CH-8 From Print and Broadcast Advertising to Social and Mobile Media – Consumer Behaviour : Chapter Notes

Chapter 8 From Print and Broadcast Advertising to Social and Mobile Media LEARNING OBJECTIVES After reading, studying and analyzing this chapter, students should be able to understand: 8.1 The strategic superiority of impression-based (eyeballs) targeting over segment-based targeting. 8.2 Google’s targeting and advertising capabilities and its value to both consumers and marketers. 8.3 The dynamics of social media and its strategic and promotional advantages over other media. 8.4 How consumers use mobile media and their reactions to mobile advertising. 8.5 How to measure the effectiveness of advertising in traditional and social media. 8.6 The advancement of print and broadcast media into electronic communications. CHAPTER SUMMARY Learning Objective 8.1: To understand the strategic superiority of impression-based (eyeballs) targeting over segment-based targeting. Since the emergence of traditional advertising media (newspapers, magazines, radio, and television), TV networks, magazines, and newspapers have sold advertising space by offering marketers the opportunity to reach audiences whose demographics and psychographics (lifestyles) match those of the marketers’ target markets. However, the audiences marketers reached via these media were larger and more diverse than their target markets and almost always included many people who had no interest in the products advertised. In contrast, today’s sophisticated tracking of consumers enables data aggregators to construct consumer profiles— based on cookies documenting people’s online surfing (and other applicable information about them)—and identify prospective customers for specific products. Advertisers then compete to reach the right “eyeballs” online by placing monetary bids. Segment-based targeting occurs when advertisers pre-negotiate prices for advertising space in media (e.g., magazines or TV shows) whose audiences largely (but never completely) match the profiles of the consumers the advertisers wish to target. Impression-based targeting occurs when advertisers specify the criteria describing the persons they wish to reach online and then bid in real time for the opportunities to reach such people. A person reached is termed an “eyeball” or “impression.” Impression-based ads often “follow” consumers online and thus keep reminding them about the products they were interested in. Retargeting occurs when ads for specific products that consumers have pursued online “follow” them and show up repeatedly whenever they go online using the same computer. Learning Objective 8.2: To understand Google’s targeting and advertising capabilities and its value to both consumers and marketers. Google is the most widely used search engine online and a prominent advertising medium. Consumers using Google are reached by three types of ads: (1) Web-search ads (generated by consumers’ searches); (2) online display ads (fixed banners that do not vary according to users’ profiles or search patterns, posted on websites); and (3) mobile ads (ads that appear on mobile devices in Google search results, on content websites, and in apps). Google’s most prominent use is as a search engine. After an online user types a query, two areas appear on the screen. The “organic results” are the links directing users to sites and resources that are applicable to their Google searches. The “sponsored space”—typically appearing on the right side or the top—consists of advertising banners that Google has sold to advertisers or “sponsors.” Each time a potential customer clicks on a sponsored banner ad, the advertiser pays Google a fee. The fees can range from a few cents for terms that very few (if any) users are likely to enter in the search engine, to several dollars (and up) for words that many users are likely to type in. Learning Objective 8.3: To understand the dynamics of social media and its strategic and promotional advantages over other media. Social media refers to means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks. Social media depend on mobile and Web-based technologies to create highly interactive platforms through which individuals and communities share, co-create, discuss, and modify user-generated content. The structure of social media includes consumers’ profiles, friends and groups within social networks, interactions among group members, and opt-ins and opt-outs that people use to control the information they post or receive online. Social media marketing is enabled by the information consumers provide about themselves and their social contacts, mostly via apps that they buy cheaply or receive for free. Apps (short for “applications”) are chunks of software—installed on one’s computer, tablet, or smartphone—that are gateways to games, online resources, and social networking. Apps also collect users’ personal information and provide them to the apps’ developers. There are several types of media channels: owned social media, paid social media, and earned social media. Social media campaigns must be planned together with advertising in traditional media. Marketers must consider the fact that social media simultaneously reaches several audiences (i.e., consumers, retailers, and other parties with whom the company does business), which justifies larger advertising budgets. Executives should closely examine consumers’ clicks on the “like” buttons and mine data from their Facebook pages to develop new niches for their products. Learning Objective 8.4: To understand how consumers use mobile media and their reactions to mobile advertising. Mobile advertising refers to sending promotional messages to consumers’ cell phones, iPads, electronic readers, and other devices that people carry while on the go. Mobile advertising can identify users’ geographic locations and deliver contextually relevant offers. As smartphone screens become larger, marketers are increasingly using mobile ads that take over the entire screen. Some mobile marketers have been experimenting with inserting ads in places where consumers do not expect to see any, in an effort to overcome consumers’ tuning-out of promotional messages. Social media is increasingly integrating with mobile devices as more and more of our interactions with people, products, and information occur digitally rather than physically. Learning Objective 8.5: To understand how to measure the effectiveness of advertising in traditional and social media. A widely used measure of effectiveness is analysis of website visits, including the number of unique visitors, cost per unique visitor, return visits, visit length, pages viewed and links clicked, actions taken during visits, and visitor demographics. There are also measures of users’ influence within social networks. Google Analytics (GA) is a service offered by Google that evaluates the effectiveness of websites and profiles their users. It enables marketers to measure the effectiveness of their websites and promotional efforts and, to an extent, predict the impact of planned advertising campaigns on customers’ behavior. Marketers can also identify pages, links, and promotional efforts that perform poorly and do not achieve the sites’ objectives. Media exposure effects measure how many consumers were exposed to the message, as well as their characteristics. Broadcasters, publishers, and owners of websites use media exposure measures to determine the size of their audiences and set the rates they charge advertisers for placing promotional messages in their media. Services that sell media exposure data to marketers have developed portable people meters (PPMs), which are small devices, equipped with GPS, that consenting consumers clip onto their belts and wear all day (in exchange for monetary incentives). The devices monitor codes embedded into the audio streams of media that consumers receive, and also have the capacity to capture visual images of the screens and written materials that consumers are exposed to. Learning Objective 8.6: To understand the advancement of print and broadcast media into electronic communications. Traditional print and broadcast media have been evolving into more sophisticated forms. Newspapers provide access to large audiences and are effective for reaching large audiences. However, they are generally inadequate when it comes to reaching consumers with specific demographics. Newspaper ads can be designed and published quickly, but they have a short life. Newspaper ads are affordable for local businesses and enable joint advertising by national manufacturers and local sellers. Magazines reach specific geographic, demographic, and interest-focused groups and enable more precise targeting than newspapers, with ads of high visual quality. Special-interest magazines are highly credible. Magazines offer long message life and increased exposure to ads because of pass-along readership. Although most magazines and newspapers are still printed on paper, almost all now offer online editions, and many are planning to phase out their paper editions. Online, both magazines and newspapers offer readers customized editions that are based on their interests. In addition, advertisers can customize the messages sent to readers based on their interests. Network and cable TV reach very large audiences. However, many programs, particularly on network TV, reach audiences that are heterogeneous in their demographics, spending power, interests, and lifestyles. In addition, more sophisticated recording and time-shifting devices have been allowing viewers to avoid seeing TV commercials. Interactive TV (iTV) combines TV broadcasts and the interactivity of the Internet. iTV can be delivered to a TV, computer, or mobile device in the form of a two-way communication between the subscriber and providers of cable or satellite TV. Other forms of media are not genuinely new technologically, but are innovative and growing. Out-of-home media consist of communications vehicles that target consumers in captive and less cluttered environments outside of their homes. This category consists of new promotional tools as well as some older means that were significantly updated with new technology. Ambient advertising (also known as experiential advertising) consists of promotions designed to simulate an actual consumer experience with the product. Branded entertainment (product placement) is created by featuring products within the contents of entertainment, such