Tuesday, September 29, 2009

What do CFOs have that CMOs don’t?

By Scott Davis, Senior Partner (pictured) and Francisco Pinedo, Senior Associate at Prophet.

We have to admit: as marketers we can be good at many things; but marketing ourselves is not one of them. Time and time again in the race to occupy the CEO seat, CFOs win.
The current financial crisis provides another proof point, as many companies are following the CFO’s advice instead of focusing on the needs, preferences, and behavioral patterns of their customers.
They are cutting costs (including marketing budgets) without considering the potential long-term consequences on their brand.
Thus, while CFOs are increasingly becoming the CEO’s right hand, we are watching the CMOs struggle to get a seat at the table.

Why is this happening?  How can we turn it around?  The answer is simple – CFOs have a “P&L mindset.” And marketers need to get it too.

Having a Profit and Loss (P&L)mindset means having a deep understanding of and/or hands-on experience with what it takes to run a business line and deliver the numbers. It’s critical for marketers to develop or sharpen if they expect to advance from being order takers or sales supporters to enterprise-wide, visionary leaders.

By developing a P&L mindset, CMOs can communicate with the CEO in his or her own language, leaving aside -at least momentarily- concepts such as “brand awareness” or “intent to purchase.” Instead, they use terms like “EBITDA” or “Economic Value Added”; terms that come naturally to the CFO.

Thus, CMOs are empowered to act upon their knowledge of the customer and drive growth through the launch of new products, services, programs, and pricing strategies.

They can engage in one-on-one discussions with the CFO, contrasting the resources that they need with the expected increase in their gross margin, and explaining (with numbers, of course) that these are not expenses but rather attractive investments.

As marketers, how can we develop a P&L mindset?
First, we need a complete understanding of the business we’re in and how we make money. As obvious as this may sound, many marketers don’t understand, for example, how it is possible that a very profitable line of products can start generating losses by slightly modifying the way their company assigns fixed costs.

How are we supposed to enter into discussions with a CFO if we don’t understand where our operating profit comes from?
We need to master our P&Ls and decode the way our accounts are affected by decisions that are made inside and outside the Marketing department. We will know we have conquered this stage when we start being consulted or at least informed before any changes that affect our P&L are applied.

Next, we need to change the way we communicate to reflect our P&L mastery and elevate the dialogue by taking it to a more strategic and integrated level. To do this, we will have to stop talking about the need to increase the marketing budget, and replace it with a discussion on how to achieve common business objectives through a customer lens.

This allows us to increase interactions with other functional areas like Finance, Logistics, or Sales and create internal partnerships and alliances, while extending our credibility within the organization. As soon as we are able to show top management small wins in the P&L as a result of these increased interactions, we will have overcome this second stage.

Finally, it is vital for us to understand that we will not be able to get here alone. If we want our marketing teams to develop a P&L mindset, we need to align performance evaluations and rewards systems with the company’s key objectives.

A brand manager may understand and even manage according to a P&L mindset, but if he or she is ultimately evaluated and rewarded according to market share growth, he or she isn’t incented to develop and execute strategies focused on what the organization really needs.

Furthermore, in proposing this organizational change, we will finally get the CEOs attention, who will understand that we are aligned with her objectives and will start to listen more closely.

Both CMOs and CFOs have to play a role in our organizations’ strategic growth discussions. When marketers are left behind, the company underestimates the power of our brands, the value of our markets, and the value of our greatest asset – our customers.

Making important decisions without these considerations can be dangerous; especially considering the effects could last well beyond this crisis. We can avoid this, but in most cases, we will have to make the first step. Let’s place the marketing function were it really belongs – at the top, helping lead the C-suite discussion.

Desperate Spokeswives: A New Marriage With Ads

Sprint Teams With Producers to Integrate Campaign With Hit Show

NEW YORK (AdAge.com) -- Viewers of Sunday's launch of the new season of "Desperate Housewives" may have noticed a little something extra during the proceedings. As the show broke away for a set of ads, viewers saw a brief sign announcing a segment titled "Another Desperate Housewife," sponsored by Sprint.

During the short, which was crafted by "Desperate" staffers, romantic tension erupts among a married couple, with Sprint's Palm Pre playing a central role in the proceedings. In the next seven weeks, viewers will see seven more vignettes featuring the couple, who find that Sprint products help them learn more about infidelity, betrayal and justice than they ever might have imagined. A few weeks down the road, the two characters should show up in subtle fashion in the actual show, "Desperate Housewives."

It used to be easy to tell the difference between a TV show and a TV commercial. One entertained, one promoted. One had high drama or a laugh track, and the other featured shots of hamburgers or sneakers. As the TV networks launch shows for the 2009-2010 season, however, they are working feverishly to make the ads look just like the shows upon which they intrude.

"You want to be able to relate to viewers within the property they know and love and that they have a passion for," said Stephanie Kelly, Sprint's entertainment media manager. The telecommunications company has also embarked on a similar venture with NBC. Last week, the first episode of "Heroes" contained a commercial-break vignette featuring a new character from the superhero drama.

In Japan, characters from favorite programs have long cropped up in the ad breaks. Now in the U.S., TV networks are collaborating with marketers to concoct commercials that incorporate elements of the programs so they don't feel the entertainment is stopping so the selling and hyping can begin.
Keeping eyeballs
"More and more, the critical tipping point for these integration kinds of deals is being able to exploit the content in ways that make sense," said Geri Wang, senior VP-prime-time sales, ABC Television Network.

TV networks are trying "to look at the entire time you have an audience watching. They have some sort of relationship with your network," said Alison Tarrant, senior VP-integrated sales and marketing at the CW network. "You try to make it as entertaining and as meaningful as possible so they don't leave the commercials." 
During the debut of "Gossip Girl" this season, the CW ran an ad that talked about "evil" characters not only in its own "90210" but also the villain in the new 20th Century Fox teen-horror movie "Jennifer's Body."

Sprint's new "Desperate Housewives" vignettes incorporate a setting and narration that are familiar elements of the show. This sort of program-specific advertising has been on the rise in recent years -- NBC has pioneered use of the technique in everything from "Last Comic Standing" to "30 Rock" to "Heroes" -- but ABC's foray seems to be a sign that this sort of customization is becoming de rigueur when it comes to TV advertising. "This is something [ABC executives] have not done before, in terms of getting an actual writer and creator of one of their hit shows to be intimately involved in the product of these shorts," said Denise Ocasio, a managing director at WPP Group's MindShare who helped craft the "Housewives" deal and oversees the agency's Sprint business.

By weaving program elements into ad breaks, networks hope viewers will be less eager to channel surf or fast-forward, thus increasing commercial ratings. Because the ads are tied closely to a particular entertainment property, they demand the forging of closer relationships between network and advertiser, and result in commercials that really can't air anywhere else other than the show for which they were designed.

