Monday, March 23, 2009

Why Sponsorship is Growing even in this Economy!

Changes in the economy, demographic shifts and the fragmentation of media have all contributed to sponsorship’s growth. Some of the largest factors behind sponsorship’s rise are:

Decreasing efficiency of measured media
Costs for traditional advertising continue to increase, while ratings and readership decline. On top of that is an even more basic problem: consumers are not paying attention to ads.

The situation is particularly acute in television. Where once the VCR’s fast-forward button was the greatest enemy faced by TV ads, the popularity of personal video recorders such as TiVo and ReplayTV has made viewers’ ability to avoid commercial messages even easier and more automatic.

Sponsorship, on the other hand, provides opportunities for embedded advertising, a fail-safe delivery system where messages are incorporated right into the action.

Changing social priorities
As issues such as poverty, the environment and AIDS loom larger, there is a growing realization that the needs of society and the interests of business overlap. Buyers are demanding to know where a company stands before they purchase its products. Making the world a more livable place is a prerequisite to achieving consumer affinity. Sponsorship, which allies companies with community responsibility and improved quality of life, is precisely the kind of statement consumers will respond to. When a company sponsors, it is providing something for its customers – not making some media conglomerate richer, but saving a high school sports program or underwriting a symphony performance.

Shifting personal values
Conspicuous consumption has been replaced by cashing out. Shopping for shopping’s sake has become déclassé. Tapping into today’s consumers’ elusive will to spend requires turning the buying experience into something larger than just acquisition. Sponsorship provides companies this opportunity. It says to the potential customer: “Buy this product not to indulge yourself, but to help make the world a better place.”

Increasing need for two-way communication
In response to the fragmentation of the mass market and mass media, companies are looking for alternative methods to communicate sales messages. The idea is to find delivery systems that allow companies to deepen their relationship with customers.

Sponsorship, which is the most direct channel of communication, is tailor-made for this environment. It reaches people in an environment that matches their lifestyle rather than intrudes upon it. It is not a passive monologue that interrupts a TV show, or comes as a piece of mail that needs to be dealt with. Sponsorship speaks to the public, not at them, creating opportunities for two-way dialogue.

High consumer acceptance
While traditional media is less effective than ever, much of the new media alienates consumers. For example, 75 percent of Americans view phone solicitation as an invasion of privacy, while 81 percent find ads in stores to be distasteful, according to a Brandweek study. In addition, 69 percent of consumers who buy or rent movies on video are annoyed by advertising before the film, according to a Gallup survey conducted for Advertising Age.

On the other hand, public response to sponsorship has been overwhelmingly positive. Sponsorship is viewed favorably because it is seen as a form of marketing that gives something back, that benefits someone else in addition to the marketer. It implies a degree of altruism absent from more commercial types of marketing.

For example, eight out of ten respondents to a survey conducted in Britain said sponsorship makes “a positive contribution to society.”

The following is a sampling of recent market research regarding sponsorship’s acceptance and ability to influence what and where people buy.

Cause marketing. Eighty-four percent of U.S. adults said they would be likely to switch brands to support a product that associated with a cause they cared about, according to the 2002 Cone/Roper Corporate Citizenship Study. According to Cone/Roper’s latest Cause-Related Trends Report, cause marketing had the strongest impact on people who Roper classifies as “Influentials.” This group – about 20 million strong – are opinion makers and group leaders. By a two to one margin (41 percent to 20 percent), Influentials are more likely to have made a cause marketing purchase than consumers at large.

Festival sponsorship. Eighty-five percent of attendees surveyed at the city of Chicago’s Gospel Festival could name one or more of the event’s sponsors, according to a survey conducted by research firm McKeon & Assoc. of Joliet, Ill. When surveyed one month later, 70 percent could still recall a sponsor. Eighty-two percent attested they would be more likely to purchase a product made by a company that sponsored Gospel Fest. The figures held across all age and earning categories, with sponsor loyalty actually increasing with income level.

Arts sponsorship. British Petroleum found a positive relationship between arts sponsorship and a company’s image and reputation. BP also examined public reaction to the BP logo built into the set of a performing arts event. Eighty-one percent of respondents thought the logo was noticeable. Of those, 88 percent said it was very acceptable or quite acceptable. Only two percent thought it was quite unacceptable; no one found it very unacceptable.

