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EREADING ADVERTISING AS A PART OF INTEGRATED MARKETING COMMUNICATIONS: ADVERTISER’S PERSPECTIVE Master’s Thesis Hanna Kännö 23.03.2012 Marketing Approved in the Department of Marketing __.__.2012 and awarded the grade _______________________________________________________ AALTO UNIVERSITY SCHOOL OF ECONOMICS Department of Marketing Master’s Thesis Hanna Kännö ABSTRACT EREADING ADVERTISING AS A PART OF INTEGRATED MARKETING COMMUNICATIONS: ADVERTISER’S PERSPECTIVE Objectives of the Study This study has two objectives. First, the purpose of the thesis is to provide an insight into integrated marketing communications and the role of eReading advertising in this context. Second, from a managerial perspective the study aims to provide an understanding of the current state of eReading advertising in the Finnish media market and to identify related challenges and opportunities. Research Methods The research approach is qualitative. The research data was collected in the fall 2011 through eight semi-structured interviews. The interviews were targeted at digital marketing professionals in media agencies. The sampling method was judgment sampling. The interviews resulted in a total of 627 minutes of interview data, which was analyzed using thematic analysis technique. Findings The study pointed out that integrated marketing communications is a strategic approach to marketing communications planning. It was found that eReading advertising is at an early stage of development in the Finnish media market and its role in integrated marketing communications is minor so far. Different media evaluation models were discussed and it was shown that media selection is a multifaceted resource allocation decision. The analysis of research data revealed that the major challenges of eReading advertising concern low reach, high costs, inadequate measurement system and limited know-how. A dynamic media environment and diverse advertising opportunities were addressed as the main advantages. Keywords eReading advertising, tablet, integrated marketing communications, media planning. AALTO-YLIOPISTON KAUPPAKORKEAKOULU Markkinoinnin laitos Pro Gradu -tutkielma Hanna Kännö TIIVISTELMÄ EREADING-MAINONTA OSANA INTEGROITUA MARKKINOINTIVIESTINTÄÄ: MAINOSTAJAN NÄKÖKULMA Tutkimuksen tavoitteet Tällä tutkielmalla on kaksi tavoitetta. Ensiksi, tutkielman tarkoitus on perehtyä integroituun markkinointiviestintään ja eReading-mainonnan rooliin osana sitä. Toiseksi, liikkeenjohdollisesta näkökulmasta tutkimuksen tavoite on lisätä ymmärrystä eReading-mainonnan nykyisestä tilanteesta Suomen mediamarkkinoilla sekä tarkastella siihen liittyviä haasteita ja mahdollisuuksia. Tutkimusmenetelmä Tutkimusote on kvalitatiivinen. Tutkimusdata kerättiin syksyllä 2011 puolistrukturoiduissa teemahaastatteluissa, joita tehtiin kahdeksan kappaletta. Haastattelut kohdennettiin mediatoimistoihin digitaalisen markkinoinnin ammattilaisille. Otantamenetelmänä käytettiin harkinnanvaraista otantaa. Haastatteluaineistoa kerättiin 627 minuuttia ja se analysointiin temaattisen analyysin menetelmin. Tutkimustulokset Tutkimuksessa todettiin, että integroitu markkinointiviestintä on strateginen lähestymistapa markkinointiviestinnän suunnitteluun. Tutkimustulokset osoittivat, että eReading-mainonta on varhaisessa kehitysvaiheessa Suomen mediamarkkinoilla ja sen rooli osana yrityksen integroitua markkinointiviestintää on vielä vähäinen. Tutkimuksessa tarkasteltiin useita mediavalinnan malleja ja osoitettiin, että mediavalinta on monitahoinen resursointipäätös. Analyysin perusteella eReading-mainonnan suurimmat haasteet ovat matala peitto, korkeat kustannukset, mittausjärjestelmän puutteellisuus, sekä mainonnan heikko tunteminen. Keskeisimmät hyödyt ovat dynaaminen ja monipuolinen mediaympäristö sekä sen tarjoamat rajattomat mahdollisuudet luovalle suunnittelulle. Avainsanat eReading-mainonta, mediasuunnittelu. tablet-tietokone, integroitu markkinointiviestintä, Table of contents 1 INTRODUCTION ..........................................................................................1 1.1 Background ...............................................................................................1 1.2 Research Problem and Objectives .............................................................4 1.3 Research Methodology ..............................................................................5 1.4 Structure ....................................................................................................6 2 LITERATURE REVIEW ..............................................................................8 2.1 Key Drivers of Integrated Marketing Communications ............................8 2.2 Definitions of Integrated Marketing Communications ...........................11 2.3 Media Planning in Integrated Marketing Communications ....................15 2.4 Advertising Medium Selection ................................................................17 2.4.1 Quantitative Media Evaluation Criteria ...........................................20 2.4.2 Qualitative Media Evaluation Criteria .............................................22 2.5 Synthesis ..................................................................................................23 3 METHODOLOGY .......................................................................................27 3.1 Research Design and Methods ................................................................27 3.2 Data Collection ........................................................................................30 3.3 Data Analysis ..........................................................................................32 3.4 Quality of the Research ...........................................................................34 4 FINDINGS .....................................................................................................36 4.1 Utilization of eReading Advertising ........................................................36 4.2 Challenges of eReading Advertising .......................................................39 4.2.1 Low Reach .......................................................................................40 4.2.2 High Costs ........................................................................................43 4.2.3 Measurement Problems ....................................................................44 4.2.4 Limited Know-How .........................................................................46 4.3 Opportunities of eReading Advertising ...................................................50 4.3.1 Dynamic Media Environment ..........................................................50 4.3.2 Unlimited Creativity.........................................................................52 4.3.3 eReading Advertising Concepts .......................................................53 5 DISCUSSION ................................................................................................57 6 CONCLUSIONS ...........................................................................................64 6.1 Research Summary ..................................................................................64 6.2 Managerial Implications ..........................................................................66 6.3 Limitations and Suggestions for Future Research ...................................67 REFERENCES .....................................................................................................69 iv List of tables Table 1: Criteria for Media Evaluation ................................................................. 25 Table 2: List of Interviewees................................................................................. 31 Table 3: Relevance of Media Evaluation Criteria in eReading Advertising ......... 62 List of figures Figure 1: Key Drivers of Change in Marketing Environment ................................ 9 Figure 2: The Four Pillars of Integrated Marketing Communications.................. 13 Figure 3: The Four Stages of Integrated Marketing Communications ................. 14 Figure 4: The ARF Model for Evaluating Media.................................................. 19 v 1 Introduction This chapter introduces the topic of the thesis briefly. The chapter begins with a description of the background of the study, which is followed by the definition of the research problem and the research objectives. The methodology and the scope are then described. Finally, the structure of the thesis is presented. 1.1 Background Over the last few decades, marketing environment has undergone substantial changes, which have strongly influenced the field of marketing communications. A few decades ago an advertiser would have most likely used television, print, radio or out-of-home media to communicate marketing messages (Reynar et al. 2010). Today, marketers have an expanding number of ways to communicate with consumers because the variety of media outlets and advertising formats have expanded rapidly and aggressively due to the development of technology (Cheong et al. 2010). Consequently, consumer media behavior changes more rapidly than ever before, mainly in response to the benefits of technological innovation (Reynar et al. 2010). Consumers are increasingly adopting highly fragmented and interactive digital channels which correspond to their diverse interests and lifestyles. Hence, the time people spend with digital media is constantly growing whereas the time spend with other media has stayed the same or declined. (Enoch & Johnson 2010). In response to these changes in media-consumption patterns, advertisers have shifted their attention to online channels (Reynar et al. 2010). Print media has long had a firm foothold in Finland, but the era of digitalization has significantly affected traditional media. Newspapers and magazines are still important channels, but economic, social and technological changes have weakened their positions in the advertising landscape (Nyilasy et al. 2011). Media fragmentation results in hard competition for audiences and advertising revenues among different media. Online communication accounts for an expanding share of 1 the total spending on media advertising in Finland, and thus newspapers and magazines have experienced a period of change as they have lost a part of their advertising revenues to other channels. (TNS Gallup 2011). Truong et al. (2010) argue that growth in digital advertising spending is likely to continue to account for an increasing proportion of total advertising expenditure. Changes in media consumption and spending on advertising have increased publishers’ interest to provide their content in a digital format, and journalism has therefore experienced a major growth in the electronic medium in recent years (Flavián & Gurrea 2006). One of the latest phenomenon is electronic reading, which is a rising trend affecting the print industry. Electronic reading refers to reading digital content, such as newspapers or magazines on an electronic reader. Electronic reading is also known as eReading and in this study these terms are used interchangeably referring to the same phenomenon. Furthermore, an electronic reader, or eReader, can be described as an electronic device that can be used for the purpose of reading digital content. Desktop, laptop and tablet computers, as well as smart phones, represent different types of eReaders. However, the term eReader often refers to handheld devices. Some of them are designed primarily for the purpose of reading, while others are also able to perform activities such as watching videos, listening to music or playing games. The history of electronic reading dates back several decades, but despite all the attempts, it has not peaked until recently (Muniz et al. 2002). Over the last years, the adoption of eReading and portable digital reading devices has proliferated among consumers. The world of eReading is still fairly novel, but growing rapidly. It is predicted that eReading will become more prevalent in the near future, which unavoidably has an influence on the future of publishing business— both on content production and advertising. Advertising is here defined as any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor, who aims to inform, persuade or remind consumers (Kotler & Armstrong 2006, 455). Advertisements are placed in a chosen medium to reach audiences that are attracted by its content. Print advertising refers to 2 advertising that is printed on physical paper and placed next to the news, editorial or entertainment content of a print media. The term eReading advertising means advertising in electronic reading context. Advertising is an important means for revenue generation both in newspaper and magazine publishing businesses. Wirtz et al. (2011) explain that newspaper and magazine publishers depend on a mixed financing system as they work simultaneously on two buyer markets, which are the reader and the advertiser market. Even though both aspects are critical for the economic survival, the importance of advertising must be underlined. Thus, newspaper and magazine publishers’ prior interest is not only to present their eReading content in a well performing format, but also to contribute to the success of advertising in eReading context. Multifunctional tablet computers offer newspapers and magazines a possibility to create creative, interactive and engaging multimedia content, and a context for advertising that can exploit many of these features. Several publishing companies in Finland released their first tablet newspapers and magazines in the late 2010 to test the markets rapidly after the launch of the iPad, which was the first multifunctional tablet that gained significant popularity among consumers in Finland. The new media has attracted advertisers, but many details of eReading advertising are still far from defined. The great number of different communication channels poses challenges to marketers in terms of developing an optimal marketing communication program (Keller 2001). Marketers should be media neutral and consider new media in an integrated manner along with traditional channels (Keller 2009). All communication channels have different qualities, which influence advertisers’ interest to utilize them. As eReading media and eReading advertising are fairly new phenomena, it is relevant to examine the challenges and opportunities related to their utilization. Since the concept of integrated marketing communications, or IMC, was established in academic marketing literature in the late 1980s, it has gained a lot 3 of attention among marketing scholars. Anyhow media planning as a part of IMC have raised the interest of academics recently (Kliatchko 2008). This research topic is closely related to the continuous fragmentation of media landscape and prevalence of digital media. However, the role of eReading advertising as a part of integrated marketing communications remains still underdeveloped, and thus there is a need for further research in this field. 1.2 Research Problem and Objectives The increasing interest in eReading advertising has created a need to advance the research of its role in integrated marketing communications. The main research question can be stated as: What is the role of eReading advertising in integrated marketing communications? In order to approach the main research question, the theoretical part of the study provides an overview of the academic discussion that encompasses the concept of integrated marketing communications. Furthermore, media planning and advertising media selection are examined. The empirical part of the study focuses on the utilization of eReading advertising and related opportunities and challenges, which are discussed in the light of the theoretical background of the study. Hence, the main question is approached through three sub questions that can be stated as: What is integrated marketing communications? (Chapter 2) What influences advertising medium selection? (Chapter 2) What are the challenges and the opportunities of eReading advertising? (Chapter 4) This study has two objectives. First, the purpose of the thesis is to provide an insight into integrated marketing communications and the role of eReading 4 advertising in this field. Second, from a managerial perspective, the study aims to provide an understanding of the current state of eReading advertising in the Finnish media market and to identify related opportunities and challenges. The research concentrates on eReading advertising in the Finnish media market. In this study eReading advertising is limited to concern tablet in-application advertising in newspaper and magazine context. Hence, the results apply to this context only. Any other market area or form of eReading advertising is beyond the scope of this study. 