1357487822.493923.pdf

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Interactive integrated marketingcommunication: combining thepower of IMC, the new media

and database marketing

James W. PeltierUniversity of Wisconsin, Whitewater, USA

John A. SchibrowskyUniversity of Nevada, Las Vegas, USA

Don E. SchultzNorthwestern University, USA

The interactivity of the new electronic media requires that a database-driven segmentation

approach to communication strategy be employed to take advantage of its uniqueness. To

accomplish this, firms must develop ways of collecting information at the individual level

by traditional and/or electronic means, and of using that data to create information-

intensive customer communication strategies. These strategies should then employ the

new media to generate interaction with customers. We term this approach Interactive

IMC. In this article we propose and illustrate an interactive IMC process model.

INTRODUCTION

Over the past decade, understanding the conceptual and strategicramifications of integrated marketing communication (IMC) hasbecome an increasingly important topic in both the academic andadvertising communities. Broadly defined, IMC is a concept ofmarketing communication planning that recognises the added value ofusing a comprehensive plan to evaluate the strategic roles of a variety ofcommunication disciplines. It combines these disciplines to provideclarity, consistency and maximum communication impact (Schultz et al.

International Journal of Advertising, 22, pp. 93115 2003 Advertising AssociationPublished by the World Advertising Research Center, Farm Road, Henley-on-Thames,Oxon RG9 1EJ, UK

Schultz.qxd 27/01/03 17:10 Page 93

1993). Research on a national scale, and increasingly in the globalarena, has shown that IMC is becoming more widespread within alltypes of marketing and advertising organisations.

The growing interest in IMC may be traced to a number ofinterrelated factors. Schultz (1999) argued that IMC is the result of anatural evolution from the use of mass-market advertising to moretargeted message strategies. Proponents of IMC contend that itrepresents a logical first step in the transition from out-boundproduct-driven communication to the more interactive, consumer-and behaviour-oriented approaches of the twenty-first century(Kitchen & Schultz 1999). From an outcome-based perspective, IMCis prescribed as a solution for achieving synergy in advertisingplanning and execution, with the end result being enhanced efficiency,productivity and performance (Phelps et al. 1996). Although IMC isnot without its critics, its prevalence in academic periodicals,educational and applied textbooks, and its use by advertising agenciesand other marketing organisations, all point to the fact that theacceptance of the IMC framework is growing rapidly.

The meteoric rise of new electronic media has dramatically alteredadvertising and marketing communication planning in general, andIMC specifically (Hoffman & Novak 1996; Bezjian-Avery et al. 1998).While the list of new electronic media is growing, those most oftendiscussed include the interactive portion of the world wide web, email,interactive television, handheld wireless communication devices andrelated systems. While some dismiss these new media as simply moredirect marketing tools, most experts acknowledge the potential forthese media to alter the way in which advertisers view marketing andmarketing communication (e.g. Glazer 1999; Korgaonkor 1999;Lavidge 1999), especially as they pertain to IMC (Low 2000). Thechallenge of the new electronic media is for marketers to find ways touse these new tools to become more effective and efficient marketingcommunicators.

Early research into electronic media focused on which businessesand consumers use them. Recently, researchers have begun to identifyways in which emerging electronic media are different from traditionalmedia (Hoffman & Novak 1996). This research is important in that it high-lights the fact that the transition from a mass-oriented IMC approachto an electronic media-driven approach requires a change in how buyer/seller relationships are viewed (Peltier et al. 2002b). In particular, theunique ability of the electronic media to provide two-way,

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INTERNATIONAL JOURNAL OF ADVERTISING, 2003, 22(1)


user-controlled, customised, one-to-one communication programmes,makes the information age not fiction but reality. The net result ofthe interactive capacity of the new media is the evolution of smartcustomers, smart markets and smart companies (Glazer 1999).

