Digital business models and marketing - Digital marketing ch...

Learning Outcomes

After reading this article, you should be able to explain digital business models and digital marketing channels, identify key features of social media, email, website, search, and mobile marketing, and describe digital performance metrics. You will understand how businesses select and assess digital marketing channels and apply relevant marketing metrics for online effectiveness in the ACCA BT exam.

ACCA Business and Technology (BT) Syllabus

For ACCA Business and Technology (BT), you are required to understand how digital business models influence marketing and the use of digital channels and metrics for online measurement. This article covers:

• Definition and features of digital business models and digital marketing.
• Major types of digital marketing channels: website, email, social media, search, and mobile.
• Benefits and limitations of each digital marketing channel.
• Purpose and calculation of key digital marketing metrics.
• How organisations evaluate online marketing channel performance and effectiveness.
• Combination of digital channels within the marketing mix.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. List three main types of digital marketing channels and give one example of each.
2. What does a 'conversion rate' measure in digital marketing, and why is it useful?
3. True or false? Social media channels are always more effective than email for building long-term customer loyalty.
4. Which digital marketing metric best indicates the percentage of website visitors who leave after viewing only one page?
5. Give two advantages and one disadvantage of using mobile marketing for a business.

Introduction

Digital business models and digital marketing have changed how organisations reach and interact with customers. Traditional approaches focused on one-way communication and physical locations; digital models rely on two-way engagement using technology. These changes have made it easier to reach more customers, gather data, and measure marketing effectiveness in real time.

Key Term: Digital business model
A way of creating, delivering, and capturing value using digital technologies, often relying on online platforms or services.

Key Term: Digital marketing channel
An online communication route through which an organisation markets products or services, such as a website, social media, email, search engines, or mobile applications.

Types of Digital Marketing Channels

Businesses select digital marketing channels based on customer behaviour, marketing objectives, and available budget. Common channels include websites, email, social media, search engines, and mobile platforms.

Website Marketing

A company website is the main online presence and often forms the centre of digital marketing.

Features:

• Provides product information and company details
• Enables online sales or customer interaction
• Collects data on visitor activity

Benefits:

• Available 24/7
• Full control over branding and content

Limitations:

• Requires ongoing investment and regular updates
• Must attract visitors through other channels

Social Media Marketing

Social platforms (e.g., Facebook, LinkedIn, Instagram, Twitter) allow direct, informal interaction with current and potential customers.

Benefits:

• Quick two-way communication
• Builds community and brand awareness
• Content can be spread via sharing

Limitations:

• Less control over audience feedback and brand image
• Algorithm changes can impact reach

Email Marketing

Emails are sent to advertise offers, news, or maintain customer relationships.

Benefits:

• Low cost per message
• Customisable and personalisable
• Direct and measurable

Limitations:

• Can be ignored or filtered as spam
• Requires permission and good subscriber management

Search Engine Marketing (SEM)

Involves increasing online visibility via paid advertising or improving ranking in search engines (SEO).

Benefits:

• Reaches users actively seeking products or services
• Delivers measurable results

Limitations:

• Competition may drive up costs
• Requires ongoing optimisation

Mobile Marketing

Uses mobile devices via apps, messaging, or mobile-optimised websites.

Benefits:

• Immediate delivery and high open rates
• Location-based targeting possible

Limitations:

• Smaller screen size limits content
• Privacy concerns may limit user acceptance

Selecting Digital Channels

Choosing the correct mix depends on:

• Target audience location and habits
• Organisation’s marketing objectives
• Content type (text, video, image, etc.)
• Resources and staff skills

Key Term: Multi-channel marketing
Using several digital and/or traditional communication channels in a coordinated way to reach customers.

Key Digital Marketing Metrics

Digital platforms enable collection and analysis of detailed performance data. Metrics help organisations measure online impact and optimise campaigns.

Below are essential online marketing metrics:

• Impressions: Number of times content is displayed.
• Clicks: Number of times users interact with a link.
• Click-through rate (CTR): Proportion of impressions resulting in a click.
• Conversion rate: Proportion of visitors who complete a desired action (e.g., purchase or sign-up).
• Bounce rate: Percentage of website visitors who leave after viewing one page.
• Engagement rate: Measures interactions with content (likes, shares, comments).
• Open rate: Percentage of recipients who open an email.
• Cost per click (CPC): Cost for each click in paid advertising.
• Return on investment (ROI): Profit from online marketing as a percentage of the total cost.

Key Term: Conversion rate
The percentage of users who take a specific action (such as making a purchase) out of the total number of visitors.

Key Term: Bounce rate
The percentage of website visitors who leave the site after viewing only one page, indicating low engagement.

Evaluating Channel Effectiveness

To assess which digital channels work best, marketing results are compared regularly using key metrics, customer feedback, and sales figures.

Worked Example 1.1

A retail company runs two online campaigns: one on social media and one by email. Both drive visitors to a sales page.

• Social media: 2,000 visits, 40 purchases
• Email: 500 visits, 25 purchases

Question:
Which channel achieved the higher conversion rate?

Answer:
Social media: 40/2,000 = 2%
Email: 25/500 = 5%
Email achieved the higher conversion rate.

Worked Example 1.2

A company’s website had 10,000 visitors last month. 2,000 left after viewing only the homepage. What is the site’s bounce rate?

Answer:
Bounce rate = 2,000 / 10,000 = 20%

Using Digital Metrics for Business Improvement

Companies use digital metrics to:

• Identify successful campaigns and channels
• Improve weak content or landing pages
• Allocate budget to the most effective channel
• Refine customer targeting

Key Term: Engagement rate
The level of interaction users have with content, often measured by likes, shares, or comments relative to audience size.

Strengths and Weaknesses of Each Channel

Revision Tip

Focus your revision on understanding the pros and cons of each major digital marketing channel and knowing key metrics by name and purpose—these form the basis of many exam questions.

Exam Warning

Do not confuse 'conversion rate' (desired actions completed) with 'click-through rate' (clicks out of views). They measure different things and are tested separately.

Summary

Digital marketing channels include websites, social media, email, search, and mobile platforms. Each offers benefits and limitations, and businesses often use several together to reach and track different audiences. Success depends on selecting appropriate channels and measuring performance using clear digital marketing metrics. Understanding and applying these practices is essential for ACCA BT exam requirements.

Key Point Checklist

This article has covered the following key knowledge points:

• Define digital business model and digital marketing channel
• List main types of digital marketing channels and their uses
• Explain and calculate major digital marketing metrics
• Distinguish between conversion rate and bounce rate
• Describe benefits and drawbacks of website, email, social media, search, and mobile channels
• Explain how to evaluate and compare channel performance
• Appreciate the role of metrics in marketing planning and improvement

Key Terms and Concepts

• Digital business model
• Digital marketing channel
• Multi-channel marketing
• Conversion rate
• Bounce rate
• Engagement rate