The Future of Interactive Advertising Viewed Through an IMC Lens
David W. Schumann, Andy Artis, Rachel Rivera
University of Tennessee
Abstract
This paper considers the future of interactive advertising (IA). While some suggest that IA is the wave of the future, others suggest that in five years IA will be mainstream marketing and will no longer be a novel concept. In order to examine this issue, the authors consider IA as it serves another important marketing concept, Integrated Marketing Communication (IMC). Thus IA is examined through an IMC lens. After a brief discussion of the definition of IA and the focus on a five-year time frame, three trends are presented with a focus on expected technologies. This presentation is followed with a discussion of IA as it contributes to IMC, and an examination of questions for future research. The paper concludes that IA will likely evolve and expand in form and that this evolution will remain a key in successful advertising and product/service interaction.
Introduction
Leckenby and Li (2000), in their comments on why the discipline of advertising needs the Journal of Interactive Advertising (JIAD), began by citing a number of “important international practitioners.” These practitioners envisioned interactivity as the “key ingredient to successful media,” and “the center of where advertising is going.” They suggested we bring together the creative types and the Internet technical experts, allowing them to focus on “relationships and how we interact” (Leckenby & Li 2000, p. 1).
While there has certainly been significant positive press regarding the role of “interactivity,” there are some experts that question the singling out of interactive advertising (IA). Consider these quotes:
o “Let’s stop being overly impressed with ‘interactive marketing.’ It’s a tool. It will be ubiquitous. By 2005, marketing types will be talking about marketing, not about things interactive. By 2005, interactive marketing will be marketing.”
Bradley Johnson, Advertising Age Interactive Media & Marketing Editor
[Advertising Age, April 17, 2000]
o “The Web is not the center of our universe. It’s just another place where consumers go. [We know] consumers are multitasking-reading, watching TV, going online-and we want to advertise everywhere they are.”
Nick Bishop, Coca-Cola’s Vice President of Consumer Connections
[Wall Street Journal, December 28, 2000]
o “The Internet has changed a lot of things, but the idea that the dot-com was going to erase the old media was ludicrous. We have been in this type of transformation more than once in history.”
Miles Grove, Chief Economist at the Barry Group
[Chicago Tribune, December 27, 2000]
o “The Internet no longer is being treated as the stepchild of media. Advertisers are beginning to see the Internet as a medium they can integrate and plan for in the same fashion they plan for TV.”
Allie Shaw, Vice President of Online Advertising firm Unicast Communications
[Wall Street Journal, December 28, 2000]
o “The direct marketing industry…has a unique kind of interactive system utilizing voice recognition software that is infinitely superior to anything that the most talented software engineers or computer manufactures can produce. It’s called the human order entry operator.”
Joe Segel, founder of QVC Home Shopping Network
[Hodgson, Interactive Marketing: The Future Present, 1995]
These quotes point to a contradiction in how experts view the importance of IA and the role of media forms that facilitate interactivity. Consider the following questions:
o Will IA be the panacea that everyone predicts?
o Will it change the way we define advertising?
o Will IA be mainstream marketing by 2005 or will it continue to stand out among the crowd of other promotional tools?
o What technology will likely facilitate interactivity in the next 5 years?
o What issues will interactive advertisers face?
o What opportunities will there be for research into aspects of IA?
This article takes the position that to resolve this contradiction and to clarify the role that IA will play in the future, it is helpful to consider IA as it facilitates (and serves as a tool of) Integrated Marketing Communication (IMC) philosophy and method (Belch & Belch 1993; Cathey & Schumann 1996; Duncan & Caywood 1995; Shultz 1993, 1995; Schultz et al. 1994). Thus the purpose of this article is to 1) define and prescribe the role of IA in the future, 2) describe likely changes in technology that will facilitate the evolution of IA within the near term, and 3) delineate opportunities and direction for future research. This article does not attempt to go into depth in any one area, but rather seeks to provide a broad perspective on the near term future of IA.
Can We Really Predict the Future of Interactive Advertising
When you stop to think about it, trying to predict the future of IA with any reasonable level of accuracy is a daunting task. There are so many possibilities, so many chance occurrences, and so many mutations that predictions may be of no more use than random guesses. Of course making a prediction is easy, but having it be accurate is difficult.
Looking back in time, did anyone predict the importance of 1-800 numbers to interactive advertisers when Alexander Graham Bell invented the telephone in 1876? How could Bell have known how his work would eventually lead to cellular phones? Did Guglielmo Marconi know in 1895 when he invented radio, that over a hundred years later listeners would interact with radio broadcasts by calling in their requests or conversing with talk show hosts in their automobiles via a handheld wireless device (the automobile was also a new invention during Marconi’s time)? Did the inventor of television, Philo T. Farnsworth, know in 1927 that this invention would eventually be combined with a thing called the Internet and evolve into Interactive TV? Each of these inventors was using the tools and knowledge available in his day to solve a current problem. Futurists at the time may have had an idea that each invention of the electronic age would have a significant effect on society, but none could have accurately predicted how each would be molding social norms, combining with other technologies, and adapting to fit the needs of consumers and businesses.
Even well thought out and reasonable predictions have to be considered with some skepticism. There are numerous examples of what seemed like realistic and believable predictions that were wrong. The expanded use of radio after World War I did not end global conflict by bringing the people of the world together through greater understanding (Sinha 2001), and television has not been primarily used to educate the masses as originally predicted. Arguably our predictions have not improved over time. The Internet did not steal away the bulk of classified advertising from newspapers and it doesn’t look like that is going to happen anytime soon (Jones 2000). It is only with the benefit of hindsight that we know that what seemed realistic at first is not necessarily how a technology evolved or was used. So to the present article, how can we now, in the beginning of 2001, accurately predict the future of IA?
