A true return on investment
Editor’s note: Barry Shepard is vice president of marketing, StarKist Seafood, Heinz North America.
When StarKist Tuna in the Flavor Fresh Pouch first landed on store shelves in September of 2000, it was heralded as the biggest innovation in the category since canned tuna was introduced in the 1920s. This new product breathed new life into what had become a mature industry.
We knew that advertising would play an essential role in promoting continued growth of this product line. To maximize our advertising’s success, we used measurement at pivotal stages during the advertising development and airing process. An after-the-fact return-on-investment analysis proved that taking this “best practice” approach was an excellent business decision.
The tuna industry in 2000
Developed in the early 1900s, canned tuna had become a stagnant industry in the United States by the end of the century. To make matters worse, tuna prices had hit a 34-year low as a result of an industry-wide inventory glut. Using “me too” packaging and products, suppliers in the $5 billion dollar category attempted to compete on the basis of price — leading consumers to view canned tuna more and more as a commodity item.
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As the world’s largest producer of canned tuna, with over 40 percent share of the category, we took the lead in transforming this environment (Figure 1). We changed our consumer marketing strategy in support of innovative new products that could establish brand equity around a superior taste position. Branding would drive product development and pricing, rather than allowing price to lead the way. We would restore excitement to the category for retailers and provide them benefits in the form of lower merchandising costs and higher profit margins. The industry itself would evolve as growth in the pouch category built equity, reduced swollen stocks, and moved the category away from price competition.
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The vehicle for this change was in the form of an easy-open, vacuum-sealed foil pouch. The new technology afforded shorter cooking and processing times, leading to a fresher taste, firmer texture, and no draining. BASES results reflected extremely strong consumer interest in both the StarKist pouch idea and product (Figure 2).
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Advertising development
In January 2001 - after a nearly 10-year hiatus - Charlie the Tuna returned to national television to introduce StarKist’s Tuna in the Flavor Fresh Pouch. As the pouch product moved from new to established, the challenge for us and Northlich, our Cincinnati-based advertising agency, was to develop copy that would drive sales and contribute to the success of StarKist tuna in a pouch as an established product. We held ourselves accountable for the product’s success and followed a rigorous, empirically-based advertising process, using the following best practices to develop our “Tuna in a Pouch” advertising (Figure 3):
- testing rough ads to determine the most sales-effective versions for further development;
- identifying improvement opportunities that might be incorporated in the finished ad;
- testing finished executions to measure the sales potential of the versions that actually air;
- using planning software to maximize the selling power delivered to market.
As an initial step, our creative team produced and ARS-tested alternative ways of executing the “fresh taste” strategy in animatic format. In May 2001 our agency produced two animatics (Figure 4), then tested them to determine the sales effectiveness of each. The two animatics achieved similarly strong ARS Persuasion levels for the total StarKist line (both at about 10), indicating that airing of the ads would add incremental volume rather than cannibalizing our canned tuna. However, “Fulton Fish Market” significantly outperformed “Life Raft” for the Flavor Fresh Pouch, with ARS Persuasion scores of 13.8 and 9.2, respectively. These advertised-product scores indicated that the “Fulton Fish Market” execution was better at selling the pouch.
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To help us better understand the animatic results, we looked to The ARS Group’s ARS Validated Drivers, a battery of strategic and content elements that are related to sales effectiveness. There are five strategic drivers: brand differentiation, new-product or new-feature information, product convenience information, competitive comparison, and superiority claim. Of these five factors, brand differentiation has consistently been shown to be the one most strongly associated with more sales-effective advertising.
An examination of these strategic elements in relation to the two animatics revealed that both roughs featured superiority and a competitive comparison to canned tuna. “Fulton Fish Market” also benefited from the use of the brand-differentiating message which demonstrated superior freshness versus canned tuna. “Life Raft” incorporated “new” information, but not in a way that differentiated the StarKist pouch from other products in the category.