1.3 Research Methodology For the empirical part of the study a qualitative approach was chosen with the aim to form an in-depth understanding of eReading advertising as a phenomenon. Interviewing provided a means to enter into other persons’ perspective and explore their thoughts, feelings and experiences. (Patton 2002). Among different interviewing methods semi-structured technique was adopted and eight in-depth interviews were conducted with digital marketing professionals in media agencies. The interviewees were selected using judgment sampling, which provides a means to include only information-rich cases to the sample (Patton 2002). Potential interviewees were identified partly by key advisers in the research project, and partly by the researcher. According to Wirtz et al. (2011) the advertising business partners of newspaper and magazine publishers can be classified in two groups, which are direct advertisers and indirect advertisers. Direct advertisers refer to advertisers who buy advertising space directly from the media seller, whereas indirect advertisers refer to intermediaries in the media buying process, such as media agencies. Here interviews were targeted at media agencies, which are obliged to compare and analyze the merits of different media options. As advertising in electronic reading context is a fairly recent phenomenon, it was considered that media agencies have a deeper insight into the topic than direct advertisers themselves. The role of a 5 media agency is to help advertisers to reach their business objectives by allocating the advertising budget to the best possible media mix. In addition, advertisers are increasingly using media agency services as the fragmentation of media landscape makes media planning more complex than before. Hence, media agencies serve as an important intermediary between media and advertisers. The interviews were conducted in the late fall 2011 between October 21 and November 15. They ranged from 60 minutes to 90 minutes resulting in a total of 627 minutes of interview data. The analysis in this research is based on thematic analysis technique, which enables to break the data into patterns according to specific themes relevant to the research question (Miles & Huberman 1984). 1.4 Structure The thesis is structured into six chapters starting with the introduction that describes the background of the study and provides an overview of the research. Chapter 2 outlines the theoretical background of the study. First, the key drivers that have resulted in the need to integrate marketing communications are discussed. Second, different definitions given to integrated marketing communications in previous academic discussions are examined. Third, the principles that shape media planning in integrated marketing communications are discussed and finally criteria that can be used to evaluate advertising media are presented. The chapter ends with a synthesis of the theoretical background. Chapter 3 describes the research methodology and presents in detail the empirical study conducted with the aim to examine the current state of eReading advertising in the Finnish media market. The chapter starts with a discussion of the research design and method, which is followed by a description of the data collection process and data analysis. The chapter ends with the evaluation of the quality of the research. 6 Chapter 4 presents the empirical findings of the study. The level of implementation of eReading advertising in the Finnish context is examined and both challenges and opportunities related to its utilization are explored. Chapter 5 elaborates the findings of the study and discusses them in the light of the theoretical background of the research. Chapter 6 returns to the objectives of the study and provides a conclusion and the implications of the research. The chapter ends with a discussion about the limitations of the study and suggestions for future research. 7 2 Literature review This chapter reviews literature related to the theoretical background of the study. The chapter starts with an examination of the key drivers that have evoked the need for integrated marketing communications. A review of definitions of integrated marketing communications is presented in order to illustrate the nature of the concept. Moreover, the principles of media planning are examined, and finally different criteria that can be used to evaluate advertising media are discussed. The chapter ends with a synthesis that concludes the theoretical background of the study. 2.1 Key Drivers of Integrated Marketing Communications Over the last few decades marketing environment has undergone various interrelated changes, which have strongly influenced the field of marketing communications and called for its strategic coordination. Since the concept of integrated marketing communications was established in academic marketing literature in the late 1980s, it has gained a lot of attention among academics and practitioners around the world (Kliatchko 2005). IMC has been widely discussed a few decades and it continues to occupy a central place in academic marketing research. Before exploring the definitions of IMC in more detail, this section presents an overview of the key drivers that has resulted in the need for integrated marketing communications. The emergence of IMC was initially based on situations existent in the US market in 1980s, but it gained rapidly international attention (Kitchen & Schultz 2009). According to Kliatchko (2005) the changes that have influenced the evolution of IMC concern primarily the three following areas: (1) marketplace, (2) media and communications and (3) consumers. Changes in these fields mainly stem from the development of technology and digitalization, which can be considered as a key 8 driver of IMC (Schultz 1996; Kliatchko 2005). IMC is expected to result in greater effectiveness and efficiency in all marketing communications activities (Eagle & Kitchen 2000; Kitchen & Schultz 2009). Figure 1 illustrates the elements that have influenced the marketing environment. Digitalization Digitalization Marketing Environment Communication and Media Consumers Figure 1: Key Drivers of Change in Marketing Environment Regarding the changes in the marketplace, digitalization has had extensive economic effects leading many companies to reconsider their key factors of competitive success. Schultz (1996) argues that technology is shrinking the globe to one vast interconnected marketplace. The proliferation of internet has widened geographic markets and resulted in an ever expanding number of competitors (Porter 2001). Also deregulation of markets and globalization of the economy have significantly tightened competition in the marketplace (Holm 2006). As more firms operate in the same market, communication clutter expands and the importance of brand differentiation as a means of competitive success increases. This has made organizations to consider the significance and benefits of employing marketing communications that are integrated through their businesses (Luck & Moffat 2009). Reid (2005) points out that tightened economic conditions have also increased the cost-awareness of marketers. Marketers have become increasingly price conscious and the efforts to measure and improve marketing communications return on investment have been given greater emphasis. Advances in technology have resulted in fragmentation of media (Rust & Oliver 1994). According to Mulhern (2009) digitalization has broadened the concept of media to include almost any kind of digital experience and organizations have 9 constantly more opportunities to interact with consumers, as more aspects of life digitalize. Pilotta and Schultz (2004) argue that almost everything in the field of media advertising has changed. For example wireless and electronic media applications have grown and traditional media forms have fragmented. As Schultz (1996) argues, in communication systems, the whole is generally greater than the sum of its parts. Today, there are multiple factors and sources of information that simultaneously influence and persuade consumers. The more fragmented media landscape becomes, the more integration is needed (Rust & Oliver 1994, Lee & Park 2007). Researchers (see e.g. Schultz 1996; Lee & Park 2007; Finne & Grönroos 2009) point out that consumers integrate marketers’ communication whether it was intended or not. Thus, integration is not just up to the marketer, it is rather up to the consumer. Schultz (1996) argues that the ways in which consumers might integrate marketing messages can be roughly divided in three groups. Firstly, consumers might integrate the messages as the marketer wanted. Secondly, they can ignore the messages and third, put them together in ways the marketer did not consider and which may even have negative effects on marketers’ organization or brand. Furthermore, the marketing organization can help the consumers to understand the marketing communication in the preferred way through strategic integration of all marketing communications. In the field of communication, advances in information technology enable marketers to gather extensively information about customers and learn about them, which have raised the head using databases in marketing (Kitchen & Schultz 2009). Thus, mass communication activities have been replaced with more targeted communication programs, which aim to build closer relationships with customers (Lee & Park 2007, Holm 2006). New technologies have also resulted in the empowerment of consumers (Rust & Oliver 1994). Consumers can access information from their preferred channels, which might also be out of the control of the marketer. One-way and out-bound communication is being replaced with two-way systems. Communication environment is faster, more digitalized, networked, interactive and global (Mulhern 2009). It is also important to note that 10 that the focus of marketing has shifted from product orientation to customer orientation (see e.g. Eagle and Kitchen 2000; Schultz 1996; Luck & Moffatt 2009; Vargo & Lusch 2004). Kitchen and Schultz (2009) argue that companies are starting to understand that consumers are the force that drives all marketing activities. Finally, audiences splinter into smaller and smaller groups, which also pose challenges to traditional mass media advertising. Consumers are increasingly adopting new, fragmented, interactive and highly targeted communication channels, which correspond better to their diverse interests and lifestyles. As a consequence their loyalty to traditional media decreases and mass communication becomes less effective. (Lee & Park 2007; Rust & Oliver 1994; Reid 2005). New media have quickly become reliable sources of information for consumers (Lee & Park 2007). Thus, marketers need to manage multiple and diverse tools targeted at multiple and diverse audiences, which underlines the need for integrated marketing communications (De Pelsmacker et al. 2007, 23). The next section explores definitions given to IMC. 2.2 Definitions of Integrated Marketing Communications Despite the growth and popularity of the concept of IMC, there has been little consensus about what it really is or what needs to be done in order to implement it in an organization (see e.g. Fill 2001, Gould 2004). Since its inception some decades ago, IMC has remained a controversial theoretical concept and scholars have not yet agreed on its general scope. Definitional issues have been one of the most often discussed topics up to the date (Kliatchko 2005; 2008; 2009). Various explanations have emerged and underlined its multiple aspects, benefits and consequences (De Pelsmacker et al. 2007, 8; Kliatchko 2005). This section does not seek to repeat all the definitions, but rather presents an overview of various perspectives to IMC and looks at some of its common characteristics. 11 “One look, one voice” thinking shaped the early development of IMC (Miller & Rose 1994; Schultz & Kitchen 2009). Beyond this phrase is the idea that advertisements should have the same look and personality across different markets and different media. (Kliatchko 2005; Christensen et al. 2008). This view serves as an appropriate starting point for discussion of IMC. However, it does not acknowledge the more profound elements that are required to support and maintain IMC in an organization, which refers to its strategic aspect. (Fill 2001). For many, IMC is concerned with consistent coordination of various marketing communication tools and synergy seeking (Duncan & Everett 1993). From this point of view, combining marketing communication tools in a mutually reinforcing way, results in greater efficiency (Duncan & Everett 1993). One widely used definition that relies on this perspective is the one provided by the American Association of Advertising Agencies in 1989 describing IMC in the following way: “IMC is a concept of marketing communication planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines, e.g. general advertising, direct response, sales promotion and public relations, and combines these disciplines to provide clarity, consistency and maximum communication impact.” (Cited in Eagle and Kitchen 2000). Duncan and Moriarty (1998) provide resembling definitions, but underline the customer-orientation of marketing communications. Customer-centricity has remained a key element in various definitions up to date. This aspect is also supported by Kliatchko (2008), who describes IMC as follows: “IMS is an audience-driven business process of strategically managing stakeholders, content, channels, and results of brand communication programs.” 12 As the citation above shows, Kliatchko (2008) regards IMC as a customer-centric business process and makes a distinction of the so called four pillars of IMC. These are stakeholders, content, channels and results. Figure 2 illustrates the four pillars of IMC. Integrated Marketing Communications Pillars Stakeholders Content Channels Results Strategic Management of Brand Communications Programmes Figure 2: The Four Pillars of Integrated Marketing Communications (Kliatchko 2008) Kliatchko (2008) argues that his definition and the four pillars sum up the many principles surrounding the concept of IMC. The first pillar, stakeholders, refers to all relevant internal and external audiences, with whom the organization interacts. Second pillar, content, describes the messages provided by the firm. This pillar has been strongly influenced by digital technology, which has shifted content creation away from mass advertising paradigm towards a more interactive approach that does not perceive customer just as the receiver of a message. Channels, as the third pillar, refer to different sources of information that serve as contact points with consumers. Finally, the fourth pillar, results, underlines that IMC programmes must be accountable for business results. (Kliatchko 2008). Over the years, discussion on IMC has evolved from a view of coordinating communication tools towards considering it as a process of strategically managing marketing communications in line with the overall business strategy (Kitchen & Schultz 2009). As Schultz and Schultz (1998) have proposed, IMC can been viewed from a more strategic perspective. From their point of view IMC can be 13 seen as a four-level business process. The four stages describe the phases that firms go through in their efforts to practice integration (Kliatchko 2008). Figure 3 represents the four stages of integrated marketing communications. Stage 4 Financial and Strategic Integration Stage 3 Application of Information Technology Stage 2 Redefining Scope of Marketing Communications Stage 1 Tactical Coordination Figure 3: The Four Stages of Integrated Marketing Communications (Schultz 2011) As represented in the Figure 3, the first level of IMC focuses on tactical coordination of communication tools. The second level is about redefining the scope of marketing communications. The third level concerns application of information technology and on the top fourth level is financial and strategic integration. The four stages illustrate that integration is not only concerned with the integration of the various functional areas of marketing and communications, but includes all the other functional areas within an organization (Kliatchko 2008). This view of IMC as a dynamic and strategic process that deal with multiple functional areas of an organization, is also supported by a number of other academics (see e.g. Fill 2001; Gould 2004). Even though the majority of academic research acknowledges the importance of integrated marketing communications, the concept has been criticized. Some have claimed that IMC is only management fashion based on weak theoretical foundations and lacking of academic rigor (see e.g. Cornelissen & Lock 2000; Cornelissen 2001). Cornelissen et al. (2006) propose that IMC should be rather understood as a metaphor, which allows a certain flexibility to adapt thinking in 14 compliance with different needs. Furthermore, it has been claimed that an extremely disordered and fragmented marketing context cannot be responded to by IMC frameworks (see e.g. Christensen et al. 2005; Cornelissen et al. 2006; Christensen et al. 2008). However, despite the debate IMC has established itself within marketing both in literature and in practice (Vargo & Lusch 2004). The definitions reviewed in this section show that IMC can be approached from various perspectives. This paper does not aim to review all the definitions but it has presented some of the diverse conceptualizations and perceptions of IMC in order to explain its complex nature. To summarize, common elements that appear in the various definitions can be recognized despite the lack of consensus on the general concept of IMC. They involve consistency and a way of managing marketing communications in a holistic manner in order to achieve strategic objectives (Fill 2001; Kitchen et al. 2004). The disciplines associated with IMC are also numerous. They range from coordination of communication tools to total integration of corporate strategy. Hence, IMC shapes multiple dimensions of the organization and evolves level by level. In this research the focus will be turned to the tactical level of IMC in order to examine in detail eReading advertising as a promotional tool. Coordination of media is a predominant theme in IMC, hence the next section discusses media planning. 