Synergistic,Antagonistic, and Asymmetric Media Interactions

Despite the highly touted potential for synergies in cross-media advertising, much has yet to be discovered about how the effects of multiple media combine to shape sales response. Two challenges related to the investigation of media interaction effects are their complex nature and their specification in a sales response model. The authors adopt a flexible modeling approach, multivariate adaptive regression splines (MARS), which captures parsimoniously complex interaction effects and facilitates their measurement and interpretation. Analysis of multiple data sets on brand sales and media spending points to the following typology of media interaction effects: (1) synergistic (positive interactions), (2) antagonistic (negative interactions), and (3) asymmetric, where each medium does not contribute equally to the interaction. The findings show that 44% of media spend produces synergistic effects, whereas 21% produces antagonistic effects. Hence synergy is not the de facto outcome of cross-media advertising. Interestingly, low-budget media play a key role in producing interaction effects.     

A promotion mix budgeting model for retailing

Our two-equation model of retail promotion provides a well-balanced explanation of both retailers' perceptions of promotion tools and their budget allocation across the promotion mix. While previous studies have examined each of these two components separately, few have integrated both in the one study. Factor analysis was used to simplify the choices of promotion tools. This reduced the number of promotion tools to four, namely mass media, in-store promotion, sales promotion/direct mail and personal selling. We support earlier studies which link budget promotion mix spending (behaviour) to perceptions about the effectiveness of each medium (attitude). The range of determinants of perceptions has been extended by incorporating the roles of retail strategy, store ownership, culture and promotion intensity. We have estimated the budget promotion mix equation using a production function theoretical framework. Although this makes little difference to the strong relationship between retailers' perceptions of promotion tools and budget allocations, the theoretical framework does enable formal estimation of cross-media substitution. We find that the two short-term oriented promotion media are substitutes. Our model has been applied to apparel retailing in Australia, with considerable scope for applications to other retail categories and to other countries.     

Does relationship quality matter in e-services? A comparison of online and offline retailing

The quality of the relationship between customers and service firms has been found to be a major driver of customer loyalty in traditional (i.e., offline) service contexts. The increasing use of electronic services, or e-services, raises questions concerning the extent to which the relationship quality-customer loyalty link holds in an e-service context. Based on an extended model of relationship quality and by applying the social information processing perspective, this research tests the relevance of relationship quality for online relationships and explores differences of the relationship quality-loyalty link between online and offline retailers. To test the model, a large-scale study is conducted on both online and offline relationships for two service contexts (media and travel retailing). Using multi-group structural equation modeling, the authors identify differences between the online and offline environment in both service contexts. Results show that (1) relationship quality is similarly important for retaining customers online and offline and (2) differences in the impact of relationship-quality dimensions strongly depends on the service context.     

Cross channel effects of search engine advertising on brick & mortar retail sales: Meta analysis of large scale field experiments on Google.com

We investigate the cross channel effects of search engine advertising on Google.com on sales in brick and mortar retail stores. Obtaining causal and actionable estimates in this context is challenging: Brick and mortar store sales vary widely on a weekly basis; offline media dominate the marketing budget; search advertising and demand are contemporaneously correlated; and estimates have to be credible to overcome agency issues between the online and offline marketing groups. We report on a meta-analysis of a population of 15 independent field experiments, in which 13 well-known U.S. multi-channel retailers spent over $4 Million in incremental search advertising. In test markets category keywords were maintained in positions 1-3 for 76 product categories with no search advertising on these keywords in the control markets. Outcomes measured include sales in the advertised categories, total store sales and Return on Ad Spending. We estimate the average effect of each outcome for this population of experiments using a Hierarchical Bayesian (HB) model. The estimates from the HB model provide causal evidence that increasing search engine advertising on broad keywords on Google.com had a positive effect on sales in brick and mortar stores for the advertised categories for this population of retailers. There also was a positive effect on total store sales. Hence the increase in sales in the advertised categories was incremental to the retailer net of any sales borrowed from non-advertised categories. The total store sales increase was a meaningful improvement compared to the baseline sales growth rates. The average Return on Ad Spend (ROAS) is positive, but does not breakeven on average although several retailers achieved or exceeded break-even based only on brick and mortar sales. We examine the robustness of our findings to alternative assumptions about the data specific to this set of experiments. Our estimates suggest online and offline are linked markets, that media planners should account for the offline effects in the planning and execution of search advertising campaigns, and that these effects should be adjusted by category and retailer. Extensive replication and a unique research protocol ensure that our results are general and credible.     

