Lufthansa Italia winging it?

By Barry Silverstein

March 16, 2009 issue

There is an air war brewing that is changing the way European airlines operate. Driven by a sputtering economy, airlines in Europe are gradually departing from the one government/one airline model. They are increasingly looking to cross-country mergers, sometimes involving private investors, as a means of survival.

Alitalia is a case in point. The Italian government-owned airline filed for bankruptcy last August, and a group of private Italian investors stepped in. Then, in January 2009, Air France-KLM (itself a merged airline) bought a stake in Alitalia. That action precipitated the creation of another airline’s new brand: German carrier Lufthansa quickly launched a separate operation, christening it Lufthansa Italia.
Lufthansa had an interest in buying a stake in Alitalia but lost out to Air France-KLM. Rather than cede the lucrative Italian routes, Lufthansa took a calculated risk and created its own new brand. It’s the first time Lufthansa has established a carrier outside its home market of Germany.
Granted, Lufthansa is an established worldwide brand. Known for its German punctuality and efficiency, Lufthansa has fared better than most European airlines. Still, the question is, will Lufthansa be able to bring the same magic to Lufthansa Italia?
Lufthansa Italia may have taken off suddenly, but Lufthansa has already shown commitment to the integrity of the new brand. Lufthansa has set up the airline as a separate subsidiary based in Milan, Italy. The airline adorned two Airbus jets with the new airline’s name and designated the planes “Milano” and “Varese” after two Italian cities. Previously, Lufthansa had named its planes only after German cities. Lufthansa Italia started operations in early February 2009, flying out of Malpensa (Milan) Airport to Paris, France, and Barcelona, Spain. More aircraft were scheduled to be added in March, and routes to Brussels, Bucharest, Budapest, Lisbon, London and Madrid were scheduled to be online by the end of March.
Lufthansa says it will imbue the new Lufthansa Italia with “reliability and high quality blended with Italian flair.” The airline says it has developed “special Italian-style in-flight services” for Lufthansa Italia (although it doesn’t specify what they are). The planes are configured to seat 138 passengers in business and economy class. Lufthansa’s operations at Malpensa Airport will be upgraded to include dedicated check-in counters, more quick check-in terminals, refurbished gate and baggage reclaim areas, and a new and improved Lufthansa lounge.
Also in February, Lufthansa Cargo announced the launch of freighter services between Milan and New York and Chicago, taking advantage of Alitalia’s failed cargo operations. Lufthansa said it will use the freight capacity of its Lufthansa Italia jets to increase the company’s Italian cargo business.
There was another motivation to starting Lufthansa Italia. Lufthansa Executive Vice President Karl Ulrich Garnadt told ATWOnline.com that the airline will seek an Italian Air Operators Certificate so that it can gain the right to fly to Eastern Europe and other non–European Union destinations.
For the present, at least, Lufthansa Italia will need to operate primarily as a budget airline. That’s because there is heavy competition for the Malpensa routes. But according to Der Spiegel, competition could also benefit Lufthansa Italia: “… there's a good chance Lufthansa will obtain flight rights on the lucrative route between Milan and Rome for the first time. Until now, the lucrative route has been largely reserved for Alitalia and Air One, but after their merger there is significant probability that the European Commission will require that the route be opened up to other competitors” (January 13, 2009).
Upstart airline brands have succeeded in Europe before. Richard Branson’s Virgin Atlantic famously came on the scene in 1984 to challenge British Airways’ monopoly. The two airlines have been fierce rivals ever since. Ryanair, arguably Europe’s most successful low-fare airline, began flying between Ireland and London in 1985. By 2006, Ryanair had carried a record 42.5 million passengers, and became the world’s first airline to carry more than four million international passengers in one month. Today Ryanair owns 30 percent of Aer Lingus, Ireland’s national airline and Ryanair’s former archrival.
Lufthansa Italia may have a different kind of challenge ahead, however. Alitalia is still a formidable brand. It has been in existence since 1946, and it has carried the colors of the Italian flag in its logo, a stylized capital A, since 1969. Italian air travelers could well remain committed to a brand that has been closely tied to their homeland for more than sixty years.
On the other hand, Alitalia has endured union strikes, poor service, management problems and a recent bankruptcy. With private investors and Air France as part owner, Alitalia is moving further away from, not closer to, its Italian roots. That presents a market opportunity for Lufthansa’s new venture. If Lufthansa Italia can show it is well run, competitive and respectful of Italian culture, this upstart airline could quickly make gains with Italian travelers. They will likely pick superior economical service over loyalty to a former national airline that is in serious need of a makeover. This is the new global economy, after all.





Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.

Time for a Brand Stimulus Package

By Kevin Randall
March 16, 2009 issue

Follow the 7Ps of Branding

Every day we are bombarded with numbing news about the economy: bank busts, bailouts and buyouts, rising jobless claims, more home foreclosures, declining consumer confidence, the unfolding “stimulus package” and a national budget in crisis.

