Specifics of the digital marketing strategies in the video games industry in different countries exemplified by Ubisoft

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GOVERNMENT OF THE RUSSIAN FEDERATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

FACULTY OF WORLD ECONOMY AND INTERNATIONAL AFFAIRS

MASTER OF INTERNATIONAL BUSINESS PROGRAM

Master thesis

Topic: “Specifics of the digital marketing strategies in the video games industry in different countries exemplified by Ubisoft”

Student

Mariya Bandenko

Moscow 2020



Table of Contents

Introduction

1. The notion of digital marketing strategies and its implementation in the video games industry

1.1 The essence of digital marketing and its role for modern business

1.2 Theoretical overview of the digital marketing strategies

1.3 Specifics of the digital marketing strategies in the video games industry

2. Digital marketing strategies in the gaming industries in different countries

2.1 Analysis of the video games industry in the U.S. and China

2.2 Analysis of the video games industry in Germany, France and Russia

2.3 Analysis of Ubisoft digital marketing strategy in different countries

3. Key findings and recommendations

3.1 Results of the study and key findings

3.2 Recommendations for digital marketing strategy development

3.3 Limitations of the study and propositions for the future studies

Conclusion

Reference List



Introduction

The world is changing, and technology is taking the lead. Today, so many spheres around us are turning digital: healthcare, real estate, banking, currencies, and especially entertainment.

The videogame industry is highly dynamic and subjected to change more than many other markets. New trends in gaming hardware, astounding innovations allowing to bring out something that seemed unlikely to happen just a year ago, huge numbers of games entering the market every day -- technologies are rushing forward at immense speed. Hence, video games marketing has to constantly change together with all of it - solutions that could perfectly work a few years ago are not so efficient anymore. New marketing channels, impressive analytical tools, new opinion leaders and the dominance of social networking -- these are just a part of what marketing works with today. And it is possible that tomorrow all of that will no longer be enough again. After all, consumers continue to change as well.

In the world today, where numerous computer and mobile games are constantly being released, and it is marketing that determines whether the game will be recognised and demanded or will die in obscurity.

Successfully reaching one's target audience is not just setting traditional ads on TV or a billboard. In order to keep the lead in a fierce competition these days and maintain their existence companies are also switching online to market their businesses. These days, social media is the new field of marketers with effective digital marketing strategies being their main “weapon” to garner broad interest, support and loyalty of both existing and potential customers: nearly 4.54 billion people are active social media users as of January 2020.

However, not only we have to consider highly dynamic development of the industry that facilitates emergence of various digital marketing strategies, but also the locations, the countries where those strategies are to be implemented. Different markets suggest differences in the marketing strategies' essence and may even impose certain significant limitations upon them due to some social, cultural or political reasons which are going to be deeply discussed in this paper.

Therefore, the main goal of this thesis is to determine the differences between digital marketing strategies for distinct markets and unveil the factors that influence their development and implementation. We will also present recommendations on what factors are crucial when we speak about introduction a video games digital marketing strategy in the Russian market.

The subject of this research lies at the point of the digital marketing strategies in the video games industry. Digital marketing strategies themselves are the object of this work.

In this work, however, we are mostly going to focus our attention on PC and console video games markets due to similarity in the way they are marketed in contrast to the mobile games market, which differs in essence a lot.

Now, let us state the main hypotheses to further prove or reject:

Hypothesis #1: Most of the digital marketing strategy's specifics in the video games industry are attributed to the use of unique digital channels.

Hypothesis #2: The only legislative aspect to be taken into account when building a digital marketing strategy in the video games industry is national censorship of creative media.

Hypothesis #3: The digital marketing strategy of Ubisoft Russia is the strategy of glocalization.



1. The notion of digital marketing strategies and its implementation in the video games industry

1.1 The essence of digital marketing and its role for modern business

The basic idea of digital marketing is that it is a marketing strategy to promote business online for brand awareness and business development.

There are several reasons why digital marketing is getting more attention and that many modern businesses nowadays appeal to digital marketing as their main form of marketing.

But before we dig into the detail on the reasons why digital marketing is acquiring greater advantage with every year, let us try to defy what this notion stands for.

According to Dave Chaffey and Fiona Ellis-Chadwick, “digital marketing includes managing different forms of online company presence, such as company websites and social media company pages in conjunction with online communications techniques, including search engine marketing, social media marketing, online advertising, email marketing and partnership arrangements with other websites”.

According to Dr. Mrs. Vaibhava Desai, Assistant Professor, Pune Institute of Management, India, whose paper has been published in the International Journal of Trend in Scientific Research and Development (IJTSRD), digital marketing is “the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium”.

