Beginner’s Guide to Digital Marketing for Southeast Asia — Main channels (part I)
Part I: Online Marketing channels and Analytics
This guide is written for both people who are new to the world of digital marketing and the ones who already have some basic experience in the field.
Specifically, if you want to:
- learn some key Digital Marketing concepts to put in practice in your existing job
- learn from content which is localised to the Southeast Asian market and more specifically the Indonesian one
- better understand whether a career in Digital Marketing could be the right choice for you
- start learning about Digital Marketing as a preparation for RevoU Digital Marketing Program
Then this guide is for you!
If you are looking for more advanced US-based growth marketing advice, we suggest you to head over to Julian Shapiro’s Growth Marketing guide. Among the very best content you can find online for more advanced marketers.
How is the guide structured?
We have split the guide’s content in two separate parts:
Part I
In Part I we will introduce you to the digital marketing landscape (what it is and why learning about it), give you a framework to look at when choosing which marketing channel to invest in by introducing concepts such as scale, targeting and acquisition costs. We will then give you an overview of the major online marketing channels, distinguishing between organic channels and paid channels.
Finally, we will show how to track what is going on your website or app, which marketing channels brought you traffic by familiarising yourself with Google Analytics, the most famous digital analytics tool used by companies of all sizes.
Part II
In Part II we will introduce you the two most important metrics of modern data-driven marketing: Customer Acquisition Cost (CAC) and Customer’s Lifetime Value (LTV).
You will learn the meaning of these two key metrics, why they are so important, how to calculate them, using a real company example, and the mistakes you should avoid doing when calculating it.
1 — The Digital Marketing landscape
1.1 — What is Digital Marketing?
Digital marketing (or online marketing) is the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium — Wikipedia
Learning about digital marketing is to learn about how to interact with potential customers through digital channels, with the goal of getting them to perform a specific action on a website or app.
Digital Marketing is an umbrella term that includes all of a company’s online marketing efforts. A company’s social media activities on Facebook or Instagram, the newsletters it sends to its subscribers or the advertising it does on websites such as detikcom or Kompas.com all fall into its broader “digital marketing” strategies.
More and more companies are investing on online marketing vs. offline channels, not only because more and more people are getting online, but because online marketing allow them to reach their target audience in a much more precise and efficient way than traditional offline channels, such as radio, newspapers or billboards.
Most importantly, digital marketing can be highly measurable. That is, a good digital marketer knows exactly how well every online marketing channel is performing and what is the Return on Investment (ROI) of every rupiah spent on online marketing activities.
1.2 — Why learning about Digital Marketing?
Digital Marketers are among the most sought after talent in today’s job market, especially in the booming e-commerce sector, where they play a key role in driving the growth of companies such as Shopee, Lazada or Traveloka.
As a result of this, the interest for digital marketing skills in Indonesia is skyrocketing, especially in the past two years:
There are an increasing amount of jobs opening for people who possess Digital Marketing skills:
Some examples of Digital Marketing jobs at top tech companies
Learning about Digital Marketing can open you a world of job opportunities and very fulfilling careers in today’s fastest growing companies.
2 — Online Marketing channels
The digital marketing space is made up of a multitude of online channels, whose primary purpose is to help a company reach its potential customers wherever they spend their time.
Let’s first look at two fundamental classification of online marketing channels:
- acquisition vs. retention channels
- organic vs. paid channels
Acquisition vs. Retention channels
The first important distinction among online marketing channels is between acquisition channels vs. retention channels.
Acquisition channels are marketing channels that allow a company to ‘acquire’ a user for the first time. For example, the marketing channels used to make a user download for the first time the Grab app or to make the first purchase on Shopee both fall into this category.
Retention channels, on the other hand, are marketing channels that are used by a company to push their existing customers to make additional transactions. For example, after you make a purchase on the Traveloka app, you will keep receiving emails from them to remind you about their additional services and offers. Email marketing and App notifications are among the most popular retention channels.
Organic vs. Paid channels
The second fundamental distinction among online marketing channels is between organic channels vs. paid channels.
Organic channels are channels which don’t require a company to pay per each additional visit generated on its app or website.
For example, when you click on a link in an email sent by a company and land on their website, the company doesn’t have to pay for each click or visit they obtain. They obtain such visits for free. That is, organically.
On the other hand, when you see a promotional banner on a website such as on Kompas.com, the advertiser (in the case below Nissan), pays for every impression the banner generates or every click the visitors make on the banner. Therefore every visit your website generates as a result of such clicks is considered ‘paid’.