2.3 Media Planning in Integrated Marketing Communications The objective of media planning is to assess the most suitable means to deliver advertising communication to consumers and to allocate advertiser’s budget to the best possible media mix (Bogart 2010). Media planning has gained the interest of scholars in the field of integrated marketing communications quite recently. Discussion has initially been opened decades ago, but it has been given more attention lately as competitive pressures and expanding media alternatives increase the need for media selection efficiency (Kliatchko 2008; Smith et al. 15 2010). This section discusses some key concepts that should shape media planning as a part of IMC. As stated earlier, IMC aims at strategically consistent communications thus this principle dominates also media planning. Furthermore, media neutral planning, zero-based planning and measuring are other key concepts in this field. According to Duncan and Moriarty (1998) marketing communications planning should be based on a zero based planning process that determines objectives and strategies based on current brand or marketplace conditions. It aims to avoid prejudices that come from past experiences and can give an image of a market environment that may not exist anymore. Because marketing environment is dynamic, also circumstances for media planning evolve. Duncan and Moriarty (1998) propose that SWOT-analysis is a good way to start media planning and to identify the most suitable marketing communication functions for achieving desired objectives. Media neutrality means that each media is considered as a potential choice depending on particular circumstances of the organization, in a particular market, at a particular time (Tapp 2005). According to Mitchell (2003) media neutral planning demands for open minded thinking that goes beyond any single media channel or discipline. This point of view is relevant as new media emerge constantly as a result of technological innovations. Consumers’ media consumption patterns change and marketers need to reconsider the right media channels for communication (Mitchell 2003). Strong customer understanding is in the heart of media neutral planning. As Kliatchko (2005) argues, audience drives the planning and selection process, not the interest of the advertiser or the media agency. Measuring is an essential part of IMC. It may be considered as a complex and challenging process as the aim is to measure the results of a combination of marketing communication elements (Schultz 2011). According to Welsh (1965) marketing communication goals should be specific, measurable and achievable. 16 Goals that are challenging motivate, whereas non-specific targets that are difficult to measure should be avoided. Based on these principles marketers should carefully consider all available communication channels when they form their media mix. An optimal marketing communication program consists of a mix of communication channels, where each channel alone and as a part of a whole has a special role for reaching the desired goals (Keller 2001). Advertising in eReading context is not an exception and it should be considered in an integrated manner along with other promotional tools. In order to facilitate integrated marketing communication planning different conceptual frameworks have been developed to help marketers understand and compare capacities of each communication channel (Mirbagheri & Hejazinia 2010). These will be discussed in the following section. 2.4 Advertising Medium Selection Organizations often spend heavily trying to communicate with their current and prospective customers through multiple media (Smith et al. 2006). Advertising people have long given considerable attention to media selection (Hornik 1980). This is due to the fact that the majority of advertising funds are invested in media space and time (Gensch 1970). Bronner and Neijens (2006) specify that this refers to approximately 80 % - 85 % of the total advertising budget. However, the economic importance of media selection is not the only reason that makes it challenging. Media planning consists of a series of decisions designed to assess the best means of delivering advertising communication to target audiences (Coulter & Sarkis 2005). The wide and expanding range of media alternatives, which each has certain advantages and disadvantages, makes the decision more demanding, and challenges advertising industry to consider how media can be compared (Harvey 1997, Romaniuk & Gugel 2010). When aiming to determine the media mix, each possible media vehicle such as TV show, magazine or newspaper should be evaluated. Given the very large 17 number of alternative choices, a person is likely to face great difficulty in comparing all reasonable media combinations in order to arrive at the best mix. (Zangwill 1965). Hence, various computer models have been created to help evaluate media and audience data. Many of these ask for the specification of media weights that reflect the difference in suitability of the various media channels. (Dyer et al. 1992). Even though computer models help to handle large amounts of data, there are also limitations. Bogart (1975) states that media models can misguide media planning unless it is recognized that there are no all-purpose answers. It is important to acknowledge that different frameworks highlight different aspects and any model is rarely complete. Thus, computer modeling and executive judgment should be considered to complement one another. (Dyer et al. 1992; Kotler 1963). One widely discussed framework for evaluating commercial media is the ARF model, which was published in 1961 by the Advertising Research Foundation (see e.g. Romaniuk & Gugel 2010; Harvey 1997). This model describes advertising media evaluation as a six-stage process and recommends that media should be compared within each of these six phases (Harvey 1997). Figure 4 represents the ARF model. 18 Prospects Non-Prospects I II Vehicle Vehicle Distribution Exposure III V Advertising Advertising Exposure IV VI Advertising Sales Perception Communication Response Figure 4: The ARF Model for Evaluating Media (Harvey 1997) As shown in Figure 4, the model consists of six levels. Harvey (1997) explains that at each of these levels the ARF Model distinguishes between prospects and non-prospects. The former refers to potential customers, whereas the latter refers to people, who will not buy despite all the advertising that might be directed to them. As can be seen from the figure, there are some non-prospects in all but the last level. The first level of the ARF model is (1) vehicle distribution, which describes a count of the physical units through which the advertising flows. For example, copies of a magazine issue. The second level is (2) vehicle exposure. It refers to the number of individuals, who are exposed to the particular media channel. The third level, (3) advertising exposure, concerns the number of individuals, who are exposed to advertising in the media. The fourth level is about (4) advertising perception, which refers to the number of individuals noticing the advertising, whereas (5) advertising communication at level five is more than the 19 simple act of noticing. It describes the number of individuals, who receive some level of communication from the advertising. The last level of the model is (6) sales response, which refers to the actual sales created by the advertising. Among other models the ARF model represents one way to evaluate advertising media. However, the media landscape has changed a lot due to digitalization since the model was introduced. Various researchers have aimed to reformulate the advertising media evaluation criteria to better correspond with the current situation. Romanik and Gugel (2010) point out that as new technology is released all the time, it is difficult to come up with a model that would include all the relevant standards. Rather than adopting one particular media evaluation model, this research looks at some of the key underlining characteristics that appear in the various frameworks. These features include both quantitative and qualitative aspects of media (Dyer et al. 1992) and they are examined next. The first subsection that follows focuses on quantitative criteria and the second one on qualitative criteria. 2.4.1 Quantitative Media Evaluation Criteria Media planners’ objective is to find combinations of media that enhance the firm’s advertising program and reach the target audience at minimum cost (see e.g. Sissors 1982; Hornik 1980). One initial concern that shapes the utilization of any medium is cost effectiveness (see e.g. Harvey 1997). Assessing media vehicles in terms of quantitative criteria, such as reach, frequency and cost is a very conventional and widely employed approach to media selection (see e.g. Assael & Cannon 1979; Hornik 1980). These variables are examined in the following. Media selection is based on the principle of optimal reach of a defined target group (Assael & Cannon 1979). Reach refers to covering a certain percentage of the target audience by one medium or by multiple media and defines how many people will see the campaign (Hornik 1980, Sissors 1982; Romaniuk & Gugel 2010). Media consumption patterns of the target audience ultimately determine 20 media selection. For example, if a target audience is not exposed to a certain type of media, a campaign using this same media mix will not reach those people either. Hence, the advertising media and the target marked are matched by determining the relative concentration of target market members in various media audiences (see. e.g. Cannon 1986; Gensch 1970; Romaniuk & Gugel 2010; Smith et al. 2010). Advertisers can identify their target audience based on different characteristics, such as demographics, psychographics or behavioral traits (see e.g. Assael & Cannon 1979; Cannon & Linda 1982; Gensch 1970; Hornik 1980). To the advertiser, some variables are more important than others (Gensch 1970). In addition to reach, the amount of optimal frequency must be considered. Frequency usually represents the average number of vehicle exposures that media audiences receive in a given time period or for example in a given number of magazine issues (Sissors 1982). Sissors (1982) explains that every vehicle exposure does not result in advertising exposure, thus it must be made clear that there is a certain difference between these two concepts. This difference was also made in the ARF model presented in Figure 4. Sissors (1982) agrees that exposure to a media vehicle is often greater than exposure to advertising in the same channel. High frequency increases the likelihood of audience exposure to advertisements. Sissors (1982) proposes that media plans can be much improved through better use of frequency. Media decisions aim to achieve the highest reach at the lowest cost (Mevik & Vinding 1966; Barnes et al. 1982). Keller (2001) proposes that all criteria that are used to assess media selection must be weighed against their cost to arrive at the most effective and efficient communication program. All marketing communications are somewhat costly, although there can be differences and budget decisions can turn some media unavailable for advertisers (Gensch 1970; Keller 2001). One key figure that can be used to compare prices of different media options is cost per thousand (CPT). It represents the cost of a medium per thousand members of audience. (Fleck 1973). The ideal criteria for media comparisons involve also measures of sales responses, such as the actual sales 21 created by the advertising (Smith 1965; Harvey 1997; Romaniuk & Gugel 2010). However, purchase decisions are not solely dependent on advertising. Many other variables interact with advertising to determine purchase and it is challenging to ignore the actions of these other variables. (Gensch 1970; Smith 1965). Even though reach, cost and frequency are important factors they can provide a somewhat simple media analysis (Hornik 1980). Selection of media to convey marketing messages is not only dependent on quantitative criteria. In addition to quantitative factors, qualitative characteristics of media are considered more and more important (see e.g. Dahlén 2005; Dahlén et al. 2008a; Dahlén et al. 2008b). These are explored in the next subsection. 2.4.2 Qualitative Media Evaluation Criteria One widely discussed topic in the field of advertising and media selection is the influence of media environment on advertising effectiveness. Media environment can be defined as the qualitative characteristics of the media in which an advertisement has been placed (see e.g. Janssens & De Pelsmacker 2005; Cannon & Linda 1982; De Pelsmacker et al. 2002; Bronner & Neijens 2006). Consumers use media because of their content, thus media environment should have a central role in media planning (Wang & Calder 2006). Media environment provides a communication setting that can either strengthen or hinder the effectiveness of advertisers’ message (Kennedy 1971). Hornik (1980) states that people are in different mental and emotional states when they are exposed to different media. For example, people read newspapers in a different way than they read magazines, which can affect advertising response even if the advertising approach in each vehicle is the same. Some media can be more suitable for a particular product due to their mood or prestige (Gensch 1970). For example, high-end products that have an exclusive quality image can prefer high prestige magazines as advertising vehicle (Gensch 1970). Hornik (1980) and Bogart (1975) state that there is an interrelationship between the vehicle and the advertising message it delivers to an audience. Hence, the media and the message 22 are inseparable. Also creativity in media planning and advertising provides a possibility to increase consumers’ interest towards advertisements (Dahlén 2005; Dahlén et al. 2008a; Dahlén et al. 2008b). According to Hornik (1980) media selection requires knowledge of competitive activity in the media vehicle. Many advertisements occur with other competing ads, which might influence recipients’ response to the message (Yi 1990). Competition for media space and time is likely to influence negatively the response to a certain advertisement and diminish its effectiveness (Hornik 1980). Each medium can also be characterized by its technical merits. Media vehicles have different technical capabilities, which have an influence on the visibility and quality of an advert in the medium. All media have typical characteristics which refer to their ability to deliver certain types of messages, such as interactive versus static content (Gensch 1970; Hornik 1980). Technical capabilities differentiate media from each other also within media genres making some vehicles more suitable for certain purposes (Gensch 1970). For example print media can be assessed based on paper quality, binding and print technique (Hornik 1980). The characteristics of the advertised product or service are likely to set requirements for the selection of advertising media. To illustrate Gensch (1970) proposes that some products must be seen to be understood, which is opposed to the use of radio as an advertising medium. For long the differences between media genres were clearly separate but now digital methods of distribution have changed and there are media that can carry any type of content. 