Marketing in the 22nd Century: A Look at Four Promising Concepts
Marketers have always used technology to advance their art. As the end of the first decade of the twenty-second century nears, it is already apparent that technological advances will continue to change how marketing is practiced. This study looks at how four promising innovations may impact marketing in the future. Specifically, this study discusses how two advertising practices-advergaming and product placement-will increase in importance due to socioeconomic and technological factors such as the growing popularity of online games and digital video recorders DVRs.
Received: July 29, 2010;
Accepted: August 16, 2010;
Published: October 26, 2010
Marketers have always used technology to advance their art. Recently, researchers
have used structural-equations marketing to explain how consumers used shop-bots
on the internet (Gentry and Calantone, 2002; Kalliny,
2009) and models for forecasting new product a doption (Gentry
et al., 2006; Gentry and Calantone, 2007).
As the end of the first decade of the twenty-second century nears, it is already
apparent that technological advances will continue to change how marketing is
practiced. This study looks at how four promising innovations may impact marketing
in the future. Specifically, this study discusses how two advertising practices-advergaming
and product placement-will increase in importance due to socioeconomic and technological
factors such as the growing popularity of online games and digital video recorders
DVRs. These distinct examples, advergaming and product placement, were selected
because the authors believe that they are the response to a growing difference
in entertainment consumption between the affluent and the poor in industrialized
nations. Online advertising supported entertainment, such as advergaming, is
growing rapidly among those who are willing to expose themselves to more advertising
in exchange for free or subsidized entertainment. This bargain is more attractive
to those with less disposable income as they have fewer entertainment options.
Product placement is becoming more and more important, especially for reaching
wealthier consumers, as the affluent have many more options for ad free media
consumption. The study further discusses two relatively new tools for evaluating
how well these and other marketing practices work: eye-tracking and neuromarketing.
Before discussing advergaming and product placement, a review of advertising
forms may prove helpful. Advertising forms are important tools that relate directly
to advertising issues such as intrusiveness (Edwards et
al., 2002; Li et al., 2002) irritation
(Aaker and Bruzzone, 1985; Raymond
and Greyser, 1968) and ad avoidance and effectiveness (Speck
and Elliott, 1997a, b). Previous literature has
shown that the duration of 10 and 20 sec ads was found not to be related to
perceptions of intrusiveness. An important difference between television ads,
pop-up ads and advergames is the time exposure. Several researchers (De-Pelsmacker
et al., 1998; Fennis and Bakker, 2001; Fritz,
1979) have studied irritation in television commercials and in pop-up ads
(Edwards et al., 2002). Previous research is
inconsistent regarding irritation effect in advertising. For instance Fritz
(1979) found that irritating advertising is better remembered than non-irritating
advertising, while Aaker and Bruzzone (1985) argued
that high irritation levels are associated with a decrease in advertising effectiveness.
Previous research; however, appear to be in consensus that irritation is an
antecedent to the formation of attitudes toward the ad (Aaker
and Bruzzone, 1985; Wang et al., 2002).
Causes of ad irritation can generally be classified into three categories:
advertisement content, execution and placement. Raymond and
Greyser (1968) found that ads are perceived as annoying or irritating if
their content is deceitful, exaggerated, confusing, or insults the viewer's
intelligence. Second, ads are considered irritating if they are poorly executed.
