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Saturday, May 22, 2010

Purpose-Inspired Growth Strategy: “Where to Play” Choices

Our single, unifying growth strategy is tightly linked to our Purpose: “We will grow by touching and improving the lives of more consumers in more parts of the world…more completely.” Specifically, we will:
  • Grow our leading global brands and core categories—with an unrelenting focus on innovation
  • Build business with underserved and unserved consumers
  • Continue to grow and develop faster-growing, structurally attractive businesses with global leadership potential.
We will create abundant growth opportunities in each of these areas.

1) Growing Our Core

Our billion-dollar brands and aspiring billion-dollar brands represent 85% of P&G’s sales and more than 90% of profit.
 

We will continue to focus sharply on our core businesses and brands because this is the primary way we touch and improve lives—and there is plenty of room to keep growing our core brands and categories.
  • Global Household Care is a $200 billion market—and P&G’s global share is about 20%.
  • Consumer Health Care is a $240 billion market; P&G is a market leader with just a 5% share.
  • Beauty & Grooming is a $300 billion market and P&G is leading, but with only a 13% share.
We will focus on growing market share profitably across all these businesses. As economies recover, we will be positioned to extend our leading market share positions.

2) Winning with Underserved and Unserved Consumers

The second growth strategy is new—build our business with underserved and unserved consumers. We’ll do this in three ways.

We are increasing our presence in developing markets.
The opportunities here are boundless. Eighty-six percent of the world’s population is in developing markets and we have strong share positions in the most important of these markets. In Blades and Razors, we’re #1 in the Central & Eastern Europe, Middle East and Africa region, Latin America, Greater China and developing Asia. In Shampoo and Diapers, we’re #1 or #2. And in Laundry, Feminine Care and Oral Care, we are ranked #1, #2 or #3 in market share.


We will continue to increase the percentage of total company sales from these markets by building consumers’ awareness of the performance, quality and value of our brands and making our products more accessible and affordable for consumers.

We are extending our distribution systems to reach more consumers through underserved retail channels.
We’re pursuing opportunities in four priority areas:

  • Drug, Pharmacy and Perfumery: This is a significant opportunity across many parts of our business, and a strategic focus for Beauty & Grooming.
  • High Frequency Stores: Already, high frequency stores would be our single largest customer if they were a single retailer. They are growing at rates equal to the modern retail trade and are the main source of our products for the majority of developing-market consumers.
  • Export Operations: This is another underdeveloped channel with meaningful potential. It’s the primary way P&G reaches consumers in newly emerging markets where P&G does not yet have on-the-ground operations. This channel sets the stage for more aggressive portfolio expansion as new economies develop.
  • E-commerce: Our “Consumer is boss” focus means we must be available to consumers when and where they seek to research or purchase P&G products. Increasingly, that’s online. We do less than a billion dollars in online sales today, and we believe we can increase that substantially over the next few years. We see e-commerce as part of a broader effort to establish online connections with consumers that build our brands and our business with retail partners.
We are expanding brand and product portfolios.
A third action we are taking to serve more consumers is to create broader and deeper product portfolios.


To do this, we will expand our categories vertically into the premium end of our markets as we have done successfully with Tide Total Care, Clairol Perfect 10, Gillette Fusion, Venus Embrace, Olay Pro-X, Dawn Hand Renewal, Secret Clinical Strength and Cascade Action Pacs. By bringing better-performing, specially targeted products to market, we will increase consumer value and drive category sales for retailers.

We will simultaneously expand our portfolio into the value-priced segment. The successful launches of Mach3 disposable razors in the U.S., Pampers Simply Dry diapers in Germany and Naturella feminine care pads into the Arabian Peninsula are three recent examples. We will also expand our core brands horizontally into adjacent product segments. Febreze Candles, Bounce Dryer Bar and Tide Stain Release are recent examples of how we have done this.

As we stretch our portfolio vertically and horizontally, we will touch more consumers’ lives and offer more opportunities to improve each consumer’s life.

3) Develop Faster-Growing, Structurally Attractive Businesses with Global Leadership Potential

Our third growth strategy for the decade ahead is to continue to grow and develop faster-growing, structurally attractive businesses. We’re concentrating on opportunity areas in the beauty and health market segments and several household care categories. With this strategy, we will continue to shift P&G’s business portfolio toward these advantaged categories.
P&G Growth Strategy: Touching and improving more consumers' lives in more parts of the world more completely. Where to play: 1. Grow leading, global brands and core categories. 2. Build business with underserved and unserved consumers. 3. Continue to grow and develop faster-growing, structurally attractive businesses with global leadership potential. How to win: 1. Drive Core P&G Strengths in consumer understanding, brand building, innovation and go to market. 2. Simplify, Scale and Execute for competitive advantage. 3. Lead change to win with consumers and customers.
Source: P&G 2009 Annual Report

Saturday, May 15, 2010

Starbucks Whips Up Frappuccino Campaign

May 4, 2010

Starbucks today (Tuesday) kicked off a new campaign for its Frappuccino brand, touting “however-you-want-it” blended iced drinks.