We began our task by setting realistic limits and have purposely selected a five-year timeframe. While we cannot realistically predict the distant future, we believe we can focus on the next five years with some level of accuracy (Johnson 2000). A five-year forecast is close enough on the event horizon to see how current trends, attitudes, and technologies might evolve and co-mingle. Furthermore, it is far enough out in time to be useful in considering a research agenda for those interested in investigating issues related to IA. Finally, a five-year time frame is supported throughout the practitioner literature: there are a relatively large number of predictions that extend out to 2005 but not beyond (Johnson 2000).
In this article we relied heavily on the research efforts of practitioners because their daily experiences with IA provide them with critical reflections that enable us to address the task at hand. We capitalized on the work of private research groups and industry analysts who are continually struggling to predict the future behavior of consumers and the actions of business. The trade publications are replete with predictions on how IA will affect other advertising media and consumer trends. We considered these predictions, dampened the exaggerations and seemingly outrageous claims, and examined how IA will likely affect the advertising community over the next 5 years. There is a noted weakness to this approach; some of these same sources made a number of predictions five years ago with less than total accuracy (Johnson 2000).
A significant number of events and activities have occurred in the realm of IA since the mid-nineties and certain patterns have emerged. This paper focuses on those emerging patterns. We base our predictions on these patterns. We consider how IA’s facilitation of IMC can help us better understand IA’s potential opportunities and threats. Finally, we use these patterns to develop a set of research questions for future exploration.
Defining Interactive Advertising
Defining IA during the decade of the nineties appears to reflect a broad-based depiction. Cutler (1990), taking an exchange perspective, defined IA as a “media that provides the opportunity to instantaneously advertise, execute a sale, and collect payment.” Steuer (1992) recognized the expanded role of the consumer and defined interactivity as “the extent to which users can participate in modifying the form and content of a mediated environment in real time.” Skuba (1996) suggests that to be truly interactive, the consumer needs to be deeply involved in a two-way communication process with the advertiser. Roehm and Haugtvedt (1999) likened interactivity to a real-time dialogue…[that] “might resemble conversations between salespersons and customers.” Finally, Leckenby and Li (2000) provided us with even more broad definition: IA is “the paid and unpaid presentation and promotion of products, services and ideas by an identified sponsor through mediated means involving mutual action between consumers and producers.”[1]
These definitions do not limit interactive to just the Internet, but allows us to include any form of IA that seeks “mutual action.” Catalogs, direct response mail, phone solicitations etc. are included in this wider view and allow use to use the extant literature, theory, and methodology to make comparisons across IA formats. Arguably one can say that IA has been around a long time. The changes we see today are in the scale, speed and scope of interactivity as facilitated by the latest communication technologies.
The JIAD manuscript guidelines suggest that IA includes and distinguishes between “human-machine-human, human-machine, human-message, or machine-machine interactivity.” These mechanisms of communication infer a human-human or human-entity (e.g. company) relationship. Ultimately it is the consumer’s choice to interact, thus interactivity is a characteristic of the consumer, and not a characteristic of the medium. The medium simply serves to facilitate the interaction.
Technological Trends in Interactive Media
Advanced Targeting of the Consumer
o “At the turn of last century, the owner of a general store knew his customers so intimately he could suggest and sell products to meet their unique needs. Now, 100 years later, marketers have the opportunity to make that same personalized connection.” [Chiagouris & Wansley, Marketing Management, July 2000]
o “This process of identifying and reaching the ‘right audience’ has become more complex and has grown in importance with the emergence of two countervailing trends: while markets are getting larger, market segments are getting smaller. Witness the expanding globalization of markets and the concurrent shift from mass marketing to the targeting of increasingly smaller segments (micro marketing).”
[Sivadas, Grewal & Kellaris, Journal of Business Research, July 2000]
One major trend of IA over the next five years will likely be the continued use of new technologies facilitating the advanced targeting of consumers. Our present technologies already allow consumers to provide information to retailers and manufacturers, voice their preferences, and communicate with other consumers, salespeople, and producers (Pavlou and Stewart 2000). Marketers are able to use the information provided by consumers to segment the market, generate ideas for future products or services, and personalize their advertising messages. Thus ads can therefore be targeted not only to a demographic or psychographic group, but also to a specific individual’s wants and needs (Blankenhorn 2000).
In the future, consumers will have the option of playing a more active role in the types of advertisements they receive. “For the first time, a user will decide what advertisements and promotions he or she will get,” states Dee Cravens, Executive Vice President at AdForce (Greenberg 2000). “Permission marketing techniques” will allow consumers to select the kind of content they wish to view and receive on a weekly basis (Carter 2000; Tiegel 2000). Stacy Jolna, Chief Programming Officer and VP-Media Partnership for TiVo, the recognized leader in recorded television-viewing technology, states “We’ve turned passive promotions into a more efficient marketing vehicle. It creates a new kind of on-demand advertising through some call to action or icon” (Tiegel 2000). Thus as others have suggested, targeted advertising and other related marketing activities will undoubtedly become even more effective, efficient, and relevant (Tiegel 2000).
The exchange of information between consumers and producers through advanced targeting will help to facilitate stronger and more efficient relationships between the advertiser and the consumer. In order to nurture such a highly targeted and relevant engagement, marketing tactics will need to be customized to whatever stage the prospect has reached in the relationship-building process (Chiagouris & Wansley 2000). These stages include 1) awareness and willingness to initiate a relationship with a company, 2) acquiring an appreciation for that company by knowing what the brand(s) has to offer, 3) moving toward a motivated exchange thereby enhancing positive feelings and trust, and 4) making the transaction which solidifies the relationship (Chigouris & Wansley 2000).
