Institute of Sales Promotion | 19.10.09

Budget cutting is continuing to slow, according to the latest IPA/BDO Bellwether survey – and, with the exception of online media, sales promotion appears to be recovering fastest from the recession.

The Bellwether found that budgets were only growing for online advertising, including internet search.

Budgets are still falling for all the other media the survey tracks. However, sales promotion has the lowest rate of fall in budgets, at -4.7. That compares with direct marketing on -5.5, media advertising on -10.4 and ‘all others’ (including sponsorship and PR) on -24.4.

The -4.7 for sales promotion is also a major improvement on the second quarter, when the index was -8.8, which in turn was much better than the first quarter’s -13.7.

The index is calculated by comparing the percentage of marketers who said they had increased their budgets in the various areas with the percentage who said they had cut spend.

The IPA says that although marketing spend fell for the eighth quarter running in Q3, the reduction in budgets was the smallest in over a year, and was linked to a strong rebound in business confidence – 47% of companies surveyed are seeing improved prospects, consistent with the economy returning to growth.

Jim Houghton, head of marketing services at BDO says:

“It will come as a great relief to the industry that the economic pressures seem to be easing. Evidently this relief won’t be uniform, with online and sales-focused marketing disciplines the strongest.”

The Bellwether is compiled for the IPA and BDO by research company Markit.

Sales Promotion | 30.09.09

REAL VALUE FOR MONEY NEEDS REAL CREATIVITY BELOW THE LINE, ARGUES PHIL PAWSEY, CREATIVE DIRECTOR OF WAX COMMUNICATIONS

Wander down any high street and you’ll see the promotional noise has grown toa deafening din in the past year or so.

Price promotions are popular at the best of times, and especially so in a recession.

Not only do they appeal to budget conscious shoppers – even the affluent are elbow-in the bargain bins, according to recent reports- but marketing directors like them for their accountability and tactical impact.

Retailers, who want to outsell the merchant up the road, have been passionate in their demand for them to hook in customers.

But are consumers starting to suffer from ‘discount fatigue’?

While a money-saving deal will always catch the eye, it’s been proved that when times are tough people are inclined to turn to the warmth and reassuring nature of established brands.

Brands like these tend to want to protect their brand equity.

Discounts can harm brands

Deep discounts can cause the consumer to believe that something is ‘wrong’.

Frequent discounting serves to lower the value of the brand because of an almost subconscious consumer reaction – they believe that quality has also been lowered.

Or, in a ‘value rebound’, as identified by US based branding experts Killian and Company, consumers begin to perceive the usual, non-discounted price as too high.

It’s often debated whether Stella Artois’‘Reassuringly Expensive’ above the line premium positioning was damaged by constant price promotions below the line. It was confusing for consumers, to say the least.

A recession doesn’t mean all brand communications should be about price.

It’s arguably even more important that brands build a distinct personality and image in tough times than in better days, because they need to achieve stand out.

With people looking for better value, having a genuine reason other than price to choose one product over another is all the more important.

Above the line agencies talk a lot about the fact that brands which continue advertising through a recession come out of it the strongest. Recent research by Oregon State University and Western Oregon University showed that advertising expenditures contributed to increased earnings by firms for up to three years following; the greatest impact occurring in the year immediately following a recession.

So building brands, both above and below the line, during a recession ensures that when the good times return, the strongest brands reap those benefits.

The good news is building brands and driving sales is not such a stark choice these days. With creative thought and proper insight, sales promotion can do both.

Take our latest work for United Biscuits, which extended the above the line campaign in a neat sales promotion in
this way.

Our integrated campaign for Hula Hoops was born out of the insight that people love to play with the hoops, usually sticking them on their fingers. So building on from the great ads that Publicis delivered, we created a campaign inviting consumers to make ‘Finger Films’ and win trips to ‘Hulawood USA’.

A strong promotional call to action can use insight to support and build brand equity.

Another UB through the line campaign we worked on asks the nation which McVitie’s biscuits they love the most. Yes, there’s a chance to win cash daily, but the central insight – that we Brits are obsessively passionate about biscuits – drives the campaign, placing McVitie’s at the heart of that obsession and building the brand in the process.

