Marketing is the art and science of selling products and services. Even if you have created the greatest product on earth, you'd have a hard time selling it without any marketing. Just think of brands like Nike, Starbucks, Apple, and Levi's. It's likely the first thing to come to mind when we mentioned these brands is their logo. Sure they sell good shoes, coffee, phones, and jeans, but it's hard to imagine them being as big as they are today without marketing. Since you're in this course, I'm sure I don't have to tell you how essential and powerful marketing is. Marketing is all around us. You've probably seen a few ads online today, and you may have gotten an e-mail announcing an attractive sale for your favorite clothing brands, or you may have seen a billboard or two, and a computer or device that you're using right now probably has a brand logo. All of that is marketing. Marketing fuels a critical part of our economy. The most significant chunk of marketing spending goes to advertising. $563 billion dollars was spent on advertising globally in 2019. As you can see, worldwide advertising spending has been growing steadily over the past decade. Here's the official definition of marketing from the American Marketing Association: "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." That may sound rather complex, but the most important part to take away from this definition is 'offerings that have value.' That's really what marketing centers around. It's a marketer's job to create these offerings of value and to get them in front of customers. At its core, marketing involves four steps: understanding and studying the audience or customers for a product, creating messages related to or promoting the product, getting these messages in front of the right people, and evaluating and optimizing the impact of your message. We refer to some of the marketing messages that are created in this process as advertising. Ads are those messages marketers pay for to get them in front of their audience. While people will mention advertising and marketing in one breath, advertising is really a subset of marketing. Let's look at an example to see how these four steps in marketing work together. Imagine you have a company that makes soap. You know you have an excellent product, one that's in many ways better than any other soap on the market. Now, that's a great start, but it isn't enough. You have to find a way to help people understand how amazing your product really is, and you have to convince them that they need it. That is where marketing comes in. To sell your soap bars, it helps to understand people who would like to buy them. What are my customers or potential customers needs, and how can my product help them? Understanding your audience is the first step in successful marketing. Then based on these insights, create your messaging. You may want to tout specific aspects of your soap that you think will appeal to your audience, and you can accompany it with images that you think the audience may like to create your ad. Next, you'll want to consider how to get your ad in front of your audience. You may decide the right place to show your ads on TV, on billboards, on a few blogs, and on Facebook. Now finally, after your ads run, you can evaluate whether they have an effect on sales. Are you seeing more interest in your soap? You may find that a particular ad of yours did really well, while other ads did not move the needle as much. You can use that information to optimize your future campaign strategies and focus on the types of ads that work. Now, here is an example of an ad from the legendary Dove Campaign for Real Beauty. The marketers behind this campaign relied on extensive research to help them understand what goes through people's minds when it comes to selecting beauty and personal care products. In fact, the campaign was based on insights from a study involving more than 3,000 women. Dove's research study found that only 4% of women find themselves beautiful. Based on this insight, marketers created a campaign that focused on helping women reassess what beauty really means. This broader campaign served as the backdrop for the introduction of several new products by Dove. Marketers for Dove got their message in front of their audience through ads in magazines, billboards, television, social media sites, and so on. The campaign was wildly successful. Based on results and specific insights, the marketing teams could then further optimize the message, and where the ads were shown to further increase their impact on sales. Marketers rely on different channels to put ads in front of potential customers. Television, radio, billboards, magazines, and newspapers are all popular channels. We refer to these as traditional marketing channels as opposed to the newer digital marketing channels, or the channels that relate to the online world like search engines, social platforms, and so on. To get their message in front of the right people, marketers go where their audience is. They follow the eyeballs so to speak. Over the years, as people have started to spend an increasing amount of time online, marketers attention has shifted to digital channels, with an increasing portion of their advertising budgets now spent on online advertising. This chart from eMarketer illustrates this. In the US in 2019, more money was spent on digital channels than on traditional channels, and the digital portion is predicted to keep growing. Marketers want to advertise in the channels where people spent their time. But that's hardly the only reason for the attraction of digital media channels. In the next video, we'll dig a little deeper into what we refer to as digital marketing and why it is so attractive.