Organic channels are typically harder to grow initially and they require a bigger initial investment in terms of manpower, with therefore a longer term approach.
Paid channels are easier to get started with and don’t require any initial investment, but becomes expensive as you grow since you will need to keep paying for every additional visit/app download you obtain.
How to choose the right online marketing channel?
It is very important to be able to prioritise your online marketing efforts on the channels that make more sense given the nature of your business.
We suggest to look at each channel on the basis of the following three criteria:
- Scalability
- Targeting
- Cost (CAC)
From our experience, this can give you a solid enough framework to start with and to avoid wasting time (and $$$) in channels which are not tailored for your business.
Let’s look at them in more details.
2.1 — Scalability
How big is the marketing channel you are using? How many people could you reach, assuming you could spend an infinite amount of money on it?
Google and Facebook (which includes not only FB but also Instagram, Whatsapp & Messenger, which are all owned by FB) are by far the two biggest online marketing channels, as almost any person with internet access is using their services.
The dominance of Google and Facebook in the online marketing field is well reflected by their share of digital advertising (Alphabet = Google’s parent company).
As a rule of thumb, the bigger and more scalable the channel is, the better, as you can keep using it as your company and sales grow.
On the other hand, if a channel has limited scale, you will be able to leverage it just up until a certain point/size. This is far from ideal as you will need to find another channel to use once you reach the point of saturation (and therefore will have to craft a new strategy, which will take time and cost you additional money).
2.2 — Targeting
In order for your digital marketing initiatives to be effective, you will need to be able to target the right users for the product or service you are selling.
If your product for example is targeting high-income customers, it would be a waste of money to target consumers who can’t afford your pricing point. Same thing if you are selling your product only in a specific geographical area. No point in advertising a product which is sold only in Jakarta to people who live in Surabaya.
Let’s go through the two main types of online targeting:
- Behavioural targeting
- Demographic targeting
2.2.1 — Behavioural targeting
With behavioural targeting you are targeting people based on their intent to buy a certain product or service through an action they perform.
For example, if you are looking to buy a new smartphone you would probably first compare on Google the prices from the different ecommerce selling it, to see which website sells it for cheaper.
This is precisely the type of intent you can capture by advertising on Google on specific keywords. Your ads could show up every time a user performs a search with a keywords relevant for the product you sell.
2.2.2 — Demographic targeting
With demographic targeting you can target potential customers on the basis of their specific demographics and interests. For example, you could hypothetically target women + living in Bandung + who studied at ITB + who like rock music.
This form of targeting is available on platforms such as Facebook or Instagram.
In this case, the user doesn’t need to perform any specific action, but will instead automatically be targeted by your ads if she matches the demographic and interest criteria you set. Depending on the platform you use, you will be able to go more or less granular in terms of targeting criteria available.
The advantage of demographic vs. behavioural targeting is that you can reach your target of users immediately without them having to perform any action. The downside of it is that your target will progressively get used to your ads and click on them less and less often, since there is not buying intent which will trigger your ads.
2.3 — Cost (CAC)
The marketing cost a company incur in acquiring a new customer to purchase its products or services for the first time is called Customer Acquisition Cost (CAC).
Let’s see what the CAC could look like for an hypothetical ecommerce company:
- the company employs one digital marketer with a monthly salary of Rp 10j
- the company invest every month Rp 20j in Facebook Ads
- as a result of such marketing initiatives, they are acquiring 100 new customers every month (new customer = customer who makes his first purchase on the platform)
- their CAC would therefore be: (10j+20j)/100 = Rp 300,000 per customer
CAC is among the most important metric to track in the digital marketing world. Probably the most important one. Any good digital marketer should know well the CAC for each acquisition channel.
Given that each acquisition channel has a different CAC, a company might be prevented to leverage a specific channel because its CAC is too high for the business to make any profit. The higher the CAC your company can afford, the more acquisition channels you will be able to invest in.
We will go more in depth on the CAC concept and marketing funnel in part II of our guide.
3 — Organic Channels
An overview of the major organic channels
- SEO
- Social Media Organic
- Email Marketing
3.1 — SEO
Also referred to as ‘Organic search’
Summary
- Scalability: HIGH
- Targeting: BEHAVIOURAL
- Cost/CAC: HIGH in the short term, LOW in the long term
About
SEO, which stands for “Search Engine Optimization”, is the practice of increasing the visibility of a website in the organic (non-paid) search engine results and specifically on Google, with the goal of increasing its traffic.
