27.5.09
Del Monte::: Social Media Strategy Created a New Pet Food
Del Monte's social media initiative created a new breakfast treat for dogs.NEW YORK (AdAge.com) -- It's one thing to debate the potential power of social media marketing to influence product sales but quite another to watch a social media project actually create a popular new product. In his keynote address at last week's Interactive Advertising Bureau's Social Media Conference, Forrester Research's Josh Bernoff explained how Del Monte Foods did that very thing in just six weeks.
26.5.09
Vodafone:::taking mobile to new heights
Vodafone took advertising to new heights, using their own employees as guinea pigs in a very public demonstration of their new wireless mobile office rangeTo ensure maximum exposure for the Spanish launch, theWaskman agency set up dedicated Vodafone offices in Madrid and Bilboa... 10 meters in the air, where everyone could see them!
The purpose-built glass 'office' spaces were constructed above billboards promoting the new range and for three weeks the Vodafone teams could be seen hard at work in an entirely wireless environment.
The campaign was also taken online as employees documented their experiences through a website - containing stories about the benefits of not being tied down to a single space - as well as a blog. Vodafone employees even took to the streets in modified golf carts equipped with mini offices to further demonstrate the total mobility of their new range.Main Website
Blog
Orlen: Taxiad campaign in Poland
Taxi ad campaign by Orlen in Poland.
Coffee cups were stikced on the taxi roofs as eyecatcher.
Absolut lights out
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Absolut adapts a global initiative with thoughtful segmentation, creating empowering experiences where people can see that making a difference doesn't have to be a chore.".jpg)
The US Hispanic neo-yuppie was identified as an important segment of highly educated affluent consumers aged 21-39. Absolut created bilingual communications including radio, bar/club activation, retailer point-of-sale and celebrity endorsement. Absolut teamed up with Reggaeton artists Angel & Khriz to drive the Global Cooling message in bars and clubs with “Absolut Lights Out” parties. People were encouraged to compete to produce energy through human-powered generators and bicycles. If enough energy was created, a six-foot pillar of Absolut bottles would be fully lit. Hand held devices also stored energy that was used for the anticipated Lights Out moment, which was announced by the DJ with a countdown. The lights in the club would then be turned off for one minute. Then Lunix balloons, generated by human energy would illuminate the whole venue.
There were more than 20 Lights Out Parties, which lead to an increase of on-premise sales of around 5% over the duration of the programme.
Rona:::Dripping genius
Never let a good opportunity pass you by...
Targeting peak hour traffic in the vicinity of the Jacques Cartier Bridge,Montreal, two cranes raised a billboard sized banner depicting paint tins collecting the colour drips underneath the Apple ad with the tagline ‘We collect leftover paint’.
This off-the-cuff stunt chimes perfectly with the brand's new "Doing it Right" initiative which spotlights RONA's sustainable development efforts, including the sale of eco-responsible products, its paint recycling initiatives and its new policies on pesticide sales and wood products procurement.
Mercedes-Benz:::Object of Desire
Developers creating apps for social media sites are emerging as a profitable force
"This has interesting ramifications for social media sites going forwards. It is foreseen that the current status quo of having few big networks is unsustainable, and that social networks will start to splinter into communities of interest (travel, music, food, etc.). As this happens, there's a matured opportunity for advertisers to partner developers on specific apps targeting niche audiences. Companies which have already proved their credentials will become big players. Advertisers, start taking note of up-and-coming developers - these guys could be your business partners sooner than you think!"
Developers move beyond second fiddle status and begin to rival social media sites themselves in revenue terms
Developers creating apps for social media sites are emerging as a profitable force in their own right, collecting revenues that look set to eclipse Facebook’s income from advertising.
Happily, a fascinating article from AdAge.com - link to the full text below - finds that the world’s biggest social network is benefiting from their success: the site is expected to earn $500m in 2009 revenue from such apps.