Creativity can shine below the line; and so it should,

now that the public is inured to the ‘half price’ message.

Creativity cuts through

Creativity can shine below the line; and so it should, now that the public is inured to the ‘half price’ message and deals are a given.

And, as the recession rolls on, we should remember consumers have been bombarded with ‘money-off’ messaging, 24/7, online andoff, in the home and on the high street for a while now. There must come a time when they not only switch off, but actively ‘tune out’.

With this in mind, I would go as far as to say that creativity counts for even more in a recession. What else is there to engage customers when price no longer cuts it?

A good strategic and creative idea sometimes (but not always!) costs no more than a run of the mill one, and offers greater ROI.

Creativity also delivers more than sales volume spikes, if planned with the bigger picture in mind.

The promotional hit of early summer – the Walker’s ‘Do Us a Flavour’ campaign – is an example par excellence.

According to Walkers, the idea came out of a brainstorming session involving Walkers marketers, ad agency AMV:BBDO, PR consultancy Freud, below-the-line agency The Big Kick and Paul Weiland, the man who directs the brand’s TV ads.

The bold central idea was to tap into the ‘user-generated’ phenomenon. By letting the public take ‘control’ of the new flavour, like other brands riding the wave of customer interaction, Walker’s was able to ‘stand back’ and let the public do the edginess. But while the creativity came ‘from the street,’ the professional feel was maintained through the campaign’s slick execution, featuring wellcrafted multimedia content.

‘Do us a flavour’ was an innovative, engaging and strategic promotion and a world away from the tactical, template variety of discount SP.

Of course the two are not directly comparable, but if both are measured against their bottom line, which offers the best return?

It’s true the Walker’s campaign gave a pretty hefty incentive to enter; not just the chance of winning a £50,000 prize but also a 1% share of future royalties. But the results are sensational.

Walkers received more than 1.1m entries, four times as many as it had hoped, and at its peak in August, the website had 102,000 web sessions per day.

Walkers had the mettle to do something different – and with every success comes a wave of ‘me too’ promotions.

Among them is Dorito’s digitally-heavy ‘Guess Which Flavour’ campaign, which invites users to guess its mystery flavour.

All very well, but is copycat marketing, even if it does mirror a highly creative campaign, a good idea?

Brands may think so, if the number of times I am asked to create a hybrid campaign ‘a bit like promotion ‘X’ but with a bit of promotion ‘Y’ thrown in’ is anything to go by.

SP is one of the few marketing industry good news stories to come out of the economic down turn; the January Bellwether report showed sales promotion now accounts for 9.2% of overall spend, compared to Main Media (30.3%), Direct Marketing (24.9%) and ‘all other’ (25.7%), a considerable rise on previous reports.

But SP is not just big news in a recession. With creativity and insight, it can be the marketing method of choice for all seasons.

Beyond the brief

Pushing the boundaries and delivering new creative spins, even if the brief appears to require an obvious solution or a re-hash of something that’s  already been done, will give SP a shelf life beyond the recession.

Consumers don’t settle for second best – why should we?

Matt Tabb, managing director of Wax Communications, warns promoters that it is not always a good idea to look back”Retro”, “nostalgia”, “post-modern”… Call it what you will, but it’s clear the good old days are very “now” when it comes to marketing.

With the credit crunch bearing down on us, the past is a very alluring refuge for brands, and FMCG marketers have responded with a spate of marketing revivals.

Cadbury and Mars, among others, are resurrecting products and slogans of yesteryear to satisfy. But is the return of Marathon, “Work, Rest and Play” and Wispa, back by popular demand, a good move strategically?

Nostalgia has its drawbacks. It can easily appear to be reheated and tired.

It can have a short shelf life. It doesn’t suit all products – technology is only ever forward-looking. It does not travel particularly well – nostalgia is firmly rooted in national culture.

It does not tend to carry younger audiences with it.

And when everybody’s doing it, it stops achieving cut-through and turns into a blunt instrument – check out Hovis’s latest above-the-line campaign, which is a nostalgia fest of epic proportion (We get it!).

