Don Schultz gives three reasons why marketers should measure synergy (part two of three).

Read part one.

Don Schultz is Professor Emeritus-in-Service of Integrated Marketing Communications at the Medill School of Journalism, Northwestern University.

He is an expert on consumer behavior and has written or co-authored 13 books on marketing, from branding to direct marketing. He recently traveled to Beijing, where consumer behavior is driving tremendous changes in a society where only six percent of the population is online. Those hundred million people who represent the six percent are rapidly changing how the rest of the society operates. So Schultz’s current focus is on analyzing what consumer behavior does to the whole media planning processes.

Schultz spends a great deal of time using cognitive psychology to examine what consumers are doing and how they are consuming media. At the iMedia Brand Summit in Deer Valley, Utah, in September, he explained why our antiquated marketing models need to be changed.

Here's more of his address…

Schultz: If you think I’m here to trash you, you think I’m here to create problems then I am. Because I am terribly concerned about how successful we’re going to be with these models. 

There was a reference made this morning -- I just came back from China -- the Chinese have one huge advantage. They don’t have the historical baggage that we’re bringing to all of these things. They are free to create, develop and implement these things in a new, and a separate, and a different way and that’s what they’re going to do. 

We’re stuck with things that we’re going to have to change. The Chinese don’t have the baggage. That’s the big advantage they have. And that’s the thing that’s the most frightening, at least to me. 

Okay. Last year, U.S. advertisers spent 250 plus daily in their media advertising based on these assumptions and hypotheses. 

Number 2, our marketplace observations and ongoing research … clearly -- and I think this is the most discouraging thing that I will tell you today -- consumers have figured out how to use multimedia. Consumers have figured out how to use all this stuff. They take a little bit from here and a dab from over there. And they do this and they do that. And they go grab these things from behind here. And they bring it all together. And they use all this stuff. And now a dozen years after Al Gore developed the Internet …

[LAUGHTER]

Schultz: … we still haven’t figured out how to plan it. We still have separate units, separate individual activities. Consumers are so far ahead of us in using the things than we are in planning and developing them. Clearly they figured out how to do this. This is how they look at it. They just take all this stuff together and they glob it all together. And they say, well this is what I know about Avis; this is what I know about Mitsubishi; this is what I know about McDonald’s. And they don’t really sit down and say well, I like your media advertising but I thought your PR program really sucked.

[LAUGHTER]

Schultz: They just glob it altogether and say: This is what I know; this is what I understand; and this is how I feel about you; and this in my relationship with you. They’ve got all of this and we’ve got separate planning.

Well, we’ve been doing a lot of research in the last two years. I work with a research group in Columbus, Ohio and what we are looking at is simultaneous media usage. And that is people using or consuming multiple media forms at single points in times. What we believe has happened is the information explosion has forced consumers to change their media usage. They have to -- just to keep up. There is huge and rapid consumer acceptance of new media forms. And clearly the thing that they’re doing is multitasking. You only have to sit in a classroom in a university to see it going on, particularly during my lectures. 

[LAUGHTER]

Schultz: They’re online; they’re looking through a newspaper; they’re, you know, doing SMS stuff; they’re doing this; they’re doing that; they’re doing all kinds of things. What I think has happened is we have a new generation of consumers that have trained themselves in multitasking, and we don’t quite know how to deal with that. 

Let me show you what we’ve learned so far. Well, we’ve done four of these now and it’s among a U.S. population. We’ve done four studies. They’re all nationally projectable. We presented this to the Advertising Research Foundation, October 2002. And we were criticized because the research instrument we used is online. And we were told by a number of research people who are big heavy hitters in the ARF that online research is not done with real people. 

[LAUGHTER]

Schultz: How many of you are occasionally online? 

[LAUGHTER]

Schultz: Well you’re not real people. The only real research is you’ve got to sit down with a paper and pencil and fill in a form. That’s real research, at least to the group that we were talking to. They’ve had to change their view a little bit since then. But essentially what it is, there's a subscriber network of 60,000,000 individuals. It’s all email addressed. Respondents report media usage and purchasing factors. We’ve got about 45,000 in this sample now. And it’s weighted and balanced in the 14 U.S. census and agent (sections, that sort of thing.

Here’s what we get when you watch TV and you simultaneously go online. And typically we will get 50 to 60 percent of the people saying, yes, they multitask with media and it doesn’t seem to make a difference what media they use. 

Now, I want you to notice what this says. When you watch TV do you simultaneously go online? Up here I get 58 and 60 in terms of regularly and occasionally. Now, when I change the question and I ask when you go online do you simultaneously watch TV, I get different answers. Why? Because clearly what they’re doing is they’re creating foreground and background media forms. They are using one and they’re going back and forth. And they’re online and that’s in the front. That is the foreground medium. And whatever else is going on in the back. But then they can switch back to television, or newspapers, or magazines, or telephone, or whatever it happens to be and they switch back and forth. And so what happens is they are creating foreground and background media forms for themselves. And we have no way of planning or even thinking about that.

Another thing the research raises is: What’s the impact of conflicting messages delivered at the same moment? What if I’m online watching or have gone online, to get a BMW Web site and on television there’s a Mercedes ad? How do I deal with those? How do I deal with conflicting messages? 

The other problem we have is -- and I know there are a lot of media people here and I hate to say this, but I have a car waiting outside so I feel fairly safe …

[LAUGHTER]

Schultz: … all media are overpriced. Because the advertiser buys what they assume to be a single audience when in essence you’re getting a share of an audience. If they’re multitasking you’re only getting a percentage of their attention or their activity, yet you are assuming, based on our ratings and our planning systems that they’re all there if that’s all their doing, but that’s not true. 

Well, it doesn’t matter what you do, newspapers, TV, you get the same thing. You get the same thing. When you watch TV you simultaneously read magazines. You get the same thing with radio, and on and on and on. And here’s what they do, on an average weekday evening, Monday to Friday, 7:30 to 11:00. You know, we got 68 percent watching TV; 38 percent surfing the Net; 35 percent reading email; 20 percent reading magazines. So clearly, in that period of time, there’s got to be simultaneous activity going on. So the same evidence challenges almost every media planning distribution measurement model currently in use. 

The third thing is this idea of synergy between and among media. We’ve never been able to measure synergy very well. We’ve never managed a way to figure out: Does television enhance magazines? Or does it conflict with magazines? And should we include this? And should we include that? And so on. How many of you read this article? If you haven’t I would urge you to get it. It’s in The Journal of Marketing Research, November 2003, “Understanding the Impact of Synergy and Multimedia Computer Communications,” written by two marketing professors.

In essence what they have done is they have created a model to measure media synergy. There is no media synergy measurement anywhere in our media planning or buying models, yet we can do this. 

One of the things I’m working with today, this fall, is we’re going to look at hard media and soft media. And we’re going to try to reflect which one is considered to be hard media and which is considered to be soft media. And is there a difference between various groups of customers and do they look at it differently? Well, what they did is they demonstrated the practicality using real world data to explain media synergy. That is synergy between media forms that demonstrates an increase in the expected sales and enhances media effectiveness. What in essence they said is they have a model now using common filters -- those of you who are statistically inclined will want to go look that up, but using common filters -- which they believe will be able to demonstrate the synergy. And looking at the synergy being able to say should I add more newspaper, more magazines? Should I take this away or add that to it? And so on. And it gets you away from efficiencies and gets you to effectiveness. Now that’s where the business is. The business has to be effectiveness.

Monday: Why media consumption is a key factor.