Social gaming company Zynga, for instance, is the top developer on Facebook. The lion’s share of its revenue comes from the sale of chips for its Texas HoldEm Poker (pictured, right, along with other titles published by the company). Weapons in Mafia Wars (pictured, above) are also a money-spinner for the company. Zynga is expected to take over $100 million in 2009.
According to AdAge, there are at least a half dozen other companies in the $10 million to $50 million range, as well as a clutch of smaller players.
25.5.09
Developments in business-to-business communications
Richard Jeans, Philip Kitchen and Gary Howells report on research which shows the stress and complexities facing business-to-business marketers
Richard Jeans,Philip Kitchen and Gary Howells
In November 1996, Carey, Howells, Jeans & Spira (CHJS) and the department of marketing at Strathclyde University carried out a survey to investigate how company executives in business-to-business markets are approaching communications. This survey repeated an earlier, 1995/6 study by CHJS, and where relevant comparative data are presented here.
All respondents were in business-to-business communications, with budgets between £200,000 and £5 million or more, and in businesses ranging from computer hardware to agriculture and legal services. (Exhibit 1)
The research was a postal survey, with respondents having the option of using a web site. A sample of 1,000 achieved a response rate of 8.5 per cent by the cut-off date, giving a sample of comparable size and character to the previous survey. Because this is a new sample, however, there are some differences in the detailed make-up of the two surveys' samples, so that direct comparisons should not be pushed too far. This article summarises the findings, which are available in full from CHJS.
OVERVIEW
Both surveys show business-to-business marketing departments being pressed to work harder with fewer people, and to manage budgets that have to cover an increasing number of activities. While the leading activities in terms of budget allocation are the 'traditional' priorities - brochures, trade press, PR, direct mail, exhibitions and databases - there is clearly growing interest in new media, and the balance of expenditure is beginning to shift, even though no one seems very sure of the likely return from the newer activities. Exhibitions and seminars, which are highly valued but labour and time-intensive, seem most likely to lose out.
The growing range of activities used by business-to-business marketers (15 different categories of activity are used by at least 50 per cent of the sample) is clearly a factor in the drive towards integrated communications, which is seen as a dominating force by the vast majority. Integration is being driven by a variety of functional and structural considerations, but it is wanted, too, because it is seen to deliver real benefits in control and impact.
This is important to these marketers, because they believe that branding is a vital feature of their marketplaces - even though they are not always convinced that their companies and colleagues necessarily buy into and understand branding as well as they do themselves.
It is clear, however, that they see themselves as able to lead their companies towards a brand-based future. With very few exceptions, they see marketing as at least on a par with other functional departments in their company, with over 40 per cent saying marketing is valued above average.
THE SAMPLE
The 85 respondents included a substantial number of companies in the it field, which - very broadly interpreted - accounted for no less than 62 per cent of the total number of respondents. The spread of communications budgets is shown in the pie chart: while the majority are quite small, over 20 per cent of the sample were spending £2 million or more.
THE STATUS OF MARKETING AND COMMUNICATIONS
Only 15 per cent of the sample felt that marketing was little valued by their senior management. For the vast majority, marketing was rated on a par with (43 per cent) or superior to (also 43 per cent) other functions, with 25 per cent saying that it is seen as critical to success. There has been little change since the previous survey in these figures, but a slight movement in marketing's favour is visible overall.
In spite of this, there seems to have been a decline in numbers employed in the marketing department, with - in particular - an increase from 40 per cent to 50 per cent in those with five or less people in the department. Nonetheless, about a quarter of the sample in each survey have 16 or more marketing employees. The same trend is reflected, too, in the numbers specifically employed on marketing communications. Here, more than three-quarters of the total have five or fewer specialists, and there has been some contraction in larger (ten or more) departments.