It is important to fully understand the difference between organic results vs. paid results (or Google Ads), as the two type of results are independent between them. Through SEO you are aiming to rank in the highest possible position for the organic results, not for the paid ones.
Which company should invest in SEO?
SEO is one of the most powerful and scalable marketing channels out there and it can be leveraged by pretty much all sort of businesses.
It does require a lot of work in the short term to get started with and it’s a very difficult channel to fully master, but if you manage to do it, over time it can become one of the pillar of your online marketing strategy.
In Indonesia there aren’t yet so many great SEO specialists, therefore there is an even bigger opportunity for SEO marketers to make this channel a key one for their company.
When you shouldn’t invest in SEO
- if you need immediate results: SEO needs some time to start producing results, so you therefore need to have a long-term horizon
- if your product or service is so new or innovative that people don’t Google it: in this case you will need to invest in demographic based targeting channels and not intent based targeting such as Google / SEO
Best resource to learn about SEO
There is a lot of content about SEO on the internet which is far from trustable and could therefore teach you the wrong approach to it. The best resource on the web to learn the basics about SEO is “The Beginner’s Guide to SEO” by Moz. We suggest you to read the first chapter, SEO 101, which will give you a good overview on what SEO is and why it is so important for any online company.
3.2 — Social Media Organic
Summary
- Scalability: LOW
- Targeting: DEMOGRAPHIC
- Cost/CAC: LOW
About
When you see a company’s posts on their Facebook page or sharing an Instagram story, you are seeing their social media marketing in action.
Every content published on a social media platform is considered part of a company social media marketing. In Indonesia specifically, social media are a very big deal, with more than 130m active social media users, corresponding to 50% of the total Indonesian population (!!).
Here the list of the most used social media platforms, as of 2018:
For more key stats and figures about Social Media in Indonesia we suggest you to take a look at the “Indonesia digital landscape 2018” from Hootsuite and we are social
For Social Media as well, it’s important to distinguish between organic social media posts vs. (paid) social media ads. Nowadays when you see a post from a company on Facebook or Instagram you almost always see a paid ads or sponsored post (see below example).
Which company should invest in organic Social Media?
Organic Social Media is a channel which can be very effective for companies when it comes to increasing a company ‘s brand awareness or to provide customer service to its customers.
On the other hand, when it comes to driving traffic or to generate leads or sales, organic social media has limited impact. Especially on Facebook where the reach of organic posts is very limited.
Why is it so?
When your company publishes a post on either Facebook or Instagram, only a few people will be able to see it (that is, your reach will be very limited), unless you invest some money in sponsoring (or boosting) your post. This is a way for Facebook to maximise the investment of companies in its platforms and therefore its revenues.
If you want your social media strategy to have any impact you will have to start buying ads (more on that in the paragraph on Social Media paid).
Best resource to learn about Social Media organic
We recommend you the below guide from Hubspot, which also links to several additional reading materials to further explore the topic:
3.3 — Email Marketing
Summary
- Scalability: MID
- Targeting: BEHAVIOURAL and DEMOGRAPHIC
- Cost/CAC: LOW
About
Email Marketing is a marketing channel which is typically part of the broader CRM (Customer Relationship Management) activities of a company. As the name says it, it involves the use of email as a channel to interact with potential and current customers.
Despite being a very old channel, email marketing is still one of the most effective channels, especially when it comes to retention strategies. That is, to keep customers engaged with a product or service.
There are two fundamental types of email marketing:
- Email newsletters
- Email drip campaigns
3.3.1 — Email newsletters
Newsletter are emails which are regularly sent to the a company’s subscribers list including typically informational content which the customer can scroll through and read.
3.3.2— Email drip campaigns
Drip campaigns are series of emails which are triggered by an action that the user performs (or doesn’t perform) on a website /app and which are sent automatically on a specific schedule.
A couple of example of the most common type of drip campaigns:
- welcome email: triggered once a user subscribes to a service (and agrees to receive emails from a company)
- upselling email: sent automatically after the user has already made a purchase to try to make her buy an additional product /service
- re-activation emails: sent if the user hasn’t performed a specific action within an interval of time (for example hasn’t made a purchase or used the service for the past 6 months)
Which company should invest in Email Marketing?
Every company should invest in Email Marketing, especially in email drip campaigns. Once you put an automated email system in place you will be able to generate additional traffic and sales to your business for free.