Before emergence of online media there was only traditional media, which, according to Hacioglu and Umit (2020), encompass printed materials (newspapers, pamphlets, magazines etc.), broadcasing (radio and television), direct mailing (postcards, direct letters, catalogues etc.) and telemarketing (calling customers over the phone) devices.

As the main drawbacks of the traditional media use normally refer the following: lack of interaction with the audience and difficulty of getting feedback from them, poor conversion rate, complexity of measuring return on investment, high costs, little control over how the message is being spread.

Digital marketing encompasses all marketing channels and methods that can use the Internet or different electronic devices, including TVs, mobile phones and even electronic billboards. There are numerous digital tactics and channels at marketers' disposal to connect with consumers online. And even though TV and digital billboards are often classified a part of digital marketing, in this work, we are going to refer to digital marketing as a way to manage company's presence online only.

There exist various suggestions on the number of channels available within digital marketing, let us stop at the classification proposed by Dishek J. Mankad in “Understanding Digital Marketing: Strategies for online success”.

Let us now take a brief look at each of them starting with Search Engine Optimization (SEO). This is a process of boosting the website's visibility in a search engine result pages for the key search queries. It means the website would be shown within the first results on the page making it more visible, therefore, able to attract higher traffic.

The next channel is Social Media Marketing which aims to promote a company / product / brand using social media platforms such as VK, YouTube, Instagram, Twitter, Facebook and many others. According to Zhang et al. (2018), social media has a significant influence for capturing and sharing consumer experiences and is a main channel through which customers share their experiences and recommendations, leave feedback on the product and service they use, explain their choices.

SMM allows the company to build a closer relationship with the customers as it often favours a more informal form of dialogue. It is also a really effective tools in terms of targeting. People leave much information about themselves on their own social media, which allows marketers to target their target audience very accurately based on key variables that are defined by the company's goals. Those variables can be gender, age, geography, interests, sphere of work and many others, which enable real time personalised recommendations. The use of those parameters helps to increase conversion and minimize the number of non-targeted impressions.

Another channel to be mentioned is Content Marketing. It is about creating text descriptions, blog posts, video reviews, podcasts, E-books as a way to tell about the product. According to Kilgour, Sasser and Larke (2015) content marketing is the active role of consumer participation for sharing and active in media space that become their interest. According to Cecilia Figueroa, “Introduction to Digital Marketing 101” (2019), useful content can be created depending on the objective and sector, including articles on topics of general interest, case studies, success stories, infographics, webinars, guides, video tutorials or reviews, e-books, templates to download and various type of news. The author also highlights that the main idea of content marketing is tell honest and unique, exceptional stories that would attract the attention of the consumer.

Moving on, we shall mention Email Marketing which denotes the use of email-s as a way of communicating with their audiences, informing them about the product. Email is often used to promote content, sales or special events, as well as to direct or lead people toward the desired landing page. The types of emails that can be sent via an email marketing campaign include newsletters, Follow-up emails, various promotions, customer welcome emails, reminders of existing loyalty programs, tips on how to use the product and get more benefits out of it etc.

The next one is Affiliate Marketing. Dishek J. Mankad defines it as a type of performance-based advertising where a company receives a commission for promoting other companies' products or services on its own website or social media.

Another method that can be used in digital marketing is Pay-per-click, which in essence is driving traffic to the website and paying for the number of times a person clicked the link / the ad banner. One of the mostly used types of PPC are Yandex Direct and Google Ad Words.

Speaking of Display Advertising, (often known as banner advertising) according to Dave Chaffey, “Digital Marketing: Strategy, Implementation and Practice” (2019), it can be defined as the use of graphical media ad units on a website, which helps in delivering brand awareness, familiarity, favourability and purchase intent. Display advertising often encourages interaction by making the viewer to rollover to play videos, fill in an online form or to view more detailed information before clicking through to a site.

In order to later develop a strategy to reach potential customers online, the main types of media channels are proposed. There are different approaches to this matter with paid, earned and owned media being mostly used.

Figure - The intersection of the three key online media types. Source: Dave Chaffey and Fiona Ellis-Chadwick “Digital Marketing” (2016) - page 12.

Paid media are the advertising promotions that the company pays for, simply put. These are bought media the company invests in for obtaining desired reach, the number of clicks or conversions through search etc. Some companies mistakenly perceive paid channels as acquisition-only conduit. However, they are also effective in maintaining interest and generating groundswell for certain content.

