Dr. Mayada Mostafa - Chapter 3 Macroenv. - DM - Final

Digital Marketing
CHS – Ain Shams University

2023 - 2024
CHAPTER THE DIGITAL

THREE MACRO-ENVIRONMENT
The Digital Macro-Environment
The digital macro environment consists of the

following components:
• Technological forces
• Economic forces
• Political forces
• Legal Forces
• Social Forces
Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
The Rate of Environmental Change
In the digital world, changes in market forces are

increasingly rapid. Firms should respond to these changes,
emerging opportunities and threats by developing
strategic agility.
Developing agility enables businesses

to handle changes in the environment
“gracefully” and smoothly.
The Rate of Environmental Change
“Strategic agility” refers to:
The capability to innovate and to gain competitive advantage within a
marketplace by monitoring changes within an organisation’s marketplace, and
then efficiently evaluating alternative strategies, selecting, reviewing and
implementing appropriate potential strategies.
Strategic agility involves:

1. Collection, dissemination and evaluation of different information sources
from the micro- and macro-environment;
2. Researching potential customer value and potential business value;
3. Developing processes for generating and reviewing new strategies that create new
value for customers;
4. Implementing prototypes of new process to deliver customer value;
5. Measurement and review of results from prototypes for further improvements or to
end a trial.
The Digital Macro-Environment
The digital macro environment consists of the

following components:
• Technological forces
• Economic forces
• Political forces
• Legal Forces
• Social Forces
I- Technological Forces
Key factors to consider in order to develop technological

strategic agility and competitiveness in the digital space:
1. Internet technology (how the internet works)

2. Cyber security
3. Developing secure systems
4. Mobile and SMS messaging and applications
5. Developing Mobile Apps
6. Emerging technologies
1. Internet Technology
Key terms related to how the internet works
The Internet
A physical network that links computers across the globe. It consists of the infrastructure of
network servers and communication links between them that are used to hold and transport
the vast amount of information.
World Wide Web

The World Wide Web is a medium for publishing information and providing services on
the Internet. It is accessed through web browsers, which display site content on different
web pages. The content making up websites is stored on web servers.
Web Server
Used to store the web pages accessed by web browsers. They may also contain databases
of customer or product information, which can be queried and retrieved using a browser.
Web browser
Browsers such as Google Chrome , Mozilla Firefox , Apple Safari® and Microsoft Internet
Explorer provide an easy method of accessing and viewing information stored as HTML
web documents on different web servers.
Streaming media server

A specialist server used to broadcast audio (e.g. podcasts) or video (e.g. IPTV)
Uniform (universal) resource locator (URL)

A web address used to locate a web page on a web server.
http://www.domain-name.extension/filename.html
URL strategy
A defined approach to forming URLs including the use of capitalization, hyphenation

and subdomains for different brands and different locations.
This has implications for promoting a website offline through promotional URLs,
search engine optimization and findability.
A clean URL that fits many of these aims is

http://www.domain.com/foldername/
document-name
Infrastructure components of the Internet
Web analytics
Techniques used to assess and improve the contribution of digital marketing to a
business, including reviewing traffic volume, referrals, clickstreams, online reach
data, customer satisfaction surveys, leads and sales.
Content
Content is the design, text and graphical information that forms a web page. Good
content is the key to attracting customers to a website and retaining their interest
or achieving repeat visits.
“Clickstream data” shows how a user progressed from an initial search page or
landing page, including which search terms/words they used, to buying an item or
service on the vendor or seller’s website.
2. Cyber Security – (Individual User Security)
Securing the confidentiality of credit card details and passwords, and
creating tight systems that are not prone to hacking is a crucial matter
for e-commerce websites and social media platforms where sensitive
financial information is shared as well as sensitive personal
information.
3. Developing Secure Systems – (Entire System Security)

Using digital signatures, digital certification & encryption methods to
add layers of security to the system for a variety of methods to check
and verify the identity of users and provide protection against
suspicious software or malware.

