Integrated marketing communications: From media channels to digital connectivity

Journal of Marketing Communications Vol. 15, Nos. 2 – 3, April– July 2009, 85–101

Integrated marketing communications: From media channels to digital connectivity Frank Mulhern* Northwestern University, Medill School, 1845 Sheridan Road, Evanston, IL 60208, USA Media is in the midst of a digital revolution that frees news, information and advertising from the technological limits of print and broadcast infrastructures. The digitization and networking of information transform marketing communications into a vastly different set of practices for connecting consumers and brands. This paper overviews the transformation in media and describes the implications for integrated marketing communications (IMC) practice and scholarship.

Digital media brings about infinite reproduction of content, consumer networking, user-generated content and an expansion of media from news and entertainment to almost any technology that has a digital interface with people. The role of media in marketing communications practices shifts from the execution of message strategies into an extension of consumer understanding. Media planning, the practice of allocating a media budget across a set of vehicles, will be replaced by a dynamic, automated process that serves ads based on information streams of consumer intentions and actions. Several of the core principles of IMC – consumer insight, data-driven decision making, cross-media integration and communications with multiple stakeholders – represent an improved framework for managing communications in a digital world.

Keywords: media; advertising; Internet; communities

Introduction The current revolution in information technology and digital communication fits the same pattern as the previous industrial revolutions, including the most recent one that gave us mass production, mass marketing and mass communications. In her book, Technological revolutions and financial capital, Carlota Perez (2002) describes how technological revolutions progress through four stages – interruption, frenzy, synergy and maturity – all stages closely tied to the allocation of financial capital. The digital revolution has blossomed into the post-frenzy synergy stage where a well-financed technology deploys itself across the economy. In an interview about the proposed Microsoft acquisition of Yahoo!, Microsoft CEO Steve Ballmer remarked that ‘offline advertising will all be online within 10 years’ (Wall Street Journal 2008, B1). This simple statement reflects the enormous transformation of advertising as it migrates from a print and broadcast world to a digital one. It is difficult to overestimate the impact of this transition on the way companies interact with consumers.

Of all the differences between traditional advertising and media and the emerging world of digital communications, none is greater than the fundamental difference between

*Email: fjm274@northwestern.edu ISSN 1352-7266 print/ISSN 1466-4445 online q 2009 Taylor & Francis DOI: 10.1080/13527260902757506 http://www.informaworld.com

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the idea of communications being about the delivery of messages through media channels versus communications being about an electronic world of networks, algorithms and automated systems for managing the connections between information and people. While creative messages remain at the core of communications, the encroachment of automated advertising networks such as Google search advertising and data-driven ad placement will shift much of media planning into a process that looks more like business logistics. This transformation poses a serious challenge for media companies, agencies and brand marketers who have constructed a sophisticated infrastructure to send messages to target audiences through media channels but do not have the mindset nor the technical expertise to master the data analysis and modeling of the digital media world.

Traditional advertising long has been immersed in the process of aggregating large audiences and delivering messages to them. While that approach to advertising continues to dominate media spending, a parallel world is developing that focuses on search, spiders, social networks, cloud computing and algorithms that filter and serve information (Plummer et al. 2007). These capabilities are working their way through everything digital – that is, all information. It will include all of what we have known as media and advertising. Remarkably, the traditional marketing communications business still places much more emphasis on branding and creative work than on data, metrics, quantitative models and digital technology (Ha 2008).

This paper overviews the transformative shifts in media and discusses what they mean for the integrated marketing communications (IMC) and for scholarly research in marketing and advertising. The digitization of media represents a phase change in the history of communications. Advertising, with its well developed business models and processes for targeting consumers with brand messages, is being reinvented for a world where demographically targeted print and broadcast messages are supplanted with datadriven, contextually relevant brand communications that no longer have to be paired with news or entertainment. For example, some brand messages will migrate to mobile devices that directly reach consumers without a connection to news or entertainment. The implications of the current revolution for media and marketing communications are systemic, profound and unlike anything the field has experienced, not even the advent of television. While television brought on a revolution in advertising content and provided an avenue for powerful messages and creative content, its inclusion in the media mix operated with the same business model as radio – the selling of broadcast time slots based on demographically defined target audiences.

Before examining what advertising media is becoming, we consider what is has been for the past few decades. Modern marketing communications has evolved from a mass communications world that rested on a few key premises that underlie how marketing communications are done, and how they are received by consumers: . Audiences can be aggregated into monolithic entities with homogenous tastes (Napoli 2003). . Advertising can attach itself to media content and project itself onto audiences by interrupting the delivery of that content (Malthouse, Calder, and Tamhane 2007). . Consumers will accept the intrusive delivery of commercial messages in exchange for free, or nearly free, content (Moorman, Neijens, and Smit 2005). . Brand messages generate brand awareness and preferences that translate, however loosely, into consumer spending (Tellis 2005). . Brand communications can be bundled into media plans that span multiple vehicles which constitute a relevant array of exposures to target consumers (Lee and Park 2007).

