Media Marketing and Journalists - Term Paper Example

Report on Media Marketing and Journalists Introduction The marketing concept and marketing management philosophy are merely outward manifestations of a basic and important development in marketing. In the past decade, marketing executives have adopted a new perspective. Embracing a systems perspective, they tend to see marketing operations as complete systems. Marketing management is responsible for designing and directing a total system of marketing action to achieve predetermined objectives. Media marketing can be described as collections of entities that form coherent groups. Channels of distribution that coordinate the activities of wholesalers, retailers, and manufacturers, or physical distribution activities resulting from the integration of warehousing, storage, transportation, handling, and inventory activities, are examples of marketing systems. The fact that entities or activities are capable of being understood as a coherent group, rather than as a collection of parts, makes them a system. This conceptual insight has led to the development of new disciplines such as industrial dynamics and systems engineering. History of Media Marketing The core of media marketing is interactive dialogue. The primary task is that of dialogue facilitation. This is the classic goal in relationship marketing, and a customer database enables a marketer to mass customize such dialogue with mass audiences. These online communities--or "destination sites," as they are called at the time--evolved through the integration of various Internet marketing techniques into extended websites (Smith, 2002). By 1997 and 1998, when they became known as "portals," most had adopted and absorbed Web-driven direct response to accelerate the expansion of their installed bases (e.g., Microsofts acquisition of Hotmail, America Onlines purchase of Mirabilis and its ICQ, Yahoos buy of the online game and sweepstake powerhouse Yoyodyne, etc.). Certain models of electronic commerce were reminiscent of high-traffic portals (e.g., Amazon.com, E*Trade, etc.), but their focus on transactions went far beyond the modified broadcast ad model--and gave rise to new kinds of auction companies (e.g., Price.com, eBay, etc.), which some observers saw as precedents of online category killers. These online communities--or " destination sites," as they were called at the time--evolved through the integration of various Internet marketing techniques into extended websites (Smith, 2002). By 1997 and 1998, when they became known as "portals," most had adopted and absorbed Web-driven direct response to accelerate the expansion of their installed bases (e.g., Microsofts acquisition of Hotmail, America Onlines purchase of Mirabilis and its ICQ, Yahoos buy of the online game and sweepstake powerhouse Yoyodyne, etc.). Certain models of electronic commerce were reminiscent of high-traffic portals (e.g., Amazon.com, E*Trade, etc.), but their focus on transactions went far beyond the modified broadcast ad model--and gave rise to new kinds of auction companies (e.g., Price.com, eBay, etc.), which some observers saw as precedents of online category killers (Brill, 2001). Media Marketing Defined and Explained Media marketing is a new concept involving an online community which helps customers to communicate and exchange information about a particular brand. Online communities strove to maintain a thematic consistency with the Web publishers content while allowing the advertiser to familiarize the visitor with the brand. The idea is not to draw the visitor away from the editorial site to the advertisers corporate site; rather, it is to augment the editorial content with advertising content (Smith, 2002). At best, the de facto strategic partnership allow both to realize their objectives (journalism, brand-building/online sales); at worst, the joint pages compromise objectivity in journalism, led to incongruities between editorial and ad content, or permitted editorials that might be considered harmful from the standpoint of the brand. Reflecting a more general concept, this "online community" of professionals offer a targeted demographic, which create a compelling market for advertisers in the industry (medical field). It is an intriguing Web model providing a precedent for many other trade and industry associations that harbor both profit-oriented and nonprofit objectives (Brill, 2001). Unlike longer-term sponsored or branded content, event promotions are short-term arrangements, typically a few weeks, highlighting a special offer, contest, or event. They require a closer integration of publisher and advertiser content. Serving the goals of short-term campaigns, they sought great visibility. With the emergence of pay-per-view cable, for instance, the media and entertainment industry has tried to sell the attractiveness of the delivery channel with high-profile, big-name PPV events, including rock concerts, professional wrestling, prize fights, movie premieres, and Broadway shows (Smith, 2002). This success and others of similar kind have a significant function in the history of the Internet adoption. It inspires other companies to exploit event promotion to sell products and services, and the