BMW has just launched what the Woodcliff Lake, N.J.-based company says is its biggest brand campaign to date, and maybe the first that puts as much focus on the drivers and their pleasure in driving as the cars themselves. It's part of a big-media strategy the company is doing to raise its profile worldwide with a more emotional, optimistic voice. Jack Pitney, VP of marketing for BMW, takes Marketing Daily for a drive. Q: How different is this campaign, thematically, from what BMW has done in the past?A: I don't think the "Joy" campaign is a tremendous diversion. We remain the "Ultimate Driving Machine" and would never move away from that. If there is a change in how we are communicating on behalf of BMW, it's in the way we are doing it. In the past we focused primarily on the cars themselves and the technological innovations under the skin. Now what we have chosen to do is focus on the end result of all that: it's the way the cars make you feel. Really, the "Ultimate Driving Machine" is about bringing the joy of driving to life. We thought if we could tap into the enthusiasm people have about our products, that might be a good way for us to expand the story of BMW. Q: Why this focus on the emotional quality of the brand? What insights led to this?A: The idea for the campaign was born about 18 months ago out of the observation that not just the U.S. economy but the global economy was going into a bit of a recession. All of our research says in a recession, brands that do the best are those that are authentic, purpose-driven brands that have defined themselves over decades as being true to their core purpose. We thought if ever there has been a time to remind people what the BMW is about, now would be the time. So we challenged ourselves to think about ways to bring that promise to life in an emotionally compelling way. What we landed upon was, well, maybe it's really about what our products do -- how they make you feel. That's why people keep coming back to the brand, and why we have the largest car club in America and the world. We thought we should shine a light on those folks and let them tell our story for us. That was, in essence, the idea: If ever there was a time when we should remind people what we stand for, now is the time, and we also thought a joyful, hopeful, and optimistic message would be well-received right now. Q: This is BMW's largest campaign to date. Is that because the media buy is so big during the Olympics, where the ads debuted?A: Our approach -- not just in the U.S. -- is to find a suitable "big bang" platform in which to launch the campaign. We looked at the Super Bowl, but we thought if ever there is a platform that epitomizes joy and was more than a one-day flash like the Super Bowl, it's the Olympics. Because of the duration of the Games and what they are all about, it's a perfect opportunity for our big-bang launch of the campaign. But this campaign is not a one-time splash and then it goes away. You will hear us talking about the story of joy not just this year, but in 2011 as well. We think there are legs here, and we are already working on the next chapter of the story. Q: And what is next for the effort?A: It's called "BMW Unscripted," which I'm really excited about. It acknowledges that it's our customers we are celebrating here, and we are going to focus in on some rather interesting owners and their stories, but letting them tell their stories in their own words. And it will manifest in both above-the-line and below-the-line activities worldwide. What makes it work so strongly is, it rings so true to what we are all about. Q: Post Olympics, what is BMW's media strategy?A: We are really taking the philosophy of "do it right or don't do it at all." That means making sure the programming we buy is indeed TiVo-proof. We are going to try to focus in on real marquee live events that people just do not want to miss. So the Olympics are a great jumping-off point for us. You will see us have a strong presence with the Academy Awards; we'll roll into March Madness with a strong presence there -- and, as the year unfolds, we will continue to focus on high-profile TV opportunities. The Internet, by anyone's estimation, has grown tremendously over the last decade in terms of importance -- not just in lower purchase funnel activity, which it has been historically viewed as. But the Internet is an opportunity to build your brand as well. So we are investing much more with our online activities. For 2010, we will have some print, but it will be very, very micro-targeted. What we are not doing, which we have done in years past, is out-of-home. You are not going to see lots of tier-one dollars going toward out-of-home. It's TV, Web and secondarily, print.