Earned media is content created by external sources (third parties) that reference a company's brand or particular product or service. Earned media take place when the public media, publisher editorials recognize some product or service and spread the word about it but not out commercial interest but rather information needs and public interest. Examples can be influencer and blogger relations, PR, media reviews etc. While a company has little to no control over what is being posted, earned media are still considered a trustful source of information as people nowadays tend to trust their peers more than they do to brands themselves (Thomas Osburg, Stephanie Heinecke: “Media Trust in a Digital World: Communication at Crossroads (2019)) page 253.

Owned media encompasses all the content online that the company creates itself and has full control over. Those include company's website, it's company or brand pages in various social media like Instagram, Twitter, VK, Facebook and others, its mobile applications and company blog posts. It gives all the freedom to the marketer to be as creative as it would be appropriate for the company's customers. However, it is important to bear in mind that the cost for creation and constant maintenance of owned branded media might be the same as when appealing to the use of paid media with something a company can repurpose.

The model of paid, owned, and earned media has been and still is the most widespread model of media types. However, in 2014, Mashable overviewed a new version of the model in the article “Why PR is embracing the PESO Model”. We can still see the previous three media types, however we can witness the emergence of the 4th component which is shared media.

Before that, the media model did not distinguish shared media as a separate segment but had it as a part of earned media instead. However, it is now segmented out as an individual media type because of its significance to the mix. Shared media is not under control of the company, while earned media still can be impacted by its relationships with bloggers, influencers, editorials and various PR sources.

Figure 1.1 - The PESO model. Source: Simon Kingsnorth, Digital marketing strategy: an integrated approach to online marketing, 2016

As explained by Stephanie Diamond in “Digital Marketing Theoretical overview of -One” (2019), shared media refers to the shares a company gets from other accounts on the different social media platforms like shares on Twitter, Google+, Facebook and others.

The benefits of digital marketing are numerous. Digital marketing provides with the new forms of communication and interaction and offers new ways for information exchange. McDonald and Wilson (1999) proposed an analysis of the differences between new (digital) media and traditional media identifying the “6 Is of the e-marketing mix” which are in essence practical advantages of digital marketing. Despite years having passed by, those findings are still relevant in many respects at present, so let us examine it in more detail.

Interactivity was found to be the first key benefit of digital marketing. Digital marketing allows or often is even based on customer initiating the contact. This mechanism is called “pull” meaning that the customer is looking for some product and seeking information about it, whilst traditional media are mostly about “pushing” advertising from a company to customers. A more detailed illustration of this communication model can be seen in Figure 1.2. Therefore, it is extremely important to have high visibility so that the seeking and potential customer does find your product or relevant information about it as a result of his search. Nowadays, this type of marketing with customers being proactive and initiating interaction by themselves, is called inbound marketing (Shah and Halligan, 2009). While “push” marketing remains crucial still, “pull” marketing means incorporated in digital marketing open up a new opportunity to reach more audience and introduce the product to it.

Figure 1.2 - Summary of communication models for (a) traditional media, (b) new media. Source: Dave Chaffey and Fiona Ellis-Chadwick “Digital Marketing” (2016) - page 38.

The second “I” in the list of the e-marketing mix is intelligence. Online media and technology have an opportunity to be used as a low-cost approach of collecting marketing research, especially of customer perceptions of various products.

Individualization is the next benefit to consider. While in traditional media it is normally one general message that is broadcasted to everyone, in digital marketing it is possible to tailor a piece of advertisement to a particular customer. With the help of personalization a customer gets personal recommendations based on their previous search or purchases, is greeted by the name as it often happens with some e-commerce companies, for example. Individualization is also largely about displaying content in a dynamic way and convenient order to suit individual needs as it is observed on online-shopping websites where people can select a very particular category of clothes or food and apply a great variety of filters to the results found.

The next positive factor in digital marketing to consider is integration. The Internet provides extra scope for interactivity and intelligence to manifest. Internet integrates marketing communications via various channels making traditional and online marketing means exist in combination and mutually complement each other so that a customer is able to move through and between the channels with convenience and integrity. The main idea is to basically be wherever the customer is and make the purchasing process easier and more convenient for him.

The next one in the list is industry restructuring. This aspect highlights how marketing methods nowadays can be automated with technology and that some intermediaries that previously linked a company to its customers, those being distributors or brokers, can sometimes be removed from the chain.

The final component in the e-marketing mix we are currently reviewing is independence of location. With digital media, a company can be easily exposed to the global market and reach international customers. The Internet allows a company to sell products to any country without having a local sales department or local customer support service, although this may still be required in case with some products. Independence of location can also be viewed as a possibility for a customer to be able to reach the customers website via internet and on any device that is currently on their disposal regardless of their location.