But these efforts require a significant increase in effort. As Sprint's Ms. Kelly describes it, the process of creating the "Housewives" shorts required much back-and-forth between ABC and the telecommunications company. Mr. Cherry and his production team "were responsible partners. They ran scripts by us and we had a representative on site as [the shorts] were being shot. We were able to review them afterwards," Ms. Kelly said.
Many issues
Many logistical issues can also surface, said Lisa Herdman, VP-director of national programming at independent agency RPA, which helped devise promotional vignettes for the Honda Fit that aired during "30 Rock" and featured Judah Friedlander, who plays a character on the show. "There are often talent issues, production issues, production payment," she said.

Speaking during a recent conference during Advertising Week, NBC Universal president-sales and marketing Mike Pilot suggested that all TV networks would begin making use of the show-specific technique, as the efforts can foster deeper relationships between an individual program and an advertiser, as "Heroes" has with both Nissan and Sprint.

"I don't see them going away," he said, though he also suggested networks and advertisers may do fewer of them overall, making the ones that do get done more "elegant," or even more seamless and alluring.

Starbucks Marketing Push for Via Begins With Taste Tests

Instant-Coffee Product Also Gets Unorthodox Retail Distribution Through REI, Office Depot, Hotel Chains

CHICAGO (AdAge.com) -- Starbucks launches its first major advertising and marketing campaign Tuesday for Via, the instant-coffee product it spent 20 years developing. The marketer is tapping traditional and social media, and asking consumers if they can tell the difference between the instant variety and the brewed coffee that made it a household name.

The chain is expecting between 8 million and 10 million consumers to visit its 7,500 company-run cafes in the U.S. and Canada to participate in a taste test that runs Friday through Monday. Participants will receive a "thank you" card good for a free coffee on their next visit, and $1 off their purchase of Via at any Starbucks.
Part of the idea for the taste test, said Terry Davenport, Starbucks senior VP-marketing, came from the Chicago market, where Starbucks did its only advertised test of Via. While the TV ads led to a high level of awareness, consumers weren't motivated to visit stores -- so the brand created an event in hopes of spurring its faithful into action.

"Instead of selling something at them, we ask them to participate with us," he said. In so doing, "we're using the best weapon in our tool kit, one that on one else has, our store-level partners." Starbucks is sending its 4 million Facebook friends invitations to participate, with the anticipation that they will invite their friends. "It has a multiplier effect," Mr. Davenport said.

A print ad from the new campaign.TV support begins Tuesday and will last through Monday, with heavy rotation in the morning. The 30-second spot builds on the chain's ads on "Saturday Night Live" last weekend, with disparate groups of people unable to tell the difference between the two types of coffee. Starbucks is also attempting "roadblocks" in major newspapers and has approached morning deejay teams in major markets to integrate a Via taste test.

The chain has foreshadowed this type of campaign since Via launched in test markets this March. Two of three Ad Age taste-testers at the time, inspired by Starbucks' bold words, tried but could not tell the difference.

"I've been fooling people for almost a year now, at home, at the office. I make coffee for my wife almost every day," Starbucks CEO Howard Schultz said in a call with reporters. "I tell people this is the instant version of Starbucks brewed coffee and they're shocked."
Starbucks' agencies are BBDO for creative, PHD for media and Edelman for the company's outside PR.
Creating more 'usage occasions'
With this launch, Starbucks is expanding distribution of Via from test markets Chicago, Seattle and London to stores throughout the U.S. and Canada. In addition to its own cafes, Starbucks Via will now be sold in REI, Office Depot, Compass, United Airlines, Barnes & Noble cafes, and Marriott and Omni Hotels. Via will break in to mass grocery in 2010.

Mr. Schultz said that the chain is looking to create "additional usage occasions" for Starbucks coffee. The idea is that heavy coffee drinkers may have a cup of Starbucks on the way to work and a mug of swill once they get there. Starbucks sees additional opportunities with travelers and campers. Mr. Schultz initially defined instant coffee as a $17 billion market, but has expanded that estimation to $21 billion, based on updated international sales figures. Instant coffee is much more popular outside the U.S., making up about 40% of worldwide consumption.

While such a retail strategy seems unorthodox, it has worked for companies such as Red Box video, which rents DVDs outside supermarkets. Cranium, the popular board-game, grew its business by scoring distribution at Starbucks stores. Red Bull catapulted to prominence in part by its popularity as a mixer with vodka.
"All of those outlets make total sense," said Lynn Dornblaser, director-consumer-package-goods insight at Mintel International. "But that's not what a major market position should be, because it's only going to be a tiny, tiny percentage of consumers."

Starbucks acknowledged that another reason for holding off on mass grocery is ensuring that Via will be merchandised with other Starbucks products, and away from Nescafe. The Nestle product has mounted offensives in Seattle and Chicago, describing Via as a product that costs 400% more, or about $1 a packet. 

Monday, September 28, 2009

Heroic Promotions

Apr 1, 2009 12:00 PM, Patricia Odell
Movie-themed campaigns are super for 7-Eleven

7-Eleven ran its first promotion with a comic- book-inspired blockbuster — “X-Men: The Last Stand” — three years ago. Since then, a string of successes, including promotions with “Spider-Man 3,” “Iron Man” and “The Incredible Hulk,” have goosed sales and delivered new customers. In 2008, 7-Eleven and its agency FreshWorks won Promo's Best Overall Pro Award after transforming 12 stores into Kwik-E-Marts in a partnership with “The Simpsons Movie.” In April, the focus turns to “X-Men Origins: Wolverine,” which opens May 1. Chief Marketer recently talked with Stephanie Hoppe, senior director of marketing at 7-Eleven, about the convenience store chain's promotional strategies.

CHIEF MARKETER: How do you get buy-in from the 7,600 franchisees?
HOPPE: We have several national meetings that allow us to communicate the program to our field personnel, who have ongoing contact with our franchisees. Because we align ourselves with such strong properties, it is easy to gain buy-in; and we have a standard kit-delivery system that ensures all materials arrive consistently on a timely basis.

CM: What is the process for deciding on a partner film?
HOPPE: We have a very disciplined process that is confidential. A cross-functional team that includes marketing, merchandising, operations and FreshWorks makes the final decision on what properties best fit our brand and resonate with consumers.

CM: How do you measure the success of these partnerships?
HOPPE: Through sales results of focus items, such as Slurpee beverages and products themed with [the movie], as well as publicity surrounding the program. We also measure how we “elevate” the awareness of the brands of 7-Eleven and Slurpee in the eyes of consumers. One other metric is buzz, as that is an indication of the promotion's “coolness” factor. So we monitor online activity and how many online mentions the promo generated.