While there still aren't any rainbows forming over America's shopping centers, a handful of retailers including Macy's, Target and Sears, posted better-than-expected quarterly results on Tuesday. Executives at those chains -- and industry observers -- think that while consumers are still cautiously measuring out their cash, retailers can finally exhale. "It's safe to say the worst is over for most retailers. And particularly for those outside the home goods area, the tide is turning," Frank Badillo, an economist at Kantar's Retail Forward, tells Marketing Daily. "We're seeing consumers continuing to spend, in much the same way they did in November, December and January, with an increase in demand for apparel and smaller-ticket items." Macy's, which posted net income of $466 million compared to its $4.77 billion loss in the same period a year ago, says sales declined 1.1% to $7.85 billion, while same-store sales eased just 0.8%. The Cincinnati-based company says its conversion to the MyMacy's program, which allows stores a much greater level of localization, is largely responsible for its better-than-expected results. "The fourth quarter represented a clear-cut improvement in sales trends from earlier in the year, driven by success from My Macy's, a 26.6% increase in online sales and a rebound at Bloomingdale's," CEO Terry Lundgren told investors during a conference call. "We out-performed most of our major competitors in the holiday season. We believe this momentum will continue in 2010." Still, he was also cautious. "Business feels better, but I'm not going to play ostrich -- macroeconomics do matter," particularly concerns about employment. (He also says the company will soon introduce a major customer-loyalty initiative, in conjunction with Dunnhumby, the British loyalty-marketing firm. Lundgren says the program will be significantly different than those used by other department stores.) The news was even more upbeat at Target, which reported net income of $936 million for the fourth quarter, compared with $609 million in the same period a year ago. And sales increased 3.7% in the fourth quarter to $19.7 billion, from $19 billion in 2008, with same-store sales gaining 0.6%. Calling the results "well above expectations," the Minneapolis chain also says it is seeing positive reactions to its new merchandise initiatives, as well as a continued modest recovery in the economy. In a conference call, Kathee Tesija, EVP/merchandising, says those gains are even coming in the home area, a discretionary spending category hit hard during the downturn. "We are definitely seeing home start to turn the corner," she says -- with sales of higher-end brands, including Smith & Hawken, doing well, as well as its lower-price points. Still, Badillo is quick to point out, retailers specializing in home goods will continue to struggle. "The housing market is clearly not out of the woods yet," he says. The Home Depot, also reporting fiscal fourth-quarter results, managed to post a 1.2% gain in comparable-store sales for the quarter -- the first in over three years -- while overall sales declined 0.3% to $14.6 billion, and comparable-store sales in the U.S. fell 1.1%. Net earnings for the quarter came in at $342 million, compared with a net loss of $54 million last year. "Despite the tough economic environment, we were able to make solid progress against our key initiatives in 2009," Frank Blake, chairman and CEO, says in its release. "For the year, we grew U.S. share by more than 100 basis points; we continued to restructure our distribution network, and we enhanced overall customer service." At Sears Holding Corp. -- a retailer that has struggled more than most in the downturn -- net income rose to $430 million, compared to $190 million in the same period a year ago. And while Sears continued its same-store sales slide, falling 6.1% at Sears' U.S. stores, comparable-store sales at Kmart climbed 1.7% in the fourth quarter -- the second consecutive quarter of gains. Total revenues decreased $33 million to $13.2 billion.
Americans are turning to casinos less often for their entertainment -- no surprise there, given the current state of the economy. But the woes may go deeper than economic doldrums, suggesting the industry has a harder road to travel once recovery sets in. "We're seeing a steady, gradual decline, not associated with the broad ups and downs of macroeconomics in the U.S.; the decline crosses two recessions and a boom in between them," Billy Hulkower, a senior analyst with Mintel, tells Marketing Daily. "This isn't about economics. And we're talking about all casinos here, including local casinos." According to new Mintel study, 30% of U.S. adults said they visited a casino in the past year, and attendance has been declining steadily since 2001, when 35% of adults went to the casinos. (In real terms, that's about 14% fewer people visiting casinos since 2001.) The steady decline suggests it's less one event -- such as the recession -- causing people to stay away, than it is the option of increasingly compelling entertainment offerings elsewhere. "When we look at leisure in general, everything that doesn't revolve around the screen tends to be losing its audience," Hulkower says. "Even the pursuits that are supposedly gaining in steam for demographic reasons -- like, say, soccer -- are actually just treading water from a penetration perspective." Of those who did visit a casino, 27% chose to stay closer to home, visiting casinos on Indian reservations, while 24% said they traveled to Las Vegas. Only 12% traveled to Atlantic City, N.J. According to the study, people making more than $100,000 a year were more likely to head to one of the destinations, but those making less than $25,000 a year were more likely to be frequent visitors -- most of them retirees. While casinos have implemented loyalty marketing programs to keep gamblers coming back, they may not be using them effectively, Hulkower says. While more than 60% of casino-visiting adults over 55 are members of loyalty program, fewer than 50% of adults 21-44 are members of loyalty programs. Among all casino-goers, only one in four said they gambled at only one casino during an overnight trip. "Regardless of the level of participation, they haven't effectively incorporated reward systems in loyalty programs," Hulkower says. In addition to the closer destinations, online gambling is attracting consumers, despite the fact that it's illegal in the United States. According to the study, 12% of adults have visited an online gambling site in the past year. Perhaps not surprisingly, men are more likely to gamble online than women. "When something is illegal, we tend to assume that it will be under-reported in studies -- some people are simply not going to believe that the survey is anonymous, and we don't know the size of that group. Even so, one in eight respondents gambled online in the past year," Hulkower says. "This is a big deal, if you assume that even a small percentage of that expenditure could have been on a physical casino."
