While chief marketing officers are intrigued by social networking sites Facebook and MySpace as potential marketing vehicles, actually using them is another matter, according to the results of a new survey. More than one-quarter (27%) of consumer and B-to-B chief marketing executives surveyed online in late October by GfK Roper Public Relations and Media for marketing services firm Epsilon identified social networking and word-of-mouth as the tools they would most like to introduce to their marketing mix to compensate for anticipated budget cuts--ahead of all other traditional or digital marketing channels. However, more than half (55%) of the 180 responding chief marketers--representing brands with revenues ranging from $250 million to more than $10 billion--indicated low current interest in actually incorporating the networking sites into their plans. One-third said they're "not interested at all" in getting Facebook and MySpace into their plans, and 22% said they're "not too interested," while 35% are very or somewhat interested. Other, more "traditional" social media scored far higher on the very/somewhat interested in integrating question. More than half (52%) ranked both Internet forums and Webinars in this category, followed by Webcasts and podcasts (47%), email (also 47%) and blogs (37%). Just 10% reported that they are already using Facebook and MySpace in their marketing plans. Why the lack of use of these networks? These sites "narrowly appeal to college and high school students," pose results-measurement challenges and yield a limited amount of actionable data, sums up Epsilon CMO Steve Cone. To put it more bluntly, "marketers don't care about teenagers sharing photographs with one another," Cone tells Marketing Daily. And while companies can post their own products or marketing-oriented profiles on these sites, site users "are likely to turn off" if they see too much marketing on these kinds of channels, which they consider vehicles for personal communications, he adds. "The same applies to text-messaging," Cone notes. "The channel can be used for marketing, but it's not advisable." In short, "marketers are being smart" by not trying to use Facebook and MySpace as no-cost online billboards, he believes. In contrast, marketers have plenty of proof that email works. Epsilon's latest benchmark stats show that retailers, for example, realize 20 cents in e-commerce revenue for every email delivered. Email's measurable profitability obviously makes it attractive to marketers--particularly during a time of budget cutbacks, notes Kevin Mabley, SVP, Epsilon Strategic Services. Indeed, responding marketers confirmed that email is the medium they are least likely to cut back on in the face of anticipated budget reductions for the year ahead. The economy will make budget cuts inevitable, in marketers' view: 93% are expecting moderate to significant budget impacts in 2009. Moreover, 70% are predicting that they will specifically need to reduce advertising expenditures within their plans. Aside from continued focus on email, what's in the game plan for 2009? About half report that their companies already use consumer data mining, but an additional 23% are planning to do so within the next 12 months. Furthermore, 55% of those who are not already using Web analytics will be leveraging that tool. Marketers are divided on customer loyalty and rewards programs. A third report that their companies already have these, and 17% are planning to implement them next year, but half say they are neither using or planning to use such programs.
While apparel sales have been suffering for months now, there's plenty of evidence that Mom is putting herself last on the list, as specialty retailers who target Baby Boomers turn in horrific results. Chico's FAS, which runs a chain of clothing stores targeting Baby Boomer women, says its sales for the third quarter dropped 5.2% to $394.2 million, while net earnings fell to just $2 million from $23 million a year ago, despite the company cutting $6.9 million from its marketing budget in the quarter. On a same-store basis, sales fell 17% at its Chico brand stores. And while the company says the results reflect the poor economy and declining consumer confidence, "we continue to strive to provide our customers with merchandise that is both compelling in fashion terms and affordable. While we are committed to keeping our balance sheet strong and preserving an appropriate amount of cash, it is vital that we continue to invest in our brands and position ourselves to recapture sales and gain market share once the economy improves." So in addition to trimming costs and conserving cash, the company also says it has entered a new $55 million credit deal with SunTrust. Saying it has no immediate plans to draw on the new facility, the company says it "increases our financial flexibility and further reinforces our ability to successfully emerge from this economic crisis." The Talbots, Inc., which also has secured new credit agreements, turned in a third-quarter loss of $14.8 million, compared to a $0.9 million loss in the same period a year ago. Total sales fell to $357 million versus $414 million in the year-ago period. And comparable-store sales declined 13.9% for the 13-week period. "Our third-quarter results reflect the impact of the deteriorating macro-economic conditions that started in mid-September," the Hingham, Mass.-based company says in its release. "While we have had positive customer response to our reinvigorated Talbots brand merchandise and marketing efforts, this was not enough to offset a steep decline in consumer traffic and spending that we and most others across our entire industry have experienced." Given the weak outlook, "we expect the environment to remain difficult and volatile for the balance of this year," it says, adding that it will not comment on the fourth-quarter outlook. Meanwhile, Coldwater Creek--the Sands Point, Idaho casual chain that targets older women--posted a $1.3 million loss, compared with a $6.2 million loss in the same period a year ago. Those results were somewhat better than expected, and due in part to a reduction in marketing spending. Sales fell to $228.5 million, compared with $271.2 million in the third quarter of 2007, and on a comparable-store basis, sales tumbled 20.5%.