CM: How are you marketing the “Wolverine” promotion?
HOPPE: The film will be prominently featured on our storefront and throughout our stores. We have created some fabulous P-O-P, as well as Slurpee character straws and lenticular Slurpee cups. The film will be promoted on our Slurpee Web site and at 7-Eleven.com, including a link to the trailer. Local promotional activities are planned, and we will support the program with radio in key markets.

X Marks the Spot

7-Eleven cup featuring Wolverine7-Eleven has partnered with “X-Men Origins: Wolverine” for a month-long promotion that will include life-size standees of Wolverine, Sabretooth and Gambit watching over the shops.
Slurpee cups feature the three, especially notable since the beverage makes a brief appearance in the film starring Hugh Jackman. The character Blob is seen with one of the drinks in a size colossally bigger than any human has ever sipped.

Sunday, September 27, 2009

Mobile A Sweet Deal for Axe

Apr 1, 2009 12:00 PM, Brian Quinton

Chocoholics Know their Craving can Hit Anytime, anywhere, at home or away. That's why Axe made sure to launch its choco-themed Dark Temptation body spray deodorant last fall with a large dollop of mobile marketing.

As part of an integrated marketing approach that included TV, movie ads, print and live events, Unilever brand Axe and its agency Castillo/Isaacson collaborated with Ping Mobile on a campaign to drive awareness and trial among mobile users.

The whole short launch campaign ran from late Sept. 2008 through the second week of November. “We only had six weeks to do a full-variant launch, and we wanted to reach as many people as possible and get them engaged quickly,” says Castillo executive Miguel Garcia.
Axe's Chocolate Man at Six Flags 
The offer chosen was a text-to-win sweepstakes in which entrants could text a keyword to short code 74642. Ping linked six different keywords, AXE1 through AXE6, with different promotional channels, so the clients could track which ones were performing hardest.

Users who texted in received one entry to the “Sweet Life” sweepstakes, where they could win a trip to Los Angeles or Las Vegas complete with VIP amenities.

Players who agreed to opt in for further SMS contacts were offered 50 more chances to win if they bought Dark Temptation from a retailer.

The mobile campaign was a success, resulting in “thousands” of text sweeps entries and a double opt-in rate of 20%, according to Ping president Shira Simmonds.

The brand concept also carried through a live campaign, since Axe had its “Chocolate Man” walking around Six Flags parks and other locations handing out cards with the text-in options for the sweeps, Simmonds says.
“People were standing in line for 20 minutes to take a picture with this guy,” Garcia adds.

Saturday, September 26, 2009

Swiffer Sweeper Gives Itself a Sleek, Clean Sweep

May 2, 2009

The problem: Procter & Gamble knew its Swiffer brand couldn’t just be any dirt picker-upper on a stick. While the brand had revolutionized cleaning for many people, not everybody was a fan. Those who snubbed their noses at Swiffer generally weren’t attracted to the product because they perceived traditional cleaning methods to be far more superior. So, Swiffer needed to up its ante against that old standby: the mop and broom. This redesign—which was implemented in-house at P&G—was designed to draw more consumers to the product. “It’s about improving and delivering that more detailed and thorough clean,” said Swiffer Sweeper assistant brand manager Guerin McClure of the challenge. Current users, too, can upgrade to “that specific [level of] clean they’re looking for,” he added.

How was it created: With its crisp turquoise and neutral hues, the original Swiffer, like many late-1990s products, seemed to have been inspired by the first iMac. However, the bulky swivel head made sweeping under the furniture more of a chore than a modern convenience. This next generation sibling sports a sassy green color scheme and a new head design that's “squared off” in the corners to allow for sleek, easy dirt pick-up. Gone, too, are the thick edges, which have been replaced with new, scalloped ones that “come down to a pretty thin point,” McClure said. And oh, anyone who has come close to sacrificing a finger to the old Swiffer’s pointy cloth-grabber teeth, will be happy to learn that version 2.0 has been made more user friendly and streamlined with soft slots that grab the duster and keep it in place.

Finishing touches: Once it got a grip on the handle and the headstock, Swiffer set out to improve its dust collectors: the dry and wet cloths. After analyzing both cloths’ current textures, P&G researchers concluded that they needed better designs for both to zap dirt. Out went the dry cloth’s V-shaped ridges that the manufacturer had been using since 2006, and in came new, honeycomb, hexagon-shaped, individual dirt trappers that pick up 50 percent more dirt, dust, hair and crumbs, Guerin said. (Wowzers, so we can eat, sleep and play with our pets on the couch?)  The wet cloths, on the other hand, underwent a texture upgrade and its cleaning solution now traps 25 percent more dirt.. Swiffer has been advertising the makeover—which includes, among other things, a new, ergonomic handle and stronger, 360-degree swivel head—via television, online and brandSAVER! coupon book efforts. Kaplan Thaler Group, New York, is the lead ad agency while Starcom MediaVest Group handles media buying duties. Swiffer was also the official cleaner of Paramount Pictures’ Hotel for Dogs. According to IRI, sales of the Swiffer Sweeper have increased 1.04 percent for the 52 weeks ended March 22.

Sweeping changes:
The original Swiffer had a nice form, but it took a little time for function to follow. The bulky swivel head made it difficult to reach into corners and under furniture.

All squared away:
New, dry cloths containing honeycomb dirt trappers pick up 50 percent more pet hair, among other dust nuisances. Point is: “Why go part clean when you can go all the way clean?” McClure said of the brand’s new, improved performance.

Dust in the wind:
The old packaging didn’t show off much of the product. The new starter kits give a peek of the swivel head and relay cleaning as a fun experience. “New. Stronger Sweeper. Deeper corner cleaning,” the label says. All right, we’re sold. Goodbye, mop and broom. (Loud clang in closet.) 

Why General Mills' Retro Packaging Worked, But Tropicana's Didn't

March 11, 2009
- Barbara Lippert, Adweek

Forget about your sluggish digestive system and/or your borderline cholesterol problems. Instead, let's go back, back, back to a time when we innocently ate sugarcoated fluorescent cereals at the breakfast table and "read" the boxes even before we knew how to identify the alphabet.

They're as reassuring as footie pajamas, these retro cereal boxes that General Mills has re-created and distributed through Target. What a smart marketing move and a genius way to redefine comfort food at a tough economic time -- by providing comfort kitchen art!

Even if your parents refused to buy them, why do these faithful updates of the originals of Trix, Cocoa Puffs, Lucky Charms, etc., conjure such powerful memories?