2.5 Synthesis This section synthesizes Chapter 2, which discusses the theoretical background of the research. The theoretical approach of the study is based on literature in the field of integrated marketing communications (see e.g. Duncan & Everett 1993; Schultz & Kitchen 1997; Keller 2001; Kitchen et al. 2004; Kliatchko 2005, 2008; Kitchen et al. 2008). There has been an increasing interest towards media 23 planning within this field (Kliatchko 2008). The topic has been given more attention lately as competitive pressures and expanding media choices increase the need for media selection efficiency (see e.g. Kliatchko 2008; Pilotta & Schultz 2005; Smith et al. 2010). Above all integrated marketing communications is a strategic approach to marketing communications planning, which is expected to result in greater effectiveness and efficiency in all marketing communications activities (see e.g. Eagle & Kitchen 2000; Kitchen & Schultz 2009; Kliatchko 2005). Strategic media planning should be executed in line with the overall business objectives and be shaped by the principles of zero based planning and media neutrality. Media planning consists of a series of decisions designed to assess the best means of delivering an advertising communication to target audience. Media selection is an important decision due to the fact that the majority of advertising funds are invested in media space and time. (Gensch 1970). However, the economic importance of media selection is not the only reason that makes it challenging. Coulter and Sarkis (2005) note that the wide and expanding range of media alternatives, each which has certain advantages and disadvantages, makes the decision more demanding. The emergence of new media challenges advertising industry to consider, how media can be compared (Harvey 1997). Consequently, various attempts for evaluating media selection have emerged. Discussion has concerned both quantitative and qualitative characteristics of media, such as costeffectiveness (see e.g. Smith et al. 2010) or media environment (see e.g. Dahlén 2005; Dahlén et al. 2008a; Dahlén et al. 2008b; Hornik 1980; Gensch 1970). Table 1 provides a summary of the criteria that have been discussed in Subsection 2.4.1. and Subsection 2.4.2. These criteria can be used to compare the advertising media in their suitability to transfer advertisers’ messages. 24 Quantitative Qualitative Criterion Description Reach A percentage of target audience covered by one medium or multiple media. Frequency Average number of vehicle exposures media audience receives in a given period of time. Cost The expenses of the media space and production of an advertisement. Sales response The actual sales created by the advertising. Media environment Qualitative characteristics of the media in which the advert has been placed. Competitive activity Competing adverts in the same medium. Technical qualities Ability to deliver certain types of messages. Table 1: Criteria for Media Evaluation As can be seen from Table 1, the criteria for media evaluation are divided in quantitative criteria and qualitative criteria. Reach, frequency, cost and sales response represent quantitative criteria. Media environment, competitive activity in the medium and technical qualities are qualitative criteria. A short description of each criterion is provided in the table. It is important to remember that there is no solid agreement about the criteria based on which advertising media should be evaluated. Different models highlight various variables. The criteria listed in Table 1 represent some of the multiple aspects of media that influence the selection of an advertising vehicle. After these theoretical considerations, the focus is now turned to the empirical part of the study. Newspapers and magazines in eReading format represent new advertising media thus it is relevant to examine the factors that influence the interest to integrate them in marketing communications plans. The empirical research conducted for this study explores the current state of eReading 25 advertising in Finland. Through this investigation opportunities and challenges related to the utilization of eReading advertising will be identified. The following Chapter 3 discusses the methodology of the empirical study. 26 3 Methodology This chapter describes the research methodology of the empirical part of the study. The discussion starts with the presentation of the research method and research design. Then the data collection and data analysis are discussed. The chapter ends with the evaluation of the quality of the research. 3.1 Research Design and Methods The setting for the research was decided upon the purpose of the study. First, the objective of the thesis was to provide an insight into integrated marketing communications and the role of eReading advertising in this field. Second, from a managerial perspective the study aimed to examine the current state of eReading advertising in the Finnish media market and identify related opportunities and challenges. The research is two-fold. It is based on a theoretical review of academic literature in the field of IMC and on an empirical research of eReading advertising in Finnish context. The research was conducted as a qualitative study. This approach was chosen, because the aim was to form an in-depth understanding of eReading advertising as a phenomenon. A qualitative inquiry is a suitable way to explore the topic because it aims to provide rich descriptions and explanations in order to make sense of different phenomena (Miles & Huberman 1984, 14). Some of the main differences between qualitative and quantitative research concern the breadth and depth of the study. A qualitative inquiry aims to observe phenomena in great depth with attention to detail, context and nuances. A quantitative research is rather concerned about classifying, counting and constructing statistical models. (Patton 2002, 227). There are various ways to collect qualitative data and different techniques are used for different purposes. Interviewing is one of these methods. It is a useful 27 tool to enter into other persons’ perspectives and explore their thoughts, feelings and experiences (Patton 2002, 341) thus it was suitable for this research. Furthermore, there are multiple interviewing techniques, which differ from each other in the extent to which interview questions are predetermined and standardized before the actual interview. The different techniques can be roughly divided in three categories, which are open-ended interview, semi-structured interview and structured interview. Of these methods open-ended interview is the most informal, whereas structured interview is highly standardized. (Patton 2002, 342). For this study a semi-structured interview method was adopted and eight interviews were conducted. Semi-structured interview is also known as thematic interview. This refers to the idea that before the interview, an interview guide is prepared in order to list the themes that will be discussed during the interviews. This outline guides the semistructured interview in such a way that all the important themes are explored with each interviewee. Moreover, an interview guide helps to carefully consider the focus of the interview. However, semi-structured interview method allows great flexibility to elaborate relevant themes that may arise unexpectedly during the interview. Regarding the fact that the research phenomenon is fairly new, this aspect was considered important. Thus, semi-structured research method was chosen for data collecting. The method also permits spontaneous wordings of questions and a conversational interviewing style. (Patton 2002, 343). It must be noted that the questions should open-ended, which allows the interviewees to express freely their personal perspectives in their responses. For comparison closed ended questions which are more often used in quantitative inquiry, oblige respondents to adjust their knowledge, experiences and feelings into predetermined categories. (Patton 2002, 348). A qualitative research aims to result in insights and in-depth understanding based on relatively small samples rather than empirical generalizations, whereas quantitative research is rather concerned about gathering standardized information from a statistically more representative sample. (See e.g. Patton 2002; Miles & 28 Huberman 1984). For this study the interviewees were chosen using judgment sampling, which is a widely utilized sampling strategy in qualitative research (Marshall 1996). According to Patton (2002, 230) the strength of judgment sampling is that only information rich cases can be included in the sample. This means selecting interviewees from who it is possible to learn the most about topics that are central for the objectives of the research. In this case potential interviewees were identified and listed partly on the advice of some key advisers in the research project and partly by the researcher. Judgment sampling is a well justified sampling strategy for this study because eReading advertising is a fairly new phenomenon in the field of marketing. For many marketing professionals it is still a somewhat obscure and unknown area. Thus, it was purposeful to identify and interview people, who were likely to be able to give insights into the topic. The interviews were targeted at media agency representatives, because they were considered to have a deeper understanding of the topic than direct advertisers themselves. According to Wirtz et al. (2011) the advertising business partners of newspaper and magazine publishers can be classified in two groups, which are direct advertisers and indirect advertisers. Direct advertisers refer to advertisers that buy advertising space directly from the media, whereas indirect advertisers refer to intermediaries in the media buying process, such as media agencies. In the newspaper and magazine businesses media agencies are important clients for the publishers. A majority of advertising sales comes through media buying professionals. One reason explaining the extensive use of services provided by media agencies, is the fragmentation of the media landscape, which makes advertising more complex than in the past. Advertisers who invest in cross media campaigns need to buy and manage a large variety of media. Thus, they can face the difficulty to compare and analyze the merits of all the different options. In addition, media agencies have strong negotiation power, and they are able to buy media at a competitive price. The role of a media agency is to help advertisers to reach their business objectives by allocating the advertising budget to the best possible media 29 mix. Thus, they are obliged to compare and analyze the merits of different media options. Furthermore, media agencies serve as an important intermediary between media and advertisers, thus their perceptions about media vehicles are especially valuable for this study. After these considerations the collection of the data is described in detail in the following. 3.2 Data Collection To start the data collection process the potential interviewees, who were selected through judgment sampling, were approached by phone or email in order to propose an interview. Reactions to interview requests were very positive and most of the persons contacted were willing to participate. The interviews were conducted between October 21st 2011 and November 15th 2011. The majority of them took place at the interviewee’s office, which provided a calm environment for interviewing. Two of the interviews were organized in cafes in the city center of Helsinki. Despite some background noise this environment was well suitable for interviewing providing a relaxed atmosphere. All the interviews were conducted in Finnish and lasted from 60 minutes to 90 minutes totaling 627 minutes of interview data. All the interviewees were media agency employees specialized in digital marketing and having a working experience of many years in this field. Some of the interviewees had more experiences of eReading advertising and were involved in tactical operations and some had a rather strategic approach to the topic. It can be concluded that all the interviewees are experts in the field of digital marketing but approach it from slightly different perspectives. Table 2 provides a list of the interviewees’ positions in their organizations and the duration of the interview. 30 Interviewee no. Position Duration 1 Digital Strategist 86 min 2 Digital Director 83 min 3 Digital Strategist 75 min 4 COO 60 min 5 CEO 90 min 6 Digital Strategist 87 min 7 Strategy Director 72 min 8 Head of Digital 74 min Table 2: List of Interviewees The collection of data was finished after the eighth interview, because the data was well saturated. In a qualitative inquiry there are no given rules for sample size, but it must be decided based on the purpose of the study. Data saturation is a well justified reason to limit the number of interviews. Saturation means that the data collection has reached a point where additional interviews are not likely to bring in any new and relevant information to the study. (Patton 2002, 230). It was noted that the field of media agencies in Finland is quite homogenous. There were a few additional names on the list of potential interviewees, if more data would have been needed. All the interviews were recorded in order to capture the actual wording of the persons interviewed. In addition, notes were made during the interviews. They served as a tool to show emphasis on some topics and to help in formulating questions as the interview moved along. As the discussion was recorded it was not necessary to make verbatim notes. Thus, the researcher was able to fully concentrate on the interviewee and interactive in-depth interviewing. Directly after the interview the tapes were checked in order to ensure the quality of the 31 recorded interview. Also details of the interview setting were noted. The interviews were transcribed soon after the interview. The interviews were transcribed in Finnish which was the language used in interviewing. Some citations were later translated in English for this study. In the translation process, special attention was paid to maintain the meaning of the original citations. The interviews started with defining the topic in question. This was considered important because eReading advertising in general is a broad concept and people might give different meanings to it. It further was specified that in this study eReading advertising refers to tablet in-application advertising in newspaper and magazine context. In the next section the analysis of the data is examined. 3.3 Data Analysis Data analysis and interpretation is making sense about what people said in the interviews, looking for patterns, putting things together and integrating what different interviewees have said. It is a process of transforming the data into findings. (Patton 2002, 380). According to Patton (2002, 432), there are many ways to analyze the data. The researcher has to adapt the analysis procedures to fit the specific situation and research in question. Thus, the purpose and the audience of the study guide the process. Regardless of the analysis method, the researcher is obliged to observe and report his or her analytical procedures as truthfully as possible. The data set consists of 627 minutes of recorded interviews. All the interviews were conducted and transcribed by the researcher, which provided an opportunity to familiarize oneself with the whole data set very intensively. After the transcription process the interviews were read through carefully in order to form a general understanding of them. Special attention was paid to challenges and opportunities related to eReading advertising. 