HOW DIGITAL MARKETING CHANGES COMPETITION IN MODERN ECONOMIES
Keywords:
Digital Marketing, Competitive Dynamics, Platform Economics, Market Structure, Data-Driven Competition, Algorithmic Pricing, Network Effects, Consumer Behaviour, E-Commerce, Digital Oligopoly.Abstract
The traditional rules governing market entry, pricing strategy, consumer engagement, and the distribution of market power have been fundamentally altered by digital marketing, which has fundamentally restructured the competitive landscape of modern economies. This study investigates the multidimensional impact of digital marketing practices on competitive dynamics across industries, with particular attention to how data asymmetry, platform dependency, algorithmic pricing, and hyper-targeted advertising create new structural advantages and disadvantages for market participants. Employing a mixed-methods approach—comprising a systematic meta-analysis of 47 peer-reviewed empirical studies published between 2015 and 2024, combined with four in-depth industry case studies (Amazon, Google Ads ecosystem, Meta Advertising, and Zalando)—this article synthesises quantitative evidence and theoretical frameworks including Porter's Five Forces, Resource-Based View theory, and platform economics. The findings reveal a paradox at the heart of digital competition: while digital marketing has lowered barriers to entry for small and medium-sized enterprises by democratising access to global audiences, it has simultaneously raised barriers to scaling through data network effects and platform intermediation costs. Furthermore, algorithmic price discrimination and personalised advertising have introduced new forms of consumer surplus extraction that challenge conventional antitrust thinking. The study concludes with strategic and policy implications relevant for businesses, regulators, and policymakers navigating the evolving digital economy.
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