The more information you have about your customers, the more granular and targeted your emails can be and the more effective your email marketing efforts.
In terms of scalability, based on our experience with email marketing you can aim to increase your existing traffic/sales by an additional 15–20%.
When you shouldn’t invest in email marketing
- if your customer base is very small, before investing in setting up an advanced email marketing system you should aim first at increasing your email customer base
Best resource to learn about Email Marketing
If you want to learn more about drip campaigns, this is a guide we highly recommend:
4 — Paid Channels
An overview of the major paid channels
- Paid Search
- Social Media Paid
- Ad Networks
4.1 — Paid Search
Summary
- Scalability: HIGH
- Targeting: BEHAVIOURAL
- Cost/CAC: MID
About
Paid Search, Google Ads, SEM are all different terms to refer to the same form of online marketing. That is, the sponsored results you see appearing when you perform a search on Google from either mobile or desktop.
In its essence, Paid Search allows you to show your ads every time a user makes a search using a specific keyword that you decide to bid on. Google Ads operates on a Pay-Per-Click (PPC) model, which means that every time a user clicks on your ads you pay to Google a certain amount (in Indonesia typically < $1 per click).
Which company should invest in Paid Search?
Paid Search is one of the most widely used marketing channels by businesses of all size thanks to both its scalability and targeting power. You can start using Google Ads by investing as small as $1 per day all the way up to millions of $ per month.
Unlike SEO, you can get started in just a couple of hours and can start driving traffic to your app or website almost immediately.
If your customers are searching for the product or service you are selling, you should definitely using Google Ads.
When you shouldn’t invest in Paid Ads
- if your product or service is so new or innovative that people don’t Google it: in this case you will need to invest in demographic based targeting type and not intent based targeting such as Google Ads (same as per SEO)
- if it becomes too expensive: for certain sectors which are highly competitive (for example ecommerce in Indonesia), Google Ads are becoming more and more expensive on a cost-per-click basis. You might therefore want to gradually shift your online marketing strategy more towards organic traffic and SEO
Best resource to learn about Paid Search
Being the most established and popular form of paid acquisition there are countless comprehensive guides on Google Ads and Paid search, including from Google itself.
We recommend you this guide by Hootsuite which does an optimal job of explaining the very basics of Google Ads.
4.2— Social Media paid
Summary
- Scalability: HIGH
- Targeting: DEMOGRAPHIC
- Cost/CAC: MID
About
Social Media Paid or Social Media Ads refer to the advertising available on Social Media platforms such as Facebook or Instagram (the two biggest ones).
With Social Media Ads you can target users based on their demographics and interests, which can be very powerful especially if you are targeting very specific type of users. Similarly to Google Ads, as an advertiser you pay for every time a user either sees your Ads (Cost-Per-Impression) or clicks on your Ads (Cost-Per-Click).
Which company should invest in Social Media paid?
Social Media paid is another key acquisition channel which every company should experiment investing in, given its potential and scalability.
Facebook and Instagram are two spaces where users are not necessarily looking for a solution to a problem they have, but rather where they discover new products & services. Therefore Social Media paid can be particularly effective if what a company is selling can have a strong visual impact, enabling it to capture a user’s attention.
When you shouldn’t invest in Paid Ads
- relative cost vs. Paid Search: if your are selling a product which is very search / intent based, Paid Search might be a more effective and a cheaper channel for you
Best resource to learn about Social Media paid
Here again, plenty of good guides to get you started. The following guide by Shopify is one of the simplest to follow and to understand more how the Facebook Ads platform works.
4.3 — Ad Networks
Summary
- Scalability: HIGH
- Targeting: DEMOGRAPHIC
- Cost/CAC: HIGH
About
Ad Networks allow you to advertise on every major site on the web and inside most mobile apps. The Ads you see for example on online news site such as Tribunnews are typically shown via an Ad Network.
The largest and most popular Ad Network is the Google Display Network (GDN) which is part of the broader Google Ads platform (which also includes the Paid Search channel). Through the GDN your ads can reach >90% of all the people on the internet and more than 2 million sites (!). Yes, the scale is massive.
Which company should invest in Ad Networks
Typically companies with broad audiences, companies that have already saturated other online marketing channels and companies that are looking to build awareness rather than generate direct conversions / sales.
