Don SchultziMedia Brand Summit Keynote

8/9/2019 Don SchultziMedia Brand Summit Keynote

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Re-ThinkingHow Media Advertising

Works

Re-ThinkingHow Media Advertising

Works

Don E. Schultz, PhD.

Northwestern University

iMedia Brand SummitDeer Valley, Utah

13 September, 2004


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Basic Premise:Most, If Not All, Our Media

Advertising Models AreBroken or Even Worse,

Irrelevant, in the 21st

Century Marketplace

Basic Premise:Most, If Not All, Our Media

Advertising Models AreBroken or Even Worse,

Irrelevant, in the 21st

Century Marketplace


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A Three Part PropositionA Three Part Proposition

A. Lack of proof requires use of derived

assumptions about how media

advertising works

B. Marketplace observations and on-going

research on how media advertising

really works

C. First stage conceptual media

advertising model


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A. Our Derived AssumptionsA. Our Derived Assumptions Note: A U.S. view but likely projectable to most

developed economies

Assumption #1 A Stimulus ResponsemodelMarketer controls the input and impact

Based on a 4Ps marketing approach

Assumption #2 Attitudinal Change

Behavioral Change

Behaviorist Psychology

Some form of Hierarchy of Effects underlying allmedia models


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ConvictionPreferenceKnowledgeAttitudes/

AwarenessPurcha

se

Behavior

MediaAdve

r-tising

One-WayOne-Way

LinearLinear

Influencing and Persuading ConsumersInfluencing and Persuading Consumers

Source: Adapted from Lavidge and Steiner

1961 - Hierarchy of Effects Model

of How Media Advertising Works

1961 - Hierarchy of Effects Model

of How Media Advertising Works


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Assumption #3 A Supply-Chain modelof media message distribution


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Porters Supply Chain ModelPorters Supply Chain Model

Mar

ke

ters

Broa

dc

as

t

Broa

dc

as

t

Pr

int

Prin

t

Inte

rac

tion

Inte

rac

tion

Media

Planning

Media

Planning

Media

Systems

Media

Systems

MeasurementMeasurement

Consumers/End Users

Con

tac

t

Con

tac

t

Agencies


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Assumption #4 Each media form worksseparately and independently of any

other. Therefore, each is and should be

planned and measured separately and

independently.


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Separate and Independent View of

Media Communication Planning,Distribution and Measurement

Separate and Independent View of

Media Communication Planning,Distribution and Measurement

Product MarketingProduct MarketingProduct MarketingProduct Marketing

SalesPromotion

SalesPromotion

Events/Sponsorshi

ps

Events/Sponsorshi

ps

DirectMail

DirectMail

PublicRelations

PublicRelations

MediaAdvertisin

g

MediaAdvertisin

g

ConsumersConsumers

AttitudesAttitudes BehaviorsBehaviors?


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Our Media Systems Are BasedOn Still Unproven Hypotheses,

Discounted Models, Out-of-Date Methodologies, Intuition

and Tenuous Associations

Our Media Systems Are BasedOn Still Unproven Hypotheses,

Discounted Models, Out-of-Date Methodologies, Intuition

and Tenuous Associations


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Yet,Last Year, U.S. Advertisers

Invested $250 Billion+ inMedia Advertising Based on

These Assumptions and

Hypotheses!

Yet,Last Year, U.S. Advertisers

Invested $250 Billion+ inMedia Advertising Based on

These Assumptions and

Hypotheses!


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B. Our MarketplaceObservations and On-Going

Research

B. Our MarketplaceObservations and On-Going

Research

Clearly, consumers have solved, or atleast resolved, the complex, multi-mediamarketplace in which they live cognitive

psychology models and media multi-

tasking


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MagazinesMagazines

InternetInternet

RadioRadio

TelevisionTelevisionWorld Wide WebWorld Wide Web

WirelessWireless

OutdooOutdoo

rr

NewspapersNewspapers

ConsumersView of Media

Advertising


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People Simultaneously Using OrConsuming Multiple MediaForms at Single Points in Time

People Simultaneously Using OrConsuming Multiple MediaForms at Single Points in Time

Information explosion forces consumers toextend, expand and change their media usage

Rapid consumer acceptance of new media forms

Consumers multi-tasking with media i.e.,reading the newspaper, talking on a cell phone,

on-line and tracking the TV all at the same time

Simultaneous Media Usage


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Evidence? SIMM Studies in USAEvidence? SIMM Studies in USA

Identification and verification of simultaneous media usage(SIMM) among US population Four studies in the USsince Spring, 2002 (4th in analysis now)

Research among double opt-in subscriber network of 60million individuals E-mail, not internet, gathered responses Respondents report media usage and other purchasing

factors products, retailers, etc.