Way back in the 1950s, the nascent National Basketball Association used the famed Harlem Globetrotters trick basketball team to generate an audience for the new pro sport in the U.S. Now, the NBA and Globetrotters are taking that strategy global. As part of a program to make the team the unofficial basketball ambassador to the world, the NBA will help plan, promote, and market the Globetrotters' international games and events. Kurt Schneider, CEO of the Phoenix-based Globetrotters, says the two organizations can help each other: the Globetrotters, which have been around for 80 years, have been trotting the globe--literally--for the past 50, most recently in Bosnia and Herzegovina, playing nearly 150 games a year overseas. What they don't have is a marketing program there. "What this really is, in basic form, is a combining of our two strengths to help grow basketball worldwide," says Schneider. "To their credit, [the NBA] saw us as a way not to cannibalize their current business but grow incrementally. They have incredible leverage and infrastructure, great relationships with sponsors, TV networks, merchandising, and mobile companies. [The Globetrotters are] another piece of content for their arsenal while we can tap into their clout overseas to grow our business," he says. "When we go overseas, we go in, play a game and are gone. So it has been, unfortunately a 'Johnny one note' condition: we come in, do a great job and go away. The NBA will allow the brand to exist internationally way beyond a single live event with merchandise, a TV presence, and mobile presence both preceding and trailing the events. Our goal here is consistent consumer contact, interacting on multiple platforms." The NBA says its games are televised in 215 countries and in 41 different languages, and that it has hosted more than 135 international events in 25 countries. The association has offices in Beijing, Hong Kong, Istanbul, London, Madrid, Mexico City, Paris, Shanghai, Seoul, Taipei, Tokyo, and Toronto, and 75 international players from 32 countries and territories. "Until this point, their business internationally has been one-dimensional, just the shows, but we see an opportunity to marry their business with our international business lines," says Emilio Collins, who is NBA senior vice president, International Development and Partnerships. Schneider says the Globetrotters have a strong fan base in China, Spain, England, France, Italy, Argentina, Brazil, and even Romania. "Because we have been touring for 50 years and the NBA started internationally 20 years ago, there's a generation around the world whose first exposure to basketball was the Globetrotters." Collins says there is particular opportunity for NBA/Globetrotters collaboration in China. "We see a particular opportunity there, where they toured in 2004, and had very good reception there. We have strong business ourselves in China, and there's an opportunity to build brand value. "The Globetrotters have an amazing heritage, and are ingrained in the memories of fans. Anytime we can tap into that to build the business around the world, we will," he says.
Ah, the day before Thanksgiving. Families are starting to gather, pies are baking and soups are a-stirring. What could possibly spoil the mood? IBISWorld will play Scrooge McTurkey, as the business research firm reports that Thanksgiving spending has dropped 3.4% this year--to $28.5 billion. The really big holiday spending, of course, starts the next day, with IBISWorld estimating a slightly lower drop in total Christmas expenditures--down 3.3%, to $460 billion. Most of the Thanksgiving spending--90% total--goes to food, IBISWorld said. That means a lot of turkey--275 million of the birds were raised in the U.S. this year, representing a 1.1% increase over 2007. But here's a feel-good factoid--more than half of those were certified organic, according to IBISWorld. The price of those domestic turkeys rose about 8% this year--from $1.10 to $1.19 a pound, according to the American Farm Bureau Federation (AFFB), making the total cost of a 16-pound turkey $19.09, up from $17.63. Turkeys, in turn, are the biggest reason why the cost of an average Thanksgiving dinner for 10 rose some 5.6%, according to the AFFB's 23rd annual informal price survey of classic items on the holiday dinner table. AFFB said the average cost of a dinner for 10 this year is $44.61, up from last year's average of $42.26. In addition to turkey, the menu includes bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, coffee and milk. While prices rose this year for brown-n-serve rolls, fresh cranberries, pumpkin pie mix, pie shells, cubed bread stuffing, the relish tray, whipping cream, green peas, and sweet potatoes, AFFB noted lower prices for coffee, milk and the ingredients needed to prepare the meal (onions, eggs, sugar, flour, evaporated milk and butter). IBISWorld gives the raw numbers for this year's increased feasting, when Thanksgiving dinners eaten at home vs. in restaurants will rise for the second year after a quarter-century trend in the other direction: in addition to the 275 million turkeys, American farmers grew 700 million pounds of cranberries (up 1.5%); 1.65 billion pounds of sweet potatoes (up 3%); 1.1 billion pounds of pumpkins (up 10%); 1.9 bushels of wheat (up 5.5%); and 850,000 tons of snap green beans (up 1%). With the price of Thanksgiving dinner rising, many consumers this year are tightening their belts, and a recent Corporate Research International study found 33% of them planning to spend less on their Thanksgiving meals this year than last year. As for Christmas spending, IBISWorld said price will be the determining factor, whether someone is buying food, gifts or decorations. Gifts are expected to be limited to immediate family, children and close friends, and "cards may be sent in lieu of presents." The firm said 20 billion mail items will be delivered by the U.S. postal service between Friday and Christmas Day. And the Greeting Card Association estimated that 25 million Thanksgiving cards are being exchanged this year, 80% of them through the mail.
