Adoption rate of new media
Just 40 years ago, TV was considered a "new medium" and 15 years ago, cable wore the same badge. During their respective early days, each of these "new media" had to prove their value to earn a spot on the media plan. Today the Internet finds itself in the same position. CEO's, brand managers, ad agency account managers, and media planners are asking the same question, "Does Internet advertising belong on your media plan?" (Mediaweek, 1997). The answer is undoubtedly yes, regardless of the brand or the category in which the brand competes. There are several facts that explain the reason that Internet advertising is and should be on everyone's media plan (Mediaweek, 1997). --http://www.ciadvertising.org/studies/student/99_summer/hyojin/respaper/intro.html [1999|Oct 2004]
Diffusion (business) [...]
Diffusion is the process by which a new idea or new product is accepted by the market. The rate of
diffusion is the speed that the new idea spreads from one consumer to the next. Adoption is similar to
diffusion except that it deals with the psychological processes an individual goes through, rather than an aggregate market
process.
The rate of diffusion is influenced by:
- the product's perceived advantage or benefit
- riskiness of purchase
- ease of product use - complexity of the product
- immediacy of benefits
- observability
- trialability
- price
- extent of behavioural changes required
- return on investment in the case of industrial products
There are three theories that proport to explain the mechanics of diffusion:
- 1) The two-step hypothesis - information and acceptance flows, via the media, first to opinion leaders, then
to the general population
- 2) The trickle-down theory - products tend to be expensive at first, and therefore only accessible to the
wealthy social strata - in time they become less expense and are diffussed to lower and lower strata
- 3) The Everett M. Rogers Diffusion of Innovations theory - for any given product category, there are five
categories of product adopters:
- innovators
- venturesome, educated, multiple info sources
- early adopters
- social leaders, popular, educated
- early majority
- deliberate, many informal social contacts
- late majority
- skeptical, traditional, lower socio-economic status
- laggards
- neighbours and friends are main info sources, fear of debt
There are four types of diffusion rate models:
- 1) Penetration models - use test market data to develop acceptance equations of expected sales volume as a
function of time - 3 examples of penetration models are:
- Bass trial only model
- Bass declining trial model
- Fourt and Woodlock model
- 2) Trial/Repeat models - number of repeat buyers is a function of the number of trial buyers
- 3) Deterministic models - assess number of buyers at various states of acceptance - later states are
determined from calculations to previous states
- 4) Stochastic models - recognize that many elements of the diffusion process are unknown but explicitly
incorporate probabilistic terms
--http://en.wikipedia.org/wiki/Diffusion_%28business%29 [Oct 2004]
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