Saturday, October 30, 2010

Marketer of the Year Runner-Up: Southwest

With Its Simple Message of 'Bags Fly Free,' Low-Cost Carrier Has Been Winning Recession-Weary Travelers

NEW YORK ( -- The brilliance, of course, is in its simplistic message.

No matter how it's said, no matter how it's presented, this is what the consumer hears from Southwest Airlines.
"We don't charge for baggage. Other airlines do." 

Southwest's popular "Grab Your Bag, It's On" campaign, produced by longtime agency GSD&M Idea City, Austin, Texas, started in the summer of 2009 and has been a hit ever since. Different iterations have sprung from the same idea, notably the "Bags Fly Free" marketing effort that launched in the fall of last year.

In the TV commercials, Southwest baggage handlers are shown in various states of incredulousness over the fact that other airlines are charging customers for their bags. That includes one humorous spot in which the handlers line up on the tarmac as a plane from another airline is taxiing, lift their shirts to spell out "Bags Fly Free" on their bodies and mock the passengers -- reminiscent, almost, of the scene in the movie "Braveheart" where Mel Gibson and his Scottish freedom fighters line up before battle, turn their backs, lift their kilts and moon the British soldiers.

"This has been winning passengers everywhere," said airline analyst Joe Brancatelli, who runs the travel site "Every time [Southwest CEO] Gary Kelly sees another airline adopt any kind of baggage fee, he must love it."

And while the low-cost carrier has built its recession-era message about saving consumers money, Southwest has long earned high marks for its customer service. It has consistently received the lowest ratio of complaints per passenger boarded out of all major U.S. carriers that have been reporting statistics to the Department of Transportation since September 1987, which is when the DOT began tracking customer-satisfaction statistics and publishing its Air Travel Consumer Report. And in June, the American Customer Satisfaction Index ranked Southwest No. 1 among all airlines for the 17th year in a row.

Dallas-based Southwest Airlines has had quite a year. In July, the company recorded second-quarter profit of $112 million on revenue of $3.17 billion. That's up almost 23% over the second quarter of 2009.

"Southwest gained an entire point in market share in the last year," Mr. Brancatelli said. "That may not sound like a lot to a lot of people, but in the airline industry, which is glacial, that's an astonishing number."

In a statement, Mr. Kelly attributed some of the growth to the ad campaign. "We experienced record traffic levels during the quarter, despite flat year-over-year capacity, demonstrating a continuing and significant market share shift to Southwest, in part due to our unique and successful 'Bags Fly Free' policy," he said.
"They've done everything right with this campaign," said Minneapolis-based travel expert Terry Trippler, who runs

The latest iteration of the work, "Good Cop, Bag Cop," was launched last month, in time for football season. In the spot, SWA employees go as far as trying to pull planes over to save baggage from the dreaded fate of the $120 fee.
Mr. Kelly also made it a point last month of saying that there will be no baggage fees at AirTran Airways, which Southwest is acquiring.

"They've made 'Bags Fly Free' the cornerstone of their marketing," Mr. Brancatelli said. "It engages customers to no end. What Gary Kelly said recently -- 'If you're going to be in the transportation business, you should be prepared to take people's baggage' -- [has never been] more true. The consumer sees the commercials, and all they think is this: 'Southwest Airlines. We don't charge for bags.' "

How much simpler can it be? 

Friday, October 29, 2010

Marketer of the Decade: Apple

Company Influences Business Models Across All Media and Creates Exceptionally Brand-Loyal Consumer Base

YORK, Pa. ( -- You think you have Apple fatigue. Apple has won Ad Age's Marketer of the Year title only once in the past decade, but it has been named runner-up several times and has been a contender almost every year in our heated behind-the-scenes discussions of who should next wear the marketing mantle. 

This year was no different. Some staffers were passionate about Apple's inclusion, while others expressed weariness over its perennial powerhouse status. In the end, we all agreed that Apple deserved consideration for several reasons: the launch of both the iPad tablet and the iAd mobile ad platforms (and the industry impact both have had); the continued thriving sales and solid marketing behind Mac, iPhone and iPod; the successful retail-stores-as-marketing strategy; and the major crisis-management coup in skirting iPhone 4 "Antennagate." 

Steve Jobs
Frankly, because this seems to happen every year, we decided to take Apple out of the running for Marketer of the Year and instead crown the tech whiz as Ad Age's first Marketer of the Decade.

It seems fitting: Apple kicked off the aughts in 2001 with the iPod, an electronic device that went on to disrupt and forever change the music industry; then mid-decade it dropped the iPhone, a mobile device that changed the mobile-phone industry and added the word "apps" to the English vocabulary; and finally, in 2010 it debuted the iPad, a computing device with the potential to disrupt the media, publishing, entertainment and computing industries.

Yes, it has been a golden decade for Apple. And while one can certainly argue that its influence has been overstated -- it is No. 56 on the list of Fortune 500 by revenue -- Apple's influence on business models across industries from music and computing to entertainment and advertising, along with its impact on popular culture, media and, of course, marketing, has been indelible.
Product as marketing
It's almost hard to believe the iPod is only of this decade, with now more than 250 million of them sold, and digital music sales playing the norm. The iPhone, with more than 50 million sold, has launched a consumer-smartphone rush. While it may never grab the kind of market share in wireless that the iPod has in music, it has been a pioneer and leader with the App Store, strongly influencing mobile advertising and portable gaming. In the latter category alone, Apple owned a 19% share of the portable-gaming software revenue at the end of 2009, up from 5% in 2008.

The iPad, meanwhile, with as many as 8 million already sold, by some estimates, has spurred a touch-tablet tempest in the industry with almost every major PC and phone maker adding it to their product portfolios. And this is an industry that has been touting tablets for years. Apple's involvement got them moving. "Tablets are now expected to be a $17 billion business by 2014, according to researcher IDC. Other estimates have come in lower, but either way, it's a big jump from the one million or so units that were sold annually before the introduction of the iPad."