According to Brian Collins, of the design firm Collins, the blend of colors and figures on the original boxes were designed to play well on nascent TV sets. Paradoxically, the Trix Rabbit and Coo Coo Bird loom larger than life in our memories, because the designs were "more reductive than today," he says. "They were designed to have affinity with cartoons and be easily captured by a TV camera at a time when color was not precise."

Collins also makes the point that when it comes to the past, vintage music and TV shows are always with us, but old package design quickly fades.

In those days, the cereal-box design stood out in commercials that were cartoons that ran during cartoons, so they had, in effect, a double impact. When moms took kids to the grocery store, they could recognize the icons on the boxes from watching television, often before they could even speak.

Indeed, the re-creation of the GM packages (they're close to the originals, but by law must have contemporary food illustrations) makes clear just how insanely overdesigned cereal boxes have gotten these days. With the battle for shelf space in cereal aisles that much more desperate, brand designers have made every inch of the box pop, and the result is often ugly and chaotic -- and forgettable.

So if old equals comfort, why was the redesign of the Tropicana packaging such a disaster? Because it tampers with the reassurance of the present design (the orange with the straw) and instead evokes the generic products of the 1970s, but in a fake way, drained of all meaning, like a ghost package. Some fans of the new design suggested that it's perfect for bad economic times, since generic products seem cheaper. But I don't think people want to be reminded of gas lines, macramé and Jimmy Carter's self-named "malaise."

Regardless, General Mills has hit it out of the park this time. The design move provides continuity for a third or even fourth generation to delight in "silly Rabbit." 

'Family Night Centers' Come to Walmart

Sept 20, 2009
- Bridget Goldschmidt

Walmart is rolling out a Family Night Center in all stores this month. The area is designed to help shoppers find new ideas for at-home activities and savings on popular items in a convenient one-stop location.

The centers feature low prices and savings on popular and traditional family games, as well as DVDs, snacks and soft drinks. The mega-retailer also created a site, www.walmart.com/familymoments, where mom bloggers offer tips on how to create a fun family night plan. Additionally, the site recommends products, and healthy snack and dip ideas, among others.

“With busier schedules and kids heading back to school, now is a great time to provide a dedicated place in our stores to give Mom the savings and ideas to create fun, quality time for her family this fall,” said Laura Phillips, chief toy officer and svp of entertainment at Bentonville, Ark.-based Walmart. “Our Family Night Center is designed to provide an easy way to quickly design a complete family night experience.”

Family Night Centers feature games such Candy Land, Chutes and Ladders and Yahtzee for $8; Jenga, Monopoly and Pop-O-Matic Trouble for $10; The Game of Life, Operation and Twister for $15; and Bop It!, Monopoly: Hasbro Family Game Night Championship Edition, Pictureka!, Sorry! and Sliders for $18. Also available are DVDs for $10, Including Camp Rock, Enchanted and High School Musical (1 and 2), and such refreshments as assorted 13.8- to 14.5-ounce bags of Doritos for $3 each and 2-liter Pepsi and Mountain Dew products for $1.25 each.

TGIF's Very Friendly Online Promotion

Sept 21, 2009
- Noreen O'Leary

What happens when a social media strategy takes off faster than expected?

TGI Friday's found out this month when, after just six days of media support, its new marketing character, Woody, achieved a Facebook promotional goal expected to occur over almost 30 days. The momentum swell that initially buoyed the brand online, in fact, threatened to drag it down -- until some quick thinking helped save the day.

TGIF's enviable "problem" began with the creation of Woody, developed by its new agency, Publicis, New York (which worked with sibling Digitas on the campaign). Earlier this month, to prove his self-described "No. 1 fan" status, Woody needed to acquire 500,000 friends on Facebook by Sept. 30. Each friend would receive a coupon for a free Jack Daniel's burger or chicken sandwich in return.

After a soft launch on Sept. 2 and subsequent e-mail campaign, Woody picked up 80,000 friends-even before TV and digital banners were launched Sept. 7. Sunday, Sept. 13, Woody hit the 500,000 mark. "[It was] fascinating to watch this explode," said Rob Feakins, president, CCO, Publicis, New York, of the highly successful campaign.

It was also stressful. With two weeks of paid media to go, the agency knew it had to add to the strategy. So on the 13th, after an exchange of 80 agency/client e-mails and five conference calls, it was agreed the promo would be extended.

As it turned out, that was a very good decision. That same Sunday night it became clear that Woody's friends who joined after the 500,000 level was hit were unhappy they'd missed out on the promo. The negative chatter carried over into Monday. People voiced frustration about not getting a coupon; accused Woody of working for TGIF; and complained about the use of marketing ploys in social media. On Monday, Woody offered six free chicken wings during that night's Monday Night Football at participating TGIFs. Few were appeased.

On Tuesday, Woody hinted good news was in the works. Later that day, an online video was posted extending the promo to the first 1 million sign-ups.

By late afternoon last Friday, Woody had 784,000 friends. (It's not expected he'll re-up his goal a second time.)

"It was interesting to see how quickly the page turned," said Feakins. "With social media and advertising we're at a collision point. You have zero control when things are good ... or when they go south."

Facebook has obviously become fertile ground for marketers. But with Woody, Publicis is seeking to create a more long-term bond with friends than a short-term bump in restaurant traffic and sales.

"The question is, how do we use Woody going forward?" said Feakins. "This is different from other 'free' promotions. The burger was the mechanism, but Woody allowed the introduction for TGI Friday fans to get together. Can these guys sustain each other three weeks from now? Have we garnered the loyalty of his fans?"

Given the fact Woody is positioned as a fan and not a brand spokesman, his persona has to be handled carefully, which is why he won't be making regular appearances in TV ads. A major concern was whether the Facebook community would accept an actor among them, and while there were opinionated comments about that role, Publicis said he received over 200,000 viewings of his videos and more than 100,000 wall postings. The feedback to Woody, said Feakins, was "shockingly positive."

Friday, September 25, 2009

How Operations Research Drives Success at P&G

You can’t just call it a company anymore — it’s more of an economy unto itself. With $76 billion in annual sales, 138,000 employees, and operations in more than 80 countries, Procter & Gamble, the world’s biggest consumer goods company, has grown to such epic proportions that economists consider it a bellwether of consumer spending and confidence. Among the more than 300 brands it sells globally, from Gillette and Crest to Scope and Swiffer, 22 generate more than $1 billion in annual revenue. Another 18 pull in at least $500 million.

Yet there’s an entirely different element of P&G’s success that doesn’t show up on the balance sheet, and which figures into almost every key decision driving sales and profits — from choosing the right brand names to slap on new products to precise juggling of global inventories. The secret ingredient? Data — some 900 terabytes of total capacity, 50 TB more than Google searches every day — that P&G uses to measure and optimize almost everything it does.

