Media Consumption in Today’s World

1. Media Consumption in Today’s World Don E. Schultz Agora, Inc., and Northwestern University Based on Data from BIGresearch SIMM Studies PMA Integrated Marketing Conference Chicago 24 March, 2010

2. The Topic in Your Program Is:“Media Consumption in Today’s World”

3. But, I’m Changing That!I’m Going to Talk About…..

4. “Confessions of a Failed Icon”

5. After 20 Years of Integration, IMC, IM and All the Other Versions and Visions….. We’re No Closer to Developing a Holistic, Customer-Focused, Marketing and Communication System Than Before

6. Organizations Still Look Like This…. CEO Marketing Sales Country C Region X Marketing Sales Human Resources IT/Digital Operations Source: Adapted from Cranfield School of Management

7. Marketing and Promotion Still Look Like This….. Brand Marketing Events/ Sponsorships Media Advertising Public Relations Direct Mail Sales Promotion Consumers Attitudes Behaviors ?

8. And, Even the “New Media” Have Fallen into the Same Trap Brand Marketing Web Based Search Advertising Viral Marketing Social Media Mobile Comm. Consumers Attitudes Behaviors ?

9. And, Even This Conference Still Follows the Same Old Rules….. • Promotional materials say: “Integrating the Tools, Techniques, Technologies and Talent” • And, only one session that purports to talk about the reason we are all here….. CUSTOMERS AND CONSUMERS!

10. Who’s to Blame?

11. Stan, Bob and I Wrote the Wrong Integration Script in the Beginning • All inside-out • Focused on only four elements: advertising, public relations, direct marketing and sales promotion • Trying to create “One Sight and One Sound” • Value to marketers, but, little to consumers

12. 20 Years Ago, Here’s How We Saw the World of Marketing Communication Agency →Media Organization →Sales Force Unique Products Consumer/ Prospect Marketer Messages and Incentives

13. A Traditional “Outbound” View, With Marketers in Control One-Way Purchase Behavior Attitudes/ Awareness Marketing Communication Knowledge Preference Conviction Linear “Influencing and Persuading Consumers” Source: Adapted from Lavidge and Steiner

14. But, While We Icons Weren’t Looking, The World Changed!

15. Information Technology Has Given Consumers Control Internet – WiFi Mobile Telephony iPods/MP3 -- podcasts Consumer Social Networks Cable/satellite Blocking Systems - TIVO/DVRs/ Filters/Pop-up Blockers/etc.

16. And, Even If the Icons Were Paying Attention, They Were Playing “Follow the Weasel”…..

17. Tossing Old Media and Promotion Out, and Embracing New Technologies With Abandon

18. Trying to Find Ways to Break In to Consumer-Created Networks

19. Yet, Consumers Are Holistic….They Integrate Everything for Themselves Customer Service Social Networks Product/Service Direct Mail How People See Brand Communication Packaging/Displays Press Coverage e-commerce DMTV Advertising Catalogs

20. Here’s the World Marketers and Consumers Inhabit…. Competitors Competitors Competitors Competitors Web Search AgencyMedia  Sales Force Products and Services Customers/ Prospects Employees/Recommenders/Distributors/Influencers Marketer Messages and Incentives Word-of-Mouth New Forms of Media

21. Marketers Still Trying to Evaluate Outbound Promotion in a Totally New System Brand Experiences Internet Systems • Web sites • Customer Service • Tech support • Retailers • Distributors • User communities • Blogs • RSS • Influencers • Recommenders Organization Messages Audiences Agencies Customer Brand Experiences Electronic Systems

22. The Problem:All This Is About What We Do or Want to Do……There’s Very Little About Customers and Prospects!

23. Yet, Consumers Are the Only Ones With Money

24. That’s What Has Led Me to Investigate What Customers Do…..Not What Marketers Do!

25. To Build Relevant Promotional Programs, Starting with Consumers

26. U.S. Simultaneous Media Usage Studies - SIMM A method of understanding how consumers use and consume media today and the impact it has on them Methodology Conducted twice per year by BIGresearch in the USA since 2002 --we provide analysis 14 separate waves (15th in analysis now) 200,000+ individual responses (17,000 more in Wave 15) Drawn from on-line interactive base of 60 million individuals Double opt-in methodology Captures media usage, retailer preference, influence of media, past and future purchases, etc. Includes 31 external media forms and 23 in-store promotional activities Accuracy of .01 level Benchmarked to non-online studies Weighting/balancing of 14 US Census 2000 age-sex cells System active in China. Testing in Mexico and other countries

