The Role of Marketing in Digital Business Platforms

TLDR

Digital business platforms such as eBay, Google, and Uber have grown rapidly, yet they face challenges in value creation and appropriation due to diverse user needs. The paper investigates how marketing can help digital business platforms succeed by coordinating cross‑side interactions and proposes new research avenues to reconceptualize marketing roles. Using a transaction‑cost‑analysis‑based framework, the authors show that marketing boosts interaction quantity and quality, cuts transaction and production costs, and leverages the resulting data to create and appropriate value on digital business platforms.

Abstract

Digital business platforms (DBPs) such as eBay, Google, and Uber Technologies have seen enormous growth; this paper explores their salient characteristics, the role of marketing in helping DBPs succeed, and important research topics for theory and practice. A new conceptual framework based on insights from transaction cost analysis outlines the role and impact of marketing in DBPs. A key role for marketing is to increase the number and quality of interactions on a DBP while reducing transaction costs for users and production costs for the DPB. The DBPs’ interactions and the data thus generated are key enablers of value creation and value appropriation on these platforms. However, there are several challenges to resolve in value creation and value appropriation because DBPs cater to the needs of many different types of users. Therefore, DBPs should carefully coordinate and manage interactions among users on different sides of a platform. For researchers, there are many opportunities to reconceptualize some of the traditional roles of marketing in the context of DBPs.