To keep up with the way customers can access and filter information about products and services in today's marketplace, organizations must take an integrated marketing communications approach that asks how and when the customer wants to receive product or service information rather than how do we want to deliver it – and asks what promises we are making to customers and are we aligned internally and externally to deliver on those promises?

INTRODUCTION AND OVERVIEW

The definition of integrated marketing in the 1990s was essentially an internal view – focusing on how to align the four main areas of marketing communication – advertising, direct marketing, sales, and promotions – in a way that would make them look the same and feel the same. The goal was to create a consistent message throughout all customer communications. This type of approach made sense in what was primarily a "push" marketplace of the time – with marketers in control of what they wanted to communicate and how they wanted to communicate it.

The Internet, the fragmentation of traditional broadcast media, and the proliferation of alternative advertising and communication options have changed all of that. In particular, the Internet, by putting information technology into the hands of the consumer, has given the customers greater control over the communication that is coming toward them. That trend has created a "pull" marketplace that allows the consumer to sit back and reject the traditional advertising that marketers are putting out while giving them the resources they need to go out and acquire information on their own.

Why try integrated marketing? According to Claire Rosenzweig of the Promotion Marketing Association Inc. (PMA), a recent study titled "ROI of Integrated Marketing," co-sponsored by the PMA and Northwestern University, supports the notion that "there is a clear correlation between companies that engage in integrated marketing and return on investment (ROI)."

THE EVOLUTION OF INTEGRATED MARKETING

A comprehensive definition of integrated marketing should still include delivering a consistent message across the variety of communications media that a company might use to deliver its brand message, says Prof. Don E. Schultz of the Integrated Marketing Communications Department of Northwestern University, but in addition, "Today we are also talking about alignment. The question is, ‘How do I align my communication and marketing and branding touchpoints with how and where and the ways in which consumers want to receive them.' So what we are really looking at now is not just how do I make everything look and sound alike, but how do I make things accessible to the consumer – or the business customer – and put it in a form that they want to receive it in and not in the form that I want to send it out in."

A consistent message is still important in push marketing, but alignment and accessibility are much more important in the pull marketplace. In fact, says Schultz, "When you talk about alignment, you are really talking about aligning the whole organization with the customer – customer service, technical support, retailers, etc. – and not just the traditional marketing touchpoints of advertising and promotions."

A current definition, taken from Integrated Marketing Communication: The Next Generation by Don E. Schultz and Heidi Schultz would be:

Integrated marketing communications is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.

FIVE STEPS TO INTEGRATED MARKETING

Beyond the definition, Schultz also identifies five integral steps to successful integrated marketing communications (IMC).

• It starts by identifying who your most valued customers are by segment. "This is critical in order to determine whom to invest your resources against," Schultz says.
  
  
• Determining current customer value and the future potential value of customers is the next step. According to Schultz, "This is needed in order to develop the appropriate messages and incentives for each segment."
  
  
• By doing this, the choice of the advertising and promotion tools you will use (step three) is a relevant result of this analysis, "rather than based on a pre-determined assumption," he says.
  
  
• Step four is to add accountability or metrics to measure performance and to determine the level of your investment. "If you can deliver those identified messages and incentives, how much can or should you invest against those customers and what you will get in return helps you determine how the marketing and communication activity can help to generate financial returns and build the brand as well," Schultz says.
  
  
• The final step is to evaluate results and make adjustments. "IMC is a circular process in that it is continuously adapted again and again as necessary to meeting changing environments," says Schultz.

A SHIFT TOWARD MORE ACCOUNTABLE MEDIA

In fact, one of the significant developments effecting integrated marketing is the proliferation of non-traditional options that marketers have to reach customers in today's world, ranging from e-mail and web advertising to Internet blogs and podcasting. Even traditional media marketing media has changed. Television advertising offers a wealth of new options beyond the major broadcast networks with lower costs and more targeted audiences. Print publications are offering more of their content online.