If a consumer is simply aware of a company, the tactics used to develop a meaningful relationship must focus more on one-to-one communication and building brand image. As media converge and interactive channels are improved (see trends below), the relationship between the company and the consumer will likely improve the company’s ability to efficiently deliver what the consumer is seeking. When the consumer is a loyal customer, the new one-to-one communication techniques will still be important. However, there will still be a continuing role for mass advertising, serving to remind the customer of the value s/he receives from the company.
Media Convergence
Within the next five years, the television, VCR, and the Internet as a single, interactive communications product, will be commonplace (Blankenhorn, 2000; Johnson, 2000; Sassos, 2000).[2] Likewise, cell phones, pagers, and personal digital assistants (PDAs) will all morph into one interactive mobile device. Even traditional print media will be able to incorporate the Internet to provide a more interactive experience for readers. Books and magazines that invite interaction with others who are reading the same thing, will be available online and online services will facilitate discussion among readers. What impact these new devices will have on consumers is dependent on a number of factors including how well the perceived value of the services facilitated by these devices is delivered to the consumer. A further discussion of this trend will follow in the next section on new interactive channels.
New or Improved Interactive Channels
Perhaps the most interesting trend in IA over the next five years will be the introduction of a whole new set of media forms and capabilities that will increase the consumer’s accessibility to all types of information, and introduce new and improved sources of interactive communication. Next we briefly describe the ones most discussed among practitioners.
Enriched E-mail. One interactive channel that has and will continue to improve is e-mail. Newly introduced “enriched e-mail” differs from traditional e-mail in that message capability now includes streaming audio, video capabilities, and order options. Some of the benefits of enriched e-mail include greater immediacy, improved consumer tracking, and higher response rates (Gunn 2000). With the improved tracking capabilities, marketers can assess if a message was opened, what time of day the e-mail was opened, how long the message was up, and whether or not the e-mail was forwarded on to a friend. According to Forrester Research, enriched e-mails experience a response rate of 12.5% compared to traditional text-based e-mails that only receive around 10% (as reported in Gunn 2000). One reason for the discrepancy may stem from consumer perceptions of enriched e-mails as been of a higher value than text-based messages. A major downside that will likely be remedied over the next five years is that only 40% of e-mail users can presently receive rich media ads; some of the major Internet companies, like AOL and Hotmail, can only handle text messages and still graphics (Gunn 2000). Competition will likely push large Internet providers like AOL toward initiating enriched e-mail. Once that occurs the availability of new forms of communication via e-mail will likely explode.
Wireless Gadgets. Another interactive channel that continues to improve are those electronic communication forms that are wireless (Blankenhorn, 2000). Through the use of new technologies, such as wireless access protocol (WAP), consumers are able to access information that previously was only available through wired Internet connections (James 2000). Advertising is currently being carried through wireless devices via short messaging service (SMS) (Greenberg 2000). “It’s a way of pushing short text messages to your phone,” says Mark Flaterty, director of product management for New York-based ThinAirApps, a middleware and server software provider for wireless, “it’s text only, non-interactive, and has nothing to do with the Internet” (Greenberg 2000). According to Yankee Group, a Boston-based technology research firm, as many as 60.9 million North Americans will be using WAP phones, personal digital assistants (PDAs), and two-way messaging devices by 2005, up from 1.3 million by the end of 2000 (James 2000). According to a study conducted by Ovum Ltd., a London based technology consulting firm, by 2005 advertising expenditures via a wireless device is expected to reach more than $16 billion worldwide, comprising 20% of overall Internet advertising spending (James 2000). The study also suggests that wireless advertising will generate response rates two or three times higher than that of the standard Internet banner ad, which is around 1% . “Wireless advertising will produce results that more closely resemble that of direct marketing,” says Rosalie Nelson, senior consultant in e-commerce and new media for Ovum, and the study originator.
Marketers see a lucrative future in wireless devices, especially in the area of transaction-specific advertisements. With the use of global positioning satellite technology (GPS), which will be mandatory on all wireless devices in the US in 2001 (by the Federal Communications Commission (FCC) for emergency purposes), marketers will be able to track wireless users’ location within 100 feet and make recommendations regarding local retailers, services, etc. (James 2000). Based on a consumer’s location and personal preferences, wireless devices will drive traffic to the nearby retailers. “With wireless advertising, it’s an immediate call to action. Consumers can respond on the spot, which make ads very effective,” suggests Ovum’s Nelson (James 2000).
Time DePriest, Director of Strategic Marketing for AdForce LLC, states, “The ultimate success of wireless advertising will be driven by an opt-in scenario.” Consumers will sign up for preferences of ads, that will be delivered in low volumes, at predetermined times of the day (James 2000). Marketers will need to offer incentives, such as free or discounted cell phone time, to consumers in exchange for personal data and the right to contact them with targeted advertising (Greenberg 2000).
In sum, from a consumer perspective, wireless devices offer a cheaper way to get connected to the Internet (Greenberg 2000). Consumers also value the convenience of having a portable device they can use for such activities as “banking on the move,” surfing the Web, sending messages, and eventually purchasing items through vending machines simply by dialing a number (Maude,et al. 2000).
Interactive TV/ Replay TV. “Interactive television is still at an early stage of development – similar to where the Internet was about five years ago – and no one is certain how it will develop” (Furber 2000). Although the future of interactive television may be questionable, the fact that consumers will have more control and marketers will gain more information is undeniable. Consumers will be able to record, live-pause, fast forward, vote for their favorites, request information, tag advertisements to look at later, and even customize their own broadcast schedules Cooper 2000; Katz 2000). From a marketer’s perspective, interactive television enables greater tracking of consumer behavior. Marketers will be able to customize advertisements to address consumer preferences.