The rise of retro has led many to conclude it heralds the end of marketing, “that it is indicative of inertia, ossification and the waning of creativity”, as author Professor Stephen Brown moots in his book Retro-Marketing Revolution.

That’s perhaps a little strong but there is no doubt innovation is vital to keeping heritage brands alive. When Ovaltine was repackaged as “proven” instead of “old”, sales perked up significantly.

Lucozade, probably the most famous brand re-invention, was valued at around £400 million last year by international brand valuation consultancy Intangible Business, who placed it fourth in its 2007 top 100 UK brands chart.

Would it have done so well as a drink to aid the sick and infirm?

There are numerous other similar Lazarus-style brand revivals: The Mini, Burberry, The Beetle, Harley Davidson have all achieved new relevance with modern audiences by going forward not looking back.

How? Firstly, they know who they are.

They are clear about the brand “truths” that have kept customers loyal over the years.

And safe in the knowledge of that they have been bold and outward facing in their marketing.

This is as relevant to sales promotion as any other aspect of brand-building.

Jacobs

Jacobs Cream Crackers have been around for more than 120 years, originally created in 1885.

They remain the fastest-selling crackers in the UK. But they have not stood still with their marketing – or indeed gone backwards despite their brand equity being tied up in the fact they are the “original” cracker and loved by all serious cheese eaters.

These “brand truths” could have become a stuffy and irrelevant campaign in the wrong hands. But pairing the classic cheese-lovers’ brand with the ultimate modern-day cheese-lover – Wallace and his trusty partner Gromit – as it did a few years ago resonated with a new audience without excluding its loyal one.

The “Cracking with Everything” campaign also showed Jacob’s Crackers in a new light, with Wallace demonstrating new and exciting topping ideas in the ad – educational for those who thought they were only good with cheese.

The on-pack prize promotion, which was undertaken by Wax Communications, extended this “modern marriage” by offering winners a neatly-titled “Grand Day Out” to New York. The 10 VIP trips worth £20,000 included a $5,000 shopping spree.

The high-value prize and the New York destination delivered new excitement to what might be considered a conservative brand. The element of surprise is a sure way to invigorate an old story.

Meaningful brand partnerships are another excellent way.

Penguin, now 75 years old, was one of the first biscuits to be advertised by name rather than company. Its association with the distinctive birds (the packaging featuring a giant Emperor Penguin) is synonymous with the brand’s appeal.

Our recent “Sponsor a Penguin” promotion in partnership with WWF tapped into that.

It worked because it retained the timeless penguin association but brought it bang up to date by putting it at the forefront of consumers’ minds for making a positive contribution to tackling climate change.

Another tactic for gaining new focus around an old brand? – limited editions.

We have done several ranges for Hula Hoops, now (shockingly) 25 years old, with different themes including Wild West, Pirate, Space and last year Wizard that picked up on the current popularity around Harry Potter.

New product development, new technology, sponsorships… there are many marketing strategies for helping make sure a brand never looks back, other than… well… simply looking back.

Nostalgia is a stable mate of complacency. Brands that rely purely on their “glory days” are at real risk of finding themselves overtaken, overlooked or undermined.

No brand can rest on the laurels of past reputation – familiar quickly becomes boring and then invisible.

Marketing Week | By Jo-Anne Flack | 11.09.08

Budgets are being squeezed and procurement departments are demanding evidence of ROI, but live marketing agencies are rising to the challenge to make the impact clients desire.

Is it possible to cut marketing costs without affecting the quality of the output?

If not, then the quality of the work being produced now must be bad because costs are being forced down like never before.

It is usually fairly obvious when an agency has been asked to produce work on a shoestring; however the evidence seems to show that good campaigns, in whatever medium, can be produced with budgets that are being squeezed.

Finding the best deals and comparing the market can be difficult with live marketing because in many ways it is a relatively new discipline, encompassing more than field marketing and events and including the latest hot ticket – experiential marketing.

How can marketers ensure they get value for money in a discipline that is quite new to many of them and can involve several different elements?

Live event providers

Mark Wallace, managing director of WRG, an integrated live events agency, says the industry remains highly competitive and is roughly divided into two areas: hardware providers – those companies that provide lighting, sound, staging, etc – and bigger, more integrated companies that consider themselves guardians of the brand they are working with.