32 In this research the analysis is based on a thematic analysis, which is a widely used analysis method in qualitative inquiry. The thematic analysis is a tool that enables to break the data into subsets or different patterns according to specific themes. A theme represents an important issue about the data related to the research question and captures a somewhat patterned response or meaning (Braun & Clark 2006, 82). According to Patton (2002, 453) qualitative analysis is typically inductive in the early stages especially when discovering themes and developing the coding manual. The final stage of the analysis can be deductive after the themes have been established. Through inductive analysis themes that emerge from the data were identified and listed. This served as the first step of coding the data into topics. Coding refers to creation of manageable classifications according to which the data will be grouped. A code integrates different instances of the data. In order to systematically code the data a coding manual was established. The idea behind this manual is to indicate a name for a theme, define what it concerns and provide a description of how to decide a theme occurs in the data. (Patton 2002, 463). When rereading the data a formal coding procedure was started. Different themes were color coded in such a way that each color indicated a piece of text belonging to a certain theme. Several readings were necessary before the data was completely processed. After coding, parts of the data that belonged to the same theme were grouped together in order to examine the meanings various interviewees gave to topics. Accordingly to Patton (2002) particular attention is to be paid to the extent to which the different instances of the data fall in a certain pattern. Furthermore, differences among various data patterns were examined too. Before going to the findings in Chapter 4 the quality of the research is assessed in the following section. 33 3.4 Quality of the Research Traditionally quality of an academic research is evaluated by three criteria, which are (1) reliability, (2) validity and (3) generalizability. These measures are widely employed in quantitative research, but qualitative inquiry produces knowledge that cannot be evaluated exactly in the same way. It is important to note that in qualitative research there are no absolute or objective criteria that could indicate whether findings are valid and procedures robust (Moisander & Valtonen 2006, 21; Miles & Huberman 1984, 231). However, reliability, validity and generalizability can be interpreted from a qualitative perspective. According to Moisander and Valtonen (2006, 24), reliability usually describes the degree to which the findings of a research are independent of accidental circumstances of their production. The concept of replicability is closely related to reliability. It refers to the possibility that other researchers could repeat the study and come up with same results, interpretations and claims (Moisander & Valtonen, 2006, 27). Qualitative research is rather contextual of time and place it is not normally possible to end up with similar findings as earlier. For example, the topic of this research is constantly developing and evolving because eReading advertising is in a development stage. Thus, the findings are closely related to the present moment. Advertising in eReading context is likely deal with different challenges and opportunities and have a different position in the media market in the future. In qualitative research reliability can be also considered to deal with the transparency of the research process (Moisander & Valtonen 2006, 27). Thus, it is important to describe in detail the processes that shape data collection and analysis. This paper aimed to provide a detailed description of the data collection and data analysis procedures in order to ensure transparency of the study. According to Moisander and Valtonen (2006, 24) validity often refers to the truth or accuracy of the claims the researcher makes. Validity can be also described in terms of how well a study represents the features of a phenomenon that it was intended to describe. Thus, the criteria that are used to evaluate the quality of a 34 qualitative inquiry are based on the theoretical and methodological perspectives that are chosen for the study (Moisander & Valtonen 2006, 21; Patton 2002, 542). As described earlier, there is no universally objective way to evaluate qualitative inquiry. Hence, Moisander and Valtonen (2006, 26) propose that validity should rather be seen as an agreement of the interpretations of a research judged by its audience. In quantitative research generalizability is a central topic referring to the extent that the research findings and conclusions of a specific sample apply to a larger population (Moisander & Valtonen 2006, 28). Typically, in qualitative inquiry this is not the primary goal. Qualitative research often deals with smaller samples, which do not statistically represent a larger population. The nature of qualitative research is rather to expand the understanding of a specific phenomenon in a specific context. Moisander and Valtonen (2006, 28) further suggest that in qualitative inquiry it is more relevant to discuss transferability. This refers to the idea, that the readers of a research report could establish connections between the results of the study and their personal understanding and experiences. Thus, it is important to provide a thick description of the research setting, as this study aims to do. This chapter has discussed the research methodology. The focus is now turned to the findings, which are presented next in Chapter 4. 35 4 Findings This chapter presents the findings of the empirical research. The chapter discusses first to which extent eReading advertising is utilized in the Finnish media market. Then challenges related to eReading advertising are explored. The chapter ends with a discussion of the opportunities of advertising in eReading context. 4.1 Utilization of eReading Advertising Advertising in eReading context is a fairly new concept of advertising. Electronic reading content can be accessed from a number of different devices, but this study focuses only on advertising in newspaper and magazine applications that are designed for multifunctional tablet computers, such as Apple’s iPad or similar devices. Development stage of eReading advertising In Finland, electronic publishing is at an early stage of development. Various newspapers and magazines have released their first tablet editions within the last years. This has offered also advertisers a possibility to adopt this new media environment. To gain an overall understanding of the current state of eReading advertising, the interviewees were asked to describe its utilization. It can be clearly seen from the quotes that advertising in eReading context is experimental at this point, as the following quote show: “eReading advertising is still only dabbling. It is still an experiment on a small scale, but it does not have financial impact.” (Interviewee 1) “It is a cherry on the cake. -- I have not seen that tablet advertising would have been given much importance in the success of a campaign.” (Interviewee 3) 36 “Today eReading advertising is still in its infancy and we are taking the first steps.” (Interviewee 6) “eReading advertising is only an additional element included in the campaign. No big results are expected from it.” (Interviewee 8) As pointed out in these quotes above, eReading advertising is still in its infancy. The interviewees described it most often as an experiment or a supplement to other forms of advertising. This is due to the fact that eReading advertising is far from a mature advertising concept. It stems from the interviews that it is still in the process of finding its position in the field of advertising. Integrating eReading advertising in marketing plans Despite the novelty of the medium, same principles that shape media planning in general apply in the case of eReading advertising too, argue the interviewees. Thus, eReading advertising may be utilized if it is relevant for the objectives set for advertising and reaches defined target audiences. According to the interviewees, however, eReading advertising is quite loosely bound to overall business objectives. Today, it is not given substantial emphasis in the success of a campaign. Furthermore, there is one additional factor that may motivate advertisers for experiments with this medium in its early development phase. Interviews indicate that some advertisers are interested in eReading advertising, because they want to be forerunners and associated with innovativeness. Thus, visibility in a novel media brings along desired reputation, as argued in the following citation: “Many advertisers want to lead the way and try out new solutions before the others.” (Interviewee 8) 37 Rising interest towards eReading advertising Media agencies are a significant player in the field of advertising as an increasing number of advertisers use their expertise in media planning. Thus, it is reasonable to find out, how media agency representatives perceive eReading advertising. Many of the interviewees argue that media agencies consider tablet newspapers and magazines as one medium among all the other media as the following quote shows: “It is just one emerging medium among the other media. We are examining it and trying to gather as much information about it as possible.” (Interviewee 8) It stems from the interviews that media agencies have a rising interest towards eReading advertising. This is natural as media agencies aim to help advertisers to reach their business objectives by allocating the advertising budget to the best possible media mix. They need to be up to date of the variety of possibilities in the field of advertising, as expressed in the following quote: “In principle, media agencies are interested in everything new, because it lets us show to the client what is happening and that we can create something new.” (Interviewee 1) It was pointed out in the interviews that planning advertising for some new media has changed the traditional division of tasks in media agency. One reason explaining this is media convergence, which refers to technology driven unification of different media channels. For a long time different media, such as print, TV and radio were clearly separated. Now digital methods of distribution have changed this and one medium can carry many types of content. One interviewee expresses it as follows: “The trend is that new media cannot be categorized whether they are print, TV or online. They combine a bit of everything, and everybody should acknowledge that.” (Interviewee 8) 38 Interviews showed that in media agencies eReading advertising falls into digital planners’ sphere of responsibility. However, interviewees point out that even though advertising in electronic reading context deals with online environment, it cannot be strictly categorized. Advertising in eReading context appears very often linked to other advertising, such as print or television. Thus, it should be rather considered as interdisciplinary advertising, which requires co-operation among specialists from many fields. Pioneering media in eReading advertising Interviewees were asked to name actors that have performed well in the Finnish media market in this early development stage of eReading advertising in tablet newspapers and magazines. Some were not willing to name any particular media. However, Teknari, which is a technology magazine published by T-Magazines, was mentioned a few times as a good example of a tablet magazine. It was considered that Teknari’s tablet magazine has been developed in terms of the media environment, and thus it utilizes the unique characteristics of the tablet device and offers also interesting advertising concepts. Another media that must be highlighted is HS iPad, which is the iPad version of Helsingin Sanomat newspaper. During the interviews all the interviewees mentioned it in some context, thus HS iPad can be considered as a top of mind tablet newspaper among these interviewees. In this section it was pointed out that media agencies consider eReading advertising an interesting advertising format. However, it is still in its infancy and is not given substantial emphasis in the success of an advertising campaign. There are some obstacles that reduce its utilization at this point. In the next section these challenges are discussed in more detail. 4.2 Challenges of eReading Advertising The challenges of eReading advertising are discussed in this section. In order to make eReading advertising a more attractive advertising concept the obstacles that 39 reduce advertisers’ interest to use it must be understood. Four challenges stem clearly from the interviews. These are related to low reach, high costs, measurement problems and limited know-how. 4.2.1 Low Reach Reach plays a central role in advertising (see e.g. Assael & Cannon 1979; Hornik 1980; Sissors 1982; Romaniuk & Gugel 2010). In the Finnish market, the penetration rate of tablet devices is still at a very low level. As a result there are only a handful of people who read newspapers or magazines using eReading applications. All interviewees explain that the very low reach is considered as the main problem that decreases advertisers’ interest to advertise in electronic reading context, as expressed in the following quotes: “The growth of tablet market penetration is critical in order for eReading to become a respectable and a natural part of everyday media planning.” (Interviewee 7) “Are there enough readers? The answer is often no. Hence, we have to consider if it is worth doing extra job because of eReading advertising.” (Interviewee 4) “When readership is low there is no reason to invest more in advertisement production.” (Interviewee 3) However, it can be argued that low reach is typical for a new medium. In this case it must be also remembered that we are talking about a totally new user interface. Consumers are still learning to use tablet computers and the content that can be accessed with them. Tablets and electronic reading are still looking for their place in consumers’ media consumption. Interviewees point out that the adoption of electronic reading will grow with the proliferation of tablet devices as the following quotes illustrate: 40 “In order to increase the readership, Kindle-like solutions are required. It is probably only a good thing that there will be competition between different manufacturers. If one has monopoly, prices will remain high.” (Interviewee 5) “There are good signs regarding the growth of tablet penetration. Sony and Kindle are going to introduce cheaper devices, which will enhance competition. It will let everyone buy a tablet at some point, which will start to increase the penetration and thereby advertising coverage.” (Interviewee 7) As expressed in the citations, launches of new tablets will increase competition in the gadget market and push prices down. Apple’s iPad was the first multifunctional tablet device that gained substantial popularity in the Finnish market and it has dominated the market until now. However, it can be considered to be expensive and, as one interviewee argues, a luxury product. Interviewees note that consumers use media because of their content, which is a view supported also by Wang and Calder (2006). From this point of view media can primarily boost eReading phenomenon by providing interesting material that attracts readers. Some interviewees suggest that media could also try to facilitate the adoption of eReading applications and aim to create user experiences by offering content with lower prices or for free, as the following citations show: “I think it is good that publishers have quite aggressively attempted to increase the readership by distributing free samples. They should generate user experiences free-of-charge in the beginning. In the long run they can become subscribers, who pay for the content.” (Interviewee 7) 41 “If you distribute a well performing and interesting magazine or newspaper for free it has more readers for sure.”