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Integrated Marketing Communications (IMC): Where to from here? Gayle F. Kerr and Charles H Patti, Queensland University of Technology Abstract IMC is one of the most controversial areas of marketing education during the past decade. While many definitions of IMC have been put forth, agreement on the discipline’s constructs remains unresolved. The core of future legitimacy of IMC resides in the development of a stream of research that develops theory and methods for evaluation of IMC effectiveness. This paper reviews more than a decade of research on IMC effectiveness, suggests where the field is heading, and identifies future directions for IMC research. Introduction and Purpose One of the most controversial areas in marketing education during the past decade involves the legitimacy of integrated marketing communication (IMC). In their 1998 article, Spotts et al analyse the various claims of the proponents of IMC and conclude that IMC is little more than a loose collection of traditional marketing concepts dressed in a new label. Despite their assertions, IMC has penetrated the marketing discipline in a variety of meaningful ways. For example, there are at least two academic journals (Journal of Marketing Communications and Journal of Promotion Management) that are solely dedicated to advancing the area. Also, entire academic programs programs are built around IMC, including at least two (Northwestern University and the University of Colorado) at the postgraduate area. The existence of dedicated journals, conferences, texts, and academic programs are strong suggestions of a discipline. However, the core of a discipline resides in the development of a literature that reflects the evolution of theory. The purpose of this paper is to examine the state of the scholarly literature in IMC, with particular emphasis on the literature concerned with evaluation of IMC effectiveness, arguably the most important aspect of IMC. This review indicates where the field is heading in terms of definition and evaluation, considers the implications of this for marketers and identifies directions for the future of IMC research. Defining the Discipline A core dimension of a discipline is agreement on its definition. Despite a lack of consensus over a definition for IMC, there has been no lack of suggestions (AAAA, 1989, Schultz, 1991, Keegan et al, 1992, and Duncan and Moriarty, 1994). These four definition offerings demonstrate an evolution in the understanding of the concept of IMC, and collectively they express several key dimensions of the field, including a process; emphasis on audience, particularly customers and prospects; a behavioural response as intended outcome; relationship building between customer and brand; all sources of information; attitudinal change; and marketplace dialogue. ANZMAC 2002 Conference Proceedings 2381 The IMC literature and the state of evaluation An irony of IMC is that the concept is built around the goal of making marketing communications more accountable, yet there is no method of evaluation or measurement of the integration of marketing communication programs. As Kitchen (1999) notes, "The critical issue concerning IMC is that of evaluation and measurement of integrated programs. This issue, as yet, has not been soundly addressed by advertising agencies or clients and still remains ambiguous among writers in this area." The legacy of measurement techniques from marketing communication disciplines of advertising, marketing publicity, personal selling, and sales promotion are an obstacle to new thinking on integration and evaluation. Should each discipline be evaluated in isolation? Is such a measurement possible? How does IMC fit into the hierarchy-of-effects models of communication? How can we account for the presence of synergy? Some writers suggest that measurement of an integrated campaign should begin with its component parts. Their contribution should be defined and objectives measured. However, such measurement must take account of the difficulty of isolating the individual parts and in estimating synergistic effect (White 1999, Kitchen and Schultz 1999). Baldinger (1996) suggests that the substantial body of research on advertising effectiveness makes it an ideal place to start examining the impact of integrated campaigns. Other writers draw from direct marketing to suggest the consideration of measures such as Customer Lifetime Value or profitability segmentation (Moriarty 1999) or the inclusion of a response device on all communications (Schultz and Barnes 1995). There is also a body of literature to support the evaluation of the totality of the IMC effect. It is felt that it is impossible to isolate the effect of each individual discipline and the concept of synergy too ambiguous to measure. Schultz (1999) states, “The fact is, in today’s marketing systems, there is almost no organization that can separate or isolate advertising, no matter how it is defined, from other promotional and communication elements. …Therefore, we suggest that Jones, Ehrenberg and others when they discuss how advertising works, are likely to be measuring the impact and effect of a combination of advertising and several other brand marketing and communication elements rather than advertising alone.” Schultz’s work has focused