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These premises remain the bedrock of modern advertising and media planning. They have served the industry well by building brand differentiation and driving consumer spending.

However, in the digital, interactive world that is emerging, these premises become less appropriate. Mass communication, matched with mass production and mass distribution, gave us the modern era of marketing and its focus on brand awareness, intensive distribution and aggressive promotions. The Internet replaces this industrial era model of communication with a networked information system that has as its bedrock a set of properties that look more like an open, free marketplace than the centrally controlled, top-down rigid one of mass communications.

The networked information economy One can approach the changes in media in a variety of ways. At the core, two related things, both technological, underlie all of the changes taking place. The first is the digital codifying of information. The web of the 1990s was the conversion of print content into digital formats in the form of web pages and electronic files. The second is the networking of that digital content. Once things are digital and networked, a whole host of things take place that comprise what Benkler (2006) calls the networked information economy.

Benkler describes how a digital, networked media enables: (1) the production and distribution of information through nonproprietary processes much like those in the arts, education and sciences; (2) a blend of market and nonmarket mechanisms for making information available to the public; and (3) large-scale, cooperative efforts that generate output from many providers, best exemplified by wikis. Unlike the mass production economy of the twentieth century, a networked information economy features: Infinite reproduction and sharing A print newspaper or magazine can only be consumed when it is physically in the hand of a reader. Television can only be watched when the consumer is physically positioned in front of a screen. However, in a digital world, media content is free of the physical constraints of print and broadcast and can be copied and shared repeatedly, at little or no cost and with no loss of quality. Infinite reproduction destroys the business models of media companies that make money selling duplicates of content (Humphreys and Messaris 2005).

Modularity of content In traditional media, news, entertainment and advertising are bundled by editors and producers into relevant packages for audiences. A digital, networked infrastructure enables individual pieces, news stories for example, to be unbundled and freely distributed separately from packaged content. Advertising can attach itself to a news story without being associated with a newspaper. No one needs to buy the entire newspaper to get one story. The modularity of content has several ramifications: . When information is unbundled and open, barriers to entry disappear. As more participants produce content, large media firms lose control of content and distribution. . Modular information is more efficient than bundled information because it provides people with what they want without extraneous content. . Advertisements also become modular and travel with pieces of information, no longer having to be packaged and sold in big bundles.

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F. Mulhern . Content aggregation happens on the demand side as consumers construct content bundles to suit their desires.

Consumer networks The field of consumer behavior has produced an enormity of research about individual consumer decision making, essentially (and largely implicitly) adopting the framework of psychology that holds that the individual person, not the group, household or community, is paramount. Consumers have always operated in social networks as demonstrated by research on household buying behavior. However, the absence of an ability to track person-to-person connections has kept network effects largely off-limits. Today, Internetenabled networks provide social graphs – depictions of who talks to whom, that promise to remake the whole idea of who a consumer is. The centrality of the individual decision maker will give way to meaningful social clusters that make purchase decisions and effectively constitute the target audiences for advertisers (Barabasi 2003).

User-control and content production Media companies and advertising agencies have long operated in a centralized environment where content producers and distributors serve as gatekeepers for what gets produced and disseminated. Technologies now empower consumers to control what information they receive and to produce text, images, audio and video content for others to access (Shirky 2008).

Customized content Once users are in control, they will create whatever consumption experience they desire.

The media content, ads and all, will be customized – not by the media company or marketer, but by the user. This shifts the marketing communications role from one of aggregating audiences to one of responding to consumer desires with relevant information and services that are highly customized (Gal-Or and Gal-Or 2005).

Information streams One byproduct of digitization is continuous streams of data about how people interact with information. Marketing communications has built an enormously large set of business practices on a very small amount of information from survey research and consumer panels for things such as grocery shopping. The torrent of digital information now produced by digital media will reorient marketing communications much the way it has done for business logistics and operations research. Ongoing tracing of media use and buying behavior will parallel, and to some degree replace, the static methods of market research and qualitative research.

Nicholas Carr (2008) draws parallels between the Internet and the origins of the electricity grid. He claims that the web is progressing toward the concentration of computing power and storage with a few, major suppliers, just as electricity production consolidated into a few, large utility companies. The declining cost of processing, storage and transmission will contribute to the digitization of not just media but of all informationbased aspects of industry and government. Digitization overhauls entertainment, health care and education and in many ways will make those industries operate with many of the properties of media – information archiving and sharing, audience aggregation and

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community development. For example, the ongoing process of digitizing medical records created a media-like entity within the medical community. In a nondigital world, media is information distributed on physical devices; in a digital world, media becomes the human interface with the vast and expanding digital universe.

