COMMUNICATIONS REPORT: INDUSTRY ON INDUSTRY

Views from the trenches Shortly after I joined PepsiCo four years ago, I volunteered to create an "Art of Promotions" training course for midlevel marketing executives across our Pepsi-Cola and Frito-Lay divisions. I passionately signed up for the many hours it took to develop the course because I recognized the large dollar commitment we and many other companies are making to promotion. For some brands, the promotional spending line on the P&L exceeds the media line, yet we in marketing don't ordinarily give the time and attention to the development of promotional briefs and evaluation tools that we give to advertising. Advertising is key to building long-term brand value, defining your brand positioning and personality distinct from competitors and "opening the door" to encourage consumers to purchase your brand. But price, in-store visibility and other factors can interrupt the intended purchase. Consumer promotion can be a powerful weapon to add value and close the sale. Done well, it can also be a brand builder. For promotion, like advertising, the same tools are critical: writing a concise and targeted brief, giving effective feedback on core ideas presented and nurturing those ideas into powerful yet simple programs to ultimately impact sales. Of particular importance to consumer promotion, is doing all the hard work on the essentials. "The devil is in the details" when it comes to successful promotions. All this becomes even more challenging in today's consumer promotion environment. Clutter continues to affect every area of marketing, and promotion is no different. In pursuit of breakthrough ideas, we see an escalation of sports marketing, entertainment marketing and cause marketing. Plus, we see more advertising in support of the promotions to drive awareness and more avenues like the Web to interact with consumers. Vertically integrated programs that include advertising, promotions, sampling, public relations and the Internet can help marketers break through the clutter. M&M Mars has done a tremendous job with this. If M&M's is adding a new color or seeding an imposter M&M, you see it on its packaging, in store, in its advertising and through PR. In each case, the M&M character embodies the personality of the brand and reinforces its "play value." The same holds true for its Snickers brand. M&M Mars tied it in nicely with sports imagery and the idea that if you're "not going anywhere for a while," you might need a Snickers bar. The promotional platform reinforces that it's OK to eat the candy. Heck, athletes do. The "Pepsi Challenge" is another example of vertical integration. It is a "retrial" vehicle that adds energy and excitement to the cola category and encourages people to reconsider their beverage options through everything from local booths to national advertising. In store, consumers soon will be able to take the Challenge and bring a Challenge kit home with them, while photos, schedules and home kits are available at http://www.pepsi.com. In today's economy, a consumer's perception of value is changing as well. Retailers react by doubling coupon values. Marketers try other avenues, such as partnering with other companies--as in the case of Coca-Cola's partnership with Universal and our partnership with Yahoo!--to create added value. Giving consumers something they can't get anywhere else is another way to increase the perceived value of your promotion. The McDonald's Beanie Baby promotion drove Happy Meal purchases because there was no other way to get the mini Beanie Baby. You couldn't buy it in a toy store. Guinness also has latched on to a unique and valuable concept--the chance to own a pub in Ireland. Don't underestimate the appeal of that offer! At Pepsi, we're bringing a unique premium to consumers in a summer promotion called "Choose Your Music," in which buyers of Pepsi products earn points toward a CD they create. Not only is this an $18 retail value, but the breadth of 180 songs by 80 artists can't be found anywhere else. Clearly, increased organizational focus, vertical integration and attention to value are all critical components of successful promotions. But one of the hardest things to do is drive short-term sales while enhancing the brand's long-term value. If you can do this, then you reap multiple benefits from your promotional spending. We track consumers' perceptions of our brand so we can read the lasting impact of our promotions in addition to advertising. Four years ago, "Pepsi Stuff" dramatically impacted consumers' perceptions of Pepsi. We imagine this also will be the case when we launch a very 21st century idea--"Pepsi Stuff" powered by Yahoo!--this fall. And every time we run alternative sports offers for Mountain Dew, we reinforce and contribute to Dew's intense positioning. If a promotion is simple, links to the brand's values and derives benefit beyond driving short-term sales, it's particularly worth the extra money that many companies are spending. By Dan Klores The new age of the entrepreneur has shown clients that public relations in the classic sense may be more important than its big brother and sister in advertising. It is the old-time tactic of PR--the ability to create news--that works. And this result has been long feared by "mediaphobic" corporate communication types. Entities ranging from successful technology and dot-com companies such as AOL, Microsoft and Amazon.com to the eminently progressive Starbucks, Ben & Jerry's, Ian Schrager Hotels and Crunch Fitness have thrived because they have acted aggressively and creatively in shaping and telling their stories to newspapers, magazines and TV outlets. They understand you can win by using PR at the top of a batting order. If, however, they would have followed the advice of rigid brand managers, frightened university J-school professors and/or the PR †berhonchos, whose first and foremost goal is to provide more varied and thus costly services to clients, their businesses may have been successful but with smaller profit margins. At the same time, the latest heartthrobbing word humming around global marketing suites is integration. Integration is a wonderful concept--it always has been. It comes, however, with resistance and fear. The idea that culturally different advertising, sales promotion, direct sales, product placements, special events, new media and PR pros can operate in harmony won't work until some major behavioral changes occur. The PR/communications industry must re-educate itself so the media-phobe stiffs in the corner offices of Fortune 100 companies and the archaic J-school professors--whose idea of PR is a press release, neatness and an appropriate response--learn to master the skills of creating news. It isn't a coincidence that when a CEO or celebrity has a big problem, their first two calls are to their attorney and PR advisor. A great PR pro is a great news editor. He feels and knows news. He treats editors and reporters as he does clients. He understands they are partners in helping to build a client's story, not