Browsing by Author "Rutz, O. J."

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How online consumer segments differ in long-term marketing effectiveness
(Elsevier, 2014-11) Reimer, K.; Rutz, O. J.; Pauwels, Koen Hendrik; Business Administration; PAUWELS, Koen Hendrik
Online commerce gives companies not only a growing global sales platform, but also powerful consumers enjoying 24/7 availability, choice proliferation and the power to opt in and out permission-based communication. Unfortunately, our knowledge is limited on long-term marketing effectiveness in this space and on how it differs across customer segments. Managers appear overwhelmed by the combination of rich online data on hundreds of thousands of customers and the typical aggregate-level data on offline marketing spending. This paper is the first to investigate the long-term impact of coupon promotions, TV, radio, print, and Internet advertising across customer segments for a major digital music provider with over 500,000 customers. We first segment customers and subsequently analyze how these segments respond in the long run to different marketing activities when purchasing music downloads. Our findings reveal that the effectiveness of marketing differs across segments, while standard segmentation approaches fail to identify the most valuable catches in a sea of consumers. In contrast to empirical generalizations on consumer packaged goods, heavy users of digital music products are least sensitive to price and most sensitive to TV advertising and to multiple touch points. Light users, the majority of consumers, are price sensitive and tend to opt out of targeted communication. Our research enables managers in the digital media space to target high-value customer segments with the most effective actions.
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Paths to and off purchase: quantifying the impact of traditional marketing and online consumer activity
(Springer International Publishing, 2016-07) Srinivasan, S.; Rutz, O. J.; Pauwels, Koen Hendrik; Business Administration; PAUWELS, Koen Hendrik
This study investigates the effects of consumer activity in online media (paid, owned, and earned) on sales and their interdependencies with the traditional marketing mix elements of price, advertising and distribution. We develop an integrative conceptual framework that links marketing actions to online consumer activity metrics along the consumer’s path to purchase (P2P). Our framework proposes that the path to purchase has three basic stages–learning (cognitive), feeling (affective), behavior (conative)—and that these can be measured with novel online consumer activity metrics such as clicking on a paid search ads (cognitive) or Facebook likes and unlikes of the brand (affective). Our empirical analysis of a fast moving consumer good supports a know–feel–do pathway for the low–involvement product studied. We find, for example, that earned media can drive sales. However, we find that the news is not all good as it relates to online consumer activity: higher consumer activity on earned and owned media can lead to consumer disengagement in the form of unlikes. While traditional marketing such as distribution (60%) and price (20%) are the main drivers of sales variation for the studied brand, online owned (10%), (un)earned (3%), and paid (2%) media explain a substantial part of the path to purchase. It is noteworthy that TV advertising (5%) explains significantly less than online media in our case. Overall, our study should help strengthen marketers’ case for building share in consumers’ hearts and minds, as measured through consumer online activity and engagement.