Understanding the Impact of Synergy in Multimedia Communications

Abstract

Many advertisers adopt the integrated marketing communications perspective that emphasizes the importance of synergy in planning multimedia activities. However, the role of synergy in multimedia communications is not well understood. Thus, the authors investigate the theoretical and empirical effects of synergy by extending a commonly used dynamic advertising model to multimedia environments. They illustrate how advertisers can estimate and infer the effectiveness of and synergy among multimedia communications by applying Kalman filtering methodology. Using market data on Dockers brand advertising, the authors first calibrate the extended model to establish the presence of synergy between television and print advertisements in consumer markets. Second, they derive theoretical propositions to understand the impact of synergy on media budget, media mix, and advertising carryover. One of the propositions reveals that as synergy increases, advertisers should not only increase the media budget but also allocate more funds to the less effective activity. The authors also discuss the implications for advertising overspending. Finally, the authors generalize the model to include multiple media, differential carryover, and asymmetrical synergy, and they identify topics for further research.