as TV, movies, video games, and online sites, among others. Marketers have developed webisodes (short videos, shown online, that feature entertainment centered around brands) and advergaming (video games played at homes, arcades, or online that have a brand or brands embedded in their structure). CHAPTER OUTLINE Introduction The most important strategic impact of technology on marketing has been the ability to target customers more precisely and effectively. Technology enables impression-based targeting, through which advertisers specify the criteria describing the persons they wish to reach online and then bid in real time for the opportunities to reach such people. Impression-based targeting is implemented through real-time bidding. Data aggregators enable advertisers to place bids on the opportunities to reach specific users, who meet a given criteria, on an impression-by-impression basis. Segment-based targeting is the traditional way marketers reached customers, where they pre-negotiated prices for advertising space in broadcast media. *****Use Learning Objective 8.1 Here; Use Key Terms impression-based targeting, segment-based targeting, real-time bidding, data aggregators Here; Use Figure #8.1 Here***** Targeting Segments Versus Eyeballs Segment-based targeting occurs when advertisers prenegotiate prices for advertising space in media (e.g., magazines or TV shows) whose audiences largely (but never completely) match the profiles of the consumers the advertisers wish to target. The audiences marketers reached via these media are larger and more diverse than their target markets and nearly always include many people who have no interest in the products advertised. Traditional media is one-way, so messages are the same for all receivers, feedback is delayed and of limited use. Consumers can easily escape TV ads by time shifting, which involves starting to watch a show about fifteen minutes after it begins and using devices that allow one to skip commercials easily. *****Use Review and Discussion #8.1 Here ***** On the other hand, impression-based targeting can customize messages based on the data, gets immediate feedback, and can repeat messages to consumers based on their interests and responses. Retargeting occurs when ads for specific products that consumers have already pursued online “follow” them and show up repeatedly whenever they go online using the same computer. Google’s Consumer Tracking and Targeting Google is the largest provider of the data and targeting tools that advertisers need for impression-based targeting, as well as the major supplier of real-time bidding to advertisers seeking impressions among consumers who fit certain criteria. Google reaches consumers by using: Web-search ads, which are ads generated by consumers’ searches. Online display ads, which are fixed banners that do not vary according to users’ profiles or search patterns, posted on websites. Mobile advertising, which are ads that appear on mobile devices in Google search results, on content websites, and in apps. Google’s most prominent use is as a search engine. After an online user types a query, two areas appear on the screen. The “organic results” are the links directing users to sites and resources that are applicable to their Google searches. The “sponsored space”—typically appearing on the right side or the top—consists of advertising banners that Google has sold to advertisers or “sponsors.” Each time a potential customer clicks on a sponsored banner ad, the advertiser pays Google a fee. The fees can range from a few cents for terms that very few (if any) users are likely to enter in the search engine, to several dollars (and up) for words that many users are likely to type in; the latter are what bring up ads sponsored by large marketers. The advertisers’ costs-per-click also vary according to whether or not the same user has clicked on the ad previously (measuring the effectiveness of online ads is discussed later in this chapter). Another source of revenue for Google is graphical and video ads posted on YouTube, which is owned by Google, and on thousands of non-Google sites. Google also runs a shopping site where retailers pay for being displayed in Google’s product-search engine. *****Use Learning Objective #8.2 Here; Use Review and Discussion #8.2 Here ***** Consumers and Social Media Social media is a means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks. Social media depend on mobile and Web-based technologies to create highly interactive platforms through which individuals and communities share, co-create, discuss, and modify user-generated content. The structure of social media includes the following elements: Profiles are the ways by which consumers tell others about themselves (i.e., their age, personality, and interests). Friends are trusted members of the social network used. They are allowed to post comments that designated members of the network can read. The networks allow users to keep tabs on what their friends are doing online (e.g., posting new pictures or updating their profiles). Groups within social networks help users find people with similar interests. Social networks create interactions among group members via discussion boards and by allowing members