January

Wal-Mart gave a thumbs up to its RFID rollout as it began receiving case- and pallet-level tagged merchandise from 137 suppliers, destined for distribution centers in the Dallas/Fort Worth area. The retail giant planned to roll out RFID to 600 stores and 12 distribution centers during 2005…. Kraft Foods announced it would stop advertising its less-healthy products to kids aged six to 11 as it shifts marketing strategy to highlight healthier foods…. Alloy, Inc. finalized its $6.75 million settlement of a class-action lawsuit. Alloy attended a hearing to finalize the settlement of a second, related suit, alleging that six executives misrepresented Alloy’s financial results.

February

ConAgra Foods agreed to pay $14 million to settle a lawsuit filed by shareholders who were disputing its accounting practices…. Volvo Cars of North America said that the introduction of its new SUV and an online sweeps dangling a flight into outer space was the most successful integrated product launch in its history. During the promotional period, it kicked off via a 30-second Super Bowl spot, the site generated 18 million hits.

March

Procter & Gamble launched its biggest marketing initiative for the year, with a $100 million push to introduce its new mouthwash product, Crest Pro-Health, which debuted at the end of March…. Madison Road Entertainment filed a counter suit against affiliates of Mark Burnett Productions, claiming defamation and libel. Burnett had filed suit weeks earlier, charging that Madison Road lied about a relationship with Burnett and charged “exorbitant” fees from sponsors of the hit show, The Apprentice. The two parties later settled out of court…. Warner Bros. Domestic Television introduced what may be the next-great-thing in entertainment marketing: retroactive product integration. Via digitization, products appear in rerun sitcoms and other programs — even though the brands were never in the original airing.

April

Kellogg Co. announced plans to buy Kraft Foods’ $80 million fruit snacks business for $30 million. Retail snacks sales in North America accounted for about 30% of Kellogg’s 2004 sales — more than cereal sales in North America, which was about 25% of Kellogg’s total…. For the third consecutive year, PROMO’s Industry Trends Report tracked an increase in promotional marketing spending among brand marketers, coming in at 8.9% for 2004. Over 58% of brand managers expected to keep their budgets flat in 2005.

May

Once again, a contender with a TV tie-in took the EMMA for best entertainment marketing campaign: Burger King leveraged its star turn on The Apprentice to launch a new burger (developed on-air by the would-be Trumps)…. A report released this month by PQ Media said the value of television placement jumped a whopping 46.4% to $1.87 billion in 2004 — mostly driven by the onslaught of reality shows — outstripping films for the first time in 30 years. In 2004, film product placement alone rose by 14.6% to $1.25 billion. Experts said the trend would likely continue, thanks to a growing use of personal video recorders and larger placement deals as marketers move from traditional advertising to alternative media. The value of product placement was expected to soar to $4.24 billion in 2005, the report said.

June

Civic Entertainment Group was named PROMO’s Agency of the Year for its work on behalf of such clients as The History Channel (including the Save Our History campaign) and CNN (notably the CNN Diner established across the street from the RNC headquarters during the Republican Convention in New York City)…. New York judges dismissed two suits against D.L. Blair and The New York Daily News over a printing error in the newspaper’s Scratch n’ Match game. The blooper resulted in a $1 million make-good pool to assuage consumers who thought they had hit the jackpot.

July

The National Hockey League reached an agreement with its players’ association on July 13 to put players back on the ice after a 301-day lockout that led to the cancellation of the 2004-05 season. That was good news for brand sponsors like MasterCard, whose Canadian division held on during the long freeze out. MasterCard Canada is the official card and payment system of the NHL, as well as official sponsor of the annual NHL All-Star Weekend.

August

Clothing, shoes, and school supplies were expected to be strong sellers for back-to-school season, but spending on the electronics category was forecast to drop more than $1 billion, according to a National Retail Federation study…. Florida modified its laws for game promotions, no longer requiring full rules in print ads for chance promotions. The move provided relief to marketers who had avoided the state because of its rules.

September

Retailers and brands scrambled to find ways to support communities in the hurricane-ravaged Gulf Coast area of the U.S. — without appearing to exploit the crisis…. The dollar still reigned as the No. 1 most-popular type of consumer and employee incentive, according to PROMO’s second annual Premium & Incentives Study. Gift cards ranked No. 2, followed by gift certificates (among consumers) and vacation travel (among employees). Stored-value cards ranked last.

