1. Chapter 8
Copyright © 2015 Pearson Education

2. Chapter 8 Learning Objectives
8.1 To understand the strategic superiority of impression-based (eyeballs) targeting over segment-based targeting.
8.2 To understand Google’s targeting and advertising capabilities and its value to both consumers and marketers.
8.3 To understand the dynamics of social media and its strategic and promotional advantages over other media.
The most important strategic impact of technology on marketing has been the ability to target consumers more precisely and effectively.

3. Chapter 8 Learning Objectives
8.4 To understand how consumers use mobile media and their reactions to mobile advertising.
8.5 To understand how to measure the effectiveness of advertising in traditional and social media.
8.6 To understand the advancement of print and broadcast media into electronic communications.

4. Learning Objective 8.1
8.1 To understand the strategic superiority of impression-based (eyeballs) targeting over segment-based targeting.
Technology enables impression-based targeting, through which advertisers specify the criteria describing the persons they wish to reach online and then bid in real time for the opportunities to reach such people. A person reached is termed an “eyeball” or “impression.” Impression-based targeting is implemented through real-time bidding, which is a technique that allows advertisers to reach the right user, in the right place, at the right time, and also sets the price that advertisers pay for each “eyeball” or “impression” (i.e., for each person reached). Specialized companies—generally known as “data aggregators”—enable advertisers to place bids on the opportunities to reach specific users, who meet a given criteria, on an impression-by-impression basis.

5. Impression- vs. Segment-based Targeting
Impression-based targeting
Segment-based targeting
Real-time bidding
Ads target browsers based on aggregated data
Two-way communications
Customized messages
Immediate feedback
Retargeting
Pre-negotiated prices
Audience profiles; waste coverage
One-way communications
One-size-fits-all message
Delayed feedback of limited use
Timeshifting a challenge
Before the arrival of the new targeting technologies, since the emergence of traditional advertising media (i.e., newspapers, magazines, radio, and television), TV networks, magazines, and newspapers have sold advertising space by offering marketers the opportunity to reach audiences (or segments) whose demographics and psychographics (lifestyles) matched those of the marketers’ target markets. Segment-based targeting occurs when advertisers prenegotiate prices for advertising space in media (e.g., magazines or TV shows) whose audiences largely (but never completely) match the profiles of the consumers the advertisers wish to target. However, the audiences marketers reached via these media are larger and
more diverse than their target markets and nearly always include many people who have no interest in the products advertised. Traditional media is one-way, so messages are the same for all receivers, feedback is delayed and of limited use. Consumers can easily escape TV ads by time shifting, which involves starting to watch a show about fifteen minutes after it begins and using devices that allow one to skip commercials easily. On the other hand, impression-based targeting can customize messages based on the data, gets immediate feedback, and can repeat messages to consumers based on their interests and responses. Retargeting occurs when ads for specific products that consumers have already pursued online “follow” them and show up repeatedly whenever they go online using the same computer.

6. Facebook Impressions
Facebook impressions lead the way for many major advertisers.

7. Learning Objective 8.2
8.2 To understand Google’s targeting and advertising capabilities and its value to both consumers and marketers.
Google is the largest provider of the data and targeting tools that advertisers need for impression-based targeting, as well as the major supplier of real-time bidding to advertisers seeking impressions among consumers who fit certain criteria.

8. Google Advertising Revenue
Web-search ads – “Sponsored space”
Online display ads
Mobile advertising
YouTube ads
Non-Google sites (search and display networks)
Shopping site – product-search engine
1. Web-search ads, which are ads generated by consumers’ searches.
2. Online display ads, which are fixed banners that do not vary according to users’ profiles or search patterns, posted on websites.
3. Mobile advertising, which are ads that appear on mobile devices in Google search results, on content websites, and in apps.
Google’s most prominent use is as a search engine. After an online user types a query, two areas appear on the screen. The “organic results” are the links directing users to sites and resources that are applicable to their Google searches. The “sponsored space”—typically appearing on the right side or the top—consists of advertising banners that Google has sold to advertisers or “sponsors.” Each time a potential customer clicks on a sponsored banner ad, the advertiser pays Google a fee. The fees can range from a few cents for terms that very few (if any) users are likely to enter in the search engine, to several dollars (and up) for words that many users are likely to type in; the latter are what bring up ads sponsored by large marketers. The advertisers’ costs-per-click also vary according to whether or not the same user has clicked on the ad previously (measuring the effectiveness of
online ads is discussed later in this chapter).
Another source of revenue for Google is graphical and video ads posted on YouTube, which is owned by Google, and on thousands of non-Google sites. Google also runs a shopping site where retailers pay for being displayed in Google’s product-search engine.

