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Sunday, December 27, 2009

Exclusive: New Beverages Creating Category Excitement


By Barbara Grondin Francella

November 17, 2009 -
NEW YORK -- Though long dominated by big brands mass marketed by the major soda companies, the U.S. beverage market is being shaken -- perhaps transformed -- by niche drinks targeted more specific consumer needs, occasions and benefits, according to recent research and industry players.

Two forces are creating sales in the beverage industry: better-for-you trends, including functional, nutrition boosting, and holistic/wellness drinks; and consumers' "quest for quality," including organic, local, artisan-made and retro/nostalgic beverages, according to "Beverage Trends: Culinary Trend Mapping Report," which was recently released by the Center for Culinary Development and Packaged Facts.

"The intrigue is in the fringe part of the beverage businesses, which seems to be growing, even during the recession," noted Gerry Khermouch, editor of Beverage Business Insights.

With Nielsen Co. reporting c-store unit sales of packaged beverages down 4.5 percent for the first 40 weeks of 2009 compared to the year prior, including carbonated soda units down 2.1 percent, bottled water units off 8.9 percent, sports drinks down 13.6 percent and once-skyrocketing alternative beverage units (made up mostly of energy drinks) falling 4.7 percent, niche drinks could bring new vigor to the category.

New, niche drinks meeting specific consumer demands appeal to diverse customers and carry healthy margins. But what do these drinks mean for c-store operators that often rely on the major soda companies and their bottlers, with weak track records in smaller alternative brands, to shape their cooler planograms?

"It will be interesting to see how retailers balance limited space and attractive incentives with the potential of new, not-yet-mainstream, niche beverages that carry more risk, but also higher margins. [These new drinks] may be more desirable to customers who are shunning sodas and have concerns about the ingredients in energy drinks," said Don Montouri, publisher, Packaged Facts, based in Rockville, Md.

At BP's ampm convenience store operation, category manager Phil Smallwood said the evolution of better-for-you product started with the growth of the water segment years ago and continues to evolve.

"Consumers are more health-conscious and have a heightened awareness of product labels and ingredients," he said. "The result is increased consumer demand for products that will provide value through a health or functional benefit. This is great news for the category -- it is the opening of the door for continued innovation and growth."

When judging a beverage's value to ampm's mix, Smallwood's criteria includes whether or not the product is on trend with consumer demand and whether the product will add incremental sales and profits to the stores.

"Manufacturers that can pinpoint emerging consumer trends and develop true innovation will be successful in the market place," he said. "These will be the brands that will grow the category."

As niche brands become more mainstream, Smallwood believes they will find their way from specialty stores to c-stores, as they begin to resonate with convenience customers.

"We have already seen this with Muscle Milk and Pom Juice," he said.

Still, distribution is a challenge when the retail executive attempts to get an emerging brand to market. "Only the brands that truly hit the mark with the consumer will able to overcome the initial distribution hurdles and become successful," he said.

While new brands and start-up activity is spurring beverage sales, especially at the premium end of the business, traditional beverages are still the bulk of the business, a state of affairs the soda companies are not eager to change, Khermouch noted. "But the larger companies seem to be getting better at offering these kinds of niche beverages, in terms of [distribution strategies and other] processes, which is not to say we've seen any outstanding successes of above-premium drinks that have been sustainable," he said.

Niche drinks are also having an effect on the way the soda giants are distributing beverages. When Coca-Cola partnered with Italian coffee company IllyCaffe SpA to launch illy issimo drinks in Los Angeles, New York and San Francisco, it rolled out the coffee drinks through independent distributors, rather than its own bottlers. The drinks, which retail around $2.69 (approximately 15 percent more than Starbucks Frappuccino or Doubleshot drinks), were first distributed to Whole Foods Markets and other more upscale venues.
"Unlike Coca-Cola's flawed partnership with Nestle, which yielded big brands like Nestea ice tea, but nothing at the premium level, Coke has kept the illy issimo drinks at a high quality and the company is willing to let the brand start small," Khermouch noted. "The company is showing some degree of patience to grow the [niche drink] into a significant brand over a period of time."

The soda giant also went outside its bottling network to launch 8-ounce Vio carbonated milk drinks at natural food stores and delis in New York.

"One problem is [traditional] bottlers know if they neglect Sierra Mist or Diet Coke, they will get their butts kicked, because their objectives are tied to what they are shipping now, not what may grow into a decent brand five years down the road," Khermouch said.

When Pepsi Bottling Group partnered with CytoSport Inc. to distribute Muscle Milk, he noted, the launch did not go smoothly because the package size, third-party production, price point and need for communicating product information presented challenges.

"I can't say the beverage giants have solved the conundrum of putting out smaller niche brands, but they are working on it," Khermouch said. "They are not longer so heavy-handed about buying these smaller brands outright and forcing them on bottlers."

Some retailers, even mainstream grocers and c-stores, are not happy to see small niche brands with big growth potential become part of Coke and Pepsi, Khermouch said.

At 100-store Plaid Pantries Inc., based in Beaverton, Ore., category manager Butch Fulton said he expressed interest in selling Pepsi Natural made with natural sugar, caramel and kola nut extract. "But Pepsi wasn't that interested in putting it in our sets. They didn't feel we were the market for it. We've seen it at Whole Food and New Seasons Market," he said.

But the chain has tapped into consumer desire for better-for-you drinks with the super-premium Naked Juice line, which he says is selling well at $3.59 for a 14-ounce drink. (Meanwhile, c-store sales in the juice/juice drink category as a whole fell 1.8 percent in the channel in the first 40 weeks of 2009, according to Nielsen figures.)

"Initially, I didn't think it would sell," Fulton said. "We put in two SKUs a year ago. This year we expanded the line to five SKUs and we plan to put in two or three more. People are willing to pay for it. Hopefully we won't see a price war in these [niche beverages] like we've had with carbonated sodas. These should be a margin opportunity."

In general, customers are buying fewer carbonated sodas in favor of healthier products, Fulton said. "Sales of bottled water have fallen way off -- because there is such a hammer coming down on PET bottles. Energy drink sales have been flat, or growing slightly this year. Consumers are looking for something perceived to be better for them and the environment."