Advertising as a service The placement of advertisements in media has long relied on fairly well-developed software systems that allocate advertising budgets across media alternatives based on expected audience profiles. The digitization of media has brought on a higher level of automation in advertising allocation. Algorithms now place ads based on key word matches identified by search terms or context-specific placements based on web content.

While ad placement often suffers from a lack of contextual relevance, the continued evolution of the Internet, particularly the development of the semantic web, will improve advertising targeting dramatically. The semantic web will feature interpretations of information that mimic the human mind; this will be an enormous improvement over today’s keyword-based systems for search, recommendations and advertising. Such interpretive capabilities are, to a limited extent, in use by online dating services that evaluate a wide range of detailed information to generate overall profiles.

The digital transformation means that media and entertainment companies can no longer financially prosper by simply charging for content or monetizing audiences for advertisers. While consumers are reluctant to pay for information they can get for free, they will pay for ancillary services and intangibles such as trust and authenticity – guarantees that the information is what it purports to be. So too, consumers will pay for services, mostly digital ones, that are matched with commercial messaging and brand connectivity. The model is already in place with advertising-supported search engines, online maps, social networking cites such as MySpace and Facebook and recommendation and filtering services typified by Google’s inclusion of ads with RSS news feeds.

Advertising will continue to align itself with services that users value (Plummer et al.

2007). In fact the present rush to develop widgets – digital service applications – represents a small but significant advance toward advertising as a service.

The shift to advertising-supported services opens up enormous opportunities for advertisers to expose consumers to brand messages and, more importantly, to interact with them. Among the emerging advertising-as-service models are what Reubel (2008) calls advertising-supported advertising – essentially brand communication and interaction platforms that bypass media companies. Brand manufacturers and retailers are beginning to create online communities that feature information, games and social networks that work much like digital media companies. One consequence of this is a reduction in the need for advertisers to rely on media organizations. This enables organizations of all types to operate as media entities – connecting information to consumers in relevant ways.

Commercial messages and interactions with consumers will be partnered with media, events, entertainment, retailers and digital services of all types. In today’s commercially laden economy, advertising is extending itself into countless forms to the point that anything digital can host advertising.

From an economic perspective, advertising as a service represents an expansion of the three-party economic model for media – free content to attract an audience that is sold to advertisers – into other domains. In fact we are seeing a progression from product marketing to service marketing and from service marketing to digital services, including those for information. The Internet enables the extension of a media economy because

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it drastically reduces the costs of reproducing and sharing information and forces businesses to partner with marketers to find a workable business model. The variety of advertising-as-service examples noted above constitute a new advertising economy, one not particularly married to traditional media, and one that is more pervasive, exact and efficient than what we have known in the past.

Media planning In 1974, the Journal of Marketing published a paper about marketing theory written by W.T. Tucker (1974). Tucker chastised marketing scholars for adopting a singular perspective of a ‘channel captain’ – a master of the marketing universe, fine tuning the outbound marketing mix variables to suit the marketer’s interests. In what has become one of the more provocative quotations in the marketing literature, Tucker (1974, 31) noted: The consumer was always considered the consumer at the micro level. That is, he was always studied in the ways that fishermen study fish rather than as marine biologists study them. . . .

The point of view of the marketing theorist was virtually identical to that of the marketing manager, and particularly the channel captain, even when his conceptual analysis was without immediate practical consequence.

Tucker went on to advocate alternative approaches to marketing scholarship, namely from the perspectives of consumers or the general economic performance and well-being of society. Marketing theorists didn’t follow Tucker’s advice. The channel captain perspective prevails in the literature, particularly with respect to advertising and media planning. For example, the prevailing view of advertising and promotion is that of outbound messaging designed to elicit a response (Tellis and Franses 2006). The premise of media planning is that a manager can, with the aid of demographic profiles of media vehicles and some software, allocate advertising budgets in ways that purportedly optimize advertising to, using Tucker’s terminology, catch some fish.

