An investigation into the impact of digital marketing on start-ups Problem Statement The problem is understanding the importance of digital marketing for the success of start-ups. To resolve this, the research question asks: How does digital marketing impact start-ups? In order to answer this question, the following objectives must be met: - Assess the perceptions of those who work or used to work for a start-up as to the importance of digital marketing to the success of the business. - Compare these perceptions against the opinions of academics on the impact of digital marketing on companies in general. - Pertinent to the participants’ start-ups, explore the level of investment in digital marketing, the methods used, and the measured effect of those methods. Background Figures on the failure of start-ups within the first year and first five years varies, but somewhere between 30-50% of start-ups fail within their first year of business, while 65-95% fail within their first five years of business (Akdeniz, 2013). Various reasons account for this, one of which is the failure to attract the business’ target market; such a failure can be facilitated by the attempt to reduce costs by cutting the marketing budget (Akdeniz, 2013). However, given the importance of marketing, it is essential that marketing activities are carried out; thus, start-ups are able to keep their marketing budget low by employing digital marketing techniques (Akdeniz, 2013). Literature Review This literature review assesses the existing body of literature on the impact of digital marketing on businesses, generally, and start-ups, more specifically. In today’s technology driven world, digital marketing – sometimes referred to as internet or electronic marketing (Chaffey et al., 2009: p, 10) – has become more important for many different types of business, including start-ups, in reaching a broader range of consumers (Chi, 2011: p. 46). While definitions of digital marketing – a relatively new phenomenon – vary, a commonly accepted definition is ‘the management and execution of marketing using electronic media, such as the web, e-mail, interactive TV, IPTV, and wireless media in conjunction with digital data about customers and characteristics and behaviour’ (Chaffey et al., 2009: p. 10). According to Mohopatra (2012: p. 132), many different forms of digital marketing exist, some of which operate independently and some of which operate in conjunction with others. These include: search engine marketing (SEM); search engine optimisation (SEO); display advertising; pay-per-click advertising; social media marketing; e-mail marketing; referral marketing; affiliate marketing; inbound marketing; and video marketing (Mohopatra, 2012: p. 132). The methods available for businesses to engage in digital marketing have increased across the years and are expected to continue increasing; for that reason, start-ups should learn how to make the best use of appropriate methods in a way that suits their business plan (Mangold and Faulds, 2009). According to Cha (2009), digital marketing can result in benefits for both consumers and businesses. However, only the latter is of interest here. Cha (2009) suggests that, for businesses, digital marketing represents a fast, efficient, and cheap way to reach target customers. This explains why businesses utilising digital marketing are faring better than those who are failing to embrace it as the majority of consumers conduct a variety of activities online rather than in physical environments (Pride and Ferrell, 2016: p. 215). Many companies will choose to undertake their own digital marketing activities, and others will choose between marketers that either deal with both digital and physical marketing or only the former (Ali, 2003: p. 2). In general, success is often synonymous with the use of digital only marketers (Ali, 2003: p. 2). However, an article by Arora and Wahi (2014) suggests that the impact of digital marketing can vary widely, depending on the market and method selected. Others agree that both digital and traditional marketing are important, that for businesses to attain success, they must merge both types of marketing, and that doing so will better allow businesses to achieve their objectives (Kaufman and Horton, 2014: p. 201). The development of a digital strategy cannot and should not be a standardised task for companies, and it should be based on a company’s needs, the sector in which the business operates, and existing social and economic factors (Red Ant, 2014). A consumer review by Deloitte demonstrates that consumers are now faced with more choice than ever before (Deliotte, 2014), which makes it more difficult for marketers to promote brands. Digital marketing is a robust marketing tool considering the power afforded to consumers by this expanded choice (Fulgoni and Morn, 2008). Many researchers have investigated the results and success of investment in digital marketing techniques, and there is a general consensus that digital marketing tends to be a more cost-effective way of reaching the existing customer base as well as potential customers (Akdeniz, 2013). However, for digital marketing to achieve this, content must meet a number of fundamental requirements. It must be accessible, easy to navigate, and quick to access and navigate (Kanttila, 2004). Social media marketing is covered in contemporary literature more than any other method