to post pictures, music, video clips, and other tidbits for the groups’ members to view. Consumers must have opt-ins and opt-outs that allow them to control the information they share with friends and the information they receive from others. *****Use Key Term social media Here; Use Learning Objective #8.3 Here; Use Review and Discussion Question #8.3 ***** Apps, short for “applications”, are chunks of software—installed on one’s computer, tablet, or smartphone—that are gateways to games, online resources, and social networking. Apps request four basic kinds of information: Basic permissions include name, identification, gender, photo, personal demographics, and list of friends. User permissions are requests to allow the installation of the applications on the users’ computers. Friends permissions include requests to share information the users have about friends using the same app. Sensitive information requests include questions about users’ highly personal aspects, such as political or religious affiliation and even sexual orientation. Social media marketing is enabled by the information consumers provide about themselves and their social contacts, mostly via “apps” that they buy cheaply or receive for free. *****Use Key Term apps Here; Use Figures #8.4 and #8.5 Here; Use Hands-on Assignment #8.9 Here***** Social advertising best practices: Marketers listen to the interactions, or social conversations, and use the information gathered to generate more buzz for their products within social networks. Most brands now have official Twitter handles and Facebook pages. Companies have discovered that customers are highly enthused about and more responsive to Twitter messages from the corporate bosses, especially if such messages encourage consumers to tell the senders about their experiences with the brands. Some companies have decided that centralizing social media communications is impractical, so they train and empower their employees to participate in social conversations with customers, within defined guidelines. Savvy marketers combine their social media promotions with iPhone applications. *****Use Table 8.1 Here ***** Many marketers allow consumers to interact with their brands’ designs. Most companies selling consumer goods have integrated social media into their advertising campaign. Effective social media is planned with traditional media advertising. Marketers must consider the fact that social media simultaneously reaches several audiences (i.e., consumers, retailers, and other parties with whom the company does business), which justifies larger advertising budgets. Executives should closely examine consumers’ clicks on the “like” buttons and “mine” data from their Facebook pages to develop new niches for their products (sometimes with partners in other product categories). Bosses who tweet personally strengthen the connections between their brands and customers. Employees should be encouraged to tweet, but guidelines for such communications must be set and monitored for compliance. However, research suggests than many CEOs resent (and even fear) using Twitter. There are different types of social media channels: Owned social media: Messages sent by marketers and delivered to consumers via channels that the marketers control Paid social media: Messages sent via channels that are not owned by the marketers, who pay for using the channels Earned social media: Channels where consumers pass along messages about brands to one another Widely used social media platforms Branded blogs and micro-blogging platforms (e.g., Twitter) that encourage interactions among consumers; these messages resemble conversations. Social networks such as Facebook and MySpace. Widgets, gaming, and other applications that users can download. Mobile phones Consumers and Mobile Advertising Mobile advertising is done by sending promotional messages to consumers’ cell phones, iPads, electronic readers, and other devices that people carry while on the go. Mobile devices provide four types of value: Monetary value: the device provides good value for the money that also exceeds the value consumers receive from using nonmobile communication devices. Convenience value: saving time and money, improving efficiency, and making life easier. Emotional value: feeling good and relaxed when using the device. Social value: being accepted by others and impressing them. *****Use Learning Objective #8.4 Here ***** Studies have identified cross-cultural differences among consumers’ responses to mobile ads. A study of Japanese men showed that mobile ads generated effective word-of-mouth. A study of European consumers showed that cross-cultural differences affect the effectiveness of mobile advertising. Research on Korean shoppers indicated that their attitudes toward mobile advertising depended mainly on the convenience of the interface and their ability to control content. Research of Chinese consumers showed that ease of use, perceived usefulness, and trust were the key factors in receptivity to mobile advertising. Researchers also found that the adoption of mobile broadcasting in Japan, Germany, and Korea was positively related to the extent of access to mobile devices and the entertainment and social interaction they provide. One