What Is Digital Marketing & How Does It Work?

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If you’re a business owner or marketer looking to expand your brand, there’s nothing more important than establishing an online connection with customers. 

Every day, billions of people buy, stream, communicate, and work off devices that expose them to ads and promotional content. And it’s not just people in your community—it’s people everywhere.

Digital marketing helps you reach all of them. 

And the best part? It’s a strategy that works for businesses of all sizes—whether you’re a new brick-and-mortar retailer or a global enterprise. 

What Is Digital Marketing?

Digital marketing refers to any type of marketing efforts that include online channels to reach customers. Some examples of these channels include:

  • Search engines
  • Social platforms
  • Google sites
  • Email
  • PCC ad networks

Using these digital marketing channels provides you with lots of benefits when it comes to connecting with customers. 

You can target them at specific points in their buyer journey, send customized content, track how people respond to your ads, and optimize your approach based on these results.

But before we cover different digital marketing channels, let’s discuss the differences between digital marketing and inbound marketing.

Inbound Marketing vs. Digital Marketing 

Inbound marketing is a strategy where businesses create digital marketing assets that attract and (ideally) retain customers. 

While digital marketing channels are often used to deliver inbound marketing content to consumers, it’s important to note that they are not the same thing

Digital marketing is a more general term describing online marketing efforts in general (inbound or outbound).

And inbound marketing is the strategy you use to attract customers.

Blogs are a great example of inbound marketing. Marketers can create posts that answer questions that potential customers are searching for.

inbound marketing vs digital marketing

To learn more, read our guide to inbound marketing.

Why Is Digital Marketing Important?

Digital marketing is important because it gives you the ability to reach your target audience wherever they choose to spend their time online. 

And people are spending more and more time online.

According to Statista, the average person spends nearly 2 hours a day on social media alone. With 5 hours of screen time total.

That means you have several hours a day to reach customers through digital platforms. And make a positive impression.

Now let’s look at exactly how digital marketing can help your business bring in customers:

1. You Can Target Specific Audiences

You would have limited control over who sees a TV ad or a billboard. 

But digital marketing lets you target a super-specific audience with personalized messaging. That can help convert prospects.

For example, you can show ads to specific users based on age, location, gender, interest, and even user behavior. 

You can even use paid search strategies to show ads to users who have previously shown interest in your brand.

Through digital marketing, you can place that same content in the online spaces where you know your target audience will come across it. 

2. You Can Measure Interactions to Build Customer Data

Every click, like, follow, and subscription is measurable. 

For example, Google Analytics can tell you a lot about how your potential customers interact with your site.

digital marketing measure interaction

This means you can get valuable insights based on audience data everyday. Digital marketing allows you to capture that information. 

By collecting information on audience interaction on web pages, social channels, email, search engines, and other forms of online content, you build up a massive amount of data that can be used to improve your marketing efforts.

Putting all this data together, just like the pieces of a puzzle, reveals a complete picture of how your audience behaves in the online world and lets you make real-time adjustments to improve your results. 

3. It Can Improve Conversion Rates

Not all leads are created equally.

Thankfully, digital marketing allows you to narrow down your audience to the people who are more motivated to buy. 

And because digital marketing is so measurable, you can continuously develop your tactics based on results.

Here are some of the ways you can zero-in on your high-intent customers with digital marketing: 

  • Use SEO (search engine optimization) to rank on Google for keywords related to your products and services
  • Create digital ads that target web users who use high-intent search terms
  • Send out personalized emails to people who have subscribed to your newsletter

Even if customers only engage with your content at first, they’re still moving down the sales funnel. Where you can approach them with different marketing strategies to turn them into buyers down the road.

4. You Can Create More Engaging Content

Billboards, mailers, and other physical marketing materials don’t have the same level of impact as they used to—people are simply more engaged by digital content.

Online marketing lets your business harness the power of interactive and entertaining content formats like: 

  • Visually-appealing infographics and webpages
  • Surveys, quizzes, and tools that promote user participation
  • In-depth longform content like ebooks and whitepapers
  • Pictures and videos that showcase the product experience

For example, Gong engages their followers with surveys that also promote their product:

engaging content from gong

There are countless platforms and channels that allow you to create and distribute content that will engage, entertain, and educate your audience.

5. It Provides Multiple Points of Contact for Customers

Another benefit of digital marketing is that it gives you multiple opportunities to connect with your existing and potential customers. Which helps you improve their experience with your brand. 

Why is this so important?