(Interviewee 3) However, interviewees understand that free-of-charge distribution can be harmful for media’s profit generation concept. Furthermore, interviewees propose that user experiences could be also created in co-operation with advertisers. For example, in terms of sponsoring: “Sponsorships such as ‘Today’s newspaper is provided by X’ could be a good means to familiarize people with eReading.” (Interviewee 4) It must be also noted that eReading media environment is highly selective, which enables advertisers to reach a distinct target market. This is one reason that favors the utilization of eReading advertising despite the low reach. Thus, the size of the market cannot be considered as intrinsic value. Users of tablets and readers of tablet newspapers and magazines may actually be the most preferred target group for some advertisers. Quality of the contacts counts, as the following quotes present: “In my opinion you cannot consider everything as mass media. It is extremely important to make the target group, which you have reached, engage themselves and spend time with your brand. They may become brand advocates, who spread the word of the brand.” (Interviewee 2) “We found a medium that reaches our clients target group. There is no reason to ignore it.” (Interviewee 6) To advance the discussion about barriers to use, it is important to note that the main disadvantage of low reach is related to costs, which are discussed next. 42 4.2.2 High Costs Effective allocation of advertiser’s media budget is one of the principles that shape media planning (see e.g. Mevik & Vinding 1966; Barnes et al. 1982). It stems from the interviews that low reach influences significantly how much advertisers are willing to invest in advertising. The costs of advertising can be roughly divided into two categories, which are the cost of buying advertising space and the cost of producing advertisements. Interviewees point out that media should take into account the low reach in their pricing policies. In general, media agencies have a favorable attitude towards innovations, but cost effectiveness is emphasized in decision making as the following citations illustrate: “New products are always welcome, but then you hope that they would be priced reasonably enough so that our clients would be willing to try them.” (Interviewee 5) “The readership is still so low that the cost per contact tends to be too expensive. It is a sad thing that even if the ideas would be as good as ever, we cannot implement them.” (Interviewee 2) High costs and a limited reach are not a combination that encourages for experiments. In this early stage of development, it would be important for both media and advertisers to gain experiences from eReading advertising, which should influence pricing. Some interviewees note that media have been willing to negotiate prices, which gets positive feedback. All interviewees highlight that production costs are high with respect to reach. The problem lies in the fact that eReading advertising represents a totally new advertising format, which means that advertisers have to produce materials specifically for this purpose and the small target group they want to reach. Interviewees argue in the following way: 43 “It is not worth to invest much in a very small audience. The cost of advertising production must be reasonable compared to reach.” (Interviewee 4) “It is yet another reason not to advertise in eReading context that the advertising production cost becomes too high.” (Interviewee 1) However, eReading advertising may be a part of a cross media campaign, which includes for example print, online or TV. Advertisements for eReading context are often edited from materials that are produced for the other media vehicles. Combining these elements into a new format naturally causes extra costs for advertisers. Interviewees also point out that planning of the creative choice takes more time as there is no set standard for this advertising format, which again increases costs. Interviewees indicate that media can facilitate the adoption of this new advertising concept by providing help to produce the needed materials. For example, some media offer services to convert existing print ads into iPad format. All the efforts that lower the barriers to use are welcomed. Some interviewees also mention diverse pricing principles among media as a challenge. From interviewees’ perspective, consistent pricing models would make it easier to compare the merits of different media. 4.2.3 Measurement Problems Advertisers expect to see returns on their investments in advertising, thus accountability is an important part of media planning. As advertising in electronic reading context deals with online media environment, the pressure of measurement is increased. Basically, in online environment everything is measurable. For comparison, it is more often accepted that advertising performance in offline media is not evaluated in the same extent. 44 According to the interviewees, there are problems related to measuring advertising response and success in electronic reading context. As we are talking about a novel medium and the majority of advertisers are taking initial steps in its utilization, it would be extremely important to provide advertisers information about the effectiveness of advertising, as the following citations illustrate: “Planners do not necessarily want to recommend eReading advertising, if there is no evidence of its effectiveness. In any such pilot study it would be good to get information on the performance in order to assess whether it is a good thing or not.” (Interviewee 1) “If there are two equally cost effective media and only one can be chosen, then at some level it matters whether advertising performance can be measured or not. It would provide a competitive advantage to the media.” (Interviewee 3) Thus, the lack of information on advertising effectiveness in eReading context can lower the interest to invest in this medium. Without tracking the performance of advertisements, there is no information about the success or failure of advertising efforts. As a consequence, it is difficult to assess how the new advertising idea worked and should it be utilized in future. It stems from the interviews that measurement issues concern largely media agency’s sphere of responsibility. Many of the interviewees argue that the media agency is often responsible for measuring online advertising activities with their own tracking systems and it is likely to continue to be so. In this case media needs to ensure that media agency’s tracking system can be utilized in the media environment it provides. Thus, measurement issues demand efforts and cooperation from media agencies and media. The development of measurement requires financial resources, which is one reason explaining its delay. It must be noted that even though the media agency would take the main responsibility of tracking the performance of ads, it would be a benefit for media to have its own 45 measurement system. Above all, the role of media is to provide sufficiently information about the media environment, and providing information about advertising effectiveness would create a competitive advantage. The problem does not concern every media, as some have already overcome this challenge. All interviewees agree that it is relevant to advance the discussion on how the effectiveness of advertising should be measured and how people react on advertising in eReading context. It must be kept in mind that advertising should be always measured in accordance with the objectives set for it. Advertisers have different goals, even though it can be generalized that the ultimate aim is often to sell a product or a service. Interviewees argue that similar indicators that are used to measure advertising performance in any other forms of online advertising are relevant also in this case. These indicators include basic information such as number of clicks and impressions, which can already be retrieved from the majority of media. Furthermore, it is relevant to measure, in what kind of action advertising resulted, such as interaction time, number of leads or generated sales. Also such things as word-of-mouth should be retrieved. “This all helps us to understand what kind of media environment works or evokes desired reactions in consumers.” (Interviewee 3) Today, measurement issues have been solved case by case. It can be seen that the interviewees, who have more experience in advertising activities in electronic reading context, do not perceive measurement as such a problem. Some of the interviewees argue that in this early phase of testing eReading advertising all advertisers have not demanded such information, but this situation will probably not last very long. 4.2.4 Limited Know-How It becomes evident from the interviews that the novelty of the medium brings in challenges related to know-how. The media environment is considered somewhat 46 obscure and interviewees clearly indicate that there is a need for more information concerning its utilization. It can be noticed from the interviews that the majority of the interviewees feel that they do not have sufficiently information about the media environment. Information need concerns multiple aspects, but primarily the ways to utilize the unique potential of eReading advertising. In the Finnish media market there are not extensively advertisements that could be benchmarked. Inspiring case examples showing different ways of doing eReading advertising would be warmly welcomed, as expressed in the following citations: “If I were a media representative I would ask some media agencies to develop an ideal example of eReading advertising, which would exploit all the aspects of tablets.” (Interviewee 4) “It would be a good starting point to tell the creatives planners what all is possible. Now they focus too much on this problem instead of creative planning. Case examples would be a great way to demonstrate what can be done and how different elements can be combined.” (Interviewee 3) It stems from the interviews that a lack of information does not only concern media agencies, but also advertising agencies, which are typically responsible for creating advertisements for different media. Advertising in a totally new medium challenges to consider creative solutions, which could utilize the characteristics of the novel media environment. Advertising agencies should come up with fresh and engaging ideas in a limited period of time. Interviewees see this as a challenge and point out that in some advertising agencies there is not yet any experience of tablet media environment. “The problem in the first place is finding a creative solution that suits tablet media, rather than its technical implementation.” (Interviewee 3) 47 “How can an advertising agency exploit the media space in the best way? Can they make it inspiring and interesting enough so that the advert will activate readers?” (Interviewee 6) Thus, in addition to media agencies media should approach also advertising agencies with different case examples illustrating creative choices in electronic reading context. The third party, who should be approached, is the advertisers. Interviewees point out that there are advertisers, who do not have a favorable attitude towards new advertising solutions, such as many forms of digital advertising. In the end, advertiser is the one, who accepts or declines media agency’s recommendation on a media plan. Some advertisers are old-fashioned in the way that they do not perceive new media potential, even though consumers have changed their media consumption and increasingly adopted online channels. One reason to reluctant behavior is that advertisers do not have any personal experience of tablets. In addition, it stems from the data that interviewees consider that media has been quite silent about their new solutions after the early enthusiasm that shaped eReading advertising after the launch of iPad in Finland. As one of the interviewees argue: “Media has been very quiet about these, which surprises me.” (Interviewee 2) Even though some case examples would be needed to boost imagination and creativeness, media do not have to aim to do the job of creative planners. It becomes evident from the interviews that media should rather provide the specifications and guidelines, which shape creative planning. The wide range of different devices such as Apple’s iPad or Samsung Galaxy Tab, which use different operating systems, poses some technical challenges as expressed in the following quote: “If you want to create an advanced tablet advert, you need to create separate versions for iOS and Android and for other 48 platforms as well. For comparison, if you would have to make different versions of a TV spot for different channels, I doubt it would be popular. Standardization would be a good thing for sure.” (Interviewee 4) For example, iPad’s operating system iOS does not support Flash, which has been widely used to display video or animation in online advertising. As a consequence advertisers have to make adjustments to accommodate ads across multiple devices. The use of HTML5 provides a solution, but it is not yet widely adopted. (IAB 2011). Interviewees argue that even if we discuss only one operating system, technical specifications and guidelines may vary from one media to another. For example, some media may restrict the utilization of special elements in an advertisement differently than other media do. For comparison, print media has highly standardized technical guidelines for advertisements. For example, many magazines of the same genre have same page size thus the advertiser can easily include multiple magazines in a print campaign and use the same materials in all of them. There would be a need for standards concerning technical specifications and guidelines, at least at operating system specific level. Interviewees see that this is a question on which Finnish Newspapers Association and Finnish Periodical Publishers’ Association could commit on. Also IAB (The Interactive Advertising Bureau) Finland is seen as an organization, which could provide recommendations concerning advertising in electronic reading context. “The role of media is the most important. -- They should somehow together decide the standards that guide advertising planning.” (Interviewee 4) In this section the challenges of eReading advertising were examined. Despite obstacles that are related to low reach, high costs, measurement issues and limited know-how eReading advertising contains a lot of potential. These opportunities are examined in the next section. 49 4.3 Opportunities of eReading Advertising Interviewees indicate that eReading advertising has a lot of opportunities, which are closely related to the qualitative characteristics of the tablet media environment. The potential of this medium is associated with the diversified media environment and the ability to create interactive and engaging advertisement. These qualities are examined in the following. 