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A Methodology Concept of Online Marketing Management with a Knowledge

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Conference Paper · March 2015

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A Methodology Concept of Online Marketing Management With a

Knowledge Base of Interactions From Internet-Based Services
Zdenek Smutny and Stanislav Vojir
Faculty of Informatics and Statistics, University of Economics, Prague, Czech Republic
zdenek.smutny@vse.cz
stanislav.vojir@vse.cz

Abstract: An effective management of a company’s marketing activities in the online environment is very difficult to achieve.
This is mainly due to the complexity of the environment and the interactions of human and artificial actors across internet-
based services (e.g. social networks, forums). This article presents a methodological concept which would support the
management of marketing activities in the environment of services on the Internet, taking these issues into account, as well
as the socio-economic impact of the Internet as a current phenomenon. The methodology, suited particularly for small and
medium enterprises, is based on three pillars: the theory of complex networks, online interactions modelling and genetic
algorithms. From a methodological point of view, the presented concept is an artefact of the research design type, which is
complemented by a practical application in the form of a web-based knowledge system. This tool presents interactions in
the form of organized mind maps and there is also an option of a continuous evaluation of campaigns with the use of time
difference. The proposed concept is a no-cost alternative to more expensive approaches based on data mining or big data,
which also makes it useful for smaller companies.

Keywords: marketing, management, internet, knowledge base, interaction

1. Introduction
There is a growing demand on the management of marketing activities of commercial organizations. The
marketing activities are increasingly reflected in their competitiveness. As described in following text, the
continuous concentration of the competitive environment in the area of Internet based services forces the
organizations to innovate their approaches in order to increase their competitiveness. This paper describes a
way of solving this issue, building on an earlier paper (Vojir, Smutny, 2014). In their previous work, the authors
focused on the design and implementation of a web-based knowledge system. The system would be suitable for
the saving and management of descriptions of users’ interactions in a service environment on Internet. This
paper focuses on the very concept of utilizing users’ interactions to support the management of online marketing
activities. Furthermore, we introduce an extension of the implemented knowledge system (by the time
dimension) and the integration of a web tool for recording users’ interactions into the described methodology.

The methodology presented in this paper should be used to support online marketing activities of small and
medium enterprises (SME), for which it is expensive and time-consuming to use advanced methods based on
data mining or big data – that is, to use advanced e-marketing systems which have a positive impact on economic
performance of SME (Dorcak, Delina, 2011). The aim of the authors´ long-term research is to create a
methodology, the use of which increases the competitiveness of companies in the hyper-competitive
environment mediated by the Internet. From a methodological point of view, the presented concept is an
artefact of research design type – see (Myers, 1997), which is complemented by a practical application in the
form of a web-based knowledge system. Its verification in practical case studies is still in preparation, but first
feedback on the proposal itself would be welcome. The innovation of the presented approach consists in the
narrow focus on SMEs in online environment, in simple deployment without a need for application support and
therefore without additional costs. To our knowledge, no such methodology is used at the moment. There are
older approaches to marketing activities management (Wang, Ying, 2002; Krishnamurthy, 2006), but current
research specializes mainly on specific tools and the methods of their use – e.g. (Moral, Gonzalez, Plaza, 2014),
as opposed to the more universal perspective presented here.

To find out the current status and needs of companies doing business in online environment in the area of
marketing activities there was a survey conducted on a sample of 4,584 Czech companies, published in (Smutny,
2014b). Selected findings are presented in the following section.

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 Zdenek Smutny and Stanislav Vojir

1.1 Current approaches to on-line marketing communication of companies in the Czech Republic
Before designing a methodology, it was necessary to determine the current use of social media and other tools
for the marketing activities of commercial subjects. A quantitative research was prepared for this purpose in the
Czech Republic (Smutny, 2014b). The subjects of the research were 4,584 companies doing business over the
Internet (w-shops, media agencies, online services, software companies, web developers). The aim was to
observe what social media and other services are used for marketing-communication purposes by the subjects
of this research.

The crucial question was: How many companies are able to connect social media with the parent website and
achieve the synergy of interactions across internet-based services (e.g. social media)? Moreover, the results
were compared with results of older surveys (Smutný et al., 2013; Filova, 2013), which were performed on
companies from the Czech Top 100 chart in the Czech Republic. In this comparison there were discussed the
differences between the instrumental use of social media (only creating a profile in the selected service) and the
companies’ ability to connect the social media for the purpose of synergy of interactions. The situation in the
Czech Republic was also compared to the trends in companies in the USA (first 100 companies in Fortune 500
chart). There are parallel studies in progress which focus on the issues of new entrepreneurs in the Czech
Republic (Lukes, Zouhar, 2013) or the ambivalence of their business strategy (adaptation versus globalization)
(Karlicek et al, 2013) brought about by their business over the Internet.

