While Toyota looks for an organizational solution to its diffuse product-quality issues, competitors seem to be benefiting with growing loyalty. Toyota on Wednesday said it will appoint a chief quality officer for each principal geographical region around the world to make the company "more alert to customer sentiment." It says the officers will serve on the company's new Special Committee for Global Quality, which is to be headed by Toyota's president and meets for the first time on March 30. The company says it will ask independent third-party experts to review the contents of that meeting. Toyota is also opening itself up to more customer input from each region so comments go directly to its Quality Group and to its Product Development Group. The initiative starts in the U.S., where the company will increase the number of its technical offices to be able to conduct on-site inspections within 24 hours of every reported incident of suspected product malfunction. On the technical front, Toyota is also adding a brake-override system that kills the engine any time the accelerator and brake pedals are applied at the same time. The new technology will go in all future vehicle models worldwide, per the company. Toyota has to move fast. According to Kelley Blue Book, the Irvine, Calif.-based automotive research and consumer shopping firm, brand loyalty has gone up for Korean and domestic automakers including Kia, Hyundai, Chevrolet and Ford. While non-Toyota owners are becoming more loyal to their current brands, Toyota brand consideration and loyalty have declined. The firm says Korean import automakers have seen the greatest recent increase in loyalty and consideration, with Kia and Hyundai owners looking at new models within their respective brands increasing by 17.1 and 10.5 percentage points versus the fourth quarter last year. The number of Chevrolet and Ford owners looking at new models within their respective brands increased by 6.5 and 4.6 percentage points. KBB says the number of Toyota owners looking at new Toyotas is down 6.5 percentage points to 51%, and owners of other brands likely to consider Toyotas are down five-to-eight percentage points. The firm says Toyota owners are also less likely to consider other Japanese automakers, including Honda and Nissan. "This finding is the most interesting of all," said Jack R. Nerad, executive editorial director, Kelley Blue Book and kbb.com. "One might have guessed Toyota owners would switch their allegiance to other Japanese brands, but instead they seem to be turning away from Japanese brands as a category. It's just another indication of the far-reaching effects of these recall-related issues." A loyalty study by Experian Automotive suggests that Ford and Hyundai were racking up brand loyalty last year, too. The firm says Ford accounted for four of the top five vehicles for customer brand loyalty from the second to the third quarter last year. Experian says Ford's Fusion, Edge, Flex and Five-Hundred models were all within the top five vehicles for customer brand loyalty. Ford Freestyle had the 10th-highest brand loyalty. Still, Toyota's Venza model had the highest brand loyalty at 63.2% and Toyota's Prius and Camry were seven and nine, respectively. When it came to corporate loyalty, Toyota moved ahead of GM to take the top spot. Ford followed closely in third place. Hyundai's corporate loyalty rose to fifth overall.
A few sponsors of the ongoing Winter Olympics are getting a boost (at least in terms of goodwill) out of their sponsorship ... and so are their competitors. According to a survey from market research firm Chadwick Martin Bailey in Boston, followers of the Winter Olympics correctly identified Coca-Cola, McDonald's and Visa as official sponsors of the Games. But many believed that companies such as Pepsi, Subway and American Express were also sponsors. "These are guys who have a big media presence, and it's hard to get away from them," Josh Mendelsohn, a vice president at Chadwick Martin Bailey, tells Marketing Daily. "It's a good thing to sponsor, but you're probably helping your chief competitor a bit." Among the top sponsors, there is a wide discrepancy among official sponsors and mistaken sponsors. For instance, 60% of those surveyed named Coca-Cola as an official sponsor, while 51% named Visa and 46% cited McDonald's. Beyond those three, however, the numbers drop off dramatically. Only 20% cited AT&T as an official sponsor; 12% named General Electric; 10% said Samsung and 7% named Panasonic. Comparatively, the percentages of those final four are in line with the top three mistaken sponsors. Among respondents, 16% said Subway was an official sponsor, 14% said American Express and 10% cited Pepsi. "There's a pretty good model for how to promote the fact that you're an Olympic sponsor. The smart ones really do it four years at a time," Mendelsohn says. "They really connect with the Olympics ideals, like reaching goals or being American. It's really about the Olympics and what that means." An explanation for the confusion may lie in the different levels and types of sponsorship, Mendelsohn says. According to the survey, 7% of the respondents thought Verizon was an official sponsor of the games. The company is not, but it has been running ads touting its sponsorship of the U.S. speed skating team. The lesson: Unless a marketer is willing to go big with promoting Olympic sponsorship, there might be other, less expensive opportunities, Mendelsohn says. "If you're doing it right, there's a benefit, but there are other ways to access this passionate audience. To consumers, after the big ones, it's a bit of a muddle." For official and mistaken sponsors alike, the benefit may be more one of goodwill than bottom line. According to the survey, 57% of consumers said sponsorship made no difference in their decision whether to support one company or another. However, 83% said sponsorship demonstrated the company's commitment to community support. "Getting goodwill from the masses is pretty hard, and that's pretty powerful," Mendelsohn says.