Speaking of why the business should actively appeal to using digital media, we shall consider several factors.

First off, we shall mention high reach, which in essence is the number of people whom we can show our ads, whom we can reach with our marketing. According to Internet World Stats, by the end of December 2019 there were about 4.6 billion users globally connected to the Internet, which is more than a half of the world population. Apart from that, a person spends approximately 6 hours and 43 minutes a day online (Q3 2019), according to GlobalWebIndex.

Figure 1.3 - Time per day spend using the Internet. Source: GlobalWebIndex, 2019

We can also identify the largest regions from the point of Internet use. For instance, China has got nearly 830 m users, making this country the biggest market for digital marketing. Next largest country for digital consumption is India: 560 m users which accounts for approximately 40% of total Indian population, meaning that the rest 60% are people who are still not connected to the digital platform. On the other hand, there is USA with 286,9 m Internet users, which makes up about 85-87% of the population of the USA. In Russia there are about 109,5 m Internet users making up for 76,1% of this country's population. The scales are different in each and every region, however there is one thing that unites them all: people around the globe are coming digital with the high pace, meaning that the field available for digital marketing is getting larger every day and it can expose a company to more and more people.

Apart from that, we shall never forget about its cost effectiveness. The main goal of every company is to allocate the limited budged in the most efficient way and get the highest profit. For a small business it is extremely hard to compete with larger companies for an advertisement slot in context of traditional marketing. Slightly over 91% of consumers check their inbox regularly every day. For every one dollar spent, email marketing obtains approximately $38 in ROI (LYFE Marketing, 2017). LYFE Marketing has also calculated an average cost of different media channels used for marketing (per 1000 people), we can see the bar chart below:

Figure 1.4 - An average cost of different media channels used for marketing. Source: LYFE Marketing, 2017

This cross-channel media costs comparison illustrates that Social media is the cheapest form of advertising available today.

Digital marketing tactics are the most cost-effective solution to reach potential customers. It is the only form of media that can reach over a thousand of people for slightly above $2,5. The advantage of cost saving is then undoubted when speaking of digital marketing.

We also should remember about high engagement; the many ways the customer can connect with our ads / marketing. For example, a customer can browse, leave likes, listen, search, comment, share, call or text (a customer can often call the number form the website directly). And almost all of these are measurable. When investing money, a company can then actually calculate how much money they are getting from it, how many impressions, how many clicks, shares, likes, comments there are, and how many people actually bought the product.

An alternative way of thinking through the benefits of digital marketing is to consider the 5Ss of Chaffey and Smith (2012), who proposed five advantages of online marketing.

1. Sell. Active use of Internet marketing allows to serve customers that can not be reached offline. It can provide a wider product range than in-store or exclusive online deals and discounts etc.

2. Speak. Internet provides a company with the brilliant opportunity to get closer to customers, learn more about their interests and needs, their view of the brand and feedback. To get closer to consumers, the company needs to engage in an open dialogue with them, giving the company's brand personality properties.

3. Serve. The company can add value by providing customers with unique benefits online, deliver customer service responding to their concerns online and informing them about the newest deals and products. Digital space makes the organization available 24 hours a day, 7 days a week. The main purpose of this presence is to serve the interests of consumers and be always in contact them. It is impossible to determine how and when the client will initiate the contact, but the company can ensure its constant online presence so that it can partake in the conversation in the place where consumers would like to communicate and interact.

4. Save. Integration of digital technologies allows the company to save its budget by reducing administrative costs, sales transaction and print expenses etc. Manual intervention in the service delivery process is reduced, and the risks of costly errors are lowered as well.

5. Sizzle. One of the key goals of a marketer is to create a positive brand perception and favorable user experience on the Internet that would increase customer satisfaction and generate recommendations for target audience. Most “hot” e.g. most viral content is nowadays born online. And any company can use this to its own advantage by finding and properly using the right leverages that would generate favourable discussion around the brand in ways which are not possible with the use of traditional media.

To sum things up, digital marketing encompasses the vast range of marketing functions; hence, it can help reduce costs, foster communication amongst consumers and improve customer service.

1.2 Theoretical overview of the digital marketing strategies

In order to fully comprehend and get the whole potential and the benefits out of digital marketing opportunities, an organisation needs a well-planned and structured approach - a strategy. Let us now define a strategic approach to digital marketing that would help manage the vast array of online channel more efficiently and deliver favourable results for the company.