Even the Mac enjoyed resurgence this decade, in part because of the halo effect of the iPod, in part because of the addition of Intel processors in 2006, and in part due to aggressive marketing via both the "Switch" and "Get a Mac" series of ads that ran from 2002 through 2009. Apple computers now have about a 7% U.S. market share, up from around 2% early in the decade.
Apple's TV spots from the past decade are like a hit parade of the most memorable ads. Who can forget the dancing silhouettes with white iPods and earbuds against hue-popping backgrounds, or the "Mac vs. PC," dork vs. hipster sly hilarity, or even the utilitarian talk-touch-and-swipe-to-get-it-all-done spots for the iPhone? However, Apple ads had other influences on advertising. The introduction of the white background in the "Switch" Mac ads in 2002 was the beginning of an aesthetic not only for Apple, but for many imitators as well.

The iPad, in particular, is having some major advertising-industry impact. The iPad's design alone has influenced all of display advertising, while Apple's iAd platform supercharged the mobile-ad industry just by its mere announcement.
Agency relationships
Apple and its agency, Omnicom Group's TBWA, make a great case study on the benefits of long-term agency-client relationships. The two have been together since the iconic "1984" Super Bowl spot, although the agency was off the account from 1986 until 1997, which is almost identical to the years CEO Steve Jobs was absent from Apple (1985-1997).

So maybe it is the relationship between Mr. Jobs and longtime TBWA creative chief Lee Clow (who is now chairman and global director of Media Arts Lab and chief creative of the TBWA network) that is the key to the magic, and the long string of well-regarded marketing campaigns. Whatever it is, it works. In 2006, TBWA created Media Arts Lab to specifically serve Apple as a new type of ad agency that creates culture, not just commercials.
Brand loyalty
Sure, it's called the Cult of Apple for a reason, but we guarantee any marketer would kill for that kind of loyalty -- for all its innovative gadgets and gizmos, it's Apple's greatest asset.

There are certainly the over-the-top fanboys (and girls), but even less dedicated customers seem to have a blind spot for Apple.

Recall the media flare-up after reports began surfacing that because of the way the iPhone's antenna is configured, calls were dropped when it was gripped a certain way. Apple initially addressed the so-called Antennagate complaints with e-mails that advised, basically, to not hold the phone that way. But amid mounting complaints a few weeks after the phone's debut, Mr. Jobs held a press conference to announce Apple would give out bumpers to iPhone 4 buyers to fix the problem.

But not before he pointed out that all "smartphones have weak spots. This is not unique to the iPhone 4," and even showed how three other competitors' phones -- BlackBerry, HTC and Samsung -- also dropped bars when held a certain way.

BlackBerry's parent company, Research in Motion, fired back the next day: "Apple's claims about RIM products appear to be deliberate attempts to distort the public's understanding of an antenna-design issue and to deflect attention from Apple's difficult situation." Yet any indignation at Apple's product gaffe and less-than-humble apology was generally ignored -- or even derided. Tech website Gizmodo took a lot of shots for trying to rally customers to force Apple to come up with a solution.
Apple retail stores have come to define the high-end, low-key, over-the-top customer-service shopping experience of the later part of this decade. And while Apple intends for all of its 273 stores to sell its wares, it also is deliberate in its use of them as marketing tools. Eleven of the stores in particular are meant to act as brand ambassadors.

According to Apple filings, those stores "have been designed and built to serve as high-profile venues to promote brand awareness and serve as vehicles for corporate sales and marketing activities." And they specifically budget expenses for those stores, to the tune of $65 million in 2009. Compare that to its overall $501 million spent in worldwide advertising in 2009, and the tally is for every $8 Apple spent on ads, they spent $1 on those 11 signature stores. 

Thursday, October 28, 2010

Marketer of the Year: Ford Motor Co.

Carmaker Steers Its Way Out of Crisis With Improved Products, Bottom-Up Creative Ideas, Once-in-a-Lifetime PR Boost

The Ford Team
NEW YORK ( -- It was arguably the darkest hour for American automakers: Struggling with the collapse of the global economy, the U.S. government in 2008 bailed out General Motors Co. and Chrysler Group with generous loans that incited rancor and debate across the country. Not so with Ford.
It seemed rather a risk for the iconic marketer to turn down the Troubled Asset Relief Program; it wasn't as though the brand that Henry built wasn't in trouble like its Detroit counterparts -- it lost $14.6 billion in 2008. But turning down the funds turned out to be a sage move.

When asked just how much declining TARP funds was worth, Ford marketing chief Jim Farley doesn't hesitate: "I think it was worth more than $1 billion of coverage and customer interest," he said. "If I had to go out and advertise, it would be that kind of bill in paid media. It's a once-in-a-lifetime thing."

Most top marketing officers would kill for $1 billion in free goodwill. But for Mr. Farley, that was just the beginning of a long road that helped the grand dame of automakers survive the Great Recession -- with a little bit of luck, a little bit of timing and a little bit of chutzpah. Ford is now firmly entrenched back in the No. 2 spot for U.S. sales among automakers, with 17% of the U.S. auto and light-truck market in the first nine months of 2010, behind GM, according to Automotive News, an Ad Age sibling. 

The company's products are better than ever, promoted and marketed by a revamped strategy headed by Mr. Farley. U.S. yearly sales are up 17% through August, which is more than double the industry-wide gain of 8.4%. Ford's $4.7 billion profit in the first six months of this year is the company's largest since 1998.

Meanwhile, Ford's ability to secure the commercial loans that helped it avoid a government bailout has led to huge perception gains. An Oct. 1 Rasmussen Reports survey, for example, found 55% of survey respondents said they are more likely to buy a Ford because the company did not take TARP funds, a stunning figure nearly 18 months after the fact.

"This is a scrappy team, a surviving team," Mr. Farley, 48, said of the marketing group that he took over in 2007. "When they got some crazy new leader, they stayed with him."

Back in 2007, when CEO Alan Mulally was trying to recruit Jim Farley from Toyota, where he had led marketing for the luxury brand Lexus, they met in Dearborn, Mich., and Mr. Farley was impressed with the plan the new CEO had in mind.

