Charles Schwab Corp. expects to stay the course in 2007 with its asset-building "Talk to Chuck" marketing campaign while revamping its online presence. The San Francisco-based discount brokerage continues to track positive results with its now year-old, typographically driven campaign. The print, television, out-of-home and online ads stand out in a category dominated by images of investors. The campaign, created by Euro RSCG, features 30-second TV spots that have been filmed and then stripped of their elements so that the actors appear animated. What Schwab has found, says Ben Stuart, vice president of brand strategy and advertising, is that viewers are more likely to listen to the investors' so-called "pain points" when they are animated rather than live action. Pain points--headlines in print and online and the subject of conversation in broadcast ads--highlight the concerns of many investors. "Think you've got a dog in your portfolio?" and "'My house is worth a Million' is not a retirement plan." While ad plans will "be more of the same," in 2007, the discount broker is planning a major overhaul of its site, schwab.com, to better "focus on issues that are important to investors in their brokerage relationships," Stuart says. As for its media spend, Schwab will allocate "slightly more" across the board and increase the percentage of its media dollars allocated to Internet advertising. In the first half of 2006, Schwab spent just under $90 million on ads in U.S. measured media, according to TNS Media Intelligence. Already, Schwab is ahead of most advertisers, Stuart maintains--noting that although 25% of all media consumption is online, most advertisers allocate around 10% to online ads. Schwab already spends about 20% of its media dollars online. "Currently, we're looking at making sure our journey online is the most intelligent," he says. In its Monthly Activity Report, released last week, Schwab reported that net new assets totaled $10.5 billion in new and current clients in November, while total client assets climbed to $1.224 trillion--up 17% from November 2005 and 3% from the previous month.
Consumer products giant Procter & Gamble--still best known for staples like diapers, detergent and toothpaste--may soon be the driving force behind glamorous beauty products from Estee Lauder or Clarins through an acquisition, suggests Citigroup analyst Wendy Nicholson in a research report. P&G already manufactures color cosmetics, but its Cover Girl and Max Factor brands are mass, not luxury. P&G would benefit by branching into prestige beauty because of the high gross margins within the category, says Nicholson. "It might make sense for [P&G] to buy a major player outright as a means of acquiring scale more rapidly than growing this business organically," wrote Nicholson last week. "The high-end color cosmetics category has become increasingly fragmented in recent years ... there's a scarcity of sizable players in the industry ... and Estee Lauder and Clarins [are] two noteworthy pure plays in prestige cosmetics we believe P&G would be interested in acquiring." The Cincinnati packaged goods marketer has recently--very quietly--been making some inroads into the prestige cosmetics arena through its Prestige Products unit. P&G distributes Dolce & Gabbana fragrances--via a license it won in July over L'Oreal--and will be introducing a Dolce & Gabbana branded line of color cosmetics. Within Prestige Products, P&G has more than 20 prestige beauty lines, with the key investments in Hugo Boss, Lacoste, Dolce & Gabbana, Gucci and Valentino brands. While SK-II, P&G's prestige skin care brand, is mostly sold in Japan, it has been expanding in the U.S., and was recently introduced in Bloomingdale's New York City flagship store. Nicholson is not alone in her theory. "P&G will make another big acquisition and it'll be sooner rather than later," said former P&G executive Gary Stibel, founder and managing partner of Westport, Conn.-based consultancy New England Consulting Group. "The nice thing about a strategic company [like Procter & Gamble] is that you always know what it'll do because it's predictable and unstoppable," he said. "Look at Gillette," he added. "Everyone thought it was too big and too soon, but it wasn't"--referring to P&G's $57 billion acquisition of the razor maker in 2005. For its part, P&G has been open about its intention on growing, both organically and through acquisition. Stibel confirmed that P&G is most interested in beauty--and is quite sure its next acquisition will be in the beauty sector, however, not necessarily prestige. Beauty is definitely one of the strategic areas of interest to Procter, he said, and more licenses are also a possibility. "One thing I am certain about is that Procter is looking for quality, and a business which already has a strong presence, like Gillette," he said. Whether or not the Lauder family--which still operates the family business founded by Estee--would ever consider selling is another question, but it does seem to be a good fit for P&G. "In our view, [Lauder] would represent a great target for P&G, given its terrific brand lineup and increasingly global footprint," Nicholson wrote. Although ultimately Nicholson doesn't think a major acquisition is in the cards in the next 12 months, Stibel indicated otherwise. While he couldn't comment on specific target companies, he did say that any acquisition under consideration would be a large one--at a cost of more than $1 billion--and one with a strong business already, rather than a turnaround situation or a niche brand. That would make a stronger case for the $6.5 billion Estee Lauder, but eliminate smaller or weaker brands, such as Revlon.
