Managing media and advertising change with integrated marketing.
THE WORLD OF MEDIA and advertising is changing. A dominant trend is the movement away from assuming that media exposure equals advertising effectiveness to considering the role of media engagement on effectiveness. Other developments include the increased use of digital video recorders (DVRs), media fragmentation, new media, expanding advertising clutter, and so on. Marketing has struggled to keep up with these changes. It needs to be less reactive and move out-in-front of them. Integrated marketing offers the best opportunity for this.
Integrated marketing is best thought of as a paradigm for doing marketing (Calder and Malthouse, 2003). As such it contrasts with the traditional 4Ps paradigm that approaches marketing as a staff function. According to the 4Ps paradigm, marketing's primary role is to orchestrate the marketing mix of promotion, product, packaging, and the like. It does this by articulating a clear consumer benefit to the product and attempting to ensure that these activities reflect this benefit. The activity under most control, of course, is promotion, and the emphasis traditionally is on managing the advertising agency. The agency's main task is to turn out messages that creatively communicate the product benefit. Where these messages are placed is largely a matter of cost efficiency in reaching the target consumer.
There is no question that the 4Ps paradigm can be successful. The question is whether there are alternative approaches that may be better for some companies, particularly companies most concerned with the changing world of media and advertising.
THE INTEGRATED MARKETING PARADIGM
Certainly the consumer is also at the heart of integrated marketing. But the connection to the consumer is more organic. The consumer is viewed whole, not as just a person who buys a certain category of product. The focus is on the consumer's life and the experience of how things fit into that life. There is also an orientation to fitting the brand to different consumers. This is consistent with the roots of integrated marketing in direct marketing. However, as discussed below, there is no assumption that customization to smaller and a smaller number of people is always desirable. Finally, integrated marketing does not privilege advertising or any one type of advertising media. Anything that can affect the consumer's experience of a brand is a potential marketing vehicle.
The diagram in Figure 1 illustrates the process of integrated marketing. Marketing should always be predicated on some corporate strategy. It seeks both to drive as well as to be driven by consumers. The critical step is to find a brand idea that makes this strategy possible in the mind of the consumer. This idea is the concept that defines how the consumer will experience the product. It is developed out of an understanding of what the consumer's experience currently is and how the product could be more relevant to that experience. The focus is on the experience of the consumer, on the product in the context of the consumer's life experiences, and not on the product per se. An example: The strategy is to reach people with continuous news about sports. Some people are first-tier sports fans who use sports in their lives as a way of finding common interest with and being able to talk to other people. The brand concept that emerges from this experience is the idea of covering sports as both information and social entertainment that engages and provokes the fan into making sports a part of his or her interaction with others.
[FIGURE 1 OMITTED]
Again, the brand concept is the idea that the marketer wants the consumer to have, of the way the consumer should experience the product. As shown in Figure 1 (ignore the shaded areas for the moment), the brand concept is derived from consumer experience. It is then used in an action-oriented way. The task of integrated marketing is to affect the consumer's experience in such a way that the consumer gets the idea. Consumers must be contacted in ways that affect their experience and lead them to the brand concept.
Contacts are anything that affects the consumer's experiences. An advertisement can be a contact (if it affects experience). But any other way of touching the consumer is equally a contact. A contact could be part of the product itself. Contacts can come before and after as well as during product usage. The key is to define a specific set of contacts that affect experience in the desired way. These contact points in essence become the marketing plan. Note that the contacts by definition are things that marketing can control and represent specific activities. If a contact cannot be controlled or executed, another contact is found that can be. The emphasis is on marketing opportunities. Integrated marketing might just as well lead to an event as to opening a showcase store or running a set of advertisements.
Contacts need to be managed in an integrated way over time and other dimensions of consumer behavior to yield the consumer experience dictated by the brand concept. The process shown in Figure 1 can thus be seen as a continuous feedback loop. Marketing is a core business process rather than a staff function. Strategy is inherent in marketing action. The term integrated also describes these aspects of the marketing effort.
As indicated, the integrated marketing paradigm calls for managing advertising and media as one of many possible types of contact points with consumers. Beyond this it implies that advertising, as with any contact, should affect consumer experiences so that the desired brand concept emerges from them. This means that ideally an advertisement should not merely tell consumers about the brand. It should, at least vicariously, let consumers experience the brand. This calls for advertisements that are more stories and less persuasive arguments (see Deighton, Romer, and McQueen, 1989). We will focus here, however, not on the implications of integrated marketing for creating advertisements but on what integrated marketing says about the relationship of media and advertising.
