Effectively Using Online Marketing Channels

Internet marketing is in an ever changing state of development with both successes and failures. At times it can be a cost effective approach to reach out to increasingly Internet savvy consumers but at other times the total online marketing mix may be incorrect leading to wasted resources.  Research by Li and Kannan (2014) delves into online channels, visits and purchases. Their study helps in understanding how channels work together to create effective practices.

Marketing channels range but often include direct URL, searches, referral sites, emails, and banner ads. It is also possible that customers may choose a display impression but never actually click upon it. Each channel has varying effectiveness in terms of its ability to encourage customers to make a purchase.  In other instances these channels may be used in combination along with newer mediums not yet incorporated into the mainstream. 

In any online marketing campaign there costs of effort and cognitive costs. Finding the necessary information to make the purchase has a cost factor (Shugan, 1980). If this information is difficult to find, doesn’t move to a purchase quickly, and is difficult to navigate customers may deem these costs as too high and simply move onto other sites without making a purchase.  The process of finding and purchasing should be smooth, simple, and use the least amount of effort.

There are also cognitive costs associated with the processing of information (Johnson, et. al., 2003). All processing of information takes considerable energy. Difficult to understand pages with irrelevant information raise cognitive costs. Marketing should encourage faster and simpler mental processing based upon the merits of the product and the audience. There are natural differences in the type of customers attracted. 

The authors found that it is necessary to estimate the effects of visiting and purchasing to find appropriate avenues of raising click to purchase rates. The channels often work together but those firms with strong brands can obtain as much traffic through organic searches as they can through paid searches. Paid searches constitute around 50% of online marketing expenditures but if removed customers switched to organic searches. Email and organic searches have a longer impact than click through ads and should have greater emphasis in a marketing campaign. Likewise, retargeting click through ads seemed to be less effective over time.

Johnson, E. et. al. (2003), Cognitive Lock-In and the Power Law of Practice. Journal of Marketing, 67 (April), 62–75.

Li, H. and Kannan, P. (2014). Attributing Conversions in a Multichannel Online Marketing Environment: An Empirical Model and a Field Experiment. Journal of Marketing Research, Vol. LI

Shugan, Steven M. (1980), “The Cost of Thinking,” Journal of Consumer Research, 7 (2), 99–111.

Using Cognitive Risk Engagement in Marketing Messages

Marketing is a fundamental function of any business or organization. Without a strong marketing mix and design maximization revenue will be limited. A study by Zhang & Buda (1999) tested the effectiveness of message framing and need for cognition to determine which types of people certain advertisements appeal. Most demographics are based in tangible concepts such as locality and income but the psychological depth of processing advertising has not been fully explored. 

All marketing messages are part of a communication. It follows a process where the sender encodes information, uses a medium (i.e.) media, is distorted by environmental noise (internal or external), decoded by the receiver, that elicits a response (i.e. to purchase or not purchase) (Yehsin, 1999). The depth by which person decodes and interprets information is important for determine marketing effectiveness. Those with a need for higher or lower cognitive engagement will naturally have different responses. 

Message framing is a concept that explains how the word choices are formulated to make positive or negative impressions in the listener’s minds. A positively framed message emphasizes the products advantages while a negatively framed message highlights the losses that result from not taking action. Products become evaluated on their economic gains and losses while mediated by consumer personality.

How these messages are framed has an important impact on the reaction of viewers. Prospect theory helps understand that risk aversion and risk prone behaviors are a result of how the message is framed (Kahneman and Tversky, 1979). When messages are positive viewers may think in terms of avoiding risk while when a message is negative people are likely more risk-prone in avoiding loss. Negative messages seem to have a greater influence in attracting interest. 

The need for cognition is another variable in the marketing mix. Cognition is associated with the ability to think about the message and process it deeper than those who have a lower need for cognition (Andres, et. al., 1990).  There are some people in the environment who want critical information to gain benefits and process information deeper while some process information at a lower rate and make decisions based on less logical motivations.  

Those with higher levels of education are likely to be more focused on the gains (i.e. positively framed messages) while those with less education are more respondent to negatively framed messages (Smith, 1996). Educated managers and experienced businesspersons are likely to pay attention to more critically oriented positively framed messages. A higher value product will require additional cognitive engagement when compared to lower priced convenience products. 

The researchers found through their study of 160 participants that framing has a significant influence on consumer’s response. Messages should be framed by cognitive predispositions of the target audience. Those with a lower need for cognition are more susceptible to negatively framed messages while those with a higher need for cognition are more receptive to positively framed messages. Expert opinions are supported by those who have lower cognition levels while such opinions are less useful for those with higher level cognition.  Higher cognition people focused on the message core while lower cognition people focused on the message context. 

Comment: Demographics and culture can change the way in which people understand and react to marketing messages. This leaves some difficulty finding ways to market within different cultures. Since cognitive engagement, or lack of cognitive engagement, is a universal aspect of being human it is less subject to cultural decoding bias. Business to Business marketers may want to focus on high cognition marketing (the message) while retail and convenient product markets may want to focus on low cognition marketing (the context).

Ahang, Y. & Buda, R. (1999). Moderating effects of need for cognition on responses to positively versus negatively framed advertising messages. Journal of Advertising, 28 (2).

Andrews, et. al. (1990) A Framework for Conceptualizing and Measuring the Involvement Construct in Advertising Research," Journal of Aduertmng,19 (4), 27-40.

Kahneman, Da. and TverBky, A. (1979), Prospect Theory: An Analysia of Decision Under RiBk., Econometrica, 47, 263-291.

Smith, G. (1996). Framing in Advertising and the Moderating Impact of Consumer Education. Journal of Advertising Research, 36 (5), 49-64.

Yehsin, T. (1999). Integrated marketing communications. Butterworth Heinemann, Oxford.

Poem: Consumer Choice of the Subconscious

Consumer choice is more than a fleeting boast,

Subconscious Marketing and Consumer Behavior

It carries the wonderment of a self-toast.

Buying the right product here and there,

Is better than hoarding with nothing to spare.

It is the art of self expression can’t you see,

It expresses the deep secrets of you and me.

Retailing should not run wild or on high-speed rail,

It is more like a treasure hunt for that right sale.

In your pocket you might not have much,

But there is no need to use your credit card and such.

Frugal shopping is nothing like a trick or stunt,

It is the rare find that gets you the goal post punt.

Back to that secret I spoke highly of,

Well...that’s your subconscious that just went above!

Author: Dr. Murad Abel