Plaid Pantries' best-growing beverage category this year, the retail executive noted, has been ready-to-drink teas, "which could be considered better-for-you," he noted. "I had cut back on the shelf space devoted to teas in the last few years because they weren't doing well, but now they've really taken off."

Also under the better-for-you flag, protein-enhanced Muscle Milk is doing fairly well "with a fairly high retail and is getting some legs under it," Fulton noted. He is now testing a few SKUs of Horizon organic (though full of sugar) organic single-serve milk.

While enhanced waters would appear to be better for you, Fulton said the trend has "come and gone" with the chain's sales of this segment flat. "The best seller is SoBe Lifewater, with a totally wrapped package. A problem with many of the enhanced waters is the color changes under the lighting in the cooler. They don't look appealing for very long. The category was dead until SoBe totally redid the package last January. Then we saw a big uptick."

Isotonic sales, too are flat, chainwide, according to Fulton, though low-calorie G2 has seen a sales increase of 18 percent.

But limited-time-only Pepsi Throwback, also sweetened with natural sugar and appeals to those looking to tap into nostalgic/retro products sold fairly well, Fulton said.

Not every trend has been a bulls-eye, however. Fulton has tried a few agave-based products "which haven't done much of anything."

Next on Fulton's radar is all-natural coconut water beverages. "We talked to a few suppliers and will probably put a little bit in and see if we can do anything with it," he said.

Although smaller niche brands may be attracting attention, Coca-Cola North America is seeing growth in a number of categories, including carbonated drinks, noted Ed Coleman, assistant vice president, shopper marketing for the beverage giant. (PepsiCo Americas Beverages declined to participate in this article.) Coke Zero, or instance, is up 25 percent to date in the convenience channel, according to Nielsen data.

"Further, sparkling soft drinks continue to be the number-one destination category in the convenience retail channel," Coleman said. "The sparkling soft drinks category is more than three times as large in unit sales as the next-largest immediate consumption subsegment and purchase frequency of sparkling soft drinks is three times greater than other shelf-stable beverages.
Coca-Cola is filling consumers' desire for functional beverages with "a full line up of innovation" next year across the Vitaminwater, FUZE, Minute Maid and Powerade brands, Coleman said, without offering specifics.


Coca-Cola Unifies Juice Brand Designs


By Sarah Knapp

November 18, 2009 -
ATLANTA -- The Coca-Cola Co. re-designed the packaging for its portfolio of global juice brands. The revamped line will make its debut this month with a new design for Minute Maid and expand to Del Valle, Andina and Cappy brands in 2010.

The global strategy aims to create uniform packaging for Coca-Cola juice brands and further strengthen the company's position in the global juice category. "This scalable, common identity was created to address a business challenge, not to simply update a package. This is truly designing on purpose," David Butler, vice president of design for Coca-Cola, said in a statement.

The move comes less than a year after Tropicana's disastrous redesign. The new design caused such a furor that PepsiCo went back to its original packaging.

By having a uniform look for all juice brands, Coke said it will reduce operating costs and increase the speed and efficiency of packaging. At the same time, the company hopes the new graphics will increase brand preference among customers.

The new Minute Maid packaging will feature a green horizon line that has been added above the logo to remind customers of nature. Minute Maid Orange Juice will feature a green leaf canopy at the top of the package and photos of oranges at the center and bottom. Minute Maid Lemonade and Punches will include water ripples and images of floating fruit. When displayed side by side, the juice packaging is supposed to evoke the idea of fruit in the produce aisle. An in-house design group handled the new graphics.

The company said this packaging is the first step in a larger business strategy that will include product and sustainability innovations, new partnerships, support for local businesses and the expansion of juice products to new markets.

-- Nielsen Business Media


Saturday, December 26, 2009

Five Keys to Branded-Entertainment Success

Viewpoint: Digital Competition Demands a Move Beyond Shout-Out-Loud Marketing


As shout-as-loud-as-you-can marketing is proven less effective every day, marketers are looking for ways to get closer to their customers and prospects. Brands want to deliver engaging, entertaining and educational messages in environments they create, not in spaces they rent.

With the digital revolution -- where every celebrity, publisher, agency or client can produce content relatively quickly (yet, somehow, they still all feature a hilarious scenario involving a hidden camera and Ashton Kutcher) -- the competition to play in this space is heating up. However, just because everyone's now in the game, it doesn't mean they are all doing it well.

Great branded entertainment must cover five key categories:

It must be an experience that could only be brought to you by the brand in question.

In order to promote its new lineup, the Cartoon Network created a series of videos known as "The Wedgies," which featured the characters from the show. The videos were developed around stories involving individual characters from "The Wedgies." Individual episodes were specific to the brand that each character represented. They were successful in promoting the show, and viewers were able to share their thoughts of the videos with their friends through posts and social media.
 
The brand or product must play an integral role in moving the story forward.
You can have 100-plus product placements in a new movie, but unless your brand is somehow tied to the hero or storyline in a meaningful or authentic way, you're just background noise. Though almost a decade has past since it made its debut, BMW's groundbreaking online film series from then-agency Fallon, "The Hire," remains a classic example. The plot was simple: The main character, played by actor Clive Owen, as a mysterious BMW-driving chauffeur, provided transportation to various people in different episodes. The cars were crucial to the storyline. Without the cars, the story did not move forward.

 
Your brand has to have the right to create this content.
The show "It's Everybody's Business" would not have worked if just any businessman was involved. Former General Electric chief Jack Welch, an authority in the business world, created the show and shared the spotlight with Microsoft throughout the branded-entertainment web series. The premise was that Jack and Suzy Welch would help different businesses solve problems in order to operate more efficiently. This show would not have worked with just anyone. Because Welch is a legend in the business world and famous for his problem-solving strategies at GE, he was able to create a show that was believable and real.
 
The content must leave room for speculation, co-creation or interaction.
Holiday Inn Express' "The Smart Show," a web series that humorously portrayed the challenges of traveling, did a great job at integrating different mediums to continue the conversation with the audience. Holiday Inn launched "The Smart Show" website, which provided information for travelers including deals of the week and travel tips based on that week's episode. It also created a blog allowing the community to communicate directly with one another about the episode, experiences they had and other travel queries. Because the conversation continued long after the episodes had aired, the series was a success and the brand continued to grow.