"He pulled out a document and there were, like, 200 individual models on it. But he said to me, 'You see this blue oval? We are going to focus on Ford, and take Ford and integrate it globally,'" Mr. Farley said of his meeting with Mr. Mulally. "As a competitor, I was always scared that Ford was going to do that."

But the bigger concern was a cultural one. Mr. Farley, a self-described "freak," was worried he wouldn't fit in at Ford.
"By 'freak,' I mean that I like bottom-up ideas, creative thinking at the client, not the agency. I expect our team to come up with new ideas and I expect that to flow up from the bottom. I was worried the culture would reject me like a bad organ," Mr. Farley said. "Alan just said, 'Jim, we'll stand back to back. Like Wyatt Earp.'"

Instead of wondering whether he would fit in with the culture of Ford, Mr. Farley changed the culture.
"Some people here thought we should talk about technology or history -- 'We need to talk about Henry Ford!' -- instead of telling the consumer how good the product is," he said. So Ford reprised its "Swap Your Ride" campaign, where it has Honda and Toyota owners test drive Fords, and used the testimonials in its advertising. It launched the 2011 Explorer crossover on Facebook and created a campaign called the Fiesta Movement, which loaned out the small car to young social-media-savvy bloggers across the country to let them seed and spread the word long before the car was set to launch in the U.S.

"Jim Farley has done a superb job," said longtime automotive advertising and marketing executive Peter DeLorenzo, who now runs "When he came to Ford, he came at the perfect time. The company was already focused on a new course thanks to Alan. Farley took all the constituents of marketing and got them on the same page. He took some risks with the advertising, and Ford's products are getting better by the month. It worked out. The marketing and advertising has all come together nicely."

Among the bigger risks? A truck campaign for the F-150, which went against everything one is used to seeing in an ad for a pickup truck, Mr. DeLorenzo said. "It's witty, it's well written, and it makes tremendous use of Denis Leary's voice-over. It's almost cerebral in a way." 

Ford actually cut U.S. ad spending in 2009 as it consolidated its focus on the Ford and Lincoln brands, though it raised network TV, print and internet spending, according to Ad Age DataCenter. U.S. measured media spending for the first half of 2010 was $530.2 million, up 10.9% from $478.2 million spent in the same period of 2009, according to Kantar Media.
It also merged advertising and public relations; gone is the church-and-state separation. "We're now praying together," said Mr. Farley.

Its commercials, featuring everyman Mike Rowe, the host of Discovery Channel's "Dirty Jobs," are a hit and it tapped social media to launch the Fiesta in China -- a move that inspired the U.S.'s Fiesta Movement.

"Other than Facebook, China has the largest social-media sites in the world," Mr. Farley said. "So we imported 100 Fiestas and started a campaign that asked people to take a picture of themselves with the Fiesta if they saw it on a street, and spread it around."

Some of those same practices will be adopted globally and domestically when Ford launches the next-generation Focus.

Meanwhile, Ford's ad agency, Team Detroit, a consortium of five WPP shops, has its roots in JWT's first efforts for Ford a century ago. And at a time when the single-holding-company model is often knocked in the ad industry, Mr. Farley and Team Detroit Chief Creative Director Toby Barlow enhanced a model Mr. Farley developed at Toyota called Train, in which the agency taps the best talent it can find -- even if it means dipping outside of WPP.

"Toby is the coach of a fantasy league and he gets to pick the dream team every time we have a project," Mr. Farley said. "It allows us to have a freshness in the agency-client relationship over and over again."

Mr. Farley said it could be as diverse as bringing in a creative who worked on a Harley-Davidson motorcycle campaign to work on a Ford F-150 truck assignment, or hiring an artist who does country-western CD art to work on a brochure.
"It hasn't been perfect," said George Peterson, president of the automotive research firm AutoPacific, citing Lincoln. "The Lincoln launches, even though they threw a lot of money around, it still doesn't seem to have resonated yet with people around the country. There are examples of launch-and-leaves out there where Ford just cannot keep enough weight on a product." For instance, Ford Flex was launched in the first week of the recession and isn't nearly up to the level of the other models.

Still, Mr. Peterson, a Ford owner himself, said he likes what he sees.

"One, they have focused their marketing message," he said. "Two, they are not only marketing to prospective customers, but to their present customers as well. I receive plenty of direct mail and emails from Ford. Three, their outreach has never been better. They're probably doing more television than anybody expected, especially with the Mustang and the Fiesta."

Ford is also an industry leader in onboard technology with its SYNC in-car communications and entertainment system, co-developed with Microsoft. Mr. Farley called mobile marketing the most underrated technology right now.
"People are spending hours on their devices with all this cool data and content, and we're not part of the conversation," he said. "There hasn't been this kind of moment in modern marketing since TV in the 1950s. We haven't seen such a quick flip of media consumption like that, and we as marketers haven't caught up. The smart companies, like General Mills, are going to application people and making it work."

Mr. Farley said he envisions a day where something like SYNC "becomes a revenue platform. Not only for us, but for companies that develop applications. Five to 10 years, tops. Who would have believed we'd be talking about us, a car company, being a leader in that technology?"

Mr. Farley pauses for a moment.
"Can you imagine?" he says. "My grandfather was an employee of this company [he owned a Ford dealership]. I love the brand, I love the products. This is for the marketing and PR team at Ford who all responded to a crisis in a way that no one could predict. The fact that we're sitting here talking about [this] is the coolest thing I could ever think of."

Marketer of the Year: The first 40 years

Ad Age began its annual marketer award in 1971. Over the past 40 years, five companies have been multiple winners: Apple, Coca-Cola, Disney, McDonald's and Procter & Gamble.

