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  • Research proposal for Woedend! Advertising Agency Final assignment for Trends & Strategies in the creative industries Erasmus University Rotterdam By Elise Adriana van de Velde Studentnumber: 336130 Course code: CC3201-09 Docent: M. Leendertse January 15th, 2010
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde Management Summary The question that I will answer in this essay is: How can each type of medium (Internet, television and gaming) contribute to a good advertising campaign, and what is the best mix of these media, with keeping in mind the brand and the digital environment we are in now? The mass media environment is changing due to digital television and the growing capabilities of the Internet. TiVo makes it harder to advertise via television commercials. But while the number of television on-spot advertising is decreasing, sponsoring of television programmes or movies is increasing. But when one mediums influence decreases, another one stands up to take its place. The Internet is a great way to advertise, even in a more effective way than television. It is easier to personalize the advertisements and to really engage with, interact with and reach your target group. Product placement in gaming is an effective and profitable way of online advertising. Do that in combination with an online community and you reach a lot of people and take care of your customer relationships. 2
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde Content Management Summary 2 Introduction 4 1 New, Digital Media 5 2 Online gaming 7 3 The end of mass media 9 4 Conclusion 11 5 Further Research 12 6 Financial proposal 13 Appendices Appendix 1 – Sources Appendix 2 – Critical reflection 3
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde Introduction Integrating television, internet and gaming with keeping in mind the brand. That was the case study of Bas van Berkestijn of Woedend. If you really want to engage those three media with a brand, you have to know how these media work and what their strong and weak characteristics are, in order to make a mix that will successfully market the brand in question. The most important thing is to show the brand in everything you do, whether it is gaming, television or internet. The next most important thing, or maybe they share first place, is that you have to be aware that the advertising environment is changing due to the ‘new digital age’. The question that I will answer in this essay is: How can you integrate the Internet, television and gaming in your advertising campaign in the new, digital age, with keeping in mind the brand? There is no way of answering this question correctly, without considering the digital media that are making their way into the daily life of consumers. The advertising environment is changing since the introduction of ‘new’ or digital media. This brings opportunities as well as threats. In the next chapters I will explain what these opportunities and threats are. 4
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 1 New, Digital Media Since consumers are able to record television programmes or movies with their dvd- recorders or TiVo, they are also able to skip advertisements. According to a TNO- rapport on advertising in the digital age, written by A. Leurdijk et al in 2005, 75 % of advertisements during a recorded programme are being skipped, which is 30 % of the total of advertisements. Although advertising loses viewings on television commercials, there are a lot of other new ways to reach their audience. When commercials are not longer a good way to advertise, there is still sponsoring. TNO expects the number of commercials to drop on the long-term while the number of sponsoring and internet will grow. Table 1. Digital television in the Netherlands, 2008 vs 2007. Provider 2008 Q4, amount 2008 Q4, market 2007 Q4, amount 2007 Q4, market share share Ziggo 1.150.000 28,6 834.000 25,8 Canaal Digitaal 825.000 20,6 750.000 23,2 KPN 775.000 19,3 497.000 15,4 UPC 649.000 16,2 550.300 17,0 Tele2 190.000 4,7 157.000 4,9 Other 425.000 10,6 444.100 13,7 Totaal 4.014.000 100 3.232.400 100 Source: Telecompaper, maart 2009 The world is still at the beginning of the changing environment in the ‘digital age’. That is why many scientists, researchers and professionals agree with the statement: ‘it will be a evolution, not a revolution’ as also J. J. L. Nagtegaal (2005) puts it in his thesis about the changing digital television environment. It means that it will take time for people to adjust to and adapt all the new technologies in their lives. Media habits are very integrated in the lives of consumers, they will not change that over day and suddenly use all the technologies available (Croteau & Hoynes, 2003). Television came a long way from one television in a block or street, to sometimes more than 3 televisions in a household. That also did not change over time. But, even though people are giving marketers and engineers the time to also adjust to the new digital age, it is important to be aware of the rapid changes. You have to be on top of everything so you can be the best, not the first (because you are already too late), in providing solutions for your clients according to these digital opportunities. In the United Kingdom they are ahead of us. In the first semester of 2009, there was more spend on online advertisements than on television advertisements. 5
