A Cool Front Moves In

You may not have heard about upcoming singer/songwriter Ne-Yo, but Coca-Cola has. It has put its marketing muscle behind the artist this spring banking on an online film to reach thousands of teens and young adults.

The 12-minute video featured Ne-Yo on stage, behind-the scenes clips and a Q&A with fans. The up and coming R&B star bolstered the brand with his fresh appeal, silky smooth voice and upbeat personality.

And this month, Coke will up the ante with its second short film featuring hip-hop star Jay-Z in concert and a one-on-one interview at Stageside.tv. The film expands the reach of the new global Welcome to the Coke Side of Life campaign, which launched with TV spots in March, to a digital medium rich with the hip audience Coke is trying to reach.

Coke, like many other brands, is not abandoning TV spots — despite the cooling off of the upfront — but is instead pumping marketing dollars into in a host of other mediums to inject its message into consumers’ lives where and how they want to be reached. The new push is all about trial and error, experimenting in ways that surprise and delight the consumer with an unexpected treat in an unexpected fashion.

“We’re not walking away from [TV spots], but looking at how we can make ads work harder,” Coca-Cola spokeswoman Susan McDermott says. “We’re more about spending the dollars wisely and really being strategic about where we are placing our ads.”

Coke spent $147.8 million on TV advertising in the first quarter of 2006, a 70% increase from $86.3 million in 2005, per TNS Media Intelligence. Despite the increase, Coke is boosting its online spending 78% this year for efforts like the Ne-Yo exclusive films. Its first quarter online spending jumped to $2.1 million, from $929,600 one year ago.

“It’s all about having the flexibility to be able to adopt to new trends especially with the way new media is emerging,” McDermott says.

This year, Ford too increased its TV spending (up 2.5% from first quarter 2005 to 2006) but has continued to diversify its marketing mix.

“Marketers, Ford included, are scrutinizing their television investments more so today than they ever have before,” says Mark Kaline, global media manager for Ford. “Whether it’s through events online, mobile devices or video games, all of those things allow marketers to reach out and touch a customer…and engage them in some sort of dialogue. It’s a brave new world.”

Ford began experimenting in ernest on the Web bumping its online spending from $9.2 million in the first quarter of 2005 to $13 million in 2006. It kicked off Webisodes for its Lincoln and Mercury brands, followed by an online sweepstakes that dangled a 2006 Lincoln Zephyr and a 2006 Mercury Milan.

“It’s a good time to experiment and make mistakes,” Kaline says. “Marketers will find there are different ways to communicate with people.”

Under its marketing alliance with popular country crooner Toby Keith, the brand adds a new spark at each of his tours to keep its message fresh.

For example, during one tour, Ford drove its new F150 truck onto the stage where Keith, a loyal Ford Truck driver, performed in the back of the truck.

Keith’s Hookin’ Up and Hangin’ Out Tour, sponsored by the Ford F-Series, begins Aug. 11 in Cleveland and will make more than 60 stops nationwide through the fall.

“It allows us to have a much deeper connection with consumers,” says Todd Eckert, Ford Truck marketing manager. “We want to be everywhere that makes sense for our customer. We go to the places they are.”

Whether through online video or an event, “It’s all about consumer engagement and how to effectively engage consumers in a digital age,” says Larry Deutsch, managing director, 141 Worldwide, Chicago. “Engagement is an active interaction with the consumer, not passive. And the way you are active is through relevant content, not just the messaging. That’s what you are seeing…a shift in spending to engage with consumers in non-traditional ways via Webisodes, online mobile technology, etc.”

Coke, for example, is giving consumers reasons to stop and watch its ads. The company has joined other marketers in rolling out digital video recorder (DVR) ready ads. Coke launched “sublymonal” ads for a Sprite ad campaign, which tell viewers the ads are DVR ready with codes hidden within the ad that can be viewed when the ad is slowly replayed. Codes entered on Sublymonal.com unlock exclusive music and video content. Crispin Porter + Bogusky, Miami, created the spots.

“It’s all very much a wink at the consumer,” McDermott says. “We’re saying, ‘We know you like marketing, but not marketing that pulls the wool over your eyes.’ We’re trying to make advertising fun and cool.”

It’s that “coolness” factor that has brands embracing DVR.

There was a time when some marketers considered DVR manufacturers like TiVo a “real pariah” for their ad-skipping capability, TiVo President and CEO Thomas S. Rogers acknowledges. The device gave marketers and networks sweaty brows over fear of plummeting ad revenue.

Fast forward a year ago, brands started changing their tune. Faced with fragmenting media and multitasking consumers, brands began following TiVo’s lead to engage viewers through interactive TV commercials, reflecting a “seismic shift” in the industry, Rogers says. Coke, GE, the WB Network and others have all tapped TiVo for its ad technologies. In May, GE launched its One Second Theater ad campaign around its “ecomagination” push (remember that dancing elephant commercial?). DVR owners pause the commercial to see clips of the making of the ad.

“There’s a lot of demand for TiVo enhancement,” Rogers says. “It’s all about how you reach those who are fastforwarding, what steps you can take to put creative and different inducements in front of somebody to get them to stop on an ad.”

In May, TiVo launched a new advertising tool that lets viewers search and select ad content. Dubbed TiVo Product Watch, consumers search for one-minute to hour-long ads and content from brands including General Motors, Sony Pictures, Lending Tree and Kraft Foods.