Three decades ago, P&G’s cadre of data analysts was programming simplistic queries into mainframe computers to determine, for instance, the best time of day to deploy television advertising. It mostly trusted executives’ instincts when deciding when to launch a new product or how much inventory to put on store shelves. These days, thanks to exponentially more powerful computers, data retrieval and storage, and new generations of software, it’s a central army of “quants” at P&G who are arguably as important to its overall success as those storied P&G brand managers.

The company has raced to the forefront of data innovation in recent years, and has turned analytics — or operations research (OR), as it’s more widely known — into a competitive edge that few others fully understand. As Brenda Dietrich, an IBM fellow at IBM’s Watson Research Center, explains, “There’s a gap between the math professionals and the nonmath executives in many companies. The companies who have people who can walk into a business meeting and tell executives how to use OR tools are the ones who’ve got the edge. Deployment is no longer done just by the math people; analytics has become much more usable by a broader set of people within an organization.”

At P&G, it’s top quants like Glenn Wegryn, associate director of product supply analytics, who have quietly led the data revolution. Wegryn’s team of 20 analytics pros combines enterprise-scale simulation and risk assessment software with in-house tool sets to help streamline supply chains, launch new brands, generate internal workflow models and tackle a host of other operational and organizational problems. According to Wegryn, P&G doesn’t make any significant analyses on supply-chain structure without input from his team, since data crunching that can improve the slightest of margins in a company of P&G’s size can generate huge dividends. “The consumer products industry is cost driven, and a lot of it is commodity type in nature,” Wegryn explains. “So very efficient and effective supply chains are critical for success and the ultimate profitability of the company. OR techniques, when utilized effectively, save costs, reduce cash investments and inventory, and can even improve top-line growth.”

P&G, GE, Merrill Lynch, UPS — the list of Fortune 500 companies getting into the OR game is expanding, says Mark Doherty, executive director of the Hanover, MD-based Institute for Operations Research and Management Sciences (INFORMS), an OR think tank. “In the private sector, OR is the secret weapon that helps companies tackle complex problems in manufacturing, supply chain management, health care, and transportation,” he says. “In government, OR helps the military create and evaluate strategies. It also helps the Department of Homeland Security develop models of terrorist threats. That’s why OR is increasingly referred to as the ‘science of better.’”

Rise of the Quants

The current analytics strategy at P&G took root in 1992, when Wegryn and a team of analytic professionals took on a daunting challenge: The company had too many manufacturing plants scattered around the country, and needed to eliminate redundant capacity, figure out optimal inventory holding policies, and develop other techniques that could optimize a supply chain that spanned continents. The data formulas Wegryn began churning through weighed myriad factors, including the impact of NAFTA on operations, trucking deregulation, and redundant capacity issues. The team, which included 30 managers and upwards of 1,000 employees around the country, spent a little less than a year devising tools that generated various consolidation scenarios. The team’s recommendations ultimately allowed P&G to shut down multiple plants and have since generated more than $1 billion in cost savings. Small wonder, then, why mathematicians are in on business decision making in many companies, not just P&G. Entire companies today — Google, for one — are being built almost entirely on mathematical modeling. 
“We all know the slogan ‘Intel Inside,’” says Vijay Mehrotra, professor of decision science at San Francisco State University. “But we don’t automatically think, ‘Is there OR inside?’ And yet there is, in a staggering number of things. When you book a car with Hertz, and instead of saying, ‘It’s unavailable,’ they say, ‘It’s available for $59, not $39’ — that’s OR inside. Today it’s embedded in the way we do business.”

P&G’s Killer Apps in OR

Streamlining manufacturing plants was just the start. Here are a handful of other killer apps in OR that Wegryn has since developed and refined at P&G:  
New product branding: Several years ago, Wegryn used decision analysis techniques to help managers decide to use Crest as the brand name on Crest White Strips. Granted, that might seem like a no-brainer, but it was a complex decision because the teeth-whitening category was new — a situation in which a new, stand-alone brand name would perhaps make sense. P&G turned to their analytics team to sort matters out, and, as a result, Crest was chosen as the brand. Wegryn says the process involved “getting clear on the question, evaluating options, understanding the uncertainties, and analyzing the best decision that you have available. In the end it was decided to use the brand equity Crest had.”  
Sourcing materials: Every product at P&G requires myriad materials, obtained from hundreds of different sources worldwide. Using OR techniques, Wegryn’s team analyzes which source is optimal for every product. “A lot of times, there’s service and quality considerations,” Wegryn says. “We also measure whether a manufacturer really has the capability to deliver the materials at the quoted price.” For instance, retail clients of P&G spend $140 million per year on in-store displays for P&G brands in the United States alone, often buying the display from one vendor. By using OR to determine the best source via a Web interface, P&G now pockets nearly $67 million annually in cost savings and has slashed the order-and-delivery cycle for store displays from 20 weeks to just eight.  
International trade and finance: P&G has ground operations in 86 countries, posing huge logistical and financial challenges. With products constantly crossing national borders, P&G is exposed to considerable exchange rate risk, where margins can be squeezed by the tiniest movements in currency. Wegryn’s group taps into software that helps predict optimal exchange rates and allows plant managers to shift production accordingly. “Let’s say there’s one plant in the US and one in Europe,” Wegryn explains. “Based on the exchange rate, we will adjust where we’re manufacturing and sourcing product from. It’s not a massive adjustment, but just a slight adjustment to minimize exchange exposure and maximize the profit, ultimately, for the business.”  
Inventory management: At giant-sized P&G, inventory management is crucial to overall efficiency. “How much inventory do I need, and where do I need to have it,” explains Wegryn, “are really simple questions that are really hard to answer.” Using OR, the company now fine-tunes inventory dynamics. For example, conventional wisdom once held that adding a new warehouse to a supply chain would always add inventory into the system as well, ratcheting up costs. But using analytic methods, Wegryn’s team poked holes in this assumption, showing that new inventory need not be added. Their work was able not only to economically justify a new warehouse, but by using better methods, they were also able to track and put exactly the right amount of inventory in the system, reducing overhead costs. “The huge deal about this application of OR is that we’ve been doing it for 15 years,” he says. “It’s used in every area of P&G.”  
Organizational design: Wegryn hasn’t aimed OR’s powerful lens on just strategic problems, but internal management challenges as well. Over the past few years, Wegryn has developed simulation models that help execs in each of the company’s five major business organizations keep tabs on their organizational structure and inflow of talent. Taking into account variables such as hiring rates, attrition, retirement, movement between jobs, promotion rates, and so on, the quants created a “flow model” that shows managers what the likely flow of people moving in, out, and within an organization will be over the course of months or years, helping them to determine where they should be hiring most and when.