study investigated the influence of the language and source of text advertisements on attitudes toward and purchase intentions regarding products advertised on mobile devices. The researchers found that reputable companies with highly perceived credibility can use entertaining language, but companies with less credibility and poorer reputations should create serious, clear, and concise mobile ads. Search advertising is a method of placing online advertisements on Web pages that show results from search engine queries. An analysis of a large sample of mobile ads indicated that: Mobile marketers are spending most of their money on search ads. Marketers have been creating mobile ads that are fun, pay rewards, and help customers find useful information (e.g., referrals). As smartphone screens became larger, marketers began using mobile ads that take over the entire screen. Some mobile marketers have been experimenting with inserting ads in places where consumers do not expect to see any, in an effort to overcome consumers’ tuning-out of promotional messages. Many advertisers use banner ads on mobile devices’ screens because such ads are cheap, although most recognize that consumers find banners annoying. *****Use Key Term search advertising Here ***** Marketers are also developing technologies that enable advertisers to link what consumers do on their computers with their cell phones. Advantages: It can identify users’ geographic locations and deliver contextually relevant offers. It can provide consumers with access to online deals in stores and the ability to pay for deals in stores while en route. Disadvantages: Smartphones’ screens are small; impossible to use cookies with apps the way it is with browsers (so marketers cannot track actions and optimize their ads the way they do in response to customers’ computer surfing); most consumers are reluctant to receive ads when using their cell phones. Measuring Media’s Advertising Effectiveness The most widely used measures of the effectiveness of online promotions are analyses of website visits, users’ influence within social networks, and the audiences’ demographics. Steps to design social media campaigns: Define the campaign’s objectives and strategic approaches. Examine the platforms available and determine which ones to use so as to achieve the objectives. Produce the campaign’s content using internal or external resources. Examine the pricing models for securing access to social media, which, unlike pricing for advertising space on traditional print and broadcast communication channels, vary greatly. Then, set the expenditures needed to achieve the campaign objectives. Measure the campaign’s effectiveness. *****Use Learning Objective #8.5 Here ***** For the most part, marketers infer the purchase behaviors triggered by ads from broad sets of sales data, as it is rarely possible to identify a cause-and-effect relationship between a given message and the resulting purchase behavior. In contrast, promotions placed in social media employ “electronic cookies,” which are digital tracking devices that enable senders to monitor the receivers’ responses precisely and often immediately. However, even with electronic tracking, some advertisers have removed their Facebook ads because they had trouble measuring whether the ads led to sales. Analyzing website visits involves tracking: Unique visitors. The number of visitors to the website that have accessed its content. User profiles (based on their Web addresses) are also monitored. Cost per unique visitor. The total cost of placing the application or ad divided by the number of unique visitors. Return visits. The average number of times a user returns to the site within a specific period. Time spent. The average amount of time from the start of the visit until the end of the last activity on the page. Page views. The average number of pages that users have clicked through. Interaction rate. The proportion of viewers who interact with an ad or application. Actions. The actions taken during visits, such as entering contests, responding to poll questions, redeeming coupons, playing games, posting comments, sending messages, inviting friends, and downloading or uploading materials and applications. Conversation-related measures. Data including the number of unique visitors participating, the number of links related to the conversation that participants reach during the conversation, the duration between the first and last posts during the conversation, and the average number of time between posts. Visitor demographics. (a) Examining how the target audience navigates around the site and which demographic profiles have the most engagement; (b) evaluating whether the content created is a good match with the users and whether it converts many into buyers; and (c) determining how to improve the sell rate and reduce the cost per impression. One’s degree of influence on Twitter is measured as follows: one’s number of followers, the number of people following the followers, the frequency of updating tweets, and the extent to which one’s tweets are referenced or cited. Twitter also identified several types of users: Celebrities have many followers but follow very few, if any, users. Conversationalists