After some strategic adjustments involving pricing, value and size, Whole Foods Markets reports that its first-quarter sales are up nicely, climbing 7%. Net income jumped 79% to $49.7 million -- better than expected -- and the company upped its forecast for the months ahead. Comparable-store sales climbed 3.5% -- the first positive quarter since the recession started. And the Austin, Texas-based company -- which has reacted to slowed consumer spending by moderating some of famously high prices, emphasizing value in its merchandising, and focusing on smaller stores -- says those gains are continuing, with comparable-store sales up 7% so far in its second quarter. "Our first-quarter results exceeded our own expectations on both the top and bottom line," CEO John Mackey says in a release. "Given the momentum we are seeing, there are many reasons to be bullish about our future results." And while he says the company still believes there is considerable uncertainty regarding the economy, the consumer, and its competition, it raised its outlook for the year ahead. "As the world moves out of this recession, we believe we are well positioned to produce strong returns for our shareholders." The retailer says it now expects sales growth of 8.5% to 10.5% for the remainder of the year, with comparable-store sales gaining between 3.5% and 5.5%. Trends aren't so positive for other grocers. While Winn-Dixie also announced results that beat expectations, its second-quarter results slipped 3.3% to $2.2 billion, primarily due to store closings and storm-related sales. Identical-store sales fell 2.9%. Net income at the Jacksonville, Fla.-based chain dropped to $2.1 million from $16.1 million, primarily due to a non-recurring gain in the prior period. "The challenging economic environment and deflationary pressures continue to impact sales for the entire supermarket industry," CEO Peter Lynch says in a statement. "Despite negative identical store sales, we are pleased with our overall operating execution during the quarter." "It is clear that consumers remain very cautious with their spending," he says, "which has influenced our sales across the chain, primarily with respect to overall basket size."
BMW of North America has launched a new global ad push that it calls its largest brand awareness campaign in its history. The effort, "Story of Joy," began during the XXI Winter Olympic Games with an ad buy that BMW says is the largest of any advertiser in the Games. The effort -- via Austin-Texas-based GSD&M Idea City, with Universal McCann of New York doing media buy -- includes TV, digital, mobile and out-of-home platforms. The Woodcliff Lake, N.J. automaker did a nine-video panel home page takeover on MSN in mid-February. A 60-second spot debuted on NBC this month and shows BMW cars and owners throughout the company's history. A voiceover says: "We realized a long time ago that what you make people feel is just as important as what you make. And at BMW we don't just make cars, we make joy." The ads will continue to run on NBC, MSNBC and CNBC during the Winter Olympic Games and the Academy Awards. BMW is also sole automotive sponsor of the network's "Olympic Moments of Joy." The other 60-second uses the BMW "EfficientDynamics" concept roadster as an emblem of how research and development informs current products. Images of the concept car and current BMW products flip back and forth as the concept zooms through a tunnel passing through bars of light and darkness made by overhead lights. At the other end of a tunnel, the entire BMW lineup emerges and heads down a road with video cutting to smiling drivers. "Every BMW is created with EfficientDynamics -- technologies that maximize the joy of driving and make us the most fuel-efficient luxury car company in America" says the voiceover. BMW did a home page takeover of MSN Feb. 15 with 3D-video that linked to BMW-branded "Golden Moments of Joy" videos and NBCOlympics.com's "Golden Moments of Joy" section. Print ads are in Vanity Fair's March "Hollywood" issue, a four-page spread featuring vintage images of Elvis posed with his BMW 507 and the headline "Joy Is Timeless." Out-of-home ads are in New York City, Los Angeles and Spartanburg, S.C. (the site of BMW's North American manufacturing plant and performance-driving school) this month and next.