9. Learning Objective 8.3
8.3 To understand the dynamics of social media and its strategic and promotional advantages over other media.
Social media depend on mobile and Web-based technologies to create highly interactive platforms through which individuals and communities share, co-create, discuss, and modify user-generated content.

10. Social Media
Means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks.

11. Structure of Social Media
Profiles
Friends
Groups
Discussion boards
Opt-ins and opt-outs
The structure of social media includes the following elements:
1. Profiles are the ways by which consumers tell others about themselves (i.e., their age, personality, and interests).
2. Friends are trusted members of the social network used. They are allowed to post comments that designated members of the network can read. The networks allow users to keep tabs on what their friends are doing online (e.g., posting new pictures or updating their profiles).
3. Groups within social networks help users find people with similar interests.
4. Social networks create interactions among group members via discussion boards and by allowing members to post pictures, music, video clips, and other tidbits for the groups’ members to view.
5. Consumers must have opt-ins and opt-outs that allow them to control the information they share with friends and the information they receive from others. A Nielsen study indicated that about one-third of consumers found ads on social networks annoying. However, 26% were more open to ads recommended by friends, another 26% said that they did not mind being identified based on their social media profiles, and 17% felt connected to brands advertised on social networking platforms.

12. Apps
short for “applications”; chunks of software—installed on one’s computer, tablet, or smartphone—that are gateways to games, online resources, and social networking.

13. Kinds of Information Requested
Basic permissions
User permissions
Friends permissions
Sensitive information
Apps request four basic kinds of information: 1. Basic permissions include name, identification, gender, photo, personal demographics, and list
of friends. 2. User permissions are requests to allow the installation of the applications on the users’ computers. 3. Friends permissions include requests to share information the users have about friends using the same app. 4. Sensitive information requests include questions about users’ highly personal aspects, such as political or religious affiliation and even sexual orientation.

14. Permissions to Collect Information
Social media marketing is enabled by the information consumers provide about themselves and their social contacts, mostly via “apps” that they buy cheaply or receive for free. Apps also collect users’ personal information and provide them to the app developers.

15. Social Advertising Best Practices
Listen to interactions
Use information to generate buzz
Have corporate bosses on Twitter
Train and empower employees
Combine social media and iPhone apps
Allow consumers to interact with brand designs
Integrate into social media
Marketers listen to the interactions, or social conversations, and use the information gathered to generate more buzz for their products within social networks.
Most brands now have official Twitter handles and Facebook pages. Companies have discovered that customers are highly enthused about and more responsive to Twitter messages from the corporate bosses, especially if such messages encourage consumers to tell the senders about their experiences
with the brands. Some companies have decided that centralizing social media communications is impractical, so they train and empower their employees to participate in social conversations with customers, within defined guidelines.
Savvy marketers combine their social media promotions with iPhone applications.
Many marketers allow consumers to interact with their brands’ designs. Most companies selling consumer goods have integrated social media into their advertising campaign.

16. Best Practices: Tweeting

17. Effective Social Media
Planned with traditional media advertising
Larger budgets because simultaneously reaches several audiences
Track likes/mine data for new niches/ partners/products
Strengthen connections between brands and customers
Guidelines for communications
1. Social media campaigns must be planned together with advertising in traditional media.
2. Marketers must consider the fact that social media simultaneously reaches several audiences (i.e., consumers, retailers, and other parties with whom the company does business), which justifies larger advertising budgets.
3. Executives should closely examine consumers’ clicks on the “like” buttons and “mine” data from their Facebook pages to develop new niches for their products (sometimes with partners in other product categories).
4. Bosses who tweet personally strengthen the connections between their brands and customers.
5. Employees should be encouraged to tweet, but guidelines for such communications must be set and monitored for compliance. However, research suggests than many CEOs resent (and even fear) using Twitter.