Internet to the Americans. In growth markets, success breeds success. But it is event and cross-promotion that often serves to make the success real. Today, many forms try to create and exploit new and pure online brands. But they soon get a bitter lesson on the complexity of building strong brands on the Internet. Until the emergence of the push services, Internet advertising is widely perceived as synonymous with online advertising. What is truly subversive in the rapid growth of the push providers is the fact that they offered offline advertising for tailored information delivery (Chan-Olmsted, 2002). With the immediate sales impact of many successful campaigns, however, product placement can be situated along more traditional sales promotion tactics, such as coupons, sampling, and sweepstakes. Having first familiarized advertisers and Web publishers with sponsored content, HotWired also took it further by rolling out "microsites" sponsored by its advertisers. Less intrusive than banners, sponsored sites attracted many advertisers who hoped the users would associate the content with the advertisers company, product, or service. One of the earliest examples was HotWireds site called Dream Jobs, which was sponsored by Dockers. Designed to promote the idea that, in ones dream job, one could wear Dockers at work, the microsite exploited lifestyle marketing. Many microsites expanded the advertorials to multiple ad/ content pages and were reminiscent of special ad supplements to magazines and newspapers (Fill, 2001). Advertorials could be considered specific instances of sponsored content. They also blur the line between ad and editorial content on the Web. Originating in print journalism, they are usually isolated as paid advertisements (e.g., distinct font, surrounding border, "Paid Advertisement" label, and so on). Unlike web publishing, however, newspaper industry has long been a mature industry. Small Web publishers stretch boundaries to survive, but entrench media companies are quick to follow them. As advertising designed to blend with editorials, advertorials are more akin to infomercials and would, in the long term, fulfill a somewhat identical role as direct sale instruments (Fill, 2001). As a vehicle of Internet advertising, a portal sponsorship, or portal (not to be confused with a portal site), represent one of the murkiest categories of sponsorship. As a hybrid, a portal has a dual function: it is an arrangement in which one site agreed to integrate the content of another site as a service to users and a branding value to the content provider. Problems and Issues Discussed in Academic Literature The main problems identified in academic literature are relationships between offline and online marketing and promotions. Smith (2002) states that after the mid- 1990s, the emergence of the Internet media and the consolidation of interactive ad agency business coincided; the two went hand in hand. To increase profitability, the market leaders had to be able to raise entry barriers and switching costs. In order to raise entry barriers and switching costs, they engaged in waves of M&A activities. In the process, the stronger companies grew stronger, the smaller focused on niche markets, and the fragile ones were restructured, sliced in pieces, sold off, or liquidated (Fill, 2001). Paley (2006) and McDonald and Christopher (2003) identify that product placements are just another of the many tools that marketers can use to enhance the visibility of a brand and support the advertising process. Often referred to as brand placement, product placement was long considered a means to brand exposure. Marketers and advertisers thought product placements affected only consumers perceptions of a brand (i.e., attitudinal rather than behavioral factors). With the immediate sales impact of many successful campaigns, however, product placement can be situated along more traditional sales promotion tactics, such as coupons, sampling, and sweepstakes. Unlike longer-term sponsored or branded content, event promotions are short-term arrangements, typically a few weeks, highlighting a special offer, contest, or event. They require a closer integration of publisher and advertiser content (Khalil et al 1999). In each case, the one-to-one marketer is not, strictly speaking, engaging in something entirely new, but building on the past historical concepts and knowledge. While identification of customers requires mass marketing, customer differentiation would be impossible without segmentation techniques. Kitchen (1999) explains that while customer interaction presumes the use of direct marketing technologies, customization would not be cost-effective without the use of web-driven marketing techniques. This historical zigzag-from mass marketing to niche marketing to loyalty marketing to one-toone marketing--is predicated on technology evolution which, in turn, has made possible the use of certain dominant (media) advertising and promotion approaches (Kitchen, 1999). Following Chan-Olmsted (2002) media communication may essentially reinforce rather than change consumer attitudes and opinions. Such forces as group norms; interpersonal relations; the perception, retention, and selective exposure of