of digital marketing. Trusov et al (2009) argues that the word-of-mouth marketing that is permitted by social networking has a stronger effect than many digital marketing techniques. The author adds that it facilitates greater awareness of a brand by other consumers. Other digital marketing methods are also effective at increasing brand awareness. According to Gerard (2013), 85% of companies argue that content marketing has proven to be useful for building brand awareness. Overall, the literature on social media can be divided into a number of categories. One of these is virtual brand community, which relates to groups of consumers that gather online due to a shared interest in a brand (Georgi and Mink, 2012). Membership to such a community can result in consumer loyalty to a company (Cha, 2009) and can act as a space in which communication between the consumer and the business can occur (Georgi and Mink, 2012). Yet, Mangold and Fauns (2009) suggest that this can only happen if companies are fully aware of and make use of appropriate communications strategies to facilitate this communication. It is not just social media that helps build a relationship with consumers; rather, digital marketing in general can achieve this. Red Ant (2014) calls digital marketing a builder of relationships. Another category is consumer attitudes and motivations. The increased choice faced by consumers (Deloitte, 2014) and the resultant increased power wielded by them (Fulgoni and Morn, 2008) means that companies must be aware of the factors affecting consumer attitudes and motivations (Heinonen, 2011). For instance, Chu (2011) found that those with social media accounts are more likely to have a positive attitude towards digital marketing. SEO, part of SEM, is another commonly researched digital marketing method. This involves use of keywords, which will be picked up by the algorithms of search engines, thus making a website more visible to consumers (Perez, 2014). The goal is to ensure that a website appears on the first page of a search (Lieb, 2012), the reason for which is that the majority of search engine users will never move past that first page (Perez, 2014). Thus, the visibility of a website is increased by SEO (Lieb, 2013). For SEO to work effectively, key words must be natural and relate to terms that consumers are actually likely to search for (The Internet Marketing Academy, 2011). In completing this literature review, it has become clear that digital marketing has been the focus of a great deal of research to date. The literature selected for inclusion best reflects the complexities of digital marketing, as it is currently understood. It is also clear that the majority of research has been experimental and theoretical, and that few studies specifically address the advantages companies, and particularly start-ups, can attain from using digital marketing. Moreover, research has tended to cover specific types of digital marketing, such as SEO or social media marketing, both of which are broad topics in their own right. For that reason, it is judged here that there is a need for a study on the impact of digital marketing methods, in general, on start-ups, specifically. Research Methodology This report to achieve high validity involves of both positivism and interpretivism (Liao & Wang, 2009). There are some limitations with the latter like adopt small sample size, it is better to combine two epistemologies (Blumberg et al. 2014). Theory proving uses positivism to make an explanation on human behaviour (Saunders et al. 2009). While, interpretivism is an approach to social science which integrates human interest into the study. (Moez, 2013) The research strategy selected for this exploratory study is one of mixed methods – that is, it comprises of both qualitative and quantitative methods. Zikmund et al. (2013: p. 156) suggests that the high degree of flexibility associated with the majority of qualitative research methods means that they can be very useful in exploratory business research designs. Baran and Jones (2016: p. 58) believe that the inclusion of quantitative methods compensates for any weaknesses inherent with using qualitative methods – and vice versa – and also helps to reduces the potential for bias either way in a number of ways. Data for the study will be collected in two key ways: first, through a self-administered questionnaire (quantitative); and second, through unstructured, face-to-face interviews with some participants, using open-ended questions (qualitative). According to Mitchell and Jolley (2009: p. 263), self-administered questionnaires – which are filled out by participants without the researcher being present – have four key benefits: first, they are easily distributed to several participants; second, they permit anonymity, which is vital for the collection of accurate data; third, they are cost-effective; fourth, they are simple to use. Mitchell and Jolley (2009) add that their main drawback is a low return rate. Various designs were possible for the questionnaire, but in the end it was decided that the questionnaire would comprise of closed, multiple-choice questions, where answers are limited, and where participants are not invited to offer information using their own terminology. Klenke (2015: p. 125) argues that unstructured, open-ended interviewing – in which the researcher uses open-ended questions to permit issues to be discussed