In combination, the adoption of new electronic media and theadvancement of information technology have created the previouslyelusive opportunity for firms to move to a customer relationshipmarketing paradigm. In that model, the goal is to develop profitablelong-term relationships with current and future customers throughdatabase-driven, individualised communication programmes (Peltieret al. 1998). Especially promising is the capacity which electronic mediaand database technologies have for creating unique and personalisedconversations with individual customers, an essential element indeveloping customer relationship management (CRM) programmes(Schultz 2000). To make these conversations a reality, a firm mustacquire and use an assortment of individual-level customer datacollected from a variety of sources that allows them to understand andnurture buyer/seller relationships. To accomplish this, the firm musthave the capacity to collect data, and then to convert the data intoinformation that can be used to develop interactive CRM programmes(Preston 2000).

Despite the promised possibility of using electronic media to forminteractive customer relationships, few organisations exploit thiscapability in building IMC programmes. Instead, most companies havepaid only lip-service to the idea of developing interactivecommunication strategies. As a result, they have failed to takeadvantage of the full potential of interactive marketing (Deighton &Glazer 1998). Still less is understood of how the fusion of electronicmedia and customer databases can be converted into integratedcommunication strategies (Peltier et al. 2002a). Even when efforts aremade to use individual-level data to understand customers,demographics and purchase history are often the only informationcollected, while other potentially valuable motivation-relatedinformation, including customer lifestyles, values, needs, motivations,and priorities are overlooked (Peltier et al. 2002a). Because database-driven longitudinal contact strategies are essential for blending moretraditional media with electronic media into effective, efficient andcustomised IMC programmes (Kestnbaum et al. 1998; Preston 2000),research on the evolution of the new media along with the value andmethodologies of data integration is warranted (Berthon et al. 2000).

INTERACTIVE INTEGRATED MARKETING COMMUNICATION

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1 Footnote.

This article has three major objectives. First, we conceptualise amodel that links the use of detailed database information to thecreation of customised and electronic media to develop interactiveand integrated marketing communication strategies. The model ispresented in Figure 1. As part of this model, we discuss thefoundations of interactive IMC and how it differs from traditionalIMC. Second, we present a case study of an organisation that had verylittle previous experience in IMC or database marketing and isdeveloping and implementing an interactive integrated marketingcommunication programme. Although we discuss the entire model,the case study focuses on how psychographic, behavioural anddescriptive customer data can be integrated to form electronically-enhanced IMC strategies. Finally, we demonstrate how the proposedprocess model can turn customer data into meaningful informationthat may be used to develop customised and electronically distributedIMC plans. Examples of successful IMC are provided.

ELECTRONIC MEDIA, IMC AND INTERACTIVITY

The use of interactive media in the marketplace is experiencingexplosive growth. Unfortunately, high expectations have been replacedby disappointment, with many companies becoming increasinglysceptical as to when, if ever, their interactive media efforts will turnprofitable (Korganjor 1999). Part of this scepticism may be traced toattempts to generate a quick electronic presence in the marketplace.Many organisations that would normally advocate using soundcustomer-centric research practices in their traditional marketingefforts abandoned this logic in the interactive portion of their communi-cation programmes. This lack of customer focus is especially problematicfrom an IMC perspective since a major strength of interactive media isits ability to tailor and deliver communication messages.

Interactivity in a marketing venue has been defined in a number ofways. Bezjian-Avery et al. (1998) defined it as the immediately iterativeprocess by which customer needs and desires are uncovered, met,modified, and satisfied by the providing firm. Similarly, Haeckel(1998) viewed interactive marketing as an approach that uses customerdata captured via person-to-person or person-to-technology contactsto create individualised exchanges designed to effect a change inknowledge or behaviour of at least one person. Extending these

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1 Footnote.

definitions into an electronic media context, we refer to electronicinteractive media as any electronic medium that has the capacity toestablish two-way communication systems between buyers and sellers.