Illusion of safety: How consumers underestimate manipulation and deception in online (vs. offline) shopping contexts

Online commerce changes how consumers shop for products and services—while also giving firms more control over consumers' shopping experience, more access to their information, and leading more firms to use these platforms to their financial advantage. In this research, I examine consumer perceptions of firms when they shop for products and services online (vs. offline), to determine whether consumers feel firms might use certain kinds of manipulative and deceptive tactics against consumers. Results show consumers believe firms are less likely to use manipulative and deceptive practices to increase consumer spending, when they shop online (vs. offline) for products and services. These findings remain consistent despite key individual differences (in ethnicity, gender, age, and time spent online). This research also demonstrates how certain cues can make consumers more (vs. less) suspicious of firms when they shop online and discusses the implications these findings have for consumer financial welfare.     

Pricing coordination of a dual-channel supply chain considering offline in-sale service

With the rapid development of e-commerce, the problem of pricing conflicts between online and offline channels has become increasingly prominent. And the in-sale service has become an important factor influencing consumers' purchase decisions. To study the impact of in-sale service, this paper establishes a dual-channel supply chain model considering offline in-sale service. Using Stackelberg's game theory and backward induction, it solves the optimal pricing of supply chain members and makes comparisons in both cooperative and non-cooperative situations. Finally, it coordinates the supply chain through a two-part tariff contract. The results show that (1) The optimal wholesale price and offline retail price are positively correlated with in-sale service quality. And the opposite of the optimal online direct selling price. (2) With the quality of in-sale service improving, the retailer's profit will increase and then decrease but the manufacturer's profit will always decrease under non-cooperation. The total profit of the supply chain will rise and then fall under cooperation. (3) The two-part tariff coordination maximizes profits with the manufacturer reducing the wholesale price and the retailer paying a transfer cost. (4) Cooperative decision is better than the non-cooperative decision in terms of the supply chain as a whole.     

Dissociating explicit and implicit effects of cross-media advertising

Knowledge of cross-media advertising effects is mainly based on explicit psychological measures, such as self-reports. To fully understand the mechanisms responsible for the success of cross-media advertising, it is important to also use implicit measures. We used both types of measures to assess whether exposure to different media combinations affects the cognitive and evaluative impact of advertising. Results show that participants performed better on all explicit and implicit measures of memory and brand preference after exposure (versus no exposure) to target ads, which validated the use of these measures. Comparison of cross-media versus single medium exposure showed differences on the explicit level, but not on the implicit level. This suggests (1) that cross-media advantages may be driven by explicit rather than implicit memory mechanisms, and (2) that implicit advertising effects may require more drastic manipulations than context changes, such as varying the combination of media used for exposure to advertising.     

Britt,Steuart Henderson. Psychological Principles of Marketing and Consumer Behavior. Lexington,Mass.: Lexington Books, 1978

Abstract

Conventionally, an advertiser's spending on the creative component of an advertising campaign is small in relation to the media budget and is channeled exclusively to a single advertising agency. Gross challenged those conventions more than 20 years ago, using a mathematical model of advertising effectiveness. His model suggested spending more on the creative component and doing so in a competition among several independent sources. The model assumed a normal distribution of effectiveness of advertisements. Data on response to consumer product ads show that the distribution of effectiveness is not normal, but quite skewed. Using Monté Carlo simulations and Gross's framework, the authors find that the skewness strengthens the case for competition. Shifting a sizable percentage of a campaign budget away from media spending and into competitive generation of creative renderings apparently can be very profitable.     

Integrating Bricks with Clicks: Retailer-Level and Channel-Level Outcomes of Online–Offline Channel Integration

This research examines the impact of online–offline channel integration (OI), defined as integrating access to and knowledge about the offline channel into an online channel. Although channel integration has been acknowledged as a promising strategy for retailers, its effects on customer reactions toward retailers and across different channels remain unclear. Drawing on technology adoption research and diffusion theory, the authors conceptualize a theoretical model where perceived service quality and perceived risk of the Internet store mediate the impact of OI while the Internet shopping experience of customers moderates the impact of OI. The authors then test for the indirect, conditional effects of OI on search intentions, purchase intentions and willingness to pay. Importantly, they differentiate between retailer-level and channel-level effects, thereby controlling for interdependencies between different channels. The results of three studies provide converging evidence and show that OI leads to a competitive advantage and channel synergies rather than channel cannibalization. These findings have direct implications for marketers and retailers interested in understanding whether and how integrating different channels affects customer outcomes.     