In the marketing world, we endure a similar drumbeat regarding the fallout: dismal corporate earnings, company layoffs, marketing budget cuts, advertising going dark, clients and agencies and people coming and going, and a brand budget crisis. There is a sense of turbulence, malaise and a lack of confidence.
Our industry is witnessing a diminishing commitment to long-term brand building. The mission of the moment is driven by the CFO, not the CMO, and calls for cost-cutting and short-term revenue-generating activities represent the only immediate focus.
Lead generation is “in.” Demand stimulus and call to action are the rage—perhaps partly because the term stimulus now enjoys so much currency. Brand strategy and market research are “out” of fashion.
Will the decline of brands and branding follow?
No.
A weighty and consistent body of historical data shows that marketers will do harm in the short- and long-run to their businesses and brands by knee-jerk budget slashing and running scared.
Hundreds of studies of marketing over ten recessions in the 20th century have concluded that not only did sales and profits decline for brands that cut brand-oriented advertising during the recession, but also that performance continued to lag upon the recovery (“Why it is important to invest in communications during an economic downturn,” IVCA.org, 2009).
Today’s brand leaders would be wise to consider and follow these 7Ps of Branding as a guide for the recession and beyond:
1. Profit
“We have a philosophy and a strategy. When times are tough, you build share." - AG Lafley, CEO, Procter & Gamble
Marketers now have a golden opportunity to profit and establish real competitive advantage by exploiting the current situation. They can increase brand value and market share now relatively more easily and cheaply than during good times. With competitive noise levels reduced it is easier for a brand to stand out in the marketplace. Media costs are more attractive. Interbrand CEO Jez Frampton argues for “protecting and growing a brand…a company’s most valuable asset—and a far less volatile asset than others during a time of economic uncertainty,” (“Interbrand Announces the 2008 Best Global Brands,” Interbrand.com, 2008).
2. Persistence
Corporate brand directors need to stay the course by going against the grain and not following the marketing herd. Even if budgets are trimmed in some areas, there should be a core of strategic and tactical activities that endure (the former initiatives tend to be less budget consuming even in good times). Such brand perseverance will provide reassurance during uncertainty to both the existing customer base, an especially critical target now, and to internal stakeholders. Rosabeth Moss Kanter cites current downturn success stories of IBM and Procter & Gamble as “role models” and examples of “persistence despite obstacles,” (“The Value of Role Models in the Downturn,” HarvardBusiness.org, 2009).
3. Planning
Despite the strong economic headwinds, brand builders should remain committed to pursuing long-term visions and executing plans while selectively and pragmatically improvising marketing tactics. IBM (the second most valuable brand in the world according to Interbrand/BusinessWeek, and a B2B brand) during the recessionary early 1990s and Southwest Airlines after 9/11 are examples of brands that never wavered from their long-range strategic compasses and profited enormously by doing so. These brands did not and do not meander based on quarterly results. The strongest, top-performing brands are built to weather the various storms that come along.
4. Performance
Brands (and their communications) will be judged and rewarded now by delivering on “value” over merely price. Some marketers have and will cut prices. Brand leaders do need to (re)define the value of their offering while not compromising the quality and experience customers expect or need (despite across-the-board corporate cutbacks). Harvard Business School professor John Quelch also recommends investing in opportunistic, focused market research since there is a real need to define “performance” and “value” and gauge what is relevant to customers in the shifting environment (“Marketing Your Way Through a Recession,” HarvardBusiness.org, 2008).
5. Positioning
Brand owners must uphold and defend their core positioning and resist the temptation to sacrifice quality, reduce innovation efforts or cut prices. A study of more than 1,000 companies showed that firms that cut manufacturing and administrative functions in a recession did tend to reap the benefits while those that decreased spending on new product development, quality and marketing suffered (“What strategic investments should you make during a recession to gain competitive advantage in the recovery?,” Strategy & Leadership, Profit Impact of Market Strategy [PIMS], Keith Roberts, 2003). Leading brands will stay there by offering and communicating their enduring relevance and point of difference. Recessions and discounts come and go, but trusted brands and their appeals tend to transcend and outlast these events.
6. People
There needs to be an appreciation of the link between top talent and top-performing brands. Hiring, motivating and keeping the best people (who exemplify the brand) while competitors are pruning overhead is a key source of proprietary advantage. Management guru Jim Collins chronicles the cases of Boeing, Hewlett-Packard and Procter & Gamble, who bucked the trend during tough times by investing in talent (when their rivals were shedding critical human capital) only to thrive and outperform the competition (“Crisis into opportunity,” CNN Money.com, Jim Collins, 2009)
7. Principles
Brand leaders should work with CEOs to make sure their brands and organizations are integrated and that employees internalize and externalize a set of values that don’t change. Both Quelch and Collins emphasize the importance of adopting core brand principles and personality traits, sticking with them and executing on them in the future. According to Kanter, IBM’s and Procter & Gamble’s strong financial results today are partly owed to their focus on corporate brand values, ethics and social mission. Valued customers and employees will be more loyal if they are reassured on principles—by the brand and by its chief executive and sponsor. This is especially critical in the B2B world, with its large transactions and numbers of stakeholders involved in the customer experience.
Long live strong brands whose adherence to the 7Ps of Branding will ensure the best return on investment!
Brands by the numbers
• Southwest Airlines was the best performing stock from 1972 to 2002. (“Crisis into Opportunity,” CNN Money.com, Jim Collins, 2009) • McGraw-Hill analyzed 600 companies from 1980 to 1985. The results showed that B2B firms that maintained or increased their advertising during the 1981-1982 recession averaged significantly higher sales growth—both during the recession and for three years following—than those that eliminated or decreased advertising. By 1985, sales for companies that were aggressive recession advertisers had risen 256 percent over companies that did not maintain their advertising (“US Recession”, McGraw-Hill, 1988).
• A study of 1,000 firms during recessions between 1982 and 1999 identified key differences regarding the strategies of the best and worst performers, with the measure of performance being changes in the company’s market-to-book ratios. Notably, the best performers had increased their marketing and advertising spending not just relative to their competitors, but also compared to their own spending in better times. (“Learning to love recessions,” Richard F. Dobbs, Tomas Karakolev, and Francis Malige, McKinsey & Co., 2002).
• A 2005 survey of 154 senior marketing executives underscored the findings of the McKinsey study (“Turning Adversity into Advantage: Does Proactive Marketing during a Recession Pay off,?” Raji Srinivasan, Gary L. Lilien and Arvind Rangaswamy), International Journal of Research in Marketing [IJRM], 2005.
• IBM reported a 12 percent increase in earnings for 4th quarter 2008 beating analyst expectations. (Google.com, 2009)