in the natural course of things, rather than using pre-determined questions – is better for eliciting genuine, in-depth responses from participants, as it permits the researcher to ask further questions as issues arise. The survey sample consists of forty-one individuals who work for or had previously worked for a start-up; sixteen of them were randomly chosen to participate in the interviewing portion to reflect a random population sharing this experience. The study was designed to reflect general understandings of those who had start-up experience, independent of demographic or industry factors; this was presumed to elicit the most useful responses. Therefore, any characteristics of the participants – such as age, race, gender, and so on – is of no bearing to the study. Additionally, any characteristics of the relevant business other than its status as a start-up – such as the markets in which it operates – is of no concern here. However, it is vital that only participants from companies that used digital marketing are included. For qualitative analysis, interview transcripts will be made from recordings and read, following which they will be coded by categorising the data, and comparing the data within those categories (Maxwell, 2005: p. 96). Inferential statistics – in this instance, percentages – will be used, based on the data provided by the sample in the questionnaires, to make generalisations about all start-ups (Lee et al., 2000: p. 7). You also need to explain your research philosophy and approach You should also include your questionnaire and list of interview questions within the appendix and refer to them above. Ethics Various ethical issues can arise when completing a study involving human subjects. While the perception of digital marketing on start-ups may not seem to be as sensitive as other, more personal interview subjects, participants could still harbour concerns about their participation or opinions on the topic becoming known. The researcher completed Staffordshire University's Proportionate Review form, which is designed to assess the risk level in a study. As Saunders (2017) notes, participant consent is another concern in the design of any academically legitimate study that could impact the participants. The concern also exists that individuals who had opted to participate may wish to withdraw their participation, but feel pressured. It is important to reassure individuals that their concerns are valid and respected, that their material will be kept in confidence, and that they may feel free to withdraw their participation at any point. As described above, individuals were provided with a participant information sheet explaining purpose of the study, as well as a consent form that provided an explanation of anonymisation measures, confidentiality, their ability to withdraw at any point. The form also assured them of their ability to refrain from answering particular questions if they wished, and of interview material's secure storage on the university servers. This should now be your Findings section Data Collection and Analysis The majority of the respondents had businesses that were eighteen months old or younger. Of the forty-one completed questionnaires returned, thirteen stated that their business was pre-start up, eighteen stated that their business was between one and eighteen months old, seven indicated that their business was between eighteen months and three years old, and three respondents indicated that their business was three years old or older. Seven segments were represented among the respondents, and most respondents used several forms of technology. Of the surveys returned, the businesses included retail trade; transportation/warehousing; information; professional, technical, or scientific services; educational services; accommodation and food services, and other. The highest segment represented was retail trade, and the lowest was educational services. Most of the businesses employed under ten people; none employed over fifty people. Overwhelmingly, respondents indicated that they used a smartphone and a laptop in their daily business, and many also indicated that they used a tablet in their daily work. Clearly, technology is important in start-ups, and it is a means of connecting digitally with markets. However, not all of the identified means of connecting with customers were used by respondents. The most popular methods of engaging with customers were Facebook, email, direct marketing, company website, and word of mouth, in that order. The other items had few selections. This likely speaks to the ubiquitous nature of Facebook and that many consumers will not only have accounts, but look on the site for products and services. Though email is not as widely used by many individuals as is social media, it is an established form of digital marketing. Many respondents faced challenges with funding their start-up. In response to the question as to whether it was easy to find resources and help in starting a business, responses were divided, with eighteen selecting “yes,” and twenty-three selecting “no.” In seeking funding, respondents sought business loans, assistance from friends and family, government grants, angel investors, and “other,” in that order. The two most popular sources of start-up information were business professionals or experts and the internet. About half of respondents consulted books, and