“In the past five years, the hardware companies, or box shifters, have found it harder getting margins from just renting out gear.

As a result, some of them have developed creative teams and are providing a one-stop shop for clients.

That may be the right approach for some clients: if you have a clear idea of what you want to do for an event, using a small supplier is fine.

But the difference between a good event and a bad event is based around the communications, not the staging. We consider ourselves communication conceivers,” says Wallace.

Wallace says some clients have been lured down the cheaper, smaller road but maintains they have returned pretty quickly.

More significantly, the live events industry is being affected by increasingly powerful client procurement departments that have already made an impact on more traditional agencies.

He adds: “In the past month we have had nine request for information (RFIs), which is unheard of.”

These RFIs are electronically delivered documents that demand information on everything from financial status to green credentials.

It means that smaller suppliers which cannot meet the benchmark set by the bigger clients won’t even get a look in.

Wallace adds:

“Organisations that are serious about communications are filtering out companies by using these RFIs.”

Start of bidding wars

In response to critics who say RFIs also filter out nimbler, more creative agencies, Wallace says: ”

RFIs are not necessarily about size. They are also about process and knowledge. Later you still have to go through the normal pitch process.”

He does admit, however, that some clients are starting to introduce a bidding process whereby a creative brief is distributed and agencies are invited to bid for the work – the lowest bid presumably winning the work. Wallace says WRG refuses to get involved in bids.

“All clients want premium, but there is a balance between cost, premium and delivery,” he says.

The live events sector is also under great pressure to perform because, as Alison Berkani, head of production experiential at live events agency Exposure, notes:

“Experiential marketing is often taking money out of a pot that was earmarked for advertising which would be reaching millions of people.

Internally, the client has to go back to their people and make sure any experiential work provides a similar return on investment (ROI).

As agencies, we have to provide that ROI any way we can get it, for example through data capture.”

Berkani also believes that larger, more integrated agencies offer clients much better value for money, even if it does mean they are spending more.

“The live event landscape has changed a lot and you must have a three-dimensional perspective including design, planning and strategy.

We look at every brief in the same way an ad agency would, including brand values.

Even if the brief is for a one-off event, we see it as a long-campaign.”

Berkani refers to the work Exposure has done for cigarette paper brand Rizla for the past five years, which began as a one-off event that aimed to make the best of the restrictions around tobacco-related advertising.

“Clients are not only asking that we be more cost-effective.

They are much smarter now – many clients have come from the agency side.

It is no longer just about cost, but also reliability and the ability to deliver on time.

Deadlines are much shorter now than they used to be,” says Berkani.

But it can still be difficult for clients, especially those new to live events, to know how best to get the most for their money. Andrew Davey, business development director at The Liquid Way, says:

“For the past couple of years there has been a buzz around experiential marketing, which has had a number of effects.

Many new entrants can talk the talk but can’t necessarily deliver.

Also, what really constitutes experiential has become diluted as each agency presents ‘experiential’ as they want to deliver it rather than looking at what the client needs and working back from that.

Experiential marketing is an increasingly flabby term with agencies describing themselves as experiential ranging from PR or field marketing to pure experiential.

“Experiential marketing is an emerging and increasingly important part of the marketing mix and as a result there are increasing expectations on the medium as people expect to get as much bang from their buck as they would out of any other medium.

Detecting bias

“Clients need to understand what an agency offers and why. An agency rooted in field marketing will always tend to offer a brand ambassador-based solution.

The key to sourcing an agency is not based on its size but more on its ability to deal with the issue of reach – how do you ensure that the people who are engaged have a sufficiently profound experience that they act on it and also talk to their friends about it?”

It does seem that if clients want to get the most from a tight budget, the solution is far from obvious.

The more integrated, and often the larger, the agency, the better.

Advertising agencies, under pressure from clients, paved the way in the Nineties by proving that size didn’t necessarily mean extortionate mark-ups and Berkani notes that transparency is one of the elements that marketers are already demanding from their live event suppliers.