Kevin Randall is Director of Brand Strategy & Research at Movéo Integrated Branding, a brand consulting and marketing communications firm based in Oakbrook Terrace, IL. Kevin can be reached at krandall@moveo.com and 630.570.4813.

Lessons from Tropicana’s Fruitless Design

By Jennifer Gidman

March 16, 2009 issue

It’s a revamp-gone-wrong tale that has already secured its place in the annals of packaging: PepsiCo retains Arnell Group to redesign its Tropicana Pure Premium orange juice cartons as part of its new ad campaign. Said cartons make their aisle debut in January, minus the familiar straw-punctured orange and sporting a modernized depiction of—well, fresh-squeezed juice. Consumers revolt and demand the old packaging back. Two months and a reported US$ 35 million later, PepsiCo reverts back to the original Tropicana packaging, straw between its legs (and back on the carton).

There’s nothing unusual about a perennial product revisiting its packaging, labels or logos in an attempt to bring outdated aesthetics up to par with an enduring brand message. Camel cigarettes underwent its first package redesign in 90 years in 2008. Bacardi, which has been distilling spirits since the 1860s, has updated its bottles to “reflect the sophisticated consumer environment.” And then there’s Pepsi, which introduced a new logo last fall (Arnell Group was also responsible for this design do-over, to mixed reviews).

But if the brand is still enjoying hefty market share, why putter around with its packaging? Tropicana has historically dominated number-two Minute Maid (owned by PepsiCo rival Coca-Cola) in the OJ category. “Sometimes [package redesign] has nothing to do with the business at all—it [comes] down to the new personnel working on the brand, hell-bent on making a mark on their career,” says Dyfed “Fred” Richards, executive creative director, North America, for global branding consultancy Interbrand, which also produces brandchannel. “It’s sometimes difficult for brand managers to demonstrate growth of a brand they’re being tasked to manage and grow.

But a new package design associated with those changes demonstrates these changes.”
The agencies commissioned for a redesign may also share some of the blame for failed packaging overhauls—think about if Mad Men creative director Don Draper’s powers of persuasion were magnified by corporate fears of losing market share in a depressed economy. “Design companies should be asking far smarter questions at the outset of the changes to really understand the reasons for the change,” Richards says. “Sadly, many [of these] companies enjoy the design process so much that design for design’s sake takes over, and all reason jumps out of the window for the benefit of a trend or effect they’ve wanted to try.”

Could this be what happened with the Arnell Group redesign strategy for the Pepsi logo that leaked onto the Internet last year? In the 27-page report, simply titled “Breathtaking,” the authors cite such lofty influences as the golden rectangle (that aesthetically pleasing formula found in architectural and artistic masterpieces like the Mona Lisa and the Parthenon); magnetic geodynamics; and Hindu numerical harmonics as all leading up to the design revolution that is the new Pepsi logo.

This is excessive profundity for a visual representation that, at the risk of oversimplifying the process, just took the old logo, rotated it and distorted the white middle wave. And while there’s plenty in the report about brand geometry, perimeter oscillations and color theory, what’s notable is a lack of discussion of either the product itself or the consumer.

Arnell Group still hasn’t verified the report as being authentic. However, Peter Arnell’s somewhat rambling defense of the Tropicana debacle is comprised of similar stream-of-consciousness associations between squeezing oranges, hugging children, and ensuring consistency between the purity of the juice and the carton. Combine this with the grammatically awkward tagline, “Squeeze…It’s a Natural,” and you’re left to wonder: is this branding genius or simply marketing mumbo-jumbo?

Extreme Package Makeover

With properly ascertained research and consumer feedback, however, a brand can, and should, make an informed decision to redesign its packaging or logo. “Any brand should be looking at itself in the mirror 24/7 and measuring itself against all its competitors,” Richards says. “If a brand is in a leadership position, then it should be protecting and leveraging those key equities at all times in an effort to reinforce the reasons why it’s the market leader.”

All parties involved need to carefully tread the redesign waters. “Understand the brand’s history,” Richards explains. “Talk to and listen to loyal consumers. This isn’t about sticking a pretty label on a box and hoping you win a design award. All the assets of the brand need careful evaluation to find out equity stretch points and equities that are sacrosanct to the consumer. More often than not, you’re not designing for your client, and certainly not for yourself—you’re designing for the consumer.”

Even after studying the ins and outs of a brand, there’s still that slippery slope to navigate in contemporizing an iconic brand’s packaging, label or logo while still retaining its most identifiable elements and the equity it’s built up over the years. “There’s a fine line between being relevant and being trendy,” Richards explains. “Updating requires a craft that can only be learned over many years of experience. I always tell my designers that working on the less glamorous brands is character-building [work], not on the boutique brands that essentially come and go and fall prey to the latest tricks and trends.”