October

Cadillac’s Under 5 campaign, delivered via a cooperative effort from Arc Worldwide and Leo Burnett, took the Campaign of the Year award at the PRO Awards Gala, held in Chicago during PROMO Expo…. According to PriceWaterhouseCoopers, video game advertising will more than quadruple to $800 million in 2009, from $120 million in 2004 as the popularity of video games soars.

November

Country took to the City, as the Country Music Association staged a week of promotional events throughout New York City in a lead up to its first broadcast of the CMA Awards outside of Nashville…. Procter & Gamble and Wal-Mart Stores continued to lead Cannondale Associates’ annual PoweRanking survey, but non-food manufacturers and non-grocery retailers edged higher in the ranks…. Kellogg Co. agreed to quit using a kids’ print ad that touted premiums, rather than products. The ad came under fire for violating CARU guidelines.

December

A report from the Institute of Medicine of the National Academies claimed that food and beverage marketing to children under 12 leads them to eat more foods that are high in calories and low in nutritional value. The report, Food Marketing to Children and Youth: Threat or Opportunity?, stopped short of saying that TV ads are a direct cause of obesity in children, but said that the connection is strong. It claimed that significant changes are needed to “reshape children’s awareness of healthy dietary choices.” The authors called for government legislation if self-regulation failed. The Association of National Advertisers, said that such legislation would be a violation of the First Amendment…. A trio of investment firms plans to buy Dunkin’ Brands, the parent company of Dunkin’ Donuts and Baskin Robbins, for $2.43 billion. Bain Capital Partners and Thomas H. Lee Partners LP, both of Boston and the Carlyle Group, New York, signed the deal.
— Assembled by the PROMO editors

From the Bench: Legal Highlights

February

The FTC turned down a bid that would have notified viewers when products were placed in TV shows for a fee and might be considered an “advertisement.”

March

AGs from 49 states settled with Blockbuster Inc. over claims that its “No Late Fees” campaign misled consumers. Blockbuster agreed to give full refunds to customers equal to the selling price of any rental item converted to a sale under the program….The FTC penalized Comp-USA for advertising “false” rebates. The FTC said CompUSA knew that a manufacturer was having trouble paying, but continued to advertise rebates. It was ordered to make good on the promised rebates, each from $15 to $100…. Simon Property Group, Inc. agreed to comply with New York’s gift card law and pay $125,000 in penalties to settle a suit brought by the state over Simon’s dormancy and administrative fees.

April

Federal regulators rejected Anheuser-Busch complaints that ad claims by rival Miller Brewing Co.’s that its brew had “more taste and half the carbs of Bud Lite” were misleading.

June

Scholastic, Inc. and two subsidiaries settled with the FTC over marketing negative option book clubs. They paid a $710,000 civil penalty…. The Securities & Exchange Commission ended its investigation into General Mills’ sales and accounting practices, with no action taken.

July

Guild Group’s former comptroller, Phillip Liu, got the maximum penalty for embezzling $1.3 million from the agency in 2004. He received 58 months in prison and was told to make full restitution.

August

Burger King franchisees sued McDonald’s Corp., seeking damages of $500 million for unfair competition from its Monopoly games and other promotions. The suit was dropped in September…. The court sided with the American Legacy Foundation in a suit filed by Lorillard Tobacco Co., saying that its anti-smoking campaign, “truth,” does not vilify nor personally attack tobacco companies or their employees…. Wal-Mart sued former Vice Chairman Tom Coughlin to void his retirement package and recoup $500,000 he allegedly stole from the retailer. It also wants back his $6.5 million in past bonuses.

October

Commercial Alert asked the FTC to investigate buzz marketers for deception. It identified Procter & Gamble, which it said has enlisted about 250,000 teenagers in its buzz marketing sales force, as a possible culprit.

January

Diageo completed its sale of Burger King for $1.5 billion (almost a third off the original asking price, thanks to stiff market conditions for QSRs). The company is now focused on its all-alcohol portfolio of brewed and distilled liquor brands. Among the priorities on its to-do list: fending off charges that it and its competitors are inappropriately marketing to minors….Guerrilla marketing around Super Bowl XXXVII reached new heights: Miller, for example, fielded a “Super Party” campaign and signed deals directly with team franchises, rather than the league.