Dave Chaffey (2019) defines digital marketing strategy as “capabilities and strategic initiatives to support marketing and business objectives an organization should deploy to harness digital media, data and marketing technology to increase multichannel engagement with their audiences using digital devices and platforms.”

The rise of the new global market based on globally standardized and recognizable products was highlighted in the research T. Levitt “The Globalization of Markets” published in Harvard Business Review. The author emphasized that these kind of products inspire more trust and credibility due to brand awareness and because they usually provide the same level of quality and standard services. The author featured some large companies like Coca-Cola, Apple, McDonalds as the bright examples of globalization itself, pointing out the idea of globalization being the new principle in international business any company should strive to in order to become successful. By that, he meant product standardization as in pretty much all the aspect like content, packaging, promotion, which would result in setting a more powerful image of the brand in people's mind, higher levels of brand awareness in global scope and better quality perception. However, this concept received controversial feedback from some customers in different countries for whom it was not possible to feel any connectivity with the corporate mindset and its global marketing strategy which was applied to all the existing products. The reason for it boiled down to fact that the modern customer is in demand of greater flexibility that would take into account regional aspects such as socio-economic factors that take place in one or another country, cultural peculiarities of the nation and their mentality, behavioural patterns generally and in terms of consumption.

As a pure global marketing strategy did not address such aspects like socio-economic differences and cultural nuances, the new communication approach recognizing local specifics was needed. The new approach was meant to merge global and local marketing strategies which resulted in emergence of the new term “glocalization” that appeared the late 1980s, in a Harvard Business Review article carried out by Japanese scholars, according to Matusitz, J. (2009). “Glocal” strategy is about adapting to local conditions and specificity of the particular market still using the global brand. Its main idea is brightly illustrated in the following motto: “think global, act local”. As it was stated by Kraidy, M.M. (2001), “glocalization makes emphasis on peculiarities and details of a global idea, whereas globalization is based on the omnipresence of corporate processes and worldwide standardization”.

In order to better understand the concept of globalization, localization and glocalization, let us have a look at the following table demonstrating the differences in each of the three approaches:

In the post-industrial economy and its information stage, the process of mutual adaptation and increasingly symmetrical interdependence of global and local processes is accelerating. As Rumford C. (200) explained it, the dynamics of global and local concepts reflect the interaction of two seemingly opposite trends: the growth of heterogeneity (specifics) of the world in the pursuit of universalization, inevitably associated with homogenization (homogeneity). In his work, Avdokushin E. F. (2010) explained that adaptation of the global product to the local consumer meaning that adaptation can be considered as an essential prerequisite for glocalization.

Table 1.1 - The differences between globalization, localization and glocalization. Source: Dumitrescu , L.; Vinerean S. (2010)

The process of glocalization changes the approach to building and functioning of international business, which means it also changes international marketing and branding strategies. In order to ensure that the company's online marketing activities are consistently carried out the way that they are finely integrated with its other marketing activities and they do support its overall business goals, a digital marketing strategy is required.

Michael Porter (2001) was concerned that the rise of the Internet, technology and digital media would make it more difficult to sustain a distinguishing strategic position with solid competitive advantage. Therefore, he proposed the six following focus areas for the company when building their digital marketing strategy.

The company needs to set up the right goal which would be reasonable in real economic value.

The company should determine a value proposition, which would be unique but at the same time realistic and possible to deliver.

The company should focus on creating a distinctive value chain.

In order to adjust the company's activities to surpass its competitors, it should be ready to make trade-offs.

There shall be a fit between what the company is doing (where it is now), where it wants to be and what resources it currently has at its disposal.

The company should establish continuity that supposes that planning decisions should be in line with the distinctive position defined by the initial company's goals.

Additionally to the abovementioned functional elements of a digital marketing strategy, Rohit Bhargava (2015) emphasized the significance of brand development. The author believes that the company should strive for creating a really distinctive brand that would facilitate the discussion and genuine interest that would enhance brand messages with the help of various social media and word of mouth.

Now, let us have a look at an overall strategy process model for developing a digital marketing strategy proposed by Chaffey and Smith (2012) thoroughly illustrated in Figure 1.5. The abbreviation means Situation, Objectives and Strategy, Tactics, Action and Control.

Figure 1.5 - The SOSTAC planning framework applied to digital marketing strategy development. Source: Chaffey and Smith (2012)



Now, let us examine in more detail what each of the stage stands for.

The first major element is the analysis of the current state of the entire business, which would help discover various problems and new development vectors. During Situation analysis the company should answer the key questions: “where is the business now?” and “what is happening to it at the moment?”. At this stage, there may be the following subjects of analysis: current marketing activities of the company; its external and internal environment; consumer behaviour patterns, their brand perception and response towards the current marketing campaigns, SWOT analysis which would help identify internal strengths and weaknesses, as well as external opportunities and threats; competitors, their activities, products, services, marketing activities; product matrix, positioning features and main advantages of products.