BUDGETING FOR COMMUNICATIONS
A significant difference from the 1995/6 survey appears in the description of how the communications budget is set. There seems to have been a marked shift from task or objective-related methods towards more rule-of-thumb budgeting. Both percentage of forecast sales (30 per cent) and last year plus inflation (13 per cent) have increased, while objective/task has fallen back from 60 per cent to 49 per cent. In other words, it looks a little as if, although marketing has retained or even enhanced its importance, the methods it is allowed or encouraged to employ are becoming less sophisticated. This could, however, be an effect simply of structural differences between the two surveys' samples.
In relation to sales, budgets are mostly (68 per cent of responses) between one and two per cent, though one in six spends five per cent or more. Compared with 1995/6, the overall levels look slightly lower.
COMMUNICATIONS TARGETING
Respondents were asked to state how their budgets were allocated, in percentage terms, between different categories of audience. Given a wide and diverse spread of answers, the results were translated into rank orders, and weighted to reflect the allocations and budget size. This provides the basis for comparability - and intelligibility. In both surveys, customers, either existing or prospective, are far the most important targets, which is hardly surprising. It looks, however, as if other categories have, overall, become rather less important. This may reflect either an increased focus or the pressure on budgets - or both. Exhibit 2 shows how the various audiences are catered for in these terms.
It looks as if employee communications, historically a Cinderella area, may again be suffering more than most.
HOW THE MONEY IS SPENT
Interpretation of the data on where the money goes is complicated by different questionnaire structures - on a prompted list - between 1995/6 and 1997. In particular, the leading category this year, brochures and literature, was not listed last year, so it is likely to have been 'buried' within other categories, or ignored altogether, in the earlier survey.
Using the same weighting technique as for the target audience, there is less sign of a clear 'winner' among a long and varied list of about 20 items. Five items stand out this year as the most important, some way ahead of the next group. These are: brochures/literature, trade press, PR, direct mail and exhibitions. These five, less brochures and including database marketing, were the top five in 1995/6, though the order was different. In relative terms, it looks as if database, direct mail and exhibitions have all slightly lost ground in importance, while the trade press has clearly gained.
Lower down the list, the business press (defined as the Economist, Financial Times, and so on), sales promotion, distribution support and house journals have all apparently lost ground since 1995/6; while seminars, the Internet, and CD ROMs have all improved their relative standing.
The extended list obscures the overall significance of broad categories, such as media advertising, direct marketing, new media, etc. If we combine these, we get a ranking as shown in Exhibit 3.
A rather different pattern is shown, however, if we look at respondents' expected changes in budgets over the next year. The activities that are most likely to see increases in spend among the majority of respondents are - in order of the balance of increase over decrease - the Internet, database marketing, direct mail, PR and CD ROMs. With the exception of CD ROMs, which are used by only just over half the sample, these are all mainstream activities, used by 80+ per cent of the sample.
Light is shed on these data by respondents' rating of the different activities in terms of their perceived return on investment (ROI), which they were invited to rank on a five-point scale from 'little or no return' to 'excellent return'. The top-ranked activities in terms of perceived ROI are, in descending order: PR, database marketing, direct mail, brochures/literature, and (all equal) seminars, telemarketing and trade press. This rank order has barely changed since the previous survey, suggesting that it embodies some quite widely held conventional wisdom: the only significant difference is that distributor support has slipped down the table, and this may well reflect sample make-up differences. These data sets are summarised in Exhibit 4.
| Spending priority | Increase in budget | Return on investment |
| 1 brochures | 1 internet | 1 PR |
| 2 trade press | 2 database mktg | 2 database mktg |
| 3 PR | 3 direct mail | 3 direct mail |
| 4 direct mail | 4 PR | 4 brochures |
| 5 exhibitions | 5 CD ROM | 5 seminars |
| 6 database mktg | 6 distributor support | 6 telemarketing |
| 7 seminars | 7 house journals | 7 trade press |
| 8 distributor support | 8 trade press | 8 distributor support |
| 9 house journals | 9 brochures | 9 sales promotion |
| 10 national press | 10 sales promotion | 10 exhibitions |
In general, firms can be seen to be moving budgets in the direction of areas where they perceive higher rates of ROI, together with the enticing but so far unproven, in ROI terms, new media of the Internet and CD ROM. This should lead, over time, to a distinct shift in the balance of budgets. Interestingly, in spite of their perceived good ROI, the 'traditional' but labour-intensive business-to-business activities of exhibitions and seminars, important as they are in marketers' budgets, are the two areas which do least well in terms of net numbers intending to increase spending.