Dubbed "Express Your Love!," the campaign comes as Starbucks tries to grow sales of its priciest drinks, such as the Frappuccino. (The coffee chain recently announced Frappuccino-inspired products, including ice creams and the Vanilla Frappuccino Light drink.)

TV and print ads, via BBDO, New York, highlight the Frappuccino brand's customizable ingredients in a photo-and-word collage. One 15-second TV spot shows the making of a Strawberries & Crème Frappuccino. First, an empty Starbucks plastic cup is plunked down, then, fresh-squeezed strawberries, ice and coffee beans are whipped together in a blender, as an anxious woman rips open a straw and slurps the drink. “Amazing ice bliss,” the woman says in the spot.

Similarly, a print ad for the Soy Strawberries & Crème Frappuccino, shows a smiling woman, along with phrases like “liquid love,” “strawberry cream bliss,” “xoxo” and “fruity.” The ad directs consumers to Frappuccino.com, where they can create their own frozen drink. The ads will run in magazines like Rolling Stone, ESPN, Maxim, Lucky, Cosmo, US Weekly and Entertainment Weekly.

Starbucks stores across the U.S. began selling the new Frappuccinos today.

The effort, which also spans social media and digital ads on sites like meebo.com, Yahoo!, Pandora and Flickr, is one of the biggest yet for Starbucks, which has traditionally spent very little on advertising. The Seattle-based coffee chain significantly increased marketing spend in 2008, when it doled out $30 million on advertising. In 2009, that figure was up 43.3 percent to $43 million, per the Nielsen Co., excluding online.

Additionally, the company is running a three-week promotion on The CW’s Gossip Girl, asking viewers to “express their love and create a mash up” of Gossip Girl show clips for a chance to win a trip to the show’s set in New York, per Starbucks rep Lisa Passe. The target consumers for the new campaign are males and females ages 18 to 25, Passe said.

“However-you-want-it” is one part of Starbucks' strategy to boost the Frappuccino brand. In an earnings call with analysts last month, chief financial officer Tory Alstead said the coffee chain plans to boost spending behind Frappuccino and Via, the chain’s new line of instant, soluble coffees. During the call, Alstead added: "[Frappuccino is a] multibillion dollar brand for us and we will spend appropriately and heavily against that very long standing and profitable brand."

Friday, May 14, 2010

How Pampers Battled Diaper Debacle

Exclusive Peek at Marketer's Process Shows Surprising Speed, Transparency


By Jack Neff



Published: May 10, 2010




NEW YORK (AdAge.com) -- Around 10 a.m. on May 6, an employee passing by a TV monitor in Procter & Gamble's Winton Hill complex in Cincinnati noticed a shot of Pampers Cruisers on CNN with the word "Dangerous?"


It's hard to say whether that was the precise moment the flap over the product's new Dry Max escalated from Facebook flare-up to mainstream-media conflagration. But when the team monitoring and responding to the brand's growing number of social-media critics got wind of the alert, it seemed as if the mainstream crossover moment they feared had arrived.

That sinking feeling was confirmed when Bryan McCleary, external relations director for North American Baby Care at P&G, almost simultaneously learned that the Associated Press was working on a story about the Consumer Product Safety Commission investigating complaints from parents about diaper rashes from the Dry Max diapers. Once that hit the wires, he knew the issue would be on the radar of every local TV station in the country.


So it was that a team of P&G executives and their PR firm Paine sprang into action with a full-bore communications strategy executed in the 28 hours between the morning of Thursday May 6 and the afternoon of Friday May 7. In a rare bit of radical transparency, Pampers gave Advertising Age a behind-the-scenes glimpse of those crucial hours.


The reality is that P&G, while trying to play it cool publicly, has been focused fairly intently on the burgeoning blowup since late last year. "We've been having daily 7 a.m. conference calls among all the functions every morning, including weekends, about this since we got the first inkling," Jodi Allen, VP-North American baby care told Ad Age between one of two TV interviews she did May 7 with TV stations from Indianapolis and Columbus.


Any critics who think P&G isn't listening to the consumer complaints might be surprised to see how intently it is. Four or so employees are regularly stationed in the brand's listening post (a term Mr. McCleary said he preferred to "war room") monitoring and categorizing new Facebook posts and other social-media chatter. Ms. Allen, who used to read through verbatims from the brand's call center weekly, said she now does so daily.


If there's any cover-up or much subterfuge in P&G's strategy, it was hard to spot in the three-and-a-half hours Ad Age observed the team directly on May 7, or from other accounts of P&G's response. In fact, there was a lot of straight talk in its communication. "I would never have put my baby in these diapers if I thought there was a problem," Kerri Hailey, head of global product development for Pampers, said in a TV interview May 7.