At the second stage, the company should formulate what numerical and qualitative indicators it wants to achieve, basically answer the question “where does it want to be?”. This may encompass a vision and prospects for digital channels, some specific quantitative objectives for the digital channels like cost savings and sales projections. Internet marketing can have many different goals, some of them, according to Leontyev A.E. (2017), can be: demand formation, knowledge formation (increasing company or brand awareness), attitude formation (allows forming an opinion by setting a range of possible interpretations), sales promotion, loyalty formation, and increasing repeat purchases (working with the existing customer base). Once the goals are set, it is crucial to select the key performance indicators (KPI's) that would be used in goal achievement assessment and measurement. At this stage, the company should identify the most important KPI's and track their implementation carefully.

Then, the company should develop a strategy on “how does it get where it wants to be”? This stage is about assembling the received analysis data and creating a clear action plan that will allow to achieve the goals set before. The strategy should take into account the following characteristics:

1. Consumer segmentation. At the level of Internet marketing strategy development, the target audience has to be segmented, the general selection of tools should be based on information about market seasonality, with the account for specificity of user behavior on the Internet and the available budget.

2. Seasonality. A company should pay attention to working with seasonal market fluctuations and conducting marketing efforts during those periods of time.

3. Selection of digital strategy tools. The choice of marketing communications tools has to be made: the options of communication tools are analyzed in order to determine which ones are best suited to achieve the goals.

According to Danchenok L. A. (2017), There exist two models of marketing activity: continuous activity model and pulsating model. The first one involves the implementation of marketing activities constantly throughout the year, enhancing efforts in the peak periods. Such a model is normally more expensive but at the same time is more effective in order to increase brand awareness. Pulsating model, in contrast, involves running separate advertising campaigns throughout the year with the breaks of several weeks or even months. Let us now have a look at digital strategy tools classification based on the marketing activity models mentioned above.

Table 1.2 - Digital strategy tools classification based on the Continuous and Pulsating marketing activity models. Source: Danchenok L. A. (2017)

Continuous model	Pulsating model
Website; Search engine optimization; Contextual advertising; Return retargeting banners; Email newsletters, content marketing; Maintaining communities in social networks; Reputation monitoring; Affiliate program;	Online PR: articles publishing and bloggers events; Working with The Media; Promotions and contests; Display (banner) advertising; Video advertising; Mobile advertising;

4. Determination of the promotion budget. A crucial issue in the strategic planning of an organization's online promotion is the marketing budget that can be allocated to achieve the company's goals.

Moving on, there is the next component in the planning framework which is defining the tactics. This encompasses particular details of the marketing mix, customer relationship management (CRM) and digital communications. Tactical planning involves detailed strategy and includes the selection of specific advertising platforms, advertising campaigns development based on understanding of the target audience, seasonality and available budget. According to Imshenetskaya I. (2018), this stage is normally implemented through the preparation of media plans, which systematize information on the tools used, advertising platforms, individual settings, targeting of the advertising campaign, as well as financial information about the cost of placement, client discounts.

Actions stage is about understanding more details of the tactics: who is responsible for each task, who does what and when, what is the allocation of human and material resources. Large tasks are divided into individual tasks to get a more detailed and thorough plan.

Control involves using the management information such as web analytics to determine whether strategic and tactical objectives are achieved and what improvements can be implemented in order to strengthen further results.

Figure 1.6 - The Ansoff Product-Growth Matrix. Source: Research Methodology, 2016

We can also examine how the Internet can be applied to the Igor Ansoff's Product-Market Matrix (suggested in 1957), portraying the four corporate growth strategies, focusing on the company's existing and potential products and markets.

Let us see how digital marketing allows to reach those 4 marketing directions. Starting off with market penetration, which is essentially about increasing company's share in already existing market, the Internet can be easily integrated to sell more of the same products to the same market.

Moving onto market development, digital marketing provides more opportunities for a company to search for and enter the new geographical markets whilst saving up on a supporting sales infrastructure in the other countries and advertising. In case with product development, Internet opens up the opportunities to creating and supporting products that can be sold and delivered online, those are primarily digital products e.g. video games. Finally, in case with diversification, the Internet provides plenty of ways on selling new products, which are developed and sold into new markets.

Table 1.3 - Attributes of Paid, Earned, Shared, and Owned Media. Source: Stephanie Diamond “Digital Marketing All-In-One” (2019).