BRANDS, BRANDING AND CUSTOMER CAPTURE
Asked to agree or disagree with a number of statements about the importance and significance of brands to their company and its employees, respondents attributed a high degree of importance to brands in the marketplace. They were, however, a good deal less sure that their companies or their companies' employees understood or were committed to the company's brands or to branding generally (Exhibit 5).
| Having branded components in a product makes it easier to sell | +75% |
| Strong corporate brands can command a ten per cent price premium for the same product and hold market share | +63% |
| Branded products are more important than they were three years ago | +52% |
| Strongly branded existing products have raised barriers to entry for competitors | +44% |
| There is little agreement within my company about what 'brand equity' means | +43% |
| Most employees appreciate the impact of our corporate brand on the marketplace | +14% |
| In five years' time earnings from branded products will be more than new products | -5% |
| Most employees understand the importance of brand portfolio | -13% |
| My company spends adequate resources on developing its corporate brand | -15% |
*(strongly agree/agree) minus (strongly disagree/disagree). |
In particular, these marketers were clear that their company's investment in branding was less than it should be.This is reflected in their responses to two further questions. They put product features well ahead of company image as the main challenge they faced in converting prospects into customers; and they rated product quality some way above brand strength as the key reason why the market buys their product. Overall, product quality, brand strength and product features clearly outweighed both price and service/support.
INTEGRATED COMMUNICATIONS
In answer to a direct question, 95 per cent of the sample agreed that business communications should be integrated. A number of factors were suggested as acting to encourage the acceptance and use of integration. The biggest single influence was seen to be the support of marketing management, closely followed by creative synergy and - virtually the same thing - the idea of 'one brand, one voice'. These were all very highly agreed to, with minimal disagreement. The same was true of top management support, but here there was a significant group who neither agreed nor disagreed. There was weaker but positive support for the importance of centrally-controlled budgets, and sales management support, while the least strongly agreed factors were the two agency-related ones: the range of agency services and the fact that the agency had affiliated above and below-the-line services.
Apart from these functional drivers of the trend, there was strong agreement about several of the possible benefits. Integration was seen to deliver communications consistency, greater control over the whole communications activity and - for most - increased impact. Slightly less strongly accepted were easier measurement and evaluation, the possibility of faster solutions, and - weakest of all - reduced costs.
There are, too, some barriers in the way of the development of integration, and these produced a more mixed reaction, with quite a degree of polarisation: for some people, it is one thing to buy into the concept, it is another to get it to work.
No one felt very strongly about any of the factors suggested, and there was a high level of 'neither agree nor disagree', suggesting that there is still room for further experience to aid judgment. The biggest perceived problems lie in organisational structure (presumably within the marketer's company), and lack of specialised expertise. No one saw centralisation as a serious problem - no surprise - and on balance people did not see costs or inflexibility of programmes as barriers to integration. Opinions on ease of measurement, dependence on a single supplier, and the need for more generalists were balanced.
CONCLUSIONS
Business-to-business marketing seems to be in quite robust shape, even though faced by the pressures on manpower and budgets that all managements have to wrestle with. Within a complex range of activities, which are becoming increasingly integrated, there are signs of a shift towards 'new media', but the weight of money remains, at present, concentrated on the traditional, proven workhorses. Budgets are evidently being focused increasingly on brand development, though there is an undercurrent to suggest that not all managements, outside the marketing department, are yet completely sold on the value of branding.