Within the market, there are a number of devices, all offering a variety of options. For example, TiVo and Replay, both personal video recorders (PVRs), allow viewers to record, live-pause and fast forward programming. They even allow super-fast forwarding over advertisements (Cooper 2000). Worldgate, Microsoft’s WebTV, and AOLTV allow viewers to surf the Internet via their remote controls and televisions (Cooper 2000). Microsoft’s WebTV Personal Service is the “first step in the convergence of bringing the TV and Internet experiences together along with the direct response functionality to an advertiser. It allows the consumer to initiate a request for more information or purchase the item after viewing the commercial,” says Joe Poletto, VP-network media group, Microsoft Corp. WebTV Networks (Tiegel 2000). Microsoft’s UltimateTV has two tuners, which allows subscribers to watch two programs simultaneously (with picture in picture), record two shows at once, or watch one and record the other. It also allows consumers to bypass commercials (Tiegel 2000). Wink and Watchpoint layer programming and advertising with interactive elements such as icons that can be clicked on to bring up the information overlay on the screen (Cooper 2000, Katz 2000). Nick Moore, creative director at Barraclough Hall Woolston Gray (BHWG) states that, “Interactive TV combines the emotional power of television, with the customer-driven experiences that the web offers. This combination results in one technology, making no extra work for the consumer” (Reynolds 2000).
According to a report by Josh Bernoff, Forrester Research analyst, the new recorders – stand-alone boxes and those combined with cable and satellite – will reach 14 million users by 2004 and 80%, which is the present penetration of VCRs, of American households by 2009 (Cooper 2000). “With some very conservative estimates about how frequently people will watch recorded programming versus live programming, and how frequently they’ll watch commercials versus skipping them, you’ll see there will be an 8% decrease in the viewing of commercials by 2004 and a 50% decrease by 2009,” says Bernoff (Cooper 2000).
The success of interactive television is contingent on whether or not consumers are willing to take a more active role in what is traditionally viewed as a passive activity. Bernoff addresses this issue by saying that the big money is to be made in “lazy interactivity,” which is interactivity you can do with “a remote in one hand and a beer in the other” (Cooper 2000).
Furthermore, while one of two formats (Internet or television) may be ideal for certain forms of communication, the transposition from one to the other may not be so smooth. For example, television interfaces as they exist now, are not optimal for presenting text. While a 10-point text font may still be readable on a PC screen, the minimum font size for viewing on television is 20-point. As a result, not much text or graphics will fit on a normal household television screen. Television at the present time does not lend itself well to the highly information-rich PC presentations. To receive comparable information via television may take considerably more effort on the part of the consumer.
Even with the stated difficulties interactive television will likely face, interactive television is already experiencing strong support from both the cable television and advertising industries. In France, interactive ads have been available by satellite for the last three years and claims of significant viewer usage have been forthcoming (Garside, 2000). According to David Verklin, president of Carat USA during a recent Cabletelevision Advertising Bureau panel, “Thirty-second spots, as we know them, will disappear” (Cooper 2000). Tim Hanlon, director of emerging contacts for Starcom IP, Chicago, a division of Starcom MediaVest Worldwide, believes that there will be more in-programming experiences. “It’s almost like the ’50s all over again with sponsored shows, star performers/spokespersons, product placement and more signage scenarios” (Tiegel 2000).
IA on interactive television is said to combine the exchange opportunities available on the Internet, with the brand presentation capabilities of television advertising. While this might appear to be a panacea for advertisers, serious problems will have to be resolved as a result of this merger of separate technologies. At the present there exists a fragmentation of digital platforms across the current three major suppliers, BSkyB, Ondigital, and cable (Garside 2000). Not only will advertisers have to negotiate airtime, they will also find themselves paying for the different platforms. Clive McNamara, marketing director at AIT Group, explains that “Not only are they different platforms, but they’ve got fundamentally different marketing propositions as well” (Furber 2000).
DVD Technology. Digital versatile discs (DVDs) provide interactive menus, full-motion digital video, comparison charts, virtual test drives, Internet connection, and order options (Nakamura 2000a). One area of particular interest to marketers is using DVDs for digital catalogs. When a consumer receives a video, DVD, or a CD-ROM in the mail, they immediately perceive it to be something of value, as entertainment or informative, and set it apart from regular “junk mail” (Nakamura 2000a). Other benefits of digital catalogs are that they cost less than $1 to manufacture, there is no connection time to worry about, there are no pages to load, and they offer full screen motion picture quality images (Nakamura 2000b). When a viewer is ready to make a purchase, there is a virtual shopping cart that can connect to the Internet. “DVD offers the equivalent of having a home shopping network at your beck and call” (Nakamura 2000a). The Web site connectivity also allows marketers to gather information on customers (Nakamura 2000b. Code Scanning : Code scanning technology will enable traditional print media to combine with the Internet to provide a truly interactive experience. Keystroke automation technology (KAT), designed by DigitalConvergence.com, connects television sets to specific Internet sites by clicking on icons during a show or by scanning printed codes (Mermigas 2000). Forbes planned to mail KAT software and scanners to more than 800,000 subscribers in advance of its September 2000 supplement “Best of the Web.” By scanning special codes, Forbes readers will be able to view web content pertaining to products, services, or subjects featured in print. Eventually Forbes plans to use KAT to make all of its editorial and advertising content interactive. Likewise, Sears is planning to refer consumers to specific sales and product information on the Web by scanning a special code printed in newspaper inserts (Mermigas 2000). Smart Devices: Technology has advanced to the point that wearable monitors are able to detect medical conditions before they become problematic. Sam Joffe, president of FitSense Technology, says that tracking glucose or cardiac issues “where an intervention can make a big difference” is the focus of a new market for sensor technology (Blankenhorn 2000). Alex Lightman, CEO of Charmed Technology, Sherman Oaks, California is working on “microtubes,” which are sensors that are interwoven into objects with Internet capabilities, that exude scents to clean themselves and broadcast advertisements (Blankenhorn 2000). According to Lightman, “People will get their clothes free in exchange for tiny scrolling ad bars woven into clothing” which will help to advertise the products. Another type of wearable monitor will be designed for doctors so they can collect data and access databases while away from their offices (Blankenhorn 2000).
