Interactive Marketing Technologies: Implications For Consumer Research

John Deighton, Harvard Business School
[ to cite ]:
John Deighton (1995) ,"Interactive Marketing Technologies: Implications For Consumer Research", in NA - Advances in Consumer Research Volume 22, eds. Frank R. Kardes and Mita Sujan, Provo, UT : Association for Consumer Research, Pages: 396-397.

Advances in Consumer Research Volume 22, 1995      Pages 396-397

INTERACTIVE MARKETING TECHNOLOGIES: IMPLICATIONS FOR CONSUMER RESEARCH

John Deighton, Harvard Business School

Chair: John Deighton, Harvard Business School

It has been speculated that interactive marketing technologies will transform the character of marketplace persuasion (Blattberg and Deighton 1991). If so, consumer behavior theories will change too. The aim of the session was to juxtapose talks about the practice of interactive marketing and talks about appropriate theoretical frameworks, to stimulate research at this frontier.

Christopher Meyer, Vice President, Mercer Management Consulting

Mr. Meyer is a consultant practicing in the information technology field

He opened with a macroeconomic perspective, observing that economies have technology-driven life cycles. He identified four stages in a technology's influence on an economy: in the first there is basic science, in the second a technological infrastructure is built, in the third entrepreneurial businesses emerge, and in the last stage these enterprises coalesce into mature organizations. He suggested that the information economy's infrastructure had reached a critical mass, that the third phase was in place, and that recent mergers and alliances signalled tentative attempts to enter the fourth phase. He identified and discussed some critical aspects of the shift from a manufacturing economy to an information economy:

Smart products and services: he illustrated a retail catalog on CD-ROM known as En Passant, which compiled the offerings of some twenty catalog retailers to allow browsing by product type or price point across retailers' offerings. By storing the dates of gift-giving occasions, the service could make gift suggestions.

Computer simulation of consumer experience: Low-cost trial and testing was now possible. For example beauty consultants could illustrate the effects of cosmetics on digital images of customers' faces.

Electronic payment: The acquisition by Microsoft of Intuit, and the founding of First Virtual Holdings, offered the prospect of dependable on-line financial transfers.

He predicted in closing that the most significant consequence of interactive technologies will be, as is was for the telephone, not the content that the medium transmits but the sense of community that it creates.

Rishad Tobaccowala, Vice President and Director of Interactive Marketing, Leo Burnett Inc.

Mr Tobaccowala is charged with leading Leo Burnett's drive to compete in the field of interactive marketing communication.

He opened by defining interactive technologies as any two-way, real-time, addressable media with rich digital content. These media constituted a fourth communications revolution, after print, radio and television, with implications for distribution and selling as well.

By the end of 1995 there would be only 100,000 U. S. households with access to interactive television, but 10 million households using non-internet on-line services and 40 million with personal computers, as well as some 10 million kiosks, automatic tellers and other interactive devices. Differences between these communicators and those displaced will be:

They will advertise by invitation, not intrusion. Consumers can ask for advertising (or information) from Oldsmobile customer service representatives via on-line bulletin boards.

Expenditures on these media will be immediately and precisely linked to behavioral results - the media will be accountable.

Their audiences will be individuals, not segments. Marketing will shift from mass through targeted to relationship, as the content evolves from the form of a speech to that of a letter to a conversation.

Leo Burnett's programs for clients, which include McDonald's and Oldsmobile, have measured results with hard measures such as length of stay in the interaction, number of responses, and responses that result in sales, as well as soft measures such as content of consumer comments, navigability and consistency with brand values. He pointed to preliminary learning from interactive tests:

Brands are important to help consumers navigate on-line services.

The communication must invite true interaction, engaging the consumer to produce high involvement.

The sponsor must be responsive.

Control must be ceded to the audience.

Programs must be hybrids of interactive and conventional technologies.

Entertainment and sex have been two dependable draws in online services.

He identified issues that might be amenable to scholarly research:

Traditional advertising response models assume intrusion. Invitational advertising calls for entirely different conceptualization.

Crafting interactive persuasive messages uses different, poorly understood, psychological principles.

Management of the masses of data generated by interactive conversations calls for new decision support systems.

John Deighton, Associate Professor, Harvard Business School

This talk introduced the concept of "virtual relationships,"

patterns of interdependence between people and "smart" machines.

