Michael Belch & George Belch. 21st Century Communication: A Reference Handbook. Editor: William F Eadie. Sage Publication. 2009.
Over the past decade, integrated marketing communities. In both the business-to-business and business-to-consumer markets, numerous research studies have indicated that IMC is one of the top priorities in the new millennium. Interestingly, agencies have been ahead of their clients and, to a large degree, academics in the adoption of IMC.
The purpose of this chapter is to examine the evolution of IMC, its meaning and the reasons for its adoption, the current state of the art, and the future of IMC.
The Evolution of Integrated Marketing Communication
For many years, the promotional function in most companies was dominated by mass media advertising. Companies relied primarily on their advertising agencies for guidance in nearly all areas of marketing communication, and many companies also used additional promotional and marketing communication tools. Sales promotion or direct-marketing agencies and promotional-products firms were generally viewed as auxiliary services and often used on a per-project basis. Public relations agencies were used to manage the organization’s publicity, image, and affairs with the relevant publics on an ongoing basis but were not viewed as integral participants in the marketing communication process. Many companies had separate public relations agencies that were autonomous and distinct from the marketing communications groups. Marketers built strong barriers around their various marketing and promotional functions and planned and managed them as separate practices, with different budgets, different views of the market, and different goals and objectives. Departmental silos based on specific communications functions were established. These companies failed to recognize that the wide range of marketing and promotional tools must be coordinated to communicate effectively and present a consistent image to their target markets.
During the 1980s, many companies began to recognize the need for improved strategic integration of their promotional tools. These firms began moving toward the process of integrated marketing communication, which involved coordinating the various promotional elements with the other marketing activities that communicate with a firm’s customers. As marketers embraced the concept of IMC, they began asking their ad agencies to coordinate the use of a variety of promotional tools rather than relying primarily on media advertising. A number of companies also began to look beyond traditional advertising agencies, employing other types of promotional specialists to develop and implement various components of their promotional plans.
Many agencies responded to the call for synergy among the various promotional tools by acquiring public relations, sales promotion, and direct-marketing companies and then touting themselves as IMC agencies that offered one-stop shopping for all their clients’ promotional needs. Some agencies became involved in these non-advertising areas in an attempt to maintain control over their clients’ promotional programs and budgets but struggled to offer any real value beyond their advertising expertise. However, the advertising industry soon recognized that IMC was more than just a fad and adopted their own perspective on the concept. Terms such as new advertising, orchestration, and seamless communication were used in the industry to describe the concept of integration. A task force from the American Association of Advertising Agencies (the 4As) developed one of the first definitions of IMC:
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—for example, general advertising, direct response, sales promotion, and public relations—and combines these disciplines to provide clarity, consistency, and maximum communication impact. (Schultz, 1993, p. 17)
The 4As’ definition focuses on the process of using all forms of promotion to achieve maximum communication impact. However, some advocates of the IMC concept (e.g., Schultz, 2004) argued for an even broader perspective that considers all sources of brand or company contact that a customer or prospect has with a product or service. Their perspective was that IMC calls for a “big-picture” approach to planning marketing and promotion programs in addition to coordinating the various communication functions. It requires that firms develop a total marketing communications strategy that recognizes how all of a firm’s marketing activities, not just promotion, communicate with its customers.
Consumers’ perceptions of a company and its various brands are a synthesis of the totality of the messages they receive and the contacts they have (e.g., media advertisements, direct-marketing efforts, publicity, sales promotions, and messages on the Internet and also price, package design, point-of-purchase displays, and even the type of store where a product or service is sold). In this perspective, IMC seeks to have all of a company’s marketing and promotional activities in order to project a consistent, unified image to the marketplace. For example, a high price may symbolize quality to customers, as may the shape or design of a product, its packaging, the brand name, or the image of the stores in which it is sold. Luxury brands of perfume use a distinctive package and brand name as well as a high price to connote quality and an upscale image, and this is reinforced by the advertising. Typically, these brands employ a selective or exclusive distribution network to add to the overall image.