Honeywell and IBM-spinoff Home Director are among the leaders in the new smart home market (Blankenhorn 2000). Mary Walker, CEO of Home Director believes that 25% of homes will have some network capabilities by 2005 (Blankenhorn 2000). Smart homes will have a server within a wall that connects to the phone lines, electric lines and a radio that can reach other appliances. Refrigerators will know when they are running low on supplies and can connect to the Internet to submit a reorder. Washing machines will be able to tell you how to get stains out of clothes by connecting to the Internet and conducting some research. Manufacturers will learn how appliances are used and performing, which will help to determining the pricing for service contracts (Blankenhorn 2000).
Voice Interface. Voice interface will simplify the interactive experience with these new or improved channels (Blankenhorn 2000). As a result, technology will prove to be less of a hindrance on consumer acceptance. Using these new interactive devices will be as easy as “driving a car is today” (Johnson 2000).
The Future of IA and Its Role in IMC
This paper takes the position that the future of interactive advertising should be considered as it relates to Integrated Marketing Communication (see also Myers, 2000).[3] IA is quickly becoming a critical tool for successful IMC strategies. Thus we contend that the future effectiveness of IA should be viewed through an IMC lens.
Over the past decade, IMC has gained a significant following as both a philosophy and a method (Cathey and Schumann, Duncan & Caywood, 1995; Shultz 1993; 1995; Schultz et al, 1994). Cathey and Schumann suggest that there are three themes that emerge from the numerous conceptual and operational definitions of IMC in the literature. These themes include 1) adoption of the audience perspective, 2) the integration of messages and media, and 3) the evaluation of outcomes. Each will be explored separately as it relates to IA.
Adoption of the Audience Perspective
Schultz, Tannenbaum and Lauterborn (1994), in their seminal book on IMC, discuss the importance of the audience’s perspective. They defined IMC as a “communication system that understands and helps marketers establish a dialogue with a specific group of potential consumers.” They prescribed that IMC be organized around the consumer, “realigning communications to look at it the way the consumer see it – as a flow of information from indistinguishable sources.”
IA has the obvious capability of facilitating the adoption of the audience perspective. As noted above, new forms of advanced targeting will provide companies with the ability to know more about the consumer, to know what motivates the consumer, to assess what the consumer values, to understand how and when the consumer is willing to take in information via advertising and other sources, and to provide more customized products and services to meet the needs of the consumer. IA technologies will be used to gather this important consumer information. This will be accomplished through increased interactive means of asking questions (online/email surveys, telephone surveys, mall intercept) and through more advanced forms of “cookies,” keeping a record of interactive media experiences (e.g., internet, interactive television, wireless gadgets).
Integration of Message and Media
Duncan and Haywood (1995) define IMC as “a concept of marketing communications planning that recognizes an added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines these disciplines to provide clarity, consistency, and maximum communication impact.” Nichol (1994) adds that IMC is the “coordination of messages and copy points across all types of communication vehicles – conveying a meaningful message with redundancy.”
The second theme of IMC addresses the dissemination of information and knowledge to consumers. IMC specifically prescribes that consumers need to hear a uniform integrated message across media that access the consumer at a number of different and optimal “points of contact.” Again, IA has an important role regarding the integration of message and media. For a further discussion of this role, this IMC theme needs to be dissected into two important sub-themes: message consistency and message delivery (i.e., “points of contact”).
Message consistency. Focusing on the important messages that consumers need to hear will be a critical element for interactive advertising in the future. As consumers gain more control of the flow of information, yet have more available information, the need for message consistency intensifies. The advertiser must anticipate the information the consumer needs and deliver a consistent message across media forms that the consumer employs (including all IA media). Thus applied to IA and advanced targeting methods, the message must be consistent for an identified consumer across such channels as e-mail, personal digital assistants, interactive television, direct mail, personal selling, and even telemarketing.
Through IA, there will be considerable opportunity to teach consumers about products and services. Indeed, through new IA media forms, consumers will likely have the ability to compare the sales messages across competitive products and services. IA via the Internet provides the consumer with increased choices, even introducing the consumer to global competition. Thus providing a consistent message (and even a consistent dialogue in the case of IA) will be even more critical to market success in the future.
Finally, this increased flow of two-way information will result in a magnification of communications in attempts to build stronger brand equity (Harvin 2000). For example, McDonald’s can’t sell their actual products over the Internet or by phone. They can, however, project their corporate values (cleanliness and family fun), and their latest promotional activities.
Message Delivery. In the near future, IA will greatly facilitate IMC’s strategy to maximize message delivery through multiple points of contact. For example, there will be increased opportunities to put information in front of people (e.g., waiting rooms, internet sources, email, direct-mail, toll-free customer service numbers, bricks and click storefronts). With added ways to get to the Internet, the number of messaging options a marketer has will dramatically increase. IA will enhance personal selling as it combines with the accessibility and convenience of brick and mortar, helping to close sales more quickly in physical stores (Harvin 2000).
However, the opportunities created by IA also bring with them certain threats that will have to be understood in order to be overcome. First, the marketer’s need for new ad-serving technologies must consider consumer acceptance of those technologies. Which technologies will the consumer rely on for their primary information sources? Second, how much of the consumer’s time will be taken up with IA messaging? What means will the consumer begin to employ to guard one’s discretionary time? In a “permission-based” communication environment, how will the advertiser garner the consumer’s permission? Within this environment, the consumer will have limited capacity to maintain multiple interactive relationships. What will determine which relationships will be maintained? As we note now, first mover advantage in the market is significant. Will first mover advantage also apply to interactive relationships?