The networked information economy obviates the channel captain. Marketers no longer control the entire media environment. Accordingly, they must learn to participate in the consumer’s world. Media planning does not just change; it goes away and is replaced by an entirely different mindset. That mindset will reflect the way consumers actually use media, not the demographically defined media audiences. Current media planning grew out of an era where audiences sat in front of televisions or sat at home or on trains perusing newspapers and magazines. Consider the following facts about media use today: . The continued adoption of more media technologies has led to a large increase in the amount of time people spend with media – a total estimated to be about 9.5 hours per day (Communications Industry Forecast from Veronis Suhler Stephenson 2007). . In addition to consuming more media, people are consuming the media simultaneously. Pilotta et al. (2004) demonstrate the prevalence of simultaneous media consumption. They find that over one-fourth of TV viewers are also online and 10% are reading a newspaper. They note that, ‘The existence of simultaneous media exposures undermines most current media measurement systems as they are defined as isolated environments’ (Pilotta et al. 2004, 291). . The geographic locating of wireless phones and other handheld devices enables advertising to person-based locations. This form of mobile direct marketing represents a major advance in advertising precision that will match ads to where consumers are and what they are doing.

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Carlin (2005) describes how the framework for traditional media planning – the sequential delivery of messages to fit into the supposed Awareness, Interest, Demand and Action model – no longer applies (if it ever did). ‘Planning’ may no longer be a useful metaphor.

First, planning implies that one lays out a well-defined set of practices and then executes them over a sustained period of time. This is a mass media concept; and applies only to the top–down channel captain described by Tucker. Planning also reflects an outbound point of view featuring centralized control of messages to target consumers. At some level, there will always need to be plans for how to allocate budgets across media alternatives. However, the idea of completely planning which messages go to which vehicles is giving way to automated systems that make allocations based on real-time information streams. What is emerging is a contingency system where messages are placed with respect to context as done with online advertising networks. For example, Takoni, an AOL property, conducts behavioral targeting that serves ads based on a person’s online behavior at a broad array of websites participating in Takoni’s advertising network.

Consider the difference in how media are purchased using Google AdSense compared to television. With television, media buyers purchase predicted audiences for TV shows that will run several months later. The media companies sell the predicted audiences, defined by demographic descriptors. If the measured audience turns out to be substantially smaller than what was sold, the media company compensates the advertiser with ‘make goods’. In this world, planning consists of using some fairly well-developed software tools to allocate an advertising budget across media alternatives to maximize exposures of the demographic target. With AdSense, an advertiser authorizes Google to use an advertising serving algorithm to place online ads in contextually relevant web locations. The only planning that happens is determining what context the ad should be attached to and how much money should be set as a cap on spending. Ads are placed with a real-time, dynamic process controlled by an algorithm that gets smarter every time someone clicks on an ad.

Demographics, which more or less drive the entire traditional media planning business, diminish in importance. Even more, the promise of linking ad serving to customer databases and online behavior represents an even higher level of precision in targeting.

By the time this model migrates to television, it is already partially in place for secondary print markets, the traditional media planning business will become much less important as it is too slow to serve ads in a dynamic, digital media world. Advertising allocation is evolving into a software system, perhaps even an artificial intelligence, which tracks continuous streams of incoming data and serves ads to the proper person at the proper time and location. In such an environment, Google and its contemporaries will constitute what Eric Schmidt, CEO of Google, calls an advertising operating system.

The driving force in digital media will be automated systems that allow for scale in the placement of ads. Since it is impossible for a planner to decide which of the millions of websites an ad should be placed on, Google and other search engines developed the automated ad serving systems noted above. As more computational systems come into play, the process of serving ads expands to incorporate not just the Internet but also interactive television (Kastidou and Cohen 2006).

The planning and execution metaphor is giving way to media as a complex adaptive system (Holland 1996). In such a system what matters are the connections, the patterns of media pieces, content and ads, that consumers assemble for themselves and share with others. Understanding how to operate in this world will allow marketing to become that which it has claimed to be – consumer oriented. Media planning becomes much less about picking among media alternatives and more about establishing patterns of interactions with consumers. This shift from media planning to digital services is depicted in Table 1.

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Table 1. From media planning to digital services.

Concept

Traditional

Digital

Planning process Targeting Consumers Partner Pricing

Linear/batch Demographics Audience of individuals News and entertainment CPM

Dynamic/ongoing Consumer and/or context Users in social unit All media, digital services and places Contingency

Note: CPM means cost per thousand.

Note that the stepwise process of deciding objectives, target audience, message and media placement gets replaced with a dynamic process that does not decide all these beforehand; it decides when it executes, using current information on consumer interests or behaviors. Instead of batch-like campaigns, advertising becomes a continuously evolving system of matching ads to people and contexts. In existing formulations of media planning, media decisions have long been relegated to the later stages of marketing communications planning. Marketing managers and agencies have long thought of strategy as comprising consumer understanding, target marketing, brand positioning messages and creative content. Media come into play for execution as depicted in the linear marketing communications planning process. In a digital world where consumers have numerable access points, media understanding must occur early in the process along with consumer insight and market research. This leads to a more dynamic process that continually monitors consumers and their use of media.

The changes brought on by digital media have many effects on advertising agencies.

