Strategic Management: Digital marketing forms: Marketing proposal for a Real Estate Agency based on Viral Marketing

Executive summary

The main forms of digital marketing that have been explained are affiliate marketing, search engine marketing and viral marketing. Affiliate marketing uses networks of marketing that can be used to channel customers to the brand or business being advertised. Search engine marketing focuses on ensuring that a product features among the first query results in a query by web users. Viral marketing uses the customers to spread messages within their social networks.

This report proposes a marketing campaign based on viral marketing. The campaign period is to be stretched over 6 months with an aggregate of 3 months for the actual campaigns. The proposal estimates that the campaign will result net gains of about £850,000.00.

1.0 Introduction

For an organisation to excel in the market, it must ensure that its marketing efforts are strategic and effective. This implies the need to focus on the right message, right channel and target the right group. The medium used for marketing must be one that can easily reach out to the persons being targeted (Keegan, 2002). As the number of consumers that frequent the internet grows, online marketing has become the fastest growing medium for marketing (Touibia, Stephen and Freud, 2011). The choice of advertisements and forms of digital media are varied and each can be chosen depending on its properties and its ability to facilitate reaching out to the desired market. Affiliate marketing, search engine marketing and viral marketing are among the common forms of digital marketing whose features, merits and demerits have been explained below. This report then singles out viral marketing and makes a marketing proposal based on this form of digital marketing in the third section of this report.

2.0 Alternative forms of digital media

2.1 Affiliate marketing

Affiliate marketing works by having different businesses using their marketing channels to create channel customers to their affiliates. In affiliate marketing, there are four distinct elements which include the merchant or brand (one whose brand or product is to be marketed); the network (system in place to facilitate the process); the affiliate (the publisher who’s efforts lead to the directing of customers to the merchant); and the customer who is the ultimate target of the marketing effort (Prussakov, 2007). Affiliate marketing is not exclusive to online marketing. It has been put into practice under the traditional marketing channels where organisations would cooperate in generating sales for each other. With the introduction of online affiliate marketing; the challenges previously faced in the traditional mode where at times it was difficult to track the number of customers channelled and obtain full payment; have been resolved (Brear and Barnes, 2008). Online marketing brings out the benefit of using tracking technologies to accurately determine the source of business and this encourages more players to act as affiliates.

The term affiliate marketing doesn’t imply the absence of use of other marketing forms such as viral marketing and search engine marketing (Prussakov, 2007). All the forms can be used concurrently with the only difference being that it is the affiliate that does the marketing and rechanneling business to the merchant. This approach enables the organisation to tap into the competencies of other organisations. Where an organisation may not have the skills and expertise to attract customers, it can easily benefit from the efforts of the affiliates who may be better accustomed to the market and better at attracting the attention of prospective consumers (Brear and Barnes, 2008). This form of marketing is also very good for market penetration. The customers identify with different brands differently and different organisations therefore attract a different carder of people depending on the personality of their brands. Each business organisation therefore has a niche depending on how strongly it commands brand loyalty and consumer confidence. By engaging in affiliate marketing, an organisation manages to obtain favourable attention from the customers of such organisations. It is therefore able to reach a market that would ordinarily not be reached using a direct marketing effort consistent with past practices.

Affiliates could maintain advertising channels such as websites, blogs and online pages in the social media which are then used to direct traffic to the desired businesses (Brear and Barnes, 2008). The main disadvantage of this approach is that it may not always be possible to control the marketing exercise. The affiliates in question cannot be bound to produce a certain result and payment is made per customer channelled. It may also be difficult to ascertain the success of the affiliate marketing approach where a consumer views an advertisement from an affiliate but later opts to purchase directly from the physical outlets or through an organisation’s official website (Prussakov, 2007). The pricing is also determined through auctions and this means that it may not always be possible to plan ahead. Market prices can be volatile and the most effective affiliates tend to be quite expensive. Nevertheless, this system allows for easier and more accurate tracking of performance and future efforts can be channelled towards the more effective affiliates.