Marketers will also have to address the privacy issue (Mellilo 2000). With increased amounts of information about each consumer, marketers could very easily overstep their welcome as we now experience with aggressive telemarketing (arguably just another form of IA). While advanced targeting techniques will provide the potential for greater access, the issues of privacy and respect for the individual’s time will be critical in maintaining a relationship with the consumer.
Creating meaningful opportunities for consumers to interact with advertisers will require significant incentives, but the payoff is significant. Ford Motor Company, for example, is linking the Internet to the TV launch of its Focus automobile (Halliday 2000; Jensen 2000). Consumers can register their names at a web page location and answer multiple-choice questions to determine which scenarios will be used for the commercials. Four spots will air during prime time. Between spots, participants are encouraged to log onto the web page to vote for scenarios and submit opening lines for the next spot. By voting online, participants accumulate points for prizes. Such interaction will help advertisers strengthening customer loyalty and brand building through a more intimate and trusted consumer relationship (Harvin 2000). IA can be a great relationship-building tool, moving past a single point-of-sale. IA can also be a natural tool in managing expectations within this product or service relationship.
Finally, in the future, although we will experience a degree of media convergence, ultimately there will be increased opportunities for the marketer to interact with the consumer. One issue that will have to be considered is media desensitization. As new media forms appear, the life cycle of these forms will likely decrease, especially in a highly competitive media environment. It is interesting to note today certain decreases that have occurred over time. Viewership of the major networks has significantly decreased with the advent of cable and satellite television. Just as record albums were replaced with cassette tapes, cassette tapes are being replaced with CDs. VHS format in television recording and playback is being replaced by DVD technology.
Evaluation of Outcomes
A number of individuals have defined IMC in relationship to outcomes. These outcomes include audience response (Shultz et al., 1994), the bottom line (Gonring, 1994), maximum communication impact (American Association of Advertising Agencies, in Schultz, 1993), perceived brand value (Keegan, Moriarty & Duncan, 1992), and audience behavior (Medill School of Journalism, Northwestern University, in Schultz, 1993).
Over the next 5 years, numerous forms of interactive advertising will facilitate direct methods for evaluating IMC campaigns and customer relations. For example, companies today are continually monitoring post-purchase activity tying satisfaction surveys to the compensation of employees. In the future, IA will provide an environment where satisfaction with the relationship will likely be monitored even before purchase takes place.
IMC campaigns will be evaluated by such means as assessing an individual’s time spent with an ad and subsequent interactive response (e.g., exchange) with the company. As in the previously mentioned Ford example, companies will provide incentive experiences for online users in exchange for accurate feedback as to their advertising strategies, the interaction with salespeople, and the performance of their products and services.
Conclusion
The future holds some exciting opportunities for companies to better relate to consumers. However, these opportunities may have significant risk attached. For example, in our free-market deregulated economy there has been a proliferation of standards between different online platforms. It is not clear when this will be resolved so that common standards across platforms are adopted. Until that time, platforms may come and go based on their acceptance by the consumer and their financial viability, and advertisers will have to configure their advertising to multiple platforms. Investing in multiple interactive channels of communication is expensive and advertisers will be forced to employ risk diversification strategies and prioritize their opportunities, not unlike the consumer’s risk when selecting platforms to use.
Another risk can be found in the expectations a company establishes with its customers. Companies are finding it increasingly difficult to deliver fast and efficient service to every customer (Brady 2000). In fact, there has been a recent movement away from providing service excellence to every customer. Companies have found it move advantageous to prioritize service in favor of their best customers and thereby sacrifice certain customers to the competition (Brady, 2000). IA formats may just exacerbate the problem since consumers will likely wrongly assume that their investment in being interactive will ensure them of quality service. In this scenario, quality service will only come from the size of the financial investment, not the time a consumer spends online.
Key Research Issues and Opportunities As IA Evolves
Once again, it may be helpful to frame future research issues and opportunities as how IA is likely to facilitate IMC strategies. One advantage to interactive media is the real-time measurement and feedback that it will provide. In considering audience perspective in an interactive environment, there are numerous questions of interest that deserve research consideration. For example,
o How will consumers alter their time and effort spent in processing advertising as a result of the potential for interaction with a company?
o What can we expect from a more proactive consumer who has greater control over the flow of information?
o How will consumers perceive the value of interactive advertising as it becomes a more ever-present aspect of our lives?
o What mechanisms and incentives will be needed to encourage the consumer to adopt different formats of interactive advertising?
Furthermore, in considering the audience perspective, there are also research questions to be addressed regarding the psychological factors underlying adoption and participation in interactive advertising.
o What will be the psychological drivers (motivation) for consumer adoption of interactive advertising formats?
o How can we best measure the usage determinants of multiple channels?
o How will the consumer incorporate information provided from interactive advertising presentations into their existing belief structures?
o How will this information be abstracted and what will be the nature of inferences that result from interactive advertising?
o Will attitudes formed from interactive advertising be more resistant to counterattitudinal messages than they when compared to attitude formation from traditional advertising?
o What individual difference factors will likely moderate the consumer’s ability and willingness to process interactive advertising?
o What negative influences on consumer perceptions are likely to arise from interactive advertising formats?
In considering research opportunities with regard to the integration of message and media, many of the research traditions in the communications discipline still apply. Applying Hovland’s elements of persuasion (target, message, source, channel) to interactive advertising, the following questions may be posed (Hovland et al. 1953; also Berlo 1960):
o What will be the optimal points of contact for interactive advertising?
o Will we be able to continue to segment the market by groups, or will we have to move more to one-to-one communication strategies?
o What channels of interactive communication will be most effective in reaching the consumer?
o What types of messages will be most effective in an interactive environment?
o What sources of information will be most effective in an interactive environment?
o How will source, message, target and channel interact with an IA environment?