on measuring the totality of the communication, rather than its inherent parts. He defines Brand Communication as the total returns of external brand programs designed to affect consumer response. Put simply, it is the aggregation of all brand messages. It is measured by determining the dollar value of the consumer group and deciding how much the organisation will spend to add new customers, retain existing ones or increase their purchase value. The effect is evaluated through a measurable behavioural response. Competition and market changes are factored in and a benchmark gained for the next campaign. Much of Schultz’s work on Brand Communication evolves from a Return-On-Investment premise and previous work including a spreadsheet approach conducted by the researcher ANZMAC 2002 Conference Proceedings 2382 (1994). It makes no attempt to isolate the effects of advertising or other marketing communication elements. Nor does it try to estimate synergistic effect. Another measure suggested Katz and Lendrevie (1996) is called Segmenting Total Exposures. It also takes a holistic approach by segmenting all marketing communication impacts into media impressions, product impressions and personal contacts. However, the difficulty with this proposal comes in its operationalisation. The measurement of product impressions and personal contacts is extremely difficult. The following table draws from key writers in the field of marketing communication to summarise the evaluation methods of marketing communication disciplines. Table: Methods of Marketing Communication Evaluation Method Evaluation of Advertising Benefits Difficulties Awareness/Recall Gallup/Starch 1920s Day After Recall Theatre Testing Tracking studies Noted, Associated and Read most TVC screened once, sample who saw program asked recall advertising Audience dial reaction to TVCs Monitor product status amongst competition Some indication of impact of print advertising Indication of memorability of advertising Provides audience reaction Strategic assessment and planning tool No clear connection to behaviour Low correlation between brand preference and recall; recall levels vary by different program environment and type of claim Unrealistic surrounds; poor predictor of sales effectiveness No definitive relationship between marketing communication and outcome Persuasion Measures rsc Persuasion Method 91% track record of ads that will/not sell Connection between persuasion and behaviour? Easy to calculate Data is aggregated temporally over purchase occasion and crosssectionally over buyers; different studies find wide range of measures of advertising elasticity Wide coverage of key variables and in-depth coverage of purchase timing and choices Fully developed STAS would revolutionize tools used to evaluate TV advertising’s benefit to a brand Weak or nonsignificant effect of TV advertising using single source data Sales Response Models Econometrics Choice Models Kanetkar, Weinberg and Weiss 1991, Tellis and Weiss 1995 Short Term Advertising Strength (STAS) – John Philip Jones Short term advertising elasticity; effect on sales of changes in absolute amounts of advertising pressure in budgetary period Single source data – scanner and cable data of household exposure STAS differential is indexed measure of share of purchase occasions using single source data ANZMAC 2002 Conference Proceedings Doesn’t distinguish advertising from promotion; absence of control; unstable for infrequently purchased, low penetration brands, does not take account of brand loyalty 2383 Direct Marketing Evaluation Response rate Number of inquiries Number of qualified leads New customers acquired Customer acquisition cost Lapsed customers reactivated Average sale Product returns & adjustments Customer service requests Customer Lifetime Value % of customers contacted who responded Number who responded Number of genuine prospects who responded Number of new prospects Total marketing costs divided by number of new customers Inactive customers who purchased Average sale per customer Number/cost of product returns Number/cost of customer service Net present value of customers over specific period of time Easy to calculate Easy to calculate Easy to calculate Easy to calculate Useful managerial tool Useful managerial tool Easy to calculate Calculates additional costs incurred in DM Calculates additional costs incurred in DM Best single measure of success of any DM program Sales Promotion Evaluation Lost revenue or break even analysis Incremental case analysis New dollars needed to cover cost of promotion Sales increases pre-promotion, during promotion and after promotion Advertising Value Equivalents Converts press coverage into advertising dollars Sets campaign objectives and evaluates outcomes against these Determines effectiveness of promotion Considers volume/profit/sales increase and residual effect Public Relations Evaluation Campaign objectives Disregards inherent differences in advertising and publicity Difficult to set realistic objectives; costly and time consuming to measure Suggested Methods of IMC Evaluation Brand Communication/ Return on Investment Schultz 1995 Start with customer segments and measure impact of marketing communications Segmenting Total Exposures – Katz and Lendrevie 1996 Divide exposures into three types – media, product