Because 80% of customers are more likely to make a purchase when brands provide a positive, personalized customer experience

Digital marketing gives you the flexibility and reach to provide this level of personalized content across social, web, and other online platforms. Don’t miss out on this opportunity. 

6. It Helps You Build a Relationship with Customers

Just because customer experience is important doesn’t mean your business will get it right on the first try. Like any relationship, building a positive connection with your audience takes time and effort. 

Digital marketing gives you the opportunity to interact with your customers online to get more direct feedback on a number of relevant topics: 

  • Their preferred communication styles and the tone of voice that resonates with them
  • The particular channels they use to collect information about products and services
  • The brand values and principles that are most important to them
  • Differentiating between which content they find valuable and which is wasted effort

Online channels like social media and email let you connect directly with customers to find this information, but you can also collect it indirectly by observing their online behavior (by reading forums, searching tags on social media, etc.). 

As you can see, there are plenty of benefits to building out your digital marketing strategy. Here’s the only downside: 

Everyone can do it.

That means all your competitors have the same tools available to get their content in front of your potential customers.

So, setting yourself apart from the pack takes a strong understanding of the different digital marketing channels and how they can be used together in an effective strategy. 

Let’s dive into it.

Types of Digital Marketing

To be an effective digital marketer, you need to understand all of the available channels at your disposal.

People regularly switch between platforms and devices as they move through their day, so each channel offers a unique opportunity to build a connection. 

As you get more experience in the field of digital marketing, you’ll find that the different channels are more effective for completing particular goals and tasks. 

At the end of the day, these channels are best used as individual parts of your integrated digital marketing strategy—but more on that later.

Let’s take a look at the most important digital marketing channels for any business. 

Search Engine Optimization

Search engine optimization (SEO) refers to the process of improving pages on your website so they are more visible on search engine results pages (SERPs). 

A given search phrase can generate millions of results, so Google ranks these results according to which page is most relevant to the user. The search engine evaluates web pages, their links, and lots of other factors to determine a ranked order. 

Optimized, relevant web pages are more likely to receive a click from users, so Google rewards these pages with a better SERP position

In general, the SERP ranking process goes something like this:

  1. You create a web page with valuable content and publish it on your site
  2. Google’s algorithm “crawls” (or finds) your website, including this new page
  3. Google analyzes your page based on a series of factors and then indexes it
  4. If your page successfully satisfies a user’s intent, it will likely appear on the SERP
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For example, if you search “mid century modern lamp” on Google, you’ll see a list of titles, links, brief page descriptions, and stand-alone content that looks something like this: 

The Google SERP for mid century modern lamp displays organic results with titles, page URLs, and meta descriptions

Lamps Plus has optimized their webpage and provided content that Google determines is more relevant than similar ones from Amazon and Wayfair, so they receive the top organic SERP position. 

With over half of all people using Google to inform a purchase, optimized web pages like Lamp Plus’s potentially have a major advantage over competitors—they’re much more likely to attract customers. 

But it’s important to know that ranking in the top position isn’t easy, and the SEO process takes time. 

So, Google has developed features for another search engine marketing tactic…

Pay-Per-Click (PPC) Advertising

Pay-per-click (PPC) advertising is a digital marketing method where a business pays to place an ad on a certain platform and pays the platform each time a customer clicks their ad. 

Google is one of the most popular PPC ad platforms, offering brands the opportunity to appear on a given page if they win out on a bidding process. They offer lots of different ad formats, including:

  • Display
  • Search 
  • Video
  • Shopping
  • Gmail

If you take another look at the “electric cars” SERP, you’ll see that the first few links are slightly different from your typical organic results. 

They have a title and link, but the description is more salesy, and there is an “Ad” disclaimer next to it. These are a version of PPC search ads.

A Google SERP for mid century modern lamp displays 3 PPC ads that include a title, page URL, and ad copy

By bidding on the keyword “mid century modern lamp” and paying for each click they receive, Mid Century Warehouse, Article, and Wayfair were able to immediately surpass Lamp Plus’s organic result on the SERP. 

However, these results are flagged as ads by Google, which may make them less appealing to users.

Google isn’t the only PPC ad platform out there—other web and social media platforms also let businesses pay to place content. 

With pay-per-click advertising, the main goal is to develop a PPC strategy that maximizes the ROI (return on investment) of your budget. 

Once you’ve got that covered, you can appear at the top of the SERPs without the wait.

To learn more about what it takes to earn a coveted ad spot, read our guide to cost per click.

Content Marketing

Content marketing is the strategy behind how you plan to distribute and promote your brand’s content.

At the end of the day, content marketing is about one thing and one thing only: 

Providing your customers with valuable information. 