Having a balanced mix of media used is crucial. As we have identified before, hard focusing just 1 media type may put a company at high risk and not be as efficient. The control level is a crucial factor to consider when choosing the right media mix for each particular marketing stage. It depends on the company's primary goals and the audience it wants to target with one or another marketing campaign.



1.3 Specifics of the digital marketing strategies in the video games industry

Every market and every industry has its own specificity that should be considered when planning its digital marketing strategy. Video games industry has its own specificity exposing it to some unique channels and strategies that can be used in achieving the company's goals.

It's a common misconception that marketing starts once the game is ready or close to shipping. Marketing actually takes place right at the very start when the game has not even been yet released. In order to find the specificity in digital marketing in the video games industry we should go through the whole process of game production.

The first phase of video-games creation is pre-production. A game would not advance from pre-production if some sort of marketing research has not been done. Marketing should partner with creative to inform them on the marketing opportunity and the expectation of the consumer around depth and feature set. Target platform, release window and follow-up DLCs and updates can all be researched in this pre-pro stage. The company should define how big the market for the incoming title is and how many people would potentially play that game. While at some cases this number would be impossible to calculate very accurately, there are still ways to at least get a ballpark number. And the first way to narrow this number down would be defining the install base size. If it's a particular console like Xbox One, Nintendo Switch or PS4, the open data is often available or, if the platforms are already partnering with the company, they may provide the necessary data for it. For PC, the number of active users can be checked for specific PC platforms, like Steam, Epic Games or Uplay. Steam shares their stats on a dedicated stats page.

The next phase is actual production. This is when the game gets made, During the production phase there are a number of things that can done by a digital marketer to help get the game ready for launch. For example, focus-testing. Running playtests, both internal and external, can be a great way to help influence game's development. The goal here would be to help identify areas of frustration and delight and create recommendations for the design team. For example, it can be done via alpha or beta tests, which would be unique and a really engaging way to get some people (potential customers) together and make them feel they do make a difference, they are actually participant of the whole creation product. This can also foster discussion around the product in case it is not restricted by non-disclosure agreement. digital marketing video game

It is vital to work with the design team before running the playtests, to identify what exactly the company is looking for with this. Dave Chaffey (2016) also highlights that in case of interviewing the playtesters, the publisher should rather not ask leading or leaded questions. It is better to avoid any sort of influence no matter how unintentional it may be.

Platform knowledge. Whether it's a distribution platform like Steam or a first-party platform like Nintendo eShop, they all will have their own unique promotional opportunities such as built-in marketing tools. For example, Steam has tools like Visibility Rounds and Curator Connect that work on a self-serve basis.

Marketing opportunities. Platfrom like to promote upcoming games. Look for programs to participate in. For example, Xbox has a while ID@Xbox program, a program by Microsoft that allows qualified game developers to deploy their creativity by self-publishing digital games on Xbox One. This program can help developers in a number of ways. It is possible for the company to promote the game with a post on Xbox.com, show the game via the dedicated ID@Xbox YouTube channel, talk about the game on their Mixer stream or even prove booth spaces at their ID@Xbox showcases.

Nintendo also does a lot to help promote some games (especially indie games) on their platforms. They have the Indie World initiative, the Nintendo power podcast, and even host a number of indie game trailers on their official YouTube channel.

Another specific opportunity for digital marketing promotion would be storefront opportunities. Some publishers like Ubisoft, Activision Blizzard, Epic Games and others have their own game launchers (Uplay, BattleNet, Epic Games etc.) and their own stores (such as Ubisoft Store). It is common for platforms to have curation and promotions features right on their store pages or in launchers. So it is a nice opportunity to also actively utilize those channels in order to talk about the game, present it, and sell it later on, too.

Build partnerships and relationships. The company should start building partnerships and relationships while the games is in production. There are so many great marketing opportunities that could come from the partners, including all the digital marketing set offered in the partners' the built-in tools we have talked about before. Therefore, it is crucial for a company, especially if it is not a big known one, to build strong relationship with someone at the platform the publisher intends to make the game for (console or PC etc.) to gain access to these digital opportunities. Game engine producers also love to showcase games that are being worked on. The company should try to get features on their website, their video reels or even their booth at future game shows. It will boost its visibility and familiarize the gaming audience with the incoming products.

At this stage, it is also great to look for journalists and influencers that cover the types of games that the company works on and start learning about them and their content. It could be helpful to try forming a genuine connection early so that by the time the game is to be announced, there are already people can potentially help in spreading the word right from the start.