MEDIA AND ADVERTISING
From an integrated marketing perspective, media should not be viewed as merely the passive vehicle though which consumers are exposed to advertisements. Advertisements are primarily encountered in the course of viewing or reading media content. The actual contact with the consumer is thus formed by the advertisement and the surrounding media content, the media context.
The content of the media should itself be thought of as providing experiences for the viewer or reader. These experiences must be considered in evaluating an advertisement as a contact. Two issues arise: (1) the strength of the experiences, the level of engagement, and (2) how well the experiences fit the objectives of the brand concept. A media context that is both strong and capable of transferring relevant experiences as part of the advertising contact should be more effective.
In our own research we have attempted to systematically describe the experience potential of a range of media. To this end we have conducted studies of what consumers think and feel, their qualitative experiences, while they read newspapers (Calder and Malthouse, 2004a), magazines (Malthouse, Calder, and Eddy, 2003), and websites (Calder and Malthouse, 2005) or watch television (in progress).
In total, we have found 44 newspaper, 39 magazine, and 22 on-line experiences. Let us give several example experiences and discuss their implications for advertising contacts. Some magazines and newspapers, but not all, are particularly good at providing their readers with the "Personal Timeout" experience. Consumers who have this experience agree with statements such as "I like to kick back and wind down with it," "It's an escape," "It's a treat for me," and "It takes my mind off other things that are going on." (These statements are derived from extensive qualitative research with consumers.) Magazines and newspapers that provide this experience give their readers a peaceful, quiet escape from their otherwise hectic lives. It is important for an advertiser to understand the extent to which a particular publication delivers this experience. Integrated marketing would lead to placing an advertisement for a product or service that is relevant to the Timeout experience in such a publication. Two publications that have comparable audiences but deliver different degrees of the Timeout experience should be valued differently.
A second experience that some newspapers, magazines, websites, and television programs are particularly good at providing is giving consumers "Something to Talk About." After reading or watching, consumers bring things up in conversations and give advice or tips to their family and friends. They feel that they become a more interesting person because of what they have read or watched. Again, advertisements for some products or services could benefit from placement in such a medium. Note too that the creative content of the advertisement itself could also be altered to connect more with the media experience. This implies that the execution of an advertisement that appears in a "Talk-About-It" publication would be different than those in a "Timeout" publication. The advertisement itself for the former might be designed to stimulate conversation while the advertisement for the latter might focus more on relaxation and escape.
Would such an approach work? There is a need for more research on the impact of media context on advertising effectiveness, especially in terms of the impact of media experiences. But available research does suggest that such effects are possible. In our work we have tested the impact of advertisements such as the one shown in Figure 2 (Calder and Malthouse, 2004b; Malthouse and Calder, 2006). This is an advertisement for a fictitious bottled water product. When consumers are told that this advertisement appears in a given magazine or newspaper, we find that the advertisement is more or less effective depending on how strong many of the experiences with the newspaper or magazine are. More research is needed (see Wang and Calder, 2006), but there is certainly support for the contention that media experiences affect advertising. From an integrated marketing standpoint, this aspect of advertisements as mediated contact points is worth attention.
If the marketing goal is to affect consumer experiences, media carry powerful experiences that can be harnessed to inject a greater experiential quality into the advertising contact. The media context of an advertisement can make it more of an experiential contact that engages the consumer in a desired way. This is not just better media scheduling--it is better marketing.
A major strength of the integrated marketing paradigm is that it applies to different branding situations. The 4Ps paradigm focuses on targeting large segments of consumers with a "mass" brand. The success of direct marketing and so-called customized or 1-to-1 marketing tactics seems inconsistent or at least different from this. Although there is considerable confusion about this, integrated marketing in fact provides a flexible framework that covers both mass branding and more customized branding.
Customization involves tailoring specific versions of contact points to particular consumers or groups of customers. The value of such customization is most often thought to lie in building relationship brands (Malthouse and Calder, 2005). We believe that relationship brands are a powerful type of branding, but that the rhetoric of mass customization and segments-of-one is often oversimplified. A more considered approach is required.
