Marketing refers to activities that promote and organize the distribution and sales of products to consumers. Specifying “cross-media” focuses on those activities that involve multiple media. As such, the term “cross-media marketing” can be used to describe two somewhat related phenomena: general marketing and promotion activities that cross media boundaries; and efforts to increase sales of content by distributing them in a variety of media forms. Increasing competition and the rise of new media forms have fragmented audiences and markets, making cross-media marketing more critical. The changing production and distribution cost structures brought about by technological developments have made it more viable.
Promotion is an important part of economic activities. Promotion helps reduce uncertainty in the marketplace, by providing consumers with information about products and services. Promotion is particularly valuable for information goods and services, as new product is continually introduced, and there is always a degree of uncertainty and variability concerning the value of information goods and services to individual consumers. Cross-media marketing, from the promotions perspective, refers to the use of multiple media for campaigns. Promotion targets potential consumers, who may or may not correspond with the audiences of specific media markets. Different media also have distinctive characteristics that may be more or less effective for particular promotional messages. As such, there was always a degree of cross-media marketing when it was appropriate for the particular product or campaign.
Trends Toward Cross-Media Marketing
Several trends are bringing cross-media marketing into greater use and prominence as a marketing and promotional tool. As competition and multiple media fragment audiences, utilizing multiple approaches across media becomes more critical in order to reach broad audiences. While fragmented audiences are valuable for those seeking targeted audiences, broad appeals need to reach across such fragments. Greater knowledge about the effectiveness of various techniques has allowed more sophistication in developing and using multiple message strategies across different media. The development and proliferation of integrated marketing approaches has also provided a focus on marketing across media. Increasingly fragmented audiences and increased competition has also acted to moderate the cost of media advertising. Technological developments, particularly the rise of the Internet and the world wide web, have opened up inexpensive alternatives for reaching audiences. These various factors have contributed to making cross-media marketing affordable, and a viable strategy.
A more competitive media environment also places a greater emphasis on promotion and branding in media products. Cross-media promotions help to reach new markets and audiences, developing interest in particular channels and products. Reducing uncertainty about the value of new products and content provides a competitive advantage for media firms. Branding can contribute to this significantly, by establishing a clearer perception of the type and value of content to be provided. In addition, brands can be established across media, which facilitates cross-promotion of particular content and channels.
Increased horizontal integration among media conglomerates, and increased marketing of content in various media forms also increases the value and likelihood of cross-media promotions. Firms that produce and/or distribute content in multiple media forms have an interest in promoting all media forms, thus increasing demand in all markets and not just for one particular outlet. They are also in a better position to utilize open availabilities for promotional efforts among “in-house” media markets, although there is still considerable value in promoting in external outlets.
Marketing refers not only to promotional efforts, but to the goal of increasing sales. One strategy for doing this is to market products in multiple forms or versions, and in multiple markets. There are sound economic motives for doing this with media products.
Economic Specifics Of Media Products
One of the distinctive characteristics of media products is that they comprise both the information content and the specific form(s) in which that content is distributed to audiences and consumers. A related characteristic is that if you focus on the information portion, it is relatively costly to produce (high first-unit or fixed cost), but after that, there is very little cost involved in duplicating the information itself (low marginal cost). There also tend to be fairly high costs in fixing that idea or content in a particular media form (high first-unit or fixed costs), and often fairly low per-unit costs in making copies and/or distribution (low marginal costs). Having low marginal costs encourages wider distribution, helping to keep average costs (and thus prices) down.
Until fairly recently, media markets were thought of as generally distinctive and tended to have limited direct competition. Differences in media were such that translation of content across forms could be very expensive. If media forms were fairly similar, content could be ported from one media market to another fairly easily (say from hardcover to paperback books or serialization in magazines, use of older movies as content for television broadcasts, or distribution in multiple geographic markets). Content could also be marketed across more distinct media types (books turned into movies), but that often required the idea to be reproduced in the new format, incurring significant new first-unit (translation) costs in the new media form.
On the down side, new forms and markets could impact on primary market sales, if audiences viewed them as close substitutes. Substitutability tended to relate to similarity in media forms. Hardbacks and paperbacks are fairly close substitutes, books and movies are not (in fact, very different media are closer to complements – where consumption of one form can increase demand for the other). Firms were often more concerned about the negative impact of cross-media marketing from close substitutes on primary market sales, than the incremental revenues to be gained from entry into new markets. Media were seen as substitutes, cross-media marketing often included other versioning techniques, such as quality differences, or time delays past the point where the primary market demand has peaked. For media seen as complements, the impact of cross-media marketing was generally positive. However, the often sizable translation costs, and the fact that often the other media was owned by someone else, reduced the likely benefits of cross-media marketing as a general strategy.