While designers should be aware of the new designs around them, they should be careful of what they leverage in their day-to-day dealings with brands they are charged to develop, Richards says. “I ask all of my designers to keep personal scrapbooks that are evaluated on a regular basis in one-on-one sessions,” he says. “I want to see what’s motivating them, what inspires them. It could be a ticket stub from a concert or a great piece of type from an ad—it doesn’t matter, as long as they are curious [about] the world around them and download the information in a book rather than carrying this information as graphic noise in their heads. That noise might then become an impure insert into a brand’s future that won’t resonate with the consumer.”

Pulp Friction

Tropicana’s carton conundrum is a compelling story on a couple of fronts. First, there’s the juicy, schadenfreude-esque media obsession—the panned carton was one of the most blogged topics the week of February 23–27, behind only the machinations of President Obama’s new administration, according to the Project for Excellence in Journalism’s New Media Index.
But even more unusual has been the astonishing backlash from a usually silent, brand-loyal contingent, and PepsiCo’s eventual acquiescence to these vitamin C devotees. Feedback on the design, relayed to PepsiCo via letters, phone calls and e-mails, has ranged from deeming the cartons “ugly” to expressing outright confusion—some customers passed right by Tropicana cartons on store shelves, mistaking the new packaging for private-label offerings. “What’s evident from my experience and perspective is that key equities of the brand were thrown away for a generic offering, and consumers reacted,” Richards says.
Despite such a marketing blunder, however, Tropicana-gate has demonstrated that the brand’s followers cared enough about the brand to effect change. “I think it’s a blessing for Pepsi that the consumers didn’t react by walking away from the brand,” Richards says. “We all remember what happened with New Coke.”
In these troubling economic times, this type of loyalty is an indicator of what roles brands play in our lives. “The rise of private label is clear (64 percent last year), and orange juice is a commodity category,” Richards says. “But consumers need their ‘comfort brands’—eventually the message [of these comfort brands] will get through, and consumers become incredibly powerful brand advocates. So when the message changes in such a dramatic fashion, as it did with Tropicana, the consumer feels betrayed.”
Revolution among the common folk is starting to resonate with the brands they’re revolting against. Facebook users, for instance, recently took issue with certain amendments to the site’s terms of service. As a result, the social-networking platform temporarily reverted back to its old terms. And when CBS canceled the prime-time TV show Jericho, disgruntled fans delivered 20 tons of peanuts to CBS offices (the network cracked and resurrected the show).
There are brands that have taken consumer opinion one step further, involving the public in actual packaging makeovers. Nestlé, for example, is tapping into social media to elicit consumer input for new packaging for its Goobers, Sno-Caps and Oh Henry! candy lines (the package redesign that gets the most votes will be on shelves by the end of 2009). And in celebration of its 150th anniversary, Eight O’Clock Coffee is letting consumers direct its packaging facelift by registering their votes at CoffeeMaker.com (with a chance to win a year’s worth of groceries to boot).
Of course, there’s empowering consumers with some say, and then there’s giving the consumers a laptop loaded with graphic-design software and directing them to redesign the packaging from scratch. “I’m a firm believer in engaging consumers at every level of the design process,” Richards says. “Listen to them first, show them what they know, listen again. Then think about what you’ve heard—put images to the spoken word and play them back. Ensure there’s a clear meaning behind every image and every word. Go on a shopping trip with the consumer from the moment the grocery list is being created to the point of selection at shelf to purchase to use in the home; do the same thing yourself. But don’t let the client or consumer design: brand design is a craft, not a beauty contest.”
So it’s back to the drawing board (or maybe not) for Tropicana. The old cartons are expected to reappear on store shelves this month. The only remnants of the US$ 35 million Arnell experiment will be the cute, orange-shaped plastic caps, which will be retained on cartons of low-calorie Trop50. The advertising campaign that’s currently in place will also continue.
Perhaps this could have all been avoided if PepsiCo had sought out real consumer input in the first place. “Respect the brand and the role it has to play in the hearts and minds of the consumer,” Richards says. “Use the product: How does it taste, smell, sound, feel in your hands—how does it perform? Do you understand it? Can you appreciate why other consumers get excited by it? Go on that consumer journey.”
Once you’ve taken that step, you’ll be able to embark on a successful packaging redesign if that’s what’s needed. “Many brands successfully update their look and feel on a regular basis with very little effect on the loyal consumer—that’s the craft of branding,” Richards says. “When you go back and look at packaging through the ages, especially the power brands that have stood the test of time through decades of changes and consumer trends, they offer a unique insight of how to develop and manage key equities and remain relevant to the consumer of today and tomorrow.”

Jennifer Gidman uses OJ as a breakfast supplement every morning and as an indispensable ingredient in her mixology experiments every Friday night.

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NEW YORK (YouTube.com/AdAge) -- Pepsico's Tropicana brand is junking the new orange juice package design it only just launched weeks ago. The beverage marketer is switching back to its old design whose centerpiece is a orange skewered by a drinking straw. In this video recorded at a press conference five weeks ago, Arnell Group CEO Peter Arnell vigorously defends his agency's carton design that has now been withdrawn from the market.

