2000 the year in review

january Trends: Keebler’s Southern California Soccer Consortium and Rosie O’Donnell’s Chub Club prove that tapping into consumer touchpoints (such as Hispanics’ love of soccer or female concerns about weight) can get brands treated like family. … The fast rise of radio conglomerate AMFM, Inc.’s Chancellor Marketing Group illustrates a growing push by media companies to go beyond using promotions as advertising value-adds to work more strategically with clients. (The question asked about AMFM ceo Jimmy de Castro on PROMO’s cover – “What Is This Man Doing in the Promotions Business?” – becomes moot just a few weeks later, however, when a merger with Clear Channel Communications sends the ceo packing.)

Strategies: Simon Properties Group and Turner Networks align on a proprietary TV network in the former’s 175 malls, one of numerous moves by marketers to develop exclusive entertainment content. (The initiative had not launched by the end of 2000). … Coca-Cola Bottling offers teens a MusicCard containing discounts for online CD purchases and kicks off a year in which music giveaways and stored-value cards become standard promotional fare.

Deals: Omnicom gets cause-minded with the acquisition of Cone, Inc. … CBS inks a 15-year, $6 billion deal for broadcast rights to the NCAA Men’s Basketball Championship that gives the network control over the tournament’s marketing, corporate sponsorships, licensing, and merchandising. … McDonald’s buys the bankrupt Boston Chicken chain, but ultimately does little to crow about it. … Visa pays $50 million to remain a global Olympic sponsor, proving the Olympic brand still burns brightly despite a scandal-induced media dousing. … Chicago agency Frankel is acquired by Publicis for a reported $150 million in the latest ad agency purchase of an independent shop.

Campaigns: Kellogg kick-starts a long-term drive to increase the power of its promotions with the company’s first in-pack premium in five years, a line of Sesame Street plush toys more expensive to produce than any previous giveaway. At year’s end, Kellogg was still struggling to regain its leader-status in the cereal aisle. … Pharmaceutical maker Roche and promo agency Momentum launch an innovative mobile campaign for the Tamiflu brand that will win consumer minds in winter and industry awards in fall.

Quote-Worthy: “It certainly shows all the characteristics of a fad,” says EPM Communications president Ira Mayer, suggesting that the “Pokemania” captivating kids and brand marketers alike might not last too long into the new millennium. Pokemon the First Movie raked in nearly $86 million at the box office; Pokemon 2000 topped off at $44 million.

february Trends: Cause marketing gets wired as nonprofits mine the Web for fast and easy donation efforts and brands put charity overlays on their home pages. … Extreme sports tie-ins become a hot way to target Generation Y a la successful promos with SoBe and snowboarding, Slim Jim and wrestling, and ESPN’s self-piloted X Games.

Strategies: Having thrown caution to the wind by (almost literally) giving away the store to lure holiday ’99 shoppers, Internet-based retailers began to see the error of their generous ways. (With the Wall Street gravy train making fewer stops by the end of 2000, the companies that survive the year find fewer dollars in holiday marketing coffers.)

Deals: With its ceo turning his attention to the NFL’s Washington Redskins, the $815 million Snyder Communications goes on the block. Paris-based Havas Advertising will scoop it up two months later. … Nike drives into promotional products for the first time in a venture for logoed apparel with Ha-Lo Industries. … Internet marketing investor CMGI pays a whopping $520 million to buy rewards-based e-mail marketer Yesmail.com, whose member ranks will climb 75 percent to 14 million by year’s end.

Quote-Worthy: “With regular prices dropping, it makes it harder for promotional pricing alone to be compelling,” says Ed Keller, brand manager for Kenmore, one of many once rebate-reliant brands looking for alternatives.

march Trends: P-O-P gets an electronic push as interactive set-ups – multimedia TVs in supermarkets, custom videos in drug stores, kiosks at airports – add new dimensions to the tried-and-true tactic. … America Online and American Airlines merge their loyalty programs, giving frequent fliers more ways to use their rewards. By the end of the year, an entire Web venture (MilePoint.com) will be devoted to this very purpose. … R.J. Reynolds Tobacco Co. revamps direct-mail sampling in Arizona in response to attorney general complaints.