Going in house

Lucy Pearce, experiential director at Wax Live, says:

“It is often more cost-effective to go for an agency with an in-house production and staffing resource as the client is not having to pay mark-up on mark-up from outsourced suppliers and facilities.

“More importantly, clients retain much more control when working with an agency that has an in-house production facility where both the production workers and the account handlers build up a deep knowledge of a client’s needs.

Ultimately it means quality, control and cost efficiencies, which are anything but cheap.

“Many agencies that are jumping on the experiential bandwagon think it’s just a case of getting on the web, sourcing a few suppliers and it’s all done and dusted.

But experiential specialists who were there at the start have a deep understanding of the discipline and know there’s a lot more to the discipline than that.”

Experiential marketing earned its stripes from edgy, young brands wanting to be seen as ‘different and unique’.

But over the last decade or so experiential has become mainstream, and is leading from the front in many campaigns.

Increased spend

Some 75% of marketers recently surveyed by Jack Morton Worldwide in the UK, Europe, the US, China and Australia  say they will increase spending on experiential marketing in 2008.

And as more brands demand it, of course, the more it is supplied – agencies are fast jumping on this ‘brand- wagon’ and developing an experiential offer to add to their list of services, with which to challenge the specialists.

But are they really equipped to do so? By definition, offering experiential as an ‘add on’ is to show true ignorance of its very nature. To tack it on as an after-thought, either to an agency’s offering or to a campaign, is to miss the point.

Experiential marketing earned its stripes from edgy, young brands wanting to be seen as ‘different and unique’.

Mainstream

But experiential has become mainstream, and is leading from the front in many campaigns.

Its power to drive other awareness channels, for instance, needs to be planned in right from the beginning as an integral part of a campaign or it could be lost.

Carlsberg Experiential Marketing Campaign

Carlsberg demonstrated how well experiential can kick start other channels with its ‘money drop’ campaign last year.

The socially responsible guerrilla  ‘we don’t do litter’ campaign saw £5000 worth of £20 and £10 notes, each bearing stickers with the  campaign message, dropped randomly on to London pedestrians who literally clamoured to get involved.

It spawned a dynamite PR campaign that exploded across the world setting traditional and non-traditional media alight with talk of it. For £5000, it had ‘probably the best ROI in the world!’ – who says experiential is hard to measure?

Dorito’s Experiential Marketing Campaign

Doritos’ recent ‘You make it, we play it’ competition, which invited consumers to generate their own digital adverts for the chance to win £20,000, has enjoyed similar success.

Which goes to show: in experiential, budget size is not important – it’s how well you use it that matters.

If the creative and strategy is right, smaller brands can make as big a splash on a budget using experiential methods as those event sponsoring giants such as Virgin, Tennants and O2.

It’s almost made for helping niche brands grow awareness.

Superdrug’s Experiential Marketing Campaign

A campaign Wax Live did for Superdrug sun cream last year used four gorgeous ‘firemen’ to rub said cream on sun-soaked festival goers at T4 on The Beach, T in the Park and the 02 Wireless events.

The campaign allowed Superdrug to literally touch end users in a way that above the line advertising can only dream of.

It delivered added value, fun, and allowed the topless ‘brand ambassadors’ to interact with consumers on a one-to-one basis to talk about the product.

For many, those festivals will always smell of Superdrug sun cream and remind them of half naked ‘firemen’ – a powerful ‘feel-good’ association!

So clearly, experiential now consists of a lot more than just handing out samples from a pretty stand. When done well it can engage consumers and enhance brand equity in a way that no other medium can match.

But doing it well is no walk in the park.

Creating these live campaigns that work in the field presents a logistical minefield and depends on deep knowledge, hard-earned experience and well-trained staff to make them work in practice.

Staff must learn how to ‘live the brand’, locations must be just right, health and safety risks have to be covered … for when experiential goes wrong, it can create a nasty  mess and ultimately do more damage than good to a brand.

Snapple

Snapple learned this the hard way. Their 25ft tall frozen treat melted and flooded Union Square, New York on the first day of summer, and left them fielding a barrage of complaints.

Remember, when you run an experiential campaign you are ultimately inviting customers to talk about the brand; the real job is making sure you create a positive buzz.