A final suggested opportunity for research focuses on the consumer/company relationship as facilitated through interactive communication. Research questions in this arena might include:
o How can relationships be initiated, maintained, and even enhanced through interactive advertising channels?
o Which interactive media formats will best facilitate relationship management?
o How can these relationships be best evaluated through interactive channels?
It is interesting to note that past effectiveness research focused primarily on outcomes and tied them back to specific media. The multi-interactive media makes this increasingly difficult. Research that examines ways of measuring multi-channel integration effectiveness will be increasingly important over the next 5 years. However, it will also be increasing important to consider process, understanding what underlies effectiveness, as well as outcome.
It will also be necessary to develop new measurement tools to assess the effectiveness of new IA formats. For example, a recent joint venture between Next Century Media, Studio One Networks, and American Demographics, produced the Sponsorship Effectiveness Index, capable of measuring the effectiveness of Internet sponsorships as a brand-building tool for advertisers.
Finally, as IA becomes more prevalent in our society with consumers having relatively easy access to many types information, and companies also having relatively easy access to information about the consumer, an increasing number of policy issues will likely surface. For example, how will the individual’s right to privacy be handled within a seemingly open information environment? What standards will be imposed to ensure security of certain forms of information? How will we protect our children from unwanted messages? These types of questions provide extensive fodder for future research addressing important policy issues.
Conclusion
The goal of this article was to provide a look at the future of interactive advertising. For purposes of retaining a realistic perspective on the future of IA, a 5-year time frame was imposed. With the editor of the Interactive Media & Marketing section of Advertising Age suggesting that his section will be discontinued within 5 years if not sooner, and that interactive advertising will just part of mainstream marketing, how should we think about the future of IA? Will JIAD have a short tenure?
As reinforced in this article, we believe that IA will be an increasingly important tool in IMC strategies. Since this article advocated this important relationship, it revealed ways in which IA might facilitate IMC strategy in the future.
While IA may become increasingly viewed as a tool, there may be reason to believe that the Ad Age editor’s column will not end in 2005, nor will JIAD. The Ad Age column will likely evolve to something that will still need to address new interactive technologies, as will JIAD. To date, IA has been viewed primarily via the Internet with an emphasis on showcasing its capabilities. However, as mentioned in the introduction, the definition of IA should be interpreted broadly and more inclusively.
We believe IA will have a significant future beyond five years. While predicting the future of IA may be an effort in futility, one can look to the science fiction world to imagine what an interactive future might look like. In her book entitled Hamlet and the Holodeck, Janet Murray (1999) of MIT presents a futuristic look at narrative creation within an increasingly technologically interactive environment. As fans of Star Trek are aware, the holodeck is a room that, through computer programming, can shift the individual’s reality to another time and place. The timeframe for Star Trek is set in the 23rd century. The members of the Starship Enterprise crew employ the holodeck to take vacations, become active participants in narrative fiction, create ideal lovers, and even run work-related simulations. The computer programming takes into account all of the human senses in its contrived simulations.
For our purposes, the holodeck experience provides an interesting lens in which to gaze into the future of consumer interactivity with advertising, products, and services. Some of that interactivity is already here. For example, much to the objection of the music industry, the consumer can now download the music from individual libraries to hear the latest recordings prior to purchase. Through three-dimensional presentational software, we can now experiment with interior design to imagine how an actual room or floor plan might appear. Virtual reality simulations are being developed to allow us to experience potential vacation places as if we were actually there. It is not hard to imagine that new technologies will be developed to tap into our tactical senses, thus allowing us to feel physical stimuli such as textile materials. Imagine how this might change the apparel industry if an individual can feel the material of clothing in an online store. Moving toward the holodeck experience, someday in the future, technology will likely exist that will allow individuals to experience product usage in a virtual reality environment.
In closing, while we might only be able to safely predict how IA might change in the next five years, a look beyond five years provides greater opportunity for multi-sensory interaction with products and services as an integral aspect of advertising. Thus it is our belief that the importance of interactivity will continue to grow as technology increases the means in which we interact with each other.
References
Belch, George E. and Michael A. Belch (1993), Introduction to Advertising and Promotion: An Integrated Marketing Communications Perspective, Homewood, IL: Irwin.
Berlo, David (1960), The Process of Communication. New York: Holt, Rinehard & Winston.
Blankenhorn, D. (2000), “Hype blasters: A brave new world? Technology and
marketing explore uncharted territory,” Advertising Age: Special Issue: The Interactive Future, (April), I57.
Brady, (2000), “Why Service Stinks,” Business Week, October 23.
Carter, Meg (2000) “The everywhere audience – Wireless application protocol means advertisers will be able to target people according to their location via their mobile phones, World Reporter, June 9th.
Cathey, Amy and David W. Schumann (1996) “Integrated Marketing Communications: Construct development and foundations for research” Proceedings of the 1996 American Academy of Advertising Conference.
Chiagouris, Larry and Brant Wansley (2000), “Branding on the Internet,” Marketing Management, (July), 34-38.
Cooper, J. (2000), “Inside the box,” Mediaweek, (May), C32.
Culter, B. (1990), “The fifth medium,” American Demographics, 12, 24-29.
Duncan, Tom and Clarke Caywood (1996) “The concept, process, and evolution of Integrated Marketing Communication,” in E. Thorson and J. Moore (editors) Integrated Communication: Synergy of Persuasive Voices.Mahwah, NJ: Lawrence Erlbaum Associates.
Furber, R. (2000), “Special report: Early starts: Interactive TV advertising offers huge potential for tailored, one-to-one marketing. But it is still early days for the medium, and many advertisers are wary of investing in it,” Marketing Week, (March), 63.
Garside, Juliet (2000) “Will viewers interact with TV advertising?” World Reporter, February 16.