18. Owned social media
Messages sent by marketers and delivered to consumers via channels that the marketers control

19. Paid social media
Messages sent via channels that are not owned by the marketers, who pay for using the channels

20. Earned social media
Channels where consumers pass along messages about brands to one another

21. Widely Used Social Media Platforms
Blogs and micro-blogs (e.g. Twitter)
Social networks (e.g. Facebook)
Widgets, games, apps
Mobile phones
1. Branded blogs and micro-blogging platforms (e.g., Twitter) that encourage interactions among consumers; these messages resemble conversations.
2. Social networks such as Facebook and MySpace.
3. Widgets, gaming, and other applications that users can download.
4. Mobile phones

22. Learning Objective 8.4
8.4 To understand how consumers use mobile media and their reactions to mobile advertising.
Mobile advertising is done by sending promotional messages to consumers’ cell phones, iPads, electronic readers, and other devices that people carry while on the go.

23. Value from Mobile Devices
Monetary value
Convenience value
Emotional value
Social value
1. Monetary value: the device provides good value for the money that also exceeds the value consumers receive from using nonmobile communication devices.
2. Convenience value: saving time and money, improving efficiency, and making life easier.
3. Emotional value: feeling good and relaxed when using the device.
4. Social value: being accepted by others and impressing them.
A study indicates that the higher the values consumers receive from mobile devices, the more likely consumers are to use those devices to purchase products and engage in word-of-mouth about what they bought.

24. Responses to Mobile Ads
Cross-cultural differences
Japanese men – mobile ads  effective word-of-mouth
Korean shoppers – depends on interface and control
Chinese consumers – ease of use, usefulness and trust affect receptiveness
Language and source
High credibility source can entertain
Low credibility source should be serious, clear, concise
Studies have identified cross-cultural differences among consumers’ responses to mobile ads. A study of Japanese men showed that mobile ads generated effective word-of-mouth. A study of European consumers showed that cross-cultural differences affect the effectiveness of mobile advertising.
Research on Korean shoppers indicated that their attitudes toward mobile advertising depended mainly on the convenience of the interface and their ability to control content. Research of Chinese consumers showed that ease of use, perceived usefulness, and trust were the key factors in receptivity to mobile advertising. Researchers also found that the adoption of mobile broadcasting in Japan, Germany, and Korea was positively related to the extent of access to mobile devices and the entertainment and social interaction they provide.
One study investigated the influence of the language and source of text advertisements on attitudes toward and purchase intentions regarding products advertised on mobile devices. The researchers found that reputable companies with highly perceived credibility can use entertaining language, but companies with less credibility and poorer reputations should create serious, clear, and concise mobile ads.

25. Search advertising
A method of placing online advertisements on Web pages that show results from search engine queries

26. Discussion Questions What are the characteristics of mobile ads?
What are the advantages of mobile advertising?
What are the disadvantages?
An analysis of a large sample of mobile ads indicated that:
1. Mobile marketers are spending most of their money on search ads.
2. Marketers have been creating mobile ads that are fun, pay rewards, and help customers find useful information (e.g., referrals).
3. As smartphone screens became larger, marketers began using mobile ads that take over the entire screen.
4. Some mobile marketers have been experimenting with inserting ads in places where consumers do not expect to see any, in an effort to overcome consumers’ tuning-out of promotional messages.
5. Many advertisers use banner ads on mobile devices’ screens because such ads are cheap, although most recognize that consumers find banners annoying.
Marketers are also developing technologies that enable advertisers to link what consumers do on their computers with their cell phones.
Advantages: It can identify users’ geographic locations and deliver contextually relevant offers. It can provide consumers with access to online deals in stores and the ability to pay for deals in stores while en route.
Disadvantages: Smartphones’ screens are small; impossible to use cookies with apps the way it is with browsers (so marketers cannot track actions and optimize their ads the way they do in response to customers’ computer surfing); most consumers are reluctant to receive ads when using their cell phones.

