Abstract
Email advertising has evolved from simple text, untargeted mass mailings to visually sophisticated, highly targeted, permission-based interactive communication for non-profit organizations. This study employed a self-administered survey method to collect data from 400 participants, randomly selected from 1,806 supporters of a National Public Radio (NPR; KTEP-FM) station in El Paso. A total of 106 responses was received. Several linear regression models were run and showed that NPR members’ innovativeness variables significantly predicted their attitudes towards email advertising (F = 5.86, p < 0.01). β coefficients further demonstrated that the more technologies and online activities NPR members adopt, the more positive their attitudes towards email advertising will be. Results also showed that NPR members’ innovativeness (measured by their online activities) negatively predict their attitudes towards postal direct mail advertising. β coefficient demonstrated that the more online activities NPR members undertook, the less favourable their attitudes towards postal direct mail advertising were. Similar results were found for NPR members’ preference of postal direct mail advertising (F = 3.76, p < 0.05). Online activities also negatively predicted NPR members’ preference of direct mail postal advertising as shown by β coefficient in the regression model. The study also discussed managerial implications for non-profit organizations to better use email advertising.
Introduction
Challenges Facing National Public Radio in a Post-recession Economy
KTEP-FM Radio (henceforth KTEP) is one of the 784 member stations of National Public Radio (NPR), a non-profit media organization. The 2009 financial statements for NPR showed that on an average, public radio stations received the largest percentage, 32.1 per cent, of their operating budget from listener support in donations, memberships and pledges and 21.1 per cent from local businesses and corporate underwriting (Larson, 2009).
Similar to other NPR stations, KTEP has historically held an annual on-air membership campaign in April every year. The campaign is preceded by solicitation and membership renewal letters sent via US Postal Service. Letters soliciting donations have also been sent in November in conjunction with the traditional holiday giving season.
Like most non-profit organizations, KTEP has faced the challenges of fundraising in troubled economic environment. According to a recent study by the Giving USA Foundation, 2008 charitable giving fell by the largest percentage, 5.7 per cent, in 50 years (Strom, 2009). The study noted an accelerated decrease in donations in the fall quarter of 2008 with the worsening economic crisis and decline in the stock market, and did not foresee an upswing in donations in the near future.
Challenges of declining contributions, budget cuts and increased operating costs have led KTEP to become more creative and efficient in fundraising efforts. Two years ago, rising postal rates and printing costs as well as greater interest in an activity on the KTEP website prompted station management to replace the paper newsletter with an email newsletter. Subsequently, there has been a significant increase in online subscriptions and donations, especially during the on-air membership campaigns.
The Center on Philanthropy at Indiana University reported in a survey of fundraisers’ assessment of the giving environment to be at the lowest level since the centre began the study in 1998 (2009). The survey participants reported extremely low levels of success with most fundraising techniques, with the exception of the Internet and email fundraising and direct mail. Changes in economic situations as well as listener donation behaviours demand NRP stations, like KTEP, to consider what advertising media will be most effective.
What can Email Advertising Do for Non-profit Organizations?
Studies over the past 20 years have continued to indicate that consumers have a favourable perception of direct mail advertising (Korgaonkar, Karson, & Akaah, 1997; Rogers, 1989; Stafford, Lippold, & Sherron, 2003). Rogers (1989) found that 70 per cent of direct mails were perceived to be useful or enjoyable. Similarly, Korgaonkar, Karson and Akaah (1997) concluded that overall consumer feelings towards direct mail advertising were very positive. Stafford, Lippold and Sherron (2005) further noted that direct mail is a well-accepted medium for advertisers as well, primarily because of favourable response rates.
As the Internet usage has grown along with technological innovations and widespread adoption of broadband connections both at work and home, email advertising has evolved from simple text, untargeted mass mailings to visually sophisticated, highly targeted, permission-based interactive communication. Email advertising has been considered as a permission-based marketing tool whose effectiveness is contingent on if prior permission from the customers can be obtained through dialogic interactions and trust building (Kent & Brandal, 2003). The Internet has emerged as a new advertising medium, competing with the traditional media as an effective marketing vehicle (Leong, Huang, & Stanners, 1998). Because email advertising is an important format of direct advertising for non-profit organizations, it is important to examine non-profit members’ attitudes towards this advertising format. Most importantly, how will postal direct mail advertising differ from email counterpart in terms of non-profit members’ attitudes that have been found to predict advertising effectiveness (Rodgers & Chen, 2002)? Furthermore, how will non-profit members’ demographics and innovativeness influence their attitudes towards direct mail advertising, whether it is delivered online or offline? The present study reported survey data collected from a random sample of KTEP subscribers. The purposes of this study are to use KTEP as a case study to shed lights on how better targeting practices led to more effective email advertising campaign.