Which is why experiential must surely be the preserve of specialists. It’s worth noting experiential agencies tend to stick to their specialism; it requires real understanding, focus and the resource to deliver it.

Only those who know it inside and out, and who can make it work effectively in the field as an integral part of a campaign, can truly deliver a brand enhancing experience.

Anything less than a whole-hearted, integrated approach and experiential risks becoming a meaningless aside, token add-on, or worse, a potentially brand damaging event that people will talk about for a long time.

See our work at www.experientailessays.com

Lucy Pearce

Experiential Director

Wax Live

It is easy to measure how a promotional activity has performed, according to this Marketing Week article 22.05.08.

. The nature of the discipline, particularly in the retail sector, means that a quick look at the sales activity during the promotional period or counting the numbers of coupons redeemed is a fairly accurate indicator of consumer response.

But brands want more than just a sales spike from their promotions. All promotions and incentives must now prove that they can be part of the brand engagement process.

But how can this be proved?Planning director at Wax Communications Craig Buchanan-Smith says promotional activity has to be measured as part of an over-arching campaign rather than a separate activity.

“If promotions are used to help build brands, they need to be treated as part of the overall marketing campaign and should be measured against the overall needs of the brand.”

Voucher collection

He refers to the work done with Sainsbury’s Active Kids.

“At its heart is a simple idea around the collection of vouchers, but you can’t measure the effect of the activity for Sainsbury’s just on redemption – it has also done a great deal of good for the overall brand.”

Marketers and brand owners are starting to see promotional activity in a broader context as the short-term impact of sales promotions begins to wear thin. Director at Differentiate Chris Radford says: “Repeat studies have shown that below-the-line promotional activity such as price cuts and incentives can stimulate a short-term sales life, but sales will return to their previous levels once the offer ends.”

Radford cites two examples of promotions that lift sales but don’t ultimately sustain growth. “Mobile phone companies are all so busy trying to ‘out promote’ each other that customer turnover remains high and so they are continually having to refill a leaky bucket.

“Packaged goods businesses can get sucked into a vicious circle of buy one, get one free promotions or big discounts. This produces short-term sales lifts, but they encourage customers to wait for the next offer, rather than truly convincing them to buy into the branding on an ongoing level,” he says.

Such short-termism has prompted a drive to ensure that promotional campaigns do more than temporarily lift sales. The traditional belief of the linear link between cause and effect for promotional communication has had to make way for something more sophisticated.

“Current promotional marketing best practice dictates that promotions should drive response and reinforce desired brand perceptions,” says 23red planning director Carol Stickler.

She says that broader promotional objectives necessitate broader measurement. “It is relatively easy to measure narrowly. But if the objective is to build the brand, you need to also track other brand measures.”

Integrated campaigns

But Stickler acknowledges that “as ever with integrated campaigns, isolating the effect is the tricky part”. She says time-series or regional analysis would need to be carried out to see what happens at the times or in regions where you give your brand no promotional support.

“The key is to clarify objectives and means of measurement up front as well as isolate the role of promotional marketing within the wider communications mix. Then you need to identify the primary target for the promotion as well as secondary targets, such as the impact of acquisition campaign on customer loyalty,” she adds.

Victoria White, head of activation at activationtmw – the sales promotion arm of Tullo Marshall Warren – says: “Alongside measuring how a promotion has worked, brands should take into account ’soft’ achievements which can result from activity as opposed to driving sales. For example, the introduction of brands to a new target audience, or providing support for retailers.

Long-term growth

“All of these measures can be important for a brand’s long-term growth and should be considered alongside a return on investment.” However, Stickler acknowledges the difficulty of isolating the impact a promotion has, apart from a temporary sales lift.

Founding partner at Mesh Marketing Toby Moore comments: “To understand promotional impact on sales requires the unravelling of the consumer brand experience and the customer ‘promotional’ price support. If we could better understand this relationship then brands would have firmer foundations to allocate and measure their marketing spends.”

The greatest challenge facing promotions, it seems, is not that it should be accountable or measurable, but that it is able to tread the line between creating new customers and getting existing ones to spend more money and at the same time staying deftly in tune with whatever lofty brand proposition is being pumped out.