few of them spoke to prospective customers. The most popular lesson participants indicated that they had learned was “Do your homework and listen to your audience/customers,” followed closely by “test the business model e.g. make sure it's scalable.” The next popular item was “ Never hesitate-–waiting too long may mean someone else beats you to market.” The least popular item was “[t]aking bigger risks.” Therefore, one can surmise that through the experiences of the respondents that strategies chosen by start ups would best reflect caution. For any questions that generated a quantitative response, i.e. numerical data, I would expect to the findings presented graphically. Fourteen respondents were asked to continue on to the qualitative interview portion, as to create a small sample for interviewing, and nine of the participants agreed to be interviewed. Themes that emerged from the interviews included the importance of digital marketing, knowing one's market, and social media as a tool for building a reputation. All of the participants that interviewed agreed that digital marketing is very important to a start-up. Several respondents stated that they would begin digital marketing as an initial step, were they to begin a new start-up. Respondents also emphasised the idea that it is essential to be familiar with the market in order to be able to effectively target consumers. One participant stated, “If you don't know your customers, you can't connect to them. The connectivity of social media is one of its primary values, but you have to know what you're doing.” Finally, the participants also emphasised that the reputation aspect of social media was valuable, with it supplementing the power of word of mouth. However, they also noted that this was a potentially negative effect as well, as the outcome of a negative experience could quickly travel and be detrimental to a start-up. You should now have a discussion section, that discusses (compares and contrasts your research ) against the findings from previous research, i.e. the literature Conclusion The results reflected the failure rate among start-ups, with most of the respondents' companies being under a year and a half old. While many of the companies relied on traditional digital marketing methods such as company websites and email, Facebook was also a popular method of maintaining contact with consumers. Many of the start ups had struggled with finding funding measures, and significantly, Facebook is free to use, as opposed to other means of digital marketing. Perhaps the most significant finding was that although digital marketing tools can be valuable for start ups, they can also have a detrimental impact, quickly spreading negative reviews or experiences. As valuable as digital marketing tools are, social media has the potential to be as damaging as it is beneficial. Another topic that emerged was the difficulty reaching clients in light of the saturation of digital marketing. Because such marketing is either free or inexpensive, it is crucial to be able to distinguish one's business from competitors. However, consumers are more likely to be annoyed with the inundation they face from online marketing (Samuel, 2016). The responses gathered reflect these paradoxes inherent in digital marketing. You have not made any recommendations based on the findings of the research and which addresses your research aim. Research Limitations Some of the limitations of the study include the fact that participation was self-selecting; those who chose to take part may have had some particular qualities that influenced their choice and also contributed to their answers. Similarly, those who agreed to move on to the interview portion may also have had some innate qualities that contributed to their participation and their business practices, impacting the results. To improve the validity of the research method it would be wise to, target Start-up’s executives and modify the questionnaire. The study with a more expansive scope, stronger results could presumably be achieved. Although the study indicates the relationship of business owners to digital marketing, due to the specifics involved, replication may yield different results. This final section should discuss what modifications you would make to your research methodology if you were to conduct a much larger study after the pilot study. So having identified your research limitations, seeing my comments above, can you then then how you would improve the validity of the research method, the reliability of the findings and the overall generalisability in a more comprehensive study? I’d expect to see an appendix section at the end that includes all the documents generated during the completion of your study. References Akdeniz, C. (2013). Why start-ups fail: deadly mistakes of business start-up founders explained. Germany: Business Hacker. Ali, G. (2013). Marketing in the cyber era: strategies and emerging trends. Hershey, PA: Business Science reference. Arora, N., & Wahi, A. (2014). Viral Marketing: A Brief Study of Pre-Established Methods and Models for Understanding the Various Implications on the Corporate Sector. International Journal of Online Marketing, 4(1). Baran, M.L. and Jones, J.A. (2016). Mixed methods research for improved scientific study. Hershey, PA: Information Science reference. Cha, J. (2009). 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