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde The Internet Advertising Bureau published their first forecast on online advertising spending in August of 2009. With keeping in mind that there is an economic recession, which makes it more difficult to spend more on advertising strategies which are not yet proven successful by (empirical) research, it is good to see that most of the uses of formats did not shrink. Table 2. Use of formats 2008 vs 2009, of 15 European countries The IAB forecasts that mobile advertising will grow in 2009, unfortunately the numbers are not in yet at the time of writing this essay. Additionally, in another press release the bureau mentions that half of media buyers plan to increase spending on online advertising, especially on video advertising. Furthermore, the digital age can give you the opportunity to be a ‘real personality’ as a brand (J. LePla & L.M. Parker, 2002). You can interact with your costumers, they can contact the brand much more easily than ever before and when you do it right, the costumers will develop an emotional relationship with the brand. People always want to be apart of something, they want to fit in. There are already many online communities, also provided by brands. For example the Nike community, where women competed against men for running the most miles. What looks like a simple concept, is actually a well-thought-of concept which will enhance the costumer relations of Nike. Amazon.com also uses interactivity to enhance the costumer relations and also to improve the quality of their services, by using the feedback that users post on the Amazone website. LePla states that it is important that you provide a new experience for the users, so they want to participate instead of surfing further 6
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde to your competition. 7
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 2 Online gaming It looks like nowadays every brand incorporates a game into its marketing strategy. Branded online gaming is growing rapidly. According to Ann M. Marck, in Mediaweek (2004) the reason for this growth is that marketers are looking for something new. Traditional ways of advertising via television are becoming less and less effective, since the introduction of (digital) recording devices which allow the viewer to skip commercials. Games, on the other hand, capture the time of the user for a longer period. With a successful brand, and a successful game, you can come a long way. Scott Singer, head of Deloitte – New York, says that the mix of audio, video and a message in the way of content is a big potential revenue opportunity. Costumers often feel that an advertisement is drawn upon them, even when they do not want to be involved with the brand or advertisement, they see it anyway on television or hear it on the radio. Dave Madden, who has worked with Nike and Sony, says that a game gives you the opportunity to teach people about your brand and to get them excited, without giving them that feeling. With adding a competitive feature to the game, you will even get people to pay for the game, instead of investing a lot in a free game. So when your first thought will be: everybody wants free games, the opposite is true. Another pointer that will help people like your game, is that the game matches the brand and on the other hand, the brand should not be the most important thing in the game. It should not be too obvious, because then your costumers will get that feeling again. Researchers state that advertising in for example a basketball-game, is more effective than advertising in a real basketball-game which is being broadcast on television. This is because when a costumer is playing your game, you know they see the ad. They are much more actively involved with the game, instead of watching television, which is more passive. It occurs often that people sit amongst each other, talking, getting another snack etc. and then there is a chance they will not notice the ad. Coca Cola, who did their own research and only gave out the outcomes, found that when players played for 35 minutes, purchase intent boosted. Games are especially attractive for men between the age of 18 and 34, although games 8
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde still are in fourth place after television, radio and the Internet. Of course, when you see games as a part of the Internet, the hierarchy will change. But also women play a lot of games, and like to do that online as well. 40 % of all internet users play online games, from which 43 % is female and 35 % is younger than 18 years old (J. Plummer et al, 2007. Women like other games than men, and youngsters in their turn favour other games than older people. So to attract a specific target group, you have to make a game adjusted to their needs, which is the same when you make a commercial for television or radio. The opportunity for marketers is the ability to follow costumers on the web and via purchase behaviour. But you have to stand out with your game. As was already said in the beginning of this chapter, almost any brand has an online game. If you want to be successful, you have to do it in such a way you will get noticed and be favoured above the other online games. The secret is to create an emotional bond with the costumers, to communicate with them and interact with the ad, instead of passive viewing. When talking about online gaming, the new web 2.0 or even 3.0 environment comes to mind. This environment is a social environment, where peer to peer production is a main characteristic. In games, this can also be integrated. The examples of Little Big Planet and World of Warcraft, where gamers can make their own levels, characters, weapons, etc., has been named numerous