The results of the survey (Smutny, 2014b) show that the majority of companies (62%) in the Czech Republic does
not link any social media with their website for the purpose of synergies in marketing activities. Furthermore,
wide gaps were identified between the use of social media (creating and managing a profile) and their active
connection with the integrated marketing communication with a view to creating synergic effects at the level of
interactions of users and visitors of web sites between Czech companies. It was also stated that competition
between Czech companies in the area of their presentation on social media is not very big compared to
companies in the USA (e.g. up to 10x smaller in case of Twitter). On the other hand, the appropriate use of social
media still leads to a competitive advantage in the Czech context.

A connection with social media and the use of the synergy of interactions with the effective management of
marketing activities can bring an important competitive advantage to the Czech companies which do the
business on the Internet. It is the issue of effective management of marketing activities in this environment
which is crucial, because due to the large amount of interactions of artificial and human users across different
services the evaluation of marketing campaigns becomes problematic. The methodology proposed below tries
to solve this problem. The methodology is intended for the support of marketing management in the
environment of internet-based services.

The trend in the coming years will be a growth of competition between companies in the Czech Republic towards
the level of competition between companies in the USA. Therefore, the described methodology should be
verified and ready to deploy in the Czech environment in the following two years. The companies analyzed in
(Smutny, 2014b) should be given a detailed questionnaire, which is currently in preparation. The questionnaire
will address their approach to the management of marketing activities. According to the results, the most
important problems and needs for the management of marketing activities will be identified and the presented
methodology will be further modified.
2. The original principles of the methodology
The environment of services on the Internet (blogs, Facebook, Twitter, etc.) gives rise to multimodal interaction
of subjects (human and artificial). In these multimodal interactions is also hidden a fragmentarization of subject
– people use various services where they create their profiles in which they reflect only a part of themselves or
create an entirely new version of themselves (unreal profile). This has an important implication for marketing
activities in this environment. We can therefore look away from the classical approach to marketing, which
focuses on people in the limited form of a physical unit (marketing in physical environment), and rather take
into account the fragmentarization conditioned by commonly used services or by environment. Unlike physical
environment, virtual environment (environment of services on the Internet) accentuates this fragmentarization
to a greater degree. Fragmentarization can be observed in the context of qualitatively different profiles of one
person in various services (Facebook, LinkedIn and others). Therefore, it is advisable to communicate with
potential customers differently within each used service. Another consequence which follows from the

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philosophical aspects of the issue is the subject's self-constitution in virtual environment; the development of
approaches to the subject is comprehensively described in (Libera, 2007, 2008). An artificial actor can thus be
placed in a new position, as a subject of an environment (equivalent to human actors at the level of interactions
carried out in the environment), and this perspective can be also used in marketing activities. It is no longer valid
to consider humans as the only entity worthy of consideration and to see artificial entities only as a tool.
Unfortunately, this view is preferred, but some exceptions can be found (e.g. optimizing pages for search
engines, which are optimized for softbots).

