Marketing Communications III Essay Assignment 2 16th May, 2011 Simon Horwood a1162495

Q: Todays media environment has

changed so much that traditional approaches to advertising are no longer as effective as they once were. Discuss.
An overwhelming majority of U.S. CMOs and marketing managers believe branding initiatives need to be more flexible today than in the past.

(Verse Group, 2009)

he media landscape of todays society is fast distancing itself

from traditional approaches to marketing communications. Many of the changes that marketers bemoan increased competition, trends in usage etc reflect a transformation of the media environment, a change to which most marketers dont know how to respond, and shows a fundamental change in the relationship between marketer and consumer of which failure to adhere to this new relationship creates a negative response (Gelb, 2006). Whilst the core principles of advertising remain the same; new media have many characteristics that propel them above traditional methods of reaching an audience. This has forced marketers to shift the way they think and ultimately market, their product or service. This paper looks to discuss trends in new media, identify the new approaches used to make use of these trends, and look at the fundamental impacts that these have on todays marketers. Evidence will be presented through the use of academic theories, global surveys and journalistic resources to create a thorough argument as to why marketers need to shift their communication 2

strategy.

THE RISE OF NEW MEDIA

Compared with Clinton, Obama was vastly under resourced financially and could not afford any of the weighty TV, telemarketing or direct mail campaigns that she could so instead he turned to social media. Obama, took a calculated gamble to ditch traditional marketing approaches and put his faith in a medium that was to have far reaching results, not only for his own presidential campaign but as a lesson for how we should all be marketing our goods and services from here on in.
(Phillip, 2011)

With a list of media that grows at an astounding pace, new media have become the driving force in marketing today. Broadly defined, new media encompasses the emergence of digital and easily accessible, networked information and communication streams that came to light in the late part of the 20th century (Belch, 2009). Perceived in a physical sense, they include such tools as the Internet, Email, television, mobile phones & social networking. Critics will argue that they are simply more direct marketing tools (Peltier et al. 2003), but it is hard to ignore the potential for these mediums to permanently alter the way in which advertisers view marketing and marketing communication (Peltier et al. 2003). A global study by Verse Group in 2009, in which 101 marketers at companies with revenues greater than $250 Million (US) found that 63% of respondents felt that traditional brand positioning & advertising are losing their effectiveness and are broken (Verse

Group, 2009). Furthermore, evidence from the study suggested that changes in the social environment, such as economic and technological changes pushed the need for marketers to innovate and find new paths to move brands across multiple delivery platforms. Results from the study highlighted the importance of new media as an efficient form of marketing (Verse Group, 2009): 62% believed that traditional methods were no longer worth the capital expenditure 62% believe breakthrough methods were the key to marketing success in the current environment 89% agreed that the current environment is highly scrutinized and under more pressure than ever before to perform New media have many advantages over traditional marketing techniques that enable them to be a premium product at a minimum cost. Some key aspects of new media include: Unlimited delivery of information Unlimited sources of information Capacity to target specific clusters of potential consumers

More importantly, the most noteworthy advancement of new media over traditional media is the interactivity and its ability to confer with the audience and enable them to choose and respond to a particular advertisement of their liking (Yoon, 2001). This is especially important in todays media environment, which tends to reward strategy that focuses on maximum response from selected groups rather than traditional approaches whereby maximum exposure to many unknown audience groups are implemented (Yoon, 2001). This new medium suggests that strategy shouldnt be based solely on chasing an audience but rather by 4

sharply focusing on the intrinsic strengths of the product & defining what part of the market it belongs (Gelb, 2006).

NEW APPROACHES TO MARKETING

Forecasts indicate that in the next five years, expenditure on new media will increase from 16% to 27% of total marketing expenditure by 2012
(PQ Media, 2008)

Marketing in the new media environment has changed the approach and priorities for many traditional marketers. As new technologies and methods to marketing create new ways to push a product, traditional methods such as television and radio are becoming more fragmented and more selective (Belch et al, 2009). According to a recent study of US executives, the segmentation of media audiences by new media technologies is one of the most important approaches to marketing in the 21st century (Belch et al, 2009). The global study by Verse Group found that many of these marketers had reshuffled their top priorities in recent years, due to changes in the marketing environment. The study showed that the following points were fast becoming key aspects of approaches to marketing (Verse Group, 2009): Achieving a more measurable ROI for marketing programs Developing integration techniques for utilizing both new & traditional media approaches Cutting budgets whilst maintaining performance.

