This is not your father's advertising.
The decades-old model of blanketing the airwaves with snazzy, expensive television commercials is coming under unprecedented pressure from the advent of commercial-skipping devices like TiVo and the fragmentation of audiences among new TV channels, video games and the Internet.
So with consumers becoming harder to reach, marketers are increasingly turning to new, nontraditional approaches to hawk their products.
Below is a look at those and other trends reshaping the industry:
Marketers have found a new way to reach today's always-on-the-go consumers: the now-ubiquitous cellphone.
Companies are making their pitches by sponsoring content or sending text messages directly to individual cellphones. Insurer Allstate Corp., for instance, is sponsoring college football rankings that are being sent to people who subscribe to an ESPN program via their cellphones. Every Monday for eight weeks during the fall, subscribers are sent a text message that reads: "Allstate BSC rankings." College football rankings appear under the headline.
"Over the last six months, this sector has really heated up," says Courtney Acuff, a wireless specialist at Starcom USA, a media buying company owned by France's Publicis Groupe. "It's a must for advertisers to be educated about this space."
You open an email to find a photo of a fictional newspaper. The headline reads: "Another slaying at Datadyne HQ." Below it is a link that sends you to a Web site where a video of an autopsy is running. Suddenly, the camera pans down and you see your name etched onto the toe tag of the body.
The screen then tells you about Perfect Dark Zero, a videogame from Microsoft Corp.'s Xbox. It also allows you to send a similar email to a friend. After you send your friend the link, your phone rings and a recorded message from Joanna Dark, the game's heroine, announces: "The job is done, friend." Then suddenly, you receive an email from Joanna that has a picture of another dead body. And the toe tag bears your friend's name.
These days, audiences want to be both informed and entertained. So elaborate online marketing campaigns like Microsoft's -- which marry product plugs and high-tech entertainment -- are increasingly being used by major advertisers. And as the penetration of high-speed Internet service continues, more people will be able to see such video on a computer as smoothly as a commercial on TV.
"Response rates to ads are higher when there is rich-media advertising as opposed to static banner ads," says Tom Bedecarre, chief executive officer of AKQA, the interactive ad firm that created the Xbox campaign. Using video is now the "price of entry" when developing a good experience online, Mr. Bedecarre says.
Companies are taking product placement to the next level by weaving products into the plots of entertainment programs. And they are even helping to create and finance the content.
PepsiCo Inc.'s Mountain Dew brand recently financed "First Descent," a documentary on snowboarding. [TEXT]The soft drinks also make an occasional appearance in the movie.[/TEXT] DaimlerChrysler AG's Crossfire and PT Cruiser cars played a role in "Cry Wolf." In the thriller, singer and actor Jon Bon Jovi drives a Chrysler Crossfire. The film was the winner of Chrysler's "Million Dollar Film Festival." As part of the contest, film makers had to weave a Chrysler vehicle into the script. While the winning film was produced and distributed by Universal Studios and Hypnotic, the car company did get a small share of the film's profits. So far, the movie, which opened earlier this year, has taken in more than $10 million at the box office. Chrysler declines to disclose how much it has made from the project.
"Fear" is driving the new push into content, says Jeff Bell, vice president of the Chrysler/Jeep brand. "We are concerned with increased fragmentation of audiences. In the 1950s, you could buy three 30-second spots and hit 80% of the population. Those days are gone."
Madison Avenue executives are calling it the Age of Engagement.
Advertisers believe you'll be more inclined to buy a product if you are in on the action. So they are using marketing techniques that invite consumers to play games or enter contests.
For instance, to promote its new Torrent sport-utility vehicle, General Motors Corp.'s Pontiac division hired six former winners of the reality series "Survivor" to drive around their home cities in Torrents. Meanwhile, television and online ads running during the series asked consumers to snap a photograph of one of the winners and send the image to the car maker for a chance to win a new Torrent.
"It's no secret the traditional 30-second ad doesn't work like it used to," says Mary Kubitsky, Pontiac's ad manager. "You have to deliver something to consumers that will engage them at an emotional level."
Being cheap isn't enough anymore. Companies are recognizing that design is as important to developing and marketing a successful low- and mid-priced product as a high-end one.
"I call it the democratization of design," says Joe Duffy, chairman of Duffy & Partners, a design and branding firm in Minneapolis.
Adds Chuck Porter, chairman of Crispin Porter & Bogusky, a Miami advertising firm: "Packaging and product design is much more important now."
No one knows that better than discount retailer Target Corp., which is known for making affordable stuff look like it should cost more. A current ad campaign for Target stars Thomas O'Brien, a high-end New York interior designer. Print ads for the campaign feature a picture of Mr. O'Brien and shots of products from a new line of home goods he is creating for the chain. The ads, which are appearing in magazines like Metropolitan Home, bear the tagline "Design for All."