Firm and market structures also influenced the value and viability of cross-media marketing. Marketing across media made more sense to horizontally integrated media firms, who could engage in cross-subsidization and economies of scope, as well as more easily capture value across media outlets and markets in which they operated. On the other hand, media and market structures where content production and distribution were handled by the same firm experienced some disincentives to engage in cross-media marketing. While the production side tended to benefit, specific distribution systems might lose out to consumers choosing to access the content via alternative media.
Impact Of Technological Developments
Technological developments and structural market changes have made cross-media marketing increasingly viable, and it has become an important business strategy. As technological developments reduced many production and distribution costs, translation costs lowered. The same developments also contributed to several structural shifts in media markets. Changing cost structures, as well as general deregulatory policy shifts, have reduced barriers to entry, encouraging new firms to enter markets and conglomerates to expand. New technologies encouraged the development of new media forms, with declining costs encouraging rapid diffusion and adoption by consumers.
For example, the once unique medium of movies has faced new competition (as well as new potential distribution markets) from a continuing litany of new media forms: television, cable systems and networks, video cassettes, DVDs, direct broadcast satellites, and on the horizon, video-on-demand, IPTV systems (not to mention digital piracy through the Internet), and cell phones, and there is probably more to come. An increasingly deregulatory policy focus encouraged these structural changes, while allowing greater horizontal and vertical integration by some media firms. Horizontally integrated firms are particularly well-positioned to benefit from cross-media marketing, as they can capture the benefits from distribution across their media outlets.
As noted earlier, technological advances have tended to reduce a wide range of production and distribution costs. Digital technology in particular has helped to significantly reduce translation costs, contributing to convergence of media markets and systems. Combined with telecommunications advances resulting in the Internet, distribution costs over some networks approach zero, virtually eliminate geographical boundaries, and expand the scope of markets. The changing cost structure has enhanced the discrepancy between the initial production costs of the information, and marginal costs. Reduced translation costs also reduce the average cost for secondary markets, enhancing their value. This has increased the potential to profit from cross-media marketing. The rise of digital media systems that exhibit near-zero translation and distribution costs are particularly disruptive. The ease with which content can be translated and distributed across digital media regardless of the intent of the content producers and owners has raised concerns about digital piracy.
At the same time, the increase in competition within and across media has impacted on revenues within specific media markets. Many firms face shrinking sales and revenues from their primary media products, making it even more critical to develop new markets and revenue sources. Firms producing content, as opposed to those only distributing it, find the ability to market that content across as many media and markets as viable critical to their continuing success. As one example, the movie industry has shifted from having its primary revenues derived from theater ticket sales, to revenues from television and cable licensing, to the point where revenues from DVD sales provide the bulk of revenues.
Trends in technology suggest that cross-media marketing will be increasingly critical, both in terms of promotion and in the marketing of content. Old market boundaries are disappearing, and with them the ability of media firms to capture audiences and monopoly profits from exclusiveness. Competition and fragmented audiences spreading their attention across a wide range of media (and increasingly multitasking) increase the value of promotion, and the need for cross-media promotion and marketing efforts, for many products. Changing cost structures suggest that content will be increasingly available across a range of media forms, and if producers do not market the content across those media forms themselves, they face losing that value to those who do (legally or not).
Currently, prospects for both aspects (advertising across media, and distributing content across media) look promising. Bruner (2005) notes the shift in advertising markets and the rise of cross-media advertising in his report on online advertising. The European Commission has been actively promoting the potentials of cross-media marketing in the emerging digital media marketplace, funding a variety of projects and consortia (e.g., Boumans 2004) as part of its information society initiatives.
- Boumans, J. (2004). Cross-media. E-content report 8, ACTeN. At http://acten.net/cgibin/WebGUI/www/index.pl/cross_media, accessed August 24, 2007.
- Bruner, R. E. (2005). The decade in online advertising: 1994 –2004. Research report, DoubleClick.com. At http://www.doubleclick.com/us/knowledge_central/documents/RESEARCH/dc_decaderinonline_0504.pdf.
- European Commission (2007). Europe’s information society. At http://ec.europa.eu/information_society, accessed August 24, 2007.
- Spinellis, D. (ed.) (2003). Cross-media service delivery. Norwell, MA: Kluwer.
- Vizjak, A., & Ringlstetter, M. (eds.) (2003). Media management: Leveraging content for profitable growth. Berlin: Springer.