ETD: 786 Does advertising work?; L.L. Bean Sues Pop-Up
Advertisers; TV Ads Lose Starring Role
E-Tailer's Digest
etd_post at gapent.com
Tue May 18 11:30:50 GMT 2004
E-Tailer's Digest --- Everything for the Retailer
Issue #0786 May 18, 2004
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Does advertising work?
[3] L.L. Bean Sues Pop-Up Advertisers
[4] TV Ads Lose Starring Role
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[1] Greetings.
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Hi All:
This is an advertising issue - all topics related to
marketing/advertising. It's interesting to see how some of the Goliath's
are advertising, so I thought we should reevaluate our
marketing/advertising efforts. What works for you? What do you think
works, but you haven't tried?
Companies like AmEx and P&G are using other alternatives. P&G invented
daytime TV advertising (hence "soap operas"). AmEx now has Jerry Seinfeld
and Superman online, which they promoted on TV. Time to re-invent marketing?
Online, L.L. Bean has sued some other players for the use of PopUp
ads. This should be an interesting suit.
Tell us about your business which will remain for posterity at
our "Members: Who Are You?" site. We just updated all those postings that
we were delinquent with the
updates. http://etailersdigest.com/resources/members/index.htm And we have
a form there for you to tell us about you. As I said when I first proposed
this idea, we have "known" each other for a long time, yet we often don't
know anything about each other. So, tell us who you are and what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Does advertising work?
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I read an interesting article (4 below) on how major companies are moving
away from TV Ads and spreading their advertising dollars across more and
different media (e.g., the Jerry Seinfeld and Superman ad online). My
question is what marketing/advertising works in today's world? Of course I
recognize that a great marketing campaign needs many different campaigns
across all media, but I also question that theory. Was it developed by a
marketing/advertising company with ulterior motives?
So, what do you think works? If you had a limited budget, and wanted to
get the best bang for your buck, what would you do? I know, "it depends on
the product/service." So pick a product/service and let us know what works:
1. Direct mail? Letters? Post cards? Literature?
2. Post cards? Who do they reach? C-Level officers? Consumers? The
trash can?
3. Print ads? Magazines? Newspapers? Trade journals?
4. Media advertising? TV? Radio? Billboards?
5. Online ads? Search engine keywords? Banner ads? Websites?
6. Seminars?
7. Trade shows?
8. Viral marketing?
9. Other? If so, what?
What works for you?
George
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[3] L.L. Bean Sues Pop-Up Advertisers
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The Associated Press reported that L.L. Bean filed lawsuits Monday against
four companies it alleges used pop-up ads that appeared when some customers
visited the clothier and outdoor gear retailer's Web site.
By creating ads that appear when Internet users visit L.L. Bean's Web site,
retailers Nordstrom, J.C. Penney, Atkins and Gevalia have traded on the
company's name and infringed on its trademark rights, said Mary Lou Kelley,
vice president for E-commerce at L.L. Bean.
"These advertisers are illegally poaching on L.L. Bean's trademark," Kelley
said. "Using our trademarked name as a trigger to which you want to serve
your ads causes customer confusion and crosses the line into trademark
infringement."
The retailers named in the lawsuits contracted with software company Claria
Corp., which creates programs to track online habits, Kelley said. These
programs then create windows to display specific advertisements when a Web
browser visits certain sites.
Company officials for Nordstrom and Atkins declined to comment. A
spokeswoman for Genvalia also would not comment until they had seen the
lawsuit.
Kelley said many consumers unwittingly install "spyware" on their computers
when they download games or other programs from the Web.
"This is such a parasitic practice that consumers hate," Kelley said.
"We're trying to get advertisers to stop serving pop-up ads on L.L. Bean's
Web site which annoy and divert our customers."
Kelly said the ads are illegal and damage "the investment we've made in our
customer relationship."
The only legitimate windows that would pop up on the company's Web site
would be one-question customer surveys, she said.
http://www.siliconvalley.com/mld/siliconvalley/news/8688447.htm
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[4] TV Ads Lose Starring Role
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In Monday's WSJ, it was reported that the growth rate for TV ad spending is
beginning to slow. Last year, for example, upfront sales increased by 13%.