February

Continental, Delta and Northwest airlines got the green light for a marketing alliance, despite grief from the Department of Transportation. The U.S. Department of Justice allowed sharing of frequent-flier miles and airport lounges, and flight codesharing. But it insisted the airlines give up 13 gates in four hub airports, limit data sharing and limit three-party bids for corporate contracts….Campbell Soup Co., Camden, NJ, settled a $35-million class-action suit for “channel stuffing,” i.e., shipping excess inventory to retailers. The suit charged Campbell with misrepresenting its sales in the late 1990s in order to inflate its earnings, per the Philadelphia Inquirer. Campbell denied any wrongdoing; its insurance covered the settlement costs.

March

Icon brands including McDonald’s, Philip Morris, Texaco, Gap, Starbucks, Nike and Disneyland became the target of Boycott Brand America, an anti-war demonstration by the activist Adbusters Media Foundation to protest the imminent U.S. invasion of Iraq. The anti-campaign generated over 20,000 e-mail signatures. Vancouver, British Columbia-based Adbusters uses “culture jams” such as Buy Nothing Day (the Friday after Thanksgiving) to protest marketing and consumerism….In one of the largest U.S. coupon schemes ever, the feds arrested 16 people suspected of participating in a clip-out coupon fraud that generated more than $4 million. The 18-month long investigation involved 370 retailers in 15 states (although most of the coupons were clipped from newspapers in the New York area). Officials said some of the money was siphoned to Jordan and Israel’s West Bank.

April

Sister agencies Lowe & Partners Worldwide and DraftWorldwide combined under the name Lowe + Draft.…General Motors began a program allowing prospective buyers to test drive vehicles overnight. Through July, customers could take any GM model overnight, with the exceptions of high-end vehicles such as the Chevrolet Corvette and the Hummer H1. Test drivers had up to 24 hours and 100 miles, and had to remain in the dealer’s state….PROMO’s Annual Industry Trends Report found the marketing scale tipped soundly over to promotions, as some 26.5% of all marketing spend in the U.S. in 2002 went to consumer promotions vs. 24% to consumer advertising (the other 49.5% went to trade marketing). Total promotional spending in the U.S. in 2002 reached $233.7 billion. Other findings: CEOs (with urging by their CFOs) back promotion as a key strategy; event marketing continues to grow.

May

Sony’s Universal’s Spider-Man took PROMO’s top EMMA, thanks to partners such as Kellogg’s and Cingular….The Pepsi Play for $1 Billion sweeps kicked off. Over two million folks combed packs of Pepsi, Mountain Dew and Sierra Mist for a chance to appear on the game’s eponymous reality show in September and a shot at $1 billion. Pepsi and SCA Promotions teamed with insurer Berkshire Hathaway to underwrite the grand prize. Outcome: a high school teacher from Princeton, WV, missed by two digits, but went home with $1 million.

June

DVC was named PROMO’s Agency of the Year for its revenue growth and work for such clients as Georgia-Pacific (the Do You Know a Brawny Man? campaign)….Toyota launched its new Scion sedans, relying on viral marketing to impress young male first-time buyers that it believed were the key demographic for the car. The car manufacturer ran no TV ads and dealers couldn’t approach prospects. Instead, it began parking souped-up Scions outside nightspots in key markets.

July

Coca-Cola was nabbed for tampering with a promotion. It admitted that it had rigged a Frozen Coke promotion by hiring a man to take hundreds of children to Burger King to buy meals that featured the drink. The disarray at Coke may be due, in part, to the turnover in its CMO spot: In June, Daniel Palumbo was named Coke’s third CMO in as many years….PROMO’s annual Salary Survey showed top male brand execs did fine during the recession, while lower and mid-level managers — and all females — saw pay wither.

August

WPP Group’s Sir Martin Sorrell arm-wrestled rival Publicis Groupe in a dramatic bidding war for Cordiant Communications. WPP paid $430 million; after sell-offs, outlay was only about $243 million. WPP has kept 141 Worldwide intact (it had 2002 net revenues of about $42 million across 91 offices in 57 countries) but broken up Bates, whose offices and clients got absorb-ed by WPP sibs.

September

President Bush authorized the Federal Communications Commission to enforce a national Do-Not-Call list. A similar list from the Federal Trade Commission exceeded 55 million phone numbers….The WUSA, America’s women’s soccer league, folded due to inadequate sponsor support….Snapple partnered with the City of New York to sell juice drinks and bottled water in the city’s 1,200 schools and in all 6,000 of the city’s public buildings. Snapple bid a total $166 million. But NYC Comptroller William Thompson cried foul in the weeks that followed, demanding an audit and cancellation of the deal.