Damage control
As mainstream consumer media coverage ramped up on May 6, the company hastened to issue two statements it was working on, getting both out on PRNewswire and other channels by 4 p.m. -- this despite distraction from the unrelated and still largely unexplained plunge of up to 39% in P&G's stock price at one point that day.


Whereas the company's most recent communications on the matter acknowledged parents' concerns while stressing the product's safety, the company's new tact was to take a tougher tone. The new statement referred to social-media complaints of diaper rashes from Dry Max as "completely false rumors" from "a small group of parents," some of whom "have specifically sought to promote the myth that our product causes 'chemical burns.'"


Besides increasing the use of the word "Pampers" for the purpose of search-engine optimization (so it would pop up around searches for "diaper rash" and Pampers) and adding "Dry Max" to the first reference to clarify that the controversy didn't pertain to all Pampers diapers, P&G didn't make many changes to Ms. Allen's statement.


P&G also revised another statement by Kimberly Thompson, founder of the pediatric safety and risk group Kids Risk and adjunct professor at the Harvard School of Public Health, in which she accused social-media critics of "unnecessarily scaring parents." The change, suggested by a corporate attorney, was to move to the first paragraph a disclosure that Ms. Thompson works on P&G external advisory boards to comply with a corporate transparency policy.


The next step was to go on its own media offensive. P&G considered approaching the "Today Show" on May 6 about doing a segment, believing coverage was becoming inevitable and the NBC morning show might provide a favorable forum, Mr. McCleary said. At that point, the company decided additional exposure wasn't worth the potential for relatively favorable coverage.


Instead, the company granted its first two lengthy sets of interviews on the diaper-rash controversy to the Indianapolis and Columbus TV stations, in part on the belief the footage will make its way to CNN and other outlets, and in part based on Mr. McCleary's belief that both stations were planning fairly in-depth looks at the subject that included commentary from independent pediatricians.


"When the stations talk to the pediatricians, we tend to do pretty well," he said. But most coverage he described as "formulaic," often consisting of on-air complaints from parents and a statement from the company.


What really fueled media coverage, Ms. Allen said prior to one of her May 7 interviews, was around April 15 when critics of Dry Max started using the phrase "chemical burns" to describe the rashes. Now the company is focusing on noting that there are no documented cases of chemical burns from the diapers.


Facebook's role
Balancing the risk that the tougher tone will further anger critics on Facebook is the fact that, as Mr. McCleary said, nothing the company has done so far has helped much there. The company heeded advice to engage critics, he said, which didn't help -- at least not within Facebook -- although a company comment on a Consumerist message section did seem to improve the tone of commentary there.

During a 10:30 a.m. meeting May 7, the Pampers team met with Paul Sagel, the technologist who was the lead inventor of Bounce dryer sheets in the 1970s, and who's now a semi-retired consultant with Encore, a group of fellow P&G retirees. In that meeting came one explanation for why so many people could be blaming Dry Max for diaper rashes.


When P&G launched Bounce with newspaper samples in 48 million homes, it knew the brand would be blamed for a lot of clothes-dryer fires, Mr. Sagel said. That's because, while its testing showed Bounce didn't cause dryer fires, the company knew there were 104,000 such fires every year in the U.S., or about 2,000 a week. So for every report from a local fire department or news outlet blaming Bounce for fires, it tried to dispatch a team to look into the issue and talk to the people involved. The complaints peaked in about three months, he said, or after use of the dryer sheets became more common.


"It's a natural human phenomenon to connect something that happens with something that's new," Ms. Allen said later in the day during a TV interview.


Dry Max is the biggest, newest thing in diapers right now, with a record national sampling program and no other major P&G or competitive initiatives in the market, so it's likely to get blamed.


At any given time, 250,000 U.S. babies have diaper rash, Ms. Allen said. But P&G has gotten only two reports for every million among the 2 billion Dry Max diapers it's sold so far. While it's not dispatching teams to every home that reports a rash, P&G is doing extensive follow-up calls when it gets complaints and inviting some parents to visit a pediatrician on the company's dime to explore the problems.


None have taken P&G up on that yet, but Ms. Hailey said that if they do, the company may invite one of the TV stations back for a follow-up visit. Despite spending considerable time on the controversy, Ms. Allen said she's also focused on the rest of the business, upstream product development and the positive. That includes seeing Pampers sales and share rise sharply since the full-scale national launch began, and repeat rates that exceeded her expectations.


http://adage.com/article?article_id=143777

Saturday, May 8, 2010

Malaysia’s Top Brand Names In Reader’s Digest Survey!