It can be said that multimodal interaction affects not only the customer, but it also influences the customer’s
feedback, which then affects other subjects, and it is mediated by the environment. A qualitative jump in the
way of understanding marketing activities can be seen in the identification of important nodes (influencers or
hubs – e.g. individual social media, blogs, forums) where there is positive communication or interaction
concerning the products or services of a commercial subject and they are brought into focus. This allows a more
effective spending of financial resources on promotion – there can be a preference for such nodes and the
positive interactions which occur there. Similarly, negative nodes can be identified. For these reasons, we will
focus on the creation of a methodology that will be able to identify these nodes (that is, a methodology which
can be used to create a model for a particular company and to identify the key nodes). The fundamental
innovation of our solution lies in the continuous evaluation of interactions and the subsequent optimization
(using evolutionary computation) and reallocation of funds towards individual nodes (marketing channels). The
planned methodology takes into account what was mentioned above and it stands on the following pillars:
ƒ Using the properties of complex networks, which are reflected in the Internet both on the level of hardware
and software and the consequences to the environment of services on the Internet. Emphasis will be put
on the possibilities of using these network properties (based on graph theory) in the management of
marketing activities (e.g. identification of important nodes).
ƒ The capture and use of interactions in this environment at the level of subjects (human, softbot) and their
impact on marketing activities in this environment. Based on their evaluation, we can identify important
hubs and communication methods specific to the individual services which are the most and the least
successful. These ideas are based on the above-mentioned fragmentarization of subject in this environment
and approaches to the subject in philosophy.
ƒ The use of artificial intelligence approaches for a continuous evaluation of the profitability of individual
marketing activities in this environment. In our case it is the use of evolutionary computing techniques for
optimizing the use of each service.
3. Online marketing management methodology
The proposed methodology is dependent on the human factor – marketing specialists and their decision-making
– which also limits its success. The methodology is therefore not an attempt to replace humans, only to provide
them with adequate support in decision-making or marketing management. A marketing employee should be
aware of the various kinds of interactions and synergistic effects which can occur. Therefore, it is necessary for
the management of marketing activities in this environment to equip the employee with knowledge which they
can use as a basis for evaluating data acquired from the environment. Within the methodology, it is primarily
the properties of complex networks along with a search for key nodes or hubs with greater interaction potential,
both across services and within each service.

Based on this knowledge, the marketing specialist performs the default choice of portfolio services (e.g. a mix
of social media), their connection to the default Web page (e.g. the website of the company) and other forms of
sharing to be offered. This approach allows monitoring interactions on three levels: web (e.g. using Google
Analytics), individual services within the portfolio (e.g. using implicit statistics of Facebook) and sharing across
services (e.g. using AddThis). Based on this approach, the marketing specialist has enough data suitable for
interpreting the obtained results in a broader context, including interactions across services which are more
difficult to register. These ideas are presented in greater detail in (Smutny et al, 2013; Smutny, 2014a) and their
specific applications at the level of promotion management are suggested in (Smutny, 2014b).

Another key area is the continuous evaluation of the obtained data and the associated effective redistribution
of funds among different services (advertising, PR articles, competitions, etc.). The reason why such continuous
evaluation is needed is the turbulent environment with frequent changes – whether it is at the level of

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interaction or preference for services. We solve the issue of continual evaluation by an iterative approach and
by optimizing the use of individual channels with the help of evolutionary computation, namely the genetic
algorithm (Berka, 2003; Marik et al, 2001). The aim is to choose a mix of channels (portfolio of services) which
will reach the largest possible number of recipients at the lowest possible cost while maximizing positive
interactions that occur in the environment – sharing or taking over messages (by human and artificial actors),
rating (Wei et al, 2013), recommendations (Al-Adrousy et al, 2013), viewing messages, a customer acquisition
(Jasek, 2014), transition to the web and others.

3.1 Introducing the methodology on an example

Figure 1 shows the basic principle and the stages of a single iteration. One iteration may delimit an entire
marketing campaign, but for large projects it is advisable to perform more iterations within a single campaign,
and thus gradually optimize the allocation of financial resources. To support the sharing of information about
past and current campaigns among marketing specialists, we prepared software support in the form of a web-
based system KnowSystem, which is introduced in Part 4. Below is the procedure shown on a simple example of
how this methodology can be used in practice.

Figure 1: The general scheme of the methodology for supporting online marketing management in the
environment of services on the internet. Source: the authors
In the initial position an expert selection of the service portfolio is performed by a marketing specialist (expert).
Their task is to select the most relevant set of services (e.g. portals, blogs, forums, special accounts on social
media with a large number of supporters). The total price for the use of these services should be higher than the
funds allocated for their payment. The number of potential respondents and price (based on communication
with the provider) are determined for each service. If there are more options of agreeing on a price, the expert
should decide what kind of cooperation in relation to the objectives of the current campaign will be best for a
given service.

Let's say that the expert chose 32 internet-based services, calculated the total number of respondents and the
total amount of funds that would be spent if all the services could be paid for. The share of each service on the
total reach and on financial performance (e.g. 0.14 respondents for the price of 0.08) is expressed as a

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percentage. The maximum price for all services is also set: the maximum amount of funds again as a percentage
of the total cost, for example 0.52.

