With Attendance Down, Weight Watchers Looks To Revamp Its Marketing

Weight Watchers International, which recently tapped McCann-Erickson as its ad agency, is hoping a new national TV campaign will attract more people to its weight-loss meetings.

The problem with the previous advertising is that it had "insufficient impact," and didn't "distinguish Weight Watchers from the rest of the noise in the weight-loss space," David Kirchhoff, president and CEO, said in a conference call, delivering the company's first-quarter results. "As a brand, we already have nearly ubiquitous awareness. But these ads fail to convey the many new and innovative things that are happening at Weight Watchers."

The company had $70.8 million in marketing expenses this quarter, up from $53.9 million in the first-quarter of the prior year.

Kirchhoff attributed a surge in the company's online revenues to the impact of its first-ever national TV campaign for its online products, and said a switch from spot to national TV was partially responsible. Online revenues gained 14% in the quarter. But attendance at meetings--the backbone of the company's business-continues to be disappointing. Currently, Weight Watchers International holds over 50,000 weekly support meetings.

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The company also said ongoing clinical research is revealing that customers attending meetings and using its e-tools are having better weight-loss results than those attending meetings alone, "setting a new gold standard in weight loss."

Weight Watchers isn't the only player to be affected by the growth in online dieting. Marketdata--which estimates that the total U.S. weight loss market should reach $58.7 billion this year, up from $55.4 billion in 2006--anticipates that more and more dieters will choose online diet advice as a more cost-effective alternative. In addition to Weight Watchers, other companies likely to be affected are NutriSystem, LA Weight Loss and Jenny Craig.

For the first quarter, Weight Watchers says, revenues rose 17%, to $399.4 million. Net income slid 5.6%, to $53.8 million, primarily due to higher interest costs.

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