Gonring, Matthew P. (1994), “Putting Integrated Marketing Communications to work today,” Public Relations Quarterly, 39(3), 45-48.
Greenberg, K. (2000), “Golden age of wireless. (Marketing via wireless devices),”
Mediaweek, (May), 102.
Gunn, E. (2000), “Marketers keen on enriched e-mail: Immediacy, response tracking, generation of new leads and adaptability get high marks,” Advertising Age, (October), S12.
Halliday, Jean (2000) “Ford weaves web into focus spots: Interactive link allows
consumers to determine which ads are aired,” Advertising Age, March 3rd.
Harvin, Robert (2000) “In Internet branding, the off-lines have it,” Brandweek, January 24.
Hodgson, Richard S. (1995), “Considerations for 21st Century Direct Marketer: Focusing on the Basics in New Environments,” in Interactive Marketing: The Future Present, ed. Edward Forrest and Richard Mizerski, NTC Business Books, Lincolnwood, Illinois.
Hovland, Carl I. I.L. Janis, and H.H. Kelley (1953) Communication and Persuasion, New Haven: Yale University Press.
James, D. (2000), “It’ll be a wireless, wireless, wireless, wireless, wireless world,”
Marketing News, (July), 25, 29.
Jensen, Trevor (2000) Automatic address, Adweek, April 17.
Jones, Tim (2000), “Media firms to use traditional tactics to generate profits during Super Bowl,” Chicago Tribune, (December 27).
Johnson, Bradley (2000), “It’s just the future: It’s time to stop framing the world in terms of the Internet; Instead, let’s consider how interactivity will change how customers interact with marketers,” Advertising Age, (April 17), Pg. 19.
Katz, Helen (2000), “Interactivity in 2000: An industry viewpoint,” Journal of Interactive Advertising, 1, (1).
Keegan, Warren, Sandra Moriarty, and Tom Duncan (1992), Marketing, Englewood Cliffs, NJ: Prentice-Hall.
Leckenby and Li (2000), “From the editors: Why we need the Journal of Interactive Advertising,” Journal of Interactive Advertising, 1(1).
Maude, D., R. Raghunath, A. Sahay, and P. Sands (2000), “Banking on the device,
McKinsey Quarterly, (3), 87-97.
Mellilo, Wendy (2000) “Getting personal,” Brandweek, March 27.
Mermigas, D. (2000), “Net technology connects data with marketers: Sears, ‘Forbes’
plan to use new system directed at consumers,” Advertising Age, (January), 2.
Murray, Janet, (1999) Hamlet and the Holodeck: The Future of Narrative Cyberspace, New York: The Free Press. .
Myers, Jack (2000) “Media Engine Gathers Head of Steam,” Advertising Age, February 14.
Nakamura, Brandon (2000a), “If you want your marketing to be profitable . . . read this!” Brandweek, (Summer).
Nakamura, Brandon (2000b), “DVD: DVD is the next gold rush!” Brandweek.
Nichol, Betsy (1994), “Integrated marketing: The clutter-buster,” Franchising World, 26(5), 15-18.
Pavlou, Paul A. and D. W. Stewart, (2000), “Measuring the effects and effectiveness of interactive advertising: A research agenda,” Journal of Interactive Advertising, 1 (1).
Roehm, Harper. and Curtis Haugtvedt (1999). “Understanding interactivity of cyberspace advertising,” in D.Schumann & E. Thorson (editors) Advertising and the World Wide Web, Mahwah, NJ: Lawrence Erlbaum Associates.
Sassos, Thomas P. “Yesterday, today, and beyond: Old fashioned cable programming will do its part to push viewers into the interactive world,” Advertising Age, April 10.
Schultz, Don (1993), “Integrated Marketing Communications: Maybe definition is in the point of view,” Marketing News, 27(1), p. 17.
Schultz, Don (1995), “The IMC process,” in R., Kaatz (editor) Integrated Marketing Communications Symposium: The Transcript of Talk at Northwestern University’s Third Annual Symposium, Chicago: NTC Business Books.
Schultz, Don, Stanley I Tannenbaum, and Robert F. Lauterborn (1994), Integrated Marketing Communications: Pulling It Together and Making It Work, Lincolnwood, IL: NTC Business Books.
Sinha, Suveen K. (2001), “The media matrix,” Business Today, (January 7), pg. 49.
Sivadas, E.; Grewal, R. and J. Kellaris (1998), “The Internet as a micro marketing tool:
Targeting consumers through preferences revealed in music newsgroup usage,” Journal of Business Research, (41), 179-186.
Skuba C. (1996, Spring). Web site vs. web session. American Advertising, 12 (1), 22-23.
Steuer, J. (1992). Defining virtual reality: Dimensions determining telepresence. Journal of Communication, 42(4), 73-93.
Tiegel, E. (2000), “Loosening the grasp of 30-second spots: New technologies offer
options in audience tracking, in-programming opportunities,” Advertising Age, (July), S6.
[1] In this article we will refrain from an even broader definition that suggests that people interact with such entities as people, computers, instruments, data, environments, simulations, visualizations and media clips (Hanss, 1999). Such a broad definition from a designers standpoint is interactivity is a synonym for navigation interactivity as a collection of mouse events.
[2] The authors believe that sometime after 2005 this single product will be enhanced to include telephone services as voice recognition technology is perfected.
[3] Myers suggests the three most important advertising trends over the next 5 years will be “interactive,” “integrative marketing,” and “return on investment.”
About the Authors
David Schumann is Professor of Marketing and the Associate Dean of the College of Business Administration at The University of Tennessee. Andy Artis is a doctoral student in the Department of Marketing, Logistics and Transportation at the University of Tennessee and previously worked in the advertising and broadcasting industry for 15 years. Rachel Rivera is an MBA student at the University of Tennessee and will be joining Burke Research after graduation.