individuals; and the impact of opinion leaders, are extremely influential. Individuals tend to reinforce their existing positions by selecting communications items that cohere with previous stances and by filtering out conflicting information. As a result, the greater the disparity between a communicators claims and the communicatees predispositions, the greater is the change in attitude required and the less likely is the message to be effective. The nature of advertising tasks is indicated by the decisions that must be made: the amount of money to be spent on advertising, the allocation of the budget among classes of media, the specific media to be selected within each class, the frequency and continuity of ads, the makeup of the specific messages to be presented, and the kinds and amount of advertising research (Kitchen, 1999). These are difficult decisions to make. For instance, management is faced with the decision of whether to advertise in markets where sales are high or low. Absolute decision guides are lacking, but fragmentary information may exist. For some agricultural products, for example, experiments indicate that sales increased significantly more in those areas where sales volume was already highest Practical Investigations and Problems As leading media and telecommunications giants eventually began to. understand the crucial driver role of the portals in the Internet mass traffic, they realized they could no longer remain bystanders. Media giants could strike deals to guide more traffic to their Web outposts, and telecommunications giants could use the online world as a marketing lever for their other products. As consumers were increasingly annoyed with the proliferation of advertising messages and the ensuing "noise," a consumer backlash was perceived as a real possibility. Yet, AOLs growth strategy left few alternatives (Chan-Olmsted, 2002). The strategic decision came at a time when the company desperately needed new sources of revenue. Insofar as advertisers were concerned, AOLs pricing decisions did not make their experiments any easier. To provide highly focused targeting opportunities, AOL made use of its new demographic ad server. It allowed marketers to target ads with precision by matching users personal information with data from offline direct marketing companies such as Polk and MetroMail. The process could reveal more than 200 variables about an individual that could be layered to paint rich consumer portraits. For instance, a car company could direct an ad at 40-year-old males with $100,000-plus incomes who havent purchased a car in the last five years (McDonald and Christopher 2003). Despite debates over privacy issues, it seemed inevitable that, in one form or another, targeting had come to stay. AOL built its brand name through a broad array of programs and strategies, including broadcast advertising campaigns, direct mail, magazine inserts, and increasingly from co-marketing, cross-promotion, and bundling agreements. It entered into co-marketing agreements with its media partners and with affinity groups and associations to market directly to and cater to the needs of specific audiences (Chan-Olmsted, 2002). It pursued cross-promotional opportunities through expanding existing, and establishing new, partnerships. Examples included agreements with ABC Sports, CBS SportsLine, CUC International, Tel-Save Holdings, and 1-800-Flowers that allowed the company and its partners to jointly market, promote, and advertise their products and services. Additionally, AOL had been preinstalled on nearly all leading PCs for the consumer market, and could be accessed through an icon on the Windows 95 and Apple Macintosh desktops and through ISPs such as the AT&T WorldNet service. AOLs marketing strategy was expected to place a greater emphasis on these cost-effective bundling agreements. Although the company would continue to market its products via direct mail programs, such programs were expected to be more cost-efficient, as they will be directed to more narrowly targeted consumer groups (McDonald and Christopher 2003). The main particle problem is a highly distributed medium, with highly segmented audiences. Consequently, advertisers could not acknowledge single and distinct websites as the exclusive or ultimate drivers of the new industry. If the Internets competitive advantages lay in network economies and interactivity, advertisers would have to find ways to exploit both. DoubleClick was one of the pioneering companies to provide a viable business model on how to accomplish both objectives. It demonstrated how to achieve the kind of frequency and reach that mass marketers required for their brands (McDonald and Christopher 2003). It assisted micromarketers to implement the kind of interactive one-to-one marketing that they required for their brands. In both cases, DoubleClick had to question, rethink, and reformulate the traditional industry wisdom on the development of new brands or building and extending old ones (Paley, 2006). Relying on the procedures and discoveries of DoubleClick and other pioneering Web agencies, advertisers, and Web publishers, Forrester Research sought to deduce proactively the new advertising practices (i.e., as and even before