Many companies and agencies have adopted this broader perspective of IMC. They see it as a way to coordinate and manage their marketing communications programs in order to ensure that their customers receive a consistent message about the company and its brands. For these companies, the IMC approach represents an improvement over the traditional method of treating the various communication elements as essentially separate activities. However, as marketers become more sophisticated in their understanding of IMC, they recognize that it offers more than just ideas for coordinating all the elements of the marketing and promotional programs. The IMC approach also helps companies manage their marketing and promotional efforts better by identifying the most appropriate and effective methods by which to contact customers, as well as other relevant stakeholders (e.g., employees, suppliers, investors, media, and the general public).
Reasons for the Growing Importance of Integrated Marketing Communication
The move toward IMC has been called one of the most significant marketing developments of the 1990s and continues to gain champions in the marketplace, for a number of reasons. One fundamental reason is that marketers recognize the value of strategically integrating the various communication functions rather than having them operate autonomously. By coordinating their marketing communication efforts, companies can avoid duplication, take advantage of synergy among various communication tools, and develop more efficient and effective marketing communications programs. Advocates of IMC argue that it is one of the easiest ways a company can maximize the return on its investment in marketing and promotion. Whether marketers adopt the broader perspective of IMC as presented here or concentrate these efforts in the communication area, the rate of adoption of IMC continues to grow.
The move to IMC also reflects an adaptation by marketers to a changing environment, particularly with respect to consumers, technology, and the media. Major changes have occurred among consumers with respect to demographics, lifestyles, media habits, and buying and shopping patterns. These changes have coincided with the development of new technologies and formats for reaching consumers. For example, over the past few decades, the expansion of cable television and, more recently, digital satellite systems has vastly increased the number of channels available to subscribers. Some of these channels offer 24-hour direct-shopping networks, while many others contain 30- or 60-minute direct-response appeals, known as infomercials, that look more like TV shows than advertisements. The 1990s also saw the arrival of the Internet—specifically, the World Wide Web. Online services now provide information and entertainment as well as the opportunity to shop for—and buy—a vast array of products and services through a medium that previously did not exist. Marketers responded by developing Web sites that provided them with the opportunity to advertise their products and services in an interactive fashion as well as transact sales. It became necessary, not optional, for these marketers to look beyond the traditional media options of the past.
In addition to the previously mentioned changes in the communication environment, a number of other factors have also contributed to the rapid growth of IMC.
A shift in marketplace power from manufacturers to retailers. Large retailers such as Wal-Mart are using their clout to demand larger promotional fees and allowances, which siphons off monies from advertising and increases the focus on short-term promotions.
The growth of database marketing. Marketers are increasing the development of databases. These databases are then used to target specific consumers through telemarketing, direct mail, and other forms of direct-response advertising. Companies develop customer relationship management (CRM) programs to reward their most loyal customers through sales promotions, discounts, and other tools, all of which increase costs. Airline loyalty programs are but one example of promotional programs that have become very expensive to operate.
Demand for greater accountability. An increased demand for accountability and a focus on return on investment (ROI) have led advertisers to consider a variety of tools that may enhance the cost-benefit relationship. It is no longer acceptable to say that one does not know how well the advertising program is working; too many other options for use of these dollars now exist. Companies have allocated more monies to sales promotions and direct-marketing programs and have increased their expenditures on the Internet in an attempt to determine how their communications are working.
The rapid growth of the Internet. While the Internet is just one of the numerous new media to become available to marketers, perhaps no other medium since television has had such a dramatic impact on the media landscape. The Internet continues to evolve, in some ways becoming more and more like television. Combine this with the advent of interactive TV, wireless Internet, podcasts, and other new media and marketers have had to rethink their traditional media strategies.
Technological advances. The ability to fast forward or skip TV commercials entirely when using digital video recorders and TiVo has led to a decline in viewing audiences watching commercials. Advertisers have reallocated some of these monies to advertising on the Internet as well as to product placements and integrations.
Changing media habits. Simply put, young people don’t read newspapers or general-news magazines as much as their parents did. Newspapers have seen dramatic declines in readership and, as a result, advertising revenues. Many of those in younger audiences indicate that they now go to the Internet to keep current on news events. While general-news magazines (e.g., Time Magazine and Newsweek) have seen circulation declines, special-interest magazines have been experiencing the opposite trend.
