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Theory of Digital Marketing

Marketing theorists use a scientific approach to explain consumers' purchasing attitudes and behaviors. Companies use this information to guide their decisions in how best to communicate their products' value to consumers. Digital marketing poses challenges in this regard, because its channels are relatively new and they're still evolving. It's necessary to apply theories to digital marketing that acknowledge both its similarities to traditional, analog channels and its differences.

Game of Theory

Game theory is a mathematical concept that analyzes how strategic interactions between individuals, or agents, produce outcomes based on the agents' choices. The agents may be assumed to have conflicting priorities. Gameification is the practical application of game theory. Forbes.com describes how Pepsi-Cola used gameification in market research to study vending sales. The game included a simulated office with 35 agents programmed to follow some rules but also to have some degree of chance. Outcomes differed as agent behaviors changed, so the game was different each time it was played. The study gave Pepsi valuable insight into how customers might react to factors such as vending machine placement and the number of machines in a building. For example, Pepsi found it could increase vending sales as much as 15 percent simply by locating one machine in a central location rather than spreading several machines throughout a building.

'''Network of Theory ''' Network theory studies relationships of all sorts, whether between people, animals or things. Social network analysis is an overlapping tool for learning about patterns that develop within social networks and how they influence behavior. The "Harvard Business Review" reports on a social-network study conducted at Columbia University. Researchers -- two of whom authored the "Harvard Business Review" article -- found that that the success of entertainment products is impossible to predict based on traditional factors such as plot or star power because "hits" are the result of the influence consumers have over each other's decisions. Digital marketing channels such as Facebook, Twitter, Foursquare and Groupon are useful in this regard, as they allow marketers to listen to what consumers are saying, and they allow marketers to leverage the power of influential users to spread messages throughout their networks. Research shows that the most powerful users are those with the most influence across a number of differentiated networks.

Collective Intelligence

The theory of collective intelligence holds that groups are smarter and more productive than the sum of their parts. The Internet phenomenon known as crowdsourcing, in which projects are broken down into small, individual tasks that are distributed to a large number of individuals for completion, has collective intelligence at its roots. Crowdsourcing allows marketers to engage consumers and make them part of their campaigns. Ocean City, Maryland, a popular Mid-Atlantic seaside resort, regularly uses crowdsourcing to promote special events on its Facebook page. Users have been asked to share Christmas in July photos, for example, or submit their suggestions for the songs that best capture the mood of summer. Wil Merritt, CEO of the crowdsourcing company Zooppa, recommends on Mashable that marketers keep their crowdsourced campaigns simple and very specific, as things can spin out of control quickly once the campaign goes viral.