In an allusion to the disruptive impact of the internet on business, former American senator John Sununu said: "Not since the steam engine has any invention disrupted business models like the internet."
The internet has spawned new industries and has changed the nature of human interaction. Digital marketing pervades the internet; all of its users are potential targets of online marketing campaigns. It offers more return on investment on marketing spend, with positive implications for corporate profitability and growth.
Since the dotcom bubble, firms provide marketing services online, with email marketing and search engine optimization constituting the earliest forms of digital marketing. With time, these services have come to include: affiliate marketing; display advertising; search marketing; and social media platforms.
In the United States, companies allocate sizeable portions of their marketing budgets to digital marketing activities. Technology research firm Gartner, reports in its 2013 US Digital Market Spending Report that $25 million was spent on digital marketing for every $1 billion in revenue. It claims that mobile marketing, commerce experiences, social marketing and content creation are top priority digital marketing investments for large companies in 2013.
In Nigeria, digital marketing is on the rise. Companies seek to take advantage of the growing online population, which is estimated at more than 45 million, according to the International Telecommunications Union (ITU). Events in the Nigerian online space reflect this growth, while pointing to prospects for online marketing and the way companies carry out business.
The vast number of internet users means that companies can leverage the intenet to execute more effective marketing campaigns that reach larger audiences than conventional mediums. Social marketing-such as Facebook and Twitter-allows for targeted marketing to demographics whose population sizes are known or can be determined. More Nigerian companies are placing advertisements online, especially on heavy traffic websites.
Advertising firms are establishing digital marketing units, alongside specialized digital marketing agencies. One such agency is House ofKaizen, created by a merger between U.S based Net X and UK-based Web Liquid. The firm's managing director, Dayo Elegbe, previously worked with companies such as Ericsson and News International, in the United Kingdom, to execute digital marketing strategies. He observes that the growth in digital marketing in Nigeria has been impressive.
"Quarter one last year, when you looked at the mobile internet traffic off Inmobia's ad network, we [Nigeria] were on something like 1.6 billion impressions, while South Africa was doing 2.1 billion impressions. By the third quarter, we were on 4 billion impressions and we are still growing. So, we went from being, literally, the second largest mobile advertising internet market in Africa, to the largest in two quarters, and we are still growing."
Elegbe adds that the potential for further growth is underscored by consumers' attraction to digital technologies.
"The thing that really stands out for me is the excitement that people still have about digital. I'm not just talking about practitioners here; I'm talking about people in general. The excitement that people display when they see new forms of advertising online-and we know this based on the comments that they give or the level that they interact with it-I still think it's way above anywhere else in the world that I have experienced. That, to me, is good because it means our population is still highly engaged and responsive [to] the medium."
Consequently, there are positive implications for the growth of local businesses as a result of digital marketing. As more Nigerian companies embrace digital and subsequently allocate more resources to online marketing, to the detriment of traditional methods, a new vista of opportunities will be created as the industry takes shape.