New York City to the Oscars: "You talkin' to me?" The former, in alliance with the Academy of Motion Picture Arts and Sciences and NYC & Company, the city's marketing organization are launching a two-week ad and promotional campaign to convince New Yorkers and visitors that the Oscars are as much about New York as they are about Hollywood. The effort includes an ad campaign, movie memorabilia, a movie marathon and tours leading up to a ticketholder-only cocktail party and viewing of the Academy Awards in Alice Tully Hall at Lincoln Center. Most of the elements begin the week of March 1, but ads start on Feb. 22. An outdoor media plan includes bus shelter, street pole banner, newsstand, phone kiosk and taxi cab ads that show the Oscar against a nighttime Manhattan juxtaposed with movie lines like "I'll have what she's having" from "When Harry Met Sally" and "You talkin' to me? You talkin' to me?" from "Taxi Driver." As part of the program, the Film Society of Lincoln Center will run a movie series called "And the Winner Goes to ... New York" March 5-7 in the Walter Reade Theater at Lincoln Center. The series will feature films like "Annie Hall," "Raging Bull," "The Godfather," "West Side Story," "Klute," "French Connection," and "Dog Day Afternoon" -- all of which take place in the Big Apple. The Shops at Columbus Circle in Time Warner Center will run a "Meet the Oscars" exhibition starting Feb. 25 and running through March 7 that features the physical Oscar statuettes won by New York-based directors, producers and actors. During the week starting March 1, a "New York TV & Movie Sites" bus tour will visit sites frequented by N.Y.-based celebs. A "New York Classic Movie" tour launches March 7. A full-page ad and sweepstakes to win tickets to the Oscar night event appears in the Feb. 17 issue of Time Out NY; the campaign will include promotional elements on Facebook and Twitter; and the NYC Information Center near Times Square will have Oscar-themed content and media.
The spring campaign for Candie's featuring singer Britney Spears was shot by three famous photographers, including Annie Leibovitz. The effort for the junior brand, which is exclusively available at Kohl's department stores and Kohls.com, is titled "Britney Spears Through The Lens." Leibovitz, Mark Seliger and Terry Richardson shot Spears at Paramount Studios in Hollywood late last year. The campaign, a series of photographs of Spears as seen through the lens of each photographer, will debut with a four-page insert in the April issue of Seventeen Magazine as well as online at candies.com and Kohls.com. Outdoor billboards, in-store, circulars, online and direct mail are also planned. Leibovitz's photograph features Spears against an industrial backdrop. Richardson photographed her on a plain white set with colorful props, while Seliger created elaborate sets. Seliger's first set was a French burlesque-inspired pink dressing room and the second was a custom-designed pink Harley-Davidson motorcycle against a perfect blue sky and green grass background. The campaign was created by the Iconix in-house marketing team. Iconix renewed its relationship with Spears last month for the duration of 2010. Past Candie's spokespeople include Fergie, Hilary Duff, Jenny McCarthy and the Dixie Chicks. "The new Candie's spring advertising campaign is innovative, authentic and provides a unique brand expression in the marketplace," says Julie Gardner, executive vice president and chief marketing officer at Menomonee Falls, Wis.-based Kohl's, in a release.
