Verizon Communications will launch a blog by the end of the year to create a no-holds barred "all issues on the table" dialogue with consumers--and will support it with a round-the-clock response team. The plan to expand blogging beyond the telecom company's existing effort devoted to government relations was described by Jerri DeVard, senior vice president of marketing and brand management for Verizon, during a panel on engaging the in-control consumer at the MIXX Conference in New York. She said the only remaining issue is making sure the proper infrastructure exists to respond promptly. "It's one of the biggest things we'll be launching this year," said DeVard, who acknowledged that Verizon is playing catch-up in the fields of online and social networking. "We were asleep at the wheel a bit," she said. Verizon will spend 15 percent of its marketing budget online this year, and she said that may not be enough. DeVard said it is critical to allocate a percentage of the marketing budget to experiment with innovative tactics so you can understand how they work for your brand. "When we did podcasting" on ABC.com's ESPN, "there was no metric of success. But we knew we had to be there," said DeVard. "Understand who your customer is and where they are." Metrics are the department's livelihood because they give evidence to defend budgets when the ax wielders come around, said DeVard. But metrics should really be used to find strengths because every year marketers across the board are getting less money to do more. Personalization will be a continued driver at Verizon, DeVard said, defining it as informed messaging that relates to the products a consumer does or doesn't have. Verizon gets a 125 to 400 percent lift on product awareness banner ads served to prospects when they are followed up with an acquisition e-mail. Tom Lynch, vice president, head of marketing integration for financial services marketer ING US, said marketing integration has to start with an understanding of the consumer and an idea. This idea can then be leveraged across the appropriate platforms. A major stumbling block, Lynch said, is that there is no common currency to do a valid comparison of media choices. ING, he said, is tackling this by picking an internal metric and applying it across the board. "It can't be any worse than people writing down in a journal what they said they are watching and then buying ads on it six months later," he said, in a barb directed at Nielsen television ratings. When it comes to engagement, said Jim Nail, chief strategy and marketing officer for b-to-b marketer Cymfony, the question "is not 'Are you ready to engage?' It's 'Are you ready when that consumer comes to you?'" When consumers show up at your Web site, do you have the information there that meets their needs? asked Nail. Cymfony, Nail said, has identified eight stages of the buying cycle and has structured its Web site to offer relevant presentations, case studies and information to move them to the next point no matter which stage they are entering at.
Seeking to pump up its leadership position among individual investors and policy makers, Fidelity Investments has developed a plan to provide research reports, host seminars and create at least one annual conference that will showcase emerging ideas and solutions for financial challenges. The research arm of the world's largest mutual funds provider intends to create "objective" reports--even though the Fidelity Research Institute will rely in part on Fidelity's own analysts for insight. Still to be formalized is a nine-member board of directors and an outside advisory board consisting of 15 to 20 experts from disciplines ranging from academia to public policy, Fidelity spokesperson Jenny Engle said yesterday. Fidelity appointed longtime executive Guy Patton as executive director and W. Van Harlow, Ph.D., managing director of the institute, to be housed at Fidelity's Boston offices. Patton had been vice president of Fidelity's Human Resources Services Co. while Harlow, who joined Fidelity in 1991, was most recently president and CIO of Fidelity Asset Management Services. All mutual funds companies provide research to clients; how the Fidelity Research Institute will be marketed remains to be determined, according to Engle. Fidelity's primary competitors--Vanguard and Charles Schwab--package research differently. In its current "Talk to Chuck" print series, Schwab promises investors that "you don't have to qualify for our best research, you just get it" and operates as a division the Schwab Center for Investment Research. Vanguard posts podcasts on its site, offering advice on topics ranging from the reasons for investing to financing education. Fidelity's first report at www.fidelityresearchinstitute.com offers information on how to enhance retirement income and shows the downside of drawing on Social Security benefits too early. One example showed that a person who lives to 100 would collect $280,000 more by waiting to age 70 instead of 62 to tap into that first Social Security payment. Arnold Worldwide is Fidelity's lead agency and created its current positioning line: "Smart move." A design firm, which Engle declined to name, created the logo for the research institute.
Why reinvent the wheel? That's what the menu and marketing folks at Olive Garden, the Orlando-based, 584-unit casual-Italian chain, are probably saying right now. Olive Garden, one of the pioneers in the casual Italian segment, posted a 2.9 percent same-store sales increase for the quarter ended Aug. 31, its 48th consecutive quarter of same-store sales increases. A spokesman attributed the winning streak to "the continued strength of operations," which includes its perennially popular "Never-Ending Pasta Bowl" promotion. The promotion offers customers all the pasta they can eat--the current iteration boasts 42 possible combinations of noodles and sauce--for $7.95. In August, Olive Garden renewed the seven-week limited-time offer, which debuted in 1995, adding two new sauces--Spinach Alfredo and Sundried Tomato Parmesan--and new advertising from Grey Advertising in New York. "Every year we look to bring news to the promotion," the spokesman said, referring to the two new sauces. Within the restaurants, Olive Garden supports the promotion with food-and-wine pairing menus and table tents. The value-oriented promotion shows that Olive Garden "is in tune and in sync with how the consumer is changing preferences and priorities," said Dennis Lombardi, executive vice president in charge of food service strategy at WD Partners, the Columbus, Ohio-based design and development firm. "Just when customers were pulling back, putting disposable income into the gas tank or credit-card debt, they're there with a great offer that just screams value." Overall, sales at full-service casual restaurants are soft, Lombardi noted. Curiously, the promotion also succeeds in getting customers to spend more money at Olive Garden: Customers "go there thinking that they'll have this great value, and by the time they get there, they see something that looks good for $9.99, and they'll trade themselves up," Lombardi explained.