Steinlager Pure – Keep it Pure

Category: New Product or Service Introduction

Agency: Publicis Mojo

Advertiser: Lion Nathan

Campaign: Steinlager Pure – Keep it Pure

SUMMARY
Steinlager was New Zealand's number one premium brand, but with Heineken and a multitude of other European brands entering the market, its position had deteriorated.
The agency uncovered a number of issues that were holding Steinlager back; it was clear that more than a new advertising campaign would be required. Extensive consumer research conducted by the agency provided a positioning for a new brand based around Purity. A beer of uncompromising purity with an attitude to match. An iconic campaign featuring Harvey Keitel bought the positioning to life. The result; a campaign that redefined the premium category, exceeded every benchmark set, and helped Steinlager Pure take a 3.3% share of the total beer category in its first year.
This campaign also won Publicis Mojo a Gold EFFIE for New Product or Service Introduction and a silver for Return on Investment.

MARKETING CHALLENGE
Steinlager had baggage including urban myths about chemicals and hangovers, an aging drinker image, a poor social image and an unclear product positioning.
The agency and client together reached the conclusion that no matter how great, or inspiring a piece of communication produced, it wasn't going to overcome all of these barriers. The issue was confronted head on with a new beer.
CAMPAIGN OBJECTIVES
1. Business Objectives
Create a new product that would:
a) Achieve 1% volume sales of the total beer category. (This objective was based on analysis of other premium beer launches.)
b) Achieve and maintain a price premium over European beers (in particular Heineken)
(“Steinlager sells at $20 for a 15 pack, you could never charge $25 for a dozen” – Trade customer)
c)Provide a platform to return the Steinlager brand back to leadership of the premium beer category within three years
Measured by total Steinlager sales (e.g. Existing Steinlager + new Steinlager)
d) To do this with minimal cannibalisation of the existing Steinlager brand
2. Marketing & Communications Objectives
a. Build a base of adorers
Lion measure loyalty by using an adoration scale. The ultimate is to be an 'Adorer' defined as 'This is the only brand I drink' or 'Almost always the first brand I consider, but also drink others'.
The benchmark Lion aims for is 8% across all brands – it was expected a new brand would take two years to achieve this.
b. Communicate that the new Steinlager is;

• really different from other premium brands


• worth paying more for


• a beer you can drink all night


• a high quality brand

TARGET AUDIENCE
New Zealanders with a hunger for a bright, vibrant and ambitious future.
25 to 35 years, primarily male.
CREATIVE STRATEGY
The creative needed to communicate why Steinlager Pure is different and why it's worth paying more for.
The answer lies in the combination of the rational (the purity / NZ ingredients story) and the emotional (a pure / uncompromising approach to life). From the bottle to the advertising, the purity message was supreme. The uncompromising approach and Steinlager's international status were realised in the Harvey Keitel TVC which perfectly balanced the rational and emotional message.
OTHER COMMUNICATION PROGRAMMES
Public Relations, Point of Sale
MEDIA STRATEGY
The media strategy incorporated television, metrolights and magazines to provided a high profile launch without compromising the important premium brand credentials, reaching premium drinkers at home and at play with a distinctive and engaging presence.

MEDIA
TV, Cinema, Print, Outdoor, Point of purchase
TOTAL MEDIA EXPENDITURE:
$2 million to $3 million
RESULTS
The campaign:

• exceeded the two year sales targets in the first six months achieving 3.3% of the total beer category


• maintained a price premium


• provided a platform to return the Steinlager brand to leadership


• has been hailed as a business success


• built a base of 'adorers'


• has been good for Steinlager classic

Chart 1: 3 Month Volume Share of Steinlager and Heineken in National Supermarkets (Jun 07 – Mar 08)

Steinlager trademark has equalled the volume share in supermarkets of Heineken in two of the last three quarters due to the launch of Steinlager Pure. Note that there is no cannibalisation of Steinlager Classic.
NB. Supermarket data is used as this is the only channel where Lion & Heineken comparative data is available.
Source: Lion Nathan / Nielsen