Both Malaysian and international brands received accolades of consumers in Reader’s Digest’s annual survey, which honours the very best brands in the country and in Asia, at an award ceremony last night in KL. Guest of honour at the ceremony was Y.B. Dato’ Sri Ismail Sabri bin Yaakob, Minister of Domestic Trade, Co-operatives and Consumerism.

“The true benchmark of success for a brand is the extent to which it wins and holds the trust of consumers, regardless of economic conditions,” says Gwen Loong, Group Advertising Director for Reader’s Digest Asia. “Winning a Reader’s Digest Trusted Brands Award is the ultimate seal of consumer approval. These winning brands are the first choices of consumers – they have proven their trustworthiness and their commitment to quality, value, innovation, social responsibility and to answering consumers’ everyday needs.”

“Because its results are based entirely on consumer voting, the Trusted Brands survey enjoys unparalleled respect,” notes Loong. “This thoroughly objective methodology means our results are accepted and trusted by consumers across Asia.”

“Made in Malaysia” brands enjoy considerable favour among consumers, with home-grown brands named winners in 23 Trusted Brand categories – more than half of the survey.

In the finance sector, Maybank and Public took the top spots as most trusted banks, while Citibank  and Maybank were voted top credit card issuing banks, and Bank Islam won sole honours in the Islamic financial services category.

Public Mutual is the most trusted investment fund company, while AIA, Great Eastern and Prudential are consumers’ top choices for insurance protection.

To stay in touch, consumers trust Maxis as their phone service provider, and Streamyx as their internet service provider.

When they’re ready to go places, consumers prefer Malaysia Airlines as their most trusted airline, and Genting Highlands and Langkawi as top family tourist attractions.

On the road, consumers prefer Honda, Proton, and Toyota as their brand of car. They prefer to equip their cars with Dunlop, Goodyear and Michelin tyres, and to fill them up at Petronas and Shell petrol stations.

Airfreight/courier services DHL, FedEx, and PosLaju are trusted to get important documents to their destinations.

Sime Darby Property was named sole winner in the highly competitive property developer category.

Among universities, Universiti Malaya, Universiti Sains Malaysia, Universiti Teknologi Malaysia, and Universiti Teknologi MARA tied for top-of-the-class position.

Jabatan Imigresen Malaysia won as the most trusted government department/agency, while Hospital Kuala Lumpur was named top hospital.

When they look for a meal out, consumers head to family restaurants KFC, McDonald’s, and Pizza Hut.

When it comes to decorating their homes, consumers trust paint from ICI Dulux and Nippon Paint, and floor and wall tiles from White Horse.

To give them a good night’s sleep, Dreamland and Dunlopillo are the mattress brands consumers trust, while consumers opt for Panasonic and York air conditioners to keep them refreshed.

Canon, Nikon and Sony are the most trusted brands in cameras, while Panasonic, Samsung and Sony took top honours for their flatscreen TVs.

Acer, Dell, and HP are consumers’ most trusted choices for their personal computer needs, while Canon and HP attracted the most votes among multi-function printer/copier brands.

When shopping for all these, consumers prefer to visit Senheng electrical appliance stores more than any other.

To put their thoughts on paper, consumers trust Kilometrico, Parker and Pilot more than any other brands of pen.

Consumers trust Kikilala and Kiko to provide the best children’s fashions.

Triumph was named sole winner in the lingerie category, while Calvin Klein, Dior, Estee Lauder and Hugo Boss tied for top spot among perfumes.

In the kitchen, Panasonic is the most trusted brand of refrigerator. Amway, Diamond, Elken and Panasonic are trusted for their water purifier products.

Buruh, Knife and Seri Murni were named trusted cooking oils, while among seasoning products, honours went to Adabi, Ajinomoto and Maggi. The top rice brands are Jasmine and Jati.

Yeo’s, Dutch Lady and Nestle make the most trusted packet drinks, while Dutch Lady is the most trusted milk brand.

Carlsberg was named sole winner in the beer category.

Dynamo, Fab, and Top are Malaysians’ most trusted choices among laundry detergents.

Among vitamin/health supplement brands, consumers trust Amway Nutrilite more than any other.

L’Oreal took sole honours in the hair colour category.


The Reader’s Digest Trusted Brands research study in its 12th year is based on responses to 350,000 questionnaires distributed via Reader’s Digest copies as well as 125,000 telephone interviews of randomly selected, upscale consumers conducted in October 2009. All survey work is carried out for Reader’s Digest by Synovate.

http://www.adoimagazine.com/newhome/index.php?option=com_content&view=article&id=5723&catid=1&Itemid=5

Wednesday, May 5, 2010

Pampers Continues to Face Backlash Online for Dry Max Diapers

P&G Battles Parent Complaints That New Product Causes Rashes, Chemical Burns


BATAVIA, Ohio (AdAge.com) -- The diaper launch Procter & Gamble Co. is calling its biggest in 25 years is also producing major social-media and PR troubles as consumer complaints about Pampers Dry Max diapers make their way from Facebook and other online forums into mass-media coverage.
 
