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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.
 
Gutsy
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.

Downgrading
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.