Poorly executed ads can be irritating if they are too loud, too long, or too
large (Aaker and Bruzzone, 1985; Raymond
and Greyser, 1968). Third, ads can result in consumer irritation when there
are too many ads or when the same ad appears too frequently Raymond
and Greyser, 1968. The most serious consequence of irritating ads is that
consumers are likely to avoid them. Most of the previous research has focused
on survey research and very little has been done on the physiological reactions
PROBLEMS WITH TRADITIONAL ADVERTISING
The values and advantages of advergaming and product placement may also be
seen by pointing out the shortcomings of traditional methods of advertising
such as TV, newspaper and radio advertising. Traditional advertising faces numerous
serious challenges that are difficult to overcome. These challenges are summarized
||Consumers are exposed to a tremendous number of advertisements
on a daily basis which makes it impossible to give significant attention
to most of them and this number is expected to continue to increase in the
future. This is truer than ever before due to the various venues available
to advertisers. No matter how useful or how interesting a piece of advertising
is, the customer has neither the time nor the mental resources to dedicate
sufficient attention to it
The majority of advertising is presented to consumers when they are
not shopping for products or services being advertised. This makes it
even more difficult for consumers to pay attention, retain or respond
to these advertising. In addition, these advertising messages are viewed
to be less relevant to the consumer during the time the consumer is exposed
to them. Aaker et al. (1992) found up to
80% of an ads score on recall and/or persuasion measures is a function
of background variables such as whether or not people are interested in
the product category being advertised
||The cost of advertising and particularly TV advertising is fairly high
so companies limit the length and frequency of airing those commercials;
therefore, the time the consumer is exposed to these commercials is very
CONSUMER ATTITUDE TOWARD ADVERTISING
It is probably safe to say that the majority of consumers do not consider the
nature of most advertising to be worth their attention or time. Several authors
(Alwitt and Prabhaker, 1992; Zanot,
1981) investigated consumers attitudes toward advertising in the United
States over an extended period of time found that the general attitude of the
public toward advertising is negative. Although, this criticism is usually directed
at the tactics advertisers employ and not at the institution of advertising
itself (Sandage and Leckenby, 1980), it does impact the
attitudes of consumers toward advertising in general. This poses a serious problem
for marketers because advertising effectiveness is believed to be rooted in
the view that advertising messages are potential communication exchanges between
advertisers and consumers. This communication exchange is central to marketing
success (Bagozzi, 1975; Houston
and Gassenheimer, 1987). The exchange assumes that both parties give and
receive something of value in order for both parties to be satisfied. The main
objective of the advertiser is to sell or create a positive perception toward
the product or service. To the consumer, the value of advertising is achieved
when advertising matches or exceeds their expectation.
The negative perception of consumers toward advertising has been significantly
impacted by irritation felt toward the bombardment of daily advertising. For
example, Raymond and Greyser (1968) found the main reason
for peoples criticism of advertising has to do with annoyance or irritation
caused by either the number or type of advertising directed at consumers. This
irritation is believed to lead to a general reduction in advertising effectiveness
(Aaker and Bruzzone, 1985). Irritation is often caused
by techniques that are perceived to annoy, insult, offend or overly manipulative
to consumers and as a result consumers develop a negative attitude toward it.
The now considerable body of research on Aad originated in the contrasting
notion that pleasant or likable advertising is thought to have a positive impact
on brand attitudes Mitchell and Olson (1981). In a related
vein, uses and gratifications research has demonstrated that the value of entertainment
lies in its ability to fulfill audience needs for escapism, diversion, aesthetic
enjoyment, or emotional release McQuail, 1983. As the
value of media entertainment is regularly acknowledged see for example: The
Economist, 1989 and as advertising is a significant portion of media content,
the ability of advertising to entertain can enhance the experience of advertising
exchanges for consumers (Alwitt and Prabhaker, 1992).
This was confirmed in Ducoffe's mall-intercept study which reported a substantial,
significant and positive correlation of 48 between multiple-item measures of
entertainment and advertising value. These three factors-informativeness, irritation
and entertainment-were the starting point for explaining how consumers assess
the value of advertising. The resulting structural equation model based on the
survey data accounted for about 50 percent of the variability in advertising
value ratings (Ducoffe, 1995). In the follow-up laboratory
experiment, Ducoffe, 1995 exposed subjects to individual
advertisements and asked them to complete a version of the questionnaire that
was revised for copy testing purposes. This experiment, focusing on the respective
influences of informativeness and entertainment, reinforced earlier survey results
as both main effects proved to be statistically significant predictors of the
value of individual ads. Evidence thus far supports the conclusion that these
perceptions impact assessments of the value of advertising in general as well
as the value of individual advertisements.