Year Marketer Business
Marketer of the Decade (2010) Apple Technology
2010 Ford Motor Co. Auto
2009 Hyundai Auto
2008 Team Obama Politics
2007 Nintendo of America Technology
2006 Toyota Motor Sales USA Auto
2005 Procter & Gamble Co. Consumer packaged goods
2004 McDonald's Corp. Restaurants
2003 Apple Technology
2002 JetBlue Airways Airline
2001 Pfizer Drugs
2000 Target Retail
Marketer of the Century (1999) Procter & Gamble Co. Consumer packaged goods
1999 Retail
1998 Volkswagen of America Auto
1997 Gap Inc. Retail
1996 Nike Apparel
1995 Walt Disney Co. Media/entertainment
1994 Microsoft Corp. Technology
1993 MCI Communications Corp.
(Bert C. Roberts Jr., chairman-CEO)
1992 Ross Perot
(Presidential candidate)
1991 Wal-Mart Stores
(Sam Walton, founder)
1990 ConAgra
(Mike Harper, chairman-CEO)
Consumer packaged goods
1989 McDonald's Corp.
(Fred Turner, chairman (Adman of the Decade))
1988 Walt Disney Co.
(Michael Eisner, chairman-CEO)
1987 Procter & Gamble Co.
(John Smale, chairman-CEO)
Consumer packaged goods
1986 Coca-Cola Co.
(Roberto Goizueta, chairman-CEO)
Consumer packaged goods
1985 General Motors Corp.
(Roger Smith, chairman)
1984 Apple Computer
(John Sculley, president-CEO)
1983 Chrysler Corp.
(Lee Iacocca, chairman-CEO)
1982 Campbell Soup Co.
(R. Gordon McGovern, president-CEO)
Consumer packaged goods
1981 Warner Communications
(Steven Ross, chairman-CEO)
1980 Ronald Reagan presidential campaign
(Richard Wirthlin, chief strategist)
1979 Burger King Corp.
(Donald Smith, president)
1978 Paramount Pictures
(Barry Diller, chairman)
1977 Miller Brewing Co.
(John Murphy, president)
Consumer packaged goods
1976 Kmart Corp.
(Robert Dewar, chairman)
1975 Mobil Oil
(Rawleigh Warner Jr., chairman)
1974 Coca-Cola USA
(Donald Keough, president)
Consumer packaged goods
1973 Delta Air Lines
(W.T. Beebe, chairman)
1972 American Motors Corp.
(Roy Chapin Jr., chairman)
1971 Norton Simon Inc.
(David Mahoney, chairman-president)

P&G, Walmart Find Success as Moviemakers for Their Brands

With a Third Film Set to Air on NBC, Have Marketers Found Winning Formula for Branded Entertainment?

LOS ANGELES ( -- Earlier this year, Procter & Gamble and Walmart teamed with NBC for what is deemed by many to be the new model for marketer-funded entertainment: a series of prime-time family movies produced by P&G Productions. The films are designed to lure consumers to buy P&G products at Walmart using original family movies and exclusive ad buys. 

'The Jensen Project'

Just don't expect too many other brands to duplicate the model just yet -- not because they don't want to, but because only the biggest and mightiest right now have the resources to pull it off. 

The two made-for-TV movies, "Secrets of the Mountain" and "The Jensen Project," were moderate hits by prime-time standards -- "Secrets" was the highest-rated program during its Friday-night premiere in April and was watched by more than 7.5 million, while "Jensen" finished second in its time slot in July with more than 4 million viewers. But as case studies for successful branded entertainment, they've become the holy grail of how networks and marketers can use entertainment to achieve scalable audiences, measurable product sales and active fan communities. 

P&G, the world's biggest ad spender, and Walmart, the nation's largest retailer, first proved they could be arbiters of original entertainment in the late 1990s, when both companies were launch members of the Association of National Advertisers' Alliance for Family Entertainment. The initiative successfully lobbied to get family-friendly programs such as the WB's "Gilmore Girls" on air and identified families with children under the age of 18 as both the largest and most underserved potential viewing audience. Of those viewers, only 23% said at the time that they were satisfied with available family-entertainment options. 

"One of the things that struck me to move down this path was some quotes from moms who said, 'We expect companies to follow where they put their ads and put their ads in appropriate content,'" said Marc Pritchard, P&G's global marketing and brand-building officer. "We took that pretty seriously. We listen pretty carefully to moms when they talk." 

P&G has long been a leader in creating original content from its early days as the co-creator of some of the first radio soap operas in the 1930s on behalf of brands such as Oxydol to its creation of daytime soaps such as "Guiding Light" and "As the World Turns," each of which just recently ended their decades-long runs on TV and its launch sponsorship of The People's Choice Awards. Next year, the company will produce the first "interactive telenovela" for MTV with Ben Silverman's Electus

But what makes P&G and Walmart's partnership more than simply a spruced-up movie of the week is its impact on sales. 

Walmart devoted extensive front-of-store real estate to participating brands for each film -- including Tide, Downy, Pampers, Duracell, CoverGirl, Oral B, Swiffer, Pantene and Gillette -- to drive viewership for the telecasts. The DVDs, released the day after each film's premiere, were then featured prominently in Walmart's electronics section and became best-sellers, said Greg Warren, Walmart's VP-creative advertising -- no small feat, considering Walmart accounts for roughly 30% of DVD sales, according to NPD Group. 

P&G, which spent a reported $4.5 million alone on the production of "Secrets of the Mountain," also reported a measurable increase in product sales and market share from the program. In an April conference call, P&G said that favorability scores for brands advertised on film increased 26% among moms who saw it, and purchase-intent scores for moms who saw the movie were 2.7 times higher than for moms who didn't see it. 

Such a halo effect for both sponsors, as well as official broadcast partner NBC, might seem like other marketers would be scrambling to re-create P&G and Walmart's model. (Other marketers have long covered similar ground -- Hallmark and its "Hall of Fame" for example. But Hallmark worked without a retail partner on the scale of Walmart, and the films it produced now generally air on its own cable channel.) 

But Jim Hoffman, NBC Entertainment's senior VP-sales and marketing, cautioned that the model is not that simple.
"It raises a lot of questions from other clients about the kind of resources that are needed," he said. "It's an enormous undertaking that needs a tremendous amount of resources, and not everybody has those capabilities. What's really innovative is how they're working together. It's almost like their commercial pods are very much part of the program." 

