More Takeaways from the ANA Annual Conference
Posted: 11/16/2009 9:13:05 AM by
Lesa Ukman | with 0 comments
I shared some of the insights heard at the ANA Annual conference in my last post. Below are more of the key ideas discussed by the “masters of marketing,” as the event is subtitled.
Eric Schmidt, chairman and CEO, Google
Schmidt had an optimistic message: “We’re about to enter a time of unprecedented opportunity as optimism collides with expanding platforms and accelerating uptake.”
Examples:
- Adoption of the mobile web is happening eight times faster than it did for mobile phones.
- Neither Facebook nor YouTube, which together comprise nine percent of all time spent online, were even around three years ago. Twenty hours of video are uploaded to YouTube every minute.
- In less than 18 months, smart phone share went from under 10 percent to more than 40 percent. The introduction of the iPhone was the disrupter. Of the three billion mobile devices, 885 million are smart phones.
To harness the opportunities created by all these platforms, Schmidt says think scale, because scale is there. “Everything you do, ask to do it better because scale allows it.” Example: Evian’s commercial with the babies on roller skates has had more than 30 million views on YouTube.
Although Schmidt said Google is in the information business, the company gets about 98 percent of its revenue from advertising—$2.8 billion in 2008—mostly in right margin search results.
Stephen F. Quinn, EVP and CMO/Walmart U.S., Walmart Stores, Inc.
“If you’re not organizing around the customer, your company is at risk,” Quinn said.
From the beginning, Walmart’s brand promise was about lowering the cost of living. However, about five years ago, it got caught up in the mass affluence trend and started advertising in places like Vogue.
Today, Walmart marketing is realigned behind its value pricing.
But, Quinn said, it is not enough to stand for great prices. Companies must also support their customers’ values. This is where sponsorship comes in. “We believe we have to use our size for good.”
Quinn said DIY product sales are skyrocketing. For example, people are changing their own oil, not because they are car enthusiasts, but to save money.
Same day sales are down this year between 10 percent and 15 percent, compared to 2008. However, one day a month sales are up 300 percent over last year. The spike occurs on the last day of the month, at midnight, and what people are buying is food and diapers. “There are families not eating at the end of the month and literally lining up at midnight waiting to buy food when paychecks or government checks land in their accounts.”
This trend prompted the retail giant to overhaul its private-label brand, Great Value, which is now promoted in commercials describing how families can fix dinners with Great Value products “for less than $2 a serving.”
Neil Golden, SVP, CMO, McDonald’s USA, LLC
Ethnic markets lead general market trends, Golden said.
His talk, one of many stories of coming back from near corporate death, began around 2000 when McDonald’s was seeing sharp declines in its business. At that time it conducted lots of short-term promotions that commoditized the brand and had partnerships where the McDonald’s brand was subordinate to that of its partner.
In 2003, McDonald’s introduced its first ever global ad campaign, “I’m Lovin’ It,” and the transformation began. Between 2003 and 2008, McDonald’s increased:
- Sales by 45 percent
- Guest counts by 20 percent
- Market share by 24 percent
- Cash flow by 50 percent.
In the U.S., Golden credits the company’s focus on African-American, Hispanic and Asian consumers—who collectively comprise 30 percent of the U.S. population, but 40 percent of McDonald’s customers—as driving much of the remarkable turnaround.
The decision to focus on these segments was based on several insights. First, ethnic markets lead general market trends. “Listening to multicultural audiences has given McDonald’s a huge competitive advantage,” Golden said. Second, ethnic markets are the fastest growing. Third, ethnic markets are the only groups with a growing number of young people.
McDonald’s obtains ethnic insights in several ways, including focus groups. Only three of every nine focus groups are conducted with general market consumers; the remaining six are split equally among its three ethnic targets. Culturally relevant insights are incorporated into creative, media and sponsorships, and two-year plans are developed for each segment.
Jeffrey Hayzlett, CMO and VP, Eastman Kodak Co.
“The new Kodak is nothing like its predecessor,” Hayzlett said in yet another turnaround story.
The transformation required more than a new marketing campaign. Kodak had to get workers on board who would take Kodak in the new direction. Thus a full 70 percent of current Kodak employees were hired within the last four years.