Chart 2: Premium Brand Image

Mainstream agencies make a bid for digital business

David Benady
2009 could be a make or break year for mainstream UK advertising agencies. Total spend on UK internet advertising - dominated by search - is poised to overtake that of television advertising and, in the midst of a recession, bigger agencies face mounting pressure to show that they have the digital skills and mindsets to compete with online specialists.
From BMB's iPint mobile phone game promoting Carling lager to TBWA\London's spoof online sport backing the launch of the Nissan Qashqai, traditional advertising agencies have shown they can display creativity outside television and print. But will the bigger agencies be able to turn out a consistent flow of digital branding campaigns to rival specialists such as Glue, Dare and Poke? Worryingly for the agencies, some brands are dispensing with their long-standing ad agency relationships altogether and bringing in digital specialists.
Last year 3, the mobile phone operator, moved its entire £28m UK advertising account out of ad agency Euro RSCG into digital specialist Glue London which will oversee both on and off line advertising. At the time of writing, ad agencies are keenly awaiting Glue's new work on 3 to see whether the agency is as adept at offline marketing as it has been at the online variety.
These will be testing times for the ad agencies and the effectiveness of the agency structures they have put in place to embrace the online world.
Structure
Among leading UK agencies, there is no single blueprint for how to organise their business to get a greater share of digital budgets. One path is to set up a separate digital unit and populate it with online marketing specialists. In the past two years, McCann Erickson London has established McCann Digital and Rainey Kelly Campbell Roalfe/Y&R has set up Saint.
An alternative and increasingly popular strategy is to pursue an integrated approach of hiring online specialists and incorporating them into existing account teams. This allows the agencies to boast that they are digital to their core rather than offering online expertise as an optional add-on.
The UK's biggest agency, AMV.BBDO, has adopted this approach along with others such as BBH. Delaney Lund Knox Warren opted for the integrated path when it disbanded its specialist unit, DLKW Dialogue, and slotted its specialisms into the main agency.
One critic of this approach says it can be stifling for digital specialists working with creatives and planners that, they would claim, do not fully understand digital and its working practices. Digital staff, transplanted in this way, may feel that they won't learn from their peers in ways they would if they were operating in a specialist agency.
"Above-the-line creatives often don't want to dirty their hands with online because they have their hands full with TV ads," this critic says.
However, integrationists say the advantage of their method is that digital specialists are tasked with explaining digital and educating the rest of the agency about new media. Either way, brand owners still need convincing that the successful online campaigns created by mainstream agencies - such as BMB's iPint, BBH's work for Axe/Lynx and CHI's online strategy for Carphone Warehouse, the european mobile retailer - are more than isolated examples.
"The real currency of today is innovation," says RKCR/Y&R chief executive Richard Exon. "Every agency and every brand is trying to do something they haven't done before. That wasn't happening ten years ago when each agency - direct marketing, media or ad agency - was trying to excel in its specialisation."
This blurring of the demarcation lines between marketing services businesses is pitting every agency into competition with each other. One problem ad agencies need to overcome is clients' wariness of handing work to ad agencies' digital off-shoots as clients fear a digital relationship may be used as a battering ram to get the entire advertising business of the client in question.
This is the view of Juliet Blackburn, business director at AAR, which matches clients and agencies. She also warns that some agencies are less than honest about their interactive capabilities. Blackburn says: "I have a problem if agencies are masking their capabilities, saying they are doing everything online when they are actually sub-contracting to specialists. I like transparency in digital delivery."
Perhaps the biggest challenge for ad agencies is to realise that the digital world is much faster moving than TV advertising. A brand such as Guinness may create one blockbuster ad a year, scoop all the awards and then start work on the next big idea.
As one agency insider says of digital campaigns like BMB's iPint: "It is a one-off, a tactical, throw-away creation, a nice-enough little thing. But digital creativity has a much shorter life span than broadcast. Production and media costs are lower so there are lots of small things happening very often."
Campaign examples
iPint
The Molson Coors lager brand, Carling, paid just £31,000 to create iPint, the Apple iPhone's most downloaded free application of 2008. The iPint game, created for Carling by its UK ad agency Beattie McGuinness Bungay, soared to the top of the iPhone free download charts within a week of its launch in July 2008. Only £16,000 was spent developing the game while Carling shelled out just £15,000 from its PR budget to promote the application online.
However, it could end up costing agency BMB much more than this, after US developer Hottrix threatened to launch a $12.5m lawsuit against the brewer for stealing its own game on the iPhone called iBeer, for which it charged downloaders $3 per download. After complaints from Hottrix, Apple removed iPint from its US download store, though it is still available to users in other countries. At the time of writing, the dispute has yet to be resolved.
Once iPint is downloaded to an iPhone, users can play a simple game on the phone's screen. Using the iPhone's "accelerometer" which detects motion, you slide a pint of Carling down the bar avoiding obstacles on the way by tilting the phone to deliver the glass into a mate's hands.
You are rewarded with an "iPint", a virtual pint of Carling. As the iPint is poured, the iPhone's screen fills as if it were a pint glass. The virtual beer acts just like a real liquid, and you can "drink" the lager as you tilt the phone. BMB says it developed iPint to fit in with Carling's brand idea of bringing friends together. The iPint is a way for people to show off their iPhones to their friends in the pub, giving them "bragging rights".
There were two stages in testing the technology. The game was constructed on a PC-based emulator to de-bug the code and then it was tested on the SDK platform - the software development kit provided by Apple to create iPhone applications. The idea was created by BMB's digital creative director Jon Williams - now creative director at Grey - working with art director Dom Martin. A team was assembled from across the agency and Carling's digital departments. Technical fulfilment was outsourced to Swedish company Illusion Labs which specialised in visualising liquid motion on mobile.
Nissan Qashqai
Launching a new car across 14 European countries with a limited marketing budget requires some imaginative thinking. To support Nissan's introduction of the Qashqai sports utility vehicle-style hatchback, ad agency TBWA invented spoof online sport "Qashqai car games" to create a pre-launch buzz and establish the model's "urban proof" positioning. You can read a full case study on the Euro Effie winning campaign here.
The Car Games website features drivers performing some unlikely stunts with their Qashqais and allows users to follow teams and drivers. This was backed up with experiential activity, such as a road-show across European cities. The site has been viewed by nearly 20 million people and TBWA says it is evidence of the way ad agencies can use their planning and creative skills to solve brand problems.
"The advantage ad agencies have over digital specialists is that we tend to have lead relationships with clients, and we are called in a little earlier and on a more strategic long term basis," says TBWA\London planning director Tom Morton, who worked on the Qashqai launch.
"Nissan gave us a problem to fix - a new vehicle in a hard-to-understand category that needs as much familiarity as possible before launch. It is a classic communications challenge at which ad agencies excel, rather than just being asked to create a new ad execution," he says.
The agency came back with the idea of positioning Qashqai as a versatile urban vehicle and using different media to express this idea creatively. TV and print ads were created by TBWA's Paris office, leaving TBWA\London to oversee the digital activity. For this, it worked with specialist online companies such as viral marketing company GoViral. The positioning was created by TBWA\London's Nissan planner, account director and creative on the business working together. Lloyds TSB Savvysaver
As the credit crunch worsened in 2008, Lloyds TSB, the UK banking group, briefed its agency Rainey Kelly Campbell Roalfe/Y&R to come up with some engaging ideas to capture the mood of the nation in the new straitened times. Lloyds wanted to show it was in tune with the public's new money-saving ethos.
The agency's digital arm, Saint, hit on the idea of creating a website offering money saving tips under the title savvysaver. This would enable Lloyds to position itself as a trustworthy source of information and a company that can help people.
Lloydstsbsavvysaver.com offers dozens of tips grouped under headings such as holidays, motoring and transport and food and dining. But the most striking point for agencies is that the digital strategy became the basis for a TV ad.

