Digital, Interactivity and IMC: How They All Fit Together Don

Digital, Interactivity and IMC: How They All Fit Together Don Schultz, Ph.D. Professor Emeritus-in-Service Medill Integrated Marketing Communications Dept. Northwestern University Izmir University 21 April, 2015

A Natural Question: What Is Medill IMC? Part of the School of Journalism, Media and Integrated Marketing Communications at Northwestern University (near Chicago) Over 650 graduate and undergraduate students enrolled 300 undergrads in a certificate program 200 graduate students – full and part-time 150 online graduate students

Other Affiliated Units Applied Neuromarketing Consortium – interdisciplinary research center Retail Analytics Council – research on intersection of online and offline retailing Omni-Channel Initiative – using software to identify, understand and communicate with consumers Spiegel Research Center – cooperative research with industry to improve marketing results

What We Teach Marketing Marketing Mgmt Mgmt Content Content Mgmt Mgmt Data Data Analytics Analytics Brands/ Brands/ Branding Branding Financial Financial Analysis Analysis Core CoreIMC IMC Concepts Concepts Consumer Consumer Insights Insights Media Media Mgmt Mgmt Data Data Platforms Platforms Market Market Research Research Comm Comm Strategy Strategy

We’re a Group of Hybrid Generalists, In an Increasingly Specialized World

One Overriding Theme: Everything Starts With the Consumer/Customer!

Our Curriculum Continues to Expand, Evolve and Change as the Marketplace, Consumers and Technology Develop

A More Scientific, Than Intuitive Approach to Marketing Communications

Moving Beyond the “Mad Men” Era

Conversation/Discussion

How Did IMC Get Started and Why?

Formal Study Began at Northwestern in 1902 . But, With Advertising A study of the innate behavior of the species

Our Historical Roots Advertising – Walter Dill Scott – psychology professor -published “The Theory of Advertising”, 1903 – later became Northwestern President Advertising taught at NU since 1905 – a major in the School of Commerce Marketing came later – 1910 – as a concept, not an activity

Early 1900s to World War Years Advertising Moved from Building Basic Demand to Brands and Branding

Advertising: 1940s-1970s Foundations of today’s advertising practice developed Mass communication/media Retailing and distribution Brand management Agency structures Consumers as “targets”

In the 1980s, Many Factors Impacted the Field Advertising .from art to science . computing and digitalization Shift of client spending .from media to sales promotion, direct marketing and PR Agency consolidation Growth of MBA-trained business managers Industry structures .functional silos

We Got “Disrupted” Out of Our Advertising Niche We Couldn’t “Remodel”, So, We Had to “Re-Invent”

We Crossed the Chasm “What We Do” “What Customers Want”

Our First Response to the Changes

The Subtitle Says It All: “Pulling It Together and Making It Work” Inside-out only – still, what we want to do Focused on four major elements: advertising, sales promotion, direct marketing and public relations – align and coordinate these elements Create “one sight and one sound for the brand” Build practical values for marketers (reduced waste) – generate assumed values for consumers (easier to understand the brand) All before “Interactivity” was even available

That Was “New” to Many Marketers, and, Certainly New to Traditional, Specialized Agencies and Media Firms

The 1990s Produced “Newer” Versions of IMC Growth and availability of consumer and retailer data and analytics - digitalization Increased focus on customers and insights – outside-in approaches Move toward a “technology base” for marketing and communication” – rise of databases and CRM Increasing emphasis on measurement and ROI Globalization and internationalization driven by emerging markets

We Defined It as IMC: The Next Generation

Built Around This Definition . “Integrated Marketing Communication is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, shared marketing communication programs over time with consumers, customers, prospects, employees and other relevant external and internal audiences. The goal is to generate both short-term financial returns and build long-term brand and shareholder value.” Schultz and Schultz (2014)

And, This 5-Step Integrated Marketing Communication Process 1. Customer Identification From Behavioral Data 5. Budgeting, Allocation, Evaluation & Recycling IMC 4. Estimating Returnon-Customer- Investment 2. Valuation of Customers/ Prospects 3. Creating & Delivering Messages & Incentives

Emphasis Was on Strategic, outside-in approaches to marketing and communication development Building communication processes – replicable, forward-looking approaches Focus on measurement and accountability Moving communication up in the corporate hierarchy – expand planning

That Was the “Newer” Stage

IMC Continues to Evolve, But, Based on Some Key Principles That Have Emerged

The Key IMC Concepts Customer Focus Stakeholders Interactive Communications Message Consistency Brand Focus Synergy Reciprocity Continuous Planning Relationships Moriarty and Schultz, 2010 Financial Investments and Returns Contact Points Cross-Functional Management

Discussion/Conversation

Everything Was Wonderful! Then, 1994 Digital and “The Internet” Technology Changed the Marketing World . Forever!