a necessary evil. Mediaphobes push a community of paper. It is understandable that they distrust the media--they hardly ever deal with it. Unfortunately, most PR people can't even name three editors at The New York Times. It's not their fault. Training is terrible. Many people enter the profession by accident. They are taught that if they have a good personality, PR may be for them. But recent times have clearly exhibited that PR is a field for intellectually quick warriors who know when to take chances. The lessons taught by so-called "perception managers" at mammoth agencies during the last 30 years, though responsible for their own financial growth, must be severely scrutinized. The new world of high- tech and dot-com entrepreneurial efforts has shown marketers that it's the lessons of 30 years before--the lessons of politics, showbiz and even sports, which helped to create Dempsey, Bogart, Monroe, Elvis, Ike, Kennedy and the Beatles--that are most useful today. Concurrently, a full-scale change must take place at J-schools. PR and communication skills need to become the minor to intensive four-year training in news making. Heads of advertising agencies need to open their minds to the true value of real and equal PR partners. Most of your underlings will feel threatened. But, if you are truly serious about integration, then let go. Dynamic leaders must step forward. For disciplines to work together, one person must lead the charge. He or she has to embrace, coax, define, demand, applaud all his forces. It's about follow-up, not about semiannual corporate meetings. I was part of a $280 million pitch with Messner Vetere Berger McNamee Schmetterer/Euro RSCG last fall. We didn't get the account. The attitude of everyone--ad agency, PR firm, minority agencies, media buying groups, political consultants--was all for one. We walked out of the door in better shape than we walked in, having learned to work as a team. Leadership is central to integration, and leadership is focus. General Motors is the primary sponsor of documentary filmmaker Ken Burns, while N.W. Ayer & Partners lead the charge. It is no accident that Burns' January 2001 10-part PBS series, Jazz in America, has marketing partners ranging from Sony Music and the NBA to the United Negro College Fund, Starbucks, Alfred Knopf, Time Warner, VH1, veterans organizations and even Harlem's Abyssinian Baptist Church. Ayer provided one very focused leader. Brand managers must rely less upon research and become much more flexible. The rigid two-sentence definition of their brand is boring, outdated and costly. Brand managers don't understand news making. As a result, they often accept lavish promotional ideas that cost 100 times their worth. If their brand has an ad budget that purchases repetition, they can get away with it. If not, it's a special appearance/POS coupon waste of time. Brand managers love to talk about process, deliverability and cumulative advertising value. By definition, this implies PR must catch up with paid media, as opposed to being on equal footing. The work of the new PR professional is interesting, often provocative, and as righteous and valuable as any other service business. By Bobbie Casey Howell Imagine for a moment that you are a soup company. You spend years formulating a great-tasting soup. You design a memorable, attractive label that reflects your brand. Now imagine that the label falls off half the cans before they hit the grocer's shelf. Big waste. Often, when a company decides to analyze or communicate with the names gathered from its Web site, it is shocked to discover that anywhere from 10 to 50 percent of the names are not mailable or undeliverable. If they are lucky or have received good advice, they will have discovered the faults in the Web site database before printing, postage and other expenses are incurred--before the label is affixed to the can. By contrast, professionally maintained mailing lists available for rental rarely have more than 5 percent of their files unmailable or undeliverable. (No one has 100 percent accuracy given the move rate alone.) Some of this difference stems from the nature of the Internet. But most of the problem is, in fact, curable. What are the causes? The first problem comes from asking too much too soon. For many consumers, one of the primary values of the e-world is its anonymity. They can explore products and pricing and ask "dumb questions" without the embarrassment of having to confront an unprepared sales or customer-service person. A second primary value of the Internet is the concept of fair exchange. To ask a visitor to lift the veil of anonymity, a Web site needs to show the benefit of doing so. Companies that require name and address registration before offering an adequate preview of its site and its contents are in trouble. It's the equivalent of being too forward on a first date. A direct consequence is a large number of "flame" registrations--people giving false names and addresses simply to view the site. Many companies process registration files through profanity checks to weed out obvious flames, but many visitors are more genteel. A quick look at the files often reveals names such as "Bond James Bond" and "Pikachu Pokemon." Given the relative youth and testosterone levels of many Web surfers, there is also a fascination with "Satan." (Who says the public schools are failing us?) Beware of addresses beginning with 666 and ZIP codes that read 66666. Additionally, visitors will frequently enter the easiest information they can--single characters for first and last names, no vowels, ZIP codes reading 11111, etc. Sites that generate a substantial number of flames or suffer very low registration-to-visitor rates should carefully examine the placement of the registration page within the site and the vigor with which they seek information. The second problem is more oversight than shortsightedness. Many Web marketers fail to realize that a large number of surfers live outside the U.S. When required to register, they are often forced to supply bogus information, as pull-down menus and other options to identify oneself as a foreign visitor often don't exist. The result is a registration file with far too many 90210 ZIP codes--the only one they know, and one that can appear legitimate. Allowing registrants to supply accurate foreign addresses will make it easier for marketers to reach those people--or eliminate them from the list if need be. Also, our postal system delivers to Puerto Rico, the Virgin Islands, Guam, American Samoa, and foreign service and military installations. Web marketers should consider this as they design pull-down menus and subsequent communications. These simple and not-so-simple fixes can reduce the cost of missent mailings (remember the soup can label problem) by 60 to 75 percent--an investment that usually pays off to clients in its first communication.

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COMMUNICATIONS REPORT: INDUSTRY ON INDUSTRY

Dawn Hudson

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Dawn Hudson