October

Disney cut a 10-year partnership deal with HP to sponsor the Mission: SPACE attraction at DisneyWorld Epcot, as well as HP sponsorship of Disney online (including sites for the theme parks, the Disney Store, ESPN and Disney Channels and the site for the ABC TV network) and tech support to Disney’s corporate parent….PROMO Expo featured a keynote address by ex-Wal-Mart CMO Paul Higham on the future of in-store promotion. Among his recommendations: Get ready for radio-frequency ID tags, which Wal-Mart insists must be placed in/on a large cadre of cases and pallets by 2005….Washington Mutual Bank wins Best Overall PRO Award for a campaign by OPTS Events, which bought out all seats on the Great White Way one matinee Saturday — for teachers nominated by bank customers.

November

Ten lawyers migrated from Hall Dickler Kent Goldstein & Wood to Manatt, Phelps & Phillips following failed merger talks between the firms. Led by Linda Goldstein and Jeffrey Edelstein, the legal eagles brought much of Hall Dickler’s advertising, marketing and media practice with them. The staffers moving to Manatt handled work for ESPN, Toys ‘R’ Us, Yahoo, DreamWorks, Reader’s Digest, Energizer Holdings, Schick, MasterCard and hundreds of advertising and promotion agencies. Manatt now has 280 lawyers.

December

Federal “Can Spam” legislation passes, and is sent to the White House for signing; the new law, sponsored by U.S. Sens. Conrad Burns (R-MT) and Ron Wyden (D-OR), will include civil and criminal penalties against the senders of unlawful marketing e-mail, special warnings for pornographic messages and calls for the investigation of a do-not-spam list….ABC (a Disney subsidiary) signs a deal with WPP’s MindShare for programming development.

January

Howard Beales, director of the Federal Trade Commission’s Bureau of Consumer Protection, reiterates FTC chairman Timothy Muris’ outline to enforce existing privacy laws, not push for new regs…. Pharmaceutical firm Eli Lilly & Co. settles with the FTC for inadvertently disclosing nearly 700 e-mail addresses of Prozac users (a second Prozac gaffe, mailing unsolicited samples, strikes later in the year)…. The FTC considers a national Do Not Call list for telemarketing, vigorously opposed by the Direct Marketing Association…. AOL Time Warner expands its partner roster through deals with Kellogg USA and Burger King…. Marketers of the Year for 2001 include DreamWorks SKG’s head of marketing and national promotion Anne Globe, McDonald’s CEO Jack Greenberg, and Harry Potter author J.K. Rowling.

February

Bob Merz, director of marketing for 7-11, oversees preparations for the c-store’s 75th birthday (in July)…. PROMO asks, Are consumers sick of brands? Turns out they’re just sick of bad marketing…. The fallout of General Mills’ purchase of Pillsbury continues as Nestlé SA takes sole ownership of Haagen-Däzs through a $641 million buyout from partner Pillsbury…. Custom publishing revenues grew 10 percent to an estimated $1.5 billion…. Kraft Foods, Toys “R” Us and Toyota climb aboard the re-release of E.T. The Extraterrestrial…. Frito-Lay returns its promotion and retail merchandising account to Tracy Locke Partnership as parent PepsiCo consolidates.

March

PROMO celebrates its 15th anniversary…. A story on the 16 most influential campaigns includes 1989’s Bud Bowl, 1994’s Guinness Win Your Own Pub In Ireland, and 1996’s Pepsi Stuff…. The U.S. Postal Service calls an agency review for its $100 million account…. The Consumer Electronics Association predicts sales will hit $95.7 billion in 2002…. Miller Brewing and Allied Domecq ink a $50 million deal to develop and market “malternatives.”… Pepsi drops tie-ins with Lucasfilm’s Star Wars: Episode II — Attack of the Clones after a 2001 campaign tied to Episode I — The Phantom Menace did not meet extremely high expectations.