Online complaints about the diapers began when P&G switched to the new design of its super-premium Cruisers and Swaddlers lines in much of the country as early as last summer, well before changing packaging or launching marketing for Dry Max. The diapers removed the mesh liners in the old Pampers Cruisers and Swaddlers, along with much of the cottony fluff pulp, and replaced them with a new, more-absorbent chemical gel, producing a diaper that's 20% thinner but twice as absorbent as rival Huggies Little Movers, according to P&G ads from Publicis Groupe's Saatchi & Saatchi, New York.

But since the official launch of the Dry Max campaign in March, complaints have only intensified on Facebook, online retailer review boards and other forums. The complaints increasingly focus not just on leaks or the feel of the new diapers but on diaper rashes, which some parents say are particularly severe and more like "chemical burns."

That has led to circulation of graphic diaper-rash photos via internet forums and stories recounting those complaints in a growing number of blogs and news media, including Reuters, the New York Daily News, Walletpop.com and ABCNews.com. Newspapers in Minneapolis and Chicago and local TV news stations in Seattle, San Francisco, San Antonio and Houston have jumped on the story, too, including this lengthy report yesterday from KHOU in Houston, replete with rare-for-TV images of inflamed baby-bottoms.
 
Fighting Facebook comments
A "Pampers Bring Back the OLD Cruisers/Swaddlers" page on Facebook now numbers more than 3,600 fans. The brand's official Facebook page has more than 220,000 fans, but discussion on the page's wall has been largely consumed in recent weeks over complaints and debate about the Dry Max diapers.

That led Jodi Allen, P&G's VP-North American baby care, to post a statement on the site April 29. In it, she notes that Dry Max diapers were tested on 20,000 babies with 300,000 changes before hitting market, and that P&G also has taken complaints seriously since the launch, assembling a team of "respected outside pediatricians and dermatologists" to review safety data.

"This comprehensive evaluation did not find any evidence whatsoever that Dry Max is behind the diaper rashes that some moms have reported," she said. "Diaper rashes, as you all know, can be a mystery. On average, babies get them three to four times a year, and sometimes they are severe."

She also said Pampers has surveyed moms nationwide in recent weeks, finding 70% prefer Dry Max to the diapers they usually use because they're "thin, flexible and one step better for the environment."
P&G spokesman Bryan McCleary said Ms. Allen's statement had been posted both on Pampers' fan page and on the critics' page, but has been removed from the critics' page.
 
Positive reactions among testers
The brand also points to Parenting magazine mom testers, 92% of whom said they liked Dry Max and 84% of whom said they'd recommend the diapers to other moms. The company also notes that Dry Max has gotten more than 500 positive posts on blogs that reach around 13.2 million visitors about the diaper to date.

A small backlash to the backlash has formed on social media, too, in the form of an "I Love Pampers Dry Max" Facebook fan page started last week that now has 24 members. The founder, Nena Parent, a mom from Edmonton, Alberta, Canada, said in an e-mail, "I totally understand there are a lot of other parents with babies having problems" but that she's not one of them and wanted to show there are parents "using and loving the product." She said people expressing their love for the product on Pampers' Facebook page now face attack by critics, another reason she decided to start her own forum.

P&G also has assembled written and video statements from pediatricians and pediatric dermatologists from Los Angeles, Chicago, Cincinnati and New York that back the safety of the Dry Max diapers.

"With the data that I've seen, I don't think it's a possibility that the newer Pampers with Dry Max are causing any chemical burns," said Susan Loiselle, a New York pediatrician and clinical professor of pediatrics at Mt. Sinai Medical Center in New York in one video statement. "It doesn't make any scientific sense whatsoever. The research does not support it. And the product really has been shown to be safe."

The U.S. Consumer Product Safety Commission has received complaints about the diapers too and is investigating, but has not called for a recall.
 
Bad news on Google
One thing that's clear: Pampers is getting blamed online for a lot of diaper rashes, in large part because of the media and blog reports. A Google search of U.S. mentions of "rash" and "Pampers" without any mention of rival Huggies returns more than 40,000 hits for the past 30 days. Numerous posts and online reviews note babies got rashes, or in some cases what were described as "chemical burns" after using Dry Max diapers, which often went away after a switch to other diapers. By contrast, Huggies is linked to "rash" in only around 700 online mentions where Pampers isn't also included in the U.S. over the same period, according to Google.

What's less clear, however, is whether there's been any increase in diaper rash at all in the U.S. since the Dry Max diapers started shipping last year or how much, if any, of the rashes can be blamed on the diapers. Pediatricians interviewed in local news reports haven't seen any increase in visits or reports regarding diaper rash. Google Insights shows searches on the phrase "diaper rash" are actually down slightly in the past 12 months from the prior year in the U.S., indicating no significant increase in parents encountering the problem and seeking information.