For the past few years, companies like DaimlerChrysler and McDonald's Corp. have been embracing videogames as a way to reach 18-to-34-year-old males, a fickle audience that is spending less time watching TV.
Advertising in videogames is expected to jump to $875 million by 2008 from an estimated $186 million this year, according to Yankee Group, a Boston-based research firm.
A few months ago, Matsushita Electric Industrial Co.'s Panasonic brand ran a 15-second commercial within Anarchy Online, a science-fiction online videogame. As game characters passed a billboard within the game, the video and audio clip would begin playing.
The idea is to "generate buzz around the advertising in the game," says Mitch Davis, chief executive of Massive Inc., a New York firm that places ads in videogames. If a company does something cool in a game, gamers are likely to chat about it on message boards, and that "generates word-of-mouth buzz," he says.
Some companies are taking niche marketing to a new level by playing to a specific culture and its beliefs.
Take Procter & Gamble Co., which earlier this year relaunched its Biomat laundry detergent in Israel. In its marketing, the consumer-products company targeted Orthodox Jews, who represent about 15% of the population. It was a tough assignment, since many Orthodox Jews don't own traditional media like television sets.
So, P&G's ad agency devised a plan that tapped into the Orthodox Jews' belief that they should aid those less fortunate. A Biomat truck equipped with giant washing machines traveled around towns. People would donate their clothing, and Biomat would wash and distribute it to the needy.
Biomat's share in the Orthodox sector has grown by almost 50% since the activity began, says Jim Stengel, P&G's global chief marketing officer.
Says Faith Popcorn, chief executive of BrainReserve, a New York marketing firm that predicts trends: "The culture is the new media."
Buzz words come and go, but "addressability" seems to be here to stay.
Advertisers are increasingly exploring ways to better target consumers. So companies like New York-based Visible World Inc. are popping up to help advertisers customize ads and target households by ZIP Code.
For example, last year UAL Corp.'s United Airlines used the technology to promote its discount airline, Ted, in the Chicago market. TV ads running on cable systems were customized to include the name of each suburb in Chicago. The technology allows different Zip Codes in the same neighborhood, where households are watching the same TV program, to get targeted ads.
"Consumers don't hate advertising, they hate irrelevant disruption," says Tracy Scheppach, video innovation director at Publicis' Starcom. "The key to getting permission is relevancy."
Meantime, the holy grail of advertisers -- tailoring ads based on specific demographics -- may be on its way. OpenTV Corp., a San Francisco-based technology company, is teaming up with Philadelphia-based cable provider Comcast Corp. on a service that will allow advertisers to target households using even more specific data provided by Experian Marketing Solutions, a division of credit-reporting agency Experian.
The data include demographic and geographic attributes like ethnicity, age, estimated household income and how many people live in the household. The cable operator is currently conducting a test on the service in Miami. An Experian spokesman declines to comment on the project.
Publishers are finding new ways to move the needle on magazine ads, which critics claim are static and boring.
Gimmicks range from a single-advertiser issue to inserts like CD-ROMs to ads that have microchips embedded in them, which allow sound to accompany print ads. They are a far cry from the standard perfume strips magazines have carried for years.
Discount retailer Target was the sole advertiser in the Aug. 22 issue of the New Yorker magazine. It's the first time the magazine carried just one advertiser. Not only did Target buy all of the ad pages in the issue, it also commissioned various pieces of original artwork featuring Target's bull's-eye red and white logo to run as an ad. The New Yorker is known for its clever illustrations.
Playboy magazine's October issue featured a videogame ad that resembles the magazine's famous centerfold. But instead of a naked woman, the ad showed a scantily clad videogame character.
While some people express concern that the line between advertising and editorial content is blurring, media buyers are quick to point out that if magazines don't add new twists to their offerings, advertising revenue will get harder to come by.
With all the diverse places to advertise, companies are looking to advertising agencies that can best produce a pitch for a given medium. And that means looking for ideas beyond the big players on Madison Avenue.
Earlier this year, Unilever PLC handed Bartle Bogle Hegarty, a midsize ad firm based in London, an advertising assignment for its Dove brand -- even though the bulk of the Dove account is handled by WPP Group's Ogilvy & Mather.
"The changes in media force you to work with more agencies," says Silvia Lagnado, Unilever's senior vice president for Dove.
Allstate, which has worked with Publicis' Leo Burnett since 1957, recently handed an ad assignment to Not Traditional Media, a small New York advertising firm. The boutique agency created a nontraditional marketing program for the insurance company that used the Internet to promote Allstate's brand to Hispanic car buffs in the Chicago area.
"I reject the notion of one-stop shopping" when it comes to agencies, says Joe Tripodi, chief marketing officer of Allstate, based in Northbrook, Ill. "I think smart marketers will have a lead shop, but you can supplement that shop with smaller firms that have a different perspective on marketing."
Suzanne Vranica, The Wall Street Journal. November 21, 2005
Copyright © 2005 Dow Jones & Company, Inc.. All rights reserved.