Historically, the advertising industry has been dominated by the view of the creative directors and brand strategists. While brand insights and creative messages will always be important, advertising planning is gravitating more to be about matching the messages to individuals and contexts in ways unthinkable in the past. As such, the message is not as important because it is in the right place at the right time (as in targeted direct mail) and therefore does not have to be as profane and attention getting as today’s interruption-based advertising.

Agencies are in the midst of a major transformation. This is not the first time they have done so. Originally created to sell the advertising inventories of media organizations, agencies evolved to become strategic partners of their clients, offering high-level services in research, strategy and creative output. Today, agencies are remaking themselves again to adapt to a digital world. Agencies incorporated digital media by adding stand-alone digital units. As more media go digital, these units are taking on a more central role.

Nevertheless, agencies remain seriously challenged because their talent base, with its strength in qualitative research and creative messaging, may be ill suited for the datadriven, computational world emerging in digital media.

Implications of digital media for IMC IMC has provided a consumer-oriented framework for strategic communication processes that drive organizational performance (Schultz and Schultz 2003). The transformation to digital media described here has enormous ramifications for IMC and how it is practiced.

In this section, we describe how digital media are influencing four important elements on IMC – consumer insight, data-driven planning, cross-media integration and communications to multiple stakeholders.

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Consumer insight Sciences advance in accordance with the quality of their metrics. Data made available from digital media are greatly improving consumer understanding. Consumer insight is typically thought of as the qualitative understanding of the motives and behaviors of consumers. As such, consumer insight analysis is conducted with qualitative research methods and consumer surveys. In a digital world, extensive data on consumer behavior and media use provide another avenue for consumer insight. Digital media data represent a complement to existing approaches. Digital media data are unobtrusive and behavioral.

While they do not provide interpretations, they can be used to make inferences about such things as preferences, price-sensitivity and brand choice decisions in situations where privacy concerns enable marketers to track behaviors.

A key challenge for marketing communications has been fully utilizing consumer insight in planning processes. A disconnect frequently occurs between consumer insight research and the planning process – often because there are different people, even different companies, performing those two things. By providing a continuous flow of information about consumers, digital media provide the opportunity for more detailed and continuously monitored consumer insight. In a digital environment, consumer insight becomes not something that is done at a certain point in time – say prior to a major advertising undertaking – but something that is always taking place. This represents a more natural and complete way to process and make adjustments to communication practices.

As a field that prides itself on having consumer insight as a foundation, IMC must accommodate information from digital sources. IMC must develop dynamic analytic systems that turn raw data from digital media into relevant consumer insights. The pairing of such information with the traditional qualitative research provides a level of understanding heretofore unknown in the field. What is required is an integrated approach that leverages this higher form of consumer insight into strategic planning, tactical execution and communication metrics. For example, recent research shows that many consumers engage with multiple media devices at the same time (Pilotta et al. 2004).

Accordingly, the interpretation of those patterns of media use can be used to modify media execution to optimize the presence of a brand in multiple media devices.

Data-driven planning IMC has distinguished itself as a practice that uses evidence-based decision making.

Central to IMC is the use of customer databases as a source of information on actual consumer behavior – in contrast to the over-reliance on attitudinal information typical of traditional approaches to marketing communications.

The presumption in a data-driven approach to marketing communications is that detailed customer databases are available. Over the years, limitations in the availability of customer databases have continued to diminish as exemplified by grocery store frequent shopper databases. The move toward digital media greatly advances the availability of customer data by providing data in real-time. As noted above, digital media provide continuous streams of data that provide an unending flow of information. The availability of such data improves the ability of organizations to implement as follows: . Customer valuation and segmentation – an IMC approach involves assessing the financial value of customers and constructing market segments accordingly. Data from digital media make possible more accurate and more frequent analyses of customer valuation. Traditional ‘batch’ customer valuation studies that take place

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F. Mulhern once or twice a year can be replaced with much more frequent analyses that provide an ongoing tracking of customer valuation. Marketing communications can thus be adjusted on a regular basis to better reach the customers based on their actual and potential purchase behavior. . Customer response analysis – measures of customer response to marketing communications improve with in a digital world. Tracking of communication tactics and their impact bring about the closed loop of direct marketing.

The continuous data in digital media enable ongoing reassessments of spending and adjustments to achieve better efficiency. This will have to be done by analytic systems that capture data and adjust allocations accordingly. Behavioral targeting does this and offers great promise because it drives customization of digital media content and ads. . Market intelligence – data from digital media provide numerous opportunities to understand consumers, competitors and marketplace interactions better than ever.