 
The content must be entertaining, informative, interesting or useful whether a brand is present or not.

The "Life Without HP" series is a prime example of interesting videos that have a storyline outside of the brand's involvement. The short videos are entertaining and appealing regardless of Hewlett-Packard's presence. The featured products are secondary to the storylines at hand, creating a memorable experience for the viewer and one that they are more likely to talk about and pass on to their peers.

Considering how many pieces of branded entertainment we as consumers and marketers see on a daily basis, I also wanted to point out a few interesting trends that are garnering attention.

Technology is really pushing the boundary of brand-to-consumer connections. For example, Doritos Hotel 626 puts the participant in a virtual horror film, and tops it all off with gaming, singing, webcams and actual phone calls from the hotel.

Personalization of video, photos and branded experiences are bringing consumers deeper into the fold. Check out this experience built for "The Dark Knight" and Verizon Wireless, where a user can upload a picture of a friend and add his face to the video of an inmate in an insane asylum.

Another great example is the use of Facebook Connect by the video game Prototype. The website looks at basic profile information, including work history and profile photos, then displays that information directly in the trailer. It uses the participant's personal information to evoke strong emotion and creates an instant connection to the game.

The message here is simple but powerful. Create a branded experience that follows the tenants of good marketing as outlined above, but use technology and social connectivity to involve the audience and allow for co-creation. People love telling stories as much as they do hearing them. They'll really listen and interact if the experience isn't just about your brand, but about their favorite topic -- themselves.

ABOUT THE AUTHOR
Joel Lunenfeld is a founding partner and CEO of Moxie Interactive, one of the largest full-service interactive-marketing agencies in the U.S. You can follow Joel on Twitter at @JoelMoxie or e-mail him at marketing@moxieinteractive.com.

Friday, December 25, 2009

Guinness Lets U.K. Drinkers Create Virtual Worlds

Partners With Google Earth as Part of Broader Effort to Boost Online Marketing




The Diageo-owned stout is best known for its epic TV commercials, but Guinness is moving its marketing online in order to build a more interactive relationship with drinkers.

Paul Cornell, marketing manager at Guinness, said in a statement, "We wanted to create an amazing campaign which graphically illustrates the life, energy and passion of our brand and its drinkers. No longer can we rely on just a distinctive TV ad to generate the required level of impact, we also have to really involve and reward the consumer. We hope it will have the creative impact fans expect from our brand."

Abbott Mead Vickers BBDO, the London agency famous for creating blockbuster commercials for Guinness, including "Noitulove," "Tipping point" and "Surfer," was responsible for the "Guinness World" digital campaign, which was produced by digital production company Unit 9.

The agency's executive creative director, Paul Brazier, said, "Google Earth was the obvious starting point for the campaign. The challenge was to enable users to bring an imaginary world to life in the browser window, without sacrificing any of the key features that make the application what it is. Expansive photo-real terrains, elegant camera moves, seamless zooms and horizon tilts have all been harnessed, enabling users to explore the planets the co-create with friends."

But Guinness has not turned its back on TV advertising. The "Bring It to Life" effort launched last month in the U.K. -- bringing to an end after more than a decade the campaign themed "Good things come to those who wait" -- with a classic AMV BBDO commercial, "World," that shows a group of guys coming together to bring a world to life in a pattern of activity that mimics the pouring and settling of a pint of Guinness. 

Thursday, December 24, 2009

New SoyJoy Ads Tout Health Benefits

Dec 23, 2009

Soybeans are the second-biggest crop in the U.S., claiming about 76 million acres (compared to 85 million for corn), so it may be somewhat surprising that when DDB's San Francisco office got the SoyJoy account this March, its first mission was to explain to Americans that soy is a plant.

Initial DDB ads talked about the history of soy, and SoyJoy's Web site includes a timeline of the crop going back to the 28th century B.C. With New Year's just around the corner, though, SoyJoy and DDB are moving into phase two of the campaign: Touting soy's health benefits.

A new animated spot from DDB explains that the product, produced by Pharmavite, contains protein, fiber and antioxidants, and shows how the soybeans are mixed with fruit and baked to make the SoyJoy bars.

Jim Bosiljevac, creative director at DDB, said the target is mostly women with active lifestyles who "eat a lot of whole foods." Bosiljevac said the brand has a decent awareness with the target demo, but those women may not be clear on soy's benefits. "There are a lot of myths about soy," he said. "We're just trying to keep it positive."

Those "myths" include soy's relationship with breast cancer, a link that the Journal of the American Medical Association disputes in its Dec. 9 issue. The JAMA study actually shows consumption of soy helps women avoid a recurrence of breast cancer. "Some people believe it's a poison and others think it's a panacea for anything that ails you," said Marion Nestle, a professor of nutrition, food studies and public health and New York University. "I think the truth lies somewhere in between."

The timing of the JAMA study was fortuitous for SoyJoy, which is launching the TV, print and online campaign next week. To reach those active women, the campaign includes tie-ins with MapMyFitness, a site that helps runners map their local routes; and ExerciseTV, a digital network that provides workout plans and exercise tips. Spending for the campaign was not disclosed. The brand spent $32 million on measured media through October of 2009 and $33 million for all of 2008, per the Nielsen Co. 


Wednesday, December 23, 2009

Ikea Builds Own Oval Office for Obama

Jan 12, 2009

Ikea's got Obama fever. Taking example from other large brands—including Ben & Jerry's and Hewlett-Packard—the Swedish home products retailer today kicked off an out-of-home ad campaign called "Embrace Change '09" that honors President-elect Barack Obama.

The effort centers on an Oval Office replica inside Union Station in Washington, D.C. Through Wednesday, those walking down Union Square's Main Hall can see the Oval Office furnished with Ikea furniture.

"Embrace Change '09" is meant to "celebrate the change" that is coming to the White House, while driving foot traffic to two nearby Ikea stores (in College Park, Md. and Woodbridge, Va.), said Ikea public relations manager Marty Marston.

The integrated campaign includes out-of-home billboards featuring the "Embrace Change ‘09" slogan on local buses and trains. Ikea is also holding a "mock motorcade," touring the D.C. area Jan. 15-16. Ikea will strap "furniture fit for a president" on top of vehicles to symbolize the incoming president and his family moving into their new home.

