Re-Thinking

“How Media Advertising

Works”
Don E. Schultz, PhD.
Northwestern University

iMedia Brand Summit

Deer Valley, Utah
13 September, 2004
 Basic Premise:
Most, If Not All, Our Media
Advertising Models Are
“Broken” or Even Worse,
Irrelevant, in the 21st
Century Marketplace
 A Three Part Proposition
A. Lack of proof requires use of derived
assumptions about how media
advertising works
B. Marketplace observations and on-going
research on how media advertising
“really” works
C. First stage – conceptual media
advertising model
A. Our Derived Assumptions
 Note: A U.S. view but likely projectable to most
developed economies
 Assumption #1 – A Stimulus  Response
model
 Marketercontrols the input and impact
 Based on a 4Ps marketing approach

 Assumption #2 – Attitudinal Change 

Behavioral Change
 Behaviorist
Psychology
 Some form of Hierarchy of Effects underlying all
media models
1961 - “Hierarchy of Effects” Model
of How Media Advertising “Works”
One-Way

Medi Attitudes/
Knowledge Preference Conviction Purcha
a Awareness
se
Adve
r- Behavi
tisin or
Linear
g
“Influencing and Persuading Consumers”
Source: Adapted from Lavidge and Steiner
 Assumption #3 – A “Supply-Chain” model
of media message distribution
 Porter’s Supply Chain Model
Media
Systems
Media
Planning
Broadcast

Interaction
Contact Measurement
Marketers

Print

Agencies

Consumers/End Users
 Assumption #4 – Each media form works
separately and independently of any
other. Therefore, each is and should be
planned and measured separately and
independently.
Separate and Independent View of
Media Communication Planning,
Distribution and Measurement
Product Marketing

Media Public Direct Sales Events/

Advertisin Relations Mail Promotion Sponsorshi
g ps

Consumers

Attitudes Behaviors

?
Our Media Systems Are Based
On Still Unproven Hypotheses,
Discounted Models, Out-of-
Date Methodologies, Intuition
and Tenuous Associations
 Yet,
Last Year, U.S. Advertisers
Invested $250 Billion+ in
Media Advertising Based on
These Assumptions and
Hypotheses!
 B. Our Marketplace
Observations and On-Going
Research
 Clearly, consumers have solved, or at
least resolved, the complex, multi-media
marketplace in which they live – cognitive
psychology models and media multi-
tasking
 Newspapers Magazines

Internet
Outdoo
r
Consumer’s
View of Media
Advertising
Wireless Radio

World Wide Web Television

People Simultaneously Using Or
Consuming Multiple Media
Forms at Single Points in Time
 Information explosion forces consumers to
extend, expand and change their media usage
 Rapid consumer acceptance of new media forms

 Consumers “multi-tasking” with media – i.e.,

reading the newspaper, talking on a cell phone,
on-line and tracking the TV – all at the same time
– Simultaneous Media Usage
Evidence? SIMM Studies in USA
 Identification and verification of simultaneous media usage
(SIMM) among US population – Four studies in the US
since Spring, 2002 (4th in analysis now)
 Research among double opt-in subscriber network of 60
million individuals
 E-mail, not internet, gathered responses
 Respondents report media usage and other purchasing
factors – products, retailers, etc.
 Current sample base of 30,000+ individuals (15,000 more in
Wave 4)
 Accuracy at .01 level
 Benchmarked to non-online studies
 Weighting and balancing of 14 U.S. census age-sex cells
When you watch TV, do you simultaneously go online?
Male Female
Regularly 22.0% 26.6%
Occasionally 36.4% 33.7%
Never 41.6% 39.7%
R/O 58.4% 60.3%

Male Female

Regularly

Occasionally

Never

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

When you go online, do you simultaneously watch TV?
Male Female
Regularly 29.4% 35.3%
Occasionally 31.3% 29.8%
Never 39.4% 35.0%
R/O 60.6% 65.0%

