Tag Archives: Purchase Decisions

Interactive Media Creating a “Pull” Economy

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Compared to printed media, online publications offer several powerful draws.

  • Lower costs of publication
  • Lower cost of consumption
  • Interactivity
  • Choice/variety (an infinite number of channels)

These appeals are causing a far-reaching shift from a “push” to a “pull” information economy. The decline in ad revenues for printed newspapers and magazines is a barometer of this change. People report spending less time with traditional mass media while spending more on interactive media which enables them to find exactly what they want, not only in terms of information, but also in terms of products and services.

People can now find what they want
instead of what someone else wants them to want

As a consequence everything we consume is increasingly customized. A shift to computer-aided manufacturing is creating the ability to mass-customize goods and services. The technology of manufacturing and the technology of communication are converging in a way that allows manufacturers with unique capabilities and consumers with unique desires to find and collaborate with each other.

Push vs. Pull in the Marketplace:
The Changing Balance of Power

As a result, we’re seeing a steady shift in information/goods/services being pulled through the economy by consumers rather than pushed by publishers and manufacturers.

The “push economy” characterized by mass production in the last century anticipated consumer demand. The “pull economy” reacts to it. Small niches of consumers once dismissed by sellers are a growing market force.

You can see this trend in everything from micro-breweries to built-to-order cars and computers, personal publishing, user configurable software, customized clothing and more.

You can hear this trend in everyday language – “me” is replacing “we.” Intellectual freedom is replacing group-think. People still want to identify with groups; they just don’t want to lose their individuality in the process. Interactivity empowers them. It’s no longer about being part of the machine. It’s about controlling the machine.

Anticipating Demand vs. Collaborating with Customers

Marketing today is still about creating products and services that fit into people lives. The shift is from anticipation to collaboration. Instead of trying to guess what the largest number of people want, marketers need to be agile enough to collaborate with customers to create what each wants on demand.

Digital Media and Purchase Decision-Making

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So I got into a debate last month with a friend who runs a very successful Internet marketing company. The subject was purchase decision models.

I argued that before people purchase a brand, they must prefer it. And before they prefer it, they must consider it. And before they consider it, they must be aware of it. The entire process is like a leaky funnel. At each step, a certain number of people fall away.Sales Funnel

My friend argued that the only things that mattered in his world were finding the right key words, optimizing web content for search engines, obtaining the top spot on page one of search results, and funneling leads to people who could close the sale. Who was right? We both were.

Awareness

There’s no argument that being the first brand people see when they begin to shop is a huge advantage. (It’s called awareness.) Being first in a Google search is like being at eye level on an end-aisle display in a grocery store, or placing your ad on the inside front cover of a magazine. You virtually guarantee people will see you. But that’s no guarantee people will buy you. You have only gained awareness.

Consideration

In most product categories, people consider three to five choices. They compare prices. They assess performance, risk, value, convenience, and many other factors. Finding the right key words for SEO is very similar to finding the right words to put on a package or in a headline. In all cases, you highlight the benefits most important to a specific target audience. The objective is to get on the prospect’s shopping list – to make them consider you. But success at this stage still doesn’t guarantee a sale. Every organization has competition. You still have to become the preferred alternative.

Preference

Becoming the preferred brand among those considered requires the customer to see your brand as the best fit with his or her needs. When prospects use search engines, they are essentially defining their needs. For instance, they may be looking for a “safe compact car under $20,000.” Search engines help sort options the same way that shoe leather and shopping trips do. “Optimizing” the pitch for a specific audience is always necessary to become the preferred choice. Before search engines, the words we used for optimizing were “market segmentation” and “targeting.”

Purchase

What it takes to win a sale varies by industry. In many, it is crucial to funnel leads to sales people. In others…not so much. Regardless, making the sale is always the final objective in the process and the amount of sales will vary relative to success of efforts earlier in the process.

Purchase Decision Process

In retrospect, I think my friend and I were arguing over semantics. I was talking about a general process. He was talking about how a specific tool worked within the context of that process.

The Internet is somewhat different from mass media in that it can simultaneously be a channel for communication, sales and distribution. Regardless, the steps that consumers or businesses go through in deciding which brand to purchase remain basically the same.

The question is not “Is awareness necessary?” The question is “How will we build awareness?” Any business leader who thinks awareness is not necessary in the Internet Age is limiting his/her potential.

The question is not “Can we skip the consideration and preference phases and send prospects straight to sales people or an order button?” If people want to consider several brands, they will. It’s important for companies to provide enough information to enable prospects to evaluate the alternatives.

Even though the technologies of selling change constantly, buyers never do.

Digital media primarily affect the efficiency with which marketers can reach people, present information and take orders.

How a Mouse Click Can Affect Future Employability

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My parents drummed into me the importance of “Buyer beware.” Today’s parents need to teach kids a variation on that phrase, “Browser beware.”

One of my younger employees once told me that he preferred digital media to mass media such as television because he didn’t have to suffer through commercials not targeted to him. However, the technology used to target digital ads can harm people who may not be aware of what’s going on (and he certainly didn’t fall into that group).

In 2011, The Journal of the American Association of Pediatrics published a study called Clinical Report—The Impact of Social Media on Children, Adolescents, and Families. The report by Gwenn Schurgin O’Keeffe, Kathleen Clarke-Pearson and the Council on Communications and Media cataloged both the negative and positive influences that social media can have. The report makes a powerful case for media literacy education.