Sports marketing. Given the choice between two products of equal cost, 72 percent of NASCAR fans would “almost always” or “frequently” choose the brand they associate with NASCAR over one that is not associated with NASCAR, according to Newport, R.I.-based Performance Research.

Friday, March 20, 2009

Check out Jacks new Office Space!

New site from Jack in the Box allows you to have Jack call your friends wit a message....Classic!

Thursday, March 19, 2009

Starbucks: Not as Expensive as You Think....Really?

CEO Sets Campaign to Combat Image Coffee Chain Is 'Poster Child for Excess'

Distressed that Starbucks has become the "poster child for excess," CEO Howard Schultz said the coffee company plans to run an ad campaign proving its coffee isn't expensive.

Howard Schultz

"There's a myth out there that there's this $4 cup of coffee at Starbucks," Mr. Schultz told shareholders at the company's annual investor meeting earlier today. "For whatever reason, Starbucks Coffee Co. has become the poster child for excess, and if you want to be really smart, you should cut out that $4 cup of coffee."

Not going to stay silent
Mr. Schultz, noting that half of the chain's beverages cost less than $3 and one-third are priced less than $2, admitted that Starbucks has been defined by its competitors. "Don't let anyone tell you their coffee is the same as Starbucks because it's not," he said. "We've been silent about these issues, but I can assure you we're not going to be silent for too long." Starbucks has also launched "value pairings," such as a breakfast sandwich or muffin and a drink, for $3.95.

Forthcoming advertising will attempt to convince consumers that Starbucks products aren't as expensive as they are perceived. Mr. Schultz said to expect social-media efforts, internet advertising, and more and sporadic TV ad buys he refers to as "brand sparks."

The company's presentation ended with a music video (rather than the usual live musical performance) of street musicians from around the world performing "Stand By Me." Mr. Schultz said the song would be incorporated into upcoming marketing efforts.

Starbucks has long eschewed traditional advertising, but has placed a number of TV ads since moving its business from Wieden & Kennedy to Omnicom Group's BBDO, New York, in October. Mr. Schultz said that these ad buys have generated strong response with consumers. The chain gave away 2 million cups of coffee on Election Day, with a promotion by way of an ad during "Saturday Night Live." He said that the spike in traffic also resulted in incremental sales and the chain was profitable for the day.

Starbucks later partnered with Oprah Winfrey on an Inauguration Day-related volunteerism push. The chain did a limited ad buy, encouraging Americans to stop by Starbucks and get a free coffee in exchange for pledging five hours of community service before the end of the year. The day after President Barack Obama's Inauguration, Ms. Winfrey plugged the promotion on her show. Mr. Schultz said that the chain had racked up 1.25 million hours in pledged community service during the promotions two-week window.

Plans for Via instant coffee
Mr. Schultz also gave some insight into Via, the company's foray in instant coffee, as first reported by While the global instant-coffee market is valued at $17 billion, he said only about $1 billion of that is in the U.S. And Via, he hopes, will lure some people to convert from brewed coffee. Of the 65 billion cups of coffee brewed in the U.S. every year, Starbucks has only about 4% of the market. The company will attempt to change consumer behaviors at home, where 25% to 30% of coffee is wasted, and at work, where many people don't like the coffee that is sometimes offered free of charge in company kitchens.

Starbucks is testing Via in Seattle, without advertising, and in Chicago, with TV ads, in-store displays, and an outdoor push that has included on-the-street sample distribution, bus and shelter ads, and a fleet of hybrid cars marked with the Via logo. BBDO has anchored the Chicago effort. Mr. Schultz said that Starbucks would use the pilot period to determine the efficacy of the advertising. Via will launch nationwide this fall and internationally next year.

Starbucks is, of course, attempting a complicated turnaround. In January, the company reported earnings were down 69% to $74 million, due largely to restructuring charges and same-store sales down 10% in the U.S. alone. At the time, Mr. Schultz said the company was beginning to see improvement in its business. Starbucks reports earnings again next month.

Friday, March 6, 2009

Pepsi Throwback and Mountain Dew Throwback

Pepsi Bets on Soda With All-Natural Ingredients

PepsiCo is adding three new soft drinks to its portfolio as part of the company’s “Refresh Everything” strategy.