[FIGURE 2 OMITTED]
The problem with the simple notion of relationship brands as mass customization is that some brand ideas are based on mass appeal. A customized pair of jeans may fit someone perfectly, but what the jeans stand for among their peers is also important. It may make sense to customize some activities around such brands, but this must be done very carefully so as not to dilute the mass appeal of the brand. A Diet Coke drinker may prefer bottles or cans, but the idea of the brand is still that it has a taste that is seen by many as superior, regardless of how it is packaged. An ESPN user may have more interest in football than basketball, may want scores sent to their email rather than as instant messages, and may not be interested in fantasy leagues, but the overarching ESPN brand concept is the same.
There is really a continuum from mass brands, where the shared sentiment is inherently part of the brand idea, to relationship brands. The distinguishing characteristic of a relationship brand is that a large portion of its inherent appeal is that the idea can be experienced in a more individualistic or idiosyncratic way by the consumer. As depicted in the shaded portion of Figure 1, relationship brands are established by providing customized contact points, which enable the consumer to have these more individualistic experiences. The firm must understand smaller groups, or subsegments, to create such contacts. A market segment is a target group (singled out from a larger universe or market) that is believed to be receptive to the brand idea in a way that others are not. A segment may be defined in various ways (demographically, psychographically, attitudinally, behaviorally) but is always a group of consumers who currently or potentially value the brand idea. A subsegment is a division of a basic segment into subgroups (Malthouse and Calder, 2005). While the brand idea by definition appeals to all these subgroups, this appeal can be strengthened by treating the subsegments differently. The goal is to allow each of the subsegments to experience the brand in a more individualistic or idiosyncratic way because of the uniqueness of their subsegment identity.
A good example of a relationship brand is ESPN and espn.com, which seeks to be the premier and most innovative sport site by informing, entertaining, engaging, and provoking the first-tier sports fan. ESPN is targeted at the market segment of first-tier sports fans, but this segment is itself very heterogeneous. A first-tier NASCAR fan may or may not have any interest in soccer or golf. Not all first-tier fans are equally technologically connected. The ESPN brand transcends these differences and all contact points--whether they are on the NASCAR or golf web page, or delivered in email or print--are designed to give the fan certain experiences that then become associated with ESPN. All first-tier sports fans want to be highly informed about whatever sports they follow, and ESPN provides "insider" knowledge, across all delivery channels, that gives the fan the experience of becoming smarter about their sport. They are entertained by watching their sport, but their involvement extends beyond simply watching to interacting with other fans about their sport. ESPN facilitates such interactions through fantasy leagues, message boards, reader surveys, etc., which are contact points designed to give the experience of being connected with others. See Calder and Malthouse (2004a, 2004b, 2005) for further discussion of experiences associated with media-oriented brands.
To all first-tier fans, the ESPN brand means content that makes them smarter about their sport and facilitates interactions with others, but not all fans want to be made smarter or connect with others in the same way. Hence fans would value more individualistic relationships with ESPN. How can ESPN create customized contact points? The shaded part of the integrated marketing process in Figure 1 indicates that ESPN first identifies and understands subsegments of first-tier fans. For example, one subsegment is characterized by wanting to engage in fantasy leagues. Not all first-tier fans want this, but a substantial subsegment does. Having identified this group, ESPN can develop contact points to deliver this more idiosyncratic experience.
Another good example of a relationship brand is the Tesco supermarket in the United Kingdom (Humby, Hunt, and Phillips, 2003). The core brand concept is that "Tesco allows you to buy more of what you want." Of course, all traditional advertising contacts and those at the point of purchase must provide experiences that support this idea. Tesco also created a loyalty program called the Clubcard, where consumers earned points on their purchases. These points were converted periodically into vouchers that could be used as cash to purchase items in Tesco stores. The vouchers were portrayed as a way of thanking and rewarding consumers. The consumer experience of appreciation, resulting from the voucher contact, reinforced the brand idea of helping you to buy more of what you want.
The Tesco brand has moved progressively farther out on the relationship continuum by actively exploiting data from the Clubcard program. One of their most successful efforts has been the Baby & Toddler Club, which started in 1996. Prior to this program, baby products were an underperforming category at Tesco. The subsegment was expectant women and mothers (mums) with children through 2 1/2 years old. The target is offered a Baby & Toddler Club membership as part of the Clubcard program (if they are not Clubcard members already, they are enrolled automatically if they join).