Cacau Show
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Twenty years ago, a 17-year-old youngster worked with his family as an apparel sales representative. Inspired by his mother’s sense of entrepreneurship, young Alexandre Tadeu da Costa decided to start working on his own as a sales representative—but one selling chocolate. Full of youthful energy, he took to the streets with his catalogs in hand and sold two thousand units of a 50-gram chocolate egg, motivated by the Brazilian custom of exchanging chocolate at Easter. However—in a tribute to his lack of experience—Alexandre never checked whether the chocolate manufacturer would be able to meet such a large order. It wasn’t. Instead of canceling the orders and disappointing his clients on their very first purchase, Alexandre borrowed US$ 500 from his uncle, bought some chocolate bars, molds and wrapping paper, and, together with a woman who made artisanal chocolate, produced all two thousand chocolate eggs himself. After paying the bills and the loan he was left with US$ 500 of profit and the valuable realization that he did, indeed, have a business in his hands. From an order that was not met by a third party, a business was born that is expected to close year 2009 with revenues of US$ 121 million. The Cacau Show franchise system already has 680 stores (as of April 2009, with more on the way) and by the end of the year will probably be the largest food chain in the Brazilian market. Cacau Show was born in a desirable demographic. According to the Brazilian Association of Chocolate, Cocoa, Peanut, Candy, and Derivatives Industries (ABICAB), Brazilian production for 2009 is estimated to reach 340,000 tons, which makes Brazil the second largest chocolate producer in the world, second only to England. With an average consumption of 2.5 kg/year per inhabitant, consumption in Brazil ranks second only to the US, Germany and the United Kingdom. The initial 50-gram egg was his inspiration. Today Cacau Show manufactures 200 different products, with a total of 10,000 tons per year and a 7 percent market share at Easter—the category’s “holiday season.” Despite its broad portfolio and Easter’s relevance for the business, the main stars of Cacau Show’s sales are the 20 types of truffles sold at a mere US$ 0.57. Long before the advent of Low Cost Society, still in the early years of his business, Alexandre noticed there were no brands offering luxury to the masses. The concept of a large class of people that desires the best but doesn’t have the means to pay for it was introduced by Massimo Gaggi, the New York correspondent of the Italian newspaperCorriere della Serra, and his partner Edoardo Narduzzi, in the book La Fine del Ceto Medio e la Nascita della Società Low Cost (The End of the Middle Classes and the Birth of Low Cost Society). Other companies riding the same wave are H&M, Zara, Wal-Mart and Ryanair, which have succeeded in interpreting people’s appetite to consume more and better while paying less and less. The economic force of 86 million Class C consumers in Brazil today is easily recognized: 20 million people have joined this segment between 2006 and 2008, driven by the economic growth experienced by the country during this time. Since its inception, the Cacau Show business had a very lean operation model, with low costs, aggressive pricing, high-quality products and creative marketing. There was nothing similar on the Brazilian market. High-class consumers had several alternatives for artisanal or imported chocolates, while, on the other end, industrialized chocolate brands were sold to all social classes through supermarket chains and food sections at department stores. The middle lane was free. But not any more: Cacau Show has already attracted followers who are now trying to copy its market positioning of providing high-quality chocolate at accessible prices. Though the product offered superior quality, an important aspect was missing in the brand’s attractiveness: the buying experience. In its early years, Cacau Show distributed its products via door-to-door sales but eventually opted for a sales format that used bakeries and small supermarkets. With the expansion of the factory, Cacau Show began using major supermarket chains and large department stores, but the narrow profit margins of this format, combined with the bankruptcy of some relevant and important players, drove the search for alternative distribution channels elsewhere. Today the distribution format is through franchises, a key part of the equation’s success. The store was the missing link for turning the brand’s magic into a tangible asset. To remain competitive, Cacau Show has had to be creative in order to maintain growth and appeal. The company keeps up a frantic production schedule to ensure expansion driven by a Brazilian market that still offers significant unrealized potential and an international market with even more promise. The brand now operates from a 36,000-square-meter fantastic chocolate factory on the outskirts of São Paulo. |
Why Brands Have an Eye on Facebook -
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