2.2 Search Engine Marketing

Search Engine Marketing (SEM) uses the search engine technologies to become more visible online. This form of digital marketing has been quite common in the developed world with markets such as USA registering revenues of over $15 billion in 2010 on search engine marketing (Lin et al., 2011). The strength of SEM is brought out in the information search of the consumer decision making process. This process with problem recognition, then advances to information search which is both internal and external (Keegan, 2002). Internal information search is based on the memory of the consumer who then moves to external search if they fail to get a satisfactory result from internal search. Traditionally, friends and relatives were the primary sources of information as people could exchange information casually while together (Kotler and Lane, 2006). As people begin to spend more time online, internet searches are becoming more central and many consumers are beginning to use the internet even where they could have just turned to a colleague nearby to ask for the information (Wilson and Pettijohn, 2006). Search engines help with this information search process where they make use of specialised engines that can sort out all the information available in the internet to display results based on relevance with the search query.

In the process of determining how to display results, search engines prioritise relevance of the results to the query as well as the wealth of information in a website and level of activity in such a website. That is why organisations are forced to rewrite the content of their websites to be in line with the most common search queries applicable to their products (Wilson and Pettijohn, 2006). The importance of this is based on findings which indicate that search results that are displayed in the first page tend to receive the greatest attention. It is rare for consumers to extend the search past the third page of the search results and in most cases will re-search using a different choice of words should what they seek not be among the first few pages. This makes it necessary for organisations to adopt strategies that could ensure that their websites or related web pages are at the top of search engine result displays. Some of the strategies used in this form of digital marketing are the use of search engine optimisation (SEO) techniques (Lin et al., 2011). SEO capitalises on generating content that matches common search queries by web users. The ranking on search engine result pages can also be enhanced by creating many links leading to the same web pages.

The main advantage of using search engine marketing is that it is likely to be very effective. Most web users use search engines on a regular basis. The market for this can be very good if well implemented. However, as competition mounts for search engine space, it is becoming more difficult for organisations to raise their rankings in the search engine result pages (Minocha and Pettre, 2012). This competition is informed by the fact that people who search for products tend to be prospective customers who are more likely to be in need of the products sought than the general market. Marketing to them therefore has a higher conversion rate as one only needs to avail the information needed to secure a favourable purchasing decision by the web users.

2.3 Viral marketing

Viral marketing is a form of word of mouth marketing which uses the internet as the basic medium. Word of mouth marketing is often said to be among the most effective forms of marketing known. It works by way of using endorsements from independent sources that can be taken as being more reliable than the direct communication emanating from the companies (Palka, Pousttchi, and Wiedemann, 2009). The rationale for this thinking is that marketers will always try to exaggerate about their products or at least downplay the negative sides of the same. Even though most countries have strict regulations on the need for marketers to ensure that their promises about their products are accurate, there is still sufficient room for hyperbole and the market is fully aware of this (Kwiatkowska, 2009). They therefore tend to discount anything they hear from a marketer or company about the products being marketed. The third party in the word of mouth mode comes in as an independent referee who can endorse a product based on their experiences. Viral marketing borrows into this concept and tries to get consumers to circulate positive messages about their products and consumers trust such sources more than they trust marketers.

Viral marketing can be conducted through the internet or through mobile phones and other mediums for electronic communication (Touibia, Stephen and Freud, 2011). The consumers are provided with messages which they pass to others within their social networks. Viral marketing has become more significant over the social media where messages can be exposed to thousands of web users at the click of a button. The channels that can be used in viral marketing include web sites, social media sites, e-mail, chats, blogs, video services and others (Ferguson, 2008). The option chosen should be dependent on the nature of customers targeted and the message an organisation wishes to pass across. The important participants in this strategy are the marketers, the social hubs and the general market. The marketers generate the messages that are interesting, current and able to go viral and the same messages are forwarded to social hubs who initiate the circulation (Datta, Chowdry and Chakraborty, 2005). The success of this strategy largely depends on whether the message resonates with the market or not.

Whichever form of digital marketing is used, the organisation must carefully consider the content of the adverts. Adverts that display the most relevant information tend to perform better than others as web users are increasingly impatient and always desiring to obtain all information needed at the click of a button.

3.0 Marketing proposal

3.1 Overview

This proposal is for a viral marketing campaign for the estate agency. This campaign is to last for 3 months and will comprise of a series of viral marketing campaigns each lasting for 2 weeks. The aim of the same will be to achieve a 25% growth in sales of houses and homes within 12 months. The details of the proposal are as listed below.

3.2 Description of target market and market conditions

The main characteristic of the UK market that is most relevant to this study is the communication trends and information search processes. Like the rest of the developed world, the UK consumer relies more on the internet than in the past. This is especially the case when it is considered that the internet reach in the UK market is more than 90% and this has been promoted by the introduction of internet capabilities even on most basic electronic devices such as phones (Ofcom, 2012; Minocha and Petre, 2013). This means that a digital marketing campaign can be very effective.