At some point during production, the company has to tell the world what they have been working on, usually with a press release, a website, some original assets and a teaser video or a trailer. As the world knows about the game it is essential to start building a community and collecting information right away. There are three things that can help, first of them being a mailing list in order to address of anyone interested in the game. Although that particular point does not necessarily refer to video games industry exclusively, it has to be taken into account.

Another channel to promote and maintain activity around the game is Discord server. A company can create a space for the community to chat about the game and discuss it all together. It is also possible to use Discord as a place to coordinate playtests with external testers, it has around 250 million global users (Game.Tv, 2019) with 90% of them being interesting in gaming.

Once people see the teaser or a trailer video, or read a new press release about the game or an in-game news, there should be an optimized landing page to provide them with the source they will be pointed once getting interested in learning more. Dave Chaffey and Fiona Ellis-Chadwick (2016) highlight that the landing page should also direct potential new fans to wish-list your game, to join the mailing list and to join the Discord server to expose and boost visibility for other company's digital channels it has presence in.

Once the game is released, another digital channel can be actively used is a streaming platform.

As Simon Kingsnorth (2016) mentioned, showing the gameplay in real time is a modern trend a great opportunity for the video games companies to utilize streaming as a great channel for promoting its products (games). The most popular streaming services are Twitch and YouTube. The first platform has been originally created in order to interact with the gaming community. As for the world's most popular video hosting (YouTube), they entered this market later, still they cope with the task no worse than Twitch, although it encompasses a broader scope of interests.

Ordinary people can engage in streamer activities by showing how they play something. Viewing current news, presenting ageless gaming classics to the public, communicating with subscribers and even getting donations (cash payments) that users make as a sign of gratitude for the viewed content.

The success of the game and the skill of the streamer are interrelated. A bright example in this case would be the game Fortnite, that has become largely popular due to great “hype” on social media, active discussions on the Internet. We can see how game streaming services such as Twitch, Mixer and YouTube can be a great channel in interacting with gamers directly and more closely and be largely helpful in creating a buzz around a video game.

The audience is more interested in high-quality content, which increases the popularity of the developer and its product, and the streamers themselves make a profit as well meaning it is appealing and favourable for both sides. Apart from the fact that the brand already receives great visibility by having people streaming the game, the company can also benefit utilizing the following:

placement of any banners on the broadcast screen, including clickable ones (direct links to the product's website);

add the product name in the title of the broadcast;

SMM promotion with placement of posts on the pages and in the public of famous streamers;

conducting a prize draw and giving out various gifts from the developer.



2. Digital marketing strategies in the gaming industries in different countries

2.1 Analysis of the video games industry in the U.S. and China

Video games are one of the fastest growing IT markets in the world and its constant growth is reported by experts from several leading research companies. Thus, according to the analytical agency Newzoo (Newzoo 2019 Global Games Market Report), revenues from sales of games in the world reached a record high of $148.8 billion in 2019, which is a +7.9% growth compared to 2018 that hit $137.9 billion back then.

In 2020, Newzoo predicts the global games market to generate revenues of more than $160 billion, showing an +7.3% increase compared to the previous year. Mobile games market will keep its status of the fastest-growing segment, hitting +11.6% increase yearly. It is also highlighted that in previous years, most significant drivers of mobile gaming were Asian region (China, South Korea, Japan), the U.S. and Western Europe and the trend might still be relevant in the years to come.

Figure 2.1 - Global games market 2019. Source: Newzoo (2019)

Moving onto forecasts for the next few years (Newzoo Global Market forecast toward 2023), it is most probable that by the year 2023 the market reaches $200.8 billion. It shall me mentioned that the forecast was made before the final 2019 report, which is not adjusted with accordance to the most recent figures for 2019 and 2020.

Figure 2.2 - Global games market 2019-2023, forecast toward 2023. Source: Newzoo, 2019

The data analyzed demonstrates that all major segments of the market continue to grow and it will do so even further.

Now, let us move towards the global market split region-wise. According to Newzoo 2020 Global Gamer Market Per Region forecast, Asia-Pacific will account for nearly the half of the total games market revenue reaching about $78.3 billion with Europe making up about a quarter of the total revenue. To be more precise, 49% of all the customer spending will come from countries like the U.S. and China,

Figure 2.3 - Global Gamer Market Per Region With Year-on-Year Growth Rates. Source: Newzoo, 2020



The same trend is forecasted to continue within the next 3 years too, shall we look at the regional breakdown of global games revenue towards 2022, which illustrates that Asia-Pacific will most likely stick to the stable 48% of the global games revenue though the latter will keep growing within the next years.

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