Two brands show how it’s done
For the brand-builders among you, the October 31, 2005 edition of Fortune had a quick, informative look at how some of today’s top brands achieved their lofty status. For example, power-tool maker DeWalt, a unit of Black & Decker, has raised itself from near death by standard and not-so-standard methods. First, it started making better products (never a bad idea), which improved customer perceptions and allowed the firm to charge higher prices. Then, after its market research told it that professional tool users held the DeWalt name in high regard, the company decided to aim most of its marketing at contractors, who account for 69 percent of U.S. tool sales. Tool-toting reps in DeWalt-yellow trucks descended on construction sites around the country to have workers test and critique DeWalt products in real-world settings. The caravans also found their way to Home Depot and Lowe’s parking lots, where contractors and DIYers alike could try out the tools. The company was also savvy enough to make inroads into two booming markets: it has been investing in NASCAR since 1993 and has been paying special attention to Hispanic consumers, who make up 20 percent of its customer base.
But the company also knows when to ease off the promotion throttle. For example, it doesn’t do TV commercials and it doesn’t sell through Wal-Mart. As a result, the brand has become an aspirational item for DIYers. “The less we talk to do-it-yourselfers, the more they want our product,” said John Schiech, president of the division that includes DeWalt.
The article also profiled another standout: the Eggo waffle line from Kellogg, which has used targeted line extensions to heat up sales. The company identified two core constituencies - kids and harried adults - and set about finding ways to meet their needs. In 2000, Eggo introduced limited-edition waffles for kids featuring icons like Sponge Bob and Spider-Man. Adults were looking for healthy fare that was easy to prepare and easy to eat. So Eggo created three varieties co-branded with Kellogg’s NutriGrain cereal line and later introduced a line of products that can be eaten while driving. The result: the Eggo brand was on track to produce a record half-billion dollars in sales in 2005.
“Breakaway Brands,” Fortune , October 31, 2005
Is interactive TV finally here?
TV networks and marketers roiled by viewers’ ad skipping may find safe harbor online, according to a BusinessWeek article. Though broadband Internet access is far from widespread (the Pew Internet and American Life Project reports that just over half of home Internet users have high-speed access), a handful of TV networks are rolling out new Web-only channels that take advantage of broadband’s capabilities.
From Comedy Central’s Motherload to MTVU Uber and ESPN360, the Web channels will augment segments of highlights from broadcast shows with all-new and Web-only features. Some execs foresee using the Web nets as a testing ground for shows that may make the leap to the big(ger) screen.
In addition, the online networks can enhance brand loyalty and give broadcasters a way to recapture ad spend that has moved away from traditional TV. E.W. Scripps, for example, owner of HGTV and the Food Network, sees promise for its kitchen design site (which was unnamed at press time), eyeing the more than 25,000 bath and kitchen stores in the U.S. as prospective buyers of classified ads on the site.
As with regular TV, content is king. What advertisers want most is to be next to video. “There is more money than the marketplace can handle right now for good, high-quality streaming video,” said Jeff Meyer, a senior vice president for interactive sales at Scripps. As the article noted, Microsoft Windows XP recently signed a deal to be the sole sponsor of a 13-part, broadband-only cooking series featuring the Food Network’s Dave Lieberman.
“TV’s New Parallel Universe,” BusinessWeek , November 14, 2005
Coming soon from TiVo: ad searching
TV viewers are fond of ad zapping. Will they warm to ad searching? TiVo Inc. hopes so. A November 2005 Wall Street Journal article announced plans for a spring 2006 launch of a new system that will let TiVo users record and search for commercials for products and services that interest them. TiVo is working with media-buying firms Interpublic Media, OMD and Starcom MediaVest Group - along with Dallas ad agency Richards Group and the Comcast Spotlight ad sales division. “We’re flipping the dynamic,” said TiVo President and CEO Tom Rogers. “If you are in the market for a product, and you have no idea when commercials related to that kind of product are going to appear, it doesn’t help you very much.”
The system will let TiVo users create a profile of products on their TV screens using categories such as automotive or travel or keywords such as “cruises.” TiVo will download relevant ads to TiVo recorders over the Web or deliver them, for those without broadband, via traditional broadcast signals. Advertisers can select the preferred categories and keywords their ads will be associated with. Talks are underway to determine pricing for the keywords but one option is a bidding system similar to that used for Internet search engines.
As the Journal article stated, as consumers’ ability to search video content grows closer to matching their ability to search Web content, ads will need to evolve in two ways. They will either need to generate enough buzz to cause consumers to seek them out or they will need to contain less hype and more substantive information.
“TiVo Users Soon Can Search for Ads,” Wall Street Journal , November 28, 2005