The customer segment to be targeted is the youthful population aged between 25 and 30. These are young people who are in the process of settling down given that most of them are likely to be having at least 5 years working experience and have over time managed to increase their incomes marginally and therefore be able to afford to buy houses and other properties (Heywood, 2012). Since most of them tend to buy houses through mortgages and long term loans, they prefer to start the process early in their career. This youthful population tends to be keen on consideration of fashion, price, security and their social standing. They also tend to be easily influenced by social groupings and the ability to belong. This is the group that is believed to have pioneered the growth in the social media and continue to be very active with the social media (Nielsen, 2011). They are therefore easy to attract by portraying certain properties as worthy of their investment through a marketing strategy such as viral marketing (Stelzner, 2012).

The effectiveness of a marketing initiative is determined by the organisation’s ability to accurately discern the characteristics and needs of the market and create messages that resonate well with them. This market segment is keen on: getting the best deal; settling in fashionable homes that they can live in for a long time; houses that are in a safe environment; and the assurance that they can fit in. They also tend to rely heavily on the internet as the main medium of information search.

3.3 Business objectives

The objective of this campaign will mainly be to boost sales. It targets to realise 25% increase in sales within 12 months.
The campaign will also target to portray the Real Estate Agency as the most suitable provider of housing in London. If this is realised, it will make the organisation the first point of reference and this will be useful in sustaining sales in the coming years. This is referred to as strengthening of the brand where the agency can be seen as the most suitable and reliable source of information about what is best in the market. The aim of this strategy is to ensure that the organisation generates stable sales over the long term.

3.4 Marketing strategies and campaign design

The marketing strategy proposed is viral marketing. The campaign is to exploit the fact that the target market comprises of people who tend to spend a lot of time online and are very active in the social media. This strategy shall be executed using social media sites that are popular in London which include Facebook and MySpace. The target would be to reach an audience of over 0.5 million target customers with this campaign. The choice of these social media sites is because they are the most popular ones in London and also that little value would be added by including more channels since users of other sites are also expected to be users of the social media sites selected (Stelzner, 2012).

The design of the campaign shall focus on two areas: the message and the duration and intervals. The message shall be carefully designed along topics that are trending in the market. It could also include focus on some new and exciting features of houses being marketed. Irrespective of the message, the underlying theme shall be to project the Real Estate Agency as the most reliable source of information on what is trendy, cost effective and suitable in the market. The generation of messages shall be a concerted effort between marketers who shall conduct research and generate messages. These shall be tested for catchiness before being introduced into the main campaign. The importance of having catchy messages is that consumers find it easier to spread to people within their social networks. The options to be considered shall also include the inclusion of pictures and videos in the messages to promote visibility. This thinking is influenced by past findings that have indicated that pictures tend to be easier to notice and also tend to leave more lasting impressions.

The campaign shall cover 12 weeks which will not be running concurrently. This means that the campaign period could stretch from June to December. It shall be divided into 6 phases which will run for 2 weeks each. The rationale for using two-week phases is due to the fact that viral campaigns shall be expected to overlap where different catchy messages will be in circulation at the same time and this will cement brand presence in the market. The 2 weeks prior to a phase shall be utilised in assessing the impact of a previous phase, learning from the lessons taken and launching the next phase. The period shall also be used to reassess whether the messages picked inter alia were still relevant or there would be need to have them modified.

3.5 Budget estimates

The estimates of the budget for this campaign will be based on costs directly attributable to the campaign and the related revenues shall be the marginal revenues directly attributable to this campaign. A summarised estimate of the figures indicating that the campaign will result in net gains of £850,000.00 is as shown in the table below.

Costs	Amount
Additional staff	£ 100,000.00
Outsourcing of message designs	£ 25,000.00
Payment for selected social hubs	£ 25,000.00
Total costs	£ 150,000.00

Revenues
Estimated additional sales margins (at 25% increase in sales)	£ 1,000,000.00

Campaign margin	£ 850,000.00

3.6 Implementation schedule

As outlined in sections above, the campaign shall be stretched over a 6 month period running from June to December with the estimated timelines being as follows:

Phases

June

July

August

September

October

November

Phase 1