Advergaming and product placement provide alternative venues for advertisers where consumers may not be as negative toward advertising. This can be achieved when the products name or image become part of the game the consumer is playing or when a hero utilizes the product during a movie. The consumer is likely to be more positive toward these forms of advertising compared to the traditional forms.
Advergaming is the practice of using games, particularly computer games, to
advertise or promote a product. Advergaming is the inclusion and delivery of
advertising messages through electronic games. The main objectives of this technique
are to build brand awareness, offer product information, drive traffic to web
sites and provide a means to compare similar products. Advergamings ultimate
objective is to develop lasting exchange relationships with customers (Hernandez
and Minor, 2003), through an immersive and entertaining experience.
Because the entertaining experience of electronic games is believed to enrich
the relationship between user and the advertised brand (Saunders, 2001), advergaming
is gaining recognition among advertisers. Advergaming is a growing method for
reaching many younger consumers, especially those whose limited resources encourage
them to pursue relatively inexpensive or free entertainment options. The increasing
popularity of this medium and the unique capability to maintain players
full attention during the time the game is being played, is increasing corporate
interest in advergaming. According to Buss (2003), Leviathan
Games Inc., a Seattle-based creator of video-game-type contests online, has
seen sales grow by 250% in the last two years of Busss study. The co-founder
of Leviathan Games Inc., Wyeth Ridgway stated, Obviously you're not going to
meet your entire audience with an online computer game, but you're meeting a
very targeted portion and one that, on a product-by-product basis, could be
the exact people you're most interested in meeting
Our forecast for 'advergames'
is that it'll be part of every advertising campaign that large companies do
at some point in the future. This illustrates the great potential for advergaming
and how companies are using technology to reach consumers via an entertaining
experience. Advergaming is becoming so popular that the US Army has built a
video game to promote cultural awareness among soldiers (Moody,
2005). Toyota developed a racing game called Toyota Adrenaline and used
it to help launch a line of cars. Snider (2003) reported
that, video games have become nearly as much a part of college life as textbooks
and midterms. As Fig. 1 shows, the brand name is inserted
as part of the game to increase brand visibility and retention.
Several models of ad attitude have been proposed and tested to explain the
relationship between ad attitude and brand attitude in traditional advertising
contexts (Brown and Stayman, 1992). Although, some researchers
(Chen et al., 2002) have attempted to extend
the concept of attitude toward the ad to websites, advergaming has not received
an adequate attention in research due to its newness.
Product placement is hardly a new development. Entrepreneurs saw the opportunity
from the very invention of moving pictures. Newell et
al. (2006) delightful summary of the beginning of product placement
documented instances of paid product placement in Europe by the Lumiere brothers
in 1896 and provided American examples from Edison films from 1897 and beyond.
While, the practice of product placement is well established, more research
is needed to determine both the impact of product placement and to determine
what factors increase the effectiveness of product placement. It is clear that
product placement may be effective in some situations. In addition to anecdotal
stories such as the famous use of Reeses Pieces in E.T. the Extra-Terrestrial,
more researchers are conducting empirical research to measure the effectiveness
of product placement. Auty and Lewis (2004) found that
children were much more likely to consumer a certain brand of soda after viewing
a movie where the hero drank that brand. Perhaps the best summary to date on
the effectiveness of product placement is (Reijmersdal et
al., 2009) meta-analysis. They found 147 studies on product placement
published in peer reviewed journals between 1981 and August 2008. Of these,
(Reijmersdal et al., 2009) then analyzed a subset
of 57 empirical studies. The known factors that make product placement effective
are beyond the scope of this study and have been well covered by (Reijmerdsdal
et al., 2009). However, their general finding that more than half
of the studies on brand placement effects were published in the last five years
documents the growing importance researchers are placing on product placement.
Increased interest in product placement is not limited to just researchers.
In fact, researcher interest may be increasing in response to marketing practice.
According to PQ Media (2010), spending on product placement
grew every year from 1975-the first year they started measuring it-through 2008.