Offline and Online Search in Used Durables Markets

This study examines how different information sources are used by consumers prior to their purchase of used durable goods, specifically used cars. We examine how online and offline search are related. Categories of online sources are dealer websites and resale websites, and of offline sources are print media and dealer visits. Prior research on new car purchases finds that online sources substitute for traditional, offline sources such as dealer visits. We examine whether this theory extends to used-car purchases and distinguish between dealer websites and resale websites (a distinction relevant to used-goods markets) by collecting data from a sample of used-car buyers. Because search in different sources can be interrelated, and due to data censoring, we build and estimate a simultaneous equations Tobit model. In contrast to existing research, we find that online search on dealer websites is complementary to and not a substitute for dealer visits. This complementary effect highlights the importance of dealers’ web presence in used markets.     

What factors determine e-satisfaction and consumer spending in e-commerce retailing?

Evidently, the Internet has resulted in a fundamental shift in retailing practice, creating a shift in both consumer and business behavior, which has been compared to that of the Industrial Revolution. The purpose of this paper is to analyze customer satisfaction in e-commerce market. In particular, we determine the factors that affect customer e-satisfaction and the relationship between customer satisfaction and consumer spending in e-commerce retailing. We focus on how American based e-commerce firms are impacted by these developments and how marketing practices have reflected the developing e-commerce situation. The results show that customer satisfaction does have an impact on consumer spending in American based e-commerce retailers. Further, the relationship between customer satisfaction and consumer spending is positive, where higher e-satisfaction results in more spending in e-commerce. The results also show that there is a direct relationship among e-service quality, e- satisfaction and e-loyalty in terms of online spending by consumers. However, the analysis shows that e-commerce still faces challenges compared with traditional offline retailers since customers cannot feel and try the products, and may end up choosing the products that they do not want.     

A comparison of online and offline gender and goal directed shopping online

The aim of this paper is to model the effect of the consumers’ perceptions of their offline and online gendered behaviour on online utilitarian shopping motivation and purchase intentions. We hypothesise that when consumers shop online, their behaviour is mediated by two gendered behaviours, namely offline and online. To test this hypothesis, 515 usable responses were collected in face-to-face interviews. The conceptual model was tested with confirmatory factors analysis (CFA) and structural equation modelling (SEM) across five product categories. Our findings show that the effect of a consumer's perception of their gendered behaviour offline vs. online on online utilitarian shopping motivation and purchase intentions is significantly different. In particular we found that utilitarian shopping motivation online has a significant effect on purchase intentions online mediated by gender (online) overall: strongly for females but not for males. Conversely, utilitarian shopping motivation online has a significant effect on purchase intentions online mediated by gender (offline) for males but not overall and for females.     

Online and offline retailing: What we know and directions for future research

The fast-paced growth of e-commerce is rapidly changing consumers’ shopping habits and shaping the future of the retail industry. While online retailing has allowed companies to overcome geographic barriers to selling and helped them achieve operational efficiencies, offline retailers have struggled to compete with online retailers, and many retailers have chosen to operate both online and offline. This paper presents a review of the literature on the interaction between e-commerce and offline retailing, highlighting empirical findings and generalizable insights, and discussing their managerial implications. Our review includes studies published in more than 50 different academic journals spanning various disciplines from the inception of the internet to present. We organize our paper around three main research questions. First, what is the relationship between online and offline retail channels including competition and complementarity between online and offline sellers as well as online and offline channels of an omnichannel retailer? Under this question we also try to understand the impact of e-commerce on market structure and what factors impact the intensity of competition /complementarity. Second, what is the impact of e-commerce on consumer behavior? We specifically investigate how e-commerce has impacted consumer search, its implications for price dispersion, and user generated content. Third, how has e-commerce impacted retailers’ key managerial decisions? The key research questions under this heading include: (i) What is the impact of big data on retailing? (ii) What is the impact of digitization on retailer outcomes? (iii) What is the impact of e-commerce on sales concentration? (iv) What is the impact of e-commerce and platforms on pricing? And (v) How should retailers manage product returns across online and offline channels? Under each section, we also develop detailed recommendations for future research which we hope will inspire continued interest in this domain.     

Social spending: Managing the social media mix

There is incessant demand for ‘proof’ of return on investment (ROI) for social media spending, and a significant degree of uncertainty among marketers with respect to allocating effort and budget to social media. In this article, we address these issues by identifying different ways that organizations use social media, highlighting important distinctions in these approaches and describing how to frame the spending decision for social media. Additionally, we identify dimensions that can be used to differentiate important types of social media in a social media mix, and relate this to tactical marketing execution. We also highlight the different nature of social objectives, the ‘backward’ process for meeting them, and the importance of establishing a social media ‘mission control’ as part of that process.     

