Understanding and Creating Media Engagement

Dr. Edward C Malthouse Sills Professor of Integrated Marketing Communication Professor Industrial Engineering, Management Science

Medill School of Journalism, Media, IMC

Customer engagement

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What is engagement?

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What is engagement? o Marc (1966): How disappointed a person would be “should

the magazine stop publication.” o Davina Kent, TiVo: “Engagement is the average time spent in

a branded experience” o Mark McLaughlin, Yahoo!: “Operationally, Yahoo! defines

Engagement on two dimensions: Loyalty (retention of unique users…) and usage [time, page views, etc.]”

o Ad Week panel: a result of delivering messages that are meaningful, resonate with consumers, and make them passionate about and involved with the brand (Smith 2014)

o ARF: a mental activation process. Activation is where engagement begins and, depending on the meaning made by the consumer, develops via the process of co-creation (Plummer, Zaltman, & Mast 2006)

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Psychological state o Hollebeek (2011a; p. 787): “the level of customer’s motivational,

brand-related and context-dependent state of mind”

o Bowden (2009): a psychological process driving loyalty

o Higgins and Scholer (2009, p. 102) “a state of being involved, occupied, fully absorbed, or engrossed in something”

o Calder/Malthouse article: collective experience—thoughts and

beliefs about how a brand contributes to a personal goal

o Sprott, Czellar, and Spangenberg (2009): an individual trait reflecting one’s propensity to include brands as part of their self-concept

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Behavior o Van Doorn et al. (2010, p. 254): a customer’s behavioral

manifestations that have a brand or firm focus, beyond purchase, resulting from motivational drivers”

o Verhoef, Reinartz, and Krafft (2010, p. 248): “a behavioral

manifestation toward the brand or firm that goes beyond transactions”

o Kumar et al. (2010, p. 297): “active interactions of a customer

with a firm, with prospects and with other customers, whether they are transactional or nontransactional in nature”

o Bijmolt et al. (2010): three key behavioral manifestations of

engagement are WOM, co-creation, and complaining behavior

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Both psychological state and behavior o Vivek et al. (2010, p. 133): “may be manifested cognitively,

affectively, behaviorally, or socially” o Hollebeek et al. (2014; p. 154): “a consumer's positively valenced

brand-related cognitive, emotional and behavioral activity during or related to focal consumer/brand interactions”

o Brodie et al. (2011): “a psychological state that occurs by virtue of interactive, co-creative customer experiences with a focal agent/object (e.g., a brand) in focal service relationships. It … exists as a dynamic, iterative process within service relationships that cocreate value. It plays a central role in a nomological network governing service relationships in which other relationship concepts (e.g., involvement, loyalty) are antecedents and/or consequences in iterative CE processes. It is a multidimensional concept subject to a context- and/or stakeholder-specific expression of relevant cognitive, emotional and/or behavioral dimensions”.

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The Engagement Ecosystem

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Brand Actions

Other Actors Brand Dialog Behaviors

Shopping Behaviors

Brand Consumption

Customer Brand Perceptions

Satisfaction, Loyalty,

Lifetime Value, Consumer value

The Engagement Ecosystem

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Brand Actions Brand strategy, product, price,

promotion, distribution

Other Actors Other consumers,

the media, regulators, etc.

Brand Dialog Behaviors

Social media, Twitter, FB,

Reviews, YouTube

Shopping Behaviors

Search, Shop logs, purchase records

Brand Consumption

Time, Frequency, Completion

Customer Brand Perceptions

Make me smarter Social, Identity, Civic, Hedonic

Satisfaction, Loyalty,

Lifetime Value, Consumer value

The Engagement Ecosystem

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Brand Actions

Other Actors Brand Dialog Behaviors

Shopping Behaviors

Brand Consumption

Customer Brand Perceptions:

“Experiences”

Satisfaction, Loyalty,

Lifetime Value, Consumer value

How do media products create value?

o Uses and gratifications theory (back to 1950s): information, identity, social, entertainment/hedonic

o Media experiences – the thoughts and feelings about how an object contributes to a personal goal (Calder/Malthouse articles and chapters)

o Also see Larivière et al. (2013) “Value Fusion” paper

The Engagement Ecosystem

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Brand Actions

Other Actors Brand Dialog Behaviors

Shopping Behaviors

Brand Consumption

Customer Brand Experience

Satisfaction, Loyalty,

Lifetime Value, Consumer value

The second, third and sometimes fourth screen is becoming a fundamental extension of the viewing experience. Megan Clarken

EVP, Nielsen Global Watch Product Leadership

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The Rate of Change Away From Live TV is Accelerating

Live TV

-7% PC

+18% Smartphone

+110%

Tablet

+158%

Q1 2014 - Q1 2016

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TV and Social Media Interactions are creating a Dynamic Engagement Ecosystem