27. When you watch TV, do you simultaneously go online?

28. When you go online, do you simultaneously watch TV?

29. Clear Evidence of New Promotional Marketing Issues What comprises an “audience”? Consumers create “foreground and background” media for themselves and for the occasion What is the impact of “conflicting messages/promotions” delivered at the same moment in time? Simultaneous multi-media usage suggests all promotional audiences are likely “overstated” and “overpriced”

30. But, Understanding How Consumers Use Media and Promotional Activities, Change How Marketers Plan and ImplementTheir Programs

31. Four Critical Measures in Media Consumption • What media is accessed • Amount of time spent with each media form • Media combinations – what media used together and simultaneously • Which media form has the greatest influence on product purchase

32. How Much Time Consumers Spend With Each Media Form First Quarter, 2008 – BIGresearch Avg Minutes per Day Email 131.3 TV 129.6 Internet 127.5 Radio 93.5 Direct 56.3 Magazines 49.1 Newspaper 44.8 IM 40.8 Games 36.6 Satellite 22.0 Web Radio 14.4 Blog 11.7 Measures #1 and #2

33. More Important: the Media Forms People Use Together…Their Media Combinations

34. US Media Combinations Measure #3 Primary Medium (When …,do you simultaneously ….) (Regularly only) Source: 1st Quarter, 2008 – BIGresearch

35. Media Combinations Are What Create Media Synergy…The Biggest Challenge in Promotional Planning Today!

36. Influence Media Form Has on Consumer Purchase DecisionsU. S. Average* Influence by Media Form % Influence Word-of-Mouth 36.2 Coupons 28.4 Inserts 21.5 TV 20.8 Newspapers 20.0 Read Article 19.8 In-Store 19.6 Direct 19.1 Magazines 17.0 Cable 13.6 % Influence Radio 13.1 Internet 12.3 Email 11.7 Outdoor 7.2 Yellow Pages 7.0 Blog 3.1 Satellite 3.1 IM 2.9 Web Radio 2.7 Picture Phone 2.2 Measure #4 *Across 8 product categories, Apparel/Clothing, Automobile, Eating Out, Electronics, Grocery, Home Improvement, Medicines, and Telecom/Wireless Source: 1st Quarter, 2008 – BIGresearch

37. With Those Four Measures, Predictive Models Can be Built….What Promotional Forms You Should be Using by Product Category

38. For Example, In the Computer Category, What Media Forms Do Consumers Prefer? Do you plan to make any of the following major purchases within the next 6 months? Example: Computer No 84.81% Yes 15.19% Total 100.00% SIMM, June, 2008

39. Purchase Intent and Media Influence Do you plan to make a computer purchase within the next 6 months by Media Influence No Yes Total Coupons 26.8 31.0 27.4 Inserts 20.6 25.0 21.3 Newspapers 19.8 24.7 20.5 TV 19.2 26.8 20.3 In-Store 18.3 23.3 19.1 Direct 18.2 23.1 18.9 Magazines 15.6 22.7 16.7 Cable 12.3 19.3 13.3 Radio 11.7 18.5 12.7 Internet 10.6 19.3 11.9 Email 10.4 16.8 11.4 Yellow Pages 6.5 10.5 7.1 Outdoor 6.3 11.0 7.0

40. What Would Be the Best Media Combination to Reach These Intended Computer Purchasers?

41. Pruned CHAID TreePlan to Buy a Computer by Categories of Media Influence Total Plan to Buy Computer No Internet Low Internet High Internet Some Radio Some Email Low Magazine High Magazine No Cable Some Cable Low Email High Email Some Email

42. Now, The Decision Is Now Based on Consumers and Consumer Preferences, Not on Media Distribution, Coverage, CPM or Other Traditional Planning Factors

43. All Fine So Far, But, That Still Doesn’t Determine How Much Money We Should Invest!

44. How an Integrated Model Works in Autos 2007 Top 100 Advertiser Media Spending Advertising Age – TNS

45. Spending by the Top Seven Automobile Brands 2007 Auto Advertisers (Top Seven) Among Top 100 Media Spending -- Advertising Age – TNS

46. Adding Purchase Intentions from SIMM Reports 2007 Auto Share of Voice* and Reported First Choice in Next 6 months** *2007 TNS based on the seven manufacturers **Includes all brands for each manufacturer and excludes other manufacturers brands, SIMM June ‘08

47. Calculating the Cost Weighted by Influence

48. But, All This Stuff Only Matters If You’re in the Market for an Auto Planning to Purchasing a Car or Truck in Next 6 Months June 2007 Plan to Purchase (Planners) 11.4% Don’t Plan to Purchase 88.6%

49. Determine Media Form Influence on the Target Market

50. Then, Calculate Optimal Allocation Among Planned Purchasers Optimal Dollar Allocation for Car and Truck Purchase Planners (June 2007)