The lineup includes a premium all-natural cola, called Pepsi Natural, to be released this month in 10 select markets, along with limited-time throwback versions in April of Pepsi and Mountain Dew. All three products will be made with all-natural sugar, and aim to take customers in a different taste direction.

Pepsi has been prepping this “natural” launch since 2006 as an answer to consumers' concerns about high fructose corn syrup.

Pepsi Natural is packaged in a sleek 12-oz. glass bottle and will be available in retailers’ premium or natural food aisles as single-serve or four-pack offerings. The cola is amber hued due to natural caramel, kola nut and apple extracts, and is made with “lightly sparkling water.”

Distribution includes Chicago, Cleveland, Pittsburgh, Los Angeles, San Diego, San Francisco, Seattle, Portland, Ore., Las Vegas and New York.

The two memory-lane beverages, Pepsi Throwback and Mountain Dew Throwback, will have 1960s and ’70s inspired retro packaging and a flavor distinct from the current beverages. The retro soft drinks will be available for eight weeks starting April 20.

“Pepsi Natural and the ‘Throwback’ duo give consumers the opportunity to refresh how they experience soft drinks,” said Frank Cooper, vp of portfolio brands, Pepsi-Cola North America Beverages, in a statement. “We’re continuing to offer a variety of products across different beverage categories, with a splash of nostalgia and entirely new experiences.”

PepsiCo spent $214 million on U.S. media for its soft drinks in 2007 and $177 million last year (not including online initiatives), per Nielsen Monitor-Plus.

Wednesday, March 4, 2009

Cereal going Old School

NEW YORK ( -- If food can be comforting, how about packaging? With consumers embracing old-world classics such as casserole, some marketers are trying to get on the bandwagon by trotting out some old-school style.

Cuckoo for Cocoa Puffs: General Mills has given Target a month-long exclusive on retro box designs for some of its best-selling cereals.
Cuckoo for Cocoa Puffs: General Mills has given Target a month-long exclusive on retro box designs for some of its best-selling cereals.

General Mills has given Target a month-long exclusive on retro box designs for some of its best-selling cereals, Cheerios, Honey Nut Cheerios, Lucky Charms, Cocoa Puffs and Trix. The package-food company is giving away T-shirts with the old designs as part of the deal. Consumers with five proof-of-purchase labels will be entitled to a free shirt at Consumers who would rather just buy one can go to the site and spend $5 to don a defunct Mills design.

Taken from the archives
The promotion, which began in stores Feb. 15, runs through March 21. The box designs were taken from General Mills archives and given minor tweaks, such as updated product shots. But for the most part, the designs are the same, with original games and activities.

Target did not immediately respond to requests for comment.

"Our brands have a history that spans many young adults' childhoods," Kerry DeLaney, associate marketing manager-Big G Cereals, said in a statement. "The retro-box concept is a fun and unique way to create a package design that appeals to Target's guests."

Although the promotion is still running, General Mills spokeswoman Shelly Dvorak said the company is very pleased with initial results. "We have even seen blog posts by consumers talking about the retro boxes," she added.

General Mills has avoided direct marketing, leaving promotion to bloggers. Andrew Gibbs at TheDieLine wrote, "My initial reaction was one of refreshing surprise -- what a pleasant treat for someone like me, who appreciates the aesthetics of yesteryear." He added, however, that such designs may have limited appeal to children, the products' ostensible consumers. "Perhaps the obvious conclusion is that these retro designs are aimed at adults who would otherwise not buy anything promoted by a cartoon rabbit," he said.

Deals have cachet
Dan Ochwat, editor of Shopper Marketing Magazine, said General Mills and Target are likely looking for a short spike in business, because the promotional window is so small. But exclusive deals certainly have cachet.

"Exclusivity is what they're all looking for now," he said. "That in these times is how you strike gold." One potential problem, he said is that many private-label packages have a retro look, and marketers may risk looking more like one of their lower-priced imitators.

Virginia Valkenburgh, senior VP of Cannondale Associates, a Wilton, Conn.-based marketing consultancy, noted that Target is known for seeking out exclusive deals. She described the retro promotion as particularly current. Consumers want to be comforted, and they are cooking and eating more at home, she said.

"It's going to make the moms and the kids feel good," she said.