times. This way of gaming can give an extra dimension to the earlier named emotional bond with the game, and eventually the brand. Howard Rheingold (2005) explains on TED.com how people always have had an urge to live and work in groups. In his presentation he takes us back to the time when people were hunters. I will not go into that now, but the most important point of his presentation is that the most successful concepts of this time (Google, Amazon, Linux, eBay, Wikipedia) have not become successful through individual economic action, but through collective action to make help each other. So apparently, as he puts it, it is in our nature to work together as a group. As p2p creation has already proven itself successful, with the biggest example being Wikipedia, it is likely to believe that making an online game where the user can make its own content will work. Of course this needs more research to empirically construct it, but it is something to seriously consider because it could give your game that extra dimension, what makes people play your game instead of others. 9
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 3 The end of mass media Seth Godin (2009) talks on TED.com about the end of mass media. He describes how people always want to make big changes. Until now we have done that, first through money and assets, and later through mass media. Now, he claims, the end of mass media is near. Thanks to the Internet, we can connect with the whole world. ‘Tribes’ as he calls it are everywhere to be found and joined. People want to connect, as also Howard Rheingold already said. We want to spread our ideas, and once a leader finds something he wants to change, we do this together. Like Al Gore, he does not change the world’s climate on his own. He gets help from thousands of people who spread his word with and for him. Once people care enough about a certain issue, they will join ‘the tribe’ and follow ‘the leader’. (Seth Godin, 2009) Mass media will exist for quite some time longer, because as already is said, things do not change over night. But now with the Internet, which allows companies and producers to reach smaller groups of people with a certain mindset or interest much more easy than before, the environment will change. Already with digital television and internet television, it is easier to reach only your target group, instead of having to pay a lot of money to broadcast your commercial to a large group, which is much more than the target group you actually want to reach. Blogger Ted Holmes states that by 2015 commercial television will be over, due to ‘cheap bandwidth and computer processing power, combined with powerful video compression’. Narrowcasting via digital television is already on its way to this prediction. Glossy magazines are on their way of providing personalized digital versions of their magazines, with adjusted advertising. This could also be the case with television, although I am wondering if this already will be in five years, rather in twenty years. Peter Hirshberg (2007) also talks about this on TED.com. In his talk he explains why the Internet is better than television. Some teenagers in his presentation say that the Internet is way more fun than television, and that they did not want to be working in a television network because they make no money anymore. According to the statement of Ted Holmes they will be right one day. Peter Hirshberg explains that 10
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde everyone with a computer can be a producer nowadays. Traditional media who make animations are much more expensive than the exact same animation made by an amateur. As online advertising becomes much more interesting and profitable, the shift from television to the Internet is inevitable, ruling out television at one time. With the coming of online advertising, product placement in games, and online videos it is becoming easier to follow your target group. You can see what other products they like, what their interests are, how they spend their leisure time, etc, etc. And with so many new technologies on the way, it can be that in twenty years, everybody will be provided with personalized television, internet websites, games, etc. with suited advertisements, which in my opinion is every advertisers’ dream: reaching exactly the type of people for your product. Another argument that is interesting as described by M. Lister (2009) is that the media might be new, but the content is not. This is also said by M. McLuhan. The new medium uses the content of the old medium. This has been the case by movies, which used novels and stories, and television uses movies, now the Internet uses television series and movies. Of course there are new things to the Internet, like online gaming and social media such as MSN, twitter and hyves. But even though people are now being entertained by a new medium, you are still able to reach the same people, only through another way than before. And this medium even gives you more opportunities. 11