Current sample base of 30,000+ individuals (15,000 more inWave 4)

Accuracy at .01 level Benchmarked to non-online studies Weighting and balancing of 14 U.S. census age-sex cells


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When you watch TV, do you simultaneously go online?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Regularly

Occasionally

Never

Male Female

Male Female

Regularly 22.0% 26.6%

Occasionally 36.4% 33.7%

Never 41.6% 39.7%

R/O 58.4% 60.3%


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0% 5% 10% 15% 20% 25% 30% 35% 40%

Regularly

Occasionally

Never

Male Female

When you go online, do you simultaneously watch TV?

Male Female



Never 39.4% 35.0%

R/O 60.6% 65.0%


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Clear Evidence of NewMedia Advertising Issues

Clear Evidence of NewMedia Advertising Issues What comprises an audience?

Consumers create foreground andbackground media for themselves and for the

occasion

What is the impact of conflicting messages

delivered at the same moment in time? Simultaneous multi-media usage suggests all

media are likely overpriced


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When you read the newspaper, do you simultaneously

watch TV?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Regularly

Occasionally

Never

Male Female

Male Female



Never 37.9% 33.2%

R/O 62.1% 66.8%


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When you watch TV, do you simultaneously read

magazines?

0% 10% 20% 30% 40% 50% 60%

Regularly

Occasionally

Never

Male Female

Male Female

Regularly 5.9% 8.5%


Never 56.0% 44.8%

R/O 44.0% 55.2%


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When you read magazines, do you simultaneously listen

to the radio?

0% 10% 20% 30% 40% 50% 60%

Regularly

Occasionally

Never

Male Female

Male Female



Never 51.2% 52.6%

R/O 48.8% 47.4%


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68.8%

38.2%35.8%

20.6%

0%

10%

20%

30%

40%

50%

60%

70%

Watch TV? Surf the

Internet?

Read/Send E-

mail?

Read

magazines?

All 18+

On an Average Weekday (Monday-Friday),

from 7:30pm to 11pm do you:


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SIMM Evidence ChallengesAlmost Every Media

Planning, Distribution AndMeasurement Model

Currently in Use

SIMM Evidence ChallengesAlmost Every Media

Planning, Distribution AndMeasurement Model

Currently in Use


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C. Synergy Among Media FormsC. Synergy Among Media Forms

Naik and Raman, Journal of Marketing Research,November, 2003 Understanding the Impact of Synergy in Multimedia

Communications

Methodology Adaptation of basic dynamic advertising model

Palda (1964) First order autoregressive advertisingmodel

Montgomery & Silk (1972) Multimedia advertising, witheach medium having different marketplace effects

Gopalakrishna and Chatterjee (1992) Introduction ofinteraction terms to capture joint effects

Jazwinski (1970) Addition of Kalman filters to modeldynamic results over time


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Demonstrated practicality using real worlddata to explain media synergy synergy

between media forms demonstrates increase in

expected sales and enhanced media

effectiveness

Results: Demonstrable and measurable mediainteraction and synergy between television and

newspaper advertising where to add media,where to reduce media efficiency

improvement


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Tying the Three PiecesTogether

Tying the Three PiecesTogether

Today, media advertising likely works basedon consumer media consumption, not on

advertiser/marketer message distribution

Our media planning models need to be re-thought, revised and revamped to deal with

consumer simultaneous media consumption

New media measurement systems are needed

Media pricing models must be re-visited


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Our First Attempt at a 21st

Century Model of How MediaAdvertising Really Works

Our First Attempt at a 21st

Century Model of How MediaAdvertising Really Works


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Media Consumption ModelMedia Consumption Model


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The Difference?

Its Not How Many MessagesYou Send Out..

Its How Much Media Is

Consumed by the Audience!

The Difference?

Its Not How Many MessagesYou Send Out..

Its How Much Media Is

Consumed by the Audience!


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Well be Developing This First

Model During Fall, 2004 atNorthwestern University..

Stay Tuned

Well be Developing This First

Model During Fall, 2004 atNorthwestern University..Stay Tuned


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SummarySummary Our media planning, measurement and

evaluation models are broken they must befixed

Consumer media consumption is onealternative model of how media advertisingworks there may be others

We will continue to conduct research on SIMMand other factors that may help explain andillustrate how consumers really use media

We encourage your help and support


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Questions, Comments orDiscussion?

Questions, Comments orDiscussion?


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Don E. Schultz [email protected]
mailto:[email protected]:[email protected]

Documents

Don SchultziMedia Brand Summit Keynote