Short Message Service (SMS) - The formal name for text messaging.
SMS Applications/Benefits/Uses
For the creative marketer who respects opt-in and privacy legislation, SMS has
proved a great way to get closer to customers, particularly those in the youth
market who are difficult to reach with other media. These are some of the
applications:
1. Database building/direct response to ads/direct mail or on-pack. This

is one of the most significant of applications.
2. Location-based services. Text for the nearest pub, club, shop or taxi. In
London you can now text for the nearest available taxi, and pay the
congestion charge through texting, once accounts are set up via the web!
3. Sampling/trial. Used for encouraging consumers to trial new products
through promotions and discount codes sent via sms.
4. Sales promotions. Timed e-coupons can be sent out to encourage footfall
in real and virtual stores. (lucky hour, happy hour, after Iftar Offers, Flash Sales)
5. Developing Mobile Apps
The key question to ask:
1. Are apps a strategic priority for the organization?
The goal of apps for most organizations will be to increase awareness and sales, or
publisher’s revenue from advertising or subscriptions.
Apps are only likely to be a priority for businesses who have the scale to gain
additional revenue gradually because they have an app that improves loyalty
compared to other channels.
Social location-based marketing via apps

Social media apps and tools give users the option of sharing their location, and hence
gives businesses the opportunity to use proximity or location-based marketing to
deliver targeted offers and messages to consumers and collect data about their
preferences and behavior.
6. Emerging Technologies
New technological innovations are the highlight of our modern era, however
customers (individuals and businesses alike B2C & B2B) vary in their
responsiveness and eagerness to adopt new ideas and technologies. The diffusion
adoption curve is the method for segmenting individuals and businesses based
on their readiness to adopt new technologies.
The diffusion–adoption curve can be used in two main ways as an analytical

tool to help managers:
1. To understand the stage at which individual customers are in adoption of a
technology, or any product or service proposed by the company.
2. To look at adoption of a new technique by other businesses – from an
organizational perspective.
For example, an online supermarket could look at how many other e-tailers have
adopted personalization to evaluate whether it is worthwhile adopting the
technique. (ex. Grocery shopping offers and bundles personalized on previous
purchase behavior)
Such technological innovations can be applied to give competitive

advantage, like the mentioned personalization technologies that are
mainly intended to enhance the customer’s online experience and
increase their loyalty.
However, personalization may require a large investment in

proprietary software and hardware technology for effective
implementation. How does the manager decide whether to proceed
and which technological solutions to adopt?
Managers often come to face a new technology-enabled marketing technique where they
then face a difficult decision as to whether to:
- Ignore the use of the technique completely, perhaps because it is felt to be too
expensive or untried, or because they simply don’t believe the benefits will outweigh
the costs;
- Ignore the technique for now, but keep an eye on the results of other companies that
are starting to use it;
- Evaluate the technique in a structured manner and then make a decision whether to
adopt it according to the evaluation;
- Enthusiastically adopt the technique without a detailed evaluation
Depending on the attitude of the manager, this behavior can be summarized as:
1. Cautious, a ‘wait and see’ approach.
2. Intermediate, sometimes referred to as ‘fast-follower’ approach. Let others take the
majority of the risk, but if they are proving successful then rapidly adopt the technique,
i.e. copy them.
3. Risk-taking, an early-adopter approach.
Different behaviors by different kinds of adopters will result in a stream in the

overall numbers of adopters over time.
Emerging Technologies
Technology innovation acceptance
Businesses differ greatly in their readiness to try and apply new technologies.
There are “technology consumption pioneers” and early adopters. Others adopt
new technologies much later. They can be classified into the above categories.
Early adopters
Companies or departments that ©
Copyright invest
2019, in new2012
2016, technologies and techniques
Pearson Education, Inc. All Rights Reserved
The figure represents