Toward “OR Inside”

One of the first myths about OR is that it applies only to operational issues. By every measure at P&G, however, OR is a cross-functional discipline applied to anything from executive compensation to inventory management. Wegryn says his analytics group looks at every business problem and asks: “Is it a strategic problem, is it a structural problem, or is it an operational problem? We are called into various problems throughout the entire spectrum.” P&G’s OR tools fall into four broad categories, according to Wegryn: structured analytical modeling using a spreadsheet-type technology; decision-making analysis methods; mathematical modeling in the form of optimization; and simulation technology. 
Within those categories, Wegryn has subsets. One he calls “OR inside” — packaged tool sets from an enterprise vendor. P&G uses outside vendors for optimization software, simulation software, object-based simulation modeling tools, and risk assessment software for decision analysis. Wegryn believes that embedded analytics in commercially available packages are a baseline for any big company to stay in the game. “Our competitors utilize OR tools that are embedded in solutions, as we do, and that is simply to stay competitive.” But “canned” OR doesn’t come prepackaged with what Wegryn calls “company intelligence” — data that’s specific to the nature of a particular company’s problems and challenges. That’s where “applied OR” comes in. 
Applied OR is project-specific, utilizing customized tools developed by the company’s analytic team that target particular problems. “We have done analyses throughout the world on very specific questions,” Wegryn says, “like what is the proper balance between capacity at a particular plant and the inventory it should be holding, to help responsiveness to our customers.” Whatever the application, his team collaborates closely with members of P&G’s IT team — the company’s Global Business Services unit has several hundred employees operating in analytics alone — in order to get the answers to many of P&G’s problems. 
Says Wegryn: “We develop the algorithms and mathematics inside, but as far as database and systems architecture and deployment and support, we defer to our IT colleagues.” In the 23 years since she joined Big Blue, IBM’s Dietrich has seen OR evolve “from data gathering that took months and months” to OR available on the desktop. “We can now deliver to executives software that, with a click of a button, can run models and present results. But it takes work to get OR embedded in daily business, and it takes people who can present OR to executives in a concrete way. 
The bottleneck in OR today is people — the industry is short on people who can deploy OR and frame it in a business context.” And that is what gives Wegryn his unique status at P&G: He can talk business, and his business counterparts listen. “Rarely are we walking in front of a senior manager without any in-business support for the work we’ve been doing,” he says. 
“We go off, we analyze options, we come up with a recommended plan, and then we present that to management. Do they throw us out of the office for screwball ideas? The short answer is no. We’ve developed a reputation of having an unbiased view of how the business operates, and we’ve earned their trust.”  
Additional reporting by Jake Swearingen. 
Source: http://www.bnet.com/2403-13241_23-188137.html?tag=content;col1

Thursday, September 24, 2009

Behind Coors' color-changing beer cans

An ink-stained entrepreneur revamps beer labels and CD cases.

(Fortune Small Business) -- As an undergraduate at Cornell University, Lyle Small annoyed his housemates by spending days on end painting their Ping-Pong table in rainbow shades of ink. He brewed chemicals to create inks that changed hue when exposed to light and heat.

"I got obsessed," says Small, now 41. "I thought all printing inks should change color."

Two decades later his passion is paying dividends. Small's Colorado Springs company, Chromatic Technologies Inc. (CTI), is booming while rivals in the ink industry are cutting back. Music distributors, foodmakers and the beer giant MillerCoors are using Small's color-changing ink to make their packaging stand out. CTI landed 120 new customers in 2008. Small expects sales to double this year, to $10 million.

coors_cans.03.jpgThanks to CTI's ink, the mountains on Coors Light cans turn blue when the beer reaches optimal drinking temperature (roughly 43�-50�F). Coors (TAP, Fortune 500) already used color-changing ink on paper labels for bottles, but the brewer had struggled to find a contractor that could create the same effect on cans. "CTI is the only one that delivered," says Ray Toms, a MillerCoors scientist who worked on the project. MillerCoors signed a two-year contract to buy all of its ink for cans from CTI. The beer company will account for 40% of Small's revenue this year.

The deal took persistence. When CTI first approached Coors in 2001, Small couldn't guarantee that the ink would work in high-volume production. Coors printed 20 million cans of Coors Light every day; any downtime would be costly. So Small arranged painstaking tests in canning factories in eight countries. Three years later he was ready to ink a deal.

The brewer's faith has paid off. Amid flat beer industry sales, Coors Light saw 3% growth this year. The color-changing artwork is prominently featured in the company's TV ads.

"It's resonating with consumers," says Benj Steinman, publisher of Beer Marketer's Insight.

In May, CTI announced another high-profile deal, this time in the music industry. Chickenfoot -- a rock supergroup fronted by Sammy Hagar -- signed with CTI to use its ink on the band's debut CD. Song titles and images of the band members appear on the cover when it's exposed to heat or light -- or merely touched.

"The band is just loving it," says Todd Gallopo, who designed the cover and owns Los Angeles design firm Meat and Potatoes. "Specialty packaging is where it's at" -- especially in an industry with slipping CD sales.

CTI also produces inks that glow in the dark, change color in the sun or transform when tilted in the light. For a recent sweepstakes, Dairy Queen used CTI's ink on its Blizzard cups; when placed in sunlight the cups revealed whether they were winners.

More recently CTI signed deals with Hite beer in Korea, Carlsberg beer in Hong Kong, Skol beer in Brazil and Pizza Hut in New Zealand and Mexico. This year's mission: Expand international operations to 50% of the company's business by tackling customers in India, Japan, Malaysia and Russia. Small says his six-person sales staff has been able to close deals with foreign brewers in six months -- half the time it takes in the U.S.

The MillerCoors deal seems to have opened a lot of doors, and the color-changing sunlight is shining in.  

Tuesday, September 22, 2009

Pepto Beats Private-Label Despite 60% Price Premium

Recession, Ad Effort Help P&G's Old Reliable See Share Gains in OTC Aisle

BATAVIA, Ohio (AdAge.com) -- Private label is on the attack as never before this recession, particularly in over-the-counter drugs, so why is Procter & Gamble Co.'s Pepto-Bismol gaining share? 

VALUE PLAY: The recession itself may have helped. Consumers turned to a relatively cost-effective, multipurpose
product during tough times.
Procter & Gamble Co.'s 108-year-old standby has added 0.7 share points in its original stomach remedy liquid and 2.5 share points in stomach remedy tablets in the 52 weeks ended Sept. 6.

That's despite the fact that the products are priced roughly 60% more than private label in an over-the-counter drug business that's been hardest hit in all of package goods by those lower-priced rivals. An IRI report earlier this month found private-label shares in healthcare products overall are up 1.5 points across all channels in the past year.