When is puffery a good word? In advertising. As attorney Terri Seligman of Loeb & Loeb LLP explained it, puffery is exaggeration, using humor, that isn't legally actionable. This means it isn't likely to delude consumers, or play fast and loose with the truth to the detriment of a competitive brand. The point is critical because as both Seligman and Andrea Levine, director of NAD, said, it is getting harder to discern between puffery and denigration, false claims, and other forms of misleading advertising. The panel discussion, "When Puffery Crosses the Line," part of Monday's NAD Annual Conference, drew distinctions with speakers offering numerous ads as examples. One ad for the Mercedes GL wagon was clearly exaggerated in its portrayal of the vehicle's virtues. All of it was deemed fine by NAD, except for a sequence in which the vehicle was side-impacted by another vehicle. The Mercedes came through without a scratch, but the other vehicle was totaled. Levine said the press lambasted NAD for its decision to take Mercedes to task for the ad when the sequence was clearly meant as humor. "Safety is not funny, and it isn't puffery to overstate the safety of a vehicle," said Levine during the panel. Pomegranate juice company Pom received the same treatment for its "Cheat Death" campaign, with NAD deeming the language more than puffery, since the company appeared to assert that Pom juice prevents cancer. Elizabeth Forminard, an attorney with Pfizer, offered the broad description of puffery as either chest-beating, such as Lee Iacocca's famous assertion, "If you can find a better car, buy it!" or the mere expression of opinion, such as Conagra's pitch for Hunt's ketchup: "Better tomatoes make better ketchup." Forminard also echoed a sentiment two other panel members had expressed: While the NAD has very stringent criteria by which it judges whether an ad is puffery or not, its efforts are diminished by the circuit courts, "which aren't even trying to be consistent," she said.
The Children's Advertising Review Unit (CARU) is days away from completing a review of its guidelines. Speakers at an industry conference on advertising regulation said changes couldn't come too soon, as Congress considers sharpening laws on how companies market to kids. Both Daniel Jaffe, executive vice president, Association of National Advertisers, and his opponent Margo Wootan, director of nutritional policy for the Center for Science in the Public Interest, agreed that CARU (part of the Council of Better Business Bureaus) should act now or government will do it for them. Their remarks came as part of the two-day NAD Annual Conference in New York. NAD is the National Advertising Division of the Council of Better Business Bureaus. "CARU has standards on how snacks can be portrayed or sold to children, but outdated standards on, specifically, the kinds of food that is or isn't appropriate for kids," said Wootan, noting that companies spend $10 billion a year marketing food to kids through branded books, licensed products, and product placement. She said CARU lacks actionable guidelines. "Yes, CARU acknowledges that cartoons affect how children react to products, but they need to say: 'It's inappropriate to put characters on foods for kids that are of low nutritional quality.'" Jaffe, arguing that legislators and politicians are becoming overzealous, cited the Senate Telecommunications Bill amendment called the Rockefeller Amendment that would prevent any interactivity with commercial matter directed to children. "That means no episode of 'Sesame Street' could include a link to the 'Sesame Street' Web site," he said. Politicians are clouding the issue and looking to score easy points, he charged, by wedding the childhood obesity epidemic to advertising to children. To dramatize his point, Jaffe offered quotes from Sen. Alan Harkin ("We are exploiting our children--we are pouring acid on their innocence"), drawing a few audible gasps from the audience. "Our industry," he said, "faces the most serious attack on advertising since the early 1970s." Jaffe said that according to Nielsen Media data, spending on TV ads directed at children has actually declined 13 percent since 1993, and 34 percent since the mid-1970s. Attorney Jodie Bernstein of Bryan Cave LLP, former director of consumer protection at the Federal Trade Commission, was chosen by the Council of Better Business Bureaus to lead the CARU review of self-regulatory guidelines for children's programming. Bernstein evoked rounds of raucous laughter by joking that she had nothing to say, because the review, which started in March and was meant to conclude in July, is still being hammered out by a working group that has included representatives from as many as 50 companies, including Yahoo and Nickelodeon, as well as advertising agencies. She did allow that the review has focused on four broad areas: food advertising to children; games and interactive Web sites; use of third-party characters in ads and products; and product placement.