That’s really all that content is—information that’s delivered through media. Whether it’s through text, visuals, video, or interactive format, businesses use content marketing to inform their customers. 

Valuable doesn’t necessarily mean educational, though it can be. As long as your content educates, entertains, empowers, or engages your audience, it’s doing its part. 

For example, VeryGoodCopy helps their newsletter subscribers learn about copywriting:

content marketing example newsletter

And Klarna shares a bit of PR via their LinkedIn:

content marketing social pr

The outcome of content marketing can vary just as much as the format, depending on the business. 

One company might provide access to an ebook in exchange for a potential customer’s email, while another might use a how-to video to improve the experience of someone who has already purchased a product.

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Content marketing provides you with lots of options for promotion. So, you need to develop a strategy to connect customers with your products and services through multiple content types. 

This way, you ensure each blog post, infographic, or social video plays its part in the larger mission of bringing in business. 

Read our guide to content marketing strategy to learn more.

Social Media Marketing

Social media marketing involves creating, distributing, and monitoring paid and organic content across a business’s social accounts. 

People are spending more and more time on social media, and brands are creating more and more content across Facebook, Instagram, Twitter, LinkedIn, and TikTok to stay relevant. 

Digital marketers increasingly use social media as a method of recycling popular content from other channels. About 50% of businesses publish content daily.

Unlike personal accounts, branded social profiles need to generate more than just likes, comments, follows, and shares. They need to contribute to leads and sales.

Social media content is a great way for businesses to generate interest, educate users, reach new demographics, and even make sales!

Developing a social media strategy will help you determine the following:

  • Which platforms your audience uses most often
  • The ideal posting schedule to use for your content calendar
  • Which pieces of content are most engaging to your audience
  • How to position products or services to increase sales

With Semrush’s Social Media Toolkit, you can see what content is working on your social media channels—and even your competitors’—as you refine your social strategy over time.

digital marketing measure social interaction

Sponsored content is when you pay another brand to create and promote content that sheds positive light on your brand or services.

Sponsored content can include any number of digital marketing channels and formats, including: 

  • Blog, ebook, and video content
  • Social media videos
  • Webpage content
  • Placement in emails or newsletters
  • Native advertising on blogs

Influencer marketing also falls under the umbrella of sponsored content. 

Ideally, their audience will have similar interests or needs. So the sponsored content will cater to their existing audience.

For example, Morning Brew plugs sponsored content in their daily newsletter that closely aligns to their readers’ interests:

sponsored content example

Influencer Marketing

Influencer marketing is a collaborative strategy between a business and a social media influencer who promotes the business to their following. 

Influencer marketing includes:

  • Social media posts promoting products and brands
  • Sponsored blog posts and web content
  • Appearances in paid ads
A popular Instagram user engages in influencer marketing by posting an image of her, her cat, and a cat food brand 

There’s no denying that building up a loyal following is difficult. Especially for business accounts in niches that may not be the most popular or engaging.

Influencer marketing lets you bypass that slow process and pay the influencer directly to spread your message to their audience. 

Read our guide to influencer marketing to get started.

Affiliate Marketing 

Affiliate marketing is when an online retailer pays a commission to external parties who bring in referrals. 

Referrals are typically tracked through links. These affiliate links have a particular tracking code added to them, so the advertising business knows exactly how much of the results are attributable to the affiliate.

affiliate marketing

While many businesses use affiliate marketing to improve sales, you can use this arrangement for other attributable events, including: 

  • Per lead delivered
  • Per link click
  • Per download or install

Examples of affiliate marketing include:

You’ve probably seen affiliate links in YouTube video descriptions. Like these that direct you to Amazon:

affiliate marketing example

Read our guide to affiliate marketing to learn more.

Native Advertising 

Native advertising is a type of sponsored content that’s placed so it blends in with the surrounding content. 

These ads can appear on web pages, social platforms, Google SERPs, and in more traditional content like magazines. 

The secret to effective native advertising is making sure that the language, formatting, and tone of the paid content matches the environment where it’s placed. Some examples of native advertising include: 

  • In-feed ads on social platforms like Twitter and Facebook
  • Promoted and paid results on search engines like Google
  • Content recommendations on websites and blogs

Such as this example:

native advertising example

If you look closely, you’ll notice that this type of content has copy flagging that it is a “paid ad,” “recommended by” a specific brand, or simply “sponsored.”

In the above example, we see the label “Ads” at the top left.

Email Marketing

Email marketing is the process of sending promotional messages to the inbox of potential and existing customers. 