The authors define social media as any Web site that allows social interaction
These include social networking sites such as Facebook and Twitter; gaming sites and virtual worlds such as Second Life; video sites such as YouTube; and blogs.

JobInterviewThe authors point out that many social sites gather information on the person using a site and use that information to give advertisers the ability to target “behavioral” ads directly to an individual’s profile. They also discuss how this information can come back to haunt kids later in life:

“When Internet users visit various Web sites, they can leave behind evidence of which sites they have visited. This collective, ongoing record of one’s Web activity is called the “digital footprint.” One of the biggest threats to young people on social media sites is to their digital footprint and future reputations. Preadolescents and adolescents who lack an awareness of privacy issues often post inappropriate messages, pictures, and videos without understanding that “what goes online stays online.” As a result, future jobs and college acceptance may be put into jeopardy by inexperienced and rash clicks of the mouse.”

Browser beware!

Impact of Nutrition Information on Food Choice

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Two University of Minnesota researchers studied the impact of nutrition information provided through popular media on consumers’ purchases in grocery stores. They studied omega-3 fortified eggs as an example. According to the authors, Sakiko Shiratori and Jean Kinsey, the results showed a significant positive impact of nutritional information from the popular media on consumers’ food choices. They also found that publishing stories  in popular media can effectively promote consumers’ health.

They conclude, “The impact of nutritional information from the popular media on consumers’ food choices is substantial. Although Omega-3 fortified eggs usually sell at a premium price compared to the typical eggs, growing knowledge of the health benefits of Omega-3 propels their consumption. To change dietary behaviors in order to promote health, publishing in popular media can be said to be an effective communication approach.”

The 2011 study takes into account other factors contributing to food choices such as price, income, household demographics or regional differences.

Positive, scientific nutritional information presented in a variety of mass media shifted  consumer demand.

My take on this: This study makes a pretty compelling case for PR when food companies have a positive story to tell. In future posts, I’ll discuss other studies related to media and food. I began my career in food advertising and worked on food accounts almost exclusively for my first ten years in the advertising industry.

If you’ve never heard of Omega-3 Eggs, this article provides a good summary. The heart you save may be your own.

Counterfeiting the Currency of Advertising

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This is a corollary to yesterday’s post about research which found that three out of four people believe claims found in advertising are exaggerated.

Words and images are the currency of advertising. The U.S. Government won’t let people counterfeit its currency. But advertising industry professionals seem to have no problem counterfeiting theirs.

When industry professionals exaggerate, make false claims, or misrepresent the capabilities of a product or service, they don’t serve their clients’ best interests or their own.

False advertising may get people to purchase a product or service once. But the inevitable disappointment they feel can ruin the client’s reputation. The purchasers not only feel disappointed in the performance of the product or service, they feel they have been lied to. Trust is lost with the relationship.

False claims and impressions also counterfeit the currency of the industry. They undermine the industry’s credibility and the return that honest advertisers hope to gain from their investment in advertising.

Governments won’t let people counterfeit their currencies. Why do ad industry trade groups not raise a bigger stink about people who devalue their currency?

How Social Media Impacts Brand Marketing: The Value of References

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Source: nielsen.com.
New research by NM Incite helps uncover what impacts social media may have for marketers trying to build their brands and connect with their audience more directly.

Consumers are spending more time than ever using social media, as demonstrated in the Social Media Report recently published by Nielsen and NM Incite, a Nielsen/McKinsey company. Building on this report, research by NM Incite helps uncover what impacts social media may have for marketers trying to build their brands and connect with their audience more directly.

Social media plays an important role in how consumers discover, research, and share information about brands and products. In fact, 60 percent of consumers researching products through multiple online sources learned about a specific brand or retailer through social networking sites. Active social media users are more likely to read product reviews online, and 3 out of 5 create their own reviews of products and services. Women are more likely than men to tell others about products that they like (81% of females vs. 72% of males). Overall, consumer-generated reviews and product ratings are the most preferred sources of product information among social media users.

Preferred sources of brand information

Research shows that social media is increasingly a platform consumers use to express their loyalty to their favorite brands and products, and many seek to reap benefits from brands for helping promote their products. Among those who share their brand experiences through social media, at least 41 percent say they do so to receive discounts. When researching products, social media users are likely to trust the recommendations of their friends and family most, and results from Nielsen’s Global Online Survey indicate that 2 out of 3 respondents said they were either highly or somewhat influenced by advertising with a social context.

Social Media also plays a key role in protecting brands: 58 percent of social media users say they write product reviews to protect others from bad experiences, and nearly 1 in 4 say they share their negative experiences to “punish companies”. Many customers also use social media to engage with brands on a customer service level, with 42 percent of 18- to 34-year-olds acknowledging that they expect customer support within 12 hours of a complaint.

Why consumers share their company experiences

Research dated October 14, 2011. For the full report: http://blog.nielsen.com/nielsenwire/consumer/how-social-media-impacts-brand-marketing/

My personal take: the value of social media in a marketing program is “references.” Other research I have seen (see post on Future of Digital Media & Responsive Design) indicates that click-throughs from conventional banner ads are not the primary value.