impressions, personal contacts Does not attempt to separate advertising from other marketing communications; assumes marketer has database or detailed customer information; longitudinal Difficulty of measuring product and personal exposures Conclusions and Recommendations As the discipline is still in its pre-paradigm stage, the authors suggest that the priority of IMC research should be two-fold. It should address what IMC is (definition and construct identification) and how it works (integration, synergy and evaluation). The benefit of a universally agreed upon definition whose unique constructs were clearly identified would mean that research could proceed from a common premise. It would also encourage a shared understanding of the discipline amongst marketers. ANZMAC 2002 Conference Proceedings 2384 Despite the ambiguity over definitional issues, construct identification and the lack of rigorous theory, there is one aspect of IMC to which all writers subscribe--the urgent need for further work in the area of evaluation and measurement. Several researchers have called attention to this need (Kitchen and Schultz 1999, Moriarty 1996, Hartley and Pickton 1999, Banham in Heath 1999); however, perhaps Kitchen’s 1999 comments best expresses the current state of IMC evaluation. "IMC measurement and evaluation still needs further work, or further dissemination of appropriate evaluation techniques. While IMC is recognised as of significant value and importance to clients and agencies alike, the fact that no clear proposal of measurement or evaluation has been developed weakens conceptual application in a global sense." (Kitchen 1999) Further empirical investigation needs to explore how IMC works in order to legitimise the new discipline. The development of evaluative measures would help marketers justify their marketing communication budget. Further, the concept of integration only makes sense for marketers if it delivers something more than their traditional methods – if it affords marketing communication plans the added benefit of synergy. Future research might also investigate the organisational benefit of IMC. Perhaps there is value in IMC apart from its alleged synergistic effect on stakeholders. Writers such as Duncan and Caywood (1996) and Low (2000) have suggested that a real benefit of IMC lies in the stronger internal coordination of the marketing communication disciplines and the push for shared objectives and greater accountability. IMC has clearly had an impact on academic thought, curricula development and the practice of marketing; yet, there is a significant area of research ahead of this discipline, particularly in the development of measures of effectiveness, including the challenging of the field’s basic constructs of synergy and integration. ANZMAC 2002 Conference Proceedings 2385 References American Association of Advertising Agencies, New York, New York, (www.aaa.org) Baldinger, A. (1996). Integrated Communication and Measurement: The Case for Multiple Measures in Integrated Communication: Synergy of Persuasive Voices, edited by Thorson, E. and Moore, J.. New Jersey USA: Lawrence Erlbaum Associates. Duncan, T. and Moriarty, S. (1998). A Communication-Based Marketing Model for Managing Relationships. Journal of Marketing Vol. 62, April. Hartley, B. and Pickton, D. (1999). Integrated marketing communications requires a new way of thinking. Journal of Marketing Communications, Volume 5, Number 2. Heath, R. (1999). Can tracking studies tell lies? International Journal of Advertising, Volume 18 Issue 2. Katz, H. and Lendrevie, J. (1996). In Search of the Holy Grail: First Steps in Measuring Total Exposures of an Integrated Communications Program in Integrated Communication: Synergy of Persuasive Voices, edited by Thorson, E. and Moore, J.. New Jersey USA: Lawrence Erlbaum Associates. Kitchen, P. (1999) Marketing Communications: Principles and Practice. London: International Thomson Business Press. Kitchen, P. and Schultz, D. (1999). A multi-country comparison of the drive for IMC. Journal of Advertising Research, Volume 39 Issue 1. Moriarty, S. (1996). The Circle of Synergy: Theoretical Perspectives and an evolving IMC Research agenda in Integrated Communication: Synergy of Persuasive Voices, edited by Thorson, E. and Moore, J.. New Jersey USA: Lawrence Erlbaum Associates. Schultz, Don E. (1993). Integrated Marketing Communications: Maybe Definition Is in the Point of View. Marketing News, January 18. Schultz, D. (1994). Trying to determine ROI for IMC,” Marketing News, January 3. Schultz, D. (1998). Determining how brand communication works in the short and long terms. International Journal of Advertising, Volume 17 Issue 4. Schultz, D. and Barnes, B. (1995). Strategic Advertising Campaigns, (4th edition). Lincolnwood, Illinois USA: NTC Business Books. Schultz, D., Tannenbaum, S. and Lauterborn, R. (1993). The New Marketing Paradigm: Integrated Marketing Communications. Lincolnwood, Illinois USA: NTC Business Books. Spotts, H., Lambert, D. and Joyce, M. (1998). Marketing Deja Vu: The Discovery of Integrated Marketing Communication. Journal of Marketing Education, Vol. 20 No. 3. ANZMAC 2002 Conference Proceedings 2386 White, R. (1999). What can advertising really do for brands? International Journal of Advertising, Volume 18 Issue 1. ANZMAC 2002 Conference Proceedings 2387