Literature Review
Non-profit Members’ Innovativeness Levels as a Predictor of Advertising Effectiveness
Rogers’ (2003) diffusion of innovation theory provides a useful theoretical framework to examine the influence of innovation characteristics, and adopters’ characteristics predict consumers’ adoption behaviour of a new technology. While innovation characteristics have been widely used to explain why a new innovation is adopted (Rogers & Singhal, 1996), our study aimed to examine another important aspect of innovation–adoption research—adopters’ characteristics. Atkin and Jeffries (1998) compared Internet adopters and non-adopters using demographics, communication needs, media use habits and relationships with technology. The study results offered support for early adopter profiles derived from the diffusion of innovation theory in terms of demographics and technology usage. Adopters were found to be younger, better educated and to have higher incomes than non-adopters and demonstrated a higher interest in trying new technologies than non-adopters (Atkin & Jeffries, 1998).
Among many adopters’ characteristics identified in the past diffusion of innovation research, consumer innovativeness has been used to study innovation adoption behaviour (Roehrich, 2004; Wood & Swait, 2002). Innovativeness is commonly identified as a personality construct (Hirschman, 1980; Venkatraman & Price, 1990; Wood & Swait, 2002; Yang, 2005) that has been used by researchers to predict consumer innovative tendencies to adopt a variety of technological innovations. The concept of innovativeness has been considered a trait that could be described as an early purchase of new products and also as a tendency to be attracted by new products (Roehrich, 2004). Previous innovation research has classified two types of consumer innovativeness—open processing (general) innovativeness and domain-specific innovativeness (Citrin, Sprott, Silverman, & Stem, 2000; Yang, 2005). Domain-specific innovativeness refers to consumers’ tendency to obtain knowledge about and adopt innovations within a specific product category (Citrin et al., 2000; Yang, 2005). On the other hand, open processing innovativeness refers to individual’s intellectual, attitudinal and perceptual characteristics that predict general innovations adoption behaviour (Citrin et al., 2000; Yang, 2005). In this study, we used domain-specific innovativeness by examining NPR members’ adoption and usage behaviour of a cluster of similar technologies and argued that innovativeness will predict their attitudes towards postal and email advertising. The objectives of this study are to examine how NPR members’ innovativeness predicts their attitudes towards email and postal direct advertising.
NPR Members’ Attitudes towards Email Advertising
Previous research by Bush, Bush and Harris (1998) examined attitudes towards the Internet and found poor attitudes towards and a reluctance to adopt Internet advertising. Rodgers and Chen (2002, p. 102) observed that ‘attitude is an important predictor of usage and successful implementation of technology’. Because email advertising is delivered via the Internet, it is important to understand non-profit members’ attitudes to ensure the effectiveness of this advertising format.
Past research on attitudes has mainly focused on Internet advertising (Mehta & Sivadas, 1995). Mehta and Sivadas (1995) surveyed domestic and foreign Internet newsgroup users to ascertain attitudes towards advertising and direct marketing on the Internet. Their findings showed that Internet users had a more positive attitude towards and willingness to receive targeted marketing communications from both their newsgroups and their email accounts. Moreover, respondents with more positive attitudes towards traditional direct marketing held more positive attitudes towards targeted advertising on the Internet (Mehta & Sivadas, 1995).
Mehta and Sivadas’ (1995) study was conducted at the very beginning of the Internet diffusion and its advertising applications. Nevertheless, because the Internet has evolved rapidly as a technology, consumers’ attitudes towards advertising via the Internet are likely to be influenced as a result. Several recently publications have, however, supported the importance of positive consumers’ attitudes in predicting their adoption behaviour. For example, Karson, McCloy and Bonner (2006) used data collected over a three-year period from students of a private mid-Atlantic university to examine consumers’ attitudes and beliefs towards website advertising (WSA). The data analysis showed that those with attitudes critical of WSA used the Internet and computers less frequently. It was also found that participants with more negative attitudes towards WSA were less useful than those who were pro-WSA or ambivalent towards it (Karson, McCloy, & Bonner, 2006).
Similarly, Merkle (2008) surveyed consumers about attitudes and usage of permission-based email marketing. Merkle’s (2008, p. 5) survey showed that 52 per cent of permission email users held highly favourable attitudes towards permission email and stated that they ‘couldn’t live without it’. Fifty-three per cent of respondents stated that they were willing to receive email advertising messages only if the messages were relevant to their needs and/or interests, while 12 per cent stated that they would be willing to receive email messages under any circumstances when they had a relationship with the sender company (Merkle, 2008).