Staples says it is launching Staples Technology Solutions, a service aimed at helping businesses, from small to large, grapple with their thorniest tech issues. Staples' announcement comes just at a time when the office-supply industry, one of the harder-hit retail sectors, is bouncing back. The NPD Group reports that sales gained in December, the first time in all of 2009. Business-to-business spending grew 2.5%, according to the Port Washington, N.Y.-based market research group. And while the retail office superstore channel -- which includes Staples -- didn't fare as well, averaging a 5% decline in the final four months of the year, that's still an improvement from the 10% monthly decline in the first half. Overall, NPD says the retail office superstore channel was down 8%. Sales of paper, writing instruments, sticky notes and office essentials are all up for the year, while sales of filing, file storage and presentation-related items are down. "Monthly U.S. job market trends have been highly correlated to office supplies trends, and we expect that to continue into 2010," it says in its report. "If the economy can start adding jobs in 2010, and if small businesses begin to take off again, we expect to see stronger performance ahead." Tech services are becoming an increasingly attractive revenue stream for retailers. Staples already offers a consumer tech option called Easy Tech, and Best Buy offers Geek Squad. Chains like Wal-Mart and Target have added service, installation and support.
Top 10 DMAs in which reside adults who drank grapefruit juice in the last six months: 1 Atlanta 2 Chicago 3 Charleston, S.C. 4 New York 5 Columbia, S.C. 6 Norfolk/ Portsmouth/ Newport News, Va. 7 Richmond/ Petersburg, Va. 8 Baltimore 9 Miami/ Ft. Lauderdale 10 Raleigh/ Durham (Fayetteville), N.C. Source: MRI's Market-by-Market study, www.mediamark.com
A week after launching Buzz, Google's new social network product, the company faced an avalanche of criticism for its privacy violations that forced it to make changes on the fly, set up a war room to monitor the negative feedback and issue this public apology on the Gmail blog last weekend:
"We've heard your feedback loud and clear, and since we launched Google Buzz four days ago, we've been working around the clock to address the concerns you've raised. Today, we wanted to let you know about a number of changes we'll be making over the next few days based on all the feedback we've received.... We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback. We'll continue to do so."Watching these events unfold, it struck me as ironic that the company known and revered both for its analytical superpowers and its "don't be evil" credo, failed on both accounts. And, in doing so, jeopardized its stellar brand. Analytical Power Failure Let's face it: we've all been smitten by Google's algorithms that deliver lightning fast, relevant searches. And, it's able to do so because it collects a ridiculous amount data: it knows what sites you visit, when and how frequently, what ads you click on, what products you buy and so on. It gathers up all those bits and bytes, crunches them, and synthesizes them into a coherent story. If you use its products -- Gmail, Gchat, Chrome, search, Voice, etc. -- it knows even more. Google leveraged some of that data to create its automated circle of friends for new Buzz users, which irritated privacy advocates. But, interestingly, it only scratched the surface of its knowledge. It didn't appear to leverage data that would have told them, for instance, that the people I most frequently email don't participate in social networks (hence, the email). Or, that I don't allow social networks to go through my Gmail contacts to find friends. Data that could have created a more customized -- and safer -- environment for Buzz users. Beyond its own data, Google modelers could have also leveraged market research that would have made Buzz a better product at the start. Data, for instance, that women are more privacy sensitive than men; that they equate privacy with safety. It's why they want control over whom they connect with online. Or data that shows consumers segment their real life connections into different social networks, protecting their personal lives from professional scrutiny. "Don't be Evil" Failure Google advises its employees in its code of conduct preface:
'Don't be evil.' Googlers generally apply those words to how we serve our users. But 'Don't be evil' is much more than that. Yes, it's about providing our users unbiased access to information, focusing on their needs and giving them the best products and services that we can. But it's also about doing the right thing more generally -- following the law, acting honorably and treating each other with respect.The code then outlines in detail what it means to not be evil. In its list it specifically singles out protecting users' privacy and preserving their trust. And yet, the team that developed and tested Buzz seems to have forgotten this code. While using the data to provide a customized experience was not necessarily in violation of their code, forcing it on to a user, without the ability to opt in and displaying their personal information publicly most certainly was. Redemption But, despite these initial failings, Google's response to the crisis is truer to its brand than its initial product launch. And, that response -- rapid and authentic -- appears to be redeeming its brand. It is as if the Google team took a page from Johnson & Johnson's 1982 Tylenol tampering crisis. Then, as now, a major, well-respected brand survived a crisis by being true to its brand and responding rapidly and with authenticity. Faced with a similar crisis, what would your brand have done?