In 2009, both global and US spending on product placement dropped for the first
time 0.8 and 1.3%, respectively, probably due to the current international economic
malaise. Even with the downturn, global spending on product placement in 2009
was $54.58 billion, with $24.63 billion of that being spent in the United States.
Based on spending in the early part of this year, PQ Media predicts that 2010
will be another record year for product placement expenditures, growing 5.3%
WHY IS PRODUCT PLACEMENT INCREASING SO QUICKLY?
The need for product placement will continue to dramatically increase as changes
in society provides wealthy consumers with more and more ways to consume content
while avoiding traditional advertising. Affluent consumers now regularly bypass
commercials in three distinct methods for their home video consumption. First,
consumers watch movies and unique television shows on subscription channels
such as HBO. The final episode of The Sopranos, viewable only in the 29-30 million
homes with subscriptions to HBO, was watched by 11.9 million people (Associated
Press, 2007). It was the second most watched program on television that
week, with more viewers than all but one show on the major networks. This is
all the more impressive when one considers that at that time the major networks
were available in approximately 111 million homes and thus had well over threefold
the number of potential viewers. The authors predict that this disproportionate
share of ad free viewing of premium television content compared to standard
advertising supported network fare will continue to grow in the twenty-second
century, especially among affluent consumers. Currently the three most popular
premium advertising free subscription services in the US are HBO in approximately
29 to 30 million homes, Showtime approximately 18 million subscribers and Starz
about 17 million households (Stelter, 2010). Interpreting
these numbers is not an exact science as some overlap the same household may
subscribe to HBO, Showtime and Starz as part of a premium viewing package and
each subscription includes multiple channels for example, one of the authors
currently receives eight HBO channels as part of his cable package.
Second, consumers will continue to purchase advertising free video content
in every increasing numbers. Nash (2010) estimated that
in 2009 Americans purchased just over 1.4 billion movie theater tickets alone
and another 1.3 billion DVD/Blu-ray titles for home viewing. Other than a few
previews at the beginning of the movies which are easily bypassed on most disc
players, this represents almost twenty-four billion dollars that people spent
on advertising-free video consumption.
The videogame industry is comparable in size to the television industry. In contrast to the previously discussed advergaming model, purchased video games for consoles are another growing method for consumers to participate in ad-free entertainment. According to J. Mazel, an industry analyst at VGChartz personal correspondence, July 15, 2010 approximately 275 million titles were sold in 2009 for various console systems in the United States 594 million units for the entire world. These numbers do not consider the titles bundled with the consoles themselves of which 34 million were sold in the US last year, 89 million consoles sold worldwide nor PC software titles. Mazel stated that the typical console owner buys approximately three games per year and that the typical new game is played about 30 h. Thus, the average gamer spends at least 90 h a year pursing advertising free video entertainment. This is a very conservative estimate as it does not include time spent on older games, game rentals, downloaded titles, nor other ad-free entertainment options.
Finally, the growing adoption of digital video recorders DVRs will continue
to enable those willing and able to pay for the service to fast forward through
commercials. According to K. Rutkowski of the Consumer Electronics Association
personal correspondence, July 15, 2010, DVRs are in 35% of US households as
of mid 2010. DVRs can work in two ways; they can simply fast forward, or zip,
through the commercials at a rapid rate as the most popular US brand, Tivo,
currently works or they can skip the commercials entirely as the line of ReplayTV
DVRs did. The ReplayTV option worked by skipping a set amount of time that could
be determined by the user. One of the authors used to own a ReplayTV unit and
would fall into an unconscious pattern of clicks for particular television viewing.
For example, after just a few experiences with recording Show A, the author
would hit the skip button four times at each commercial break to completely
skip all advertising and continue watching the show with virtually no interruption.
As technology advances, smart DVRs will be developed that will recognize the
difference between commercials and the show and will automatically skip the
commercials on recorded shows. Consumers clearly desire this feature. Ferguson
and Perse (2004) found that DVR owners who skipped ReplayTV or fast forwarded
Tivo through commercials reported significant increases in television viewing
enjoyment, television viewing satisfaction and received greater entertainment
benefits from watching television. The latest version of the Tivo, the Premiere,
also includes a 30 sec skip button.