On the basis of the above literature review, we proposed the following research questions:
Method
This study employed a self-administered survey method to collect empirical data. Self-administered surveys offer quick turnaround time, low cost and simplicity of processing in comparison to other methods, the reduction of biasing error that might result from the presence of interviewers and greater anonymity resulting from the absence of an interviewer that can contribute to a higher answer rate (Rubin & Babbie, 2007).
This study employed a random sampling method to select a sample of 400 from a database of 1,806 supporters of KTEP, an NPR station, housed at a large public university in the Southwest. A total of 106 responses were received within the 21-day period, an overall response rate of 25.25 per cent. Among the 106 respondents, 59.4 per cent (n = 60) were female, while 40.6 per cent (n = 41) were male. The majority of respondents fell between the ages of 55 to 64 years, that is, 28.7 per cent (n = 29). More than half of the respondents, 57.4 per cent (n = 58), reported annual household incomes of over US$66,000, and 54.5 per cent (n = 55) had a post-graduate degree. The majority of respondents, 34.7 per cent (n = 35), had been KTEP subscribers for more than 10 years.
The innovativeness construct was measured by their ownership of a list of eight technologies related to the Internet (such as desktop computer, laptop computer, cell phone, Blackberry or other PDA, iPod or MP3 players and so on). The construct was also measured by a list of eight online activities that consumers have undertaken. These two innovativeness measures (i.e., technology adoption and online activity) were computed to form indices for later statistical procedures.
Twenty-six five-point Likert statements were designed from Merkle (2008) to examine consumers’ attitudes towards email advertising (13 questions) and postal mail advertising (13 questions). The statements included questions such as email advertising is ‘irritating’, ‘enjoyable’, ‘intrusive’, ‘credible’, ‘convenient to use’, ‘easy to use’ and so on. Because past studies have found that consumers’ attitudes towards advertising are multidimensional (Pollay & Mittal, 1993; Ramaprasad & Thurwanger, 1998), we conducted factor analysis to extract common factors from these scales. Furthermore, scale reliability was computed for each extracted factor.
Principal component analysis procedures were run to identify common factors from KTEP members’ attitudes towards email and postal direct mail advertising. ‘Perceived benefits of email advertising’ were made up of eight variables (i.e., ‘will read when relevant to needs’, ‘making purchase’, ‘will read when relevant to interests’, ‘convenient’, ‘influence purchase’, ‘enjoyable’, ‘easy to use’ and ‘like to receive’; α = 0.90), while ‘perceived intrusiveness of email advertising’ was made up of two variables (i.e., ‘intrusive’ and ‘irritating’; α = 0.69). On the other hand, ‘perceived benefits of postal advertising’ were made up of five variables (‘easy to use’, ‘convenient’, ‘will read when relevant to needs’, ‘will read when relevant to interests’ and ‘credible’; α = 0.83) and ‘preference of postal advertising’ included four variables (i.e., ‘like to receive’, ‘enjoyable’, ‘irritating’ and ‘intrusive’; α = 0.83). The above four extracted factors were composited to form four indices for later regression analyses. Extracted factors that have low reliability coefficients (such as lower than 0.5) were removed from later analyses.
Findings
To provide empirical data to answer four research questions proposed above, we conducted two linear regression models which were run to examine if KTEP members’ innovativeness variables can predict their attitudes towards email and postal direct mail advertising (RQ1 and RQ2).
The Relationship between KTEP Members’ Innovativeness and Attitudes towards Email and Postal Advertising
Results showed that KTEP members’ innovativeness variables significantly predicted their attitudes towards email advertising in the regression model (F = 5.86, p < 0.01; see Table 1). β coefficients further demonstrated that the more technologies and online activities KTEP members adopt, the more positive their attitudes towards email advertising will be.
On the other hand, linear regression procedures were run for postal direct mail advertising (F = 6.60, p < 0.05; see Table 2). Results showed that KTEP members’ innovativeness (measured by their online activities) negatively predicts their attitudes towards postal direct mail advertising. β coefficient demonstrated that the more online activities consumers undertook, the less favourable their attitudes towards postal direct mail advertising were. Similar results were found for KTEP members’ preference of postal direct mail advertising (F = 3.76, p < 0.05). Online activities also negatively predicted KTEP members’ preference of direct mail postal advertising as shown by β coefficient in the regression model.
Regression Model Examining the Relationship between KTEP Members’ Innovativeness and Attitudes towards Email Advertising
Regression Model Examining the Relationship between KTEP Members’ Innovativeness and Attitudes towards Postal Direct Mail Advertising
Discussion and Conclusion
This study sought to examine how KTEP members’ innovativeness predicts attitudes towards email and postal direct mail advertising. To collect empirical data for this examination, the study used a self-administered survey questionnaire. Participants had given permission to be contacted by email and postal mail.