"Everybody today is struggling with a love-hate relationship with mass media," says Mark Mears, senior vice president of marketing and sales at Universal Studios Hollywood and incoming chairman of the Promotion Marketing Association (PMA). "We still need to establish a foundation of reach, and mass media is the most effective and efficient way to do that, but it's more difficult today when you have more fragmentation of media consumption. With hundreds of cable channels, the advent of Tivo, and other distractions that today's consumer is up against – coupled with more clutter in the marketplace than ever before, you've got a tougher time making the case for the return on your investment in behind mass media as opposed to micro-media."

Being able to measure ROI, in fact, is another big reason that more companies are making use of alternative media. "Whether it's direct mail, e-mail, or another type of promotion, when you put a promotional offer out there, you know how it pulls for you. It's much easier to measure that return on investment," Mears says. "If I put a rebate offer out there, or if I do sampling, or I do some form of event marketing that leads to a purchase, I can measure how I do. If I use interactive media for something like an online sweepstakes, I can measure the number of prospects that collects for my database."

He adds: "In today's competitive marketplace, chief marketing officers are under more pressure to deliver an ROI for their marketing spend, so you will see a shift toward more accountable media, where you can create metrics of performance and then measure how you do against them."

BALANCING TRADITIONAL VERSUS NEW MEDIA

It's not that marketers are abandoning mass media for micro-media. "You still need a balance or a blend," Mears says. "But in your integrated marketing process you will be asking, ‘How much reach do I need?' ‘What type of media should I employ?' and ‘How important is it that I measure what I do?' versus ‘What type of pull-through do I need?' It's a real balancing act."

And there are a lot more different types of media to choose from. "You have a broader palate of colors to paint from to create that integrated marketing communications plan than you did ten or fifteen years ago," says Mears. "There are new and different ways of reaching people. Previously you had the big four – TV, radio, print, and maybe outdoor. Today you have digital media, whether it be via your website, e-mail, online advertising, and search engine advertising, in addition to direct mail and direct response television. There's event marketing and experiential marketing. Even point-of-sale marketing and merchandising has made great improvements over the old days of cardboard displays and shelf talkers." (For additional ideas and options see No. 9105, "The New Marketing.")

According to Mears, "It all comes back to establishing a balance of mass and micro-media and promotional marketing techniques to accomplish the goals that you set out for yourself. If you don't have any goals at the front end, then you're really just throwing it against the wall and hoping that it sticks, or you're using traditional history or performance to lead you into the future. You have to establish clear objectives upfront as to what you are trying to accomplish, then you build the integrated marketing communications plan around those objectives – so you know whether you're going to get there or not."

A CHALLENGE FOR MARKETING

One of the emerging challenges of integrated marketing communications is that, in the past, when we were dealing primarily with push marketing, the marketing department pretty much controlled all of the information that went out and could control and adjust the message that consumers were receiving. In today's marketplace, where customers have more informational resources and more control over the messages that they let through, that's no longer the case. As a result, "Marketing and communication becomes much less a functional activity and the responsibility of one department or group, and it becomes much more of an organizational discipline – something the organization does, rather than what a specific functional department or silo does," says Schultz.

"Marketing is still an important part of the process, he adds, "but only a part – the marketing department has to be aligned with the other things that the organization is doing."

This forces organizations to think more horizontally rather than in terms of more vertical structures or silos like marketing, human resources, sales, customer service, etc., all of which are reporting up through the organization. "What you really need is some way to create a horizontal system that allows the organization to focus on customers and not just on individual functional elements," says Schultz.

CREATING A CUSTOMER-CENTRIC ORGANIZATION

" The goal is to put the customer in the center of the organization, so that we understand what their wants and their needs and requirements are, and then, how do we fill those," Schultz says. With the customer at center stage in this way, you can align your organization and manage your message more specifically to prospect, sell, cross-sell, upsell, and resell.

Two significant issues that organizations should keep in mind as they move toward being more customer centric:

• Not every customer is a valued customer. This is why it is important to identify key customer segments and to determine current customer value and future potential value. You want to understand the needs and requirements of those customers who have the greatest long-term value or potential and invest your resources in them rather than in marginal, less profitable customers.
  