Other components include a site, www.embracechange09.com, where Ikea fans can design their own Oval Office using a drop-and-drag click tool, and a $1,500 gift card giveaway to visitors who log onto the site.

Ikea, which spent $82 million on U.S. advertising through Oct. 2008 (excluding online), per Nielsen Monitor-Plus, said the campaign's significance is on par, if not greater than promotions for new store openings.

"We have never had an opportunity to do anything surrounding the message of change from a national standpoint," Marston said, adding that Ikea seized a good branding opportunity. "[Obama's] notion of change and his commitment to fiscal responsibility match the Ikea philosophy of practical and affordable home furnishings for all." 


Tuesday, December 22, 2009

Domino's Burns Subway


Jan 22, 2009


bw/photos/stylus/68168-Dominos-CEO.jpg
The battle between Subway and Domino's Pizza over baked sandwich superiority just got hotter. After receiving a cease-and-desist letter telling the No. 2 pizza outfit to stop airing its new campaign, Domino's president David Brandon set fire to the document on national TV last night (Jan. 21).

The ad, which was produced less than a week ago and ran on Fox's American Idol, is the latest messaging trumpeting the fact that consumers preferred Domino’s new oven baked sandwiches over Subway's by a margin of two-to-one. The results were part of an independent taste test conducted on Domino's behalf.

The letter arrived from Subway earlier this month. Upon receiving it Brandon challenged his marketing team and lead agency Crispin Porter+Bogusky, Miami, to come up with a plan to leverage it. "I said ‘listen this is a bit if a swipe at us, suggesting there is an integrity issue around the test we did and how we did. I don’t like it,'" Brandon told Brandweek. "It made us want to scream even louder about our two-to-one taste claim results. When they asked me to be in the ad, I had to be a team player.”" Domino's plans to continue running the ad for awhile.

Brandon brushed off the letter because in order to get approval for the campaign, Domino’s had to have the claims reviewed by lawyers as well as the networks. "The requirements are significant and we passed all of them."

Prior to the launch of this new attack ad, Jeff Moody, CEO of the Subway Franchisee Advertising Trust, told Brandweek: "We don't think the test was legitimate and therefore the results are very misleading. The networks would not know enough about the operations of the companies to easily see through the flaws in the research. Therefore, as long as there was a big enough sample they would approve the ads even though they are false."

Moody’s four specific issues were:
1. "They did the comparison against three sandwiches and have written the ads to suggest that the results are relevant across the whole product line."
2. "They did not compare the Domino's Philly Cheese Steak sandwich to Subway's Philly Cheese Steak (which we have as a national product) but rather to our Steak and Cheese. Philly Cheesesteak uses a shaved beef product which is completely different than our Steak and Cheese product so their comparison is invalid."
3. "Subway's whole positioning is that we make customized sandwiches, right before your eyes, with your choice of bread, meats, cheeses, vegetables and sauces. We believe that they made every Subway sandwich the same and based the build on our pictures which include all the veggies. The majority of consumers don't add all the veggies."
4. "The production and consumption conditions weren't reflective of the real world and were biased against Subway. Our subs are cooked one at a time and consumers usually eat them right away in the restaurant, or take them across the street to their office." If the subs were served cold they obviously weren’t as good.

"[Subway is a] big company that is very good at what they do, but we are very proud of our baked sandwich product line. We have every right to shout it from the rooftops," said Brandon. "They tried to get to pizza business which is a direct assault on pizza category. We didn’t whine about it. They had every right to do a taste claim which wouldn’t have worked very well."

Domino’s spent $135 million on U.S. media for the first 11 months of last year compared to the $412 million Subway spent (excluding online expenditures), per Nielsen Monitor-Plus. 




For Some, 'Taste Test' Ads Are Leaving a Bad Taste

Jan 10, 2009

Marketers aren’t just bashing their rivals on TV, they’re attacking them behind the scenes in the industry’s self-policing unit, the National Advertising Division.

Disputed claims rose 40 percent in 2008 compared to the prior year. Those included a case in which NAD recommended General Mills yank claims that its Yoplait Yo-Plus has been proven to “regulate digestive health.” This came after Dannon, marketer of Activia yogurt, demurred. Another change came after Cablevision complained about Verizon’s claims that its FIOS service was “20x faster than cable.” Gerber, meanwhile, asked NAD to look into Beech-Nut’s claim that some of its products increase an infant’s attentiveness. NAD recommended Beech-Nut retract the claim.

“The statistics show a more competitive atmosphere,” said Lee Peeler, president/CEO of the National Advertising Review Council, the agency that sets policies for NAD. “Our speculation is when the economy’s not growing that market share is more important than it ever was. Advertisers are being more adventurous and more sensitive to advertising claims.” About 95 percent of such complaints are settled by the NAD. Others are directed to the Federal Trade Commission.

The increase came as comparison ads seemed to jump as well. The past few months have seen a volley of advertising matchups including: Dunkin’ Donuts v. Starbucks, Campbell’s Prego spaghetti sauce brand v. Heinz’s Classico, Burger King v. McDonald’s and Domino’s v. Subway. In all those ads, the challenger has claimed a victory in taste tests over its rival.

While it is unclear whether NAD is hearing claims related to any of those campaigns (the organization’s policy is that all such claims are anonymous until settled), Jeff Moody, CEO of the Subway Franchisee Advertising Trust, told Brandweek, ”We believe the Domino’s ads are misleading and that the research was not done in a way that is either valid nor representative of what real consumers experience.” Among his charges was the fact that Domino’s cherry-picked its test sandwiches for its advertised taste test, so that Domino’s compared its Philly Cheese Steak sandwich to Subway’s Steak and Cheese, rather than its own Philly Cheese Steak sandwich. “Philly Cheesesteak uses a shaved beef product which is completely different than our Steak and Cheese product so their comparison is invalid,” he said.

Russell Weiner, CMO of Domino’s, said the fact that the ads are running is proof that they hold up to scrutiny.  “The networks will not put you on the air unless you can provide legal substantiation that everything you did is on the up and up. We are on every network out there,” he said, adding that he thinks Subway is rattled by the ads. “If Subway came out with a pizza that beat us two-to-one, I’d be scared. That means it works. Our sandwich sales are doing very well.”