4.3.1 Dynamic Media Environment Tablets offer newspapers and magazines a possibility to create creative, interactive and engaging multimedia content, and a context for advertising that can exploit many of the same features. Interviewees seem to think that this vehicle combines the benefits of print media and online media, as the following citations illustrate: “An eReading advert has the good features of traditional print media but additionally it combines the strengths of online media. In a certain way it is a completely new form of advertising. It is neither print advertising nor conventional online advertising. The truth is somewhere in between.” (Interviewee 7) “It is neither a print advert nor an online advert. It is rather a combination of both.” (Interviewee 3) According to the interviewees, a favorable print-like feature is the good quality of image, which has long been the trademark of magazines. A fairly large and sharp screen of an eReading device provides a favorable media environment for visually impressive advertising, but it is not limited by page size. Furthermore, advertising in electronic reading context can utilize all the interactive elements of online advertising, but tablet device provides a user interface that is much more intensive 50 than smart phone, laptop or desktop. The following citations describe these benefits: “In tablet advertising it is possible to use many elements that cannot be utilized in print advertising. Tablet advertising can show to the readers so much more than a print ad.” (Interviewee 6) “The user experience of a tablet advert is much more intense compared to an advertisement banner that is often encountered on the computer screen.” (Interviewee 7) Even though the interviewees see a high potential in tablet newspapers and magazines, they do not believe that they would totally replace any other media in the future. Compared to traditional printed papers, eReading offers a different user experience but it does not mean that one or the other would be better or replaceable. Some interviewees express that both printed newspapers and magazines and their tablet versions will probably have their own roles in consumer’s media consumption. A certain difference must be also made between newspapers and magazines, because the motives to use these two media are not the same. This is likely to influence also how their tablet versions are used and what kind of advertising will be published in these two media. Electronic reading context provides a unique media environment. According to the interviewees, its main advantage is to provide deeper information about the advertised product or service in an engaging and interactive way. As a consequence the time spent with the advertised brand may increase, which should positively affect brand preference. Interactivity makes the user experience more intensive, and thus may have a deeper impact on the consumer. Online activation can directly generate sales. In addition, marketing communications can be highly targeted as the reading device is very personal and the user can be probably identified through newspaper or magazine subscription. Furthermore, few of the interviewees mention location-based marketing as one future trend of eReading 51 advertising. In addition to these features it is possible to measure all the actions consumers take with the ad. At this early stage of development, advertisers can also benefit from the novelty of the medium, as the next citation illustrates: “It is still such a new media and everything new is terribly interesting for consumers. The same applied to the early stage of online advertising, too. People were clicking like crazy all the banner ads just to see what is behind them.” (Interviewee 7) The charm of novelty is likely to increase readers’ interest towards advertising. As stated above, the same phenomenon shaped the development of online advertising. This advantage is likely to decline, when readers get more used to tablets and the content they provide. It will not, however, reduce the interest to advertise in eReading context. The following citation concludes the discussion of the characteristics of electronic reading advertising and is supported by all the interviewees: “Tablet advertising has all the features of a great advertising medium.” (Interviewee 1) 4.3.2 Unlimited Creativity “You have there a screen where you can combine everything within the limits of creativity.” (Interviewee 3) The citation above summarizes in a comprehensive way the possibilities which eReading advertising offers for marketers. As discussed in the previous subsection, advertising in electronic reading context provides a media environment, which can combine various characteristics of different media vehicles that were previously separate. Interviewees were asked to describe different cases of eReading in order to expand the understanding of what kind of advertising formats are utilized and needed. 52 Interviewees were unanimous that advertising in eRreading context should utilize the special characteristics of reading devices, such as interactivity and multimedia elements. However, utilization of these elements cannot be considered as intrinsic value. As many of the interviewees point out, “bad advertising is bad advertising”. The use of fancy elements does not make an advertisement good, if they do not result in the desired objectives. Thus, each element in an advert must be justified and have a meaning. Many of the interviewees mentioned that they had seen interesting creative solutions concerning automotive industry. These ads had well utilized the characteristic of tablet’s touch screen and included elements such as video or gaming. In addition, there had been a possibility to reserve a test drive aiming at generating leads. Other examples came from food industry and telecommunications. However, it must be kept in mind that there is not only one way of doing eReading advertising. The focus must be on desired results, which shape creative planning. It stems from the interviews that yet it is difficult to predict, what kind of advertisement will be needed in the future. “Time will tell what kind of advertising concepts should be offered in eReading context. You cannot know it yet. Time will tell what kind of opportunities emerge and what needs it creates for advertisers.” (Interviewee 6) This quote leads to the next subsection, in which a discussion on different eReading advertising concepts is set up. 4.3.3 eReading Advertising Concepts In the end of each interview, eReading advertising concepts were discussed with the interviewees. They were presented a set of adverts that had been published in tablet newspapers and magazines overseas. The respondents were asked to comment on the ads and different elements in them. The examples included both 53 conventional online adverts and advanced adverts that exploit the unique characteristics of tablets. Traditional online advertising in eReading context Display advertising is one form of online advertising which can be published in eReading context. It can be often referred to as banners which appear next to online content. Interviewees consider that display advertising will have some kind of role in eReading advertising, even though they do not see it as the best means to advertise in tablets. In favor of banner advertising, interviewees argue that the adverts are quite simple to produce, thus the production costs are decent. However, their suitability for tablet newspapers and magazines depends strongly on the lay out of the publication. Until now media have rather offered interstitials which are regarded as more impressive and more effective due their larger size. They can be static or can include interactive multimedia, such as rich media elements. Advertising experiments in eReading context The static interstitial is a widely employed advertising concept in eReading context. In other words, it is a full page advertisement that is displayed when moving from one page to another in an eReading newspaper or magazine. Interviewees express that the major benefit of using static adverts is low production cost, which results from the fact that it is quite convenient to convert a static interstitial from a print ad. However, interviews reveal that a static print advertisement is not considered to be the ideal way to advertise in eReading context, even though many of the early experiments with eReading advertising represented this format. The quotes below illustrate attitudes towards this advertising concept: “This is taking the easy way out. Most of the people would consider that this kind of advert is malfunctioning. There are no clickable elements even though people are used them.” (Interviewee 3) 54 “In my opinion it is abuse to use this media platform in such an old-fashioned way.” (Interviewee 4) Interviewees explain that a static interstitial can be visually appealing, but it does not exploit the unique features of the media environment. However, it serves as a decent starting point to eReading advertising. With rather low effort, a link can be added to the static interstitial, which makes this advertising concept more attractive from the interviewees’ point of view. The link may direct the interested reader further to the advertiser’s web site, to an online shop or to any other relevant landing page. The main benefit of this concept is that it enriches the user experience and allows the consumer to look for further information. The advertisement can also expand within the application when initiated by the reader. Hence, in this case the user will not leave the application at any moment. Utilization of interactivity in eReading advertising As mentioned already earlier, tablets offer a media environment that can carry any type of content, such as sound or video. Interviewees consider the use of multimedia elements interesting but all the elements in an advert must have a meaning and work together. Interviewees also note that the elements should not irritate the reader in a way that is not beneficial to the advertiser. For example, it is recommended that video and audio adverts should be click-initiated and not too long. These are some specifications which apply in any other online media too. Rich media adverts can utilize the full potential of the user interface in a very comprehensive way. Game-like adverts activate and engage the user to spend time with the brand. However, the production costs of game like adverts are very likely to be high. Interviewees also point out that they work only for certain target groups and for a limited period of time. It is possible that rich media adverts will lose their novelty value after readers have familiarized themselves with tablets. The benefits of game-like adverts are related to their entertaining and experiential nature. 55 Advertising in eReading context can be also more indirect. One way to enter the world of eReading advertising is sponsoring. Here it refers to sponsoring eReading content to readers. It provides added value for the consumer and offers a possibility to enhance the brand image. It stems from the interviews that there are many factors that influence the development of eReading advertising. Interviewees see a lot of potential in eReading advertising, but there are challenges that must be overcome before it can become a truly respectable channel. However, interviewees agree that we are talking about an interesting media, which is supposed to grow in the future. They see that eReading advertising has all the potential to expand and become a competitive market. The findings presented here are elaborated further in Chapter 5. 56 5 Discussion This chapter presents an analysis and an overview of the research findings. First, the results of the empirical study are elaborated. Second, the challenges and opportunities identified in the interviews are discussed in the light of the quantitative and qualitative media evaluation criteria retrieved from academic literature. Development stage of eReading advertising The empirical part of the study explores the current state of eReading advertising in the Finnish media market. The findings show that advertising in eReading context is still in its infancy at the present moment. It is far from a mature advertising medium, but in the process of finding its position in the field of advertising. Some advertisers have integrated eReading advertising in their marketing communications. For the majority of them its utilization is tentative and it is not yet given substantial emphasis in marketing— most often it is considered as an experiment. However, for some it has provided a means to reach niche markets with encouraging results. The findings point out that advertisers adopt eReading advertising according to same principles that shape media planning on average. Furthermore, it is remarked that presence in an innovative and novel medium provides an opportunity to build one’s reputation as a forerunner which can also motivate advertisers to experiment with eReading advertising. The experience which media agencies have with eReading advertising varies from one agency to another. However, all follow its evolution with interest. In media agencies eReading advertising falls into digital planners’ sphere of responsibility, but it cannot be strictly categorized. Because of its ability to carry any type of content, it breaks the traditional task division of media agency. Its utilization asks for co-operation among planners from many fields, and thus it should be rather 57 considered as an interdisciplinary advertising medium. This aspect can be interesting from media’s point of view when they plan their selling efforts. The results of the study indicate that whereas media agencies are naturally interested in new media, direct advertisers can be more cautious. For many advertisers eReading advertising is still an obscure area which can result in reluctance related to its utilization. This can be considered critical because the advertiser is the one who ultimately approves or disapproves media agency’s recommendation about the media mix. The research findings allude that if something must be cut down, eReading advertising can be under the pressure to be left out of a media plan because still there is only little evidence and research of its effectiveness. Circumstances for media planning evolve due to the dynamic marketing environment. Principles of integrated marketing communications demand for open minded thinking that goes beyond any single media (see e.g. Mitchell 2003). The wide range of media vehicles can be compared based on their pros and cons. It stems from the interviews that the major challenges of eReading advertising concern low reach, high costs, measurement issues and limited know-how, whereas the dynamic media environment and diverse advertising opportunities are considered as the main advantage. Low reach as a major challenge Advertising in eReading context provides a means to reach niche markets, but extensive utilization demands for larger audiences. Adoption of eReading is now highly dependent on situations in the marketplace and is likely to grow with the proliferation of tablet devices. Competition in the device market will push prices down and make them affordable for more people. The role of media is to provide interesting content that attracts readers. This is likely to challenge media to consider the relation of printed editions to tablet editions. It stems from the interviews that both offer different user experiences and are likely to have their own roles in consumer’s media consumption. In order to facilitate the adoption of 58 eReading, media can also aim to create user experiences. Means for this might include offering content with lower prices or for free for a trial period. Furthermore, user experiences can be created in co-operation with advertisers, for example in terms of sponsorship. High cost of advertisement production Interviews show that the cost of advertising space has been negotiable with media, but production costs that follow are high. Advertisers rarely have ready-made tablet compatible materials, and thus they must produce advertisements to serve this particular purpose and the small target group they want to reach. Planning costs are relative high due to the novelty of the medium. The media is not yet familiar for many creative planners and therefore it can take more time to find the creative solution. Advertisements for eReading context are often edited from materials that have been used in other media vehicles, such as print, online or TV. Thus, the look of a creative choice is likely to be integrated with other campaign materials. Media can ease the problems related to production for example by providing services that help advertiser to produce the needed materials. This can mean converting print ads to tablet format or addressing subcontractors. Any means that reduce the costs provide added value for advertiser and lower barriers to use eReading advertising. Inadequate measurement of advertising performance In online media environment the pressure of measurement is increased, because in principle everything is measurable. The majority of advertisers are taking initial steps in the utilization of eReading advertising thus it would be important to provide information about its effectiveness. The lack of this information can lower the interest to invest in eReading advertising. Interviewees indicate that media planners can be unwilling to recommend the use of a medium if they do not get data on advertising performance. Without any tracking, there is no information about the success or failure of advertising efforts. Consequently, it is difficult to assess should this advertising concept be utilized in future. Some media have 59 overcome measurement issues, but for many it is still a challenge and advertisers are not provided sufficient reports on advertising performance. Measuring issues concern both media and media agency. Media must be able to give information about advertising effectiveness in the media environment it provides. Media agencies have also traditionally their own tracking systems, which measure the performance of advertising across different media. It is relevant to advance the discussion on how advertising effectiveness should be measured and how people react on advertising in eReading context. It must be kept in mind that advertising should be always assessed in accordance with the objectives set for it. Advertisers have different goals, even though it can be generalized that the ultimate objective is often to sell a product or a service. Similar indicators that are used to measure advertising performance in any other forms of online advertising are relevant also in eReading advertising. These indicators include basic information such as the number of clicks and impressions. Furthermore, it is relevant to measure in what advertising resulted in, such as interaction time, number of leads, generated sales or word-of-mouth. In this early