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 4 Conclusion The mass media environment is changing, that is for sure. The way that it is changing and at which pace is not clear yet. We know that certain technologies such as TiVo make it harder to advertise via television commercials. But while the number of television on-spot advertising is decreasing, sponsoring of television programmes or movies is increasing. Commercial television is not yet on the end of its profitable age, but critics say that it will come to an end. But when one mediums influence decreases, another one stands up to take its place. The Internet is a great way to advertise, even in a more effective way than television. It is easier to personalize the advertisements and to really engage with, interact with and reach your target group. So, how should you interact with this changing media- and advertising environment? First of all, you should invest in research. Many things are not clear yet. There are things that have already been researched, but most advertising agencies are lacking knowledge of how advertising in a digital age truly is effective. For now, product placement in gaming is an effective and profitable way of online advertising. Do that in combination with an online community and you reach a lot of people and take care of your customer relationships. 12
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 5 Further Research As I already stated in the previous chapter, there has not been done much research yet. At least not in comparison to the large amount of research that is dedicated to the Internet, television, gaming and advertising as separate divisions. As it is all coming together now, the research should be updated. There is research available but the largest part is dated before 2007, before the economic recession, which also is likely to have an influence on the rapid development of technology and on empirical research. That is why I recommend to do research on these topics: - The effect of online branding in the digital age; - The effect of online communities on the costumer relations; - How to best integrate games into your marketing campaign; - Social media: a way to advertise or not? (not discussed in this essay, but something you should think about, because critics say it will never work); This research has to be done by the following research methods: - Literature research - Survey research 13
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde 6 Financial proposal Because of the large amount of research that has to be done on the still quite unknown area of digital media, there will be a team of researchers to execute the research. The research will be done only by junior researchers, the team exists of 3 researchers. Each researcher charges € 20,- an hour. The research consists of two parts: survey and literature research. The survey research will be for determining the effects of online branded gaming, advertising in social media and the effects of online communities on profits but also on costumer relations. For these topics there will also be done literature research of course. How you can best integrate games into marketing campaigns will be researched by only literature research and might be tested via experiments or cases. This depends on how you as Woedend want us to research it. Estimated costs: Topic Hours/Costs (incl. V.A.T.) The effects of online branded gaming Literature research 50 hrs / € 1.000,- Survey research 30 hrs / € 600,- Advertising in social media yes/no Literature research 40 hrs / € 800,- Survey research 20 hrs / € 400,- Effects of online communities Literature research 20 hrs / € 400,- Survey research 30 hrs / € 600,- Integrating games into marketing Literature research 50 hrs / € 1.000,- All Total 240 hrs / € 4.800,- 14
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde Appendix 1 – Sources Croteau, D. & Hoynes, W., 2003. Media/Society. London, Sage Publications Ltd. LePla, J., L.M. Parker (2002) Integrated Branding. Kogan Page Limited, London, United Kingdom. Leurdijk, A., et al. (2006) TNO-rapport. Reclame 2.0. De toekomst van reclame in een digitaal televisielandschap. TNO, Delft. Lister, M. et al (2009) New Media. Routledge, New York, USA. Mack, A.M. (2004) Gaming scores with advertisers. In: Mediaweek, vol 14, iss 26. page 18-20. ABI/INFORM Global Nagtegaal J. (2005) Baas over de buis. De kansen en bedreigingen voor reclame bij een transformatie van analoge naar digitale televisie. Faculteit der Historische Kunstwetenschappen, Erasmus Universiteit Rotterdam. Plummer, J., et al. (2007) The online advertising playbook. John Wiley and Sons, Inc. Hoboken, New Jersey. TEDtalks via TED.com: Seth Godin on the tribes we lead. (2009) Peter Hirshberg on TV & Web: why the world wide web is better than television. (2007) Howard Rheingold on collaboration (and group nature). (2005) 15
  • Research proposal for Woedend! January 15 th, 2010 by E.A. van de Velde Appendix 2 – Critical reflection For me it was very interesting to write this proposal for Woedend. During the weeks I was getting more and more curious about the new media and what the future will bring us. In this essay I tried to stay close to the present day. Sure, technology will evolve in such a way that thing might happen which are far from what I wrote down for this proposal. But on the short-term, I really think Woedend can enhance their ‘advertising game’ with more in-depth games with a competition or other factor in it, instead of a simple shooting game for Doritos. I would have liked to gone more into the combination of the three types of media. The lack of relevant of literature made me decide to leave this out of the essay. I would also have liked to have found relevant researchers to point out the research they have done and how this could be the starting point of my research for Woedend. But about the points that I have picked for my research, are written only a few articles and maybe a few books where the subject is mentioned. To be honest, I found my true inspiration for this pitch in the TED talks. These people think about things that maybe are not fully researched yet, but it is very inspirational. 16