We are now seeing the development of data mining methods and knowledge management systems that harness information for digital media to build more robust and informative market intelligence. A prominent example is the way Amazon.com uses a recommendation algorithm that analyzes consumer preferences and makes recommendations for future purchases. . Financial models – data from digital media will bring about a major boost in the financial metrics used in marketing. The dominance of measures such as awareness and attitudes will give way to financial metrics such as incremental profit, ROI and customer value. Financial models based on data from digital media can guide media spending decisions far more precisely than the budgeting models used today, which are largely based on mass-media audience metrics.

Data from digital media help IMC move toward greater efficiency and accountability.

This represents a major re-orientation of the practice of marketing toward evidence-based decision making. As such, marketing takes on some of the qualities of other business facets such as operations and distribution where improvements in processes and execution have enhanced business practice. IMC is uniquely positioned to lead marketing through this transition by keeping the focus on consumers and the financial gains firms can achieve harnessing data to drive strategy.

Cross-media integration IMC originated around the idea of connecting objectives and messages across multiple media vehicles. As more and more vehicles become available, connecting across them becomes more challenging. Digital technologies allow for unlimited options in the placement of advertisements. As such, media planning becomes something that planners cannot manage without automation. Media planning software has long provided ways to match ads to demographically defined target markets. Online, advertising serving algorithms provide ways to match ads to topics consumers are searching (search engine marketing) and to web page content. Increasingly, these algorithms will also match ads to individual consumers done with direct marketing models that prioritize households for receiving offers.

From an IMC perspective, the key problem is that algorithms that optimize placements based on search, context or user identity do not ‘integrate’ those placements over time or media formats. Hence, consumers are likely to see bundles of brand messages that do not systematically come together in a coherent way. The challenge remains for academics and

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practitioners in IMC to develop systematic approaches to placing and monitoring brand messages across multiple digital media platforms. Doing so requires formalizing principles of integrated media planning into algorithms that analyze consumer media use.

As a field, IMC has developed many principles that help guide decision making.

However, formalizing them into models represents a much higher level of sophistication.

What is needed is a set of axioms about relevance, exposure, timing, behavioral response and other precepts of media planning. Axioms do exist for many aspects of mass media planning and direct marketing. However, since digital media consumption is new and constantly changing because of technology and usage protocols, axioms are not well developed. By bringing a focus on consumers, media integration and measured outcomes, IMC is in the right position to lead the development of the next generation of media planning tools.

Communications with multiple stakeholders One of the most important distinctions of IMC compared to traditional marketing is the inclusion of multiple stakeholders in communication planning. IMC accommodates internal audiences such as employees, as well as business partners and professionals such as retailers, vendors, franchisees, regulators and reporters. Cross-stakeholder integration incorporates the interests and desires of different stakeholders in the way organizations manage communications.

Digital media affect multiple stakeholders in many ways. Various stakeholders, often with vastly different interests, come to the same corporate websites. Companies must present themselves in ways that are relevant to all stakeholders while providing navigation for each stakeholder to the information of interest. Stakeholders can now talk to each other in ways impossible before. For example, employees can blog to the consuming public or investors. Shareholders can communicate to management more easily.

An integrated approach to communications helps connect and coordinate communications across multiple stakeholders. In some ways, new avenues to communication opened up by digital media challenge existing approaches to interacting with audiences. For example, corporate communication departments typically want to control all communications with news reporters. However, when employees can blog to the public or e-mail reporters, central control is no longer possible. An integrated approach represents that each stakeholder deserves a voice and connectivity across stakeholders can provide opportunities for building communities and strengthening brands.

IMC, having long supported cross-functional planning, provides a perspective that allows organizations to manage and participate in communications with all relevant stakeholders. Here, digital media act to facilitate such cross-functional and crossstakeholder communications by providing platforms and tools – blogs, wikis, social networks – that foster participation. An integrated approach to communicating with multiple stakeholders is far more preferable than the entirely outbound, centrally controlled ways of mass media.

Scholarly research for a digital media world To accommodate a digital world, scholarly research must adopt new approaches to theory and method. Over the last several years there has been some research on consumer behavior in the digital media context. Unfortunately, most of the research about digital media deals with small behavioral questions regarding online behavior (e.g. Ratchford, Talukdar, and Lee 2007). Because of the rapid changes in the Internet, many published

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articles on digital media are outdated before they are printed. For example, Danaher (2007) provides an excellent study of how page views relate to reach and frequency.

The problem is that web software now allows content to change within a given page, more or less obviating a page view as a relevant metric. The main areas of scholarly work that need to change to accommodate digital media are: (1) consumer media use; (2) computational models for advertising allocation; (3) network effects of brand communications; and, most importantly, (4) a theory for marketing with digital media.

We consider each of these in turn.