Between 10% to 12% of U.S. households own a DVR. Within five years, at least 50% of U.S. homes will own the technology, Rogers says. In TiVo households, consumers tend to fast forward through about 70% of commercials, he estimates.

CHILL IN THE AIR

This year, marketers slowly bought into the traditional upfront — the time during which TV networks sell the bulk of their ad time for the fall season. But some experts predict change is coming soon for the traditional upfront model as we know it today. Rather than one overall ad-buying season, more emphasis will be placed on the scatter market or two-to-three smaller upfront periods within three years, according to Morgan Stanley Inc. Such a move would give advertisers “incremental flexibility” on their budgets and a better chance to verify rating guarantees.

There are a variety of estimates for upfront sales, with figures ranging from $8.2 billion to $9 billion for network television (the cable upfront was still ongoing at press time). Media analyst Jack Myers says that this year network television revenue dropped 5% to $8.2 billion from $8.65 billion last year.

Myers estimates that sales from the cable upfront could reach $6 billion, bringing the total upfront spending to $14.2 billion for 2006, compared to $14.7 billion last year.

“These markets have been moving very slowly as buyers and sellers circle each other waiting for a shoe to drop,” Myers says.

Yet, a few facts about the upfront are clear. “People are still putting ads on television because it’s a good place to reach a large audience at one time. But marketers are looking elsewhere,” says Leo Kivijarv, VP-PQ Media, a Stamford, CT-based media research company. “Where else are the 18-to 34-year-olds? It all goes back to ‘I am following where my audience goes.’”

“There are so many new choices marketers…are re-evaluating the efficiency of television because of the Internet and its better ROI measurements,” he adds. “Brand marketers are willing to experiment. The model has changed.”

Marketers will see a diminishing significance of the upfront “as the value of television ads and inventory may be viewed as less significant,” TiVo’s Rogers says. “The most important questions — are ads being viewed and to what extent will they be viewed in a DVR era?”

Nielsen Media Research, however, may change the landscape by taking measurement one step further. In November, Nielsen will begin tracking exactly how many people watch TV commercials, a first-ever move for the company. The effort could have big implications for the media industry, including how future viewership may be measured and how brands negotiate upfront deals.

THE CONSUMER IS BOSS

STILL SOME BRANDS HELD BACK altogether. Johnson & Johnson sat on the sidelines from this year’s upfront, and instead is shifting from a broadcast year to a calendar year to keep its media buying more in line with its business planning timeline.

“This is a reflection of what works best with our brands in light of the changing media environment,” J&J spokesman Mark Monseau says.

J&J spent $194 million on TV spots in the first quarter this year compared to nearly $254 million in the first quarter of 2005, per TNS. Overall, J&J spent $818.3 million on TV ads in 2005, TNS says. The New Brunswick, NJ-based company looks to boost its online spending this year. In the first quarter of 2006, J&J spent nearly $8.5 million on online advertising compared to nearly $4.7 million in the first quarter of 2005.

As viewers migrate from TV to the Internet and alternative media, brands like Procter & Gamble want to build a marketing model that better connects with consumers “when and where they are most receptive.”

“Today’s consumer is reinventing marketing in response to the explosion of choices available, not only in terms of product, but in media channels,” says P&G spokesperson Aimee Harney. “At P&G, the consumer is boss. We know consumers today are less responsive to traditional media and that they are embracing new technologies that empower them with more control. We must evolve with our consumer.”

For P&G, that means reaching consumers off air via outdoor, radio, online, word-of-mouth and in-store.

“We are exploring and testing new marketing that keep consumers’ interest top of mind,” she adds. “We need to make our advertising so appealing that they welcome it in their lives.”

Still unsure about Ne-Yo? Check out MTV or VH1. Chances are, you can find the artist in concert on a file sharing site. Who knows? Maybe you’ll bump into Jay-Z on the way.

Coming to a TV Program Near You

Brand marketers are going beyond traditional 30-second spots to reach consumers, looking to build emotional ties with audiences.

Take Johnson & Johnson’s ongoing partnership with Turner Network Television to sponsor original films on the cable network. Under J&J’s Spotlight Presentation movie banner, the company gets on-air and off-air support from TNT, as well as brand association with movies that leave consumers reaching for the tissues.

“We look for stories that are insightful and meaningful,” says Linda Yaccarino, executive VP and general manager of Turner Entertainment ad sales and marketing. “The stories are born out of terrific writing, which ultimately deliver unique content to viewers.”

That emotional connection to movies is leading brands to re-evaluate where they want to place their messages, says media analyst Jack Myers.

“We’re in the early stages of a trend where marketers are looking to identify those television programs and networks that have the most relevant, emotional connection with their best target consumers,” Myers says.

TNT has produced seven titles under J&J’s Spotlight Presentation title since 2002. Interpublic’s Magna Global Entertainment division, New York, handles. This month, the network debuts its next original film under the J&J banner for The Ron Clark Story, a true story that stars Matthew Perry as an energetic young teacher who leaves his North Carolina home to teach in a New York City public school. Through his love for children and passion for teaching, Clark makes a difference in his students’ lives. The Ron Clark Story premieres Aug. 13 at 8 p.m. ET on TNT.

To support the movie, TNT is dropping 184,000 direct mail pieces to teachers in 20 markets asking them to watch the film. An essay contest simultaneously lets students write about how their favorite teacher has made an impact on their lives for a chance to win scholarship prizes. Teachers that are honored in the winning essays will win a getaway trip. The promotion runs through Oct. 31. Online materials, TV spots and print ads will support.
— AJ