Innovativeness and Media Type
Atkin and Jeffries (1998) noted that Internet adopters demonstrated a greater interest in trying new technologies than non-adopters. Horrigan (2007) used the number of electronic devices owned and online activities engaged in to determine Internet users’ innovativeness and predict their levels of Internet usage, with usage rising with innovativeness.
Following Horrigan’s (2007) model, this study examined the number of electronic devices owned and online activities adopted as a means of measuring KTEP members’ innovativeness. Results showed that KTEP members’ innovativeness significantly predicted their attitudes towards email advertising. The more technologies and online activities consumers adopted, the more positive were their attitudes towards email advertising. Conversely, results showed that KTEP members’ innovativeness as measured by their online activities negatively predicted their attitudes towards postal direct mail advertising. The more technologies and online activities consumers engaged in, the more negative were their attitudes towards postal direct mail advertising.
There were significant differences between technology adoption groups in responses to statements regarding convenience and ease of use of email. Respondents with more technological devices were more likely to view email advertising as easy and convenient to use. These perceptions likely accounted for the finding that email survey respondents owned a greater number of technological devices such as laptop computers, webcams and iPods.
This study also found a difference between online activities groups with perceptions of ease of use of email advertising. Those with greater online activity were more apt to agree that email advertising was easy to use. This finding is likely to account for the higher percentage of those email survey respondents who engage in most of the online activities.
Theoretical and Managerial Implications
The theoretical contribution of this study lies in outlining the key factors that influence KTEP members’ attitudes towards and adoption of email advertising. Rogers (2003) wrote that some innovations rapidly diffuse from introduction to widespread use. As an example of such an innovation, Rogers (2003) cited the Internet and its applications such as email. The Internet was adopted by over 70 per cent of Americans in less than 12 years. The results of this study suggest that email advertising, which yielded less than half of the responses of postal mail, has not yet approached the rate of adoption of the Internet and email.
For advertisers, media and marketing professionals, the managerial implications of this study are to help better understand factors leading to more positive attitudes towards email advertising, which can help plan more effective email advertising campaigns. There has been an abundance of marketing publications, both print and online, touting the advantages of email advertising versus postal direct mail advertising and providing guidelines for its usage for marketers (Chase, 2008; Lewis, 2002; MacPherson, 2001; Roberts, Feit, & Bly, 2001). These publications are written from the advertiser’s perspective and cover mechanics, such as format of the email communication and composition of the database (Chase, 2008; Lewis, 2002; MacPherson, 2001). This study examined email and postal direct mail advertising from the KTEP members’ point of view, providing a better understanding of how email is perceived by the recipient.
These findings suggest that email advertising has the potential to be an effective marketing tool, particularly if targeted towards KTEP members who demonstrate innovativeness through greater ownership of technical devices and participation in online activities. As found in this study, more innovative subscribers perceived email advertising more positively, which was likely to lead to more effective campaign results.
Although various segmentation parameters can be used to classify and cluster NPR subscribers, results from this study supported that innovativeness was a powerful predictor to people’s attitudes towards two different types of advertising delivery methods. The study also provided NPR station managers, in particular, and non-profit managers, in general, to identify how to select and target their members’ market segments, by which email advertising can be used effectively in their campaigns.
Future Research Directions
The study findings have implications for improving KTEP members’ acceptance and response to email advertising. Much diffusion research has focused on adopter and innovation characteristics of the Internet and its applications such as email, rather than email advertising (Bachman, Elfrink, & Vanzana, 1996; Gefen & Straub, 1997; Horrigan, 2007; Rogers, 2003). Although these studies provide a plethora of data on Internet and email adoption and adoptors, there has been little data on email advertising adoption and adopters. Marketing research and publications have focused on email advertising from the advertiser’s perspective marketers (Chase, 2008; Lewis, 2002; MacPherson, 2001; Roberts, Feit, & Bly, 2001). These publications are useful as guidelines to the mechanics of email communication such as format and composition of the database, but they do not examine consumer attitudes and perceptions of email advertising.
As noted previously, the results of this study suggest that although email advertising has not yet approached the rate of adoption of the Internet and email messaging, KTEP members’ innovativeness positively affects attitudes towards email advertising. Future research focusing on the email advertising recipient and using a larger, more generalized sample with characteristics more closely mirroring the adult population of the community could lead to a more accurate depiction of the effectiveness of email advertising.
As also noted previously, the email survey questionnaire was delivered in a simple text message. Future research conducted from a Media Richness Theory perspective that explores the impact of various levels of message richness could lead to a greater understanding of response and effectiveness of email advertising.
