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Yardstics

Yardstics

The yardstics blog is discussing issues related to marketing and marketing communication. It is to be used as an tool for learning and sharing of information in the mentioned areas. Scroll your way through the blog and find information related to your current course. Ask your lecturer for a password if you want to add material. Enjoy your stay!

How to Price Web Advertising?

Measurement Posted on Sat, October 27, 2007 23:42:13

Some are wondering what pricing method is the best for Web advertising? Is it the CPC (Cost Per Click), the CPV (Cost Per View) the CPTU (Cost Per Time Unit) or some other method like HPM (Hybrid Pricing Method)?

The answer to the question is actually depending upon who you are. If you are an advertiser you can always try to influence the company publishing your ads to use a method that suits your “interests”. For instance, an advertiser could benefit from using CPC in at least two ways. The standard way and the standard argumentation is that you are only paying for those who are really interested in your product or company (read more about this inadequate idea in the “Measurement” Category). Another less common line of argumentation is that companies pursuing image communication can benefit from the CPC since fewer customers will click on such an ad and thereby the campaign will be less expensive.

CPV (sometimes called CPM, cost per thousand views) is a pricing method where the advertiser pays for the number of customers that have been exposed to the ad. The price per “view” is usually lower than the price per “click” but here you are paying for everyone that are exposed to the ad, including those that are not interested in the advertisement. Publishers are using this method to a greater extent today than what they have done in the past, perhaps since they, when using the CPV, can get revenue even though web surfers are not clicking on ads.

The CPTU pricing model for the Web is similar to what is used in print media. It is basically like when you are paying rent for your apartment, a hotel room or the like. You pay for the time that you are using the space, if you use it for a day you pay for a day etc. This pricing method is also gaining in popularity, just like the CPV.

The HPM – Hybrid Pricing Method can comprise of a mix of the previously mentioned pricing methods and future ones not yet established. One frequently used hybrid is that the advertiser pays for every “view” and pays extra for every “click”. This can even be combined with a “fee” for the number of days or weeks that the campaign is running.

A serious downside with the non-time based methods is fraudulent behavior from actors on the market. So called “Click-Fraud” may be a threat to the advertisers’ budgets, the publishers’ credibility and also for search engines such as Yahoo, Google, Altavista, MSN and the like. A lot of effort is put in to battle Click-Fraud but still it is an open battle between the search engines and their “enemies”. Who will win the battle is yet to be determined.

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se



Marketing & Communication

Marcom Posted on Sat, October 27, 2007 22:08:10

Yesterday I was asked “to what extent communication is part of marketing communication and marketing” but since I had to rush away I promised to put an answer to the question here on the blog. More can of course be said about the issue but here is a brief answer.

Duncan & Moriarty (1998) argue that marketing theory and communication theory share common roots and thereby they are enriching each other. Amalgamating marketing and communication consequently forms the area of marketing communication. In a marketing communication context, information is distributed to inform, persuade, motivate and to make potential customers aware of an organization’s offering (Keller, 2001).

Marketing communication comprises of a variety of activities aiming at communicating with the company’s customers. Marketing communication tools are typically divided into four or more defined areas and these tools or sub functions are often referred to as the promotional mix. The tools in the promotional mix are advertising, personal selling, sales promotion, public relations and can also be extended with for instance direct marketing, packaging, point of purchase display and event marketing.

In summary; Communication is an intrinsic part of Marketing as well as Marketing Communication.

Duncan, Tom and Sandra E. Moriarty (1998), “A Communication-Based Marketing Model for Managing Relationships”, Journal of Marketing, 62 (2), 1 – 13

Keller, Kevin Lane (2001), “Mastering the Marketing Communications Mix: Micro and Macro Perspectives on Integrated Marketing Communication Programs”, Journal of Marketing Management, 17 (Sept), 819 – 847

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se



Marketing communication is marketing

Marcom Posted on Sat, October 13, 2007 23:26:59

To enlightened marketers the headline may sound very odd. However, every now and then I meet marketers who have the most peculiar notions. Like for instance that Marketing communication is something else or different than Marketing. Or that selling is one thing and marketing something else.