  
• Customers are in the marketplace 24/7. "Part of the problem today is that most marketing communication is campaign-oriented," says Schultz. "That is, we're going to run this campaign for 13 weeks, and then we'll do another one, not recognizing that customers are in the market 24 hours per day seven days a week, not just for those 13 weeks that you are promoting and communicating." That should change how you think about customers, and should force the organization to think about long-term relationships and not short-term exchanges.

FROM BRAND MANAGEMENT TO "PROMISES MANAGEMENT"

Integrated marketing communications for the customer-centric organization also involves an evolution in thinking from "brand management" to "promises management," says Schultz. "In essence, marketing and communications and the organization make promises to customers and the real requirement for them is, ‘How do I keep those promises?' And keeping promises means that you have to be integrated. If you're a bank, for instance, you can't promise ‘fast, friendly service' and deliver slow, surly tellers."

Even if the marketing department can say, "We've done our job. People remember that we have fast, friendly service," the organization hasn't done it's job unless that promise is fulfilled at the operational level.

"So you really have to align and integrate the organization to make those kind of things happen," Schultz says. "And when you start thinking about promises – the promises that the organization is making to its customers – and begin to ask, ‘How do we fulfill those promises?' that really opens up all of the things that have to be aligned and integrated in the organization in order to make that work."

The brand is really the experience that the customer has, Schultz argues, and if the brand promise isn't kept, at some point the brand just disappears because people look at it and say, "I can't trust you."

IMPORTANCE OF INTERNAL COMMUNICATIONS AND REWARDS

The big question for organizations looking for that sort of integration is, "Can my employees deliver on that? Can we align employees behind what we want to promise externally?" There are a lot of things that an organization can promise from a marketing standpoint, or from a branding standpoint. The real question is, "Can and will my employees be able to provide what we are saying they will provide?"

Clair Rosenzweig of PMA puts it this way: "Think of campaigns where the ultimate consumer might be the public, but where you need retail to support the whole marketing-at-retail piece, and where you need your salespeople to communicate that message to retail. If you have a product that has to be displayed properly within the store, it helps to have those people understanding what the overall concept, goals, and objectives are, and how they can help to carry them out. They are part of the whole integrated process."

Employees – and employee motivation – become critically important elements in the integrated marketing communications process from this perspective. "And that raises the whole question of, ‘What are the incentives, what are the rewards, and what do I get for all of those brand promises that you are making if I am the employee?" says Schultz. "Does that mean that I get to work harder? Does that mean that I get to spend more time here? Or does it mean that I get some kind of a reward or satisfaction from supporting what you are promising and what customers want?" Reward and recognition programs, in other words, have to be aligned with and support the marketing communications to ensure that everyone is behind the effort and that brand promises are kept on the operational level.

Mark Mears of Universal Studios agrees. "Internal communications and rewards play a very important role in integrated marketing as it relates to internal constituents and channel partners," he says. "You have to have a well-articulated overall brand strategy that not only is what you communicate to your end-user consumers and channel partners but is communicated up and down the line both internally and externally. You have to get alignment among your internal stakeholders in order to deliver the brand promise, so it's important that the internal messaging is embraced by your internal stakeholders and they are aligned behind what your brand promise is so they can deliver against it. And you have to incentivize your employees to help the marketing department pay off on the brand promise just as you would want to incentivize your channel partners to accomplish what you've set out to accomplish for the brand."

INTERNAL MARKETING TO SUPPORT INTEGRATION

To be successful, however, special incentives or promotional products have to be tied back to performance that supports the brand promise. "Just to give someone spiff, or free products, or special incentives or trips without tying it back to performance that supports the brand promise is a waste of money," Mears says.