In response to charges from an organic-industry "watchdog" of "misleading and unethical" claims in its new EarthGrains campaign, Sara Lee has changed some language on the brand's Web site and issued a clarification statement. The Cornucopia Institute, a Wisconsin-based nonprofit farm policy research group, Monday issued a press release slamming the brand's campaign, which focuses on EarthGrains' use of a new "Eco-Grain" as a flour ingredient, with the tagline, "The Plot to Save the Earth, One Field at a Time." Charlotte Vallaeys, a food/farm policy analyst for the institute, labeled the campaign a "crass example of a corporation trying to capitalize on the valuable market cachet of organic, while intentionally misleading consumers -- without making any meaningful commitment to protect the environment or produce safer and more nutritious food." The institute also sent a letter to the CEOs of both Sara Lee and National Public Radio (which is carrying underwritten spots for EarthGrains), asking that both suspend promotional activities for EarthGrains until their organizations can complete their own analyses of the institute's "comprehensive study" on the marketing claims being made. Sara Lee sources Eco-Grain wheat for flour from Cargill affiliate Horizon Milling. According to Sara Lee, Horizon has worked with Idaho-based family farmers to use "precision agriculture" techniques such as satellite imagery and soil sampling, which enable farmers to use fertilizer only where it's needed and reduce energy use and emissions while increasing the wheat yield. The EarthGrains Web site states that Eco-Grain comprises 20% of the flour now being used in its "100% natural, 24 oz. bread." None of the marketing makes "organic" claims for the brand. The site states that "even a single loaf" of the bread makes "a small contribution to protecting the environment" when compared with bread made from 100% traditional flour, and provides an interactive tool that lets consumers see estimates (based on "historic observations and studies") of the impact on the environment with every loaf of bread they purchase, such as the amount of reduced fertilizer and acres of farmland saved. The copy notes that "the more loaves of bread made with Eco-Grain flour that you -- and lots of other people -- buy, the greater the impact," and that EarthGrains is "committed to increasing [the Eco-Grain] percentage as our bread sales increase." Sara Lee has said that its goal is to increase Eco-Grain content in its EarthGrains breads next year, and that it will introduce some Eco-Grain into its Thin Buns later this year. The Cornucopia Institute, however, charges that the brand's claims amount to a "shell game" and "greenwashing." Eco-Grain farmers "differ very little from most conventional grain producers" -- they still use petroleum-based fertilizers, pesticides and fungicides -- in contrast to certified organic farmers, who are prohibited by law from using any of these, the group pointed out. The institute also said that given the 20% Eco-Grain usage level in EarthGrains breads (and no Eco-Grain content in the brand's other products), the estimated 15% reduction in use of synthetic fertilizer realized through Eco-Grain production methods actually amounts to a total reduction in such fertilizer use of "a meager 3%." Furthermore, it strongly objected to wording on the EarthGrains site (now removed) that Eco-Grain farming methods "have some advantages over organic farming" -- specifically, that organic growers require more land than conventional growers. The institute quoted a Rodale Institute agricultural researcher as saying that this claim "does not hold up against recent scientific data." The Cornucopia Institute describes its mission as "seeking economic justice for the family-scale farming community" through "research, advocacy and economic development" in support of ecologically produced local, organic and authentic food. On Monday, Sara Lee released a statement calling the situation a "misunderstanding." The company said that it had "taken the necessary actions to remove any comparable language highlighting the major differences between" Eco-Grain and organic farming, but also stressed that it has made no "organic" claims for the grain or the bread, and has been "completely transparent about the environmental benefits" of Eco-Grain growing methods. The grain's "precision agriculture" farming practice has been "shown to reduce the use of fertilizer and fuel, which is better for the environment," Sara Lee stated. "This is our first step toward improving the environmental benefits of our products and we know that more can be done." EarthGrains hopes to "lead the bread industry in the right direction" by commercializing "innovative farming practices like precision farming, which has a number of benefits for both the consumer and the environment," the company added. In describing the new EarthGrains campaign and its Web site during their kickoff early this month, brand manager Kate Cosgrove told Marketing Daily that the brand wants "to provide the consumer with complete transparency" about "what Eco-Grain is, and what it's not," adding that the grain and the breads are not -- for instance, organic. In its press release, the Cornucopia Institute also noted that other Sara Lee bread ingredients (such as soy oil and soy lecithin) use genetic engineering and chemical extraction methods, and quoted Marion Nestle, professor of nutrition at New York University, as pointing out that the term "natural" on products like bread "is not regulated by state or federal government," leaving companies to come up with their own definitions for the meaning of "all natural." In 2007, Sara Lee petitioned the Food and Drug Administration to define "natural" in a way consistent with the U.S. Department of Agriculture, saying that the food industry and consumers need clearer guidance on the term. (The petition included an argument for considering sodium lactate as "natural," per msnbc.com.) The Sugar Association also petitioned for a clearer definition. Thus far, the FDA has not formally responded to those petitions, but in 2008, an FDA official told FoodNavigator-USA.com that the agency had no plans to address the definition in the near future due to budget constraints and other priorities. However, last year, in response to a query from the same publication, the FDA indicated that it would object to the use of the term "natural" on products containing high-fructose corn syrup.