Strategies: Tax preparer H&R Block launches an ambitious loyalty program that puts customer returns into a debit card loaded with partner discounts. The effort proves as complex as an IRS audit, leading the company to scale back plans for 2001. … Marketers such as Quaker Oats and Loew’s Cineplex are linking with dedicated online sampling sites such as startsampling.com and freesamples.com, but others question whether the operations build brands or giveaway-hungry consumers. … “Webcast” becomes a popular buzzword as marketers add online broadcasts to their events.

Deals: Ha-Lo takes a deep plunge into online waters by paying $240 million for 10-month-old promotional products portal Starbelly.com. Initial plans to lead with the Starbelly name will be scrapped by the fall, when the company launches a major ad campaign for Ha-Lo Branded Solutions and is rumored to be mulling a sale of assets.

Campaigns: Mall marketing becomes more sophisticated as Procter & Gamble takes Dryel to the masses through an event-focused launch plan. … Government agencies dive into promotion as the Census Bureau rolls out a mobile awareness program fast on the heels of the U.S. Mint’s golden dollar campaign. … Momentum’s work on the launch of American Express’s Blue card wins the Super Reggie in the Promotion Marketing Association’s annual awards competition.

Quote-Worthy: “To be honest, the NASCAR fan base is Kmart shoppers,” says spokesperson Frank Buscemi, as the chain launches the first-ever national in-store campaign for the racing association.

april Trends: Niche online portals offering a crack at highly targeted demos attract big bucks from packaged goods sponsors: Oxygen.com scores more than $70 million in support from Hewlett-Packard, Johnson & Johnson, and Procter & Gamble. … After years of targeting, targeting, targeting, broad-reach couponing returns as brands look to boost redemption with increased distribution. … Although still in its infancy, interactive TV lets marketers send sample offers and coupons right into living rooms. At the Association of National Advertisers conference in October, CPG chief executives will warn advertisers about the rise of TiVo.

Strategies: General Mills puts Chumbo.com software titles inside 25 million Cheerios boxes, one of numerous alliances between traditional promoters and new dot-coms. … Sears leads a growing list of brands targeting Asian-Americans.

Deals: Quaker Oats inks a deal with Novartis Consumer Health to develop functional foods and beverages. … Hain Food Group buys Celestial Seasonings. … Once-independent Davidson Marketing becomes the U.S. centerpiece of Communicator, a “from concept to consumption” marketing partner that, along with parent Lighthouse Global Network, will be sold to London-based Cordiant Communications in the fall.

Campaigns: Time Warner gathers an impressive list of tie-in partners and $65 million in marketing support for a direct-to-video Scooby Doo fall release. … Alternative get-togethers gain branded ground as Certs, Mudd Jeans, Kodak, and Candies set up Atomic Lounges after school.

Quote-Worthy: “We’re looking to provide incremental marketing dollars. Notice I say marketing, not advertising,” says new Toys “R” Us ceo John Eyler about the chain’s push into promotion marketing.

may Trends: PROMO’s Annual Report of the U.S. Promotion Industry pegs ’99 spending at $93.4 billion, a 9.4 percent increase over ’98 that reflects strong growth for the ad specialties, sponsorships, and games, contests, and sweepstakes categories. … Free Internet service offers become the latest trend in customer acquisition and retention led by Kmart’s Bluelight.com, which attracts more than five million subscribers by year’s end – when Kmart is forced to buy the foundering company operating the service and AltaVisa abandons its effort.

Strategies: Herbally enhanced drink brands such as SoBe and Mistic use grassroots efforts to reach consumers who don’t consider themselves part of any soda generation. … Doctors make mall calls in a marketing tour for Roche’s Xenical as direct-to-consumer promotion for prescription drugs (see January) begins to flourish.

Deals: Internet incentive marketer MyPoints.com buys rival Cybergold for $157 million in stock. … Eastman Kodak Co. extends its worldwide Olympic sponsorship through the 2008 Games. … Omnicom buys kids’ premium specialist AdPac.