This year, media buyers and network executives expect sales during the
period to rise by just 3%. Some big marketers are making cuts to their TV
ad budgets and allotting those dollars elsewhere -- a move that threatens
to dethrone the 30-second TV spot as the centerpiece of any major campaign.
American Express Co. is foremost among the renegades. A decade ago, the
financial-services company lavished 80% of its annual advertising and
promotions budget on TV spots. AmEx has said that television now accounts
for just 35% of its ad war chest, currently estimated at $550 million. Over
the past 10-year period, print spending has remained flat.
Uncharacteristically, company executives are beginning to speak out. In a
recent speech to NBC's ad salesforce, American Express chief marketing
officer John Hayes warned: "Your business model needs to adapt and to
change." He added: "It used to be that we bought the time, shipped you the
commercials, had lunch or a glass of wine together once in awhile; you took
care of the quality of the programming and we made sure the check did not
bounce. We all sat back, checked the ratings, watched our business grow ...
those days are woefully over."
Mr. Hayes isn't alone. Procter & Gamble Co., synonymous with TV advertising
since the days when it sponsored the first "soap operas," also is becoming
restless as consumers become harder to reach through the tube. "Brands that
rely too heavily on mainstream media ... will lose touch," Jim Stengel,
P&G's global marketing officer, told a gathering of media executives
earlier this year. Unilever, another consumer-products giant, also
indicated recently that it has been moving money out of TV media and into
other areas such as online and direct marketing. Unilever estimates that 5%
to 10% of its TV-ad dollars now are going to other outlets.
Echoing a broad concern among marketers, AmEx's Mr. Hayes fears that
videogames and the Internet are siphoning off TV viewers, and muting pricey
ads in the process. Another threat is digital video recorders, which let
viewers skip ads altogether.
The company is aggressively redirecting its message. In March, it launched
the first of two online minimovies starring Superman and longtime AmEx
spokesman Jerry Seinfeld. So far, the four-minute "webisodes" have drawn
more than two million viewers. In another artistic conceit, AmEx is touring
a museum-style exhibit that includes some images from its vintage print
advertisements. The photos, on display in public venues, feature celebrity
cardholders such as Tom Hanks, Sammy Davis Jr. and Woody Allen and were
photographed by Annie Leibovitz. To ensure traffic and buzz, AmEx alerted
local hotel concierges to the diversion. The result: long lines to view the
commercial exhibit.
Bucking a decades-old advertising model isn't easy. Mr. Hayes has faced
internal resistance from some colleagues who chafed at abandoning
traditional methods. A few of American Express's new ideas flopped, notably
a scheme to promote the company's investment gurus on a Webcast, with
consumers posing questions online. (Few did.) Such moves didn't sit well
with some executives at Ogilvy & Mather, AmEx's lead ad agency, according
to executives close to American Express.
Mr. Hayes hasn't sworn off television altogether; he's just demanding a
bigger role for Amex onscreen. Rather than shoehorning ads between segments
of sitcoms and dramas, the company is working to embed its cards and logos
into programming.
Last summer, for example, the company and two marketers sponsored "The
Restaurant," the reality show on GE's NBC network. American Express's
small-business brand, Open, got several plugs within the program, and AmEx
ads ran during commercial breaks. AmEx is expecting to receive similar,
favored-brand status in the new "Blow Out" series.
The company's shift away from television began in 1999, with the launch of
Blue, its new credit card aimed at the dot-com generation. At the time,
research showed that TV was an imperfect vehicle for reaching the card's
Web-savvy, peripatetic target market. The agency made its pitch using more
stealth, lifestlye-driven methods, such as placing Blue-labeled water
bottles at health clubs and printing Blue ads on millions of popcorn bags.
Rather than use a high-profile curtain-raiser such as the Super Bowl to
launch its Blue campaign, AmEx staged a Sheryl Crow concert in New York's
Central Park. Television and print ads did serve to hype the new card, but
AmEx spent less than $45 million on those outlets -- far less than the $100
million typically spent to introduce new plastic.
Amex's current strategy reaffirms its belief that such marketing risks can
pay off. Five-year old Blue holds the record as the most successful
new-product launch in the company's history. In less than twelve months,
American Express gained more than 1.5 million Blue customers, far more than
it had anticipated.
URL for this article:
http://online.wsj.com/article/0,,SB108474859657412894,00.html
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