Indeed, P&G and Walmart's custom commercials, created by Martin Agency and featured exclusively throughout both films, are perhaps the most significant investment from the project. P&G also had extensive product placement in the first film (for both its own and Walmart's Great Value house brand) and dabbled with some in the second -- the marketer's Pur water filter was featured in a storyline integration in "The Jensen Project." 

'Secrets of the Mountain'
Walmart and P&G spent a collective $2.7 million on measured air time during "Secrets of the Mountain," and more than doubled their investment for "The Jensen Project," for which they spent a combined $4.93 million on ad buys, according to Kantar Media. Spot buys for the later ran as high as $221,000 -- comparable to a top-tier broadcast drama such as ABC's "Desperate Housewives" or a Fox comedy like "Family Guy." 

While the movies may not be the most beloved by critics (The New York Times wrote in July: "'The Jensen Project' may be friendly to family values, but it gives the cold shoulder to fun."), but they have been well-received among their core audience. The films were at least decent enough to pique the interest of four-time Academy Award nominee Ed Harris ("The Truman Show"), who stars in "Touching Home," an independent family film that he recently pitched to P&G and Walmart for potential distribution. 

As the companies prepare a third film, "A Walk in My Shoes," for a premiere on NBC later this fall, Mr. Warren said the companies remain aligned in their common pursuit of underserved consumers.
"We've been very collaborative -- it's not like one person passes duties to the Procter folks. We're all around the room in our video conferences making comments. It's much easier to have these conversations when you're so clear on the end goal," Mr. Warren said.

Wednesday, October 27, 2010

Your Media Questions Answered: MobileYour Media Questions Answered: Mobile

Kunur Patel
Kunur Patel
Is anyone really watching TV on their phones?
Well, not yet, but signs look good. Out of the more than 200 million American mobile subscribers 13 years or older, 11 million watched TV or video on their phone in the three months ending in July, according to ComScore. Keep in mind, those numbers include YouTube views as well as downloaded shows. Fewer than 3 million watched broadcast TV on their phones in that period, though that audience is growing as more phones with high-resolution screens and larger-format devices, like iPad, come online. 

Restrictive data networks will remain a hurdle for mobile video as streaming video on cellular data networks is often slow or restricted to Wi-Fi streaming only. But as the midsize screen gains ground -- iPad's expected to be 2010's Tickle Me Elmo during the holiday season, and Android tablets will hit the market soon -- the question is: Which mobile device will grab TV viewers? Both ABC Network and Netflix launched early video iPad apps that have so far been downloaded millions of times.
What kind of traffic do the biggest websites get from mobile?
It's a good question that's still tough to answer. While the wired web enjoys third-party measurement from the likes of Nielsen and ComScore, we're just not there yet in mobile. There are tools to measure visits and usage within individual apps and mobile websites, but it's going to take coordinated efforts from carriers for the data we're used to online in mobile. ComScore does not yet release mobile-website traffic and Nielsen releases numbers based on sampling, not meters. While mobile-measurement startup Ground Truth can rank the top-visited mobile sites, it only releases market share, not hard visitor counts.
Do the rules of the wired web still apply to mobile?
Some things haven't changed in mobile: Google still leads as the most-visited site in mobile and is the primary starting point for users on their paths to other mobile sites, according to Michael Libes, Ground Truth founder and chief technology officer. According to Nielsen's sampling, Google sites have 46 million U.S. unique visitors on the mobile web in July -- that's almost 16% of all mobile subscribers. We also know social networking accounts for most mobile-web traffic. "In the mobile web, social networking dominates by far in terms of unique users and page views," said Mr. Libes. "Social networking is about half of everything done on the mobile web." But it's not just the usual social-networking players like Facebook, MySpace, YouTube and Flickr. While Facebook and MySpace account for the majority of traffic, we see an entirely new suite of mobile-only brands like FunForMobile, MocoSpace and Myxer. 

What's more, properties that make ComScore's list of top 10 web properties like Yahoo, Microsoft and AOL don't show up on Ground Truth's mobile-web-leaders list. Those online brands still draw mobile audiences in the millions. Yahoo sites had 39 million mobile uniques in July, MSN properties nearly 26 million, and AOL had almost 21 million, according to Nielsen.
Are apps still relevant?
Yes, Apple's App Store at more than 225,000 apps and growing, and more developers are turning to Google's mobile operating system, Android, but it remains to be seen what real value media companies can find in the app economy. By usage numbers, apps are largely led by gaming and utility. According to Nielsen, gaming apps are the most popular, followed by weather, maps and search, and social networking. Facebook is the most popular individual app on iPhone and BlackBerry. On Android, Facebook is No. 2, trailing Google Maps -- this app, the Weather Channel and Pandora, are leaders on all platforms. In Apple's App Store, the only media properties that make the Top 25 free, paid and top-grossing lists are Facebook, Cook's Illustrated, Groupon, Netflix, Glee and ESPN Fantasy Football. But that might just be an endorsement for the mobile web, a mobile medium that is arguably a lot less sexy than the app. Mobile websites span devices -- the same site works across iPhone, Android and Blackberries, while you'd have to develop separate apps for each of those platforms -- which results in a substantial user base on the mobile web. 

Top media brands are rounding out Nielsen's list of top visited mobile web brands: Weather Channel had almost 21 million uniques in July, CNN nearly 15 million, ESPN more than 12 million, Fox Interactive 10 million and Fox News 9 million.
Do the same ads work online as in mobile?
No. Creating mobile-specific creative that's separate from the desktop campaign means improved performance -- 80% increase in click-through rates and a 43% bump in conversion rate, according to Google. Mobile ads also mean different ways to target and sell ads. While big publishers sell inventory in their mobile apps, a good deal of in-app ads are sold through mobile ad networks like Millennial Media and Google's AdMob that don't let you cherrypick the apps where your ads will run. With an ecosphere ruled by developers whose operations may not be big enough to to support a sales staff, ad networks provide targeting by demographics, handsets and verticals, but not necessarily specific content.