Previous research (Bellman et al., 2010; Gilmore
and Secunda, 1993; Stout and Burda, 1989) documented
that fast forwarded advertisements provided significantly weaker effects compared
to full attention regular speed commercials. However, there was one positive
finding for advertisers. The researchers found that the diminished impact of
fast forwarded was almost neutralized if the viewer had previously viewed the
advertisement at least once. They theorized that the zipped fast forwarded ad
helped the viewer recall the previously viewed commercial.
Thus, the case for increased product placement rests upon multiple trends among those with large disposable incomes to purchase advertising-free entertainment. In terms of passive video consumption, well over thirty million households subscribe to premium ad free television content. Sales of movie tickets and DVD/Blu-ray title purchases are in the billions and this does not include rentals. Over 275 million units of console game software were purchased by Americans in 2009 and 35% of US homes now have a DVR. It is clear that there is a large and growing market for advertising free television service for those with the discretionary income to enjoy it. Product placement is a viable mechanism for marketers to reach this affluent population as they enjoy these ad-free entertainments.
Eye-tracking research is based upon the assumption that if one may observe
where a respondent places his visual attention, one may better understand where
the respondent places his mental attention. This is not a new assumption; researchers
have been tracking eye movements and publicizing their theories on the subject
for almost three centuries e.g., (Porterfield, 1737;
Delabarre, 1898; Dodge, 1900,
1907; Nixon, 1924; Yarbus,
1967; Pieters and Wedel, 2004).
What is relatively new is the use of video-based machines to track eye movements
for researchers. These machines were very expensive when first developed as
they required extensive computing power to calculate the point of regard visual
attention in real-time from viewing respondent eye features such as corneal
reflections and the pupil center. However, as Moores Law progressed, the
cost of these devices has now reached the point that it is very feasible for
marketers and market researchers to utilize them.
EYE-TRACKING ASSUMPTIONS AND TERMINOLOGY
In Duchowski (2003), an eye tracker can only track the
overt movement of the eyes, however, it cannot track the covert movement of
visual attention. Thus, in all eye tracking work, a tacit but very important
assumption is usually accepted: we assume that attention is limited to foveal
gaze direction, but we acknowledge that this may not always be so. In theory,
a respondents mental attention may be elsewhere instead of where his visual
focus is. He may be lost in thought and not paying attention to his vision.
Or he may be deliberately using his peripheral vision. However, neither of these
can be currently measured, so researchers have to assume that visual attention
is a good proxy for mental attention. In practice, this has worked well.
Researchers who wish to utilize eye-tracking research do not need to invest
an inordinate amount of time to become expert oculographers. However, a basic
understanding of the terminology is necessary so a few commonly used terms are
provided (Gentry, 2007).
||Minor eye movements around a point of interest. These minor
eye movements are needed to keep points of interest in focus
||The amount of time that a viewer spent viewing an object per fixation
||The cumulative time that a viewer spent viewing an object. In two cases
this number will be identical to the duration when the number of fixations
on the object is 0 or 1. For all other cases, the exposure is the sum of
all durations for the object
||A visual indicator of the areas that received the most fixations, either
by quantity or by time
|Point of Regard POR
||The object of visual attention and presumed object of mental attention.
||Rapid eye movements changing the fovea to a new location of interest.
||The observed pattern of eye movements over an image.
Lee et al. (2007) defined neuromarketing as
the application of neuroscientific methods to analyze and understand human behavior
in relations to markets and marketing exchanges. Neuroscientific methods would
be those that allowed researchers to directly study cortical activity while
the subject was exposed to marketing stimuli. Direct methods include the use
of recent techniques such as positron emission tomography PET, magnetoencephalography
MEG and functional magnetic resonance imaging fMRI. However, older and less
expensive techniques such as electroencephalography EEG and galvanic skin response
GSR are also tools available for neuromarketers. The GSR goes by several terms,
including electrodermal activity EDA and skin conductance responses SCR. While
the term neuromarketing was first coined in 2002 by Lewis
and Bridger (2005), researchers have been studying the brains response
to marketing stimuli since at least 1969. Researchers at General Electric conducted
electroencephalogram EEG studies to determine how viewers reacted to television
commercials (Krugman, 1971).