27. Learning Objective 8.5
8.5 To understand how to measure the effectiveness of advertising in traditional and social media.
The most widely used measures of the effectiveness of online promotions are analyses of website visits, users’ influence within social networks, and the audiences’ demographics.

28. Steps to Design Social Media Campaigns
Define objectives and strategic approaches.
Examine appropriateness of available platforms for achievement of objectives.
Produce the campaign’s content.
Examine the pricing models and set expenditures to achieve objectives.
Measure effectiveness.
1. Define the campaign’s objectives and strategic approaches.
2. Examine the platforms available and determine which ones to use so as to achieve the objectives.
3. Produce the campaign’s content using internal or external resources.
4. Examine the pricing models for securing access to social media, which, unlike pricing for advertising space on traditional print and broadcast communication channels, vary greatly. Then, set the expenditures needed to achieve the campaign objectives.
5. Measure the campaign’s effectiveness.
For the most part, marketers infer the purchase behaviors triggered by ads from broad sets of sales data, as it is rarely possible to identify a cause-and-effect relationship between a given message and the resulting purchase behavior. In contrast, promotions placed in social media employ “electronic cookies,” which are digital tracking devices that enable senders to monitor the receivers’ responses precisely and often immediately. However, even with electronic tracking, some advertisers have removed their Facebook ads because they had trouble measuring whether the ads led to sales.

29. Analyzing Website Visits
Unique visitors
Cost per unique visitor
Return visits
Time spent
Page views
Interaction rate
Actions
Conversation-related measures
Visitor demographics
1. Unique visitors. The number of visitors to the website that have accessed its content. User profiles (based on their Web addresses) are also monitored.
2. Cost per unique visitor. The total cost of placing the application or ad divided by the number of unique visitors.
3. Return visits. The average number of times a user returns to the site within a specific period.
4. Time spent. The average amount of time from the start of the visit until the end of the last activity on the page.
5. Page views. The average number of pages that users have clicked through.
6. Interaction rate. The proportion of viewers who interact with an ad or application.
7. Actions. The actions taken during visits, such as entering contests, responding to poll questions, redeeming coupons, playing games, posting comments, sending messages, inviting friends, and downloading or uploading materials and applications.
8. Conversation-related measures. Data including the number of unique visitors participating, the number of links related to the conversation that participants reach during the conversation, the duration between the first and last posts during the conversation, and the average number of time between posts.
9. Visitor demographics. (a) Examining how the target audience navigates around the site and which demographic profiles have the most engagement; (b) evaluating whether the content created is a good match with the users and whether it converts many into buyers; and (c) determining how to improve the sell rate and reduce the cost per impression.

30. Measuring Twitter Influence
Degree of influence
Types of users
Number of followers
Number of people following the followers
Frequency of updating tweets
Extent to which tweets are referenced or cited
Celebrities
Conversationalists
Spammers
One’s degree of influence on Twitter is measured as follows: one’s number of followers, the number of people following the followers, the frequency of updating tweets, and the extent to which one’s tweets are referenced or cited.
Twitter also identified several types of users: Celebrities have many followers but follow very few, if any, users. Conversationalists follow about the same number of users as follow them. Spammers “collect” users with the intent to push content to as many people as possible.

31. Google Analytics Where visitors come from
Actions after landing at initial page
Geographic location and visit lengths
Assignment into profiles/segmentation
Google Analytics is a service offered by Google that evaluates the effectiveness of websites and profiles their users by collecting and analyzing the following data:
1. Tracking where visitors come from: Referrals, search engines, display advertising, pay-per-click networks, campaigns, and other digital links (e.g., clicks within PDF documents).
2. Customers’ actions after they “land” at the initial page: Viewing other pages, downloading files, registering with the site, and other actions.
3. Website visitors’ geographic location and their visit lengths. GA also assigns websites’ users into profiles and segments them.
Google Analytics enables marketers to measure the effectiveness of their websites and promotional efforts and, to an extent, predict the impact of planned advertising campaigns on customers’ behavior. In addition, Google Analytics’ e-commerce service tracks sales activity and performance and provides marketers with their sites’ transactions, revenue, and many other commerce-related metrics. Marketers can also identify pages, links, and promotional efforts that perform poorly and do not achieve the sites’ objectives (e.g., “converting” visitors to users, generating repeat visits, and getting users to register).