Sunday, October 24, 2010

How Coke, P&G, Samsung Plan to Hit Bold Growth Targets

Beverage Titan, Electronics Giant Aim to Double Sales by 2020; House of Ivory Reaches for 1 Billion More Consumers in 5 Years

BATAVIA, Ohio ( -- Forget the prospects of a weak recovery, double-dip recession and all the talk of a "New Normal" where consumers are scared to spend. Marketers' projections are bigger than ever. Rather than an era of reduced expectations, this might be better termed the Era of Big Projections. 

Consider: At the Association of National Advertisers' annual confab earlier this month, Coca-Cola Co. Chief Marketing and Commercial Officer Joe Tripodi talked of doubling its sales -- now at $31 billion -- within 10 years. Ralph Santana, once a top North American soft drink executive at Mr. Tripodi's nemesis PepsiCo and now CMO of Samsung, did him one better by promising to nearly triple sales to $400 billion. 

To boost its sales, P&G opened a pop-up store in New York to hook consumers on buying more of its products (see story below).
Some of the growing list of big projections sound huge, but appear doable. Procter & Gamble Co. Chairman-CEO Bob McDonald last year set out to reach a billion more among the world's 6.7 billion consumers within five years, bringing P&G's total from 4 to 5 billion. Tough, but by P&G's accounting, achievable. Even in a year when the company struggled to reinvigorate growth, P&G added 200 million consumers, right on plan.

The North American leg of P&G's plan to "touch and improve more lives more completely" focuses on the "more completely" part. In North America, P&G already reaches 99% of consumers with at least one product. The goal over the next five years is to get each one to buy at least one more. That would add $1 billion to $3 billion annually to the company's sales, which have been largely flat in North America the past couple of years.

To that end, P&G last week launched a "Have You Tried This Yet?" campaign aimed at getting people to try just one among several products launched within the past 18 months. Among its tactics is a pop-up store in New York to encourage sampling its products.

The "Just One More" idea is no small task, but not unattainable either. If each of the 133 million households in North America bought just one more P&G product annually, they'd only have to spend about $7.50 each to add $1 billion to P&G sales. A bigger-ticket item or repeat purchases that would drive the household sum up by $23 would add $3 billion in sales for the company.

Other big projections sound amazingly hard to meet but could turn out to be easier than they seem, even if the path from here to there isn't entirely clear yet.

Take Coca-Cola Co.'s goal of doubling sales in 10 years. That comes out to a compound annual growth rate of 7% -- difficult, but not impossible for a company whose motto is "Live Positively." It's even more possible without ruling out acquisitions or currency movements to hit the target. It's reasonable to assume Coke will buy some companies over the next decade, and given the size of the U.S. trade deficit, dollar devaluation seems a given.

Coca-Cola, in setting its doubling goal last year, said it expected 60% of growth to come from such markets as China and India, vs. only 15% from developed markets. (Mr. Tripodi said it wants to achieve 3 billion servings a day by 2020.) With sales up 5% last quarter, though, it will need to pick up the pace.

P&G under Chairman-CEO A.G. Lafley nearly doubled sales in just seven years last decade, helped by liberal doses of both acquisitions (led by Clairol, Wella and Gillette) and currency devaluation. For the past three years of recession, however, sales have stuck around $80 billion.

Unilever CEO Paul Polman, a veteran of P&G whose work in Western Europe helped P&G attain that doubling under Mr. Lafley, has set a similar goal of doubling Unilever's sales since he took over early last year. But he's done two things that make attaining that goal a little easier: He didn't set a timeline and he didn't specify that it had to be organic sales growth.

Such things as the recent acquisitions of Alberto-Culver can help, as has the devaluation of the euro this year. On the other hand, he added a caveat that made it tougher -- reducing total negative environmental impact while doubling sales.

Samsung, which already holds leading shares across a dizzying array of consumer electronics and home appliance categories, has perhaps a tougher task even in a market with stronger growth prospects.

Mr. Santana held one of the means to his end in his hand at the ANA meeting in Orlando -- a yet-to-be-launched tablet PC that he noted was considerably smaller than the iPad ANA CEO Bob Liodice was using to organize his 
presentation. Mr. Santana's fit in his jacket pocket.

The bigger solution for Samsung lies in going from a big brand with a largely functional image to what Mr. Santana called "a curator brand," which he likened to ESPN -- one that defines the notion of cool within its space.
That's not unlike, though he didn't say this, Apple. And it's a tall order, one that Mr. Santana, who started at Samsung only three months ago, acknowledged will take some time -- though, presumably, less than 10 years.

Turning Samples Into Sales

No "free" sign waved in front of P&G's New York pop-up store Friday, but people got the message all the same.
Hundreds filed in and out of the corner location in midtown over the course of its first day of business, queuing for free hair-color treatments, skin evaluations and take-home samples of some of the consumer giant's most recognizable brands. It's all part of its Have You Tried This Yet? initiative, which aims to introduce new P&G products to its already-loyal consumers. 

A visitor to the New York City pop-up store gets a free Siascope reading, which measures the health of one's skin.
A visitor to the New York City pop-up store gets a free Siascope reading, which measures the health of one's skin.
And try it I did. Along with dozens of others, I enjoyed a shampoo and conditioning treatment with Head & Shoulders products and a styling with Pantene classic gel and hairspray. (I declined a Clairol Nice N' Easy color treatment and a CoverGirl color-match consultation, though I could've had those, too.) I watched my smile digitally rendered to show how it might look after a Crest Whitestrips Advanced Seal regimen, and even submitted to a Siascope reading, which bore distressing news about the state of my "dull, uneven" skin after a summer in the sun.