Americans spent $159.5 billion to improve and repair their homes last year at the same time as new, one-family home square footage edged to 2,227--up from 1,905 square feet 15 years earlier. That nugget is just one of thousands inside the U.S. Census Bureau's "Statistical Abstract of the United States: 2007," a statistics-laden tome that might be subtitled "The Way We Are." One of the many things we are, says Peter Francese, demographic trends analyst for Ogilvy & Mather, is less transient. The census reports that a record low 14% of Americans moved to a new home last year versus 20% who moved two decades ago. "We're staying put longer," he said. But--and this is an important "but" for marketers--affluent Baby Boomers turning 60 are spending more money on second homes. "And you know what that means," said Francese, rhetorically: Two kitchens, two living rooms, two dining rooms. And the newly aged 60 (there are 10,000 more every day) are harder to reach by conventional media because they're traveling between homes weekly or seasonally. "They are spending more on travel and transportation and portable food," said Francese. Think juice packs and aseptically packaged foods, which they can ingest in a growing number of motor vehicles (a record 25% of us own more than three). Americans drank more than 23 gallons of bottled water per person in 2004--about 10 times as much as in 1980--ate more than twice as much high-fructose corn syrup per person as in 1980, and remained the fattest people on Earth. Well, what are Americans doing when they are in their homes? Next year, adults and teens will spend nearly five months watching television, surfing the Internet, reading daily newspapers and listening to personal music devices, the Census shows. Online, 97 million adults read the news in 2005, 92 million bought something, 91 million made a travel reservation, 16 million networked for business or pleasure, and 13 million created a blog. What else are they doing? Eight million of them are working, the Census shows, as the growth of home-based businesses accelerates. That means "we're spending more on our homes," said Francese, buying copiers, fax machines, furniture and telecommunications equipment, adding what he estimates to be $525 billion in consumer spending. One in three of those 8 million micro-entrepreneurs is a woman.
As Coca-Cola celebrates the 75th anniversary of introducing ads with the Santa Claus we know and love, White Rock Beverages says it is the beverage company that deserves the credit for putting a contemporary image of Santa in its ads--decades earlier. "Claim Debunked," proclaimed the headline of the press release White Rock issued Friday. "135-Year-Old Beverage Company Used St. Nick in Ads Decades Prior, Demands Secret Recipe as Reparation." Coca-Cola, which did not return a call from Marketing Daily, did not, to our knowledge, comply with the request. "We tried to do it in fun," said Larry Bodkin, president of White Rock Beverages--who said he also had not heard a response from his rival. Paging Muhtar Kent! Coke has been ballyhooing the creation in 1931 of its first ad featuring Mr. C. The company is holding an online exhibition of past Santa ads, as well as a free display at New York's Lincoln Center. White Rock's press release was filled with jolly references to Coke slogans, to wit: "The Claus that refreshes was actually introduced two decades earlier by White Rock" and "You can't beat the feeling of telling the truth. These upstarts at Coke owe it to the American people to admit that White Rock and Santa Claus is the real thing. Only then can people have a Coke and a smile." But seriously, folks, White Rock has posted copies of a 1915 ad that ran in Collier's and several from the 1920s in Life magazine that show Kris Kringle--fat, white-whiskered and garbed in red and white--enjoying the taste of White Rock. Naughty Santa was even pictured enjoying a little whiskey with his soda. Bodkin, whose family has run the New York-based White Rock Beverages since 1952, is asking the Atlanta soft drink company to either publicly apologize for taking undue credit or divulge its secret recipe to White Rock. Founded in 1871, White Rock is one of America's oldest beverage companies. Its products are distributed in more than 40 states and multiple overseas markets. Psyche, a Greek goddess and White Rock's trademark, signifies the company's commitment to the utmost quality, purity and refreshment. Take that, Coke.