These key aspects are all linked into the IMC programme, whereby

companies can avoid duplication, take advantage of promotional tools, and develop more efficient and effective marketing communications programs (Belch et al, 2009). Due to the changes in the marketplace, and the growing effect of new media, major characteristics of approaches to marketing a product or service have changed. 21st Century characteristics of key marketing principles often now include (Belch et al, 2009): Shift from media advertising expenditure to sales promotions Movement towards lower cost communications approaches (Facebook pages, online media etc.) Growth of large retailers (Harvey Norman, Woolworths etc) has shifted marketplace power to the retailer, not the manufacturer. Database marketing is now vital for advertising. Traditional approaches to advertising required little knowledge of the consumer. New media requires knowledge of demographics, purchase patterns, credit ratings and other consumer details to be of an efficient nature.

HOW DOES NEW MEDIA AFFECT INTEGRATED MARKETING COMMUNICATIONS?

New media offers companies multifarious ways to reach consumers, communicate with them, and measure their communication, browsing or purchase-related behaviors. These options are valuable for marketing in general, but should be of particular relevance for customer relationship management, which employs knowledge on individual customers for crafting individualized marketing activities
(Hennig-Thurau et al, 2010, Page 2)

The alteration of the media environment with the addition of new media has led to increased importance of efficient IMC in business planning. IMC concepts recognize that a well planned, comprehensive and executed IMC programme will provide clarity, consistency & maximum communication impact (Schultz et al. 6

1993). The huge rise in popularity of new media has dramatically altered marketing planning, and IMC specifically (Peltier et al. 2003). Comparing new media IMC programmes against traditional IMC programmes allows for clarity in defining the key differences between the two themes. As discussed earlier, a key aspect of new media is its ability for two way communication between the consumer and the seller. Previously, IMCs that utilized traditional marketing aids, found that their one way communication resulted in a lack of sufficient data on their consumer do be truly customer focused (Peltier et al. 2003). This is a disadvantage that is mostly eradicated in new media IMCs, whereby the two way communication patterns allow for thorough and accurate database construction, where demographical, psychographic and behavioral information about consumers is merged, resulting in more personalized and consumer driven IMC programmes (Peltier et al. 2003). Table 1 below outlines some of the differences between traditional and interactive IMC strategies (Peltier et al. 2003).

Table 1: Traditional VS Interactive IMC (Peltier et al. 2003, Page 5)

As we can see from the table above, changes in new media have transformed traditional IMC programmes, to allow firms to create and distribute a customized, interactive, IMC programme (Peltier et al. 2003). Furthermore, the overall goal of an interactive IMC programme is to establish an ongoing communication medium with specific clusters of customers and segments. Firstly, the data gathered through interactive media channels is analyzed to segment the audiences into their specific groups based on demographics etc. Secondly, discussion of specific investment levels for each cluster occurs, and then finally each cluster is assigned various media tools to push the segment specific objectives, incentives and messages (Peltier et al. 2003). A good example of this in action is Campbells Soup. Based on IMC theory, Campbells IMC programme should be designed to deliver one consistent message spanning across all of the products promotional media (Tanner et al, 2007). In this case, their slogan mm, mm good is utilized across all of their advertising channels, such as print, television and online campaigns. Although the Companys ads communicate the consistent message of the flavor of their soups, each ad is tailored to specific clusters of customers, as identified by their IMC programme (Tanner et al, 2007). Drawing on concepts earlier, we can see that the use of new media in an IMC programme will continue to evolve as the field of marketing moves from traditional to more interactive ways to develop its IMC strategies.

WHAT IMPACT DOES IT HAVE ON TODAYS MARKETERS?

While traditional IMC has demonstrated the value of creating a consistent theme and/or creative platform for the communication 8

campaign, the CRM foundations of interactive IMC highlight the importance of being able to develop individualised messages that are consistent with the overall theme and creative platform of the communication programme

(Peltier et al. 2003, Page 1)

As discussed earlier, the rise of new media channels has changed the landscape of a marketers environment. As a result, there are 2 major themes that stand out when comparing new vs. traditional marketing aspects. The first and foremost issue with new media is the ever presence of marketing accountability and the pressure that this is placing on marketers to prove they are worth the capital investment. Secondly, as consumer consumption moves to the Internet, advertisers must be able to manage their brands across numerous platforms to create a coherent brand experience for the customer (Verse Group, 2009). Furthermore, changes in communications between buyer and seller and the availability of information for buyers through sources such as the Internet have highlighted the need for marketers to develop a thorough IMC programme (Tanner et al, 2007). Hennig-Thurau et al (2010) discuss in their report on new medias impact on marketers; a conceptual framework colloquially known as playing pinball. They argue that traditionally, companies influence customers though actions such as loyalty programs and public relations and stressed that consumers are predominately passive receivers of marketing information. These points are seen in Table 2 below in arrow A, F, B & E. Businesses that successfully utilize this method often had control of the messages in their consumers minds, leading to retention (arrow C).