A familiar example is the automated teller machine, which communicates customer-by -customer, tailoring the content of communication to each customer, taking into account the detailed history of past interactions just as human interaction takes account of history. This sensitivity to context is used to customize the product it delivers. For example, an ATM dispenses cash in response to a particular consumer's need, not to the average needs of consumers in a demographic or psychographic segment, and declines to advance cash when its memory of past interactions suggests the account is overdrawn. It can selectively deliver promotional messages when its memory of past interactions suggests they will be well received. As television shifts away from broadcast transmission and acquires the features of a client server computer network, so it too will be able to form one-to-one relationships with memory.

Theories that account for consumer response to broadcast media tend to emphasize passivity. Marketers are conceived of as acting on consumers, supplying the stimuli that consumers process and react to, often in states of low involvement. Theories to account for consumer interaction with responsive media emphasize activity, envisaging a consumer who initiates requests for information and advertising, co-produces what is consumed, and sustains relationships over time if the interactions are rewarding.

Interactive technologies permit the formation of virtual relationships. At best, these relationships are more than merely instrumental, and can elicit emotion from the consumers. To account for the expressive value of interactions with non-human sources, this presentation describes a theory of relationships formation and maintenance as the management of social context: essentially the machine "seduces" the consumer by inviting the consumer to co-create a lifelike context (Deighton and Grayson, forthcoming.

An exploratory study was described in which subjects discussed "continuing, evolving relationships between you and a machine, system, or entirely non-human object." The objects included software, computers, cars, voice mail, a calendar scheduling system, a mutual fund on-line system, America Online, the Internet, a negative option compact disk club, and a catalog. A content analysis of these descriptions identified such attributes as customization, responsiveness, anticipation, dependency, investment, exit costs, and domination and obedience. However, the emotional tonality of these relationships was unlike intimate personal relationships because there was no concern for the feelings of the other. These were essentially master-servant relationships. To illustrate that master-servant interactions are not culturally invariant, the story of Aladdin and his Magic Lamp was analyzed in three translations: from 1802, 1896 and 1970. The conclusion was that if the interactive marketer aspires to be the consumer's "obedient servant," the interface will have to be alert to the culture's conception of servanthood, and different interfaces may be required in different cultural settings.

Jonathan Frenzen, Visiting Assistant Professor of Marketing, University of Chicago.

Professor Frenzen was discussant and chaired the exchange between speakers and audience. He argued that while interactive technologies were new, the underlying market forces were not. Many familiar consumer theories would still apply. He pointed to Geertz's study of sellers searching for buyers and buyers for sellers in a peasant bazaar (Geertz 1973), and observed that modem methods of shopping, such as surfing the internet, had merely lowered search costs for buyers and sellers.

However pampering was a need that would endure, and one challenge to interactive marketers was to manage customer relationships artificially in a manner that emulated or evolved toward intimate human relationships. He suggested the Turing test to decide whether a virtual relationship was indistinguishable from the real thing or not. An important researchable issue would be the question of how to expand a relationship. He cited the work of the social psychologist Margaret Clark, who observes that as a relationship becomes deeper, the participants become less sensitive to the precise balance of indebtedness between them (Clark 1984). Another feature of relationship expansion was each party's revealing of private information, the exchange of intimacies and confidences.

At a more macro level, he discussed the sociological concept of Blau spaces: when individuals are mapped into a space defined on demographic axes, the organizations to which they are affiliated and the markets in which they transact overlap. These patterns of overlap point to an exciting result for researchers interested in interactive marketing: as consumer researchers have long argued, individual brand purchases are an unnecessarily narrow research topic research, and overlap among markets and organizations is a fundamental attribute of markets that interactive marketers can pursue.

REFERENCES

Blattberg, Robert C. and John Deighton (1991), "Interactive Marketing: Exploiting the Age of Addressability," Sloan Management Review, Fall.

Clark, Margaret (1984), "Record-keeping in two types of relationship," Journal of Personality and Social Psychology, 47 (September) 549-557.

Deighton, John and Kent Grayson (forthcoming), "Marketing and Seduction: Building Exchange Relationships by Managing Social Consensus," Journal of Consumer Research.

Geertz, Clifford (1973), The Interpretation of Cultures, New York: Basic Books.

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