How you actually get these email addresses depends on the mix of digital marketing channels your business uses. Webpages, ebooks, social media posts, and paid ads are all effective for gaining this information. 

And once you have these emails, you’ll be able to unlock one of the most powerful, underrated marketing channels out there. Email marketing can help businesses:

  • Generate high ROI
  • Lower marketing costs
  • Convert new users
  • Deliver personalized messages

While email marketing may not seem as flashy as social media or influencer marketing, it’s a key component of driving business online. 

Take Semrush’s email marketing for an event for example:

email marketing promoting event

This email went out to Semrush users and provides clickable links to register for the event. 

The email marketing team can track how many people opened the email, how many people clicked on the links, etc. Which provides valuable insights about our audience.

SMS Marketing

SMS marketing involves sending promotional material to a target audience via SMS text messages. 

SMS marketing is a newer digital marketing channel, with people getting more used to the idea of interacting with businesses directly through their phones to receive: 

  • Promotional offers
  • Product information 
  • Personalized messages 
  • Surveys and quizzes

Like these examples from jewelry brand Mejuri:

sms marketing from Mejuri

Like with email marketing, businesses have to collect contact information from their customers before they can engage in SMS marketing. 

Once businesses get this information, they can upload it into marketing automation tools to send out through campaigns. 

Digital PR

Digital PR is when you get online coverage from digital publications, blogs, or other websites.

Like traditional PR, the goal is to receive coverage that makes your business standout as newsworthy and relevant. 

Digital PR is a type of digital marketing that requires research of and outreach to brands that have a large following and good reputation. 

Here are some of the ways you can engage in this digital marketing practice to improve your own brand following and reputation: 

  • Contact reporters or experts through social media or email to suggest coverage of your business
  • Look through online review and aggregator sites to find and respond to content regarding your business
  • Pay attention to your blog, social media, and email channels so you can respond to comments from existing and potential customers

For example, you can check your business’s Google Reviews and respond to comments from recent patrons:

digital pr example

Ready to get started with digital PR? Read our in-depth guide.

Marketing Automation

Marketing automation means using software to perform certain marketing tasks that would otherwise be performed manually. 

Think Mailchimp’s email marketing tools, Semrush’s Social Media Poster, or Drift’s chatbots.

Marketing automation tools can save you tons of time on tasks like: 

  • Scheduling and sending bulk emails and social posts
  • Launching multiple ad campaigns
  • Analyzing performance across all channels
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These tools allow you to pass off the administrative (and sometimes boring) aspects of marketing to focus on creating the best experience for each customer. 

Plus, marketing automation tools free up your marketing department so the business can take on more clients!

How to Create a Digital Marketing Strategy

You now have a better understanding of digital marketing, why it’s so important, and all the different channels it covers. 

Next, it’s time to create a digital marketing strategy for your own business.

We’ve outlined the major steps of developing your digital marketing strategy below so you can get started today.

1. Establish Your Marketing Goals

For your business overall, the goal is simple: make a profit. 

For marketers, the question of an overall goal takes a bit more thought and analysis. 

You need to identify how your promotional content is going to capture the attention of your target audience, transform them into paying customers, and keep them satisfied with your brand.

Do you want to increase sales on your products? You might choose to focus on SEO and optimizing content that brings potential customers to your website.

Maybe you need to build brand awareness and get potential customers into your marketing funnel? Posting on social media is a good choice.

Identifying your marketing goals is a key first step that will inform how you proceed with your overall strategy. 

2. Identify Your Target Audience

Next, you need to identify the audience segment that you’ll target in order to achieve your marketing goals. 

It’s crucial that you identify the correct target audience. The success of your digital marketing strategy hinges on putting your marketing assets in front of people who are interested.

Here are a few tips to make sure you’ve identified the right target audience: 

  • Brainstorm about the general demographics most likely to use your products and services
  • Research these demographics and identify their online behaviors, channel preferences, and buying habits
  • Pay attention to the marketing strategies of your competitors to identify who they target
  • Create buyer personas based on the research you’ve done and narrow it down to an ideal customer profile

To research and get data on your target audience, you can use a tool like Semrush’s Market Explorer. Here’s a snippet of the kind of info you can find:

market explorer summary

As you roll out your marketing strategy across different campaigns, make sure you keep an eye on your ideal audience to note any shifting trends or incorrect assumptions. 

3. Set Up Your Marketing Channels

Proper selection and setup of your marketing channels ensure that you will not only reach your target audience. But you’ll be able to collect valuable data on the success or failure of each interaction.