consumer adoption
categories, adoption rates
& readiness to accept new
technologies and
products.
Businesses and individuals differ greatly in their readiness to try and apply new technologies.
There are “technology consumption pioneers” and early adopters. Others adopt new
technologies much later. They can be classified into the following categories below:
• Innovators
• Early Adopters
• Early Mainstream
• Late Mainstream
• Lagging Adopters
The five adopter groups shown in the previous slide have differing values and
mindsets.
• Innovators are venturesome—they try new ideas at some risk.
• Early adopters are guided by respect—they are opinion leaders in their
communities and adopt new ideas early but carefully.
• The early mainstream is deliberate—although they rarely are leaders, they adopt
new ideas before the average person.
• The late mainstream is skeptical—they adopt an innovation only after a majority of
people have tried it.
• Lagging adopters are tradition bound—they are suspicious of changes and adopt
the innovation only when it has become something of a tradition itself.
This adopter classification suggests that an innovating firm should research the
characteristics of innovators and early adopters in their product categories and direct
initial marketing efforts toward them. Therefore, marketers should focus on the type of
technology the company has to offer, as well as doing segmentation and targeting
accordingly
II- Economic Forces
Economic forces affect supply and demand and consequently it
is important for digital markets to identify which economic
influences they need to monitor.
Classic economic factors are growth and unemployment as they

affect purchasing power, as well as interest and exchange rates,
as they affect every aspect of business activity.
Interest and exchange rates for example have strongly been

linked to the Facebook and Google ads crisis for digital
marketing firms in Egypt during the currency fluctuation in 2023
and 2023, and they have also affected prices and purchasing
powers.
III- Political forces
Political control and democracy
It is important for digital marketers to be aware that political action enacted through
government agencies to control the adoption of the Internet includes:
1. Promoting the benefits of adopting the Internet for consumers and business to improve a
country’s economic prosperity;
2. Sponsoring research leading to dissemination of best practice among companies;
3. Enacting legislations to regulate the environment, for example to:

- Protect privacy (Internet Investigations Authority, consumer protection authority
against false online ads)
- Control taxation; (taxes on freelancers, taxes on social media ads and ecommerce
websites)
4. Developing strategies that create opportunities for growth and development of the
digital economy by governments.
III- Political forces
Taxation
Taxes are paid by online businesses, and some are making benefits by operating in low
tax countries.
The UK Government aims to introduce new taxation laws to stop large Internet
companies that legally avoid paying their taxes in the UK. In the past both Google and
Amazon have been accused of routing their tax affairs through low tax jurisdiction
economies; as a result Amazon has been found to be paying 11 times less corporation tax
in the UK than other bookstores, by operating in other countries online.
Tax Jurisdiction
Tax jurisdiction determines which country gets the tax income from a transaction. Under
the current system of international tax treaties, the right to tax is divided between the
country where the enterprise that receives the income is resident (‘residence’ country)
and that from which the enterprise derives that income (‘source’ country)
IV- Legal forces
Data protection and privacy law

Anti-spam legislation
Disability and discrimination law
Brand and trademark protection
Intellectual property rights
Online advertising law (misleading ads)
III- Legal forces
III- Legal forces
IV- Legal Forces
Information Types and Data Collection
V - Social Forces
Demographics:
Age population and break down of age groups is a
changing factor in society that needs to be taken into
consideration from time to time.
Culture – Changes in culture have been an observation

in most countries. This poses opportunities and threats.

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Digital Marketing

CHS – Ain Shams University

CHAPTER THE DIGITAL

The digital macro environment consists of the

In the digital world, changes in market forces are

Developing agility enables businesses

Strategic agility involves:

The digital macro environment consists of the

Key factors to consider in order to develop technological

1. Internet technology (how the internet works)

World Wide Web

Streaming media server

Uniform (universal) resource locator (URL)

Key terms related to how the internet works

A defined approach to forming URLs including the use of capitalization, hyphenation

A clean URL that fits many of these aims is

Infrastructure components of the Internet

3. Developing Secure Systems – (Entire System Security)

4. Mobile and SMS messaging and applications

1. Database building/direct response to ads/direct mail or on-pack. This

Social location-based marketing via apps

The diffusion–adoption curve can be used in two main ways as an analytical

Such technological innovations can be applied to give competitive

However, personalization may require a large investment in

Different behaviors by different kinds of adopters will result in a stream in the

The figure represents

Classic economic factors are growth and unemployment as they

Interest and exchange rates for example have strongly been

Political control and democracy

3. Enacting legislations to regulate the environment, for example to:

Data protection and privacy law

Culture – Changes in culture have been an observation

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