39% TV viewers keep up with shows so that they can

join social media conversations

33% TV viewers are more

likely to watch programming if it has a

social media tie

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The Engagement Ecosystem

Brand Actions

Customer Engagement

Behaviors

TV Consumption

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The Engagement Ecosystem

Brand Actions

Customer Engagement

Behaviors

TV Consumption

Twitter volume Twitter sentiment Twitter richness

#Live viewers, #Recorded viewers

Tune- in Advertising Tweeting

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Simultaneous System of Equations for Estimation

o Where: Y1: The logarithm of the size of the live audience - log(NLive) Y2: The logarithm of the size of the recorded audience - log(NRec) Y3: The logarithm of the number of tweets from viewers - log(NTweetViewers) Y4: The logarithm of the number of tweets from the TV Show - log(NTweetShow) Y5: The logarithm of the advertising effort of the TV Show - log(Advertising) X1: Number of tweets with positive sentiment - Positive tweets X2: Number of tweets with negative sentiment - Negative tweets X3: Tweet richness score - Richness t: a weekly trend variable starting from the first week the show was aired

1 11 12 , 13 , 14 , 15 , 16 , 17 , 18

2 21 22 , 23 , 24 , 25 , 26 , 27 , 2

1 2 3 4 5 1 2 3 1

2 1 3 4 5 1 2 3

log(Y ) log(Y ) log(Y ) log(Y ) log(Y ) X X X

log(Y ) log(Y ) log(Y ) log(Y ) log(Y ) X X X

st st s t s t s t s t s t s t s

st st s t s t s t s t s t s t

t uα β β β β β β β β

α β β β β β β β β

= + + + + + + + + +

= + + + + + + + + 8

3 31 32 , 33 , 34 , 35 , 36 , 37 , 38

4 41 42 , 43 , 44 , 45 , 46 , 47

2

3 1 2 3 5 1 2 3 3

4 1 2 3 5 1 2 3

log(Y ) log(Y ) log(Y ) log(Y ) log(Y ) X X X

log(Y ) log(Y ) log(Y ) log(Y ) log(Y ) X X X

s

st st s t s t s t s t s t s t s

st st s t s t s t s t s t

t u

t uα β β β β β β β β

α β β β β β β β

+

= + + + + + + + + +

= + + + + + + + , 48

5 51 , 1 52 , 1 53 , 1 54 , 1 55 , 1 56 , 1 57 , 1 58

4

5 1 2 3 4 1 2 3 5log(Y ) log(Y ) log(Y ) log(Y ) log(Y ) X X X

s t s

st s t s t s t s t s t s t s t s

t u

t u

β

α β β β β β β β β− − − − − − −

+ +

= + + + + + + + + +

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Data • Set-top box data from a cable company with over 1 million subscribers • Focused on a TV show as the unit of analysis • Extracted TV viewing data for 31 drama and entertainment shows

launched in 2015 from a sample of 191,222 devices • Of the 31 shows, 10 were canceled and 21 were renewed • Aggregated total number of live and recorded viewers each week t for

each TV show s • Merged weekly advertising data from Kantar for every TV show • Aggregated Twitter measures for every show each week – volume,

sentiment and richness for tweets by account (TV show) and viewers

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Descriptive Statistics for S x T=306 observations

Variable Mean SD Nlive 3,335.60 3240.72 Nrec 2,861.13 3,079.91 Advertising 29.80 149.50 NTweetShow 63.14 65.88 NTweetViewers 1,139.20 1,639.29 Positive Tweets 10.04 1.82 Negative Tweets 1.26 0.60 Tweet Richness 1,437.56 1,766.06

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Results

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Size of time-shifted audience increases

with size of live audience!

Time-Shifted Viewing

Live Viewing

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Tune-In Advertising from a TV show makes people

record it and watch later!

Live Viewing Time-Shifted Viewing

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Tweets from a TV show make

people want to watch it live

Time-Shifted Viewing Live Viewing

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Time-Shifted Viewing Live Viewing

Negative sentiment on social media makes people want to

watch shows live

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Implications • Motivations for time-shifted viewing could be

different from live-viewing • Negative sentiments have a much stronger effect

than do positive sentiments • Advertising does little to influence desired

outcomes such as live-viewing or engagement on Twitter

• Tweeting by TV Shows can have a detrimental effect on time-shifted viewing

• Audience size does not seem to increase with time – TV shows have to acquire a critical mass of viewers from week 1 MEDILL IMC | SPIEGEL RESEARCH CENTER

Opportunities for Future Research & Collaboration

Content providers

Predict success or failure of TV shows

Leverage social media to drive engagement

The Effect of POEM from

a IMC perspective

Advertisers

Viewer-based segmentation and targeting

• Market Basket Analysis • Native Advertising Tracking behavior across

channels (media & retail)

Programmatic Advertising

Content Distributors

Redefining value – CLV of different segments

Omnichannel strategy Second chance for

unsuccessful shows Skinny bundles!

Viewers Cord loyalists, Cord cutters, cord shavers, cord nevers Media consumption patterns over time • Live/recorded • Multitasking • Genres • Social viewing

Response to interactive ads, marketing communication

If content is king, then distribution is queen!

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THANK YOU! ecm@northwestern.edu

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