At this point we use genetic algorithms – see (Marik et al, 2001). The following calculations can be performed
with the support of freely available spreadsheet programs (e.g. part of the OpenOffice package) in the case of
smaller campaigns. First you need to create an individual in our population, which may be a random selection
of six services, the length of the chromosome will be twelve (the i-th gene is 1 for the selected services, otherwise
it is 0). Repeating this procedure will generate additional individuals and thus an entire zeroth population. To
create the next generation it is necessary to choose the criterial function which will select the most appropriate
individuals based on their fitness. Its aim will be to find the highest number respondents for the price closest
from below to the maximum - 0.52. The most appropriate individuals will be selected on this basis and their
mutation will be used for completing the population. This brings us to the initial portfolio mix of seven services,
which will be an individual with the fitness of 0.79 respondents for the price of 0.51, for example.

To find out whether this initial mix proves useful in terms of marketing objectives, it is necessary to get feedback,
i.e. responses to individual online marketing activities. It is obtained at point 1 (see Figure 1) by recording positive
interactions for a certain period (bounded campaign). There can be multiple types of interaction and we must
evaluate every interaction in terms of marketing objectives. The hardest part is to assign a cause to a certain
interaction – point 2. It depends on and is limited by the possibilities of obtaining data on interactions by the
marketing specialist (or department). Let us say that the employee will prioritize all forms of sharing and
discussion. Each service thus gets a third parameter for evaluation: positive interactions expressed again as a
percentage of the total positive interaction. During assessment, the expert can come across so called hubs,
where there is a greater amount of interaction (those can be services which are already used, but unused
services as well). At point 3, the expert can disable the services which are evidently unsuccessful and without
positive feedback or those where the reaction is mainly negative. The remaining services will be complemented
by newly identified hubs or new services – e.g. due to changes of marketing objectives (modification of the target
group).

This procedure designated a new mix of services in which one parameter for each service can be adjusted using
data from the past campaign and real numbers of respondents addressed by our action. The criterial functions
in point 4 will now prefer individuals with the highest values of respondents and positive interactions and with
a price closest from below to the maximum (a different volume of funds can be allocated to the next iteration).
The criterial function can be adjusted for the new volume of budget.

Continuous evaluation is important because it can change the focus of the campaign according to the current
preferences of the organization (e.g. sale vs. image, a different target group). This includes other types of
interactions and therefore it is necessary to focus on those services which generate the highest number of such
interactions. The amount of funds changes in a similar way (e.g. the budget is higher before Christmas or
holidays).The methodology described above is not final and will be further developed and modified so that it
could be simply applied in practice. A fundamental disadvantage of the methodology is the strong human factor.
It is the marketing specialist who makes the final decision about whether the proposed option is really the right
one or whether it does not omit an important factor. On the other hand, in the case of large-scale campaigns
across the nations of the world, this methodology can be beneficial in terms of sorting priorities and offering
promptly an optimal mix of internet-based services.
4. Software support in the form of knowledge base of interactions from internet-based
services
Although the methodology can be applied without the need for software support, the research activities of the
authors also include the development of a web-based software system. The purpose of this system is to simplify
the use of the methodology by providing an interface for recording users’ interactions and for sharing this
knowledge between the employees of a marketing department. In the latest version the system was extended
to support the possibility of a comparison of the current marketing campaign with previous (closed) campaigns.
A marketing expert is also able to monitor the success of activities within each social medium and other internet-
based services. The system is briefly presented in the following sections, including the presentation of the
current extension – the support of the time dimension.

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4.1 Knowledge management using a knowledge network

A suitable form of organization and storage of knowledge and experience in the field of marketing is a form of a
conceptual knowledge network. The draft of a knowledge network, presented in (Vojir, Smutny, 2014), is based
on the natural feature of progressive development of ideas and thoughts. The entire network is for the users
similar to a mind map, but it is not restricted to a single central node which other nodes depend on. In the
designed knowledge network it is possible to browse the network gradually starting from any node. Another
advantage is the organization of nodes into several “layers”. For a better understanding of the principle of the
knowledge network let us explain the structure/organization of the layers.

