Wal-Mart Bucks Ad Spending Trend

A weak economy is often a trigger for reducing advertising expenditures. Although it seems counter-intuitive to invest less in marketing activities that could stimulate sales, that is what companies often do. It is understandable given the need to control expenses in tough times, but the marketing reduction often occurs at a time when marketing is needed most.

One company that is bucking the trend of spending less on marketing during the recession is Wal-Mart. It has been reported that Wal-Mart increased measured media spending by 56% in 2008. At a time when retailers reacted to weaker demand by being conservative with their marketing spending, Wal-Mart sensed opportunity to appeal to value-conscious consumers with its low price brand position.

Wal-Mart’s media strategy serves as a reminder to marketers to resist the temptation to save money at the expense of brand building. Yes, reducing marketing expenses may be inevitable during these economic times, but it should be a strategy of last resort. Rather than reducing marketing budgets, the focus at this time should be a review of how marketing dollars are allocated. The result should be to shift marketing spending to categories that are most likely to deliver immediate results.

Link: MediaBuyerPlanner.com – “Wal-Mart’s Media Spend Soars 56%”

Even Love Isn’t Recession Proof


Good thing money can’t buy love, because Valentine’s Day shoppers are planning to spend less money this year. According to a study by the National Retail Federation, shoppers plan to spend about $103 this year on Valentine’s Day gifts and products, down from $123 last year. Findings from the study revealed consumers will still buy the same categories of products associated with Valentine’s Day; flowers and jewelry still are not expected to experience a significant decrease in terms of percentage of shoppers who will buy those products.

An interesting Valentine’s Day product I saw recently was Mattel Hot Wheels Valentine’s cars. There were different models with Valentine’s-themed designs and paint schemes. What a brilliant brand extension to capture incremental revenues for a selling event not typically associated with cars! At a price point of around $1, even the tightest of budgets can afford to buy these products for their young car fans.

If your loved one seems to have spent a little less on you this year, you can take comfort in knowing you were not alone. Indulge in some pink and red Hot Wheels cars and enjoy- Happy Valentine’s Day!

Link: eMarketer Daily – “All You Need is Love… and Money”

Wi-Fi: The Next Frontier for Airlines?

“You’re now free to move about the country” may soon take on a new meaning. Southwest Airlines is conducting a test program that offers free Wi-Fi internet access on its flights. One plane is already equipped with the service, and three more planes will offer Wi-Fi beginning next month. After a 60-day test period, Southwest will decide whether to roll out Wi-Fi access to the rest of its fleet.

This offering seems to be one that is long overdue. Internet access in-flight could enhance the productivity of business travelers flying with Southwest or be an inexpensive alternative to offering in-flight movies. The most refreshing aspect of Southwest’s Wi-Fi service is that it is free, a word not often uttered in the airline industry. Rather than coming up with creative ways to extract money from customers in the form of new fees, Southwest is seeking to add benefits to one’s flight experience. Little wonder Southwest has fared better than most other airlines in the past decade.

Link: Marketing Daily – “Southwest Testing Wi-Fi On Board”

Denny’s Super Bowl Grand Slam

Denny’s Restaurants made quite a splash with its first Super Bowl commercial on February 1. The restaurant chain promised everyone in America a free Grand Slam Breakfast between 6:00 AM and 2:00 PM on February 3. The $3 million outlay for air time and support advertising online, not to mention the cost of the meals given away, would seem to increase the odds that Denny’s Super Bowl marketing effort would not pay off. All indications to this point suggest otherwise.

The promotion itself was a tremendous success, with Denny’s estimating 2 million customers visited its locations on February 3. Denny’s experienced a spike in web site visits, too, following the Super Bowl commercial. A 23% increase in hits was second only to GoDaddy’s 29% increase. Search engine terms related to Denny’s rose following the commercial airing on the Super Bowl. Also, it is estimated that Denny’s received media exposure of the commercial and promotion valued at $50 million.

