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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
Regularly 29.4% 35.3%
Occasionally 31.3% 29.8%
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
Regularly 21.6% 27.0%
Occasionally 40.5% 39.8%
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%
Occasionally 38.1% 46.7%
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
Regularly 12.9% 10.5%
Occasionally 35.9% 36.9%
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]