In addition to these factors, there has been a dramatic shift in the media landscape. This shift has contributed even more to the necessity of an IMC approach to marketing communications.
The Changing Media Landscape
In the 1960s, Chevrolet spent almost its entire U.S. television media budget on one program—the Dinah Shore Show. At that time, prime-time viewers had only three network channels to choose from, and an advertiser could reach 80% of U.S. households on any given evening by running commercials on CBS, NBC, and ABC programs (Belch & Belch, 2009). Newspapers were a primary source of information, and cable TV and the Internet were decades away from development.
Currently, there are more than 400 cable TV channels in the United States, network TV audiences have declined at the rate of approximately 2% per year over the past decade, and cable TV now commands a larger audience than the networks. The Internet has experienced unprecedented growth, and advertising can now be seen on one’s cell phone, in bathrooms, and in almost every conceivable (or inconceivable) location. Product placements and integrations have increased significantly. Erwin Ephron—a media consultant (www.ephrononmedia.com)—estimates that in the 1980s, a media planner had nearly 1,250 scheduling options on television alone. In the 1990s, with 100 broadcast and cable channels to choose from, the number of options rose to 1.25 quadrillion. With more than 400 channels at present, the number of options is incalculable.
With the proliferation of new media—the Internet and interactive TV, wireless, podcasts, video on demand, blogs, and more—traditional media such as public relations, sponsorships, event marketing, and product placements have taken on a new perspective. Advertising is no longer king, as some of the largest TV advertisers (General Motors, Procter & Gamble, and American Express, among others) are shifting more and more dollars to the “new” media. As traditional media revenues decline, new media revenues are climbing at an unprecedented rate.
Evidence of this trend is abundant. In the 1990s, Procter & Gamble spent 90% of its advertising budget on television. Now, for some new products, less than 25% may be allocated to TV, with the balance going to sales promotions, new media, direct marketing, and related activities. McDonald’s, which once spent nearly two-thirds of its communications budget on television, now spends less than one-third there. Ford, which spent less than 2% of its budget in nontraditional media in 2001, now spends more than 20%. These are just a few of many examples of the shift.
Communication programs now require the use of a variety of media to reach the markets, as well as the integration of these media to put forth a unified and consistent message. It is now obvious to marketers that it is no longer “business as usual” and that IMC addresses the issues involved in managing this changing media environment. At the same time, IMC provides a framework for establishing communication objectives to be used to guide the communication program and assess its effects.
As with the myriad changes in the overall marketing environment, there have also been numerous changes in the media landscape. Prior to discussing the factors leading to this transformation, it is necessary to establish a common ground. For the purposes of this chapter, we group media into three categories:
1. Traditional media: When one thinks about the media that have seemingly been around forever, what most likely comes to mind are television, radio, newspapers, magazines, and outdoor. While all these media forms have changed over the years (with, e.g., the advent of satellite radio, new forms of outdoor advertising, and online newspapers), for the most part, the basic structure has remained consistent. TV commercials may now be 20 seconds instead of 60 seconds, but there has not been a dramatic shift in the medium. The same holds true for the others as well.
2. Traditional but different: Media that have also been around for quite some time but have experienced significant changes over the past few decades include public relations, product placements, sponsorships, and direct marketing. For example, public relations, which (as previously noted) has traditionally been an independent component of organizations’ communication programs, has now become more integrated with marketing-oriented communication elements. The degree to which this integration has taken place varies from one end of the continuum—where the public relations function is still primarily independent but not completely detached—to the other end—where it has become essentially a marketing function. At this end, public relations has specific marketing public relations objectives. Likewise, product placements and sponsorships are nothing new but have changed in their scope and frequency: Remember when college football games were called the Orange Bowl, Sugar Bowl, and Rose Bowl? Direct mail and catalogs have evolved into direct-response TV commercials, infomercials, and home shopping channels as well as online retail shopping.
3. New media: While the list of new media seems to grow faster than one can keep up with, what we refer to here are the never-before-seen tools such as wireless, podcasting, blogs, search ads, product integrations, video on demand, and behavioral targeting.