I do not know the origin of these ideas. Nonetheless; here is a brief summary of how it is;

Marketing communication is an important part of marketing with the purpose to communicate with companies’ target markets [1]. Keller (2001, p. 823) describes marketing communication as representing “…the voice of a brand and the means by which companies can establish a dialogue with consumers concerning their product offerings”. The reasons why companies communicate to their markets vary but often the purpose is to bring to customers’ attention information regarding new goods and services, to change attitudes toward a product or to remind consumers about products (Keller, 2001). The companies’ communication activities can furthermore be part of an information exchange between company and customer with the intention to maintain and develop customer relationships (Reid, Luxton & Mavondo, 2005). No matter the purpose, communication is an integral part of the marketing function and is executed by staff and functions within the organization and/or together with external organizations specialized in the area of communication.

Marketing communication, frequently called promotion and being one of the four P’s, is a broad concept that covers the sub areas of advertising, personal selling, public relations, sales promotion, direct marketing and areas connected to these (Duncan & Moriarty, 1998). The various areas are serving different purposes and aiming at achieving different goals. For instance, sales promotion is short term incentives to stimulate purchase whereas advertising can be used to build a brand image or to create a presence on a new market. Common for these sub areas is that they all include an element of communication that is directed towards the market. Communicating with the market and the consumers is important since it over-bridges the gap between companies and customers. At a basic level, communication will make it possible to inform and make potential customers aware of a company’s business, its offering or to persuade customers to enter into an exchange relationship.

[1] The communication aspect of marketing is explicitly formulated in the AMA definition of marketing, “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” (The AMA definition as reported by Keefe, 2004, p. 17 – 18)

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se



To complain or not to complain

Consumer Speaker's Corner Posted on Sat, October 13, 2007 21:00:21

To complain or not to complain

Satisfied with your purchase or not? To speak or remain silence? That is the question. Do you want to gain more as a consumer? Speak up! When a consumer is not satisfied with a product bought and chooses to be silent, he or she chooses to be a victim. Speak up and you will always win. In fact, it’s a win for both the company and you. Besides the fact that you will get value for your money, the company will learn more about its products’ failures and a chance to turn dissatisfied customers into happy satisfied ones. Let’s make a change. Let us be smart consumers. Share your experiences with us and speak out on how you would wish companies to address dissatisfied customers.

Many consumers have been in situations where they were dissatisfied with a product and would have liked to complain to the company in question, however, never actually did so. Consumers’ complaints are expressions of dissatisfaction and there are various factors underlying complaint behavior. A majority of dissatisfied consumers do not voice their complaint to the company in question (Best and Andreasen 1977, TARP 1986, Tschol 1994).

Consumer Complaint Behavior and in particular the interactive exchange between the company and the consumer is an often overlooked topic. This exchange determines the eventual satisfaction or dissatisfaction of the consumer (Davidow and Dacin, 1997). Among the few researchers that are arguing about the importance of encouraging customers to complain to companies can be mentioned Fornell and Wernerfelt (1987, 1988). Most literature, see for instance Day (1984), Gilly (1987) and Singh and Wilkes (1991), about consumer complaint behavior have mostly focused on describing and developing general models of consumer complaint behavior or on modeling organizational complaint responses, such as for example TARP (1986). Davidow and Dacin (1997) argue that not many have attempted to integrate these two streams of research.

There are two main sources accountable for causing customers to become dissatisfied with a product namely, the formation of expectations made by the customer and the disconfirmation of those expectations evaluated by the performance of the product. Before buying the product, consumers form expectations about what the product characteristics will perform. The actual usage of the product will then reveal the performance of the product and is compared to the consumer’s expectations. If the product does not meet the customer’s expectations, the outcome will be negative disconfirmation. On the other hand, positive disconfirmation occurs when the performance of the product was as expected (Oliver and DeSarbo, 1988). In addition, Bearden and Teel (1983) also consider expectations and disconfirmation as determining factors of dissatisfaction. Referring to the discrepancy theory when reading consumer literature, Gilly and Gelb (1982) argue that the amount of dissatisfaction experienced and thus the probability of complaining depends on the size of the perceived discrepancy between expectations and outcomes.

When looking up the word “expectation” in a dictionary, “hope” is one synonym found. One explanation of the word is the following: “hope about a certain development that also is perceived to be possible”. Another description is “what is considered most likely to happen”. I found this discovery quite interesting since when considering the meaning of the word it gives a positive impression. When reflecting upon this word “hope” from a consumer’s point of view I believe it to be logical that consumers do have certain hopes of products to improve their lives in some ways. Considering the positive expectations and therefore aiming to reach a certain “ideal” state of mind, it is not surprising that when these hopes are not being met the consumer becomes dissatisfied.

