Digital Marketing Business Model Explained

Why do most businesses fail to capture the potential of the online world?

There are so many courses out there to purchase that go through every single aspect of internet marketing…why do people still fail?

There are a number of core reasons for these high percentage failure rates:

  • how many courses have you bought and never opened?
  • how many courses have you bought that promised the world in 3 easy steps?
  • how many courses have you bought and never applied into real world knowledge?
  • have you bought too many courses and now you have so much knowledge that you are overwhelmed and dont know where to even start .. so you don’t start at all?

These are all valid examples of why there is such a high failure rate in internet marketing.

There is a saying which applies with exponential force in internet marketing:

“An expert does 12 things 4,000 times ….. not 4,000 things 12 times”.


A generalist wants to know everything..but never truly masters anything.

An expert masters only a few things … but if you master only a few things how do you get all the elements of an online business in play and working most effectively?

One answer to this is outsourcing tasks that you are not expert in. This is a very valid answer .. but when you are starting out how do you afford to pay the oustourcers … and much worse … the outsourcers only know their own expertise (maybe…depending on how well you select an outsourcer) … and all the elements of your online business do not know how to talk and interact with each other to complete the big picture goals of the business.

Whether you already have an bricks and mortar business that you want to take successfully into the online world or you are creating a brand new online only business … business is business. You don’t start a brand new bricks and mortar business without some form of capital to pay for the setup expenses. Too many people want to start an online business with no capital … it does not work.  Business is business … the internet is just another technology delivery platform for a business … to be successful you still require capital and hard work to get to a break even point and then to continue growing into a profitable business.

So what is my expertise? What 12 things do I do 4,000 times to become an expert? I have developed the Digital Marketing Business Model to encapsulate my knowledge into a business model and also my Digital Marketing Business Process to encapsulate my 12 steps to a profitable online business. Whether you have an existing bricks and mortar business or not .. the 12 steps remain the same. My 12 step Digital Marketing Business Model is explained further in another series of posts here.

What does the Digital Marketing Business Model consist of?

The Digital Marketing Business Model consists of 4 steps and is documented in the business model diagram attached to this post.

The 4 steps are:

  • Acquisition
  • Behaviour
  • Conversion
  • Profit Optimisation

Digital Marketing Business Model

I have deliberately made this model in line with Google’s Analytics breakdown of website analytics. I’ve done this for a number of reasons:

  • Firstly: Google has big dollars for research … why  not re-apply their thinking that has already been produced by the top talent.
  • Secondly: it also allows us when it comes to Profit Optimisation which has a 100% reliance on quality data availability to ensure we have our analytics and research all lined up
  • Thirdly: it makes common sense

“Common sense is not very common”


Think of it in terms of a bricks and mortar business …


A physically located business build a business at a physical location. It now needs for people to find them … if they are on a back street hidden away … they are harder to find … they need people to ring them or to come to their business.  In our online business we need visitors too coming to our website. If they can’t find us then we have no visitors.

There are many different channels for obtaining traffic to our sites and people will also be a very different stages of the sales funnel process depending on where they are coming from.

For example…someone searching for a company brand name may just be in the stage of looking for information whereas someone searching for a brand, make and model number is more likely closer to the purchase decision.

People don’t go to Facebook with the intention of making a purchase of a product, they go there to see what’s going on with their friends lives … so if we interrupt them with our ad and they take notice, they’re still not likely to be in a purchasing mindset.

“Traffic Sources and Sales Funnels needs to matched together”


What works for one traffic source, does not necessarily work for another traffic source. There is no one size fits all answer.


When people come to our physical shop we want for them to take certain actions. In our physical shop we want them to browse through our shop … we want for them to see we are a real business that has high standards (think of the local shop that is unkept .. faded photos and artwork in the window, dirty floor, messy stock ….. we don’t want our online business to be like that or people will click away from us).

We want to steer people towards certain actions that we want them to take (think for a moment as to why supermarkets always place the bread and milk at the back of the store? Is it because they know that everyone buys bread and milk as a staple consumer item so by making you go to the back of the store you have to pass all the other food stock along the way.


In our bricks and mortar store the end result of prompting people to take certain behaviours is that they make a purchase … the purchase is the conversions of all our prior efforts and without it we have no sales, no income, no profit. A conversion could also be taking someone’s details for further follow up eg to advise them when a certain product is available.

In our online digital marketing business model we want to expand our conversion tracking to incorporate any outcome that is positive for the business. It may be an outcome that is early in the sales funnel or all the way up to an actual sale conversion.

So, what outcomes might we want from our online business? Some outcomes examples are:

  • download a free report
  • subscribe to our newsletter
  • leave their contact details in a contact form
  • fill in a request for quotation form
  • purchase a product or service

We want to track all these types of events that form a part of the business’ sales funnel. And, we need to know the value to us of every step in the sales funnel. eg if it takes on average 10 leads to get one sale that is worth on average $50 to us, then each lead is worth $5 to us.

Profit Optimisation

Once we have traffic, beahviours and conversions occurring .. what now? We want to maximise our hard work and scale the profitable parts of our business and turn down or off the unprofitable parts of our business. By keeping track of all the data in a tool like Google Analytics, we then need to start analysing that data and coming up with insights based on that data.  With these insights we then take actions to test our theories and once we have a profitable sales funnels working for us then we maximise it for all we can. Ultimately if we can build a profitable sales funnel….eg if we know that for every $1 we put into a sales funnel we get $10 in return .. then we can apply an unlimited budget to exhaust all the traffic we can get from that source.

At the extreme level if we can build a sales funnel which outperforms our competitors, buying us leads and sales at a cheaper value than any of our competition then we can afford to out-buy our competitors and dominate our market.

There are a lot of online businesses that add Google Analytics or similar statistical product to their website..but stop there. They don’t ensure their data is accurate, they don’t analyse their data, they don’t gain insights from their data and based on that data they don’t take any actions to test potential improvements.

“You can’t improve what you don’t measure”


It’s an old saying … but it’s also only the first step in properly optimising your online business for profits.


All of the above elements in the Digital Marketing Business Model are required to make a successful and highly profitable online business.

You need:

  • sources of traffic
  • encourage the behaviour from that traffic that you want them to take
  • conversions that lead to business outcomes
  • and an optimisation regime to maximise the winners and cut out the losers.

Miss any of these elements and you are just playing roulette at the casino … and we all know that the house always wins. The internet and its services providers will gladly take your money without return.
In the following articles I will delve more deeply into each of the elements that make up the Digital Marketing Business Model.