A CASE STUDYMARK PENDOLINO INTERACTIVE MEDIA MARKETING A Look at the new Commercial Movement

A CASE STUDY MARK PENDOLINO

INTERACTIVE MEDIA

MARKETING A Look at the new Commercial Movement


AGENDA •Introduction / Background

•Definitions

•Online Advertising Resurgence

•Burger King’s New Creative

•Interactive Media Effectiveness

•McLuhan & Marketing

•What to Expect

Interactive Media Marketing

3

Introduction / Background

Definitions

Online Advertising Resurgence

Burger King’s New Creative

Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Interactive Media Theories & Practices

Interactive Media Huge potential for growth and adaptation Seen as new “tool” by commerce

– Engage the customer in one-on-one conversation

– Create a sense of loyalty, connection and intrigue,

– Track consumers’ behaviors

Interactivity generates new “branding” opportunities– Enables greater awareness through ubiquity

– Word of mouth factor

– Creates “relationship” between business and consumer

Can exist outside the Web– Tivo teaming with advertisers


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Interactive Media Responsibility and possibilities belong to

advertisers– Interactivity in advertising more about effect of

experience than content

– Marketers are communicators

– Need to study effects and effectiveness of new tool

– Media can obstruct as well as enable communication

– Need to understand the medium and its social impacts~ Media powerfully reshapes social cultures


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Marketing Definitions“Interactive Marketing” A dynamic collaborative process of creating, purchasing,

and improving products and services that builds close relationships between a business and its customers, using a variety of services

“Integrated Marketing” an approach based on the consistent and systematic

strategic creation and delivery of marketing messages and materials

“Viral Marketing” Marketing phenomenon that facilitates and encourages

people to pass along a marketing message

“Rich Media” New media that offers an enhanced experience relative to

older, mainstream formats


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Online Advertising StatisticsInternet advertising on the rise (again) $2.37 billion in online ad sales revenues for the

2nd quarter of 2004 7th consecutive quarterly revenue increase since

the fourth quarter of 2002 3rd consecutive record-setting quarter of growth.


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

As broadband begins to reach critical mass in the home we think the number of traditional consumer brand advertisers will further increase as it provides a better platform for more compelling media ads and video formats

– Tom Hyland, Partner, PricewaterhouseCoopers LLP

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Online Advertising StatisticsAd Sales Revenues:


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

*Source: Interactive Advertising Bureau (IAB) Internet Advertising Revenue Report, 2nd Qtr 2004

Conducted by Price Waterhouse Coopers

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Online Advertising StatisticsAd Sales Revenues:


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect



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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Online Advertising Statistics Spending Split:


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect



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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


“Rich Media” Usage


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Comprises 43% of all ads served– Up 12% from 2003; 26% from 2002

Click-through rates five times higher than non-rich media (non-rich media defined as GIF/JPGs, banner ads, etc.)– Stable after heavy decline in past year

Ad spending up nearly 37% in 2004; growth rates of 25% projected for next three years

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


“Rich Media” Statistics


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Total ads served:

31.7%

36.6%39.7%

42.8% 42.7% 42.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04

*Source: Ad Serving Trend Report DoubleClick Q3 2004; November 2004

Conducted by doubleclick.com

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


“Rich Media” Statistics


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Click-through rates:

1.57%

1.24%

0.98%

1.17% 1.17%

1.87%

0.20%0.23%0.25%0.27%0.29%0.34%

0.00%

0.50%

1.00%

1.50%

2.00%

Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04

*Source: Ad Serving Trend Report DoubleClick Q3 2004; November 2004

Conducted by doubleclick.com

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Burger King’s Advertising Changes Steady decline of sales led to change of ad

agency partner– Fired: Young & Rubicam

– Hired: Crispin, Porter & Bogusky

Wanted to move back to “have it your way” theme

Create greater brand awareness and image Focus efforts on target group: elusive 18-34

year-old males– Difficulty reaching people over web prompted desire

for innovation in advertising


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Innovative Campaigns Edgy, innovative campaigns:

– All embody efforts to fully use interactivity, integration and viral marketing


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Innovative Campaigns


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

subserviantchicken.com angusdiet.com

chickenfight.comhaveityourway.com

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Campaign Effects Positive and negative –

but gaining attention– Uniqueness, edginess

draws attention from industry world

– 10 days after subservientchicken went live: ~ Google provided 700 links

to sites discussing

~ Site received over 20 million hits

– Company reports 9-month same-store sales growth (October, 2004 up 6.9%)


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

It even spurred mock satire

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Campaign Interactivity & Objectives Chickenfight.com

– Interactivity~ Encouraged people to play games, post high scores, email

friends, etc.

~ Over 5 million users cast votes for favorite chicken

– Integration~ Tied in with Television (DirecTV), email, streaming media

– Branding~ Generate branding image and viral marketing (buzz)


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Mass customization is what’s in right now.

– Rob Doughty, Burger King Spokesman

We’re trying to give people something to talk about.

– Jeff Benjamin, Crispin, Porter & Bogusky Interactive Creative Director

Campaign Interactivity & Objectives


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

It is advertising, albeit the first of its kind…It may be a little silly and little questionable in taste…(but) we give them credit for it.

– Bob Marsocci, DirecTV Spokesman

This is a target audience that requires high entertainment value in the way you connect with them.

– Russ Klein, Burger King Chief Marketing Officer

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


Rich Media vs. Non-Rich MediaStudies reflect lasting impressions Consumer study:

– Rich media provides message association lift of 44% (non-rich media at 21%)

Advertiser survey:– Interactive ads increased message association 37%

Post-impression activities 60% higher Flash ad impressions reached 4.8 billion in Feb.

2004


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


IAB FindingsInteractive Advertising Bureau study results


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Key Issues Methodology Key Conclusions

User Acceptance

• Lab studies

• Live testing

• Web surveys

• When consumers have more control, they are more acceptant to advertising

• Audio initiation must be user initiated, except where content dictates otherwise

Ad Effectiveness

• Historical analysis

• Ad effectiveness research

• Rich media very effective for branding goals

• Rich media especially good at moving purchase intent

*Sources: Microsoft/MSN Usability Research, 2004Dynamic Logic, 2003 & 2004

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


McLuhan & MarketingMcLuhan’s Communication theories apply Media conventions (not

information) is what’s important– They affect habits of perception and

thinking, not just deliver content

– Important to understand total effect of the message (not just the content)


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

Medium is the Message

(Content) of the medium is like the juicy piece of meat carried by the burglar to distract the watchdog of the mind.

– Herbert Marshall McLuhan, 1964

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


McLuhan & Marketing Considered advertising as one of the great art

forms of the age– Argued that advertisers knew instinctively that their

job was not to convey an idea, but to achieve an effect

– Understood power of the consumer:~ The best way to oppose something was to understand it,

“then you know where to turn off the buttons”

– Contended that marketers must think more deeply about what they are doing

Believed marketers need to develop more participatory communication systems than persuasive promotional messages


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


What to ExpectInteractive Media marketing will increase Analyst studies of ad technology:

– By 2007, rich media will gain 22% of market share over conventional ads

– By 2008, 39% of all online ad revenue will come from rich media

More consumers will favor Internet over TV– Consumer study: choose only two media outlets:

~ 45.6% chose the Internet; 34.6% TV

~ Trend to continue: among 18-24 year-olds, 50.5% chose Internet

– Consumer study: which medium used for entertainment?~ 74% indicate Internet; approaching TV levels (86%)


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect

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Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


ConclusionInteractive Media effective and innovative in marketing & advertising Empowers consumer Generates message retention Innovative in charge for new marketing integration

(Burger King) Marketers must be cautious and responsible

about effects and impacts of new media tool Control to audience increases in the future


Definitions



Interactive Media

Effectiveness

McLuhan & Marketing

What to Expect


INTERACTIVE MEDIA

MARKETING

Documents

A CASE STUDYMARK PENDOLINO INTERACTIVE MEDIA MARKETING A Look at the new Commercial Movement