Your audience likely uses multiple channels throughout the day. So make sure your marketing strategy incorporates all the platforms you’ll need to reach that audience. 

Some popular points of focus include: 

  • Social media platforms
  • Search engines 
  • Web and Google sites
  • Email 
  • SMS

In addition to creating your own business accounts on these platforms, you’ll want to invest in marketing automation, CRM, and analytics tools. 

In Semrush’s CRM, you can see data on prospects and leads, maintain customer information, and send reports on an automated schedule.

Semrush’s CRM

By integrating your marketing channels with these tools, you’ll vastly increase the efficiency of your marketing efforts. 

4. Create Quality Content 

Once you know who your target audience is, you can create content catered to those customers.

Content can take many forms: social media posts, blog posts, newsletters, PPC ads, and much more.

To ensure you’re creating content your audience wants to read, perform keyword research before producing content.

You can use the Keyword Magic Tool to easily find high-volume keywords and related terms to target.

keyword magic tool results

The content types you choose may change depending on your goals and what platforms your audience prefers. 

But remember: any content you make should engage, entertain, or educate your audience.

To make quality content creation part of your overall marketing strategy, you should:

  • Keep an eye on the content your competitors put out
  • Plan out your pieces using a content calendar
  • Make sure your content addresses the needs of your audience persona
  • Align your content with your brand positioning and tone of voice

You can use Semrush’s Marketing Calendar to help you and your team plan your campaigns. And stay on the same page:

Semrush marketing calendar

5. Launch Your Campaigns 

Launching a marketing campaign involves scheduling and strategically distributing your content so it reaches the right audience at the right time.

It may be tempting to post your blogs all at once or to send out multiple emails to your leads, but timing is important. 

Flooding your channels with content can have a number of negative impacts on your results. Like: 

  • Overwhelming your target audience 
  • Competing against yourself for audience attention
  • Penalties from social media moderators and search engines 
  • Causing followers to unsubscribe 
  • Being labeled as a spam account
  • Making it difficult to collect accurate data

Patience is just as important as action when it comes to launching a marketing campaign. Make sure you take time to coordinate your efforts across channels and ship your content strategically.

6. Analyze and Optimize

Things won’t always go according to plan. That’s why you need to consistently monitor your marketing strategy and analyze performance so you can identify how to make improvements. 

Optimizing for better marketing performance is just a part of the job. There’s always room to improve content quality, audience targeting, and the overall strategy. 

By integrating your marketing channels with the automation, CRM, and analysis platforms mentioned earlier, you arm yourself with plenty of data to make informed decisions about how to improve campaign results.

The most important thing is that you take time to develop and finetune your strategy. Don’t just dive into your channels and start creating content without a plan.

How Digital Marketing Works for Different Businesses

Digital marketing strategies can work for both B2B (business to business) and B2C (business to company) companies. Regardless of their industry and what they sell.

But best practices will differ. So there are a few things to keep in mind before approaching B2B and B2C marketing activities:

B2B Marketing

B2B marketing often revolves around lead generation. Where the goal is for a prospect to talk to a salesperson. 

You can use digital marketing to attract and convert high-quality leads.

B2B decisions typically need more than one person’s input. So on your end, the sales cycle will usually be longer than with B2C marketing.

Depending on your niche, you may choose to adopt a more formal tone than you would with B2C marketing. Because you may want to use more industry terminology and technical language than you would with customers.

Focus on your website as well as business-focused channels like LinkedIn. This is likely where your demographic will be spending time online.

B2C Marketing

With B2C marketing, it’s likely that your digital marketing goal is to attract people to your site. Where they can become a customer without ever needing to speak to a salesperson.

B2B marketing focuses a lot on attracting leads. While B2C marketing focuses more on streamlining the buyer’s journey. So the time between landing on a website and making a purchase is as quick as possible.

Customers often respond to entertaining or emotional language. So if your industry allows, you may try to be more playful and creative with your B2C tone of voice.

Your primary channels will depend on your niche. But oftentimes, entertainment-based channels like Instagram are better bets than LinkedIn for B2C purposes.

Set Yourself Up for Digital Marketing Success with Semrush

Digital marketing should be a cornerstone of almost any business’s overall strategy.

It allows you to stay in constant contact with your customers. Which provides unique opportunities to earn new leads, get brand exposure, engage with your existing audience, and much more.

Better yet, you can use Semrush to help you out along the way. 

Plan content and campaigns with the Marketing Calendar, schedule and monitor social posts with Social Media Toolkit, and much more.

Ready to get started? Sign up for your free trial today.

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