Consumer media use With traditional media, until recently, media consumption followed fairly straightforward patterns of behavior, and media research concerned itself with the size and composition of audiences. Today, the proliferation of media devices and user controls has made media consumption far more complicated and nuanced. Research is needed to ascertain the ways consumers participate in media to construct their mediated experiences. Of particular interest is the blending of personal and mass media. While mass and direct media, including print and broadcast, have long been commercialized, personal media such as telephone and personal written communications have not. The digitization of personal media as e-mail, wireless phones and instant messaging provides opportunities for advertisers to attach messages to personal communications. This practice will increase substantially in the years ahead as advertisers subsidize wireless communication services now largely financed by customer fees.

The proper way to understand media consumption is from the consumer’s perspective.

Schultz, Pilotta, and Block (2005) show how media research is much more valuable if it adopts a consumer perspective and tracks media use across all platforms. Importantly, research should not approach consumer media use from the narrow view of cognitive psychology that has dominated consumer research for decades. Theoretical approaches are needed to consumer media use that explain how people assemble personal mythologies for themselves and their social groups. Jenkins (2006) describes how consumers participate in communities to vastly extend content and brands beyond what media companies produce.

Sports fantasy teams, Stars Wars conventions and Harry Potter communities exemplify the kinds of phenomena consumers create for themselves and each other, all built on what were originally media experiences.

Such undertakings fall outside existing theories of media production and consumption.

Accordingly, theoretical developments should include both communication content as well as interpersonal connectivity made possible through digital media and social networks.

These developments bring into question exactly what the boundaries of media are. As digital content and advertising expand into digital services, media become far broader than the set of communication channels heretofore controlled by media organizations.

Some existing research addresses consumer construction of media experiences.

Beaudoin (2002) and Beaudoin and Thorson (2003) develop such a theory for newspaper consumption. That approach evaluates the determinants of newspaper readership and the relevance of newspapers in the consumer’s life. Glasser (2000) describes news consumption as play – something undertaken for its own reward. Conceptual approaches to media consumption such as these can provide a starting point for theories of media consumption.

The proliferation of media options now available vies for consumers’ attention.

Lanham (2006) describes how the economic model for allocating scarce resources across

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a set of alternatives gets reversed in today’s media world because of the abundance of low cost media content. The more pressing economic model is the consumer’s allocation of scarce attention across media alternatives. Research is needed to connect the characteristics of media content, including social aspects, to the allocation of consumer attention. An understanding of this can address the emerging paradox between the multitasking practice of people allocating continuous partial attention to multiple media options versus the deeply immersive experiences of video games and online social networks. Immersive environments in particular represent extensions of consumers into digital worlds where information, entertainment, social connectivity, digital services and advertising converge.

Computational advertising The literature in marketing and advertising has had a fairly well-developed stream of work on advertising allocation models (e.g. Little 1970, 1979; Lodish 1975). This literature includes probabilistic models of advertising effectiveness as well as qualitative models for allocating budgets. Separately, an extraordinarily important literature on advertising allocation systems is now developing. It differs from the existing literature in two striking ways: (1) the models are based on data mining and artificial intelligence, not probabilistic statistics: and (2) the models are being developed largely by computer scientists and software engineers, not marketing or advertising academics. For example, research on advertising placement models for digital media is much more evident in electrical engineering journals (Yang et al.

2006).

Yahoo! (2008) has coined the term computational advertising to refer to the software systems that serve ads. They define computational advertising as: a new scientific sub-discipline, at the intersection of information retrieval, machine learning, optimization, and microeconomics. Its central challenge is to find the best ad to present to a user engaged in a given context, such as querying a search engine, reading a web page, watching a movie, and IM-ing.

Anagnostopoulos et al. (2007) provide an algorithm that serves ads based on a tracking of consumer online behavior. This approach is exemplary of the kinds of allocation systems that will dominate advertising placement in digital media. Advertising allocation algorithms are at the heart of what media planning is becoming and they represent the only way that digital media can scale. Scholars in marketing and advertising need to join the developers of these algorithms in computer science and software engineering. While an understanding of how these models work should be part and parcel of advertising scholarship, the models are scarcely mentioned in the traditional academic journals and textbooks.

Research on advertising algorithms needs to be paired closely with the understanding of consumer media use described above. Advertising algorithms, like much of the software behind the web, attempt to mimic how consumers think. For example, algorithms allocate ads based on website content on the presumption that the content of web pages visited reflects the intentions of the user. This practice of mimicking the intentions of the consumer represents a vastly superior approach to modeling consumer behavior than the isolated, controlled experiment approach that prevails in consumer research. The data streams produced by digital media provide an enormous recourse for understanding consumers. Harnessing these data for research will lead to enormous gains in our understanding of consumer behavior.