http://www.youtube.com/watch?v=Ik9Gc-8p2RY

Socially networked show

BRAND :Cheetos
BRAND OWNER: Frito Lay
CATEGORY:Food
REGION: USA
DATE: Feb 2009 - May 2009

Cheetos wanted to target 18-35 year olds just out of college or getting into the real world and associate itself with engaging content that would entertain rather than interrupt. This was part of a wider Cheetos campaign to appeal to adult consumers.
The snack brand teamed up with popular actor Ashton Kutcher to fund a web-series centering around a Hollywood production company, with Kutcher as the boss. It was the first sponsored series to be distributed through a Facebook application, called FunSpace, created by Slide, the largest publisher of entertainment applications.

The idea was that Cheetos could engage with young people in this way in an environment where they were hanging out anyway, with the hope that it created conversations around content.
The series, KatalystHQ, is a “fly-on-the-wall reality” parody about working in Kutcher’s production office and follows the experiences of Katalyst’s staff as they navigate the excitement and perils of corporate life set against a backdrop of the television and film industry. Cheetos are worked into the story lines and given custom-made pre-roll ads. It is available at www.FunSpace.com/KatalystHQ.
The deal echoes that of Family Guy creator Seth McFarlane’s microseries deal with Google.

Become a Doritos guru

Doritos has a long track record of user generated ads, and its latest campaign in Canada is no different. Doritos has launched a new flavour with a secret recipe and is inviting people to think of a name to match it in the Doritos Guru Contest.Consumers can find the new flavour in stores in a plain white packet.

Consumers are invited to try the new recipe, think of an appropriate name and then create and upload a 30-second commercial inspired by the flavour.

Visitors to a microsite vote for their favourite and the winner receives $25,000 in cash and one percent of the flavour’s Canadian net sales.

Doritos Canada 2009

How We Work: Our Process and Pricing Guide for Web Design

Arnold Yoon / October 15th, 2008 /
In this day and age, being fiscally aware and responsible are really important things - I want to know where my money is going, and in what fashion. Service industries such as ours have always been plagued with a lack of clarity in pricing.

Full disclosure, no secrets!
When shopping for products, whether it’s a couch, food or a computer, both cost and quality play important roles in making a decision. The prices are clearly laid out, even for big ticket items such as homes and cars, so that we can make an informed decision. This being said, why is it that professional service industries don’t have this sort of transparency as a norm? Shouldn’t I be able to see the qualifications and cost commitment at-a-glance to determine if I can afford a particular lawyer, general contractor, or web shop? The answer to these questions should be, YES!
That has always been committed to integrity and true transparency with all of our clients, both prospective and active. We calculate and provide clear, value-driven pricing on everything that we do. No smoke-n-mirrors, no secrets and definitely no BS! Granted, we’re not the low-price leader in web design firms, but do you really want the cheapest open-heart surgeon out there? You want the best for your dollar. We price our services on a value-based model: one which delivers comprehensive intellectual ROI immediately and throughout the business relationship.
Intellectual ROI? What on earth is that?! It means that you, as the client, receive tangible deliverables that produce valuable results throughout our whole relationship, not just pretty designs after 4 weeks. The road to those deliverables requires a lot of research, strategy and planning before execution (this is the Base Process). This is where we, the “metro web nerds,” combine our expertise with your passion and build a plan to execute your vision. After all, it’s impossible to cook a great meal without a solid kitchen, fresh ingredients and some culinary knowledge.

In our initial meeting, we learn about your project and understand brand goals and vision. Also share expertise in the web 2.0 space as it applies to brand project. Once have a collective understanding of what Brand goals are, we’ll build an estimate for the total cost of the project. While we work on an hourly basis, we want you to have an accurate representation of what the project will cost based on our discussion. There is always the chance of the project scope increasing as we strategize new ideas and functionalities, but you’ll always be a position to approve or deny the enhancements. We charge a rate of $175-$225/hour depending on the complexity of each task for strategy, design, front end development and integration services.
Here is an outline of how a typical engagement with dt works:

1. Strategic Alignment (primary discovery and brainstorming session)
2. Proposal and Contract
3. Kickoff Meeting (Both teams design and fill in the minute details on the project roadmap)
4. Flows & Wireframes (the structure and user interface of the site / web app - think of this as a blueprint for the key user interfaces to be built)
5. Living Designs (the look and feel of the interface - we add color, light, graphics and texture to the wireframes)
6. CSS/.XHTML Build (the Living Designs come to life with web standards strict code)
7. integration/Interaction Design (design templates are integrated into the website and made functional - additional programming takes place, such as AJAX and other front end effects)
   

Our relationship with you is like cooking with a partner - we work together to create something unique and super tasty. We will challenge your thinking and evolve your concept like a beautifully-crafted meal. This being said, it’s time to break the traditional service-agency model and “put our menu in the window.”