Although there are several aspects of the new electronic media thatdiffer from traditional media, we focus on those differences that arecrucial to developing an IMC programme. Our primary interest is inidentifying those elements that involve output and response methodswhich permit ongoing interactivity and customermarketer dialogues.Our view of interactive media includes four elements that are centralto the model: (1) the two-way nature of the communication system,(2) the level of response control each party has in the communicationprocess, (3) the personalisation of the communication relationship,and (4) the use and involvement of database technology. Although allthese elements are important to interactive media, the role ofdatabases is especially critical when moving from traditional IMC tointeractive IMC. Specifically, interactive personalised relationships,electronic or otherwise, cannot be maintained without the use ofongoing database management practices (Peltier & Schibrowsky1997). Conceptually, interactive data may be synthesised to developand implement information-intensive strategies tailored to the specificneeds of targeted customers (Peppers et al. 1999). This is true whethercustomer data are generated via traditional, website or email surveys,through online or store-based purchase history, or by tracking websitenavigation. Unfortunately, most organisations lack sufficient data to betruly customer-focused, and are thus unlikely to attain the potentialbenefits of interactive marketing (Deighton & Glazer 1998).

Despite the paradigm shift that is underway regarding howmarketers and customers interact with each other, and the role thatconsumer databases play in this evolution, practical and theoreticalinadequacies abound. In particular, though direct marketers have longpractised database management, traditional advertisers and marketershave not (Shepard 1999). Even when traditional marketers holdcustomer information (i.e. internal records), the lack of connection orcooperation between marketing, sales and research often preventstheir use. Consequently, the underuse of consumer data is usually dueto firms inability to accumulate and integrate existing data rather thana lack of actual marketplace information.

A specific problem germane to the ability to develop personalisedcommunication is that the majority of marketers who claim to usedatabase information typically place the highest priority on generating

98



1 Footnote.

transactional and other behaviourally-oriented data (Preston 2000), tothe exclusion of psychographic-oriented information such as motivations,needs, attitudes and lifestyles (Webster 1998). Although behaviouraldata are a necessary prerequisite for maintaining interactive relation-ships, the development of meaningful, effective, personalised commu-nication strategies does not only require the measurement of who thecustomers are and what they are doing. The marketer must alsounderstand the psychological factors that motivate those customers toseek or maintain a relationship (Peltier et al. 2002b). At the highestlevel, interaction requires an understanding of the total relationshipbetween buyers and sellers, and this requires the merging of bothbehavioural and psychographic information (Schultz & Baileyforthcoming).

Practising effective interactive IMC requires organisations todevelop an internal structure for doing so. For a firm to truly becomea smart company, it must have the ability to develop smartmarketing campaigns and smart integrated marketing communicationprogrammes. To accomplish this, firms must have the ability to collectinformation at the individual level and use that data to create infor-mation-intensive customer management strategies that use electronicmedia to generate interaction (Glazer 1999). However, while mostadvertising researchers, managers and academics would agree that thetrue value of electronic media lies in its interactivity, the way toproceed to make that a reality is less clear. Consequently, the conceptof a fully interactive IMC approach is more of an intriguing idea thana practised reality (Davenport et al. 2001).

Quite possibly the greatest change caused by increased interactivitywill be in the area of database construction where demographical,psychographic and behavioural information about customers andprospects is merged, with the end result being an increased use ofmore personalised and consumer-driven IMC programmes. As isevident from our model in Figure 1, IMC strategies rely on threeinterdependent database management components: collecting,analysing and using customer data. Drawing upon literature from thedisciplines of IMC, interactive marketing, electronic media andrelationship marketing, Table 1 is our conceptualisation of how theIMC paradigm will evolve as the field moves from more traditional tomore interactive and electronic forms of IMC. We conceptualise fourspecific areas of change: (1) the role of databases, (2) communicationissues, (3) relationship dynamics, and (4) IMC metrics.


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1 Footnote.

The model presented in Figure 1 conceptualises the relationshipbetween database management and interactive integrated marketingcommunication programmes. Using a database-driven CRMprogramme provides the mechanism for firms to create and distributea customised, interactive, integrated marketing communicationprogramme. In our model, database management refers to the processof collecting customer data, integrating the data to form customersegments, and then using other data to build predictive models forcategorising other customers and prospects. The IMC portion of ourmodel relates to the development of targeted, personalised andinteractive communication programmes based on information learnedin the data analysis stage. In the following section, we illustrate howthe proposed model can be implemented in an organisation that doesnot currently have a functioning customer database.