Analysts said such back-and-forth is symptomatic of a down economy. “In difficult times, marketers often want to cut to a harder, more direct sell and not rely on a softer image-building approach,” said Allen Adamson, managing director of Landor Associates, New York. “It’s a natural tendency.” Donald Sexton, professor of marketing at Columbia University, agreed. “When times change, you have to change your approach. There was a period where emotional benefits were more salient, but maybe emotion alone doesn’t do it anymore and you have to back it up with proof.”

That, however, doesn’t mean that comparison ads are 100 percent effective. Adamson said the approach is “not necessarily the best way to market a product” for various reasons. One is consumer skepticism—viewers of such ads tend to conclude that a test is rigged somehow to show a positive result. Another is confusion in the marketplace; consumers can forget who is making the initial claim. “Consumers can’t figure out who said what to whom and end up tuning out the whole category,” Adamson said.

Nevertheless, comparison ads seem to be used consistently, regardless of the economy. “These things go in cycles,” said Derek Rucker, an assistant professor at Northwestern University’s Kellogg School of Management. Rucker pointed out that Miller Lite had initiated taste tests against Bud Light in 2005, well before the economy went sour.

Campbell rep John Faulkner said his company’s new ads for Prego weren’t driven by the economy. The spots, which broke in December, note that the sauce beat its rival in a blind taste test. “Comparative advertising is a tactic that has been utilized across many categories,” Faulkner said. “Consumers are making a comparison when they get to the store shelf. We believe our ads will help motivate consumers to purchase our brands.”   

—with Elaine Wong 


Monday, December 21, 2009

Why a Music Strategy Matters to Brands

Dec 16, 2009

If brands and their creative agencies agree, in full or in part, about the breadth of the cultural influence and the social value of music, they need to make a long-term commitment to developing a "music strategy," according to Steve Yanovsky, music and emerging media strategy consultant at Mindshare, a unit of GroupM, a media investment management firm. This involves product placement, tour sponsorships, licensing a song for a TV spot, product integration in a music video, artist endorsements—all the tactical components that may be used as a marketing mix for a brand. Yanovsky, who has worked on a variety of brand/music tie-ins, with the latest example being the New Moon soundtrack, chatted with Brandweek about the importance of such deals. Through music strategy, he said, brands can create "music equity," which is "really the long-term idea in utilizing music as a framework for their marketing." Excerpts of that conversation are below:   


Brandweek: You've worked with many brands over the years. What were some of your most memorable projects and why? 
Steve Yanovsky:
Two come to mind immediately, ESPN X Games and Heineken Red Star Sounds. These projects are most memorable because I helped establish music as a core component of their creative, content, programming as well as establishing as part of the marketing mix for both brands.

For Heineken, I launched the Heineken Red Star Sounds music initiative.  The idea was to use music to help create greater relevance for the brand with African Americans.  The message, ‘Music Can Make A Difference’, focused on supporting music education in Urban neighborhoods.  We set up a non-profit entity, The Heineken Foundation, as the conduit for awareness and donation. What was notable was the absence of any product messaging.  The Heineken Foundation was merely tagged at the end of each spot to demonstrate Heineken’s investment in music education.  The entire campaign was supported with TV (BET, MTV, VH1, UPN), Radio, Print (VIBE, Rolling Stone), OOH and online. According to Heineken, there was a lift in case sales in mainly Urban markets.  Heineken Red Star Sounds continues to be part of their messaging platform for their multi-cultural marketing.

BW: Most marketers turn to the big screen and TV shows for product placement.  What about music tie-ins? How valuable are they?
SY:
It’s ironic that one of the highest rated shows in the history of television is a show about music. There is no disputing the social aspect and commercial impact of blockbuster films such as New Moon or hit TV franchises such as American Idol.  As with music, they are also vastly communal and can be deeply personal.  But, they are finite platforms.  Unlike Film and TV, music is neither confined by space, time, season nor location.  It is completely portable, addressable and measurable.  And although music can be passive and active, engagement with it is mostly unrestrained, both to the conscious and the subconscious.  Lady Gaga wears several pairs of sunglasses in her new video Bad Romance, including a pair of Carrera White Champion.  Yes, a music video is screen facing and all of three minutes.  An aspiring female fashionista will watch it dozens and dozens of times.  After reading this month’s feature pictorial in Elle magazine just prior to walking into Macy’s, she hears the song.  Does it remind her of those sunglasses she wanted buy?  It is one possible scenario that moves Carrera to the top of their consideration set at the height of purchase intent.  Surely, this is the outcome Carrera hoped for in the first place. 

This reflects the importance of music in what I call the "thrivecycle"—where consumers live, thrive and buy.  If connecting on an emotional level is central to consumer engagement, then music offers a multitude of paths to accomplish this.  


BW: Moving into more specifics, you've done some work with the 'New Moon' soundtrack. Can you explain what it involved and which brands participated?
SY:
I got a call from Atlantic Records about online media sponsorships and ad inventory around the re-launch of their content channels on YouTube. Because Atlantic was the label partner for Twilight Saga soundtracks, one idea that we came up with was an exclusive online sponsorship of the New Moon soundtrack. This would include ownership of all 15-second pre-roll, companion ads, bumpers and rich media across all the official/proper New Moon soundtrack music videos on YouTube including a co-branded New Moon Soundtrack Channel as well as the New Moon Soundtrack Website.  For the most part, this would be the first online media sponsorship executed under the new WMG/YouTube deal.

With a core 12-24 female target, it’s no surprise that Unilever’s Dove was extremely interested to participate. With the massive search and discovery taking place online for New Moon, it seemed opportunistic to begin just after the film’s opening weekend.  We would launch it from the world video premiere of, “Possibility”, written and performed by Atlantic’s new artist Lykke Li. “Possibility” was considered the most pivotal song in the film.  However, creative and logistical challenges with the Lykke Li video delayed its debut.  Instead, the video for “Solar Midnite” from Grammy Award winning artist Lupe Fiasco took its place.  Since the song was only available on iTunes digitally as part of the iTunes-Deluxe version of the New Moon Soundtrack album.  With Lupe’s enormous fanbase, we would be able to amplify its push beyond core Twilight/New Moon fans and reach Urban lifestyle-centric audiences. 