The samples may be free for now (the shop will shutter for the year after Oct. 31, and the products will be featured in the company's BrandSaver book), but P&G is one marketer that knows that if you bring a horse to water, it may just stay thirsty for a lifetime. -- THOMAS PARDEE

Wednesday, October 20, 2010

Marketer of the Year Runner-Up: Domino's

Pizza Chain Sees a Gutsy Move Pay Off as Foes Become Fans and Store Profits Reach an All-Time Industry Mark

NEW YORK ( -- "I seriously hated Domino's in the past," wrote Kris Johnson on the pizza chain's Facebook page. "Only had it a couple times and it made my stomach upset and it was average at best. I recently moved and tried Domino's again since there's not much for delivery where I moved to. We are totally turned around by the taste! We have ordered again since 2 more times and plan to order a lot more in the future. ... Way to turn things around Domino's, keep up the fantastic work!!!" 

The ability to persuade folks like the Facebook commenter to make the leap from non-fan to repeat customer is precisely what Domino's was banking on in December 2009 when it launched one of the boldest ad campaigns the restaurant industry has seen in years.

Domino's stopped centering its ads solely on recessionary messaging, such as two-for-one pizza deals, and passed the mic to its harshest critics -- and permitted them to publicly condemn the taste of its core product. Then the chain took it one step further and sided with the haters. Domino's admitted in its ads that its pizza was gross. And it threw out its 49-year-old recipe, which had been compared to cardboard and ketchup, and replaced it with a reformulated sauce, new blend of cheese and a garlic-seasoned crust.

Many observers balked at the approach -- with some even predicting the campaign would be brand suicide. But historic double-digit lifts in same-store sales later, the lesson for all marketers is that it's OK to acknowledge when something's broke so that you can assure consumers you'll fix it.

Two months into the turnaround campaign, validation came in the form of a taste test that saw Domino's edge out the competition. Nearly 1,800 random pizza consumers from eight U.S. markets did a blind test, and in head-to-head comparisons participants selected Domino's pizzas as tasting better than both Papa John's and Pizza Hut by a wide margin.

It didn't stop there. Rather than serve up the recipe change as a one-time stunt, the effort spearheaded a new platform of transparency for the brand. Under Chief Marketing Officer Russell Weiner and lead creative agency Crispin Porter & Bogusky, Domino's has rolled out a host of efforts under the transparency banner. Domino's promised that all national advertising would feature pizzas actually made by its employees and vowed to never artificially manipulate pizzas when photographing them.

In the wake of the makeover campaign, Domino's posted a 14.3% same-store-sales gain -- a record for the fast-food industry, beating the highest-ever gain by McDonald's of 14.2%. And in the most-recent quarter, the chain, which opened its 9,000th store worldwide in March, saw revenue increase 14.5%, and quarterly profit was up a whopping 55.7% to $22.6 million.

The majority of Domino's marketing efforts this year hasn't spoken at consumers, it has involved them. With "Taste Bud Bounty Hunter," consumers nominated people they know who haven't tried Domino's new pizza, and those who converted the most taste buds won a year of free pizza. In the "Show Us Your Pizza" effort, consumers could send in photos of real Domino's pies they ordered for possible use in a national ad campaign. Winners received $500.
That every major media outlet, blogs and TV personalities have paid attention to Domino's tactics hasn't hurt either. After all, who wouldn't want to have Stephen Colbert taste-test their product on his show, only to say: "Is that pizza, or did an angel just give birth in my mouth?"

Tuesday, October 19, 2010

Marketer of the Year Runner-Up: PepsiCo

Beverage Company Becomes a Digital and Social-Media Leader; Sees Gatorade, SoBe Sales Bounce Back

NEW YORK ( -- What a difference a year makes. Last year, PepsiCo found itself in the headlines for all the wrong reasons. This year the snack and beverage giant has hit its stride.

The company has emerged as a leader in the digital and social-media space, with programs such as Refresh Project, Dewmocracy, Gatorade Mission Control and PepsiCo10, an incubator for media, communications and technology startups. Its beverage brands, many of which went through the ringer in 2009, have bounced back thanks to strong innovation and marketing that led to growing sales, while its food brands continue to be a bright spot. And the company's much-discussed "Power of One" strategy is coming to life on the marketing front, thanks, in part, to the purchase of its two largest bottlers. 

PepsiCo started the year with a bang, announcing Pepsi would bypass the Super Bowl for the first time in 23 years to focus on the Refresh Project. Buzz surrounding that move outstripped the buzz of the brands that actually bought time in the Super Bowl. Refresh Project, meanwhile, has attracted nearly 53 million votes and, almost 10 months after launch, still generates between six and 12 media reports a day.

Gatorade has also begun to bounce back. The G Series, launched in April, seems to have sparked consumer interest, with volume growing 6.8% through the end of August, according to Beverage Digest. Gatorade Mission Control has also helped the brand manage perceptions and shape conversations. The team has had more than 2,000 one-on-one conversations with consumers, while the brand's "likes" on Facebook have skyrocketed to 1.2 million, reaching the 1 million milestone a full five months ahead of schedule.

Elsewhere in the beverage portfolio, Mtn Dew took crowdsourcing to a new level when it had consumers select creative agencies. Ads for the products began running in April. SoBe's embrace of PR and digital shops also seems to be paying off, with market share growing five points in the first half of the year, according to Beverage Digest. Pepsi Max has gained traction, with new packaging and a comparison campaign that pits the brand against Coke Zero. Sales were already up double digits in the four weeks following the launch. And the company tapped into popular demand for sugar-sweetened beverages with the launch of Sierra Mist Natural.

But perhaps the biggest news in the beverage division this year was the completion of PepsiCo's acquisition of its two largest bottlers. That move has positioned PepsiCo to capitalize on what it calls the "Power of One." The strategy entails making the company's myriad businesses more cohesive. By purchasing its bottlers, PepsiCo is now able to bundle promotions for its food and beverage brands, merchandise its products together and coordinate things such as joint deliveries. Another Power of One program will come to life on the ad world's biggest stage, with Doritos and Pepsi Max teaming up for a "Crash the Super Bowl" campaign. The contest is being run jointly and shared in-store promotions are also planned.