A CASE STUDY OF A FIRM DEVELOPING ANINTERACTIVE IMC PROGRAMME

The case study reported here was done in conjunction with an energyconservation organisation. Energy conservation was chosen for fivereasons. First, recent energy shortages and high energy prices inCalifornia and other states illustrate the critical nature of energyconservation. Second, the melding of behavioural, psychographic anddescriptive data for better understanding of and communication with,customers has previously been advocated in the energy literature(Formichelli 1999). Third, demographics and psychographics haveindividually been found to be only weak predictors of attitudestowards energy conservation and/or conservation behaviour (Peltonet al. 1993). Fourth, while utility companies have little experience withconsumer databases, recent developments in the deregulation of theseindustries have led to a number of these firms beginning to compiledata on their customers (Formichelli 1999). Finally, little is understoodeither about how psychographic and behavioural data can be capturedand used to refine the processes of defining customer relationshipsand segmenting customers in order to target communication andoffers, or about the impact that interactivity might have on maximisinglong-term customer value. As a consequence, the energy field hasmuch to gain by developing specific and target-oriented energyconservation communication programmes.


101


1 Footnote.

Ultimately, the goal of the organisation was to gain a betterunderstanding of the customer at the individual level. This wouldallow various communicators to take advantage of the benefitsassociated with the interactivity, on-demand quality and one-at-a-timenature of electronic media. We believe this is a necessary first step ifadvertisers are going to integrate these new media successfully intotheir IMC programmes.

THE SETTING

In collaboration with utility companies, a pilot study was conducteddesigned to identify energy conservation segments in the residentialmarket. From this project, an integrated communication plan is beingdeveloped to persuade Wisconsin residents to become more energy-conservation-oriented. The programme was therefore designed toinfluence attitudes towards saving energy and to promote energyconservation practices across a wide range of potential behaviouralchange opportunities. Note that the proposed model suggests that thedata-collection phase potentially includes data from a number ofsources. In this particular case the majority of the data were suppliedby an in-home energy audit survey completed by the home-owner.The questionnaire contained questions pertaining to attitudes aboutenergy conservation (e.g. people should be able to use as much energyas they wish as long as they pay for it), beliefs (we are using up ourenergy too fast), motivations (we need to save energy for futuregenerations) and lifestyle questions related to energy use andconservation (e.g. I tend to entertain a lot at home); behavioural datasuch as average monthly home energy bill, amount of effort given toreducing home energy bill, specific behaviours already adopted toreduce energy bill; and respondent demographics.

Procedure

A mail survey was sent to 2000 randomly selected home-owners. Toenhance the response rate, a postcard was mailed prior to distributionand a $2 participation incentive was attached to the survey. Of these,68 were returned as undeliverable. A total of 1330 people respondedto the survey request. Of these, 33 were deemed unusable due to anexcessive amount of missing data. This resulted in a total of 1297usable surveys. The net result was a response rate of 67.1%

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1 Footnote.

(1297/1932). The data were integrated with other availableinformation from the companies database (e.g. energy usage, previousenergy audits) to form the initial database.

DATABASE MANAGEMENT ANALYSIS

Forming segments

Respondents were classified into energy conservation segments usingk-means cluster analysis. While a number of different segmentconstruction analyses were employed, in the final analysis the use ofthe individual energy-oriented attitudinal and psychographic questions(in contrast to using factor scores), along with a summed energyconservation score, worked best. The summed energy conservationscore was formed by adding up all of the self-reported energyconservation behaviours from a battery of 16 activities (e.g. had an in-home energy efficiency audit, installed storm windows). Conceptually,this suggests that behaviour and energy psychographics/attitudes in combination were superior in forming segments than werepsychographics/attitudes alone. This is an important distinction fromprevious research in interactive psychographic segmentation whereonly psychographic information was used to form the segments.

Ultimately, a four-segment model best represented the data. Thesegments were named as follows: apathetics, proactives, receptives andcomforts. Each cluster/segment had specific psychographic character-istics associated with it, and the names of the segments were derivedfrom their scores on the battery of psychographic and behaviouralquestions. Table 2 contains a general description of each segment.