Male Female

Regularly

Occasionally

Never

0% 5% 10% 15% 20% 25% 30% 35% 40%

 Clear Evidence of New
Media Advertising Issues
 What comprises an “audience”?
 Consumers create “foreground and
background” media for themselves and for the
occasion
 What is the impact of “conflicting messages”
delivered at the same moment in time?
 Simultaneous multi-media usage suggests all
media are likely “overpriced”
When you read the newspaper, do you simultaneously
watch TV?
Male Female
Regularly 21.6% 27.0%
Occasionally 40.5% 39.8%
Never 37.9% 33.2%
R/O 62.1% 66.8%

Male Female

Regularly

Occasionally

Never

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

 When you watch TV, do you simultaneously read
magazines?
Male Female
Regularly 5.9% 8.5%
Occasionally 38.1% 46.7%
Never 56.0% 44.8%
R/O 44.0% 55.2%

Male Female

Regularly

Occasionally

Never

0% 10% 20% 30% 40% 50% 60%

When you read magazines, do you simultaneously listen
to the radio?
Male Female
Regularly 12.9% 10.5%
Occasionally 35.9% 36.9%
Never 51.2% 52.6%
R/O 48.8% 47.4%

Male Female

Regularly

Occasionally

Never

0% 10% 20% 30% 40% 50% 60%

 On an Average Weekday (Monday-Friday),
from 7:30pm to 11pm do you:
All 18+
68.8%
70%
60%
38.2%
50% 35.8%
40%
20.6%
30%
20%
10%
0%
Watch TV? Surf the Read/Send E- Read
Internet? mail? magazines?
SIMM Evidence Challenges
Almost Every Media
Planning, Distribution And
Measurement Model
Currently in Use
C. Synergy Among Media Forms
 Naik and Raman, Journal of Marketing Research,
November, 2003
 “Understanding the Impact of Synergy in Multimedia
Communications”
 Methodology
 Adaptation of basic dynamic advertising model
 Palda – (1964) First order autoregressive advertising
model
 Montgomery & Silk – (1972) Multimedia advertising, with
each medium having different marketplace effects
 Gopalakrishna and Chatterjee – (1992) Introduction of
interaction terms to capture joint effects
 Jazwinski – (1970) Addition of Kalman filters to model
dynamic results over time
 Demonstrated practicality using “real world”
data to explain media synergy – synergy
between media forms demonstrates increase in
expected sales and enhanced media
effectiveness
 Results: Demonstrable and measurable media
interaction and synergy between television and
newspaper advertising – where to add media,
where to reduce – media efficiency
improvement
 Tying the Three Pieces
Together
 Today, media advertising likely “works” based
on consumer media consumption, not on
advertiser/marketer message distribution
 Our media planning models need to be re-
thought, revised and revamped to deal with
consumer simultaneous media consumption
 New media measurement systems are needed
 Media pricing models must be re-visited
 Our First Attempt at a 21st
Century Model of How Media
Advertising Really Works
Media Consumption Model
Response
Potential Fragmentation Potential Synergy
Of Attention Via Simultaneous Media Usage
(Message Impact Diluted) (Messages Reinforced)
Media
Consumer

Media Media Media

Exposure Exposure Exposure

Foreground/Background Media

Time Allocated To Each Media Form

 The Difference?
It’s Not How Many Messages
You Send Out……..
It’s How Much Media Is
Consumed by the Audience!
We’ll be Developing This First
Model During Fall, 2004 at
Northwestern University…..
Stay Tuned
 Summary
 Our media planning, measurement and
evaluation models are “broken” – they must be
fixed
 Consumer media consumption is one
alternative model of how media advertising
works – there may be others
 We will continue to conduct research on SIMM
and other factors that may help explain and
illustrate how consumers really use media
 We encourage your help and support
Questions, Comments or
Discussion?
Don E. Schultz Ph.D.
dschultz@northwestern.edu