A Shekel for Your Thoughts: Israel’s promotion practices are not U.S. knockoffs.

According to my tour book, I’d already made a big mistake. I was minutes away from landing in Tel-Aviv with no shekels in my pocket. Since it was the Sabbath, the banks would be closed and I would be out of luck – and cash – until Monday. Thank goodness Naftali was picking me up. Otherwise, there wouldn’t have been any taxis or services available to me.

At least that’s what the guidebook said. It also said watch your back, don’t talk to strangers and, most importantly, don’t ever talk politics with Israelis.

I should have just thrown the book away. The airport was a bustle of activity, with taxis and car services jostling for my business and cash machines and currency exchange kiosks everywhere.

On the ride into the city, I was amazed at the number of U.S. brands I saw on billboards, with messages in both Hebrew and English.

I’ve done quite a bit of traveling, but I’m still amazed at how big and loud our brands look against the backdrop of foreign architecture and cultures. You’d think they would have been subtler here, only miles away from Jerusalem, but that was not the case.

Israel is a bit smaller than New Jersey, with a population of about six million people, 1.2 million of them kids. Israelis are resourceful, smart, ambitious, and not afraid to show their competitive nature. They like to negotiate and they like to be first.

That’s why Naftali, on behalf of the GoldMedia promotion agency, had invited me to Tel-Aviv. The agency was hosting the first-ever promotion seminar in Israel, and I was keynote speaker. The theme was kids’ marketing. Other speakers included local marketing managers from top multi-national brands, broadcast marketers, and a well-known psychology professor.

Naftali said there would be about 100 attendees, mostly senior-level marketers. But there would be no agency representatives, because the competitive nature of Israelis won’t let them attend another agency’s event. That surprised me.

What also struck me was the age of the audience. At 30, I was the oldest person there except for the professor. How strange that so many senior-level marketers were no older than my little brother.

But these people are definitely savvy about marketing. They don’t rely solely on American business practices to sell their products because they don’t need to. They’ve found a way to tap into the psyches and behavior of Israelis, especially kids. With young people targeting the young, how can they possibly go wrong?

Of course, another reason not to adopt our practices is the fact that Israel’s infrastructure is so different. The country has just one coupon clearinghouse and a general distrust of coupons because “Jews like to touch and feel things before buying them,” says Joni Saar, president of agency Promarket. “We want added value and to know we’re getting a good deal. If something is 10 shekels one day and five the next, we get angry and feel cheated.”

Weak distribution channels, few supermarket chains (there are about three), and the fact that scanners – and thus FSIs – are not used also make this country a very different marketplace.

Then what do marketers rely on to tout their brands? TV commercials, for one. “It’s a challenge for promotion agencies to compete against ad agencies because commercial TV is still so young here [about six years old],” says Saar. About 75 percent of marketing budgets go to advertising, with the other 25 percent used for promotion. “Consumers are still impressed by big brands and their messages,” Saar says. Quite different from those jaded, pitch-savvy American kids, eh?

What else is different? The emerging popularity of shopping malls. There are four or five in each town, and their presence often leads to the failure of giant retail chains such as Toys R Us. Consumers – and thus marketers – are less apt to invest time and money in a single retail outlet when they’ve got a mall just down the street. And malls are full of marketing opportunities. “Malls are a popular channel for marketers to communicate directly with their target audience,” Saar says. A mall activity costs between $250 and $400 per two-square meters per day; every mall in the country has something going on at all times.

But what I found most unique was the ability of giant brands like Doritos, Dannon, and Sprite to get into school classrooms with the blessings of teachers and the Ministry of Education. GoldMedia, which claims to be the only agency doing in-class marketing right now, prides itself on being able to knock on any elementary classroom door and take over for 10 to 30 minutes on any given day. Samplers distribute products while field reps lead classes in songs and activities that support the brand message. Israeli schools tend to lack funds for new playground equipment and computers, so “schools are hungry for added value and the opportunity to get items for students,” says Dror Kreisler, GoldMedia promotion division manager.

GoldMedia initially got into schools by winning over the Ministry of Education with a yellow pages of 220,000 kids in 30 cities across Israel. The book contains not only names and phone numbers but also relevant information on entertainment, help centers, and malls.

As Israeli promotion agencies continue educating their clients about the importance of investing in the kids’ market, they’re looking toward the future. They’re investing huge amounts of money into research departments that track kid trends, and they’re looking beyond segmented marketing to ethnic marketing and other areas. “The religious groups are the best collectors [of information] because they’ve just recently begun to participate and they’re still open to the concept,” says Kreisler.

Israelis are also beginning to develop custom kids’ publications and Internet promotions. With more than 220,000 households already connected to the Internet (a 25-percent increase over mid-1998), Israeli’s kids should be in for as many surprises as I was.