Profiling

It should be noted that the information contained in Table 2 wouldnormally be sufficient to develop a customised IMC plan employingonly traditional advertising media. However, the interactivity of thenew electronic media requires that all individual customers beclassified into one of the relational segments. Since the extensivepsychographical and behavioural data captured via the in-home energyaudit survey would not be available for all the customers, there neededto be a way to generalise these psychographics to those energycustomers in the database who would not be surveyed so that they


103


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1 Footnote.

could also be categorised into the energy conservation segments. Toaccomplish this, demographic information, a limited amount of easy-to-obtain psychographic information and behavioural data were usedto develop the scoring models. These data were chosen because it wasfelt that they were either already contained in the database (e.g. size ofthe electric bill) or could be obtained easily through external meanssuch as warranty cards, on-line surveys and data warehouses. Inaddition, the profiling results and past research has shown that whileindividual variables tend to be relatively good discriminators, the realvalue in this type of modelling is the predictive power of thecombination of variables used to construct the model (Peltier et al.1998; Peltier et al. 2002a).

A variety of models employing various types of data weredeveloped using discriminant analysis. (It should be noted that anumber of statistical techniques have been used to develop customerclassification models including discriminant analysis, logisticalregression, CHAID and neural net modelling.) Once the models wereconstructed, they were investigated to assess their accuracy inclassifying customers. The assessment was performed on a set ofcustomers who had been given the home energy audit survey, so thattheir true classifications were known.

First, a demographics-only model was developed. The modelcontained two predictor variables. It correctly classified 37.2% of thesample. This was an improvement of 41% over the proportionalchance criterion.

Second, a model that included demographics and responses to alimited number of general energy conservation perceptions andattitude questions was developed. Examples of the overall energyperception questions include: (1) I am careful about how much energyI use; (2) I have already done most of what I can do to lower myenergy bill; and (3) I should probably cut back on how much energy I use. This model correctly classified 47.1% of the respondents or animprovement of 78.5% over the proportional chance criterion. Thisrepresented a significant improvement over the demographics-onlymodel and demonstrated the added value of including psychographicsin the classification model.

Finally, a model that included demographics, a limited number ofgeneral energy perception questions and individual energy con-servation behaviours was developed. Individual energy conservationbehaviours included such items as: (1) I have turned down the


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temperature on the water heater; (2) I have purchased energy-efficientappliances; (3) I use water heater jacket/wrap pipes; and (4) I installedenergy-efficient ventilation and/or an air-conditioning system. Thismodel correctly classified 68.5% of the respondents. This was animprovement of 260% over the proportional chance criterion. Thiswas also a substantial improvement over the demographics andpsychographics model, and signified the added value of includingbehavioural data in the classification model. This is of particularimportance since behavioural data can often be obtained from internalrecords. This model therefore provides a logical starting point. Itcorrectly classified slightly better than two out of three customers withrelatively easy-to-obtain data.

The results highlight the value of collecting additional informationfrom customers over time. The more information the organisation hason its customers, the more accurately it will be able classify them. Thisalso suggests that continuous analysis of data is needed to improve theclassification models. In the final analysis, the ability of the organi-sation to create a differentiated integrated marketing communicationprogramme is predicated on its ability to classify its customerscorrectly. It is important to note that, although the energy segmentswere validated via a test and holdout sample, the focus of this paper ison how interactive IMC may be enhanced using combined attitudinaldata, and not on whether these energy segments are generalisable toother studies. Moreover, the model is designed to turn this attitudinaland behavioural data into actionable interactive IMC strategies.

TURNING CUSTOMER DATABASES INTOINTERACTIVE IMC

The guiding principle of the interactive integrated marketingcommunication model is that to take advantage of the interactivity ofthe new electronic media, an organisations marketing strategy must bedata-driven. To accomplish this, a firm must have a process in place tocollect information at the individual level and use that data to createinformation intensive customer communication strategies that use thenew media to generate customer interaction (Glazer, 1999; Davenportet al. 2001). The segmentation and profiling data illustrated thatattitudinal and behavioural data collected through traditional and/orelectronic means may be used to further understanding of what it is

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that customers are looking for in their relationships with sellers andhow those relationships might be developed and enhanced. At thispoint, we turn our attention to how this customer orientation can beconverted into interactive integrated marketing communicationprogrammes. The approach is outlined in Figure 1.