Another very successful use of Ad Networks is when you are looking to retarget people that have already visited your site or app. Retargeting marketing is what you have to blame when you keep on seeing the ads of an app you have just downloaded or site you have just visited :)
When you shouldn’t invest in Ad Networks
- As a result of the lower quality of traffic that Ad networks are typically delivering, the CAC tends to be higher than for the paid search and social media paid channels. Therefore companies shouldn’t start with Ad Network as their first paid acquisition channel.
Best resource to learn about Ad Networks
A great comprehensive intro for Display Ads and specifically Google Display Network by Acquisio
5 — Digital Analytics
The analysis of qualitative and quantitative data from your website and the competition, (2) to drive a continual improvement of the online experience that your customers, and potential customers have, (3) which translates into your desired outcomes (online and offline) — Avinash Kaushik
One of the reasons why digital marketing can be so powerful is because of its trackability and measurability. That is, the possibility to measure with a high degree of precision and almost in real time what is working and what not when it comes to the effectiveness of your marketing strategy.
Being able to measure the Return on Investment (ROI) of each online marketing channel and each dollars spent on is possible in the online world. Much harder to do it in the offline world.
Over the years, one digital analytics tool in particular has been increasingly adopted by businesses of all sizes to track every type of users interactions on their website >> Google Analytics.
Let’s start getting familiar with it.
5.1 — Introduction to Google Analytics
How does Google Analytics work?
We found over the years that many digital marketers, even the ones with years of experience, don’t always fully understand how Google Analytics (GA) truly works. That is, what does it mean to ‘track a website’.
Based on our experience, we believe that understanding how GA works from the very beginning can be very valuable. We therefore recommend to take a read at Google very own explanation in the link below:
Getting familiar with the Google Analytics interface
Let the fun begin!
Click here to start a guided tour of the Google Analytics account for the Google Merchandise store (you will need to be logged in with a Google account to access it).
Next, continue your tour by discovering Google Analytics’ main reports:
And finally learn how to navigate a full report:
5.2 — Main reports in Google Analytics
There are 4 main types of reports in Google Analytics. Understanding the meaning of each of them and why they are different (more than just memorizing their interface), will go a long way in giving you solid foundations to understanding the analytics of most websites and apps.
5.2.1 — Audience reports
These are the reports which will help you understand the characteristics of the users who visit your website. For example: countries/cities they are in when they access your site, technology they use (device, browser), age, gender etc. From our experience, the most important reports within the audience section are:
- new vs. returning
- mobile (overview + devices)
- browser
In general, the audience reports are very useful to look at once in a while to see whether your users demographics is changing over time, but you shouldn’t look at those reports on a daily basis (as it’s the case for the acquisition reports, see more below).
For a complete overview of the audience reports, watch the short video below:
5.2.2 — Acquisition reports
The acquisition reports are probably the most important and actionable reports in GA and therefore the ones you should get the most familiar with.
They provide you with the necessary information about the sources (ie. marketing channels) that brought users to your website. Remember the different acquisition channels you read about in the first chapter? In the acquisition reports you will know how each of these channels is performing and how much they are contributing to the overall traffic of your app/website.
For a complete overview of the acquisition reports, watch the short video below:
5.2.3 — Behaviour reports
Once a user lands on your website, via any acquisition channel, what do they do? How do they interact with your website/app?
How much time do they spend browsing, which pages to they look at? You can find the answer to these and many more questions un the Behavior reports.
The most important report is the Landing Pages one, which is telling you the ‘entry point’ to your website or the first page that a user views (ie. ‘land’ on).
5.2.4 — Conversion reports
The fourth fundamental type of report, a bit more complex to truly master, is the Conversion reports.
By default, no conversion is automatically tracked by Google Analytics, since this depends of the business you are in. You will first need to define what are the conversions which make sense to track for your specific business.
It could be the user signing up for a newsletter, a purchase of a good, or anything which might have a value for your business. In order to start tracking a conversion you will need to set up a ‘Goal’.
It is fundamental to set up your Goal as it’s the only way for your business to measure the ROI of each of your acquisition channels, and ultimately each of your marketing activities.
To learn more about Goals in Google Analytics, watch the video below:
To put it all together and further develop your understanding of what you can do with Google Analytics, we recommend you to read the article below by ShivarWeb, which is one of the most comprehensive and better written on the topic:
Head over to Part II to learn about the two most important metrics of modern data-driven marketing: Customer Acquisition Cost (CAC) and Customer’s Lifetime Value (LTV).
You will learn the meaning of these two key metrics, why they are so important, how to calculate them using a real company example and the mistakes you should avoid doing when calculating it.
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