Integrated Communication

Synergy of Persuasive Voices

Esther Thorson,Jeri Moore

• Publisher: Psychology Press
• Year: 2013
• ISBN:
  9781134780297
• Edition: 1
• Topic: Business
• Subtopic: Consumer Behaviour
• Index: Business

Building brands through integrated marketing is an approach being used by all top-level marketing strategists. The result of a series of papers presented at the eleventh annual Advertising and Consumer Psychology Conference held in Chicago, this volume brings together researchers and professionals whose efforts focus on integrating the various persuasive tools of marketing. It goes beyond case studies of the use of integrated marketing to look at how integrated communication actually works on achieving optimal effects on the various audiences for products.

I

Integrated Marketing Communication: Definitions and Theoretical Foundations

1	The Concept, Process, and Evolution of Integrated Marketing Communication

Tom Duncan
University of Colorado

Clarke Caywood
Northwestern University

Recognizing that the marketplace was changing and that advertising was fast losing its golden halo, ad agencies went on a merger and acquisition binge in the late 1970s and throughout the 1980s in an attempt to offer their clients more than just advertising. Unfortunately, most of these marriages with public relations, sales promotion, and direct response agencies were based on a physical (i.e., financial) attraction, not on love and respect for their new partners’ communication skills. The acquisitions were driven by the attempt to not lose the money that clients were transferring out of advertising into the other communication areas. In addition, these agencies had little understanding of the integrated marketing communication concept. They continued to have tunnel vision, responding to most situations with the attitude of “advertising is the answer, now what’s the problem.” The advertising agencies were either unwilling or unable to fully assimilate their newly acquired communication functions, in most cases allowing the newly acquired agencies to remain independent profit centers. Consequently, ad agency clients, for the most part, saw little benefit in ending their relationships with their current public relations, sales promotion, and direct response agencies. Advertising agencies are still searching for the best way to incorporate the concept and practice of integrated marketing communication (IMC).

Recognizing that IMC was more than a fad, in the late 1980s, the ad agencies, led by the American Association of Advertising Agencies, tried to co-opt the concept by calling it the “new advertising.” To say the least, this self-serving term did little to build positive relationships with public relations, sales promotion, and other nonadvertising communication agencies. If anything, the “new advertising” title made some of these increasingly important players feel disenfranchised. Some public relations academics began to refer to IMC as “marketing imperialism.” Also, several have pushed hard for changing or dropping the word marketing and referring to the concept as “integrated communications.” (This latter phrasing actually more accurately describes the advanced stages of IMC, as explained later in this chapter.)

Although the advertising agencies continue to struggle with how to recognize and focus their efforts, more and more clients are taking a hard look at IMC because of the synergistic effect it can provide—giving them a better return on their marketing communication investment, which is extremely important as bottom-line pressures increase. Partially because many advertising agencies’ first attempts to use IMC were more for their own benefit than for their clients’, the understanding of IMC has been mixed, at best. This understanding is clarified when it is recognized that IMC is both a concept and a process. Although most people agree that it is conceptually a good idea, there is still little agreement about what it truly means and even less agreement about “how to do it.” And to make things even more confusing, both the concept and the process continue to evolve.

To help explain this concept and process, we first look at the two “parents” of IMC—changes in the marketplace and the growth in expertise of the various marketing communication functions. This is followed by a discussion of several IMC definitions that show how the focus has expanded from the consumer to all stakeholders. Two U.S. studies that document IMC’s perceived value as well as the barriers to using IMC are then presented, followed by a discussion of the various levels of integration.

Some marketing communication practitioners contend that IMC is nothing new. They cite advertising agencies such as Leo Burnett, which has designed Kellogg packaging since the 1950s, put together the Pillsbury Bake-Off in the mid-1960s, and guided Marlboro and Virginia Slims into event sponsorships and direct marketing (e.g., the Marlboro Store) when, after the early 1970s, cigarettes were no longer allowed to be advertised on TV. They also argue that many small- and medium-sized agencies have traditionally handled public relations, sales promotion, and other marketing communications, in addition to advertising, for their clients whose budgets have not justified separate agencies for each communication function.

It is true that some clients have long had their marketing communications centrally planned and executed; however, today’s marketing arena has significantly changed since the 1960s and 1970s, requiring, we believe, a similar significant change in the strategic planning and execution of marketing communications. Although having marketing communications centrally controlled is an important element of IMC, this element alone is not enough to provide organizations a competitive advantage in today’s marketplace that is being shaped by the following trends.

MARKETPLACE TRENDS THAT HAVE NECESSITATED NEW WAYS OF COMMUNICATING

The following trends and changes have been the primary factors driving organizations to adopt integrated marketing communication.

Decreasing message impact and credibility: Not only are consumers becoming more callous to commercial messages, the growing number of commercial messages makes it increasingly difficult for a single message to have affect.

Decreasing cost of using databases: In the mid-1970s, the cost of storing and retrieving a single name and address was about $1.50; today, that cost is less than one cent. This drastic cost reduction, coupled with the increased sophistication of audience segmentation, has provided marketers with a whole new way to more efficiently reach target audiences.

Increasing client expertise: Gone are the days when only the ad agencies had MBAs and client marketing departments were run by promoted (or demoted) salespeople—clients are now not only pushing their agencies to be more cost effective, but are also no longer accepting the idea that TV advertising should always be the primary medium for reaching consumers. At the same time, many clients are realizing that other stakeholders and publics are often just as important to communicate with as are consumers.