Table 2: Effects of New Media on Marketers (Hennig-Thurau et al, 2010, Page 4)

The remainder of the table shows the effects of new media on the marketing environment, and how it impacts marketers and their ability to interact. Hennig-Thurau et al believe that in the current market the flow of information has become multidirectional, interconnected marketers and difficult create a to predict. marketing They ball believe that now (branding

messages/themes) that is released into a dissonant environment, which is either accelerated or bumped by new media (HennigThurau et al, 2010). Marketers must control the ball as best as possible, but with the huge market of advertising mediums, the ball may go off its intended course, of which the slightest miscue can be amplified into a catastrophic crisis (Hennig-Thurau et al, 2010). As discussed in Belch et al (2009), major changes have occurred among consumers with respect to demographics, lifestyles, media use, and buying patterns. In addition to this, decline in general audience size for traditional media has resulted in a decline in response rates to tradition media outlets (Belch et al, 2009). This 10

has impacted marketers to look for alternatives ways to advertise with their audiences. For example, product placement is a growing alternative to traditional methods whereby companies pay to disguise their promotional messages by making them part of popular culture (Belch et al, 2009). To conclude, from the theories and evidence shown throughout this paper, its clear that new media must be integrated within a communication plan. Furthermore, a well-planned and integrated IMC plan should include a database driven segmentation method to contact consumers. The approaches to marketing that exist in the current media environment show that the way we have traditionally viewed advertising and the concepts of IMC have vastly changed; for better, or for worse (Peltier et al. 2003). The ability of the new media to provide two-way, customised communication allows organisations to develop smart communication programmes that evolve constantly over time. It is the firms ability to respond to customers responses that makes the IMC programme truly interactive.
(Peltier et al. 2003, Page 20)

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References:
Belch, Belch, Kerr and Powell, (2009) Advertising and Promotion: An Integrated Marketing Communication Perspective, McGraw-Hill, Sydney Brantson, G., Stafford, R., (2007), The Media Students Book, 4th Edition, Routledge, Taylor & Francis Group. Gelb, A., (2006), New Media Age, New Marketing Strategies, OJR: The Online Journalism Review, searched with Google 20/4/2011, available at http://www.ojr.org/ojr/stories/060206gelb/ Hennig-Thurau, E., Malthouse, C., Freige, C., Gensler, S., (2010), The Impact of New Media on Customer Relationships, Journal of Service Research, SAGE Publishing Peltier, J., Schibrowsky, J., Schultz, D., (2003), Interactive Integreated Marketing Communication: Combining the Power of IMC, the New Media & Database Marketing, International Journal of Advertising, Issue 22, pages 93-115. Phillip, S., (2011), Why Traditional Marketing No Longer Works, Linked2Success, searched via Google 26/4/2011, available at http://linked2success.wordpress.com/2011/02/14/why-traditionalmarketing-no-longer-works/ PQ Media, (2008) New Media Spend to Hit $160B in 2012:, MarketingVOX, accessed via Google 26/4/2011, available at http://www.marketingvox.com/pq-medianew-media-spend-to-hit-160b-in-2012-037592 Schultz, D.E., Tannenbaum, S.I. & Lauterborn, R.F. (1993) Integrated Marketing Communication. Lincolnwood, IL: NTC Business Books. Tanner, J., Raymond, M-A., (2007), Chapter 11: Advertising, Integrated Marketing Communications & the Changing Media Landscape, Principles of Marketing, Searched with Google 24/4/2011, available at http://www.flatworldknowledge.com/pub/1.0/principlesmarketing/105008#web-105008 Verse Group, (2009), CMO Survey: Traditional Branding is Broken, Marketing VOX: The Voice of Online Marketing, searched with 12

Google 20/4/2011, available at http://marketingvox.com/cmosurvey-traditional-branding-is-broken.html Yoon, S-J., (2001), Factors Affecting the Choice of Media Journal of Advertising Research, November December 2001.

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