In fact, a research-based white paper on "Motivating Employees to Embrace Integrated Marketing" developed for the Forum for People Performance Management and Measurement at Northwestern University, suggests that a focus on internal marketing has a significant impact on the success of integrated marketing programs, and that some of the factors contributing to that success include the extent to which:

• Marketing campaign objectives are disseminated at all levels of the organization.
• All departments of an organization, including, PR, marketing, sales, customer service, and others, work together for the implementation of a marketing campaign.
• Customer contact employees are especially well informed of the marketing campaign strategy and message.
• The level of integration with other organizational functions and teams is measured as part of overall integrated marketing performance.

CASE HISTORIES

Universal Studios Hollywood. Universal Studios Hollywood launched a new brand campaign in the summer of 2006 entitled "Universal Studios Hollywood – The Entertainment Capital of L.A." to play off the well-known reputation of Hollywood as a global entertainment hub. All of Universal's products and offerings, including Universal Studios Hollywood, Universal Studios Hollywood theme park and CityWalk retail, restaurant, and entertainment complex, were included in the initiative. Its integrated marketing campaign delivered that message through 60-second TV ads, radio, and 30-second TV ads with a promotional offer – that a child under 15 got in free with each paid adult admission. The company also had an annual pass/frequent customer program that sent out e-mails with specific offers throughout the summer, and it made use of FSIs, direct mail, and its own website to deliver a coordinated message celebrating the many different reasons people had for coming to Universal Studios Hollywood.

Internally, the company supported its brand positioning through employee incentive programs linked to guest satisfaction scores during the campaign and through a peer-to-peer award program by which any employee could recognize any other employee with a card that said "you were caught in the act of doing something great" and which could be accumulated for prizes.

Panasonic Battery Corporation of America. To build a campaign around a new line of Oxyride batteries, Panasonic used an integrated strategy using a variety of non-traditional marketing components. Creating a set of cartoon characters known as the Oxymites to represent an anthropomorphized rendering of energy to appeal to the target market of 16 to 24 year olds and to supply a unifying theme, the company built a campaign featuring rock concert sponsorships, online games, T-shirts, a nightlife blog, and a mobile events tour – all supported by late-night TV advertising on cable networks like MTV and Spike.

Interactive elements like on-the-spot contests at the sponsored events that could be entered via text messaging also reinforced the brand message. Traditional marketing tools were also used. Oxymite promotional products including T-shirts, key chains, wristbands, etc., were distributed at concerts and campus events. Panasonic even offered downloadable dollar-off coupons via the Oxyride website, along with games, downloads, and "night-owl hipster blogs."

Doral. R.J. Reynolds Doral cigarettes brand is restricted from using broad-based advertising, and has long used direct and target-marketing tactics to keep its name in front of customers. Thanks to Reynolds' extensive customer database, Doral has a good picture of who its target customer is – a middle-aged, coupon-clipping, "red state" denizen with a penchant for collecting.

While Doral still uses live customer events to keep in touch with these customers and build a sense of community, a substantial amount of the brand communication between the company and Doral customers takes place via the Internet. To get customers to move online, the company first partnered with computer distributor PeoplePC to offer Doral customers discounts on desktop computers, a promotion advertised via direct mail. It also created a website that was easy for customers to navigate and to register. Today the online Doral community stands at 2 million, and the website offers bulletin boards and chat features in addition to coupons and smokers' rights information. Doral also offers on-package collectable cards featuring history or trivia, and customers can buy, sell, or trade the cards with others on the Doral website. The website also offers promotional deals on a variety of other merchandise from Zippo lighters to Omaha Steaks. Cigarette pack seals can also be redeemed for awards ranging from tools to electronics to craft supplies through a regularly updated reward catalog.

Pontiac. The "Pontiac Solstice Early-Order Program on The Apprentice" promotion, a multi-faceted campaign that reinvigorated brand awareness by utilizing TV advertising and the Internet, among other components, drove the brand's first 1,000 brand-new Solstices to be sold out within an unprecedented 41 minutes after first airing. By teaming up with NBC's "The Apprentice" TV program, the Solstice campaign offered Pontiac the opportunity to reach several of its target audiences and renew its imagery as a leading-edge automobile brand.