BW: How do you measure the success of this type of partnership?
SY:
For the most part, this was a fairly straightforward online media sponsorship.  From a reach standpoint, my expectation is that it will deliver what is required for the Dove program.

BW: Can you give other examples of the most recent brand/music tie-ins you've worked on?
SY:
For Trojan (yes, the condom company), I have been producing both long and/or short-form video content with as part of a dedicated online campaign to address the issues around condom use—ranging from embarrassment to disease prevention.  As a compliment to its ongoing partnership with MTV Networks, Trojan tasked both its agencies and media partners to create humorous and thought provoking PSA-like videos.  Working with their media agency, Maxus Global, my approach was to collaborate with recording artists who already have an existing circle of trust with their peer and fan communities.  They know how to engage them more effectively than any brand, rather than disruptively, over the long term.  Both hugely successful major label acts as well as indie artists delivered some of the most compelling content for the entire program including pieces by Cobra Starship, All American Rejects, Ryan Star, Good Old War and April Smith.  


What should they strive for and what should they avoid?
SY:
Regardless of time on screen, brands should be most concerned with context and relevance. It’s no secret that marketers should opt into placements where their brand can be integrated into the storyline. In addition to insuring contextual relevance, securing IP rights connected to the placement that can be used in or part of collateral material, messaging and/or activation should be factored into the financials.  Film lends itself to this.  Depending on the depth of integration within a music video, master and sync rights to the associated song for radio and/or online promotions should be baked into any deal.  In most cases, additional fees for sync and master rights for a song should not be cost prohibitive.  Record label marketing budgets pale in comparison to what brands spend; they are more eager today to leverage a brand’s media commitment to broaden artist exposure than merely asking for a check for a license or product placement.

I am often surprised as to how frequently brands and their agencies do not opt to secure these rights.  Unconditional adherence to existing creative is often the culprit.  It is counter intuitive for a brand to integrate their product in an artist environment, but shun the artist association in the brand environment.  Marketers need to strive toward consistency in their commitments to be in these environments.  Consumers are smarter than we give them credit for.  Over time, you will garner attention and impact your relevance and relationship to your audience. 

BW: Do you see these types of brand-soundtrack partnerships as a rising trend?
SY:
I do not recognize this as a trend.  For the right project, the connection to a soundtrack is a way to take advantage of the amplified marketing efforts around a film and garner the emotional equity connected to it.  At the same time, some studios use the soundtrack as a way of extending their promotion of the film prior to its theatrical release.  Fewer studios and labels are producing soundtrack albums because they are not as financially lucrative as they once were.  For the Twilight Saga, since music is such a significant part of the franchise DNA, Stephanie Mayer and Summit were going to release a soundtrack album.  Neither Atlantic Records nor Summit had any idea that it would sell over 3.4 million copies worldwide.  For New Moon, Atlantic offered a number opportunities to tie-in with the film including events, listening parties, artist performances, etc. around the music from the soundtrack.  I was surprised that more brands did not take advantage of them.    

One trend that is beginning to rear its head is non-endemic brands partnering directly with artists, providing them with a potentially massive, exclusive distribution channel.  Over the past year or two, this form of disintermediation has been a focus for Live Nation. But it's best exemplified by Target’s exclusive distribution deal with Pearl Jam and their latest album, Backspacer. For Pearl Jam, it has been a way to underwrite their marketing costs while utilizing the marketing muscle and national footprint of Target.  For Target, it has been a self-liquidating marketing initiative.

BW: Do you have any final advice/takeaway you'd like to provide?
SY:
Music is both content and media. If we characterize consumer engagement as the sum total of the number of daily impressions plus the total amount of content consumption, then music offers the largest array of consumer-facing touch points (reach) than any other category and is by far, the most consumed entertainment content today.  This includes all daily interactions that consumers directly or incidentally have with music—all physical and digital music sold. It is every other format that music exists within or is engaged, including both entertainment and advertising.  If attention is the biggest cost in marketing, then all of these are potential attention silos.  If done collectively over time, it can help create the emotional equity to build trust with consumers, which is still the most valuable connection a brand can make.



Monday, December 7, 2009

Enfamil Maker Loses False-Advertising Suit Against PBM

Federal Court Orders Mead Johnson to Pay $13.5 Million in Damages to Private-Label Baby Formula Competitor



NEW YORK (AdAge.com) -- A federal court has ruled the maker of baby formula Enfamil, Mead Johnson Nutrition, must pay $13.5 million in damages to competitor PBM Products for misleading consumers with a comparative ad campaign. The award is one of the largest to date for a false-advertising case.

 
PBM's suit, which was brought this past April, marks the third time the Gordonsville, Va., company -- which supplies store-brand infant formulas to major retailers like Walmart and Target -- has sued Mead Johnson for false-advertising claims.

In his decision, U.S. District Court Judge James Spencer wrote that the outcome of the case was the result of Mead Johnson choosing to run an attack ad campaign due to waning sales.

At issue were promotional materials Mead Johnson ran that stated things such as "There are plenty of other ways to save on baby expenses without cutting back on nutrition," and "It may be temping to try a less expensive store brand, but only Enfamil Lipil is clinically prove to improve brain and eye development." Also at issue was a direct mailer that went out to more than 1 million people showing a blurry picture of a cartoon duck juxtaposed with a clear picture of the same image to get across the idea that products not containing Enfamil's blend of ingredients are inferior and could cause poor eye and brain development.

"Mead Johnson consciously decided that its marketing should be more aggressive and risky as it witnessed a decrease in its sales and an increase in store-brand sales," Mr. Spencer wrote. The court order requires Mead Johnson to pull any ads or promotional material making claims about PBM's infant formula, and the company is enjoined from marketing in the future that suggest that PBM's infant formula is inferior.

A Mead Johnson spokesman didn't immediately respond to a request for comment.
 
Further troubles
"Mead Johnson's ads have been false in suggesting that there is a nutritional difference between our store-brand formula products and their products, when in fact the only major difference is price," PBM's CEO, Paul Manning, said in a statement. "This jury verdict should send a significant and clear message to Mead Johnson about the way it conducts marketing and advertising for its brands."


