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The first is cost and effectiveness. According to recent studies, US advertising expenditures for TV, print and other traditional mass media in 1992 were more than 130 billion dollars. At the same time, studies reveal that the efficacy of these ads is rapidly decreasing. Many experts suspect this is a function of saturation, the infoglut that has accompanied the explosion of new technologies and delivery vehicles over the last twenty years.
The average American is exposed to more than 5,000 advertising messages every day. This includes everything from product labels, like the brand of shaving cream you use in the morning, to the billboards you see as you commute to work, the drivetime radio you listen to in your car, the newspapers you read over your morning cup of tea, the television you watch at night ... Of these, however, only 2% register in our minds, and even fewer are retained.
The second primary reason is a shift in the psychographic profile of the target audience. Most consumers and business persons today are far more difficult to reach via traditional media. While sociologists in the 50s and 60s regaled us with promises that the future would bring increased leisure time - less work, more constructive play - the reality is that Americans work harder and longer now than they have ever done before. According to Lou Harris, leisure time decreased 37% between 1991 and 1992. We work a month more every year today than we did fifteen years ago. At the same time, the number of dual income families continues to increase. Today, over 60% of US families are dual income.
Diminished time means targets have less time to analyse and buy products. Look at the trend in TV zapping, where consumers use their remote controls to flip channels as soon as advertisements appear. And the targets too have changed. They are generally better educated than their parents, more sophisticated in their tastes, more discriminating than ever before. They no longer care to know their breakfast cereal tastes great. They assume the cereal tastes great. They want to know its bran content, how many grams of sugar it contains and what it will do to their children's teeth.
Third, the last few decades have seen an explosion in the new technologies and new media. Thew in turn have driven the creation of new niche delivery vehicles:
Direct mail
Players included all hardware and software manufacturers creating demo disks in house, and traditional DM shops using interactive ad agencies such as Einstein and Sandom, Inc (EASI)
Point of purchase kiosks
Used at tradeshows, within retail outlets and corporate high traffic areas. Thew applications are produced by corporate communications departments or by independent multimedia developers and interactive ad agencies, such as EASI.
Online
Via CompuServe, Prodigy (for whom EASI creates interactive ads), and other online services. Prodigy alone has spent more than $800 million to develop its interactive consumer service.
Bundled
Within magazines or with product sales. This includes not only hardware and software manufacturers (ie, demo dish), but campaigns such as the recent Forbes bundling, produced by Ogilvy & Mather's interactive marketing group.
Direct sales
Corporate and sales presentations using laptops and projection TV systems. Heavy players include the pharmaceutical and financial services companies, producing direct sales presentations in house or through interactive advertising agencies such as EASI.
Dedicated interactive multimedia players
Such as CD-I or 3DO, delivering sponsored entertainment, electronic catalogues and "how to" disk and CD-ROM titles. Most of this kind of advertising is produced by software publishers, multimedia production shops, in house corporate multimedia departments and a hand full of interactive multimedia advertising agencies such as EASI.
Interactive television
Combined with dedicated interactive multimedia players or via cable. The much touted Time-Warner, US West and SGI ITV test, scheduled to roll out to 4000 homes in the Orlando area early this year has ignited a great deal of interest in interactive multimedia, but this is only one of many ITV tests either planned or currently being conducted around the country. Other players include Bell Atlantic, TCI and Liberty Media Corp. (this deal alone is worth more than $44 billion); Paramount and Viacom; Capital Cities, ABC and EON; Interactive Network Inc: and NBC; and Microsoft and General Instruments, among others. While only in test phase, thew efforts clearly represent a multi billion dollar commitment to interactive communications that must be advertiser supported if they are to succeed. No one within the industry believes that these efforts can be maintained via standard, consumer supported cable billing practices alone. The millions of dollars in interactive advertising generated and sustained by these systems will be produced, bought and scheduled by independent multimedia producers and independent interactive advertising agencies such as EASI, plus those traditional ad agencies that are now entering the field.
All of these interactive multimedia applications represent a kind of democratisation of marketing. Why democratisation? In today's world - one has only to look at Eastern Europe and the former Soviet Union - economic freedom is political freedom. That empowerment, that natural desire to control our destinies, to reach out and manipulate is provided by the new generation of interactive multimedia technologies. Multimedia technologies go beyond treating individuals as if they are simply another Myrmidon in the mass market. Through intuitive interactive interfaces, multimedia marketing presentations take choice a step further. They treat people as individuals because they are intelligent and sophisticated enough to respond to individual needs.
Einstein and Sandom, Inc. is the leading US producer of multimedia PC driven interactive advertisements, commonly called InterAds. Why are InterAds proving to be so effective? First and foremost, the demographics which accompany the PC user are extremely attractive to marketeers.