The promotion increased website traffic at Pontiac.com by 255%, resulting in an early order waitlist in excess of 40,000, and ultimately led more than 6,000 consumers (16% of online registrations) to visit a local Pontiac dealer and place an order. Remarkably, as a result of the promotion, the Pontiac Solstice sold out its entire production inventory months before the first car was available in the showroom thus earning the Promotion Marketing Association's "Super Reggie" for 2006 for "making the cash register ring."

ASSOCIATIONS

For related associations, please go to the Industry Association Listings page.

FINDING A SUPPLIER

Some suppliers will handle a single type of marketing program and integrate it with your in-house programs or those being handled by other suppliers. But there are also suppliers that will coordinate several types of marketing communications.

Promo magazine's Web site includes a "Source Book" for identifying promotion industry suppliers.

Promotion Marketing Association Inc.'s annual membership directory (for sale to members) includes an extensive list of suppliers. Call 212-420-1100.

For additional suppliers, go to #5920, Supplier Finder.

SEMINARS, CONFERENCES AND TRADE SHOWS

PMA Integrated Marketing Summit, sponsored by the Promotion Marketing Association, is a one-day program that brings together brands and agencies to delve into the challenges marketers face when planning, implementing and evaluating integrated marketing programs. For information go to www.pmalink.org.

DMA Annual Conference & Exhibition, sponsored by the Direct Marketing Association, highlights all that's new in the world of direct marketing: products, services, and media. Go to www.the-dma.org.

Annual DMB-Direct Marketing to Business, cosponsored by the Direct Marketing Association and Intertec, is designed for business marketers who want to make more effective use of interactive marketing. Go to www.the-dma.org.

National Center for Database Marketing, cosponsored by the Direct Marketing Association and Intertec, focuses on how to integrate marketing, technology, and information to create a customer-centric company. Go to www.the-dma.org.

BOOKS

Advertising and Promotion: An Integrated Marketing Communications Perspective, by Michael A. Belch, analyzes the role of individual communications media in an integrated marketing program and discusses objectives, budgeting, and evaluation. 1997. Irwin/McGraw-Hill.

Developing a Creative and Innovative Integrated Marketing Communications Plan: A Working Model, by James R. Ogden, is an interactive book with templates that permit the reader to develop a personal integrated marketing plan using the knowledge gained from the text. 186 pp. 1998. Prentice Hall College Div.

Enterprise One to One: Tools for Competing in the Interactive Age, by Don Peppers and Martha Rogers, explains how to use high tech and the Internet to learn more about your customers and build unbreakable customer relationships. 432 pp. 1999. Doubleday.

IMC: The Next Generation, by Don E. Schultz and Heidi Schultz, describes a five-step process for integrated marketing communications (IMC) by which organizations can accelerate returns by combining and coordinating all of the methods through which buyers and sellers come together. 320 pages. 2004. McGraw-Hill.

Integrated Direct Marketing, by Ernan Roman and Anne Knudsen, uses case studies to illustrate the benefits of integrating direct marketing into the total marketing mix. 223 pages. 1995. NTC Business Books.

Introduction to Marketing Communications: An Integrated Approach, by John Burnett and Sandra Moriarty, is a comprehensive study of organization structure, the changing marketplace, and ways to integrate each element of marketing communications into the overall plan. 800 pages. 1997. Prentice Hall College Div.

Marketing Communications: An Integrated Approach, by Paul Smith, a lecturer in marketing at London Guildhall University, aims to provide readers with a comprehensive framework to understand the individual elements of the marketing communications mix and their collective effectiveness. 450 pp. 1998. Kogan Page Ltd.

PUBLICATIONS

For a list of relevant publications, go to the Industry Publications page.

RELATED SMN ARTICLES

For additional information related to topics discussed in Integrated Marketing, see #1120, Customer Profiling and Modeling; #7024, Relationship Marketing Via the Internet; and #9105, The New Marketing.