What's behind that success seems to mystify even Pepto Brand Manager Nathan Fox somewhat, but he largely credits an ad campaign from Publicis Worldwide, New York, that took flight into the worst headwinds of the recession last fall. The recession itself may have helped, too, he said, as consumers turned to a relatively cost-effective multipurpose product at a time when a plummeting economy was literally making some of them sick.

Mr. Fox believes the "Coverage" TV campaign that launched last fall has made a difference. One reason to believe: It's the best-scoring Pepto campaign on copy tests since P&G acquired the brand 28 years ago.
The brand spent $24 million in measured media in 2008, according to TNS Media Intelligence, down 18% from 2007.
Lest anyone conclude the high-scoring campaign must be formulaic, "Coverage" actually breaks with an OTC business that often produces cookie-cutter ads. It features a headset-wearing, pink-vested "Pepto Guy" fielding calls and offering humorous advice to gastrointestinally-challenged callers, including most recently a driver stuck in a car with a flatulent passenger in a donkey suit.

"Coverage" replaced the 5-year-old "Singing the Praises" campaign from Publicis, which was successful in its own right. The commercials, featuring singers highlighting the five symptoms Pepto treats, took hold in pop culture, spawning copycats everywhere from schoolyards to YouTube.

But it was getting old. Mr. Fox said copy-test scores on ads were declining, a sign the campaign itself was wearing out.

"We wanted a more emotional approach," Mr. Fox said, "something that said using Pepto is almost like a good insurance policy."

The campaign also makes it easier to cover the full Pepto product lineup beyond the liquid in the bottle, including the launch last year of cherry-flavor Pepto Max and the rest of the cherry-flavor lineup, which has fueled much of the brand's growth, he said.
Holding and building
And Mr. Fox said he suspects the economy too has helped the brand. The most recent "Donkey" ad hits hard on a value message, using one product to treat multiple problems. "We believed we had the momentum and tried to build on that," he said.

Pepto didn't hike its media spending, mostly TV, but didn't cut significantly, either, Mr. Fox said. "Having an older brand, we've got a lot of experience on what levels of media work well for us," he said, adding that Pepto is still "learning its way into digital," including some search ads. WPP's Bridge Worldwide, Cincinnati, handles digital for the brand.

He also believes Pepto's advanced age may have helped rather than hurt against private label. "That equity has really benefited us quite a bit," he said, "particularly as people hearken back to solutions that are tried, true and trusted."

But the brand is looking to contemporize that image with a recently shipped product, Insta-Cool chewable tablets, which produce a cool sensation in the mouth, backed by a marketing plan that includes a tie-in with P&G's sponsorship of the U.S. Olympic Committee for the 2010 Winter Games.

Booze-Brand Advertising Harks Back to a Time When Men Were Men

Efforts From Ketel One, Chivas, Others Tap Into Old-Fashioned Ideals

CHICAGO (AdAge.com) -- In the latest ad for Ketel One, a group of Rat Pack wannabes hoist their glasses as a narrator celebrates a return to "when men were men." New creative for Chivas Regal urges men to live by a "code" of chivalry. And 1800 Tequila has an actor best known for playing a mobster all but calling Patron a phony little priss.

Spirits marketing has certainly come a long way from "Sex and the City" and its signature pink cocktails. And, amid a recession, challenger brands are attempting to paint their rivals as relics of a freer-spending, less-sensible time.

"It's a reaction to the pink cosmos as much as anything," said Dan Fietsam, chief creative officer at Energy BBDO, which created the "Damn Right Your Dad Drank It" platform for Canadian Club that celebrates the no-nonsense, pre-metrosexual glory of the "Mad Men" era.

Mr. Fietsam's team at Energy BBDO also created a campaign for Jim Beam bourbon titled "Guys Never Change," which shows how certain male activities -- like playing air guitar -- have persevered through the years. "There's also this idea of a fundamental guy-ness that doesn't change, which is really appealing to people at a moment when there's a lot of changes going on."

A return to fundamentals, of course, starts with an economy that has rendered much of the cocktail craze moot. Consumers go out less and drink at home more, diminishing the appeal of certain pricey brands that might have sounded impressive to call for in a bar setting.

Beyond that, they're also trading down to less-expensive beverages and increasingly shunning white spirits such as vodka and tequila, which dominated the boom years, in favor of brown spirits such as whiskey. And while whiskey drinkers tend to skew decidedly more male, that hasn't stopped vodka and tequila marketers from making more gruff appeals as well.

The new pitch from superpremium 1800, starring "Sopranos" star Michael Imperioli, takes on category leader Patron directly. In one version, Mr. Imperioli declares: "These days, it's all velvet ropes and posturing. I don't know about you, but when I drink it, I really like to kick back and be myself." He then throws his feet up onto the table in front of him and sends a bottle of Patron careening toward the floor.

It's not subtle. "Look, tequila is a man's drink, and Patron has feminized the whole category," said Elwyn Gladstone, VP-marketing at 1800's parent, Proximo.

And while picking a fight with a larger, better known and more profitable competitor is a time-tested strategy for challenger brands to gin up buzz, 1800 is hardly the only brand taking that tack. A voice-over in the first TV ad for Diageo's Ketel One laments, for instance, that "there was a time when men didn't drink their vodka from delicately-painted perfume bottles. ... There was a time when men were men." That broadside, of course, could easily be aimed at Grey Goose or Belvedere, the envelope-pushing uber-luxe brands of the vodka category.

In the whiskey category, Chivas Regal late last year launched a new campaign focusing on "Chivalry," which it defines as a "code of behavior that sets certain men apart." The spot opens with a sea of suit-clad workers all walking in the same direction -- deliberately evocative of category leader Johnnie Walker's "Keep Walking" mascot. "Millions of people, all looking out for themselves," the voiceover says. "Can this be the only way?"

Russ Lidstone, CEO of Chivas' agency, Euro RSCG, London, said the ads did indeed target Johnnie Walker. "Look, they have this phenomenal idea of 'Keep Walking,' which is predicated in perseverance and personal progress," he said. "But our opportunity is to rail against this 'personal progress' notion because, yeah, individuality is important, but it's how you do things and your respect for others that's important," he said, adding: "That greed-is-good notion has dissipated to some degree."

Man laws

Four trends spirits marketers are trying to capitalize on by going from girlish to grunting appeals.
Consumers are going out less, and staying in more. The bar- and club-hopping appeal of "Sex in the City" and its fabulous pink cocktails seems like a relic from another era amid the recession. Advertisers naturally want to position themselves with the times.