Symphony IRI data do show a 1.9% increase in unit sales of baby ointments and creams in the 12 weeks ended April 18 vs. the same period a year ago. The growth rate is down, though, from the 3.8% volume increase in baby ointment for all of 2009, according to IRI data from Deutsche Bank.

The increase in the volume of diaper-rash cream comes despite declining volume of actual diaper sales both for the year and the more recent quarter, which would suggest an increase in cases nationwide as the Dry Max diapers have rolled out.
 
Recession to blame?
But another possible explanation would be diaper rash increasing because parents changed diapers less often to save money during the recession. Supporting this theory would be the fact that the growth rate in ointment sales actually slowed in the past quarter even as Dry Max shipments ramped up but the economy improved.

None of the social or conventional media firestorm has singed Pampers' sales so far, though much of the mainstream media attention has come only in the past two weeks. P&G's diaper share was up 2.2 percentage points to 41.2% in the four weeks ended April 18, according to Nielsen data from Sanford C. Bernstein on a volume increase of 7.4%. That was led largely by the Dry Max rollout, and doesn't include Walmart, which gave the launch major merchandising support with end-cap displays.

By contrast, Kimberly-Clark reported its North American diaper volume was down 5% last quarter, which the company blamed on lower promotional activity compared to a higher-promotion period a year ago.

But K-C is hitting back hard at Dry Max now, launching a TV ad last week from WPP's JWT, New York. The ad does not discuss rashes or leaks but claims the new Pampers Cruisers sag 50% more than Huggies Little Movers. K-C gave the ad heavy play relatively rare for the diaper category on NBC's Thursday night prime-time lineup last week.

Monday, May 3, 2010

Why Long-Form Ads Are the Wave of the Future

Short Films, Music Videos Featuring Products Engage Viewers With Brands by Providing Entertainment


NEW YORK (AdAge.com) -- Since Lady Gaga's nearly 10-minute video "Telephone" made its debut a few weeks back, it's garnered 28 million views on YouTube, been watched on MTV.com nearly 500,000 times and shared on Facebook and tweeted directly from the pop star's site some 150,000 times.
LET'S MAKE A SANDWICH: Gaga pauses to whip up lunch with Wonder Bread, Miracle Whip.

The video-slash-short film is easily one of the most-popular pieces of longer-form content in recent times, boosting visibility for brands like Miracle Whip and dating site PlentyofFish.com that made appearances in the video. But it's also just one in a growing batch of examples that signal marketers' desire to engage with consumers for longer than the standard 30 seconds.

"We've definitely seen an upswing in longer-form ads," said Matt Miller, president and CEO, AICP. "While advertisers are looking for efficiencies in short-format/multiple platforms, they are also looking for new ways to engage consumers. ... One way to do that is through short films and fun pieces that create awareness of the brand, and reward consumers."

While long-form certainly has precedent -- from Michael Jackson's "Thriller" in 1983 to BMW Films in 2005 -- industry-watchers all agree there's been a spike in such pieces. Kraft Foods recently created a 27-minute crowdsourced film to advertise its Lacta chocolate bar in Greece; electronic brand Philips collaborated with Ridley Scott Films to create "Parallel Lines," a set of short movies that acted as a global ad campaign to tout the cinematic viewing experience offered by Philips' range of TVs; and U.K. grocery store chain Waitrose ran a three-and-a-half-minute spot that took up the entire span of commercial breaks and featured the country's celeb chefs Delia Smith and Heston Blumenthal. That's in addition to the laundry list of luxury fashion brands -- from Oliver Peoples, Pringle of Scotland, Opening Ceremony and Rodarte -- that are increasingly using movie-like ads featuring celebrities donning their clothing and accessories.

"We all are learning the rules, and it's that entertainment is king," said Roger Camp, chief creative officer at Publicis & Hal Riney.

That insight is a key one that agencies and their clients are using in their quest to triumph over consumers' shrinking attention spans, a particularly acute challenge with younger demographics. A Kaiser Family Foundation report earlier this year found that while media consumption is increasing overall -- it's gone from six hours and 21 minutes spent with media in 2004 to seven hours and 38 minutes today -- more multitasking is going on as media gets more fragmented. The foundation, in fact, estimates that because more people are using more than one medium at a time, consumers are actually managing to pack 10 minutes and 45 seconds of media content into those 7 and one-half hours.

Shrinking attention spans have dictated the shrinkage of media segments too, from 60-second spots to 30-, 15- and five- and even one-second spots to a degree that now there's a bit of a pushback to create work that really stands apart, according to industry execs. "That common rule of trying to keep it under a minute and half at the long end of the spectrum is being demolished and now it's about making sure that the entertainment value is there," said Mr. Camp. "And rather than having the brand talk about itself for a minute and half, what we've learned as advertisers is that the hard sell can't be a component of something you watch for a long time."
 