Here are the details about our process, the time it takes to achieve them and what each of the parts cost:
Base Process: $6,300

• Meet and Kickoff
  
• Strategy, Research, Client Self Realization (Creative Brief)
  
• Project Management and Meetings
  

Page Design Process: Cost Depends on the Project and the Numbers/Types of Pages

We divide our projects into 3 key types of pages, based on their classification and complexity. For each type of page, there are 3 “ingredients” required to create the finished product:

• Flowcharts and Wireframes
  
• Living Designs
  
• .CSS/HTML Build

Per-Page Costs (includes the 3 ingredients above for each page)

• Home Page: $4,200
  
• Primary Design Page: $2,450/page
  
• Secondary Design Page: $1,225/page
  

A Sample ProjectLet’s say that we’re embarking on a project to build a site for a neat web application that will give users sample recipes based on what they have in their fridge or pantry. The project might be priced out like this:

• Base Process ($6,300)
• Home Page Design ($4,200)
• Primary Page Designs/Build ($7,350)

Enter ingredients
Recipe results
Featured recipes
Blog
Cooking tips

• Secondary Page Designs/Build ($3,675)

Search recipes
About Us
Contact us


TOTAL: $21,525 + Integration Costs (based hourly on time and materials)


Time and Materials: $175/hrdigital-telepathy offers strategic user experience design without any filler. We never “pad” hours in our estimates - you get the straight story with no BS! We use the calculations above to figure out how many hours it will take to complete your project. This being said, there are often aspects of your project which will be billed additionally as Time and Materials. Some examples of these a-la carte items are:

• Additional strategic time
• Logo/Branding
• Additional design time
• Integration into your backend or a CMS, and front-end programming (these are nearly impossible to quote initially, as the complexity is not usually determined until the flowcharts and wireframes have been completed.)
• Additional features and functionality
• Out of scope revisions
• Additional project management time
  

What do You Get?In addition to piece of mind resulting from a solid strategic foundation, you’ll walk away with a beautifully engineered and artistically crafted front end (Page Designs + .CSS/HTML Templates) for your back-end application or content management system. We’ll integrate the designs into your system if you like, or you can have your programmers take care of that

Skittles :::Wikis its homepage

BRAND: Skittles
BRAND OWNER:Mars
CATEGORY:Food
REGION:USA
DATE: Feb 2009 - Dec 2008

These days it is not unusual for a brand to give consumers some control over their website or marketing, be it Doritos inviting consumers to name a new flavour, or getting consumers to come up with a TV spot idea. But Skittles has gone one step further by completely relinquishing control of its own website. 

In a bold move, skittles.com features content drawn from all over the internet, with social media touchpoints including content from YouTube and Wikipedia, what people are saying about Skittles on Twitter as well as Flickr and Facebook.

Upon arrival to the site, visitors are greeted with the message: “Don't sweat it, this is still Skittles.com. It just has a new twist. Use this as your guide to find anything and everything Skittles that's online. Have fun".

The homepage is made up of Twitter comments including the word “Skittles”. Anyone who “tweets” about Skittles automatically gets their comments to appear on the Skittles homepage. The site has effectively been “Wikied”, providing a window onto all content created about Skittles within social media.

Visitors to the Skittles.com are accompanied by a small branded toolbar which allows for navigation between the various social media outlets.
Skittles has been criticized of copying Boston ad agency Modernista!, which pulled a similar move last year with its own website, although it is a first for a consumer brand.





























HEAR THE RAINBOW
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BREAK THE RAINBOW
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CRY THE RAINBOW
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TBWA/SHANGHAI 

Mini-series drives airlines alliance

BRAND: Star Alliance
BRAND OWNER: Star Alliance
CATEGORY: Travel/Airlines
REGION: Multi-local
DATE:Oct 2008

Star Alliance, the international airline network aimed at frequent international travellers, wanted to increase awareness among its target audience and so created a series of short documentaries with businessmen in mind to drive traffic to their website.
The series, called “A Meeting of Minds”, produced with CNBC International, saw entrepreneurs interviewing global business leaders on the art of improving business, especially in emerging markets, and breaking into international markets.
The films were uploaded to staralliance.com and were available in nine different languages.
To complement the campaign, Star Alliance also developed an international business etiquette guide to acknowledge the importance of different cultures when doing business around the world, produced in association with international magazine, Monocle.
As well as the mini-series Star Alliance placed a number of advertisements on targeted news, business ad travel websites directing visitors to a video landing page at www.staralliance.com, and ads ran in Star Alliance’s 21 member carriers’ in-flight magazines, on entertainment channels and in posters at London’s Heathrow and Paris’s Charles de Gaulle airports.

The horror of milkshake

Milkshake brand Frijj looks to highlight its “unique thickness” via a film contest that plays on the classic horror movies.A series of virals show Four Ridges, a fictional 1950s town, being terrorized by a little girl called Martha.

These drive consumers to a website where they are encouraged to upload their own scary movies featuring Frijj. The brand has also extended the horror metric to cinema with a ticket giveaway that offers purchasers the chance to watch classic horror movies as part of a film festival.