Allocating Media Resources in

a Push and Pull Marketplace Allocating Media Resources in a Push and Pull Marketplace

Don E. Schultz and Martin P. BlockNorthwestern University

DMEF Direct/Interactive Marketing Research Summit

San Diego 18 October, 2009

Media Allocation Used to be Easy

Media Allocation Used to be Easy

Marketer Customer/Prospect

Agency → Media → Retailers

Messages and Incentives

Unique Products/Offers

Efficient Delivery Was Always the Answer

Today’s “Push” and “Pull” Communication System Today’s “Push” and “Pull” Communication System

Marketer Customer/ Prospects

Agency → Media → Retailers

Competitors

Competitors

Competitors

Competitors

Messages and Incentives

Commoditized Products/Services

Word-of-Mouth New Forms of Media

Web Search

Em

plo

yees

/Rec

om

men

der

s/F

rien

ds

/Infl

uen

cers

Allocation Based on Message Distribution Doesn’t Work

Allocation Based on Message Distribution Doesn’t Work

Response

Media Exposure

Media Exposure

Media Exposure

MediaConsumer

Potential SynergyVia Simultaneous Media Usage

(Messages Reinforced)

Potential Fragmentation Of Attention

(Message Impact Diluted)

Foreground/Background Media

Time Allocated To Each Media Form

Media Consumption Measures Are Needed

Media Consumption Measures Are Needed

Schultz and Pilotta, ESOMAR, 2004

Questions Media Consumption Raises

Questions Media Consumption Raises

How Do Online and Offline Intersect and Combine at the Customer Level? What media forms do customers use in combination?

What media forms do customers use simultaneously?

Is there synergy among and between online and offline?

If so, how can we measure the combinations?

Who does the planning and allocation in a push and pull marketplace?

Simultaneous Media Studies (SIMM) – BIGresearch

Simultaneous Media Studies (SIMM) – BIGresearch

A method of understanding how consumers use and consume media today and the impact it has on them

Methodology Conducted twice per year in the USA since 2002. China since 2006 14 separate waves (15th in analysis now) 200,000+ individual responses (17,000 more in Wave 15) Drawn from on-line interactive base of 60 million individuals Double opt-in methodology Captures media usage, retailer preference, influence of media, past and

future purchases, etc. Includes 31 media forms – online and offline Accuracy of .01 level Benchmarked to non-online studies Weighting/balancing of 14 US Census 2000 age-sex cells

Testing in Mexico and other countries

Four Critical Measures in Media Consumption

Four Critical Measures in Media Consumption

What media form is accessed

Amount of time spent with each media form

Media combinations – what media used together and simultaneously

Which media form has the greatest influence on product purchase

How Much Time Consumers Spend With Each Media Form

How Much Time Consumers Spend With Each Media Form

Avg Minutes per Day

Email 131.3

TV 129.6

Internet 127.5

Radio 93.5

Direct 56.3

Magazines 49.1

Newspaper 44.8

IM 40.8

Games 36.6

Satellite 22.0

Web Radio 14.4

Blog 11.7

Measures #1 and 2

First Quarter, 2008, BIGresearch

More Important: the Media Forms People Use

Together…

Their Media Combinations

More Important: the Media Forms People Use

Together…

Their Media Combinations

US Media Combinations US Media Combinations Primary Medium (When …,do you simultaneously ….)

(Regularly only)

1st Quarter, 2008 – BIGresearch

Online TV Maga-zines

News-papers

Direct Mail

Cell Phone

Radio

Online 26.2 6.1 8.1 9.9 13.9 17.1

TV 37.5 20.2 24.1 21.4 14.9 8.0

Magazines 7.0 10.3 5.0 8.3

Newspaper 10.3 11.6 4.7 11.3

Direct Mail 21.0 14.2 6.7 10.7

Radio 21.7 3.8 11.8 12.6 12.2 11.7

Measure #3

Media Combinations Are What Create Media Synergy…

The Biggest Challenge in Media Planning Today!

Media Combinations Are What Create Media Synergy…

The Biggest Challenge in Media Planning Today!

Influence Media Form Has on Consumer Purchase Decisions Influence Media Form Has on

Consumer Purchase Decisions % Influence

Word-of-Mouth 36.2

Coupons 28.4

Inserts 21.5

TV 20.8

Newspapers 20.0

Read Article 19.8

In-Store 19.6

Direct 19.1

Magazines 17.0

Cable 13.6

% Influence

Radio 13.1

Internet 12.3

Email 11.7

Outdoor 7.2

Yellow Pages 7.0

Blog 3.1

Satellite 3.1

IM 2.9

Web Radio 2.7

Picture Phone 2.2

*Across 8 product categories, Apparel/Clothing, Automobile, Eating Out, Electronics, Grocery, Home Improvement, Medicines, and Telecom/Wireless

1st Quarter, 2008 – BIGresearch, Inc.

Measure #4

Using Those Four Measures, We’ve Developed Predictive Media

Models…

Using Those Four Measures, We’ve Developed Predictive Media

Models…

An Example, In the Computer Category, What Media Forms

Do Consumers Prefer?

An Example, In the Computer Category, What Media Forms

Do Consumers Prefer? Do you plan to make any of the following

major purchases within the next 6 months?

Example: Computer

No 84.81%

Yes 15.19%

Total 100.00%

First Quarter, 2008 – BIGresearch

What Would Be the Best Media Combination to Reach These

Intended Computer Purchasers?

What Would Be the Best Media Combination to Reach These

Intended Computer Purchasers?

Purchase Intent and Media Influence Purchase Intent and Media Influence Do you plan to make a computer purchase within the next 6 months by Media Influence

No Yes Total

Coupons 26.8 31.0 27.4

Inserts 20.6 25.0 21.3

Newspapers 19.8 24.7 20.5

TV 19.2 26.8 20.3

In-Store 18.3 23.3 19.1

Direct 18.2 23.1 18.9

Magazines 15.6 22.7 16.7

Cable 12.3 19.3 13.3

Radio 11.7 18.5 12.7

Internet 10.6 19.3 11.9

Email 10.4 16.8 11.4

Yellow Pages 6.5 10.5 7.1

Outdoor 6.3 11.0 7.0

First Quarter, 2008, BIGresearch

Pruned CHAID TreePlan to Buy a Computer by Categories of Media

Influence

Pruned CHAID TreePlan to Buy a Computer by Categories of Media

Influence

15.19%(100.0%)

11.2%(60.9%)

17.6%(18.8%)

23.3%(21.1%)

14.9%(17.9%)

17.7%(6.4%)

19.6%(12.6%)

15.2%(4.7%)

22.2%(7.9%)

20.9%(12.1%)

26.6%(9.0%)

20.6%(3.0%)

29.5%(6.05)

No Internet Low Internet High Internet

Some Radio

Some Email

Some Email

No Cable Some Cable

Low Magazine High Magazine

Low Email High Email

Total Plan to Buy Computer

In the Increasingly Complex Push and Pull Media Marketplace, Media

Consumption Is the Key Element

In the Increasingly Complex Push and Pull Media Marketplace, Media

Consumption Is the Key Element

We’re Working on Media Synergy

We’re Working on Media Synergy

Media Synergy Comes of Age – Part 1Journal of Direct, Data and Digital Marketing Practice

Don E. Schultz, Martin Block, and Kalyan Raman Volume 11, Number 1, July – September 2009

Media Synergy… Revisited… and now, Relevant - Part 2

Journal of Direct, Data and Digital Marketing Practice

Don E. Schultz, Martin Block, and Kalyan Raman Forthcoming

Questions or Comments?Questions or Comments?