The whole structure of the knowledge network can be divided into four layers. The main content layer of the
network are nodes of “knowledge objects”. They contain a record of the stored knowledge in the hypertext
form, optionally accompanied by images and multimedia content. To enable user identification, each knowledge
object has a title, abstract and information about the date of creation. The implemented version of the
knowledge system supports full-text search of the contents of knowledge objects, of course. But the organization
of a knowledge base in the form of separate “articles” (even with mutual links) would not be very effective. For
this reason, the saved knowledge objects are characterized also by keywords. The nodes of keywords are the
basic organizational layer of the knowledge network. The keywords are interconnected by mutual links and are
also connected with the nodes of knowledge objects. Each keyword can be connected with any number of other
keywords and knowledge objects, each knowledge object can be connected with any number of keywords. The
user can browse the network using the layer of keywords. The connections between keywords and knowledge
objects are also used for suggesting “near knowledge objects”. For example: a marketing expert (using the
described knowledge management system) has a task to prepare a marketing campaign in the form of contextual
advertising. He uses the full-text search and finds at least one relevant knowledge object. From this object, the
marketing expert can find other relevant objects using the structure of the knowledge network (browsed from
the node of the given knowledge object). He or she can also go to the near knowledge objects, which are
connected with a similar set of keywords. The system suggests the near knowledge objects automatically.

The third layer of the knowledge network consists of nodes of persons. Persons are the authors of knowledge
objects and also the authors of their ratings and comments. The final, fourth layer of the network are comments
and ratings. The ratings of knowledge objects are in the form of “like” or “dislike”. This layer is very important
for maintaining the highest possible quality of the entire knowledge network. From the technical point of view,
the data model of the knowledge network is an RDF graph. The nodes of the network are instances of ontological
classes and they are identified using URIs. The existing implementation of the system is in PHP.

4.2 Time dimension in the knowledge network

A knowledge network with the described structure is suitable for the storage and management of information
and knowledge of a permanent or long-term character. To be able to use the network also for flexible
information of a short-term nature (for example detailed information about marketing activities currently in
progress), the data model has to be extended using the time dimension. In the previous version, knowledge
objects were marked with the date of creation or modification and users could see all of the stored objects. But
showing all nodes of the network, where the nodes were gradually regrouped, updated (and also versioned)
etc., certainly would not lead to a greater clarity of the network. For this reason, the entities (knowledge objects
and keywords) in the data model have the newly added information about their temporal validity. Nodes of
keywords and knowledge objects have literals with dates of creation and possibly removal from the network.

In case of a modification of a node in the network (modification of the content or links to other nodes), a new
node is created and stored. The original node is connected to the new one with the relation “hasNewerVersion”.
The new node also clones links to other nodes in the network from the original node. The new node is created
for each modification except saving a rating (like, dislike or comment) or modifying a list of authors of a
knowledge object. When a knowledge object or a keyword is deleted, the system does not save the new node –
the “deleted” node is marked with the date of the end of its existence.

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 Zdenek Smutny and Stanislav Vojir

Figure 2: Change of the structure of the knowledge network when adding a connection between a keyword and
a knowledge object. Source: Authors
Through the use of temporal validity of nodes in the network and their gradual modifications the users are able
to browse the knowledge network not only from a current point of view, but also from any point in the past. For
example, the user has an overview of the use of service providers in different marketing campaigns or of the use
of a certain tool across separate campaigns. When browsing the network, the user can set the date to which he
or she wants to see the network – the nodes and links which are not valid at the given time are hidden. For
recommending near knowledge objects, the system takes into account all knowledge objects (at least partly)
valid within the validity period of the displayed knowledge object.

5. Conclusion and future work

The paper introduced an innovative methodology which solves the issue of funds distribution within a marketing
campaign. It focuses primarily on marketing management support, which is dependent on the ability to make
adequate decisions over data obtained from individual marketing activities. Our article offers two perspectives
– on a higher level in the form of the suggested methodology, and its instrumental support in the form of a web-
based knowledge system (lower level). The advantage of the proposed methodology lies in the fact that it is a
no-cost alternative solution for smaller companies (to support marketing management), compared to the
complex and more expensive solutions based on data mining and big data.

This methodology has also its limitations. It includes both a human actor – i.e. his or her decision-making ability
– and an optimization and selection of services. Even with the best price/reach ratio, the overall campaign can
lose the heterogeneity of the channels it uses (preference is given to certain types of services). The paper
presents the progress of our long-term work, which has several aims:
ƒ To determine the current state of the use of tools for online marketing activities of Czech companies and
their approach to the management of these activities.
ƒ To improve the competitiveness of small and medium-sized businesses by an effective management of
marketing activities (suggesting a methodology) and its software support in the form of a web-based
knowledge system.
In future, it will be necessary to examine the proposed methodology in practice in the form of a case study. We
plan to do so this year, together with a qualitatively oriented research among Czech companies, which will deal
with current methods and approaches to the management of marketing activities over the Internet.
Acknowledgements
This paper was prepared thanks to the IGA grant VSE IGS F4/18/2014.

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