Blending traditional and interactive data collection

The starting point in this model of the relationship between databasemanagement and interactive integrated marketing communication isthe collection of data to further understanding of customers. Theissue is not whether an organisation can acquire individual level data;that is a given. Rather, the question is: What specific informationshould be gathered and what is the most efficient way to obtainaccurate data from customers? Traditionally, marketers have relied ondemographic information and perhaps some group-level psycho-graphic data collected via survey research. Although traditionalmethods are likely to remain a strong component of the data-collection process, augmenting the existing or to-be-built customerdatabase by collecting additional customer data through multipleinteractive contact points creates both opportunities and challengesregarding how we describe buyer/seller relationships (Preston 2000).

Interactive IMC

The case study demonstrated the ability to develop segments, toidentify the relationship each segment is seeking, and illustrated theprocess whereby all customers could be categorised. However, this isonly the first step. Once segments are identified and understood interms of attitudes, beliefs, motives, knowledge and lifestyles, an IMCprogramme based on these differences, employing both traditionaland new media, can be developed. Significantly, the data-collectionprocess we used was not contingent on whether energy consumers useemail and other web-based information sources on a regular basis.Rather, interactive IMC is built on the ability of sellers to commu-nicate with buyers and prospects through a variety of electronictechniques.

Interactive IMC strategy development differs from that oftraditional IMC in that the goal of interactive IMC is to establishongoing dialogue and communication programmes with specificgroups of identified customers. The starting place is to prioritise the


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segments in terms of IMC efforts and investment levels and, fromthat, to use various media tools to establish segment-specificcommunication objectives, messages and incentives. In other words,the general approach should be to develop an analysis of theindividual segments, determine their value to the marketingorganisation and then prioritise them in terms of the amount of thecommunication budget and other efforts directed towards each one ofthem. In most cases, the potential return on invested communicationdollars will be much higher for some segments than for others. Thesmaller the overall communication budget or investment levelavailable, the more critical this stage becomes.

As is the case with traditional IMC, the interactive approach hasboth overall objectives and themes. However, with the interactiveapproach there are segment-specific goals based on those overallobjectives. The segment-specific information contained in thedatabase determines the goals to be achieved with each group. Oneadvantage of the database is the ability to develop more specific andmeasurable goals and objectives, and to provide a meaningful form ofmeasurement of results.

While traditional IMC has demonstrated the value of creating aconsistent theme and/or creative platform for the communicationcampaign, the CRM foundations of interactive IMC highlight theimportance of being able to develop individualised messages that areconsistent with the overall theme and creative platform of the com-munication programme. The synergistic value of this combination ofconsistency and customisation, all under a broad communicationumbrella, is one of the key strengths of interactive IMC.

Once the interactive IMC strategy has been developed, segment-specific IMC plans can be formulated. First, every communicationshould be tailored either to fit with, or to alter, the prior attitudes andbehaviours of the customers in that segment. For example, in theenergy study, it was found that the receptives were concerned withthe environmental impact of energy usage, while the comforts werenot interested in environmental impact issues at all and felt that energyconservation was an individual choice. To be effective, the messagestargeted at each of these groups should be dramatically different, yetreinforce the overall theme of energy conservation.

A second important point is that every communication withcustomers should be considered as an opportunity not just to talk tothe customer but to learn more about the customer as well. Thus

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there should be a goal of collecting more individual-level data witheach and every communication contact. In our view, virtually everycommunication contact should encourage some type of traceableresponse from the customer, which can be added to the marketersstore of knowledge.

Both traditional and electronic media create opportunities to targetspecific segments. However, with an interactive IMC approach, theemphasis should be on how the media types may be used together todevelop more effective and efficient communication programmes.Specifically, each customer is placed a priori in an attitudinal/behavioural segment and personalised messages are sent according totheir segment classification. In this way, IMC becomes interactiveIMC. The following are just a few examples of how the varioustraditional and electronic media tools can be employed to createcustomised, segment-specific IMC communication approaches. Whatall of these techniques have in common is that an organisationsdatabase is used in a fashion consistent with that outlined in Figure 1.