While these media forms have all evolved in one way or another, the results are the same—marketers now have many more options from which to choose. When considering these new options, the goal of creating the most effective and efficient media strategy takes on a whole new meaning. The marketer of today is assigned the task of using these tools to achieve media optimization and communication effectiveness. He or she must understand the characteristics of these media and how they affect the receiver—individually and in the gestalt. Planners must also understand that as the environment continues to change along with these media changes, the requirements necessary to achieve this understanding and manage the media process will increase dramatically.
Requirements for an Effective IMC Program
To establish an effective IMC program, it is necessary to understand the communication process, how changes in any of its components will affect this process, and the factors creating such changes. As discussed, the media landscape has changed, resulting in a much greater variety of options for message delivery. Determining how and when these media are most likely to be effective requires an understanding of how the receivers will use and respond to them. As the market changes, IMC strategies must evolve as well. The media landscape did not change in and of itself but rather as a result of changes in the technologies, market conditions, consumer behaviors, and so on.
While the consumers of the 1960s might have been characterized as a traditional family with one working adult, with few media options, and easy to reach through the TV, the consumers of today have different characteristics.
Money rich and time poor. For many consumers, the concern is not about having enough money but having enough time to spend it. Dual working spouses, longer work days, and changes in lifestyles leave consumers less leisure time and more time management requirements. In turn, these factors give rise to different demands on and different use of the media. CNN and CNN Headline News found success by providing consumers with the news when they wanted it—not when it was convenient for the network. USA TODAY provides national and international news in a much briefer format that allows for quicker reading. The increase in the use of digital video recorders and video on demand also reflects this time-management orientation. The result is that the marketer must now provide the commercial message when the consumer wants it—not at the marketer’s own convenience.
Multitasking. Hockey night in Canada has given way to individual family members watching TV on their own sets. Not only are they watching on their own sets, they are likely to be doing something else—multitasking—at the same time. Numerous studies have shown that most consumers multitask and that the likelihood of doing so is highest among the younger demographics. Watching TV while reading a magazine or newspaper, talking on the phone, or using the Internet has become a much more likely scenario than sitting on the couch intently focused on the TV and the commercials. Reading a magazine or newspaper while listening to an MP3 player is also commonplace. Each medium used while multitasking constitutes a touchpoint for a marketing communication. This requires that the messages sent through each of these media be consistent and mutually reinforcing.
Media prolific. As noted previously, the increased number of media options has provided marketers with a number of new ways to deliver their messages. Likewise, the typical consumer has multiple media options of his or her own: Most households have more than one television set, household Internet penetration continues to grow (as does access at work), iPod and MP3 sales continue to increase. And is there anyone who doesn’t have a cell phone? Three decades ago, of the items on this list, only the television existed. Daily exposure to ad messages has risen from 1,500 per day at that time to more than 4,000 per day now. Consumers love their gadgets, and each has become a medium for marketers to exploit.
Lifestyle diverse. It started with the characterization of the baby boomers, then Generations X and Y, and the new millenniums. There is the gray demographic, teenagers, and tweens. Boomers are more brand conscious. Gen-X is more conservative. Research has shown that tweens are more responsive to product placements and that Gen-Y consumers are more social, event oriented, and likely to purchase through the Internet or at a kiosk, and so forth. Even Facebook and MySpace have become demographically and lifestyle focused. It seems that each lifestyle has its own corresponding media preference.
Technologically savvy. E-mailing is out. Texting is in. The cell phone is a camera, an MP3 player, and a means for accessing the Internet. You can also use it as a GPS system, as a barcode receipt for an airline ticket, and for depositing money in your parking meter. While you can now use your TiVo to skip commercials, soon you will be able to use it to stop the commercial you are watching and order the merchandise being advertised. There are billboards that can talk to you. While each of these technologies creates more communication opportunities for the advertiser, what is perhaps more interesting is that so many people know how to use them. More important, they do use them, and they are becoming the means by which consumers acquire product information and make purchases. Ford and Lexus (among many others) understand the fact that more than 75% of potential car buyers who visit their showrooms have researched their automobiles on the Internet prior to coming in to make a purchase. At some restaurants, the customer may order and pay through a cell phone—the same way he or she located the restaurant and reviewed it.