- The new Kodak is focused on B2B, not B2C
- Margins for B2B are about 60 percent higher than B2C
- Some 70 percent of Kodak’s revenue now comes from digital products
- 2008 revenue: $9.4 billion
- Two-thirds of Kodak’s income is from outside the U.S.
- Kodak is creating its own Hispanic show with Telemundo
- Kodak sees its Web site as an important channel and around any sponsorship wants exclusive rights to photos for its Web site
Insights that drove Kodak’s transformation:
- People don’t take pictures, they capture memories and moments
- The real Kodak moment is sharing our moments
- My memories are what make me, me. It’s only when I share them that I become complete.
Andrew J. England, CMO, MillerCoors
Beer marketing needs to help answer the question: “Dude, why are you drinking that?” Selling beer means helping a young male of legal drinking age “have the right answer for his friends, but especially for himself,” England said.
Brands need to identify their core positioning concept and take it to all media. For Coors Light it is Rocky Mountain Cold Refreshment, and Coors executes against it across all touchpoints—“equity advertising, innovations, Hispanic, sponsorships, p-o-s, Internet and social networking,” England said.
Coors Light sponsors the NFL because it is huge with its audience. “The key is figuring out how to make the NFL work for us.”
England said that online traffic for 21-to-34-year-old men peaks between 3 p.m. and 5 p.m., so that’s when Coors Light is online. The “4:53 to Happy Hour” creative came from knowing when the audience was surfing. A 4:53 microsite lets users count down to 5:p.m., find an excuse to leave early, send friends a 4:53 voice alert, read a vibe guide of happenings around town, etc.
Men comprise 75 percent of beer sales by volume.
Fifth year in a row Coors Light volume is up.
While Coors Light is all about RMCR, Miller Lite is all about great taste.
MillerCoors competes not only with other beers, but also wine and spirits because most of the retail chain buyers are the same for all three.
England also had some advice for those who wanted to be a successful CMO:
- Own the P & L
- Be the salesperson: “Put yourself in their shoes; how are your programs going to help Walmart meet its objectives
- Understand the impact of what you do on the supply chain
- Be famous for benefit-driven innovation, such as the label on Coors Light bottles turning from silver to blue when the bottle temperature is properly chilled for consumption
- Cherish great people (on your marketing staff)
Michael Keller, Chief Brand Officer, Dairy Queen
Keller, one of the last speakers at the conference, addressed brand authenticity, an idea also discussed in my earlier blog from ANA. Keller said “marketing only controls two of our nine consumer touchpoints.”
Defining these touchpoints as the inside of a DQ, the outside, product quality, location, customer service, menu, speed of service and advertising, he said it is critical that everyone within the organization understands and is empowered to translate the vision.
He said DQ’s strongest asset is the Blizzard, which last year rang up over $600 million in sales. The product’s tenth anniversary is in 2010 and Keller is moving money out of traditional media into events to celebrate.
Another big idea from Keller: “Turn your biggest fans into media.”
- DQ has some 2.5 million members in the Blizzard Fan Club. Next step, from club to community
- One million fans have registered in under 18 months at the company’s two Facebook sites, one for DQ and one for Blizzard
- 4,000 Twitter followers; the number doubled in the last five months and DQ is getting lots of kudos for responding so quickly to tweets
- Uses FriendFeed to help community keep up with all the DQ offers and content
Social media brings us full circle to my original point in the earlier post: Live events are flourishing. As any U2 fan can attest, the band’s use of Google’s YouTube to bring the concert experience free to an estimated 10 million consumers from 16 countries was unprecedented.
Depending on the quality of your speakers or headphones, the sound was likely to be better than the tinny sound of the outdoor show. And the multi-camera shoot brought fans closer to Bono than they’d get on site. Plus, no waiting in line for drinks or the toilet, no paying for parking or sitters. No bad seats.
U2 got millions of fan tweets enabled by the same YouTube page hosting the concert, and there were several links to iTunes to buy albums and Project (RED) products, which raises funds for AIDS treatment and education in Africa.
Read more blog posts
Filed under: digital media, entertainment, events, social media, trends, beer