Timeless masculinity is comforting during unstable times. "The idea that there's a fundamental guyness that doesn't change is really appealing during a period when it feels like everything is changing," said Dan Fietsam, chief creative officer of Energy BBDO, Jim Beam's ad agency.

Amid a recession caused in part by greed, brands want to be seen as selfless and workmanlike, not flashy. "The financial meltdown gave us all a clear look at what greed can do to the world," said Russ Lidstone, CEO of Euro RSCG London.

Challenger brands see opportunity. The boom times earlier this decade launched pricey prestige brands such as Grey Goose and Patron into the sales stratosphere, and now brands eyeing their sales see an opportunity to paint them as irrelevant during tighter times.

P&G Taking Its Marketing Back to the Store

Turns Focus to the Shelf, Emphasizing Consumer Mind-set Across Agencies

BATAVIA, Ohio (AdAge.com) -- If it doesn't work at the store, it's no longer a good marketing idea for Procter & Gamble Co., which increasingly is driving home this concept, known as "store back," with all its agencies, not just its so-called shopper-marketing shops.

Global Brand-Building Officer Marc Pritchard dealt with store back at length in a presentation at P&G's agency summit in Cincinnati earlier this month and has been briefing agencies on it since at least January.

Spokeswoman Martha Depenbrock said store back is meant to be "a mind-set," not another process in a company that already has plenty. But it's also clear the mind-set could have a substantial impact on process, elevating the role of shopper marketing to also become a creative gatekeeper. "It means you have to have the end in mind when you're coming up with the [marketing] idea," she said. "If it doesn't work at the store, it's a miss."

Realistically, store back is a practical idea of the moment during a recession when P&G and its largely premium-price products have had a tougher time winning consumers at the shelf. P&G's U.S. sales were down 0.7% in the just-completed fiscal year even as most rivals saw at least modest gains, and last quarter it recorded its first quarter of global organic sales growth decline in years.

It also recognizes a reality of package-goods marketing: Even P&G, which has a bigger ratio of consumer to trade marketing than most, spends at least as much on the store (trade promotion and shopper marketing combined) than on media.
Shopper-marketing mind-set
Last year, P&G spent around $3.5 billion on trade promotion and shopper marketing in the U.S. and Canada, according to a person familiar with the matter, compared to $3.2 million in U.S. measured media spending, according to TNS Media Intelligence.

The move also reflects more of a shopper-marketing mind-set at the top. New CEO Bob McDonald spent the past five years running global operations, including the sales effort. One of P&G's new top global media executives, VP-Global Media and Brand Operations Dina Howell, spent the prior five years as the top corporate shopper-marketing executive.

Despite that and its scale, P&G still sometimes gets beaten by smaller, lighter-spending rivals with a sharp focus on the store shelf.

Colgate-Palmolive Co.'s SoftSoap maintained its share in the highly competitive body-wash category last year despite spending less than $5 million on measured media, according to TNS -- a fraction of spending by such behemoths as P&G's Olay, Unilever's Dove and Johnson & Johnson's Aveeno and Neutrogena. The recent launch of SoftSoap's Nutri Serum body wash added 3.9 share points for Colgate in the category to reach 12.4%, even before most consumer marketing for the brand switched on, according to Information Resources Inc., measuring the four weeks ended Sept. 6.

Keys to SoftSoap's success have been product formulation, fragrance and packaging and how they play out on the store shelf, an area where the marketing team focuses much of its time, Colgate executives said in a presentation at the HBA 2009 Global Expo and Conference Sept. 15 in New York. "Our packaging is our No. 1 touchpoint with the consumer," said Rekha Rao, marketing director-personal care for Colgate.
Front of mind
Andy Murray, CEO of Publicis Groupe shopper-marketing agency Saatchi & Saatchi X, said he sees store back elevating the role of shopper marketing at P&G and elsewhere. "It will bring more shopper-marketing insight work into the upstream ideation process," he said.

He's sometimes seen initiatives where Saatchi X "has to do some rework to make it work at the store level, and we can probably eliminate that by having better insights about the store built into the front end."

It's easy to tack on a shopper-marketing component to most ideas, such as through an adaptation of an ad that runs on in-store TV or a packaging blurb. But store back is supposed to be about ideas designed from the start to resonate with shoppers.

One example was Pampers' campaign last year that donated funds for one tetanus vaccine in developing markets for each pack of specially marked diapers sold. The "1 pack=1 vaccine" stickers on pack were easy to understand and worked on shelf.

Three of P&G's biggest traditional ad agencies -- Saatchi, Grey Global Group and Leo Burnett Co. -- have shopper-marketing shops in their networks, making the shift easier.

One issue clients frequently bring up: The brand's consumer isn't always the shopper, said Jonathan Dodd, exec VP-global director of strategy at Grey's G2. "You can play to both of those," he said, "as long as there isn't a dissonance in the messaging."

Why shopper marketing is getting more attention

PERCEIVED ROI IS UP: A 2008 report by Deloitte Consulting for the Grocery Manufacturers of America found in-store marketing ranked highest in perceived return on investment by respondents, followed by trade promotions/displays, TV advertising and interactive/web advertising.
SHOPPER-MARKETING DEPARTMENTS ON THE RISE: The Deloitte/GMA report also found rapid increases in the size of shopper-marketing departments at manufacturers, with more than 30% reporting departments of 21 people or more in 2008, up from under 10% reporting departments that size a year earlier.
CONVERGENCE WITH DIGITAL: "Search advertising is shopper marketing done online," said Andy Murray, CEO of Saatchi & Saatchi X. Meanwhile, the killer app of mobile media may yet be in the store, as more consumers use their mobile devices to scan barcodes and get product reviews, coupons or other promotional offers. For example, Unilever has tied in with Walmart for its Soundcheck program, where consumers view special performances presented by the marketer on Walmart.com and get free music downloads courtesy of the presenting Unilever brands.
CONVERGENCE OF CONSUMER AND TRADE BUDGETS: Big retailers increasingly are asking manufacturers to help foot the bill for their own consumer ad budgets through co-op advertising. Walmart has gone so far as to put out an analytical tool that suggests manufacturers put a share of their consumer marketing budgets equivalent to Walmart's share of their sales into its programs. Based on the growing number of Walmart ads featuring tags from one or more vendors, the idea is getting some traction.
CONVERGENCE OF CONSUMER AND SHOPPER RESEARCH: Increasingly, shopper and consumer research are working together in the same department and jointly informing media and communications planners, said G2 Exec VP-Strategy Director Jonathan Dodd.
RETAILERS TAKE CHARGE: Big retailers not only want manufacturers' marketing funds, they also want to tell them how to spend them. Clean-store policies increasingly are making marketers' corrugated displays a thing of the past as more and more retailers direct efforts into their own customized displays or in-store media.