they would emerge on the Web). Like distinct content providers, these networks would package the Webs dispersed content and traffic for advertisers. From the advertisers standpoint, however, the two were not of equal practical significance. Compared with single content sites, networks had important strategic strengths, or network economies. Individual sites could not afford the direct salespeople required to pitch agencies and clients, whereas networks could sell a portfolio. Also, running an effective ad-supported content operation would require significant investments in ad servers, measurement and profiling technologies, digital certificates, and personalization. Networks were able to leverage this investment across multiple sites, whereas single content sites could not (Paley, 2006). With the network economies, the new model enabled advertisers to minimize risk. In effect, the emerging ad networks shared certain affinities with investment activities and the stock market. The old top sites model of media buying was comparable to a naïve investor who put an the eggs into a single or at best a few baskets. On the other hand, a professional money manager diversified the risk by putting eggs in highly diversified baskets, according to the investment objectives; he or she also allocated investment funds dynamically and flexibly on the basis of the results and the performance. Not only did networks have important strategic strengths compared with single content sites (Smith, 2002). They also offered advertisers significant advantages. First, even the most popular site could not deliver the traffic of a network. In 1996, PointCast populated more than one million desktops in six months, while DoubleClick attracted ten million unique visitors to its network. Unlike single content sites, networks could run the large databases required to track ads, content pages, and individuals--ensuring that an ad reached its audience as often as expected. Seeking trusted business relationships, clients and agencies liked to know who they were dealing with. Interview with a Practitioner The interview with an experienced marketer working with AOL, Mrs Jones, unveils the main problems faced by media markers today. Mrs. Jones tells that advertisers and agencies would be forced to changed with the new environment. They would have to find new ways of dealing with highly expansive and complex distribution webs. Presumably, networks could assist them in reaggregating the disaggregated sites and consolidating the fragmented audiences. Ad networks would create order into the chaos. It was DoubleClick that pioneered the concept of ad networks. Ad-reach networks were reminiscent of traditional broadcast media, geography-based networks tend to appeal to both national and local advertisers along traditional models seen in cable TV and print. Local affiliates sold store listings and classifieds, while national organizations brought in big brands that looked for reach; the ad model of the former was reminiscent of local city magazines, whereas that of the latter was more typical of national magazines. These rivals could offer advertisers 50 to 200 cities. Indeed, it was this characteristic that made them highly appealing to the new aggregators (search engines, online service providers), as well as software companies with powerful browser/home page presence (Microsoft, Netscape). The value proposition sought to tie promotions to local retail classifieds, which made the category critical in the nascent electronic commerce. To some observers, local networks represented a significant substitute threat to the old monopoly of classified advertising by local newspapers. Depending on the nature of the ad objectives (media advertising/ brands, or direct response/promotions), the pricing models were based on click rates or response rates (conversion rates)/percentage of sales. Industry rivals in this space included Digital Cities, Hometown Network, and Microsofts Sidewalk (formerly CityScape). Due to the perceived importance of the category, strategic groups involved all major portals: leading online service providers (America Online, MSN), major websites (Microsoft), and search engines (Yahoo!). Toward the late 1990s, leading newspaper players launched their home pages and websites, and experimented with local-network style solutions seeking to mark and defend their territory in classified advertising. Mrs. Jones states that unlike ad-reach networks that sought both mass and one-to-one marketing relationships, top content providers relied on focus strategies. Top content providers seemed to evolve in two distinct and separate directions. After the perceived failure of the Pathfinder site and its notion of the corporate home page as a brand umbrella, these content providers sought unified content themes and/ or narrower target audiences. Also, some mutated into content networks with ten to fifteen thematically related site properties: ads related to content. As a result, the pricing model reflected high CPMs based on context, somewhat like with special magazines (more focused audiences translated to higher CPMs). On the other hand, certain major content providers sought to provide two to three networks that were oriented toward