Denny’s Super Bowl marketing program was a great success in terms of creating awareness and interest in the brand. The ultimate test of the campaign will play out in the future. Will the investment made on Super Bowl advertising lead to more customers patronizing Denny’s more frequently and spending more money? If those outcomes occur, then we can say with certainty that Denny’s hit a grand slam during Super Bowl XLIII.
Link: Marketing Daily – “Denny’s Free-Breakfast Super Bowl Ad Scores”

Why Kellogg Had to Drop Michael Phelps

Michael Phelps has made news worldwide in recent days for the wrong reason. A British tabloid published a photo of Phelps partaking of marijuana at a party. While the picture is certainly embarrassing for Phelps, it created an even more uncomfortable situation for Phelps’ numerous corporate partners. Several companies inked Phelps to endorsement deals before and after the 2008 Olympics. Now, his remarkable achievements in the water are overshadowed by behavior unbecoming an athlete and role model.

When a celebrity endorser gets into trouble, companies sponsoring the celeb have to decide whether to ride out the situation or cut ties and move on. In Michael Phelps’ case, three companies have come out to take a stand. Speedo and Visa quickly made statements in support of Phelps and intend to continue their relationships. Kellogg, on the other hand, announced it would not renew its contract with Phelps when it expires this month.

It can be argued that all three companies made the correct choice. Speedo sells swimming apparel; Michael Phelps is a world class swimmer. Until his performance declines in the water, he is an effective endorser for Speedo. Visa has a broad target market, and its services have nothing to do with Phelps’ source of celebrity. He was hired for the name recognition and familiarity he can bring to the brand. So, while Visa would probably prefer he not embarrass himself, it can withstand a situation like this. We are a celebrity culture; we love our heroes and have always been rather forgiving of most their transgressions (most O.J., not all).

Kellogg had little choice but to sever ties with Phelps. Its products are based on promoting good health, and its target market is moms and children. Associating with someone who is perceived as a party guy (other photos and video help create that image), Kellogg cannot afford to risk its brand reputation further. A common theoretical explanation for how celebrity endorsements impact consumer behavior is that the image of the endorser transfers to the image of the brand being endorsed. In this case, Kellogg cannot take a chance on negative associations with Michael Phelps having a negative impact on its brand.

Employees as Billboards Doesn’t Fly

Spirit Airlines made news last week with an idea to sell advertising space on the aprons of its flight attendants. Specifically, logos for alcoholic beverage brands would be placed on aprons. Such a move would not only create advertising revenues, but it could stimulate sales of products on board with the additional brand exposure. The head of Spirit’s flight attendants’ union complained about the ad proposal, saying “we’re not walking billboards.”

The plan to put advertising on part of employees’ uniforms (which an apron would be part of a flight attendant’s uniform, at least at certain times) raises the issue of whether employees should be expected to be involved in promoting other brands. Employees are perhaps the number one “billboard” for their own companies, but should they be involved in advertising other brands? In the case of the airlines, there appear to be other pieces of real estate on a plane available to sell as ad space: overhead bin doors, seat backs, and lavatories come to mind. Involving employees in ad placements could put them in an uncomfortable situation. What if a flight attendant is asked to wear an apron with an ad for a product she/he does not use? Worse, what if the advertised brand is one the employee opposes for ethical or moral reasons?

Employees should not be put in a position of having to display other companies’ ads on their bodies in any way. There may be no limits to such a practice: Nurses with ads for health care products on their uniforms? Package delivery personnel advertising for retailers on their uniforms? Let’s hope not.

Link: Media Buyer Planner – “Spirit Flight Attendants: We’re Not Walking Billboards – New Aprons Not Cool”

Super Bowl Advertising III: Stay on Sidelines or Get in Game?

A weak economy has forced many Super Bowl advertisers to re-evaluate their participation in the big game. Actually, review of committing to being a Super Bowl advertising has been ongoing for many advertisers as the price for a 30-second spot has risen 50% since 2002. This year’s going rate of $3 million serves as a reason for advertisers to scrutinize whether the money invested on the air time, producing a commercial, and other marketing spending in support of their Super Bowl ad is worth it. Two veteran advertisers, GM and FedEx, concluded the answer is “no” and will not be advertising during the Super Bowl. Three rookies join the commercial lineup: General Electric, Denny’s, and Pedigree.