In addition, interactivity encourages higher retention rates. A university study in the United States has shown
Doesn't it always seem that the more obvious the result of a study, the greater its cost? Such research on interactivity only seems to support what is, after all, common sense. The more you interact with an environment, the more you remember about it. It is like driving in a car from one village to another. If you're in the back seat, you never remember how you got there. But if you're driving if you're looking out the window at all the signs and landmarks passing by, interacting, you have a much better chance of finding your way back home from the pub. Technically, the greater the stimulus, the more synapses are activated in the brain, the more defined the chemical path We are constantly rewiring, rebuming the circuitry in our heads, and it is the multimedia world we touch and see and lieu which underpins our memories.
In direct marketing campaigns, or when InterAds are bundled within magazines or used as hitech premium giveaways, multimedia marketing presentations are clutter busters. The targets' psychological dispositions toward an InterAd are markedly different from their feelings for traditional advertising. Research indicates that people are more likely to open a direct mail piece if it contains a diskette than if it holds a standard brochure or passive VHS tape. Impression rates of 85% or higher are not uncommon. Furthermore, InterAds are viewed more frequently than traditional collateral, and they boast higher pass along rates. Due to their image as functional software, InterAds generate a longer shelf life than traditional collateral. People don't throw away diskettes, they have intrinsic value. Marketeers can leverage this extended shelf life by printing on the disks themselves, rather than using a label which can be tom off and discarded. In this way, even if the disks are re-used, reformatted with new software, they continue to generate a high quality advertising impression, just sitting in the target's disk rolodex.
As an added benefit, InterAds are cost effective to revise and update. When a product or product price changes, or when a new testimonial is required, due to the modularity of the medium, InterAds can be updated quickly and easily. You simply go to the screen that needs changing, update the information, and you have a new master. Unlike analog videotape, PC based digital media do not degrade upon copying. Each generation is an exact duplicate of the last. Unlike brochures, you don't have the expense of resetting entire mechanicals. The disk you digitally alter is your new electronic mechanical.
Finally, the cost of developing InterAds can be amortised across a variety of applications. Interactive multimedia presentations are extremely versatile, welcome news in these recessionary times. They can be delivered via direct mail, online, as leave behinds, during direct sales efforts, bundled with magazines or product sales, and used in point of purchase or point of information kiosks. Plus, at POP, you can control the hardware environment to incorporate CD-ROM, laser video, MPC, 3DO or CDI technologies, thereby supporting voice generation, touch screen capabilities, full symphonic music, and even full motion video.
In addition, InterAds boast other unique benefits, especially at point of purchase. They
Founded in 1984, Einstein and Sandom, Inc. serves as the multimedia marketing and interactive advertising agency for a diverse clientele, including Citicorp, American International Group, US Army, the Netherlands Foreign Investment Agency, the North Carolina Department of Commerce, Coming, Canon USA, New York Power Authority, IBM, AT&T, the US Department of Agriculture, the General Accounting office, Dun & Bradstreet, Merck Sharp & Dohme, among others.
Traditional advertising agencies
Already Ogilvy & Mather and J. Walter Thompson have started to develop interactive advertising capabilities, and Ketchum, DDB Neeham, and Y&R (Wunderman) are taking their first tentative steps into the interactive advertising realm. O&M currently creates POP/POI applications, some disk based ads (such as the Forbes disk), and are currently helping to develop the interactive advertising paradigm for AT&T - Viacom. JWT produces Prodigy ads for its automotive clients, plus some disk based advertising. EASI has produced InterAds for clients of JWT, Y&R, Lintas and Grey Advertising.
Interactive ad agencies
There are only a handful of interactive ad agencies such as EASI in the US today which exploit all the applications listed above.
Independent multimedia producers
A growing cadre of AV shops are trying to enter the business as independent multimedia producers as the demand for traditional video production diminishes. They join an expanding list of small multimedia producers, many of whom are also trying to enter the title development business, who offer their services to corporate clients directly or via traditional ad agencies in the development of custom multimedia marketing presentations. Often these shops use PC technologies to produce images that are transferred to video tape, while also creating interactive multimedia presentations primarily for POP/POI (especially trade shows), and some single sponsor disks and CD-ROMs. This is especially true in Europe where companies such as Rauser produce single sponsor PC games targeting young adults. But even in the US some CD-ROM developers are producing single sponsor titles, such as the recent Stanley Tool's CD Books that work
Corporate multimedia departments
Some companies, such as American Express, are growing their own multimedia departments to create multimedia marketing and training presentations. This echoes the development of in house AV departments. This trend threatens traditional ad agencies much as in house ad agencies threaten the business. The struggle between in house and outside production will become more acute unless traditional ad agencies make more of a commitment to multimedia marketing.
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| Author: J G Sandom CEO/CCO, Einstein and Sandom, Inc. 6 West 18th St, Suite SF, New York NY 10011 USA Tel. 212 627 0970 Fax. 212 645 8610 Please cite as: Sandom, J. G. (1994). Interactive multimedia marketing. In C. McBeath and R. Atkinson (Eds), Proceedings of the Second International Interactive Multimedia Symposium, 494-498. Perth, Western Australia, 23-28 January. Promaco Conventions. http://www.aset.org.au/confs/iims/1994/qz/sandom.html |