(1) Targeted permission emails, along with electronic andtraditional segment-customised newsletters, can be sent to theindividuals of particular segments. The message of the emailand any click-through URLs should be designed for thatspecific segment. The newsletter would employ the samestrategy of directing its readers to segment-specific links andinformation sources. The same strategy could also be employedfor targeted bill inserts. Members of each segment wouldreceive bill inserts asking them to go to a specific URL designedto provide information for that segment, or to phone aparticular number to request a segment-specific brochure orcatalogue. Peppers and Rogers (2002) reported research byYesmail which showed that having a number of personalisedelements in an email significantly boosted the campaigns click-through rate. Specifically, in a study of over 90 millionmessages, Yesmail found that emails with no targeting orpersonalisation pulled an average click-through rate of 4.7%.The click-through rate jumped to 7% when three to sixpersonalised elements were introduced, and to 14.8% whenseven or more personalised elements were used. The authorscontend that email messages can be differentiated usingdemographic, attitudinal and behavioural data. They caution,however, that inundating users with data-collection enquiries


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must be done with caution and advise businesses to make suretheir customers know exactly how personal data will be used.

(2) Broadcast and print media could be designed to work in asimilar fashion. The original advertisement media selection andmessage would be segment-specific, based on the profile ofeach customer group. For example, the segment-specific profilemight be used to match the demographics of a particularmagazine or television show. The specific advertisement placedthere would be based on the message selected for that segment.In addition, the message could include a request for a traceableresponse, such as contacting a segment-specific URL or callinga unique segment-dedicated telephone number. It is essentialthat all responses be directed to segment-specific traceablelocations, such as URLs or telephone numbers. Segment-specific URLs should contain segment-customised messages,information, links, goods and services, chat-room informationand so on. If the user has been to the site before, a cookie couldbe used to further customise the site. A good example of usingmass media to form interactive relationships is that of Voice,Europes first mass-customised consumer print magazine.Published in Sweden, Voice targets women between the ages of25 and 44, and creates hundreds of different variations bycombining editorial, advertising, and insert content accordingto how subscribers have answered a wide range of questions.There are unlimited advertising combinations, up to 36different advertorial inserts, and nine editorial sections. Thisinteractive IMC strategy is powered through self-provideddemographics, communication channel preferences, buyingattitudes, general interests, editorial interests, and media andproduct preferences. Since its introduction in 1998, Voice has acirculation of more than 100,000 the third largest in Sweden.

(3) The potential of the telephone as a link in the new electronicmedia should not be overlooked. Advances in computertelephony integration (CTI) allow the telephone to become avirtual terminal so that callers can use the keypad to send andreceive information. The information collected from this formof response can then be electronically integrated into thedatabase. This is a key electronic tool for markets and segments

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that do not generally have access to the internet or otherinteractive devices. In addition, inbound and outbound callcentres may be used to further customise messages bydeveloping segment specific scripts and by using instant accessto specific customer data. Although in its infancy, banks arestarting to see the value of customising both telephone-basedand personal contacts. For example, Peppers (2002) reportedcommercial research for a bank which showed that providingcustomer service reps with a complete view of each customershistory and account information and programmed on-screenprompts greatly increased cross-selling of the banks products.Peltier and colleagues (2002a) found similar results for the useof personalised messages for different bank segments.