Automakers have stayed clear of explicitly castigating Toyota for its problems, although they have implicitly been aiming at the Japanese giant with trade-in offers. Not so fast. The Torrance, Calif. automaker has actually come out near the top in the highly regarded Consumer Reports annual study of vehicle reliability and overall value. Unfortunately for one automaker that has been trying to lure Toyota owners, its rankings have tanked this year. Consumer Reports says Chrysler -- which has the lowest grades in the study -- is the only automaker to drop from last year in all measures. The firm says the Ram 1500 pickup is the only Chrysler model on its "recommended" list, while "Most models from the manufacturer have noisy, inefficient, unrefined powertrains; subpar interiors; and poor visibility." The organization also gave Honda and Subaru "class leader" status for building the best all-around vehicles for American drivers, with Toyota in second, even with recommendations on eight of its vehicles suspended by the magazine. Honda's win is the fourth year in a row. Chrysler's standing in the all-around ranking was last, and per the magazine, worse than last year. Chrysler had one "recommended" vehicle this year -- the Ram pickup -- compared to no recommended vehicles last year. Consumer Reports says Kia and Hyundai are the two automakers that have made the best improvement this year versus last, jumping to fourth place from ninth last year. The magazine says the Honda Fit and the Toyota Prius topped the best-value vehicle list, beating out more than 280 cars in eight categories. The two cars each earned a value score of 2.08 on a scale where average is arbitrarily given a "1.00" score, meaning that 2.00 is twice the value of the average model. Consumer Reports also said both the Prius and Fit have "excellent reliability." The Yonkers, N.Y.-based organization ranks vehicle value by looking at performance, utility, and reliability for the money, which includes total owner costs over the first five years. In small cars, the organization said the best value was Honda Fit, and the worst was Chevy Aveo; in family cars, Prius was paired with Dodge Avenger R/T, which was given the worst value scores in the segment. Hyundai Elantra touring was the best minivan or wagon value, and Dodge Grand Caravan was the worst; in small SUVs, Subaru Forester fared best, while Dodge nitro was worst. Hyundai Santa Fe limited was the best mid-size SUV, and Jeep's Wrangler Unlimited Sahara was the worst value; in upscale sedans Acura TSX was judged the best value with Dodge Charger R/T judged the worst. Among luxury vehicles, the Infiniti M35 got top value nod and Mercedes-Benz S 550 was the worst. Finally, in sporty cars, Mini Cooper got top marks, while Chrysler Sebring was the worst. While Consumer Reports deemed Honda and Acura models the most reliable, the organization says the most recent models from Honda don't have as good interior quality and fuel economy that earlier models did. The redesigned 2010 Legacy sedan and Outback wagon raised Subaru's overall test score, helping it tie with Honda in the rankings. How about Ford? The magazine says that some Ford models now rival competitors from Honda and Toyota. However, while Ford Flex, Fusion, and Mercury Milan got high scores, the firm said most models from Ford, Mercury, and Lincoln were just middling in reliability. Consumer Reports recommends 75% of the Ford models that were tested, up from 70% last year. General Motors models that scored well include the Buick Enclave and LaCrosse, Cadillac CTS, Chevrolet Corvette, Equinox, Malibu, and Traverse, and GMC Acadia.