Revisiting the showrooming effect on online and offline retailers: The strategic role of in-store service

This study revisits the showrooming effect on online and offline retailers and is the first to examine the strategic role of in-store service in this regard. Considering the effect of in-store service in attracting consumers to offline channels and the showrooming effect of persuading offline consumers to purchase online, we propose a model consisting of two firms, a brick-and-mortar (BM) store and an e-tailer that can invest the staff or facilities necessary to deliver in-store services to consumers. Based on the service decisions, the two firms make their pricing decisions. We compare the optimal decisions of retailers in the cases without and with showrooming to explore the interaction between in-store service and showrooming. Our findings indicate that when a customer bears a high travel cost to visit the BM store, the store should lower the price, and improving the in-store service is ineffective in countering the consumer's showrooming behavior. Moreover, the service level in the case with showrooming can be either higher or lower than in the case without, and the outcome mainly depends on the efficiency of the service investment. Interestingly, in-store services can lead to a win–win situation for both online and offline retailers with showrooming. This study can also be extended to the case of powerful e-tailers or competing BM stores.     

Consumer heterogeneity and online vs. offline retail spatial competition

This paper develops a game-theoretic spatial model featuring consumer heterogeneity in online vs. offline retailers’ spatial competition. We find that consumers’ browse-and-switch behavior intensifies the competition because both offline and online retailers’ price and profit decline when the behavior occurs, but it is not necessarily a threat to offline retailers especially when the product relates more closely to experience. We consider six equilibrium scenarios for different combinations of consumer behaviors when considering a hybrid retailer. The analysis taking consumer heterogeneity into consideration shows that the hybrid retailer operating both online and offline is not always the winner. Particularly, the business opportunity for the offline retailer lies in consumers’ willingness to pay in store, and whether the retailer launches an online store depends on the type of products and services provided.     

Cross-Media Consumption: Insights from Super Bowl Advertising

When viewers engage in cross-media consumption—view television advertising and social media posts on another medium—how do stimuli from multiple screens influence their response? To address this question, we construct a comprehensive dataset to estimate the effects of Super Bowl advertising and the advertised brands' Facebook content on ad likability. The novel insights emerging from the analyses include that: both media directly and significantly impact the response, contributing 60% and 40%, respectively; thinking hurts liking; and an ad's serial position does not matter, which differs from the primacy and recency effects previously reported in advertising studies. This study contributes to the theory and practice by: (i) testing open research questions empirically regarding the complementary effects of two screens; (ii) extracting the formal, analytic, and narrative thinking styles from the actual words in social media comments; and (iii) demonstrating that divided attention across screens has negative consequences on viewer appraisals.     

An Experimental Study of the Relationship between Online Engagement and Advertising Effectiveness

We discuss consumer engagement with a website, provide a systematic approach to examining the types of engagement produced by specific experiences, and show that engagement with the media context increases advertising effectiveness. Based on experiments using measurement scales involving eight different online experiences, we advance two types of engagement with online media — Personal and Social-Interactive Engagement. Our results show that both types are positively associated with advertising effectiveness. Moreover, Social-Interactive Engagement, which is more uniquely characteristic of the web as a medium, is shown to affect advertising after controlling for Personal Engagement. Our results offer online companies and advertisers new metrics and advertising strategies.     

An integrated model of advertising clutter in offline and online media

The rapid growth of online advertising raises concerns about advertising clutter in the online media environment. This paper proposes an integrated model of advertising clutter that addresses the unique characteristics of the online media environment. We review the structural, information processing and functional approaches to advertising clutter, and integrate these approaches into a new comprehensive framework that explains consumer response to advertising clutter by differentiating consumer-centred analysis from media-centred analysis. The differences between online media and offline media are compared in terms of audience control and advertiser control. Attitudes towards advertising in general and in specific media contexts, and task orientations are introduced as mediating factors that affect the perception of and the subsequent response to advertising clutter. This paper offers a set of propositions on the factors affecting perception of advertising clutter, the relationship between physical characteristics and perception of advertising clutter, and how perception of clutter creates negative advertising effects. Managerial and theoretical implications of this framework are discussed.     

Online customer service and retail type-product congruence

This study investigates how various elements of customer service affect the behavioral intention to shop at the online or the offline store for different product categories. We focus on the perceived value, trust, interface, empathy, and offline presence as the dimensions of the customer service for the retail store (online or offline). Using 317 respondents from the online stores’ users, this study finds that perceived value is the strongest predictor for future intention to shop at online stores, whereas offline presence of an online store did not enhance the future intention to shop at online stores. Other dimensions such as enhanced trust and ease of interface strengthen the intention to purchase at the offline stores. Finally, perceived value and empathy associated with online stores harm the offline stores. In synch with the Theory of Congruence, this study supports the notion that the perceived congruence between product type and retail store type affect their intention to purchase certain product categories at the online stores and to purchase other groups of product categories at offline stores. Further ramifications of these findings are discussed in the paper.