Trans fats and menu-board calorie counts are not on the National Restaurant Association's list of trends to watch for 2007. However, bite-size desserts, flatbread and bottled water do emerge as product trends, based on the Washington, D.C.-based trade group's survey of 1,000 chefs. Pomegranates, figs, fresh herbs, exotic mushrooms, grass-fed and free-range meat and whole-grain breads and focaccia also make the hot list. Chefs' favorite trendy cuisines include Mediterranean, Latin American and pan-Asian. Organic and locally grown produce remains trendy, too. Operators of fine dining, casual dining and family dining establishments said they expect sales of such items to grow in 2007, with fine-dining leading the way at 52%. The NRA also spotted several dining-out trends. One worth noting: Less harried eating, with 36% of adults saying they do less on-the-go eating than they did two years ago. And cars are losing favor as America's alternative dining room, with 48% of adults saying they eat in their cars less frequently these days. Another prominent trend: Self-service ordering and paying. Some 46% of diners said they'd use self-service ordering and payment terminals if available. Younger customers are even more enthusiastic about self-service, with 71% saying they'd use the equipment if available. The association said it expects nationwide restaurant sales to grow 5% next year, to $537 billion. Full-service restaurants are expected to see a 5.1% sales increase, to $181.6 billion, and quick-service restaurants a 5% increase, to $150.1 billion. The association expects Nevada to rack up the biggest sales increase, at 8.1%, followed by Arizona (7.6%) and Florida (7.1%). "The restaurant industry will enter its 16th consecutive year of real growth in 2007, and will have a total economic impact that will exceed $1.3 trillion," said Steven C. Anderson, president and chief executive officer of the National Restaurant Association. The complete forecast is available online at www.restaurant.org.
In what SAB Miller says is the first move by an international brewer into Inner Mongolia, the company's joint venture in China is buying brewing operations of Mengyuan Fine Wine & Brewery Co. Ltd. for $4.7 million in cash as well as the brewing assets of Shanxi Yueshan Brewery Co. Ltd. in northern China for $17.7 million. China Resources Snow will produce its popular Snow brand for a Chinese market that one brewer has forecast will represent 80% of global growth in beer sales by 2010. Sales of Snow in the northern China region over the first six months of 2006 have more than doubled the total sales from all of 2005. Sales of Snow in the Inner Mongolia region in the first half of 2006 have topped all of the brand's sales in all of 2005. The Shanxi province is located to the east of the Yellow River, with a population of about 34 million. The Inner Mongolian autonomous region borders the Shanxi Province and is the third-largest region among Chinese provinces and autonomous regions, with a population of 24 million people. SABMiller said that despite a relatively low population level, Inner Mongolia has a favorable beer market, as beer consumption per capita is high and the population is relatively concentrated in its major cities. London-based SABMiller is the parent company of Miller Brewing Co.
In 2006, you couldn't attend an industry event or read a marketing publication without coming across buzzwords like digital, rich media, product placement, podcasts and other terms for non-traditional marketing tactics. But like any buzzwords, these reflect an underlying reality: marketers need to find new and measurable ways to reach consumers as market and media fragmentation erodes the effectiveness of traditional approaches. There's just one catch. How do marketers know how much money to invest in these new tactics and what results to expect? And, assuming a company's marketing budget remains the same, how does it reallocate marketing dollars to digital and non-traditional marketing without harming its business? Enter a standard set of metrics. As companies continue to increase their investments in emerging media, they can no longer manage these activities in silos like many do now with separate metrics for different marketing tactics. The only way a company can have a true "apples-to-apples" comparison of new media with traditional media is to develop one standard set of metrics for all media. That ensures that senior management will have fact-based, comparable information to support decisions on where the next incremental dollar should go to produce the highest return on investment. Don't let the myth that non-traditional media are hard to measure impede establishing metrics standards. In fact, non-traditional media are as measurable as TV, print and direct mail as long as a few best practices are followed: Plan to measure Upfront planning makes measurement easier. Define how a tactic will be measured, when it will be measured and what data will be collected to support measurement. Spend enough to be heard There must be a meaningful investment to have a meaningful measurement. If budget is an issue, then concentrate the activity in a narrow time period or in selected markets. Apply the correct analytic approach There are many analytic approached to choose from. Where there is sufficient data, many companies use marketing mix models. If data is a challenge, a test and control methodology might be the best approach. Each approach has its benefits; the key here is to focus on consistent measurement across the entire marketing mix. Manage expectations Not all non-traditional and digital vehicles are right for all companies. That's why it is important to set management expectations early, make assumptions clear, and establish criteria for continued investment or graceful exit. Douglas Brooks is vice president, product marketing, Marketing Management Analytics. He joined MMA in 2004 as part of its initiative in continuous marketing planning. MMA works with clients to develop fact-driven marketing strategies, comprehensive brand plans, on-demand marketing effectiveness, and comprehensive analysis of brand plan execution results. Doug can be reached at douglas.brooks@mma.com, or visit the company's Web site at www.mma.com.