phase of testing eReading advertising all the advertisers have not yet demanded such information, but this situation will probably change. Lack of information and standardization The novelty of the medium brings in challenges related to know-how and concerns all the actors that are involved in the advertising process. The media environment is somewhat obscure and there is a need for more information concerning the ways to utilize its unique potential— what can and what cannot be done. Media should approach all relevant interest groups with case examples illustrating different creative choices, utilization of special elements and their performance in eReading context. Media do not need to do the job of advertising agencies, rather inspire and offer ideas. This issue would benefit the whole publishing industry, thus it could be of federal-level interest (i.e. Finnish Newspaper Association, Finnish Periodical Publishers’ Association). In addition to reference cases, media should provide technical specifications and guidelines 60 which shape creative planning. Today, these might vary from one media to another, which demands advertisers to make adjustments in order to accommodate their advertisements across multiple media. Standards that would serve as a basic guideline for planning would be highly recommended. This is an issue that requires co-operation among media. Potential of dynamic media environment Despite the challenges eReading advertising contains a lot of potential, which is closely related to the qualitative aspects of the media environment. It combines the benefits of multiple media that were previously separately offering an interesting context for advertising. The main advantage of eReading advertising is to provide deep information about the advertised product or service in an engaging and interactive way. Consequently, the time spent with the advertised brand may increase, which should positively affect brand preference. Interactivity makes the user experience more intensive, and thus may have a more profound impact on consumer. Online activation can directly generate sales. Furthermore, marketing communications can be highly targeted and location-based marketing is seen as a future trend of eReading advertising. In addition to these features it is possible to measure all the actions taken with the advertisement. Only creativity limits the number of ways to integrate advertising in eReading context. Interviewees are unanimous that advertising in electronic reading context should utilize the special characteristics of tablet devices. However, it must be noted that their utilization cannot be considered as an intrinsic value. The use of fancy elements does not make an advertisement good, if they do not result in desired objectives. Thus, each element in an advert must be justified and have a meaning. Relevance of media evaluation criteria in eReading advertising In Table 3 the challenges and the opportunities of eReading advertising, found in the empirical research, are discussed in the light of the media evaluation criteria that were identified previously. 61 Quantitative Qualitative Other Criterion Description Relevance in eReading advertising Reach Certain percentage of target audience covered by one medium or multiple media. Low reach is considered as the main obstacle of eReading advertising. At the moment eReading advertising can provide a means to reach niche markets, but extensive utilization requires larger audiences. Its growth is highly dependent on market situations and likely to increase with proliferation of tablet devices. Frequency Average number of vehicle exposures media audience receives in a given period of time. Frequency did not come up in the interviews, hence it can be considered as a criteria that does not at this point influence significantly whether eReading advertising is integrated to marketing communications or not. Cost The expenses of the media space and production of an advertisement. Low reach influences on the interest to invest in eReading advertising. Cost of buying advertising space is considered reasonable, but cost of producing adverts is high relative to reach. In the early stage of eReading advertising it is important for both media and advertisers to gain experiences from eReading advertising, which should influence pricing. Sales response The actual sales created by advertising. In the case of a new media it would be import to measure advertising performance in order to assess how the advertising served. Today all needed key figures cannot be retrieved from media, however, some publishers have solved the problem. Media environment Qualitative characteristics of the media in which the advertisement has been placed. The media environment offers a possibility to create creative, interactive and engaging multimedia advertising. The tablet media context combines the strengths of both print and online advertising and provides an interactive and engaging user experience. Competitive activity Competing adverts in the same medium. At this early phase of eReading advertising there is not significantly competitive activity in the media, which can be considered as a benefit from advertisers’ perspective, because it is easier to stand out. Technical qualities Ability to deliver certain types of messages. Tablet media can carry any kind of content. It combines various characteristics of media that were previously separate. Know-how Ability to exploit the media environment. The media environment is considered somewhat obscure and there is a need for more information concerning the utilization of its unique potential. Table 3: Relevance of Media Evaluation Criteria in eReading Advertising 62 Table 3 shows that most of the media evaluation criteria retrieved from academic literature are relevant in the case of eReading advertising. These criteria include both quantitative and qualitative aspects of media. Reach was found to have a major influence on the utilization of eReading advertising. In addition, costs and ability to measure sales responses were noted to influence the interest to advertise in eReading context. Frequency was found as the only quantitative criterion, which was not mentioned in the interviews. It may be considered as a variable which does not significantly influence on whether eReading advertising is integrated to marketing communications or not. Regarding qualitative characteristics, the media environment was considered important. Competitive activity came also up in the interviews as well as the technical aspects of the media. In addition to these criteria the interviews revealed that know-how can influence the selection of an advertising medium. Hence, all these criteria could be considered when integrating eReading advertising in marketing communications. To sum up, eReading advertising is undergoing a critical period in the Finnish media market. At the moment it is experimental and its development requires cooperation between media and advertisers, who are both in a testing phase and looking for the best ways to utilize the unique potential of this channel. Now, eReading advertising provides a means to reach niche markets, but more extensive utilization demands for larger audiences. As the device market matures the challenge of low reach is likely to disappear. Interviewees have a positive feeling about the development of eReading advertising and agree that it is likely to establish its position in the Finnish media market within the forthcoming years. The following Chapter 6 will conclude the study. 63 6 Conclusions This chapter provides the conclusions of the research. The chapter starts with a brief summary of the study. Here the research questions that were set out for the study are answered. Then the practical implications of the study are examined. The chapter ends with the discussion about the limitations of the study and suggestions for future research. 6.1 Research Summary The study was motivated by the increasing importance of digital channels in consumer media consumption, which has resulted in growth of digital advertising spending at the expense of traditional media. These changes have increased publishers’ interest to provide their content in digital format. Marketers have an expanding number of ways to communicate with consumers as in recent years the variety of media outlets and advertising formats has grown rapidly and aggressively due to the development of technology. Over the last years the adoption of eReading and portable digital reading devices has increased among consumers. Multifunctional tablet devices offer newspapers and magazines a possibility to create creative, interactive and engaging multimedia content, and a context for advertising that can exploit many of the same features. However, many details of eReading advertising were far from defined. The purpose of this study was to explore the role of eReading advertising in integrated marketing communications. Furthermore, this study has made an effort to explore the current state of eReading advertising in the Finnish media market and related opportunities and challenges. For the empirical part of the study a qualitative approach was adopted. Eight indepth interviews were conducted with digital marketing professionals. Due to the novelty of the phenomenon interviewees were chosen using judgment sampling, 64 which provided a means to include only information rich cases to the sample. Interviews were targeted to media agencies, i.e. indirect advertisers. The interviews were conducted in the late fall 2011 resulting in a total of 632 minutes of interview data. The analysis was based on thematic analysis technique, which enabled to break the data into patterns according to specific themes relevant to the research question The theoretical part of the study was based on academic literature in the field of integrated marketing communications and media planning. It was a relevant topic since lately competitive pressures and expanding media choices increase the need for media selection efficiency. Various attempts to evaluate advertising media have emerged. Different models were examined and key variables were identified. The main findings of the study are concluded below and they are preceded by the research questions that were introduced in the beginning of the study. The main research question was to examine the role of eReading advertising in integrated marketing communications. The research question was divided in three subquestions, which are answered in the following. What is integrated marketing communications? Above all integrated marketing communications is a strategic approach to marketing communications planning, which is expected to result in greater effectiveness and efficiency in all marketing communications activities. Strategic media planning should be executed in line with the overall business objectives. Advertisers should be media neutral and consider all possible communication channels in order to maximize their communication effort. New media should be considered in an integrated manner along with traditional channels. What influences advertising medium selection? Media selection is a multifaceted resource allocation decision (Dyer et al. 1992). The range and diversity of communication options poses challenges to advertisers (Keller 2001). Hence, it is important to understand, what media options have to offer and how they can be compared. In this research various media evaluation 65 models were examined and key variables that influence the selection of an advertising medium were discussed. It was noted that media should be evaluated based on both quantitative and qualitative criteria, such as reach, costs and the media environment. The criteria presented in this study were summed up in Table 1. What are the challenges and the opportunities of eReading advertising? In this study the challenges and the opportunities of eReading advertising were identified through an analysis of in-depth interviews with digital marketing professionals. It was found that the challenges of eReading advertising are strongly related to the quantitative aspects of the media and its newness. Low reach, high costs, measurement problems and limited know-how were addressed as the key variables reducing advertisers’ interest in using eReading advertising. Despite the challenges eReading advertising contains a lot of potential. The study showed that the opportunities are associated to the qualitative aspects of the media. The opportunities that were named in the study are dynamic media environment and the unlimited creativity it provides. The challenges and the opportunities of eReading advertising were presented in Table 3 and discussed in the light of the media evaluation criteria. The criteria that were identified to influence the decision to allocate resources on eReading advertising are consistent with the media evaluation criteria retrieved from previous academic literature and presented in Table 1. In contrast to these criteria, however, frequency did not come up in the interviews as a key variable. Hence, it was not considered to be a central challenge neither an opportunity in the case of eReading advertising. 6.2 Managerial Implications This research has indicated that eReading advertising is undergoing a delicate period in the Finnish media market. At the moment, the development of eReading 66 advertising is sensitive to situations in the marketplace, but two implications of this study for business practitioners can be made. Need for more information and standardization In the first place, it was noted in this paper that eReading media environment can be considered somewhat obscure among advertisers and there is a need for more information concerning the ways to utilize its unique potential— what can and what cannot be done. These findings suggest that more attention could be paid to approach all relevant interest groups with case examples illustrating different creative choices, utilization of special elements and their performance in eReading context. Following that, this paper pointed out ambiguity concerning the technical aspects of eReading advertising. Today, these guidelines that shape creative planning might vary from one media to another. It may demand advertisers to make media specific adjustments in order to accommodate their advertisements across multiple tablet magazines or newspapers. Hence, in addition to reference cases, it can be recommended that technical specifications are developed in cooperation with multiple media in order to create standardized guidelines for eReading advertising. Both of these issues addressed here can be of the benefit to the whole publishing industry. In this early stage of development of eReading advertising, co-operation among various eReading media could be beneficial. It could be also of federallevel interest (i.e. Finnish Newspaper Association, Finnish Periodical Publishers’ Association) to make it their business to develop eReading advertising. 6.3 Limitations and Suggestions for Future Research One limitation of the paper arises from the qualitative research approach due to which it must be carefully considered in what extent the results can be generalized. However, it is typical for a qualitative research that it aims to provide in-depth understanding of a phenomenon focusing on relatively small 67 samples rather than empirical generalizations. For this study only media agency representatives were interviewed. This limitation was made because of the novelty of the research phenomenon. In the future when eReading advertising matures studies could also explore the thoughts of direct advertisers. This study provides a description of the current state of eReading advertising in the Finnish media market. It must be noted that the findings of the research are limited to this context only because they are strongly linked to the current level of adoption of eReading advertising in Finland. It is possible that in any other context there are other challenges and opportunities. The world of eReading is changing rapidly, and thus the results of the study are especially relevant at the present moment. This is true in the case of exploring any other topic which is in the development phase. Three suggestions for continuing the research on eReading advertising are addressed. First, the current study paves the way for further research into different eReading advertising concepts. Based on the interviews it can be indicated that eReading advertising formats should be established. It would be recommended that these formats would apply across multiple media and devices. 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