The question of whether to commit $3 million-plus to Super Bowl marketing is the same question a marketer asks when considering a $300 ad in the local newspaper: can a return on investment be attained that justifies spending the money? An even more important question to ask is: what is the ad supposed to accomplish? Is it reasonable to expect sales will increase? Will we get more telephone calls or web site hits from people wanting to know more about our business? Will awareness for our company or brand increase, which could lead to increased sales?

Being a Super Bowl advertiser can be a badge of honor for a marketer, albeit a very expensive badge! Being a part of the game is not the objective to attain; it is crucial that any marketing spend have an outcome that will advance a brand in some way.

Link: Advertising Age – “Rookies Eager to Play in Super Bowl”

Super Bowl Advertising II: Advertisers Mindful of Tone of Their Messages

Super Bowl advertisers have been forced to reconsider the tone of their messages this year in the wake of a gloomy economy. Two reasons for reconsidering what is said and how to say it: sensitivity and opportunity. Advertisers are sensitive to the plight of the thousands of Americans who have lost their jobs in recent months. While Super Bowl commercials can provide levity to one’s situation, failure to consider if a message is in line with consumer sentiment could result in encouraging consumption that consumers simply cannot afford at this time.

The opportunity driver of ad message evaluation is changing messages to respond to consumer needs at this time. For example, Hyundai purchased two 30-second spots months ago, before the economic meltdown occurred. The original plan was to run two spots for its Genesis coupe. Now, Hyundai will run one spot for the Genesis and one for its Hyundai Assurance plan, which helps customers who run into difficulty repaying their loan.

The Super Bowl is a festive event, a time when viewers can set aside whatever issues they are dealing with for a few hours. Kudos to the advertisers that recognize this and have taken steps to make sure their commercials do not disrupt the positive atmosphere.

Link: The New York Times – “Advertisers Change Game Plans for Super Bowl”

Super Bowl Advertising I: The Commercial is Only the Beginning

What’s the fastest way to spend $100,000 of a marketing budget? It has to be buying a 30-second commercial during this year’s Super Bowl broadcast. At approximately $3.3 million for 30 seconds of air time, it costs advertisers $100,000 per second to have a presence during the big game. The $3.3 million figure is misleading because it really represents the initial commitment of a marketing investment that should include spending both before and after the Super Bowl to maximize the exposure a commercial provides.

Examples of communication tools Super Bowl advertisers can and should utilize include public relations efforts in advance of the game to tout their commercial, a presence on YouTube to show teasers or other video to pique interest, search engine ads driving traffic to the advertiser’s web site, and a social networking presence to allow interested persons to connect with the brand around the Super Bowl commercial message.

One advertiser that has successfully marketed around its Super Bowl ad involvement is E*Trade. The online brokerage firm gave us the popular talking baby commercials in 2008. He’s back in 2009, and he has a presence on YouTube, Twitter, Facebook, and MySpace so that the interaction with E*Trade is not limited to 30 seconds during the Super Bowl.

Is it worth the big bucks of a Super Bowl ad buy? E*Trade reported it increased its number of brokerage accounts by 32% following last year’s Super Bowl. The E*Trade example serves as a reminder for all types of advertising: measurable outcomes, such as the number of new accounts, should be tied to any communication effort.

Link: Media Post News Marketing Daily – “E*Trade’s Baby Brings Friends to Super Bowl”

Web Freebies Stimulate Sales, Not Stifle Demand

The copyright police units at several media companies have aggressively fought to keep their protected works off free access sites like YouTube. These efforts are rooted in the long held belief that copyrighted works should controlled by their owner. The advent of viral marketing, file sharing, and user-generated content has turned this mindset on its head. Should media companies change their relationship with the YouTubes of the world from adversarial to collaborative?

YouTube is working with content creators to drive sales with free videos and songs on its web site. The formula is exposure to the free content stimulates demand for buying a movie or song through legitimate channels. In this scenario, consumers are buying, not pirating, copyrighted works. Thus, rather than fighting free distribution with an aggressive monitoring effort, entertainment marketers should be exploring ways to exploit tools such as YouTube to whet appetites of people who will pay for entertainment.

Link: The Daily Online Examiner – “YouTube: Free Clips Boost DVD Sales”