Enjoyable viewing experience
Luxury eyewear maker Oliver Peoples recently released its third branded film, an online ad in which rock star Shirley Manson and actor Elijah Wood model a variety of sunglasses and fancy frames while swimming in a pool and walking about a posh home. "The feedback was incredibly positive and people genuinely seemed to enjoy getting to experience the brand in a new and different way," said Michelle Lynn Walnum, senior director-brand image and communication at Oliver Peoples. "Cut to today, where the internet, social sites and viral media in general are growing wider and faster, we found that this was an opportunity to engage with our current customers as well as introduce our brand to new potential clientele. This film gives us the opportunity to create marketing with discreet branding that has always been central to our brand."
Three reasons you should consider doing more long-form ads
  • It's a way to stand out among the sea of 30-second spots and deliver entertainment value to consumers.

  • The economics are changing; longer spots don't necessarily cost more because they can be repurposed and there's less need to buy media.

  • There are a number of good case studies to reference in making your long-form ads more successful.


  • Said Matt Bijarchi, executive producer of media arts at TBWA/Chiat/Day: "With the proliferation of media, very few things are good, and when it's good, you get more attention."

    When Hulu did an experiment about 18 months ago, giving consumers the choice of ad to watch, either a two-minute ad before an online program or a couple of 30-second ads in the midst of a program, a whopping 88% of Hulu viewers opted for the two-minute ad. A bevy of marketers bought the long-form opt-in ads on Hulu, including Sprint, Capital One, Hyatt, Paramount Pictures, American Express and Columbia TriStar. The high opt-in rates suggested that because consumers are selecting the ads, they are more likely to be engaged with them. "The opt-in rate is proving this is something people want," Hulu told Ad Age at the time.

    Besides consumers' willingness to watch, there are other practical factors fueling the growth of long-form ads, industry execs said, citing the ease of distribution of long-form content in the digital era and a growing number of case studies marketers can point to that allow others to jump on the bandwagon. And then there's the cost. At a time when marketers' ad budgets are squeezed and agencies are being asked to do more work for less, the cost proposition of long-form work becomes more favorable.

    According to Mr. Bijarchi, the average cost of a 30-second ad today is about $380,000, and agencies are learning that longer than that doesn't have to be looked at as more expensive, particularly if the ads are spread on the internet and the cost of buying media is negligible. "It doesn't have to be looked at as more expensive ... you're spending the money on the long-form stuff and then you're cutting to make the commercials," he said. TBWA recently created a 30-minute film for Absolut Vodka shot by celebrity director Spike Jonze that premiered at the Sundance Film Festival, but was later repurposed into 30-second and 60-second segments to be used as trailers, or for other ad purposes.

    So with all this increased time consumers are spending with ads, is it really driving connections with brands, and more importantly, purchases? According to Ms. Walnum of Oliver Peoples, yes.

    "The traffic to our site has doubled each of the last three years and we attribute this in part to the demand for our short films. More importantly to us, the time a potential consumer is spending on the site continues to go up, which we believe leads to a better and deeper brand experience, and of course an increase to our e-commerce sales."

    Brands get creative with long form

    Brands are learning that even though media segments are getting smaller and smaller, consumers enjoy engaging with long-form content -- when it's good, of course. Here are some recent examples of what brands are doing when it comes to making advertising that's longer than a 30-second spot, and a lot more subtle to boot.
     
    PRINGLE OF SCOTLAND
    The iconic brand presented the spring/summer collection with a film starring Academy Award-winning actress Tilda Swinton, who walks through the Scottish highlands wearing the expensive clothes.
     
    ABSOLUT VODKA
    The booze brand created a 15-minute commercial for Absolut featuring Jay-Z. The ad-slash-documentary, which was called NY-Z, was by TBWA/Chiat/Day and directed by Danny Clinch.
     
    RODARTE
    Photographer Todd Cole created a thriller-cum-high-fashion drama called "Aanteni" as a way to promote Rodarte's spring 2010 collection. Set in California on property belonging to PayPal founder Elon Musk, it shows the designer clothing throughout the film.
     
    NIKE
    In a ploy to reach its fans who are also music lovers, Nike, with the help of agency Wieden & Kennedy, Tokyo, created a three-minute ad that shows us the art of dropping beats using sneakers.
     
    WAITROSE
    In March, high-end British grocery store chain Waitrose broke an ad that took up an entire three-and-one-half-minute commercial break. It took the form of a mini-cooking show featuring celebrity chefs cooking a meat dish, and offered tips on how consumers can make it.
     
    KRAFT FOODS
    For Lacta, a chocolate brand popular in Greece, Kraft and Ogilvy One crowdsourced a 27-minute branded movie that initially was going to run only online but spurred so much talk that a local TV station offered to air it for free.
     