Campaigns: PepsiCo revives the Pepsi Challenge for summer. … Coca-Cola uses a newly devised false can top to give away multiple million-dollar prizes in a summer effort. … In a silent admission of its failed ’99 tie-in, Kentucky Fried Chicken quietly puts leftover Star Wars: Episode I premiums into kids’ meals. … Once red-hot kid band Hanson advertises for tour sponsors in the pages of PROMO.

Quote-Worthy: “Cereal is a big category. No one thing is going to work,” says Kellogg vp-consumer promotions Kevin Smith, predicting the tough road he’ll have in 2000.

june Trends: The evolution of promotion agencies from tactical after-thoughts into true strategic partners for clients continues: Miller Brewing Co.’s Joe Jones says he likes his ad agencies to talk to promo AOR Zipatoni before pitching their ideas. … The 10 largest agencies in the annual PROMO 100 have a combined $1.3 billion in revenues for 1999; in ’93, the top 10 totaled $272 million. … Forget computers. Wireless services begin testing the delivery of marketing messages through cell phones, pagers, and PDAs, giving marketers the potential to reach consumers anywhere and, perhaps soon, target them by location.

Strategies: Back-to-school takes on a musical beat as McDonald’s ties to N’ Sync and Sears dances with Christina Aguilera. … Cross-over artists and die-hard fans widen country music’s attraction to promotional partners.

Deals: Ford Motor Co. inks Nickelodeon’s animated Blue as spokespuppy for its child-seat safety campaign. … Gage Marketing Group invests in four agencies to round out its services portfolio.

Campaigns: In addition to the Challenge, Pepsi readies PepsiStuff, an Internet upgrade of its continuity program (through a partnership with portal Yahoo) that will make a huge splash with consumers in late summer.

Quote-Worthy: “If we can grow by $3 million to $5 million a year with the right clients, we’re doing fine,” says Jim Holbrook, president of The Zipatoni Co., which is selected as PROMO’s Agency of the Year.

july Trends: After watching in-store marketing drive sales in supermarkets for decades, retailers in other channels such as Blockbuster and Petsmart get in on the action. … Government and community agencies begin using the Master Settlement windfall to send anti-smoking messages to kids. But some of their strategies are eerily similar to those once used by Big Tobacco to create a nation of smokers. … Playing to consumer tastes for fashion-forward everything, promotional apparel is getting upgraded with more brand names, better-quality materials, and higher-ticket products.

Strategies: With minivans having lost their “cool” status to SUVs, marketers of the family vehicles go functional, stressing features that keep parents from worrying and kids from fidgeting. … Web loyalty providers such as MyPoints.com and WebMiles.com broaden traditional programs for mass appeal online. But the question remains: Do they help build brands or simply foster a society of rewards-blinded buyers?

Deals: Having climbed to the top of the PROMO 100 list with revenue growth that grew nearly ten-fold in two years, sampling master U.S. Marketing & Promotions agrees to be acquired by Omnicom. … Unilever gets bigger by closing its acquisition of Bestfoods. … Indirect competitors Blockbuster and DirecTV unite to cross-promote each other’s products and services. … Turner Broadcasting System strikes a 10-year advertising deal with Coca-Cola.

Campaigns: TV advertising didn’t work, so the next chapter written in the Dot-Com’s Guide to Marketing is mobile tours, with a year-long, 40-city effort from barnesandnoble.com the latest in an endless parade of campaigns. … Warner Bros. releases a list of 50 licensees for its first Harry Potter film, which is expected to turn this year’s literary smash into next year’s theatrical blockbuster.

Quote-Worthy: “Our store is our best promotional tool. And the whole shopping experience is about more than just buying merchandise,” says Pet-smart’s Ken Banks.

august Trends: Movie theaters become an effective promotional channel for brands to reach consumers – without having to spend mega-bucks on film tie-ins. … New technology from specialty printers lets marketers deliver sweepstakes and games in a can, on a computer screen, and just about anyplace else. … Promotion-rich e-mail newsletters are turning subscribers into click-happy customers. … Food Marketing Institute works on industry guidelines to keep loyalty marketing programs from invading shopper privacy.