Members receive coupons at different points in time for baby and toddler essentials such as wipes and creams, the basic customer relations management program. More than this, the Club seeks to relate to the special needs of new mothers. Mums are not only faced with having to make their money go ever further, they also feel considerable anxiety over making sure that their product choices are the best possible for their baby. So the Club emphasizes information about things like planning the pregnancy, immunization, and when to call the doctor, issues about which mothers welcome advice and help. Moreover, this advice is given on a time-dependent basis to reflect the stage of the mother's progress from pregnancy to baby to toddler. The experience from these contacts is designed to provide help and offers at every little step of the way. The Tesco brand forms a relationship with these women by extending the brand idea that Tesco allows you to buy more of what you want to the unique situation of these women in having to cope with the new expense and the high standards of motherhood.
Why not think of fans interested in fantasy leagues and the Tesco Baby & Toddler Club as simply reaching a different market segment? If Tesco plans to have a different brand positioning for mums with young children, then these consumers are a market segment and the brand idea must somehow be different for them. Suppose that Tesco also targets empty nesters as a segment. The brand idea for empty nesters, by definition, will be different, otherwise they would not be a separate market segment. But, the brand idea for both is that Tesco allows you to buy more of what you want. The goal is rather to create a relationship with the brand by allowing it to be experienced in a more individual way. So for Tesco it is logically better to think of mums with young children as a subsegment. Referring to them as a segment would not only be misleading terminology, it would obscure the key notion that the goal is to customize the same brand idea to different consumers.
Creating customized contact points to build relationship brands will become more important for a broader set of products and services because technology is enabling such contacts and consumers are becoming less tolerant of irrelevant advertising. Advertising and other contacts that are not relevant are increasingly being filtered out by the consumer with the do-not-call list, email spam filters, caller ID, pop-up blockers, and DVRs.
It is well known that firms using direct marketing contacts such as direct mail and email (e.g., ESPN's website and Tesco's clubcard mailings) can customize these contacts. But advertising contacts that have been traditionally oriented toward a mass audience are also being customized. Digital printing makes it possible to customize the advertisements that a particular subscriber receives in a magazine or newspaper. Plasma screens in stores make it possible to customize point-of-sale advertising for a specific customer when the customer can be identified, e.g., through wireless devices. Systems are being developed to assemble customized television advertisements for a specific household (see, e.g., visibleworld.com). Integrated marketing lends itself to taking advantage of these developments by using them in the service of subsegmentation.
Suppose that we were marketing a brand positioned in terms of the benefit of a key product attribute. Any traditional agency should be able to create advertising messages for this brand. Integrated marketing goes beyond the traditional agency creative interface in at least three important ways. Marketing should:
1. Treat advertisements as experiential contacts as opposed to persuasive messaging.
2. Evaluate media based not only on potential exposure but also on the strength of relevant experiences provided by the media context.
3. Build (if indicated) a relationship brand by subsegmenting and customizing advertisements by how the different subsegments experience the brand.
BOBBY J. CALDER is the Charles H. Kellstadt Distinguished Professor of Marketing at the Kellogg School of Management and the Medill School of Journalism. His research focuses on the analysis of marketing research, marketing planning, and consumer behavior. His work has covered the health care, food, electronics, and financial services industries. He has published more than 40 articles in leading academic journals and contributed to several books. Prof. Calder serves on committees for the Marketing Science Institute and the Advertising Research Foundation, is past chairman of the policy board of the Journal of Consumer Research, is a frequent speaker at company and association meetings, and is a consultant to a number of major U.S. businesses, such as AT & T, General Motors, and Coca Cola Foods, as well as not-for-profit organizations. He is a partner in Calder LaTour & Associates, Inc., a marketing research and direct marketing firm.
EDWARD C. MALTHOUSE is an associate professor of Integrated Marketing Communications at the Medill School of Journalism. He is an expert in data mining, market research, and media marketing. He develops statistical models and applies them to large data sets of consumer information to help managers make marketing decisions. The primary application areas of his models include market segmentation and targeting, and direct marketing. He received his Ph.D. in statistics from Northwestern University, an M.Sc. in operational research from Southampton University, and a B.A. in mathematics from Augustana College.
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BOBBY J. CALDER
Kellogg School of Management, Medill School of Journalism
EDWARD C. MALTHOUSE
Medill School of Journalism
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|Author:||Calder, Bobby J.; Malthouse, Edward C.|
|Publication:||Journal of Advertising Research|
|Date:||Dec 1, 2005|
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