iterate more quickly on a platform-by-platform basis. For instance, if a social campaign isn't driving the engagement you want, you don't have to wait a year to adjust it.

Use data to drive marketing results

Amplify your brand’s digital marketing by becoming a digital marketing and SEO expert. Learn the fundamentals of digital marketing and e-commerce, including how to attract and engage customers through digital marketing channels like search and email, in less than six months through Google's Digital Marketing & E-commerce Professional Certificate.

If you enjoy working with data, consider a career as a marketing analyst with in-demand technical skills, with the Meta Social Media Marketing Professional Certificate. No degree or experience is required. Become job-ready in seven months and get exclusive access to Meta’s job search platform upon completion.