Increasing mergers and acquisitions of marketing communication agencies: Today, the top 10 public relations firms are owned or merged with an ad agency. At the same time, the 10 largest ad agencies (except Leo Burnett) either own or are partnered with a variety of agencies and firms offering specialized communication functions such as public relations, sales promotion, direct response, event planning, and packaging. Although these mergers have resulted in few clients moving all their communication business under one roof, the mergers have underlined that even advertising agencies recognize that these other forms of marketing communications are important and will comprise an increasing portion in their clients’ marketing communication mix.

Increasing “mass” media costs: While database costs were falling, increases in mass media CPMs, especially television’s, far outpaced the consumer price index throughout most of the 1980s.

Increasing media fragmentation: With the exception of the decreasing number of newspapers, the number of AM, FM, and public radio stations, television stations (especially cable), and magazines in the United States increased between 1980 and 1990, thus increasing the competition for consumers’ attention.

Increasing audience fragmentation: With the help of computers and more sophisticated research methods, companies have increasingly been able to more accurately segment and target specialized audiences such as Asian Americans, teenagers, Hispanics, affluent retirees, and so on. This has, in turn, placed more emphasis on finding media that can efficiently reach these niche markets.

Increasing number of “me-too” products: With the increased ability to analyze and match successful competitive products, manufacturers have continued to flood retailers with new products that are nearly identical to many already on the shelves. The fact that many of the new products have few if any significant differences means that marketing communication must either create a strong brand image and/or deliver enough commercial messages to gain attention and sales.

Increasing power of the retailer: The December 21, 1992, cover of Business Week summed this up with the headline: “CLOUT! How Giant Retailers Are Revolutionizing the Way Consumer Products Are Bought and Sold.” Because of their size and the instant information provided by scanner data, retailers now have both the clout and knowledge to tell suppliers the kind of products and promotions they want and when they want them. Most suppliers cannot afford not to cooperate.

Increasing global marketing: Nearly every major company is involved in global marketing in some way today. Even if a company is not selling outside its native country, it must be aware that its competitors will increasingly be foreign based. There is also the possibility that equipment and supplies will, to a greater extent, come from outside the United States. These changes underline the increase in competition and the necessity for companies to concentrate on maximum efficiency in all their operations.

Increasing pressure on bottom lines: Wall Street and the rest of the financial community continue to look at quarterly earnings of public companies, thus driving managements to push marketing to do more with less and give priority to short-term rather than long-term results.

GROWING EXPERTISE OF “OTHER” COMMUNICATION AREAS HAS CREATED COMPETITION FOR AD AGENCIES

Through the mid-1970s, advertising agencies were the gurus of promotion. Clients, both large and small, looked to them for guidance on nearly every aspect of marketing, especially in all areas of communication. This is not to say that there were no sales promotion, public relations, packaging design, or direct response agencies operating during this time, but rather these agencies were generally considered as auxiliary services and used mostly on a per-project basis. It is true that many public relations firms have had long relationships with many of the clients; however, these most frequently have involved corporate counseling in areas other than marketing communications.

In the late 1970s and throughout the 1980s, these relationships significantly changed. The decreased cost of using databases provided direct response agencies with competitive advantage for reaching niche audiences. The increase in media cost and decrease in paid message credibility at the same time opened the marketing door for public relations agencies. In essence, brand managers began discovering the power and cost efficiencies of product publicity. As retailers became more demanding and Wall Street put more pressure on quarterly reports, marketing managers turned more attention and a greater portion of their budgets to sales promotion, an activity that was both more predictable and more short term than traditional advertising. In their drive to do more with less, marketing managers began to discover that often for the cost of producing one TV commercial they could redesign a line of packages and significantly increase sales. This, in turn, gave packaging firms more attention and respect, and soon many packaging firms began offering corporate identity programs and brand positioning strategies.

No longer were advertising agencies the only game in town. Both the clients’ attention and marketing communication dollars began to be divided among other communication agencies. With their increased revenues and client involvement, these “other” communication agencies grew in expertise. The result has been that clients now have many alternative ways to solve a communication problem or take advantage of a marketing opportunity.

The new challenge for clients is to find the most effective and efficient way to make use of the “new” marketing communication alternatives. The concept of integrated marketing communication is helping them meet that challenge, allowing them to strategically focus and coordinate their marketing communication programs in a way that will produce a synergistic effect, a result that can also help the bottom line.

Evolving IMC Definitions

One of the first widely discussed definitions of IMC came from the American Association of Advertising Agencies (the 4As) in 1989. This definition, which is presented here, focused on the “process” of using more than just advertising to achieve maximum communication impact. No reference is made to audience(s) or effectiveness other than impact:

[ICM is a] concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines—general advertising, direct response, sales promotion, and public relation—and combines these disciplines to provide clarity, consistency, and maximum communication impact. (Caywood et al., 1991)

In 1991, Don Schultz and his colleagues in Northwestern University’s Integrated Marketing Communication program came up with the following definition of IMC: “The process of managing all sources of information about a product/service to which a customer or prospect is exposed which behaviorally moves the consumer toward a sale and maintains customer loyalty” (Northwestern University’s brochure, 1991).

This definition focuses strictly on the customer or prospect and places an implied emphasis on building a relationship between the customer and the brand. For IMC to be successful, according to this definition, there must be a behavioral response from the customer or prospect. By including “all sources of information” to which customers and prospects are exposed, the definition includes a wider variety of communication functions than that suggested by the 4As’ definition, even those not originating from the organization or its communication agencies.

Duncan’s first definition appeared in Marketing in 1992. It viewed IMC as: “The strategic coordination of all messages and media used by an organization to collectively influence its perceived brand value” (Keegan, Moriarty, & Duncan, 1992, p. 631).

Unlike Schultz’s definition, Duncan’s first definition did not limit the focus to just customers and prospects, but implied that whoever had an interest in the organization/brand was to be taken into consideration. Also unlike Schultz’s, this definition limi...