Relatively little of the latest neuromarketing research is being published.
As Lee et al. (2007) explained, most of this
research is commercially sensitive, so those conducting this research keep the
results for themselves and their clients. However, some interesting research
has been published in peer reviewed journals. McClure et
al. (2004) used fMRIs to discover a higher preference for Coke over
Pepsi when the brands were identified and that people processed the two brands
differently in their minds. When an image of a Coke can proceeded Coke delivery,
significantly greater brain activity was observed in the DLPFC, hippocampus
equivalent knowledge about Pepsi delivery had no such
effect; indeed, no brain areas showed a significant difference to Pepsi delivered
with or without brand knowledge. While, the full implications of this research
are still being discussed, marketers could use this information to understand
the Coca-Colas marketing of the Coke brand effectively causes noticeable
activity in consumers brain activity and their competitions efforts
have yet to reach this point. Gakhal and Senior (2008) employed
galvanic skin response GSR testing to measure the relative importance of celebrity
status vs. physical attractiveness and found that celebrities evoke more of
a psychophysiological response than unknown but attractive models. The fact
that this celebrity effect was driven by the right hemisphere of the brain suggests
that the processing of fame is underpinned by emotive processes more so than
the processing of beauty. Stoll et al. (2008)
used fMRIs to measure the difference in brain activity when subjects were exposed
to attractive and unattractive packaging. They found that attractive packages
trigged brain activity in areas related to visual attention, memory and reward-related
areas. In contrast, unattractive packages are accompanied with activity changes
in brain areas associated with the perception of research conflict, uncertainty,
disgust and expected risk. Plassmann et al. (2008)
were able to use fMRIs to confirm multiple theories that price acted as a signaling
tool. Subject tasted what they thought were five different wines that were available
at five different price points when in fact only three wines were tested. Wine
1 was tasted twice, once as a $5 wine and again as a $45 wine. Wine 2 was tasted
twice as a $10 wine and a $90 wine. Wine 3 was tasted once as a $35 wine. Subject
reported enjoying the higher priced wines more than the lower priced ones and
the fMRI showed an increase in their blood-oxygen-level-dependent activity in
medial orbitofrontal cortex, an area that is widely thought to encode for experienced
pleasantness during experiential tasks. While this finding probably did not
surprise any marketing practitioners, it upset a basic assumption in economics
that the experienced pleasantness EP from consuming a good depends only on its
intrinsic properties and on the state of the individual. The study clearly found
the perceived price of a good also affects the experienced pleasantness of consumption.
Neuromarketing holds great promise for allowing researchers to better understand human behavior and to help marketers increase the efficiency of marketing practices. However, the current costs of neuromarketing and the need for collaboration between market and medical researchers to conduct neuromarketing research are serious challenges that will have to overcome in order for neuromarketing to become a valuable tool for 22nd century marketers.
The authors forecast a growing divide in how consumers obtain and view content.
More affluent consumers will enjoy advertising free content through premium
services, purchasing ad-free media and through DVRs which will become better
at bypassing commercials as technology advances. Product placement will become
more vital for reaching wealthier consumers, especially those whose ample resources
allow them to consume many advertising-free entertainment options. While the
authors are confident in their prediction that the need and use of product placement
will continue to grow, research is needed to determine both the impact of product
placement and to determine what factors increase the effectiveness of product
placement. As Auty and Lewis (2004) pointed out, almost
every article now being published on the subject notes that product placement
has suffered relative neglect at the hands of researchers.
Less affluent consumers will be exposed to more adverting by watching advertising support content through traditional television channels as well as through the internet. This internet consumption will also include advergaming. More and more marketers will use techniques such as eye-trackers and neuromarketing to measure and improve the effectiveness of product placement and advertisements placed around a video or a game advergaming.
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