The Academy Awards are called "The Super Bowl for Women," often coming in as the second-most viewed annual TV event. But these days if you're looking for winners, it's better to bet on engagement than it is on the number of eyeballs watching. Last year the Emmys, Tonys, Golden Globes, and Grammys all posted modest viewer gains after years of steady declines. The Oscars bounced back to 36 million viewers last year, and we're predicting an even bigger jump this year as consumers, still disheartened by the economy, continue to seek some glamorous, escapist entertainment that doesn't cost them a dime. It does, however, cost advertisers. A 30-second ad is running between $1.3 and $1.5 million, a range that tracks about even with last year's prices even as a newly expanded pool of best-picture nominees might bring broader audiences. But while we wait for the numbers to come in, we'd like to point out that the investment of millions of dollars doesn't have to be done in a vacuum. Engagement metrics can advise advertisers whether they're making good or bad investments, can be done for any brand, for any media, and, most importantly, before you spend your money. Last year we offered up some odds on who would win the Academy Awards based on the loyalty and engagement assessments we use to measure brand and media options. They managed to predict -- with 92% accuracy -- the recipients of the various Oscars. So here are the odds we came up with for the "big" categories this year. These calculations are for entertainment value only. If you're making real bets on the outcomes, you're on your own. Best Picture Avatar: 1:3 The Hurt Locker: 8:1 Inglourious Basterds: 15:1 Up In the Air: 10:1 Precious: 25:1Blind Side: 40:1 A Serious Man: 50:1 Up: 50:1 An Education: 50:1 District 9: 75:1 Best ActorJeff Bridges: 7:2 George Clooney: 4:1 Colin Firth: 10:1 Jeremy Renner: 12:1 Morgan Freeman: 15:1 Best ActressSandra Bullock: 2:1 Meryl Streep: 8:5 Carey Mulligan: 6:1 Gabourey Sidibe: 12:1 Helen Mirren: 25:1 Best Supporting ActorChristopher Waltz: 7:2 Woody Harrelson: 9:1 Stanley Tucci: 10:1 Matt Damon: 18:1 Christopher Plummer 25:1 Best Supporting ActressAnna Kendrick: 8:1 Monique: 9:1 Penelope Cruz: 12:1 Vera Farmiga: 12:1 Maggie Gyllenhaal: 30:1 Best DirectorJames Cameron: 1:3 Kathryn Bigelow: 1:5 Jason Reitman: 15:1 Quentin Tarantino: 20:1 Lee Daniels: 30:1 We wish all the nominees and advertisers "good luck." Actor/Director Clint Eastwood once noted, "There's a lot of great movies that have won the Academy Award, and a lot of great movies that haven't. You just do the best you can." With engagement assessments, advertisers can do better than that.
It is said that when European discoverers first came to the New World some five centuries ago, the natives they encountered literally could not see the explorers' large-masted ships, even though they were moored no more than a hundred yards or so off shore. How could this possibly be? How do you "miss" a 60-foot ship the likes of which you've never seen before? Well, the thinking goes that to the natives, their world ended at the shoreline. It was simply not possible for anything to exist beyond the water's edge. To them, these men magically appeared out of nowhere. Even the wisest among them could not see beyond this paradigm. Now consider how leading business people every day fail to see the boats right in front of them. How many times must an organization get blind-sided by new competition that comes out of the blue simply because it is unable to see beyond its own "shoreline?" Take Sony as an example. How did the company not beat Apple to the iPod? And IBM. How were the company's PCs made irrelevant by a 20-year-old college student building computers in his dorm room? There are plenty more examples. How did Xerox totally miss out on the desktop publishing phenomenon? How did Polaroid, the company that invented instant photography, somehow end up AWOL in the development of digital photography? In short, how did these companies, with resources, market share and intelligence the newcomers could only dream of, get beaten at their own game? I would submit that they were unable to see beyond their "water's edge." They accepted as gospel the prevailing paradigm, and saw it as static, as something that would never change. After all, all these companies had an unprecedented share of the market. Why monkey with success? With that mindset, the term "innovation" gets defined as finding ways to make your product or service incrementally better. Add a few more bells and whistles. Find ways to cut production costs. Release it in some hot new color. Cut R&D, because we already have a product people love. What you end up with is a Walkman that plays both sides of the tape. Settling for incremental improvements is rarely the road to long-term prosperity. So how do you keep from "pulling a Sony?" For starters, develop a flanking strategy. Dedicate a meaningful budget to explore "what might be." Treat this as "couch cushion money," not accountable to any ROI analysis. Assign your best big-picture thinkers. Talk to customers, not just about how they like your product today, but what they expect in the future. Look at emerging technologies and trends, and ask how these can be harnessed to improve future offerings. Above all, it helps to believe that the impossible is (somehow) possible. That the world might not end at the shoreline, as we've been taught all these years. And continually ask yourself, what boats are you not seeing?