Publicis Groupe's Saatchi & Saatchi has long handled advertising for Mead Johnson Nutrition in several markets in Asia and Latin America, and recently it was awarded U.S. ad duties for Enfamil baby formula after a lengthy pitch.
Mead Johnson, which is in the process of splitting from parent Bristol Myers Squibb, has slightly increased its ad budget during the recession, to $283 million for the first nine months of 2009, from $276 million in the same period last year. Much of the spending increase was invested in the Asian and Latin American markets. The global market for infant formula is estimated at nearly $8 billion.

The PBM suit isn't the only problem Enfamil has run into with its advertising. Comparative claims that Enfamil contains certain nutrients for babies that other formulas don't resulted in action by the National Advertising Division of the Council of Better Business Bureaus, which took the matter to the Federal Trade Commission earlier this year for review. Other competitors, such as Abbott Laboratories, which markets its formula under the Similac brand, have also filed claims against the company.

Michael J. McSunas, a lawyer at Chambliss, Bahner & Stophel, in Chattanooga, Tenn., who isn't affiliated with the case, said the $13.5 million damages sum is "really high but understandable considering it was a jury award."
"Any issue that involves babies and possible harm to them is going to cause a strong visceral response from any jury," Mr. McSunas said. "I have a feeling that if we had the same jury but the advertisements were about hot dogs or beer, the verdict would be a lot lower. The lesson here is that it is usually better to settle than to roll the dice with a jury." 

Sunday, December 6, 2009

Life After Oprah: Five Things to Know, and What to Expect

As the Queen of Talk Prepares to Depart for Cable, Clues as to How She'll Fill 24 Hours of Airtime, and More



O, GOSH: This is Oprah's Ted Turner moment.

1. This won't be Oprah's Howard Stern moment.
Given that Oprah is moving from syndicated broadcast TV to a cable network with less reach, there's been plenty of speculation that her power as a cultural force could diminish in the same way that Howard Stern's did when he moved from free radio to satellite. (OWN, the Oprah Winfrey Network, will be replacing the Discovery Health channel, with its distribution to 70 million homes.) But keep in mind that her partner, Discovery Communications, has rather awe-inspiring new leverage to negotiate wider carriage -- if you've ever seen Oprah work a room full of TV executives, you know what an amazing salesperson she is -- and it understands the economics involved in securing more homes. (According to SNL Kagan, the flagship Discovery channel is basically neck-and-neck with TBS, The Weather Channel, Nickelodeon and the USA Network among the most widely distributed cable networks in the U.S.; all are in basically 101 million homes.) As TV columnist Tom Jicha of the South Florida Sun Sentinel put it, "Cable systems don't want to have their switchboards blown out by angry fans demanding to know, 'Why can't I get Oprah?'"

2. Oprah really had no choice but to quit her talk show.
OWN was supposed to launch this year, but was quietly and mysteriously delayed. Why? Because even Oprah can only multitask so much. Some background: I was an editorial consultant on the launch of O, The Oprah Magazine, the joint venture between Oprah's Harpo Print and Hearst, so I got to watch up close as Oprah extended her brand to the glossy world. (She was, for the record, a joy to work with -- every bit as authentic, thoughtful, gracious and funny as she is on TV.) She was deeply hands-on, whether she was on site at the magazine's headquarters in New York or calling in from Chicago. (I got used to getting afternoon and evening calls from Oprah -- after she was done taping her show -- in which she'd offer her considered opinions on every last detail of the magazine, right down to the sidebars and captions.) Over time, Oprah's involvement in the magazine has diminished, as you'd expect, but there was no way she was going to launch OWN -- obviously a much bigger undertaking than starting a monthly magazine -- without the same sort of obsessive attention to detail. Something had to give, and it was the syndicated show. And speaking of O magazine ...


3. For a clue to how Oprah will fill 24 hours a day, seven days a week of airtime, look to O.
Oprah brought a lot of her broadcast brands and franchises to her magazine -- Dr. Phil and Suze Orman, for instance, were given columns starting with the very first issue -- but the magazine has also fed ideas back into the broadcast. For instance, "Oprah's Favorite Things," the top-rated episode of her show each year, actually started out as "The O List" in O. Oprah's show, given how topical it tends to be, lurches all over the cultural terrain by design, whereas O magazine offers a more programmatic, systematic take on its readers' interests -- which is exactly the sort of holistic approach OWN will need to fill 24 hours of broadcast time each day. In a way, Oprah's magazine has been a perfect laboratory and sandbox. I'd bet that just about every idea that ends up on OWN will have already appeared, in one form or another, in the pages of O mag.


4. Watch for a viral/social-media aspect to factor big into OWN.
All indications are that Oprah is increasingly fascinated with the power of viral culture -- from her friend Will.i.am's "Yes We Can" campaign video for Barack Obama to the big boost she gave Twitter (by the way, Oprah has reportedly signed celebrity Twitter icon Ashton Kutcher's production company, Katalyst, to create original programming for OWN), to the "flash mob" her staff staged on Chicago's Michigan Avenue to kick off her current season. If Discovery and Oprah are smart -- and they are -- OWN will be engineered from the start with plenty of little editorial franchises that can work as well in the social-media realm (and on YouTube, Hulu, etc.) as they can on cable.



5. This is literally about Life After Oprah.
Before Oprah, Phil Donahue redefined daytime TV. Then he went off the air, and he faded into broadcast history, even if he's fondly remembered. Oprah wants, and needs, to be more than fondly remembered. This is her Ted Turner or William S. Paley moment -- her chance to make history as not only a one-of-a-kind TV talent, but as a business and broadcast visionary. "My intention [for OWN] is for it to live beyond me," she told Sonia Alleyne of Black Enterprise last year, "for it to be a living network of possibilities for people in their own lives. To be able to say that my life was used in service, to help people come to their highest potential -- I would do it even if my name wasn't attached to it."


That sounds almost spiritual ... because for Oprah, it is.
~ ~ ~
Simon Dumenco is the "Media Guy" media columnist for Advertising Age. You can follow him on Twitter @simondumenco.