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Network effects Network effects – the connections among people – are not well understood in marketing.

With mass media, network effects could be ignored because the advertising and media industries could do no better than identify broadly aggregated clusters of consumers.

However, with digital media, network effects are paramount and measurable. Network effects are well represented in economic models. The network effects represent the linkages of buying and selling through multiple parties. For example, a consumer purchase of an automobile yields substantial monies that go into paying for steel, upholstery and component parts. The makers of those parts use their revenues to pay for their raw materials, etc. This is known as the multiplier effect in economics (Auerbach and Kotlikoff 1998). Media and marketing research conceptualize multiplier effects including content sharing, viral marketing and word-of-mouth. While those ideas have been around in the literature for quite some time, the formal models of media planning and the measures of the effects of media communications only minimally include them. The poor representation of multiplier effects for marketing communications stems from a lack of data – a problem that is quickly disappearing in a networked world where communications among consumers can be tracked.

Marketing with digital media – toward a theory The theoretical foundations of most research for marketing communications were developed for mass communications, and are of limited value in providing a proper framework for research on digital media and communications strategy. There is a dire need for a theoretical framework for the emerging world of digital media and digital services that is emerging.

While trying to establish a theoretical foundation is beyond the scope of this paper, we can set forth some characteristics such that a foundation should have: . Demand-based – marketing communications have been about the creation and delivery of messages to consumers; digital media empower consumers to pull and aggregate content to satisfy their needs. . Social – digital media blend information and interpersonal connectivity. A useful theory for marketing with digital media must incorporate social networks and other manifestations on interpersonal relationships. . Interactivity – overly simplistic mass communications models depict senders and receivers of messages. In an interactive, social media landscape, interpersonal connections are more important than information. Theories must incorporate network effects that represent all possible interactions among consumers and between consumers and organizations. . Metrics – the theoretical foundation should support a breadth of metrics that represent the variety of digital media experiences in people’s lives, as well as the value of communication expenditures to organizations.

When television advertising was new, agencies treated it as a separate entity from print and radio. Similarly, until recently, media companies and agencies have regarded digital media as a separate entity, particularly because it required skill sets different from those of print and broadcast. The distinction between online and offline media disappears as digital swallows all other media. We are also witnessing the migration of media from places such as homes, office and trains to people themselves. Personal media devices allow media to travel with consumers. Digital media must be approached as the interaction with

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individual consumers and social clusters, not the management of media channels. As such, digital media, rather than being a manageable set of channels should be viewed as an emerging ecosystem – an interactive web of patterns and connections that seemingly has a life of its own, which can be monitored and participated in, but not entirely managed.

Advertising in such a system becomes a matter of ‘finding the right customer in the vast web of infinite communications’ (Kelly 1994, 201).

The weakening of the control of media content by the major media organizations brings forth an era of a digital, networked world that blends commercial and noncommercial content, digital services of many types and, perhaps most importantly for consumers, interpersonal connectivity. The onus is on scholars and practitioners in marketing and advertising to develop the theories, concepts and methods to allow brands to successfully participate in this world.

Conclusion For marketers, media have long been construed as a set of communication channels through which marketing messages are sent. Within that framework, media institutions are intermediaries that provide access to desired audiences. The economic function of media institutions is producing and packaging bundles of information and entertainment that attract audiences for advertisers. In a digital era, the viewpoint of media as communications channels cannot be sustained. One reason is that there are too many communication channels now available for any media planner to effectively allocate communications across them. More importantly, the media-as-channels framework fails to incorporate several of the dimensions described in this paper. These include: . The evolution of media beyond information and entertainment to include other digital services and experiences. . The ability of organizations of all types to communicate directly with consumers and other stakeholders, without the need for traditional media organizations. . The networking of communications among audience members and the ability of people to exchange information directly with each other. . The availability of continuous streams of data about consumer purchase and media use behaviors. . The expansion of mediated experiences beyond what media companies generate and control. . The replacement of outbound media channels with multi-dimensional communication networks. . The blending of commercial and noncommercial content – not just branded entertainment but the inclusion of noncommercial information in ads.

As more aspects of everyday life converge toward digital, opportunities for organizations to interact with consumers expand dramatically. What we have known as media broadens to potentially include any digital experience – using a mobile phone, playing a video game, walking past electronic billboards, even programming one’s microwave.

As commercial messages spread into all things digital, organizations can communicate with people in vastly more ways than those typically thought of as media. It remains for academics and practitioners to establish theories, concepts and methods that organize the digital landscape into a hyper-media ecosystem that subsumes traditional brand communications into a networked world of instantaneous and archived information.

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Notes on contributor Frank Mulhern is Professor and Associate Dean for Research, Medill School, Northwestern University, Illinois.

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