Strategies: Procter & Gamble goes one-to-one with Reflect.com, a site that uses its HBA know-how to make customizable products for consumers. Later in the year, new P&G ceo A.G. Lafley notes that the operation’s profitability is not the company’s priority. … Brands use strategic partnerships to stay close to Baby Boomers as they age into Zoomers. … Those lucky brands with Harry Potter tie-ins begin developing plans. … CPGs and retailers dreaming of simplified back-office operations invest in e-marketplaces such as Transora and UCCNET.

Deals: Philip Morris creates a 73-brand empire by acquiring Nabisco Group for $14.9 billion. … ConAgra buys International Home Products for $1.6 billion. … Cordiant buys Lighthouse in a $421 million stock deal. … Ford Motor Co. joins with Ha-Lo and launches a company to manage its worldwide merchandising efforts – but could court outside clients in the future. … Growing promotion network Marketing Drive Worldwide acquires Event Management & Promotions.

Campaigns: Eastman Kodak Co. wraps its largest consumer promotion ever in Picture Perfect Summer, its first marketing program tied to both merchandise and services. … General Motors blurs the line between corporate sponsor and content provider with online-only coverage of the Le Mans road race. … Vanity Fair Intimates kicks off the first Vassarette product launch in its 10-year ownership of the lingerie brand. … Clamato and Budweiser give Hispanic consumers exactly what they want with a cross-promotion at Circle K stores.

Quote-Worthy: “Some [marketers] see new technology and the first thing they ask is, `Who else is doing it?’ Well, wouldn’t you rather be first?” asks Leonard Zuk of CCL Label.

september Trends: Consumer pass-through of trade promotion dollars reached an all-time low in 1999, according to Cannondale Associates’ annual study. But that didn’t stop brand marketers from boosting their allocations, which are increasingly being funneled into account-specific campaigns. … US Open sponsors move their activation off-site, just the latest way marketers look to get more bang for their bucks.

Strategies: After spending three years building an entertainment and sport marketing services empire, SFX, Inc. embarks on a plan to assemble a client list of corporate-wide partners. … Marketers are slowly beginning to understand and, thus, successfully promote to African-Americans.

Deals: Diageo sells Pillsbury to General Mills for $10.5 billion, thereby creating the fifth-largest food maker in the world.

Campaigns: The death of creator Charles Schulz does nothing to slow down tie-ins with Peanuts, which is being used for promotions by Days Inn, Swanson, Wendy’s, and others. … Best Buy promotes its invasion of the Big Apple with a Sting concert in Central Park that borrows the best components of last year’s AmEx Blue launch event.

Quote-Worthy: “If you just want to entertain clients, don’t buy a sponsorship. Get a ticket package. It’s a lot cheaper,” advises Lauren Tarr of Prudential Securities.

october Trends: Internet promotions are so cost-effective that marketers are using them not to increase sales but to compile consumer data for use in future sales-generating campaigns. … Magazine publishers flood subscribers with free scanners that send them to the Internet via imbedded links in ads. Pundits wonder whether it’s the wave of the future or simply a ho-hum technology soon to be passe. … Sweeps marketers promise (again) to mend their ways after Publishers Clearing House and Time, Inc. cough up a combined $26.1 million in restitution and refunds.

Strategies: Political candidates shake hands on the Internet in hopes of translating clicks into votes come Election Day. … Finding that “official sponsor” status and arena billboards aren’t cutting it, sports sponsors follow Coke’s lead and begin activating their sports ties with experiential campaigns.

Deals: Promotional product giant Cyrk, Inc. retains Donaldson, Lufkin & Jenrette to explore strategic alternatives after a rocky nine months in which precipitous dips in business from McDonald’s and Ty, Inc. sent sales and earnings downward. … SFX, Inc. expands its sports marketing empire by acquiring motorsport pros Cotter Group.