Disenchanted with traditional media. As network television viewing decreases (cable now has a larger audience), other media fill the void. The YouTube phenomenon is not the result of better content alone. Rather, viewers have become disenchanted with television for a variety of reasons. Their trust of traditional news media is at an all-time low; many people now get their news from online sources such as the Drudge Report and blogs. The number of commercials on both television and radio has led to less positive attitudes toward these media, lower ratings, and less involved audiences. Lower ratings mean smaller audiences, hence advertisers’ search for other options.
The combination of these factors requires that marketers change their approach to marketing communications. To adopt a successful IMC approach, marketers will need to address the following issues.
No longer carry on “business as usual.” The traditional approach to communicating with consumers and potential consumers is dead. Marketers will no longer be able to focus on a one-medium strategy (see our earlier reference to Chevrolet). In the 1990s, when the World Wide Web started to take off, some marketers believed that the Internet would be the only medium necessary to market one’s products. They predicted the death of shopping malls and advertising on television. As the Net has evolved, it has proven to be a powerful element in an IMC strategy, but it is not a stand-alone medium. Recent reports show that approximately 38% of Internet sales began with a television commercial, and the majority of Google searches focus on brands. Communication plans must now involve a number of media, each designed to contribute in its own way.
Capture consumers’ involvement. As the media markets fragment, marketers will be required to focus more attention on capturing consumers’ attention and involvement. Doing so will require more innovative programming and content, more specific targeting, and new ways to gain involvement. Commercials will be designed to reflect program content and be adaptable to a variety of media (e.g., the Internet as well as TV).
Rethink communication strategies. The adoption of an IMC perspective necessitates a new way of thinking. Traditional means of conducting business must give way to adapting to the new communication environment. One of the most critical requirements is to recognize that consumers’ exposures to the media and messages are now under their control—not that of the sender. Technological changes leading to the development of new media is just one of the factors that have enabled receivers to obtain information when they want it, not when the marketer sends it.
In addition, marketers must recognize and accept the dramatic shift in media usage that has occurred—particularly among the younger demographic segments. To successfully adopt an IMC orientation, companies will need to take several steps.
Recognize that consumer perceptions of a company and its brands are a synthesis of all the messages they receive or contacts they have with the company. The message being communicated, the media in which these messages appear, interactions with the sales force, the Web site, and public relations and publicity all help shape the perceptions of the company, its products, and its brand image.
Identify all the sources of contact that a customer or prospect has with the company. These contacts can include media advertisements, Web sites, articles and stories in newspapers and magazines or on television and radio stations, word of mouth, sponsorships or events, and product placements, among others. The IMC process starts with the customers or prospects and then works back to determine the best ways to reach them.
Consider the strengths and weakness of various communication channels and of the marketing communication tools that form an effective IMC program. For example, massmedia advertising—such as television—works well for building overall awareness but is less effective for communicating detailed information. Publicity lends credibility to a communication but is not always under the marketer’s control. The Internet, while excellent for providing information, is less effective than other media for achieving reach. As noted earlier in this chapter, television commercials are often the initial contact and impetus for seeking additional information on the Internet.
Create a consistent unified message to present to current and potential customers. All forms of marketing communication should focus on the same key selling points, theme, and positioning platform and strive to speak with “one look and one voice.”
Focus attention on achieving communication objectives that will ultimately lead to the attainment of marketing goals. After years of discussion and research, marketers are only slightly further along in determining the ROI of various media in sales, market share, or other market objectives than they were decades ago. The reason for this is that the dependent variable—sales or market share—is affected by other environmental and market conditions beyond just the communication program. It is time to recognize the specific objectives that communications are designed to accomplish and to understand how achievement of these objectives will lead to the attainment of marketing goals.
Develop new ways to evaluate the effectiveness of IMC programs. New metrics must be developed and used. These metrics must be validated and consistent to allow for proper measurement. The outcomes should include traditional measures such as recall and recognition but must also incorporate new criteria such as increasing Web site traffic, or other media-specific measures. A focus on the overall, combined impact of the various media used is essential.