32. Media Exposure Media exposure effects Companies
How many consumers
Who received it
Companies
Nielsen
Mediamark Research Inc.
Arbitron
Cross-platform measurement
Media exposure effects measure how many consumers were exposed to the message and their characteristics. Consumer research companies assess how many consumers received the message and construct a profile of those who received it.
The largest syndicated company that collects such data and sells it to advertisers and other organizations is Nielsen. Originally, Nielsen monitored TV viewing, but it now maintains many panels consisting of groups of consumers who have consented to the monitoring of certain aspects of their media exposure and consumption. Mediamark Research Inc. (MRI) provides, for a given magazine, data on its circulation as well as a descriptive audience profile (a breakdown of its readers by gender, median age, and household income). Arbitron measures the audiences of radio broadcasts. Arbitron is known primarily for monitoring radio broadcast audiences and, more recently, for developing portable people meters, which are small devices, equipped with GPS, that the consumers clip onto their belts and wear all day (in exchange for monetary incentives). The devices monitor codes embedded in the audio streams of media that consumers receive (e.g., TV and radio programs and in-store announcements) and also have the capacity to capture visual images of the screens and written materials that consumers are exposed to (e.g., billboards and other out-of-home media, magazines and newspapers read, and online surfing). Nielsen bought Arbitron and acknowledged the attractiveness of PPM technologies in developing cross-platform effectiveness measures and successfully competing with other newer companies that have been developing similar techniques (e.g., comScore).

33. Learning Objective 8.6
8.6 To understand the advancement of print and broadcast media into electronic communications.
Print and broadcast media are one-way communications where all the members of a given audience receive the same one-way messages from marketers.

34. Segment-based Targeting Media
Discussion Question: What are the strengths and weaknesses of:
Newspapers
Magazines
Television
Radio
Newspapers, magazines, TV, and radio use segment-based targeting. Because each individual has his or her own traits, characteristics, interests, needs, experience, and knowledge, senders of advertising messages segment their audiences into groups that are homogeneous in terms of relevant characteristics, including media exposure patterns.
Newspapers provide access to large audiences and are effective for reaching large audiences. However, they are generally inadequate when it comes to reaching consumers with specific demographics. Newspaper ads can be designed and published quickly, but they have a short life. There is considerable clutter because many messages, particularly for local services and research outlets, compete for attention. Nevertheless, because of redemptions of specific promotions and timely measurement of sales volume after the ads are published, feedback can be collected quickly.
Magazines reach specific geographic, demographic, and interest-focused groups and enable more precise targeting than newspapers, with visually high-quality ads. Special-interest magazines are highly credible. Magazines offer long message life and increased exposure to ads because of pass-along readership. At the same time, ads require longer lead time for production, and numerous magazines do not guarantee ad placement in a particular position within the magazine. Feedback from magazine ads is often delayed and is measured via Starch scores.
Online, both magazines and newspapers can flourish by offering readers customized editions that are based on their interests.
Network and cable TV reach very large audiences. However, many programs, particularly on network TV, reach audiences that are heterogeneous in their demographics, spending power, interests, and lifestyles. Network TV (and later cable TV) has been the most desirable (and expensive) advertising medium for many decades because television enables marketers to send messages that draw attention and generate emotion. Also, with many TV ads for competing and often similar brands creating clutter, marketers had to design short-duration messages and repeat them frequently. Furthermore, the feedback from TV ads has been imprecise and did not enable marketers to effectively determine which ads led to sales and which ones did not. Because TV reaches large and diverse audiences, marketers have been aware that many of their TV commercials reached many consumers that neither had interest in the products advertised nor became customers. Also, more sophisticated recording and time-shifting devices have been allowing viewers to avoid seeing TV commercials altogether. Both the production and broadcast of television ads are very expensive.
Radio’s advantages are its high geographic and demographic audience selectivity, as well as the short lead time needed for producing and placing commercials. Presently, almost all radio broadcasts, globally, are available online. However, the reach of radio advertising is limited.

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Copyright © 2015 Pearson Education