With all the recent talk about targeting and making use of data, our industry is missing something major: Brands need to engage the right audiences, not just reach them. Let me explain: Advertising data is the hot industry topic these days. Many advertisers believe they can effectively reach increasingly targeted audiences -- if only they can get their hands on the right data. The industry is focused on adding more and more data to demand side platforms (DSP) and using real-time bidding (RTB) to leverage that data. Which is great -- but insufficient. Study after study shows that the best performance for brands comes when they combine premium sites with compelling creative. Engagement has been pushed to the back burner lately, but it's still critical for brands -- and successful engagement requires concerted efforts that go well beyond data and targeting. You cannot automate quality, creativity and engagement. The online advertising industry does need to make some wholesale changes to adapt to the insights and needs of our sophisticated advertisers. One of those changes is to emphasize what brands are doing to engage (and not just reach) the right audience. I've heard many advertisers wonder why a brilliantly targeted campaign didn't generate the desired goal of brand lift, increased purchase intent, sales lift, and so on. Although current conventional wisdom is that the campaign would have worked if the targeting was just that much more precise, Dynamic Logic's recent study (covered in Online Media Daily last fall) showed that the single biggest predictor of brand impact was the ad creative itself. Effective targeting can (of course) help people reach the right audience members, but that first step can give a false sense of confidence. Using data alone misses the value of both context and creative. Data have become a crutch that is, by definition, easier to quantify (and that much easier to justify to the client); yet data are unlikely to be the cure-all catalyst for a campaign that engages consumers. Think about it this way: targeting identifies people who are likely to be interested in your brand. The offline equivalent would be hand-delivering ads only to the people who are hanging out outside your store or already inside -- they might be good customers but they are certainly not the bulk of your sales prospects. And if you don't have something compelling to say or show to the folks who haven't strolled near your store, they won't be interested. If you over-rely on targeting, you are limiting yourself. Beyond targeting you need to look at whether your audience finds you memorable. Are they partial to your creative? Are you sparking the curiosity of new prospective customers? Are you building affinity and planting seeds for future purchases? Then, as an industry there is the deeper issue that if we over-rely on targeting, it will reduce the efficacy of targeting. If everyone buys from the same data providers, then what do you have that's unique? And the more precisely you target, the more likely you are to miss valuable prospective and developing customers who fall outside the bounds of your over-precise targeting. Context and Creative Matter Every campaign needs to find a balance between the audience most likely to be interested in the type of goods you sell and serving the right creative to that audience in a context where they are most predisposed to engage with your offering. The media mix should absolutely reach known prospects and customers through targeting, social media and email marketing -- but should also be expanding the universe of prospects through contextually relevant, memorable campaigns. The probability of engagement is so much higher on vertical sites (according to comScore, which found that people reached by vertical ad networks spent at least 60% more time in those site categories) because you are presenting your campaign in a context where the audience is predisposed to be receptive to your message. On vertical ad networks you can broadly target the top of the funnel and begin engaging the audience before you move down the funnel with narrower targeting. Why start with one-to-one marketing (the bottom of the funnel --or the people hanging outside your store front)? You should move there once you've already found audiences willing to engage with your brand. Brands can't overlook the creative that they deliver in their contextually relevant, targeted campaigns. Interactive marketing veteran Cory Treffiletti, in a recent blog post, implored the industry to, "not bypass creativity completely because creativity is what actually provides us with better access to data and can help us assume the top position for marketing dollars." Yet when we recently conducted a survey of media planners, we found that a vast majority of agencies don't consider ad networks' creative capabilities as a point of evaluation. That's a problem because creative capabilities stand to make the difference in campaign impact and efficacy -- particularly when creative is served in the highly engaging and contextually relevant environments found on vertical sites. Both publishers and advertisers have to find the right mix of both reach and engagement to be successful. But you'd be surprised how infrequently that happens. I believe that will change, but we need to start redirecting our focus to engaging audiences, not just reaching them.