linking content themes (e.g., sports, entertainment, and so on) with advertising and commerce. The focus was not on content, but on supporting relationships between advertisers and consumers. In this category, the value proposition reflected the objectives of leading content providers to position themselves in electronic commerce. The narrower content network version emulated the direct model providing only two to three networks (sports, entertainment, etc.) per major content provider. Consequently, the pricing models reflected response rates and percentage of sales for related direct marketing. Barriers and Constraints Industry rivals included companies like CNET, ZD Net, Starwave, iVillage, Greenhouse (America Online), Pathfinder (Time Warner), CMP, TechWeb, and Attitude Network. Strategic groups consisted of online news providers, local aggregators, major OPSs, as well as leading media and entertainment companies. The heavy emphasis on computer-related rivals was not dictated by the network, but by the relatively low reach of the then-Internet--hence the focus strategies concentrating on "early adopters" and "early majority." In the long term, major OSPs and local aggregators, as well as Americas leading media and entertainment companies were natural candidates for content networks. The value proposition focused on mass traffic, short visits, and key word advertising (Smith, 2002). If the visits were brief, it would be futile to provoke appropriate conversion rates. Still, the negotiations between Procter & Gamble and Yahoo! on the use of click-through as the prevailing ad model for navigation hubs indicated that, along with CPMs, click rates could and would be applied with the major industry players. These networks consisted of dominant search engines, including Yahoo!, Excite, Altavista, Netscape, Magellan, WebCrawler, Infoseek, and Lycos. Recommendations In order to improve media marketing practices, companies should take into account customers demands and privacy issues, ethical standards and industry forecasts. One-to-one marketers can differentiate customers, not just products, in order to ascertain and predict which customers are worth more than others and how to meet each ones individual needs. Historically and today, as mass marketers look at the market rather than the individual customer, they concentrate on getting a greater number of transactions during a particular time period or in a given geographic area. From the marketers perspective, these transactions are all independent of one another. Instead, one-to-one marketers see a single customer not as a one-time transaction, but as a series of transactions over time. They think of the task of generating a greater share of the customers business as maximizing an individuals lifetime value to the firm. The true, current value of the customer is a function of the customers future purchases, across all the product lines, brands, and services offered by the firm. Mass marketing companies know how to manage products, and reward their successful product managers for selling more product and winning more market share. But customer managers at one-to-one organizations know how to manage and grow their customers value and are rewarded for increasing the share of customers and the lifetime value for each customer one at a time. One-to-one marketers focus on the critical importance of actual past behavior (i.e., transactional databases) (Smith, 2002). Direct-response and database marketers should take into account that not every customer has equal value to the marketer. Brand strategists should embrace the challenge to develop new research methodologies (e.g., the rise of differential marketing). They all would have to identify the most valuable customers; the customers that give the firm more business through referrals; the customers who are not worth catering to at all; the prospects the firm would like to convert to customers; and the types of consumers the firm would consider real prospects. Just like frequent flyer programs provide a means for differentiating an airlines most valuable customers from its less valuable customers, one-to-one marketers would use such programs to differentiate customers, not just products. Bibliography 1. Brill, A. M. 2001, Online Journalists Embrace New Marketing Function. Newspaper Research Journal, 22 (2), 28. 2. Chan-Olmsted, S. M. 2002, Branding and Internet Marketing in the Age of Digital Media. Journal of Broadcasting & Electronic Media, 46 (4), 641. 3. Fill, C. 2001, Marketing Communication: Contexts, Contents, and Strategies. 2. edn. Upper Saddle River, NJ: Prentice Hall. 4. Mrs. Ella Jones. AOL Marketer. Personal Interview. 15 May 2008. 5. Khalil, O., Harcar, E. M., Talha, F. 1999, Relationship Marketing and Data Quality Management. SAM Advanced Management Journal, 64 (2), 26. 6. Kitchen, P.J. 1999, Marketing Communications: Principles And Practice, International Thomson Business Press: London. 7. McDonald M., Christopher M. 2003. Marketing: A complete Guide. Palgrave Macmillan. 8. Paley, N. 2006. The Managers Guide to Competitive Marketing Strategies. Thorogood. 9. Smith, P.R. 2002, Marketing Communications: An Integrated Approach, 3rd edn, Kogan Page Limited: London. Read More