When customers purchase certain goods in order to fulfill particular needs, they assess the outcomes of their purchases based on what they expect to receive. Consumers tend to voice out their dissatisfaction to companies more frequently when it comes to expensive products as opposed to everyday products (Fast Moving Consumers Goods).

When looking at the products that we use at work, in our spare time, at school, and in our homes, we can observe that we consume more FMCG than we might realize. In fact, we consume more FMCG as opposed to other product categories. Many consumers may not be aware of how much money is actually spent on FMCG yearly. It is therefore in my opinion that exploring the complaint behavior of consumers of this product category of great importance if not, a necessity from both the consumer’s as well as the company’s perspective.

Claudia Rademaker, M.Sc.

Let’s make a change. What are your experiences as a dissatisfied customer? How did the company react? How do YOU think companies should address dissatisfied customers? Discuss your experiences with me! You can reach me at claudia@stics.se

Claudia is currently conducting research in the area of Consumer Complaint Behaviour

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or internet based, without prior permission. www.stics.se



Ford’s Green Marketing is really Green

The colour GREEN Posted on Wed, October 10, 2007 23:00:26

Marketing has a quite long history and telling the story of marketing usually includes the Ford corporation in one way or the other. The very first marketing management philosphy was more than anything else a Ford creation or at least perfected by Mr Henry Ford. His philosophy was to improve production of the early Model T so that costs could be reduced. Thereby the price could be lowered and more people could afford it. However, in the strive for standardization and cost reduction it was deemed unimportant to allow customers to have any influence on what colours the cars would have. The Ford colour issue has become quite well known but it is less known that it was actually Mr Henry Ford himself who joked about that he was offering people a car of any colour as long as it was black.

Considering Ford’s colourful heritage it was quite surprising to observe that they, after almost a hundred years, went back to their original strategy. That is, to sell cars that come in only one colour, no matter the whishes of the customer. You may now wonder if this really has happened and the answer is indeed yes.

It is a few years back when Ford made an extra environmentally friendly effort in launching their ethanol fueled Ford Taurus. Apparently they considered their product so nature friendly that it could only come in one colour – Green – what else?

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Old habits die hard but I guess that even stubborn marketers at Ford ought to realize, after a hundred years, that it is not a successful strategy to deny customers their freedom of choice!
/Patrik

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se



The Hoax – 50 Years of Subliminal Advertising

Myths and misinterpretations Posted on Fri, September 28, 2007 00:34:30

There are few stories in the area of marketing that have come to be as widespread and well known as the “Coca Cola – Subliminal Advertising” story. Here you can read a brief summary of the story and the blatant lies behind it. The story goes like:

“This advertising specialist, Mr Vicary, comes up with a brilliant idea and inserts a brief advertising message into a movie but the message is so short that it will not be perceived consciously. The message “Drink Coke” and “Eat popcorn” constitutes a subliminal advertising message and is received by the audience at a sub-treshold level. In the pause, the sales of Coke and popcorn increased dramatically.” End of Story.

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This story is every now and then surfacing in media or among the general public, it can be heard from students, marketing researchers, advertisers and sadly enough, by many professors and professional researchers. What few know is that the “Jim Vicary Hoax” might as well be dubbed the No. 1 Myth in Marketing. It is by far the most well known phenomenon related to marketing that people in general knows about. And that they think is true. Nonetheless, the concept of “Subliminal advertising” is unsubstantiated. (See references below)

Jim Vicary whose advertising agency, at the time, was not doing very well came up with the “experiment” and claimed that he had succeeded in advertising Coke and popcorn in an ingenious way. However, later when he was challenged and could not replicate or even produce the results, Vicary admitted that the results of the initial study had been fabricated (Weir, 1984). Furthermore, later studies have never produced any scientific evidence of the phenomenon, on the contrary (Moore, 1982, Rogers & Seiler, 1994, Percy & Elliot, 2005).

Then, what is this so called “Subliminal advertising” all about? “Subliminal advertising” is defined as advertising that employs stimuli operating below the threshold of consciousness. It is supposed to influence the recipient’s behaviour without him/her being aware of any communication taking place. However, fact is that since the message is communicated below the treshold then this is equivalent to no input at all. The human attention system is not constructed in such a way that it can receive and make sense out of messages that has such a short time span.