PepsiCo's food business has been a bright spot throughout the recession. During the most recent quarter, the division again posted positive results, with revenues growing 4%. Revenue is also up 4% year to date. 

Friday, October 15, 2010

Bud Begins New 'Journey'

Sept 29, 2010
- Andrew McMains, Adweek

Keith Levy, vp of marketing at Anheuser-Busch InBev, describes Budweiser's new "Grab some Buds" campaign from Anomaly as a "beginning of a journey. We're not looking for the brand to turn around tomorrow. We are looking to begin that stabilization process and this is part of that." The first work from the brewer's newest roster shop features TV spots as well as radio, outdoor and print ads. In addition, the client will distribute some 500,000 free samples in the next two weeks, with the primary goal of winning over 21- to 27-year-olds who have never tried the brand. Levy, who assumed his role as head of U.S marketing in 2008, discussed the campaign with senior reporter Andrew McMains.

ADWEEK: What did your research tell you about this approach?
Keith Levy: One thing we found out from this campaign, which is called "Anticipation," is that it endears itself to what we call our Budweiser loyalists but also it gives cause for younger consumers to give it a different look. . . . It's all around the moment of anticipation. If you think about anticipation, it's one of those things that -- young or old -- you look forward to what will come next . . . Whether it's people that are going out just to enjoy a backyard barbeque or if you're going out on a first date, it's anticipation of what that day or that evening could bring. That's what we're trying to really convey with the imagery. If you think about the tagline -- "Grab some Buds" -- it talks about grabbing your friends and grabbing a beer as part of that good time. So, we like the way that came together.

How would you describe the work stylistically?
It's very visual. . . A lot of the Budweiser work, even if you go back over the years, has been fairly copy intensive. There's not one spoken word in the campaign. So, what you're going to have is a lot of beautiful visuals, camera angles and great music, which sort of builds as the spot builds in that feeling of anticipation and pays off with a fairly big crescendo. Again, [it's this feeling of this culmination of a great day or a great night [that's] about to happen because your friends and Budweiser surround you. 

Compared to last year's "It's what we do" campaign, from DDB, are you trying to shift to a more emotional space?
Yeah, very emotional, very emotional. It's a little different than what people are used to in terms of traditional beer advertising. You're a brand that stood the test of time, you're iconic, some might say, but you want people to look at it in a different light. I think this does exactly that, which is what we're counting on. And we're counting on it to appeal to people on a different level.

As we were going through the summer time, we were looking at a lot of different work for Budweiser, as is past practice with a lot of our brands, we do invite other agencies in to pitch. Anomaly was one those agencies this time and came forward with some really great insight about the brand.

Did you or colleagues know Anomaly from another context? I'm curious what led them to your door.
We've been familiar with Anomaly and have been looking at lots of different agencies over time. We've had both internal people at A-B, as well as global, that are familiar with Anomaly and decided to give them an opportunity to pitch.

Do you see this as a project for the shop or is Anomaly every bit of a roster shop as DDB?
Right now, it's relatively new in the relationship. The work is extremely good and we're hoping we can build off that.

What's the life span for this campaign?
This work will run throughout 2010. . . . We're working on Super Bowl cuts now and working on planning for 2011 work. And as long they continue to reach to it in the way in which they have so far . . . it's something that we can begin to build off as a platform.

Are there any new wrinkles in your TV buying patterns?
We continue to buy heavy sports and we will be heavy sports throughout the fall, obviously with Budweiser's association with Major League Baseball. We have bought a little bit more entertainment cable this summer, we have bought some more digital media and we've done the things that many marketers have done as the market has moved a bit. 

How and when did you first connect with Anomaly?

How does the free sampling work into the fabric of your campaign?
What we know about Budweiser is that in blind taste tests, the brand does extremely well. There are a lot of people who haven't tried Budweiser as well. About a third of the young population -- 21 to 27 -- has never had a Budweiser. They're not opposed to it, they're not unaware of it, but they haven't considered it for one reason or another. . . . So, we're going to get out there and sample -- about 250,000 consumers between the beginning of next week and the end of this week. And we hope to sample another 250,000 consumers by the middle of the month. We're very excited about doing that and it's fun as well for the retailers. It's a salute to the foundation of our business -- the people who make it possible: the bartenders, the wait staff, the proprietors, those folks that are out there. So, as we get out there -- we meaning our executives, our frontline sales people, our wholesalers -- it's our opportunity to unite these restaurants and bars around the U.S.

Do you have any concerns about free sampling devaluing the brand long term or making it seem cheaper?
Well, sampling has been a part of our business for a long time. That is nothing new. If you think about it, if anybody has bought you a beer in a bar, it's a nice gesture, it's something that makes you feel good. And so, that's part of what we're trying to do as well.

When you set off to develop this campaign, what were the issues or problems you were trying to solve?
One was what we've calling reappraisal, having people give Budweiser another look. Secondly, that emotional connection around those great moments that we all look forward to and Budweiser being a centerpiece of that. And just having people say, "Boy, that's different as well." That's why no copy, no words, different music, different visuals and really feeling like this is a brand that is defining itself again.

Are you trying to get back to some of the talk value and pop culture influence that the late 1990s early 2000s' "Wassup" campaign had?
"Wassup" was a very unique piece of advertising, it became part of pop culture, it was humorous and it created a word that was part of the vernacular, part of the fun. I think what it didn't do is persuade people to buy more Budweiser. Hey, I'm all about advertising that's talked about, that taps into pop culture, that does some things that "Wassup" did. But I'm more about advertising that sells beer. So, what we have to do is have advertising that does both.

At the end of the day, it's art and commerce, right?
You took the words right out of my mouth. I love awards just like the next guy, but awards should be outputs of reaching strategic goals for brands with advertising that catches people by surprise or is different or groundbreaking. Certainly, "Wassup" was that. I'm not trying to diminish the quality of the work. The awards speak for themselves. But again, it's trying to do a little bit of both. It's art and science and at the end of the day, results.