    OPENING CEREMONY
    Jason Schwartzman and Kirsten Dunst star in this short film featuring clothes by hip store Opening Ceremony and music by Schwartzman's label, Coconut Records. 

    Sunday, May 2, 2010

    How Miracle Whip, Plenty of Fish Tapped Lady Gaga's 'Telephone'


    Singer's Manager Dishes on All Those Product-Placement Deals (and Lack Thereof) in the Nine-Minute Video


    LOS ANGELES (AdAge.com) -- The most-talked about aspect of Lady Gaga's Beyonce co-starring, Jonas Akerlund-directed music video for "Telephone," which premiered Thursday night, was not the singer's flagrant partial nudity, girl-on-girl kissing or mass-murder sequence in a diner featuring Tyrese Gibson.

    It was the product placement.

    At least nine different brands make appearances in the nine-minute music video, from Gaga's own Heartbeats headphones to a "Beats Limited Edition" laptop, from HP Envy to "telephone" partner Virgin Mobile, and from Miracle Whip and Wonder Bread to Diet Coke.

    Almost instantly, the video lighted up the web with reactions from the likes of the Huffington Post, The Guardian, Jezebel, Rolling Stone and Interview Magazine, which gave a helpful rundown of all the brands -- including fashion and accessories -- that make appearances.

    But despite the cornucopia of products, only a handful were paid placements, said Gaga's manager, Troy Carter, CEO of Coalition Media Group.

    Mr. Carter told Ad Age that several of the brands were Gaga's ideas and did not pay to be included. A scene in which Gaga curls her hair with Diet Coke cans was an homage to her mother, who used the exact same grooming technique in the '70s. Another sequence, in which Gaga poisons a whole diner full of patrons, is interspersed with footage of the singer making sandwiches with Wonder Bread and Miracle Whip. Mr. Carter said Gaga wanted to juxtapose the poison sequence with all-American brands, and suggested Wonder Bread for an unpaid placement. Miracle Whip, meanwhile, made a paid appearance to appear in the clip. A Miracle Whip spokeswoman confirmed the brand's paid integration, but didn't comment further. The product shots feature new Miracle Whip packaging, and seem the latest in a series of Gen-Y outreach maneuvers, including a new campaign promising "we will not tone it down."

    Featured throughout "Telephone" are shots of a Virgin Mobile cellphone, a nod given to the mobile sponsor of Gaga's Monster Ball tour, as well as a Polaroid camera and photo booth as part of Gaga's new role as the camera company's creative director. Several characters are also seen listening to music on Heartbeats by Gaga headphones from Interscope Music and surfing the internet on the "Beats" laptop from Hewlett Packard, all of which were unpaid extensions of Gaga's marketing partnerships.

    PlentyofFish.com, an online dating site, also makes a surprise appearance, the result of ongoing talks with Gaga's marketing team at Universal Music to find the right project.

    Plenty of Fish VP Kimberly Kaplan on Friday said the dating site got into the video through an ongoing partnership with Interscope Records. This just the second music-video integration for Plenty of Fish, which still does the bulk of its advertising online. She admitted the brand was "nervous" without creative input, but very pleased with the outcome. Plenty of Fish had seen a 15% increase in search by close of business Friday, but wasn't yet able to quantify an increase in traffic.
    If 'Thriller' were made today
    "We have a lot of fun with it now," Mr. Carter said of the "Telephone" video's product placement. "If Michael Jackson was making 'Thriller,' he would do this too. These million-dollar music videos have to have partners to be produced."
    Dyana Kass, who heads up pop music marketing at Universal Music Group, added, "We were trying to line up brands that were organic. There were natural pieces in there, like being in a kitchen, so those kind of scenes that just made sense for brands. But we always agree creatively, and get sign-off before we walk down the aisle."

    Mr. Carter would not comment on the nine-minute, Jonas Akerlund-directed video's budget, other than to say, "Lady Gaga plus Beyonce equals an expensive video."

    The video was shot across three days and took a month and a half to edit. Its premiere airing on E! News, after the network's 11 p.m. ET time slot, attracted 833,000 viewers, a 32% increase from the network's average performance in the time slot.

    Mr. Carter said E! was selected over MTV and other music networks because "we wanted a network partner that was going to show the video as it was intended to be shown. They gave us 20 minutes of real estate on their network ... and it was pretty much unedited."

    Online, music-video site Vevo bought a slot on the YouTube home page that referred users to the "Telephone" page 
    on Vevo.com, which crashed the morning of the clip's premiere. The video broke all Vevo single-day traffic records and had already generated close to 4 million views on YouTube in less than 24 hours.

    As for the "To be continued..." message at the video's end? "Stay tuned," Mr. Carter teased.