(4) Finally, the key element in interactive IMC is just that,interactivity. The ability of the new electronic media toprovide two-way, customised communication allowsorganisations to develop smart communication programmesthat evolve constantly over time. It is the firms ability torespond to customers responses that makes the IMCprogramme truly interactive. Interactivity should be designed tocreate conversations with customers rather than simply tryingto sell them an idea or product. With interactive IMC, what thecustomer has to say thus becomes central to customising futuremessages. E-Trade is a prime example of a company that issuccessfully integrating interactive IMC. E-Trades appeal is notsolely that customers can transact business on-line. It alsooffers toll-free phone support through call centres, providestailored online portfolios, has broadcast studios that createproprietary content for clients to access selectively on thewebsite, has personalised trade alerts, and on-site programmesand seminars. Driving these interactive IMC programmes is thecompanys data warehouse that has stored customerinformation on its retail and corporate customers, which maybe accessed to cross-sell and up-sell the companys variousproducts. These data are then used in the form of propensitymodelling, which provides value-added products that arepersonalised based on targeted customer profiles. Key to eachof these examples is the ability to track precise customerresponses in terms of specific messages delivered, media used,


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products offered, and any of a wide range of other responses.Media responses from customers can take many forms such asreplies to email messages, visits to URL-specific websites basedon targeted advertisements, returned bill inserts, direct mailefforts, traditional and electronic newsletters, online andtraditional surveys, and online and telephone-based polls.

These are just a few of the ways to build a database and dialogues withcustomers. For those communicating over the internet, visits tospecific websites may be tracked via cookies and other customertracking software. Other types of cookies may be used to rememberpreferences, browsing behaviours and past purchasing activities, alongwith the ability to personalise and customise home pages. In addition,response information and cookies may be used to personalise andcustomise extranet pages where access is password-protected. Thesepages can contain individual usage information along with a variety ofanalysis tools that use individual data to make calculations. An exampleof this type of customisation is the TIAA-CREF website, whichallows individuals to estimate their future retirement accumulationsbased on their current accumulations along with a number ofadditional variables selected by the individual. In this way, thecustomer is provided with individual-level information that would bevery difficult for them to either obtain or determine on their own.

It should be noted that some segments are more likely to respondto various forms of communication than others. For segments withlow levels of responses, it is difficult to develop smart marketingprogrammes. In these cases, creative proactive approaches togathering additional data must be considered.

Moreover, the data received from customers may be used to makethe database more accurate and complete. They can also be used torefine the current segments, identify new ones and to develop moreaccurate classification models. Finally, the data may be used to trackthe effectiveness of the current communication efforts.

CONCLUSION

This is the most exciting, most challenging time in the history ofadvertising research. We are sure to see innovations in research duringthe next several years the likes of which have never before been seen

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in the field (Lavidge 1999). When this is coupled with the newapproaches of IMC and electronic media, the face of advertising willbe changed forever. Our belief is that marketers must identify ways tointegrate the new media into their current communication plans. Wehave argued that the unique characteristics of the new media requirethat a database-driven segmentation approach to communicationstrategy be employed. This should include the development of acustomised, interactive, integrated marketing communication plan aswell. However, an integrated IMC plan should not be considered anend goal but rather a starting point in the development andimplementation of a smart marketing programme. This approachchanges the way we have traditionally viewed advertising and theconcept of integrated marketing communication as well.

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ABOUT THE AUTHORS

James W. Peltier is the Arno Kleimehnagen Professor in Marketing atthe University of Wisconsin-Whitewater. He has written award-winning articles on database marketing and the integration ofpsychographics into new media strategies. In 2001 he received theRobert C. Clarke Outstanding Educator by the DMEF and sits on itsBoard of Trustees. He has published in the Journal of AdvertisingResearch, Journal of Interactive Marketing, Journal of Direct Marketing,among many others.

John A. Schibrowsky is a Professor of Marketing at the Universityof Nevada-Las Vegas. He has received a number of research awards inthe area of database marketing and the role that psychographic dataplays in effective interactive marketing strategies. He has published inthe Journal of Advertising Research, Journal of Interactive Marketing, Journalof Direct Marketing, Personal Selling and Sales Management, among manyothers.

Don E. Schultz is presently Professor Emeritus-in-Service ofIntegrated Marketing Communications at the Medill School ofJournalism, Northwestern University. He is a Visiting Professor atCranfield University School of Management, Milton Keynes, UK. Heis also President of the consulting firm, Agora, Inc. both in Evanston,Illinois. He has authored over a dozen books on marketing andcommunication and is a frequent contributor in trade and academicjournals.


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