Those talking about the Subliminal effect are mixing things up! It is worth to notice that one should not, like many do, confuse the term subliminal with unawareness. Unawareness of the impact of an advertisment is something completely different than the “Subliminal”-concept. For instance, a person may read an article in a newspaper and next to the text is an advertisement for a product. Now, in this case the reader will be exposed to the advertisement perhaps even for minutes and the peripheral vision will capture parts of what is advertised as the eyes of the reader is being scanned back and forth over the text for a long period of time and also covering the ad at times. Clearly this does not have anything to do with the claimed “subliminal effect” but when studying the advocates of “Subliminal advertising” some are confusing Subliminal with unconscious. Another example frequently used is the small ice cube lady in a glass of whishy or any other drink. In this case some are arguing that it is “Subliminal advertising”. A notion that is somewhat difficult to understand. In cases like this the small pinup girl wearing bikini in the glass is clearly visible if you take the time and look. So in what sense is that “Subliminal advertising”? And what do the advocates of “Subliminal advertising” expect to happen? That the customer runs and buys a bikini?

So why has “Subliminal advertising” gotten so much attention then? To understand that, things has to be put into context. There may actually be some answers.
a) The book “The hidden persuaders” by Vance Packard from the end of the fifties was successful in stirring up peoples feelings. In his book he is sketching how consumers are manipulated, with advertising, into a consumption prison to the benefit of the companies.
b) During this era, 50s – 60s, when the cold war was raging and senator McCarthy was at his peak some people and some organizations were very concerned about whether methods like “Subliminal advertising” and the like could be used for political propaganda as a hidden weapon.
c) During the 60s, 70s and up to the mid 80s the concept of hypnosis and subconscious effects were widely popular. Perhaps you may even remember TV-shows from this time where psychologists or “magicians” were hypnothising people live making them do funny things. “Subliminal advertising” fit very well into this time.
d) “Subliminal advertising” is interesting because it tickles our imagination! The very concept of “Subliminal advertising” challenges our free will. It is manipulating us and worst of all, it is obscured or hidden so we do not know if or even when we have been subjected to it… and that may perhaps be the number one reason why this marketing myth is still alive and continuous drawing attention to itself.

This year (2007) it is 50 years since Jim Vicary conducted his infamous “experiment”. Today Vicary’s story has unfortunately developed into folklore. But what is worse is that the general public as a consequence of this has a serious misperception of marketing and advertising.

//Patrik Nilsson

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se

Find more on this topic in the following references:

Sheri J. Broyles, (2006), “Subliminal Advertising and the Perpetual Popularity of Playing to People’s Paranoia.” Journal of Consumer Affairs, Vol. 40 Issue 2, p392-406

Dichter, Ernst (2007), “It was rubbish then, it’s rubbish now” Advertising Age; 9/10/2007, Vol. 78 Issue 36

Moore, Timothy E. (1982). Subliminal Advertising: What You See Is What You Get. Journal of Marketing. 38-47.

Rogers, Martha; Seiler, Christine A. (1994), “The answer is no: A national survey of advertising industry practitioners and their clients about whether they use subliminal advertising”, Journal of Advertising Research, Mar/Apr, Vol. 34 Issue 2

Weir, Walter (1984), “Another Look at Subliminal ‘Facts’.”, Advertising Age.



Measuring advertising effect

Measurement Posted on Tue, September 18, 2007 22:38:12

The industry practice of using click rate as a “true” measure of advertising effect originates from a belief that “only what is clicked on has effect”.

A passage from a research study using multiple experiments to elaborate on the issue reveals that the industry may be mistaken; “Using click-through as a measure of advertising effect seems to be an inappropriate procedure where the market researcher is at risk of measuring the wrong thing. Remember Krugman’s statement, “[…] the nature of effective impact of communication or advertising on low-involvement topics, objects, or products consists of the building or strengthening of picture-image memory potential. Such potential is properly measured by recognition, not by recall. The use of recall obscures or hides already existing impact.”The use of the click-through measure obscures already existing impact to an even greater extent than what recall does since it is an even less sensitive measure than what recall is.”

One could perhaps add that the purpose of advertising is not always to achieve a click. If that would be the case advertisers would pull their hair nowadays since click rates are dropping and are now often found to be below 1‰ in a population. Instead of solely relying on click rates, advertisers should include additional measures of advertising effect. //

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science. www.stics.se



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