Digital marketing is described as a way of communicating a message to customers using an online platform.  This blog will look into whether digital marketing strategies can give companies a competitive advantage and if they can sustain this over their competitors.

Michael Porter described a competitive advantage as an advantage over competitors either by differentiation, cost or focus (Porter, 2008). But with most companies having some form of digital marketing presence in this new era, what sets apart your company from your competitors and how do you ensure they don’t copy you?

(Earley, 2014) discusses how firms must leverage new digital marketing tools and approaches faster than others in the same industry, creating differentiated value for the customer. So for example, Hotmail was one of the earliest to use viral digital marketing by inserting the tagline ‘Get your free e-mail at Hotmail’. This differentiated them from other email providers and Hotmail signed up 12 million users in 18 months  (Jurvetson & Draper, 1997).

However, since then many companies have jumped onto the viral marketing bandwagon perhaps doing it bigger and better than hotmail suggesting their competitive advantage has not been sustained. For example the Red Bull space jump.

In an interview with  (Bell, 2013) Rita McGraph goes so far to say there is no such thing as sustained competitive advantage anymore only transient competitive advantage. I believe that statement is a bit drastic but in the world of digital marketing it is certainly true that sustained competitive advantage is hard to achieve due to low barriers to entry, increasing knowledge and the ease of copying.

So this brings me back to the original question of how can digital marketing be used as a sustained competitive advantage. I’ve come up with the following list which is designed to help companies stay one step ahead of the digital marketing crowd. (With a little help from (Earley, 2004) and  (Singla & Durga, 2015))

– Be pro-active in searching out new and better ways of digital marketing

– Don’t be afraid to take a risk, it could work out as a barrier to entry for competitors

– Transform the whole digital marketing approach. Don’t use the same processes with new software as software is easily copied.

– Apply new approaches to the context of the company. An approach which is tailored is harder to copy.

To summarise, this blog has identified that digital marketing strategies can give companies a short term competitive advantage but competitors are likely to follow suit.

References

Bell, G., 2013. The end of the strategy world as we know it? Rita Gunther McGrath on how sustainable competitive advantage may be a thing of the past: an interview with Rita Gunther McGrath, Columbia Business School, USA. Strategic Direction, Vol.29(No. 8), pp. Pg. 37-40.

Earley, S., 2014. The Digital Transformation: Staying Competitive. IT Professional, Vol.16(No. 2), pp. Pg. 58-60.

Jurvetson & Draper, 1997. Viral Marketing: Viral Marketing phenomenon explained.. [Online]
Available at: http://dfj.com/news/article_26.shtml
[Accessed 5th March 2015].

Porter, M., 2008. Competitive Advantage: Creating and Sustaining Superior Performance. 1st ed ed. New York: Simon and Schuster.

Singla, M. & Durga, A., 2015. How Social Media Gives You Competitive Advantage. Indian Journal of Science and Technology, Vol.8(No. 4), pp. Pg. 90-95.