Chapter 5. Digital marketing

Digital technology is the representation of information in bits, reducing the costs of collecting, storing, and parsing customer data. This has led to a reduction of five costs: Search costs, replication costs, transportation costs, tracking costs, and verification costs. In this article, we argue that this has transformed the study of marketing, leading research in marketing to be at the forefront of research in economics as to the effects of digital technology. This is because the reduction in costs associated with digitization has had a transformative effect on digital marketing activity before many other sectors. We discuss how this shift in costs has affected the traditional 4 ‘P's of marketing.