Even as it's pushing Black Friday, Office Depot is singing a greener song, too--the company just released its fifth annual Green Book, a catalog of thousands of environmentally preferable products. From light bulbs to paper to toner to office furniture, recommendations are geared for businesses of all sizes--and this year, feature a higher recycled content cutoff, with more than 1,400 items with at least 30% post consumer or 50% total recycled content. Also new is the biodegradable tableware made from sugarcane waste, to help shift away from Styrofoam. Of course, the Delray Beach, Fla.-based company is also touting its Black Friday specials, including GPS units and digital picture frames, which it began emailing to customers on Tuesday. (Stores will open at 6:00 a.m.) But there is new evidence that even in this economy, stores like Office Depot are smart to give consumers as many green options as possible, and to cultivate their environmental colors. A new study from TNS Retail Forward, a consultant based in Columbus, Ohio, says that while the share of shoppers who view a retailer's or brand's commitment to social responsibility and sustainability as important has declined since the beginning of 2008, "more shoppers are aware of retailer and brand initiatives related to these issues." In its ongoing ShopperScape data, Retail Forward has also found that an increasing share of shoppers is willing to pay "a little more" for "green" products. "Although retailer commitment to social responsibility and sustainability is not yet driving store choice or purchase decisions for most shoppers," it says, "shoppers are increasingly aware of retailers' and brands' green agendas." Walmart is already one such winner, it says. While the share of shoppers who can name a retailer or brand committed to sustainability and social responsibility has increased more than 4 percentage points since November 2006, Walmart has "grown its level of unaided shopper mentions to 16% since 2006."
Marketing Daily will not be published on Thursday, Thanksgiving Day. We'll be back on Friday, though! We wish you and your family and friends a safe and happy holiday.
There is no doubt that whether you are an internal marketer "client" or external agency "partner," if you're not bringing real strategy that builds and sustains value, marketing can be a really cold place. Clients across virtually every sector are reducing head count, slashing marketing spend and taking a surgical look at marketing's strategic value. The current economy has made everyone and every agency accountable for making marketing sing for its breakfast, lunch and dinner! Clearly, no single type of marketing agency owns the strategic keys to the client kingdom any longer. Traditional advertising agencies once did by being the early gatherers and keepers of data, which was fused into relevant insights and in many cases, led to great creative ideas. It's no longer that way. Data is now accessed from public and private domains, including Google, to manufacturers and retailers. Data, like the world today, is all about making it make sense. Just think about it--no one buys anything that doesn't make sense ... especially today! So being of strategic value--making real sense with compelling insights and creative--is the only agency model that works. Regardless of the table you (as the agency) are accustomed to sitting at--360 or IMC, board or conference room table, shopper or customer team table--as a solution provider, solving marketing challenges is everyone's role. It's not about the functional agency being a game-changer, it's about realizing the game has changed. Going a little deeper on the subject of functional-based branding, in many circles, brand messaging has evolved--as a result of the obvious economic realities--into value messaging, or at least a form of hybrid-based branding. You see this where the "brand narrative" features an underlying value story as subplot. Again, even campaigns are being asked to do more. Regardless of where (the value of) messaging falls in a particular brand's story line arc, it is often considered a strategic point of difference in many categories and for many retailers. The creators or facilitators of this kind of content are located throughout the proverbial agency food chain. This new world order is potentially huge for clients across many category landscapes. No longer does one kind of agency lay claim to being the strategic enabler because the issues at hand are so wide-ranging and dynamic--from retail-centered branding needs to solution-based selling (e.g., meals, entertainment, household cleaning, even personal care). People, like brands, are looking for help--for real value--and will go where they can get it. There you have it. These are tough times. We all know this. But, if you believe like I do that the way out of any bad situation is through a good idea (strategically valid, with simple execution and integrated, if possible), then the new strat race we're in will help get us out! Being a full-fledged member of the new strat race means "getting" a few things: 1. Smart, strategic thinking that sets up the idea is always smart in IMC or any other marketing-related business. 2. Leveraging this new world order, you have to think "top down and bottom up," which really means thinking about tactics strategically and planning strategy in tactically, nimble ways. 3. Newly mined, defendable and hopefully dynamic insights are always valuable, but way more when there is so much risk due to budget cutbacks. 4. Waiting for direction is "so yesterday." In a strat race, being dynamic, not passive is key. 5. While 'we're all in it together' is a wonderful attitude, the reality is, we're also in it alone--so bringing your own passionate commitment all the way to the results is key. 6. That said, respect is created--just like really killer ideas. Being a real asset and exceeding the expected in unexpected ways is the most defining way to join and thrive in the new strat race of marketing today. 7. Said another way, if you act like or define yourself as a function, you'll always be limited to that function versus the solution the function provides. In today's strat race, function clearly follows value. 8. Finally and honestly, strategy should always be what stirs the marketing pot--because with it comes C-suite acceptance, the potential for sustainable value (investment versus expense) and a definable landscape "benchmark" to measure a program or plan's success. Obvious stuff ... maybe. But in good times a lot of misguided spending occurred. In these times, it's hard to imagine getting real money without real thought!