April

Newly renamed Masterfoods USA (formerly M&M/Mars) breaks its largest promotion in its 61-year-history with the Global Color Vote…. Burger King goes after McDonald’s market share with a $300 million brand re-launch that includes 14 new products, an online loyalty program with eBay, and promotional partners including Universal Studios…. The severity of the marketing slump is fully realized as coupons — the “recession-proof” tactic — suffered drops in both distribution and redemption for 2001…. Bankrupt Kmart is allowed to drop its NASCAR sponsorship while Martha Stewart says she’ll stick with the retailer…. BMW of North America wins two Gold awards and takes top honors as the Best Campaign of 2001 in the Promotion Marketing Association’s annual Reggie Awards.

May

Coors Brewing Co. and PepsiCo pay $300 million and $160 million, respectively, to become official sponsors of the National Football League, knocking rivals Anheuser-Busch, Miller Brewing Co., and Coca-Cola Co. out of those slots…. DreamWorks SKG’s Shrek dominates PROMO’s 2002 EMMA Awards, winning best overall campaign and tying in with Baskin-Robbins for best feature film promotion and home video release…. The FTC attacks deceptive spam by challenging the way some marketers gather e-mail addresses…. Stadium sponsorships hit the wall as marketers reevaluate bloated 20-year, $20 million deals…. Unilever announces it will spend more on sponsorships globally.

June

Trade promotion experts sound the alarm for marketers to heed new guidelines from the Financial Accounting Standards Board that change the way packaged goods companies report trade spending…. ACNielsen reports that fewer shoppers frequent grocery stores…. GMR Marketing rides the wave of event marketing to earn the top spot as PROMO’s Agency of the Year (141 Communicator and DraftWorldwide round out the top three)…. Coca-Cola bounces back from losing the NFL sponsorship by signing a four-year deal with the National Basketball Association.

July

Loyalty marketing grows up: Pepsi-Cola Co., Miller Brewing Co., and Kellogg stop or revamp their loyalty programs as auction-based promotions and Upromise grow in popularity…. Nearly 60 percent of promotion agency professionals got no salary increase in 2001, according to PROMO’s Agency Salary Survey…. Philip Morris sells Miller Brewing to South African Breweries…. Blockbuster gives 4,000-plus stores a face-lift, with sections devoted to selling videogames

August

Unilever hones its Master Brands strategy to back key brands and concentrate on connecting with consumers beyond product categories…. Tube foods gain momentum at ConAgra Foods, Kraft Foods, and Mott’s, building on the 1999 launch of Yoplait Go-Gurt…. In other tube news, TV networks weave advertisers right into scripts with product placement that Tivo can’t zap out (such as Revlon’s role as an evil cosmetics empire in ABC’s All My Children).

September

Hershey Foods Corp. abandons plans for a sale after it rejects a last-minute $12.5 billion offer from Wm. Wrigley Jr. Co…. A consortium of U.S. capital firms — including Texas Pacific Group, Bain Capital, and Goldman Sachs — take a $2.26 billion bite out of Burger King when they purchase it from Diageo…. Four men are convicted for fraudulently redeeming McDonald’s game pieces in a scheme led by a Simon Marketing security director, who pleaded guilty.

October

Anheuser-Busch Cos. sells its 22-year-old in-house marketing agency, Busch Creative Services, to three of its own executives, who rename it the Spark Agency…. Frankel promotes Dick Thomas to president-CEO…. Consumers want less, better direct marketing, according to research by Yankelovich Partners and DIRECT Magazine. The study found that 54 percent of consumers responded to at least one direct-marketing effort over the past six months and 40 percent made a purchase.

November

CoActive Marketing scoops up PROMO’s top PRO Awards honor for its Eat Like a Champion program for Safeway supermarkets…. Agency veteran Bud Frankel is honored with the first-ever Lifetime Achievement Award at the 12th Annual PRO Awards at PROMO Expo in Chicago…. Burger King’s sale hits a road bump when the food chain’s recent poor performance leads the consortium to revise agreement terms…. McDonald’s says it will close 175 restaurants worldwide and cut 400 to 600 jobs to revive business.

December

Burger King sale regains life as Diageo looks to push the sale through…. Anheuser-Busch teams with Microsoft Corp. to bring Xbox games to bars and clubs in 100 markets…. Small-format and specialty stores are poised to drive retail growth in the next five years…. More brands create homegrown sports tie-ins as grassroots marketing steals thunder from sponsorship deals…. State tourism boards, including New York City, battle post-Sept. 11 budget and travel woes…. Internet campaigns dominate PROMO’s seventh annual Dialog Awards, recognizing the best in interactive promotion. Gold winners include Subaru and PT Cruiser.