Campaigns: In support of theatrical release Rugrats in Paris, Paramount Pictures and sister Nickelodeon devise an ambitious campaign that will have as many as 20 million kids scurrying to stores to collect “stars” from the products of such marketing partners as Burger King, Mott’s, Mattel, Inc., and Toys “R” Us – and that is just part of the overall campaign. … Coca-Cola’s latest Internet initiative is an effort for Sprite that puts Rocket Cash online currency on one billion bottles … Hyatt Hotels reintroduces an expanded version of its flagship Gold Passport frequent-guest program.

Quote-Worthy: “It’s amazing how many good ideas you come up with when you stay focused on the customer,” says Bob Pifke, senior vp-marketing services at Visa, one of 50 brands selected by PROMO as the best-promoted.

november Trends: Public relations firms are acting a lot more like promo agencies as marketers add media impressions to their list of campaign goals. The trend is evident in many of the promotions honored in PROMO’s annual PRO Awards competition. … The impact Internet marketing and Millionaire-mania has had on prize pools reaches another milestone when SCA Promotions underwrites the first $1 billion giveaway for online contest destination Grab.com. … Entertainment marketers promise to watch their steps after a Federal Trade Commission report slams them for pitching R-rated films to underage kids. … Promotions.com, the highest-profile Internet-based promotions agency, undertakes a restructuring in the latest example of a public marketing company suffering from Wall Street’s swoon.

Strategies: Online retailers vow to avoid the mistakes that plagued the 1999 holiday shopping season (see February) by spending more time on customer service and less on unrealistic marketing promises. … Wireless marketing gets its first big tryout with a 1,000-person test in Boulder, CO, conducted by SkyGo.

Deals: Hasbro inks a multi-year alliance to develop products based on Walt Disney Co. films and becomes the official game and toy company of Disney’s parks and resorts.

Campaigns: Eight partners join for $75 million in combined promo support behind Universal’s Dr. Seuss’ How the Grinch Stole Christmas. … Campbell Soup Co. adds an on-pack instant-win game to its 27-year-old Labels for Education program, proving that you can teach an old dog new tricks. … An innovative door-to-door sampling campaign for Philips Lighting earns U.K.-based Davies Little Cowley Fiddes the Grand Prix, the top award in the Association of Promotion Marketing Agencies Worldwide’s inaugural Globes award competition.

Quote-Worthy: “They’re much more receptive to marketing messages if they can interact with the brand on their own terms,” Ogilvy Public Relations Worldwide’s Mark Curran says of today’s consumers.

december Trends: The Internet’s speed and ease of use is engendering a society of consumers more aware of promotional offers and more inclined to respond to them, according to a survey conducted for PROMO by NFO Research. But these Netizens still rely heavily on traditional media channels including magazines, newspaper inserts, P-O-P displays, and product packaging to learn about offers, and are just as likely to participate offline as on, the survey finds. … With even the biggest marketing services companies buying each other up, industry consolidator Aspen Marketing Group says it will explore strategic alternatives.

Strategies: VH1 sidesteps award show-overload with MyVH1, a show letting cybersurfers choose the categories, nominees, and winners. … Brands increasingly use exclusive music concerts to give customers an experience they can’t get anywhere else.

Deals: Tony the Tiger looks to get a financial assist from Ernie and the Elves as Kellogg buys Keebler Co. for $3.86 billion. … Shortly after buying alternative drink maker South Beach Beverage Corp., Pepsi becomes the owner of the sports drink category by acquiring Quaker Oats and its Gatorade brand for $13.4 billion. … DVC Group considers going public, merging with another promo agency, or selling to an advertising conglomerate, but ultimately opts for a $100 million-plus investment from Lake Capital and its partners, who plan to build an agency network around the shop.

Campaigns: American Express enters the stored value market with new promotions heralding its CobaltCard for kids. … Citibank and American Airlines break a sweeps proffering the largest total frequent-flier giveaway in history – 100 million miles. … Gillette unveils early details of a $150 million-plus campaign to launch Venus, a women’s razor due in stores this April.

Quote-Worthy: “Marketing has been about transactions, but now it’s about personal relationships,” says P&G’s Lafley.