Information Technology Gave Consumers Control Internet – WiFi Mobile Telephony Consumer iPods/MP3 -- podcasts Social Networks Cable/satellite Blocking Systems - TIVO/DVRs/ Filters/Pop-up Blockers/etc.

Consumers Are Now Armed with Two Powerful Tools Pictures and Voices

And, Much of It Is on “The Cloud” Okazaki, Shintaro “Fundamentals of Mobile Marketing: Theories and Practices”

So, We’re Reinventing Ourselves .Again!

Starting with This: Consumers Inhabit a Multi-Dimensional World They are continually and consistently changing Trying to hold them static is useless Yesterday and curated data are irrelevant factors

But, Marketers Have Created A Linear World . Like Legos

Consumers Live in a Multi-Dimensional World Like Tinker-Toys

Our Present Tools and Techniques Just Don’t Fit . and Worse, They Often Don’t Work!

So, Most Outbound Communication “Push” Models Are Out of Date and Irrelevant

Employees/Recommenders/Friends/Influencers The World Marketers Still Try to Control Web Search Competitors Competitors Media Sales Force Agency Products and Services Marketer Messages and Incentives Competitors Word-of-Mouth Competitor s New Forms of Media Customers/ Prospects

Ignoring Consumer Demand for “Real-Time” Responses

What to Do?

Discussion/Conversation

What’s Needed?

1. New Business Models

Traditional 4Ps Supply-Chain Model Final Packaging Assembly Batch/line/Continuous process Raw material Suppliers Distributors Distributors Agents & Agents & Brokers Brokers Retailers Retailers Manufacturer Customers/End Users

Start With Customers to be Served, Not Products or Services to be Sold!

Wants/ Needs/ Desires Recognized/ Unrecognized Appropriateness of Solution Knowledge of Solution Value/Sacrifice to Obtain Access to Solution Market Planning Solution Seeking: Considerations Customer-Driven Demand-Chain Model Marketing/ Marketing/ Sales Sales Production R&D Admin Customers/End Users Intermediaries

2. New Communication Models

Abandon Western Psychological/Attitudinal Approaches Marketing Communication One-Way Attitudes/ Knowledge Preference Awareness Conviction Purchase Behavior Linear “Influencing and Persuading Consumers” Source: Adapted from Lavidge and Steiner

Recognize Communication Is Networked, Dynamic and Non-Linear

Remember Our Multi-Dimensional Example

In a Networked World, Behavioral Measures of Customer Performance Customer income flows Then, re-invested to retain present customers and gain new ones Aggregated into customer value Tracked and measured over time Customers treated as investments and returns

3. New Organizational Models

Most Organizations Are Still Based on “Command and Control” Lines and Boxes

Organizational Silos That Ignore Customers and Prospects CEO CEO Marketing Marketing Marketing Marketing Sales Sales Sales Sales Human Country C IT/Digital Human Region X Operations Resources Country C IT/Digital Region X Operations Resources Source: Adapted from Cranfield School of Management

Needed: Horizontal Planning Processes That Focus on the Customer CEO CEO Finance Sales Information Technology Strategy Development Process Strategy Development Process Value Creation Process Value Creation Process Channel Management Process Channel Management Process Information Management Process Information Management Process Performance Management Process Performance Management Process Source: Adapted from Cranfield University Operations Customers Customers Marketing

Where We’re Headed

Planning in Real Time Network #1: Customers Network #5: Communication Delivery Network #2: Data Network #3: Analytics Network #4: Marketing Planning

Using a Consumer-Focused Response Model S I V A Solution(s) – Customer Pain Relief Information – Sorted and Supplied Values – Input and Outcomes Access – Client’s Where and When

That’s Where We’ve Been, Where We Are Now, and Where We’re Headed

I’ll be Here All This Week, Let Me Know If You’d Like to Discuss This Further

If you want to chat, contact me at Don E. Schultz Ph.D. [email protected]