Reorganize the department or agency responsible for communication. In most companies and agencies today, communication silos continue to exist. Those responsible for advertising and media buying often compete rather than cooperate with those in public relations, promotions, or new media. Rather than working toward a unified goal, these departments wage turf battles in a competition for budgetary dollars, fail to ensure adequate internal communication, and fail to comprehend the specific roles each should assume to contribute to the overall effort. The education and training of specialists in integrating marketing communications and the integration or elimination of these silos will be critical to the success of the program.
Barriers to the Successful Adoption of an IMC Program
While the adoption of an IMC perspective makes sense, the fact remains that this may be easier said than done. Instituting a successful IMC program will necessitate overcoming many of the following challenges.
Lack of IMC trained personnel. While the integrated approach has been adopted by more and more companies and agencies as well as in academia, the number of persons with the broad perspective and skills needed to make IMC work effectively is still very limited. As noted above, even in those organizations that undertake an integrated approach, silos continue to exist. While a growing number of the larger corporations are creating positions such as manager of IMC or vice president for IMC, at this point in time they are in the minority. Furthermore, many of these executives are not really trained in IMC but rather may have expertise in only one or a few of the communication areas. A search for university programs in IMC indicates that there are only a handful of such programs in existence. Thus, the pool of individuals that are academically trained or that have actually practiced integration is very limited.
Turf battles. As noted previously, communication silos are still prevalent in companies and agencies. The adoption of an IMC orientation will lead to changes beyond mere job requirements. As monies are moved from one communication area to another—for example, to new media at the expense of broadcast media, budget increases and decreases will create more opportunities for some and losses for others. The battle for turf can also be a battle for existence as roles and positions are created or eliminated. At the same time, it is a battle of egos in both agencies and corporations as various roles increase and decrease in perceived importance.
Determination of leadership. A question arises: Who will assume leadership of the IMC program? Will the responsibilities lie with the agency or the firm? Will it be a top management position or the equivalent of a brand manager role? Some agencies and corporations currently employ committees for making such decisions, though this would not seem to be the optimal approach.
Agency compensation. In many existing situations, compensation for traditional and nontraditional media purchases is not equivalent. In the past, agency fees were often determined on a commission basis as a percentage of the media budget for print and broadcast media, with a different payment method employed for collateral services. If larger agencies do not have the capabilities for or expertise in, for example, new media or if additional agencies must be employed for this purpose, how will compensation take place? Will all be paid at the same rate—a break from tradition? Furthermore, reviewing the issues of leadership and turf wars, how will compensation systems differ if integration is not the responsibility of one agency only? Will the lead agency in charge of integration be compensated additionally for this responsibility?
Measurement. As noted throughout this chapter, metrics and communication effectiveness measurement have always been a controversial area. This issue became even more complicated when the Internet arrived: The online community employed different means and metrics for determining media costs as well as effectiveness. Now we are experiencing product placements and integration, wireless, and other media that have no established metrics or measures of effectiveness in place. Comparing media efficiencies as well as effectiveness now becomes even more a matter of apples and oranges—not to mention a few other fruits thrown in! A second issue in this regard is that of determining the effectiveness of the IMC program. As noted previously, while research is ongoing, the ability to measure the individual and combined contributions of media in an IMC program has not been established. Thus, some managers may be reluctant to invest in a strategy that (they believe) has no proven success (though the same can be—and has been—said about advertising in general).
The Future of Integrated Marketing Communication
Because it has become well established throughout business and industry, there is no longer a need to debate the merits of IMC. Prior arguments concerning whether IMC is a marketing fad or a viable management strategy have given way to its acceptance as a required means of developing effective communication programs. As consumers’ needs and media habits continue to change, media continue to proliferate and evolve, and clients continue to demand accountability, the need for an integrated approach will increase accordingly. The degree to which IMC advances, however, will depend on the degree of acceptance by those involved in communications. This acceptance will be predicated on changes in internal and external management thinking, the development of new metrics for assessing the effectiveness of communication, and continual adaptation to changing marketing conditions.
Indubitably, IMC is here to stay. There is also no doubt that those who adopt this approach will achieve a competitive advantage over those pursuing a more traditional approach. It is now time to prepare future employees for these tasks.