From this strategic profile, coupled with consumer playback, it was clear that we could improve selling power even more by making the following improvements to the final live commercial:
- dialing-up StarKist’s brand-differentiating “fresher and better taste” product benefit, and
- including information about our new single-serve pouches, which had just been added to the “tuna in a pouch” line.
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Our creative team used this learning to produce “Fisherman’s Wharf,” a finished execution featuring real San Francisco fishermen engaged in a live, unscripted taste test comparing the freshness and quality of the Flavor Fresh Pouch to canned tuna (Figure 5). Consumer playback revealed that this finished execution was about three times more effective than the “Fulton Fish Market” rough at communicating the “fresher” superiority and the taste appeal of StarKist Tuna in a Pouch. The playback of “new” in “Fisherman’s Wharf” was twice as high as the “new” playback from “Fulton Fish Market.” Most importantly, the finished execution was nearly twice as persuasive as the superior animatic version. In fact, the score of 21.8 for the advertised pouch was the highest ARS Persuasion level achieved by an established brand in 2001.
In-market impact
Given the ad’s score, our premium price, and our planned spending level, the ARS Outlook planning tool estimated that StarKist Tuna in a Pouch would achieve an advertising-related share gain of +1.0 points in the quarter the ad went to air. The ad began airing nationwide on June 11, 2001, and - as projected - we saw a 1.1-point case share gain in the advertising quarter. The “what-if” software projected a share gain of +1.6 points for the total StarKist line. When the ad aired we saw a 1.7-point share gain during the advertising quarter, again matching the ARS Outlook estimate.
Wearout learning helps gain additional impact
The ad went off air in early July. Our partners at The ARS Group advised us that we were “leaving money on the table” - that additional airing behind the ad would continue to significantly impact share.
This recommendation was based on their wearout model. In the early 1980s, The ARS Group uncovered evidence suggesting that advertising’s selling power gets used up, or wears out, in a predictable fashion; that is, as GRPs are spent behind an execution, the ad’s persuasive power declines, consistently, and the relationship between GRPs and this decline in persuasive power is very strong (Figure 6).
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The precision of the model makes it useful in planning the optimal number of executions for a given media plan, planning the optimal allocation of media among advertisements, and determining when commercials have worn out and should be refreshed. In our case, the model revealed not that our ad had worn out, but that it had a significant amount of selling power left. In fact, the planning software projected that our “Fisherman’s Wharf” execution still retained over 80 percent of its selling power! We took this recommendation to management, and they approved a few more million dollars for our TV media budget. The ad went back on air in January. Tuna in a Pouch share gain for the following quarter was 1.3 points, a bit higher than the Outlook estimate of 1.0 points for the expected advertising contribution.
Better practices lead to higher performance and ROI
We calculated the return on investment for this marketing and research activity based on the incremental sales and profits achieved versus the cost of the advertising activity, including production and development, media, and The ARS Group’s Best Practice tools. The results from the initial advertising quarter yielded an ROI of 76 percent, an enormous improvement over the break-even ROI we had expected for the quarter using a traditional approach. Incorporating the costs and incremental profits involved with the unplanned - or second - flight, we were up to 368 percent return on our TV advertising activity.
In addition to producing the “Fisherman’s Wharf” commercial itself and achieving an outstanding ROI, this experience provided us with a long-term sustainable campaign for the Flavor Fresh Pouch as well as the more recent introductions of our portable single-serving Lunch-To-Go kits and Tuna Creations, a line of flavored pouch tuna.
Our experience has not only shown us the importance of using a quality measurement to gauge the effectiveness of our advertising, but of applying this measurement and related planning tools throughout our development and airing processes.
Continues to build
The StarKist brand and agency team continues to build on the StarKist Tuna in a Pouch project. John Sicher, brand manager for StarKist, is using the information to help create further success with a new line extension, Tuna Creations. By adopting the measurements and tools needed to accurately gauge the sales effectiveness of the introductory advertising and determine the quarterly sales impact it will generate, the brand and agency team are offering quantitative assurance to the retail and sales areas that the forthcoming introductory advertising will move product.