follow about the same number of users as follow them. Spammers “collect” users with the intent to push content to as many people as possible. Google Analytics is a service offered by Google that evaluates the effectiveness of websites and profiles their users by collecting and analyzing the following data: Tracking where visitors come from: Referrals, search engines, display advertising, pay-per-click networks, email campaigns, and other digital links (e.g., clicks within PDF documents). Customers’ actions after they “land” at the initial page: Viewing other pages, downloading files, registering with the site, and other actions. Website visitors’ geographic location and their visit lengths. GA also assigns websites’ users into profiles and segments them. Google Analytics enables marketers to measure the effectiveness of their websites and promotional efforts, predict the impact of planned advertising campaigns on customers’ behavior and tracks sales activity and performance to provide marketers with their sites’ transactions, revenue, and many other commerce-related metrics. Media exposure effects measure how many consumers were exposed to the message and their characteristics. Consumer research companies assess how many consumers received the message and construct a profile of those who received it. *****Use Key Term media exposure effects Here; Use Review and Discussion #8.4 Here***** The largest syndicated company that collects such data and sells it to advertisers and other organizations is Nielsen, which has various panels and measures across platforms. Mediamark Research Inc. (MRI) provides, for a given magazine, data on its circulation as well as a descriptive audience profile (a breakdown of its readers by gender, median age, and household income). Arbitron measures the audiences of radio broadcasts. Arbitron is known primarily for monitoring radio broadcast audiences and, more recently, for developing portable people meters, which are small devices, equipped with GPS, that the consumers clip onto their belts and wear all day (in exchange for monetary incentives). Traditional Media’s Electronic Evolution Print and broadcast media are one-way communications where all the members of a given audience receive the same one-way messages from marketers. Newspapers, magazines, TV, and radio use segment-based targeting. Because each individual has his or her own traits, characteristics, interests, needs, experience, and knowledge, senders of advertising messages segment their audiences into groups that are homogeneous in terms of relevant characteristics, including media exposure patterns. *****Use Learning Objective #8.6 Here ***** Newspapers provide access to large audiences and are effective for reaching large audiences. They are generally inadequate when it comes to reaching consumers with specific demographics. Newspaper ads can be designed and published quickly, but they have a short life. There is considerable clutter because many messages, particularly for local services and research outlets, compete for attention. Because of redemptions of specific promotions and timely measurement of sales volume after the ads are published, feedback can be collected quickly. Magazines reach specific geographic, demographic, and interest-focused groups and enable more precise targeting than newspapers, with visually high-quality ads. Special-interest magazines are highly credible. Magazines offer long message life and increased exposure to ads because of pass-along readership. Ads require longer lead time for production, and numerous magazines do not guarantee ad placement in a particular position within the magazine. Feedback from magazine ads is often delayed and is measured via Starch scores. Online, both magazines and newspapers can flourish by offering readers customized editions that are based on their interests. Network and cable TV reach very large audiences. Many programs, particularly on network TV, reach audiences that are heterogeneous in their demographics, spending power, interests, and lifestyles. Network TV (and later cable TV) has been the most desirable (and expensive) advertising medium for many decades because television enables marketers to send messages that draw attention and generate emotion. With many TV ads for competing and often similar brands creating clutter, marketers had to design short-duration messages and repeat them frequently. The feedback from TV ads has been imprecise and did not enable marketers to effectively determine which ads led to sales and which ones did not. Many TV commercials reach consumers that neither had interest in the products advertised nor became customers. More sophisticated recording and time-shifting devices have been allowing viewers to avoid seeing TV commercials altogether. Both the production and broadcast of television ads are very expensive. Radio’s advantages are its high geographic and demographic audience selectivity, as well as the short lead time needed for producing and placing commercials. Presently, almost all radio broadcasts, globally, are available online. The reach of radio advertising is limited. *****Use Review and Discussion Question #8.6 Here ***** Instructor Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828