Saturday, December 5, 2009

Mobile Marketing Beyond the Mobile Phone

E-readers, Tablets and GPS Systems are Connecting More People Every Day -- Here's How Marketers Can Benefit


NEW YORK (AdAge.com) -- If you think mobile marketing is about reaching customers on their cellphones, you need to get more creative.

In the hyper-connected world, everything from medical devices to cameras to dog collars can forge a wireless connection—and carriers are eager to provide it. Already Sprint powers connections for Amazon's Kindle, and AT&T powers Barnes & Noble's new Nook e-reader. Makers of previously offline gadgets are increasingly embedding wireless access into their wares. In addition to a new crop of faster and fancier smartphones slated for next year, more e-readers and tablet devices will also join the wireless fray.

While wireless-device proliferation means more opportunities to reach the mobile consumer, it also means marketers should view mobile less as a tactic and more as an integrated strategy, while also considering the behavioral shifts mobility brings.

"There are more and more popular devices that are beginning to be connected," said Eric Bader, managing partner of mobile-marketing agency Brand in Hand. "But it's not, 'What's the available media I can buy?'; it's thinking about how consumers are behaving and what role do devices have in the way they behave."

Here are some of the near-term opportunities to put on your radar.

E-READERS
These devices for reading digital books are multiplying; by Forrester Research's count, some 40 e-readers are on the market today worldwide. With their sales set to double next year, e-readers are quickly coming into their own: A survey commissioned and published in September by consumer- electronics portal Retrevo found that 21% of respondents said they planned to buy an e-reader this year, which is more than those who say they'll buy MP3 players.

 
THE NAMES
Amazon Kindle, Barnes & Noble's Nook, Sony Reader

 
WHY YOU SHOULD CARE
Perhaps more than any other non-phone device, e-readers have marketers excited, with some seeing sponsorships and apps as being part of the advertising mix on these devices.

Think apps or content extensions: If someone is downloading a book on starting a vegetable garden, there's an opportunity to offer a bonus, in the way of a companion application or some additional content with tips on how to grow, say, summer squash, that's sponsored by a fertilizer or pesticide maker. If someone's buying a book about vintage German cars, Mercedes or BMW could step up to offer a free app.

"One would have to assume that the device manufacturers will look for opportunities...to differentiate their devices with interesting content, and potentially there are opportunities for them to sell sponsorships on these devices," said Bill Predmore, founder and president of Seattle-based interactive agency POP.

SMARTBOOKS, TABLETS AND MORE
MOBILE INTERNET DEVICE (MID), ULTRAMOBILE PC (UMPC)
Between a smartphone and a netbook sits a mishmash of devices that are both lightweight and sleek enough to fit into a small purse. Among these, expect to hear more about smartbooks, described as an "always-on" mini-laptop, as mobile-chipset maker Qualcomm has been talking up these devices at least since January.

This class of devices typically favors touchscreens over physical keyboards, and tablets, one of which Apple is developing (though it's yet unseen). HP also plays in this space, and is said to be releasing its specs to media companies.

 
THE NAMES
Archos Android tablet, Nokia N900, Sharp Netwalker

 
WHY YOU SHOULD CARE
Qualcomm is dangling scenarios like "watch HD movies on a brilliant, high resolution screen," and "play your favorite 3-D game without burning through your battery"--these units are made for super-rich, multimedia content. "I think the video experience is going to be really good on these devices, more so than on a little iPhone ... [it's] going to end up being the killer app for these machines," Mr. Bader said. That's good for advertisers, as richer media can lead to greater consumer interaction and engagement. "Today's mobile marketing is pretty limited creatively; the more flexibility you have, the more things you can do with it and the more engaging it can be," he said.

PORTABLE ENTERTAINMENT PLAYERS
On one spectrum are the lightweight, portable handheld gaming devices; on the other are MP3 players, a category Apple dominates. As gaming and music devices start to converge, many believe Sony is well positioned to turn its popular mobile-gaming platform into a computing and entertainment venue to compete with the iPod Touch, through which Apple has found an audience for cheap, downloadable games. Similarly, Microsoft is trying to position Zune as a gaming play with its partial Xbox integration, and could expand Zune's gaming marketplace through some integration with the Windows Mobile application storefront.

 
THE NAMES
Apple iPod Touch, Microsoft Zune HD, Nintendo DS, Sony PSPgo, Sony PS3

 
WHY YOU SHOULD CARE
IPod Touch users are showing that apps are more than a passing fad--so don't be surprised when gaming devices and music players open up app stores where marketers can hang their branded content. IPod Touch users download 80% more apps than iPhone users, according to mobile ad network AdMob, and 10% of the ad requests on AdMob's network in October came from iPod Touch users, second only to the iPhone, which generated 22% of the ad requests.

Mr. Predmore envisions other device makers will follow Apple's app platform model. "Sony," he said, "has investments in many different areas--portable music devices, mobile phones and hand-held gaming devices--so an app platform that could be shared among these devices would be very interesting."

Gaming hand-helds also have live internet connections, giving brand marketers more leeway to control their in-game campaigns--they no longer have to be dead-bolted into the game.

NAVIGATION DEVICES AND IN-VEHICLE COMMUNICATIONS SYSTEMS
Google's offer of free, turn-by-turn navigation services on Verizon's newest smartphone is threatening to upend the personal navigation device (or PND) space and so PND makers like Garmin are fighting back by differentiating themselves with a slew of on-board, feature-rich navigation capabilities.

 
THE NAMES
Garmin, OnStar, TomTom

 
WHY YOU SHOULD CARE
Navteq was acquired by Nokia in 2007 and opened its navigational and mapping content to advertisers about a year ago. In that time, Garmin has allowed the advertising program to run on more than 10 of its devices. A Navteq-commissioned survey this spring found that 19% of PND consumers who recalled seeing a specific ad clicked through to find nearby retail locations, and up to 6% of GPS users visited a business after seeing an ad on their PND. OnStar, the most popular of these in-vehicle communication systems, has no advertising program, and no plans for one.

A caveat: Although PNDs sold today use mobile broadband to access navigation data, older devices rely on radio signals for data and are limited to just over 50 markets. What's more, clickthrough rates aren't trackable on one-way devices. As Google greases the wheels for location-based advertising, reach may be a problem for the PNDs, Mr. Predmore said--"a fragmented market may slow the adoption by marketers."