… With Big Social-Media Push

Get ready for Starbucks Holiday 2.0. The brand is going big in social media this year, having learned that its consumers want to participate in a variety of ways. So Starbucks is pulling back from its Thanksgiving TV buys of the past two years to focus on where its customers already spend time online and drive them into stores.

Starbucks is spreading the love around, advertising on websites from NYTimes.com to Meebo; partnering with Pandora to offer branded holiday playlists; and encouraging participation in social and owned media to get consumers in the holiday spirit. The chain is continuing its partnership with Red, launched last Thanksgiving, by offering a free “All You Need Is Love” CD, with tracks from U2, John Legend and the Dave Matthews Band, when consumers spend $15. Additionally, Starbucks will give $1 to fight AIDS in Africa. There are also a variety of holiday-themed “Red” products for which Starbucks will also make the $1 donation with a customer purchase. This represents a stepped-up version of last year’s offer, which was a five-cent donation made when consumers bought a holiday beverage such as a peppermint mocha.

“It’s like we’ve taken the version 1.0 of last year and now we’re really doing it at scale and going to a lot more places where our customers already are,” said Chris Bruzzo, VP-brand, content and online at Starbucks. “People are saying this is going to be a big year for social media and we’re a microcosm of that. Whereas last year it was a curiosity, this year it’s a core part of the program.”

Multiple touchpoints
Mr. Bruzzo said the brand has learned that different people want to connect in different ways, so Starbucks is offering a variety of touchpoints. “Of our 5 million [fans] on Facebook, not everyone is going to want the same thing,” he said. For instance, last year Starbucks encouraged consumers to stop in, buy a holiday beverage, take pictures of themselves inside Project Red’s logo parentheses, and upload their pictures to a Red holiday microsite. To make it easier, this year Starbucks is hosting a Flickr page where consumers can upload pictures of themselves with their holiday paraphernalia. They can also do so on Facebook, where fans can also send their friends red Starbucks cups. Mr. Bruzzo said the Starbucks shutterbugs are among the chain’s biggest fans, valuable evangelists for the brand who educate friends and family about what’s new at the chain.

For music lovers, Starbucks is partnering with Pandora in the hope that consumers will be thinking about Starbucks while listening to music, and perhaps will be more likely to pop by for a gingerbread latte. Mr. Bruzzo said the branded playlist on the music site is designed to get consumers into the store to spend $15 and get the “Love” CD. “We get the appeal of do good, feel good,” he said. The Starbucks’ integration includes Pandora’s iPhone app, and Starbucks is paying Pandora for ad placement. BBDO, PHD and Blast Radius worked on the campaign.

Starbucks has also found a faster and easier way for consumers to get involved, even if they’re not yet comfortable in social media. “There are some ways that take a lot of energy but make [consumers feel] vulnerable and scared, and only the hardcore people online will go through such incredible content submissions,” Mr. Bruzzo said. For these less-comfortable folks, Starbucks created the “love drawing,” at StarbucksLoveProject, for visitors to create a digital drawing using different paints and colors. For each of the first million drawings, Starbucks is donating 5 cents to Red.

“We’re already up to a couple thousand on the site with people just coming in,” Mr. Bruzzo said of the site’s first day. “It takes a minute and it’s a fun, engaging activity.”

… has cut the list of semi-finalists vying for the brand’s national creative account in half.

The shops moving to the next round are two Publicis Groupe shops: Bartle Bogle Hegarty, New York, and Publicis, New York; along with Interpublic Group of Cos.’ Martin Agency, Richmond, Va. Eliminated are Omnicom Group’s DDB, Chicago; Interpublic’s Gotham and independent McKinney, Durham, N.C. Cadillac confirmed that list.

The holidays will be a frenetic time for the finalists to put together their presentations, as the marketer has said it will hear pitches in January. A decision is expected soon afterward.

Prior experience
The three finalists have experience dealing with car brands.

Bartle Bogle was a finalist in Audi of America’s review in 2006. The agency’s London office handles Audi in the U.K., which created this TV spot for the Q5 early this year. In the Audi of America review, the agency pitched against incumbent McKinney, which had held the account from 1993 to 2006. The account is now with Venables, Bell & Partners.

Publicis, New York, had handled one of BMW’s four regional dealer ad accounts, but lost it last year after a consolidation pitch won by Grey West, San Francisco. Publicis had also created BMW’s first national, certified-used car blitz in newspapers in 1999. (Publicis’ Starcom MediaVest Group handles GM’s U.S. media planning and buying account for all brands, but the automaker is not reviewing its media business.)

Martin has solid auto experience, having handled GM’s Saab account from 1997 to 2001 and before that Mercedes-Benz dealer groups. The shop was a finalist in Subaru of America’s pitch five years ago and also held Maserati’s account from 1987 to 1989.

The dark horses
Industry experts had ranked Gotham and DDB as the dark horses in Cadillac’s review. Gotham, a 160-person agency founded in 1994, has never had a car account. But in January the shop hired Marty Orzio as chief creative officer, from Energy BBDO Chicago, where he held the same post. Earlier in his career, Mr. Orzio was a member of a three-man creative team that developed some of the most awarded car work for Mercedes-Benz, first at Lowe & Partners, New York, and then at the shop known as Merkley Newman Harty, where he followed the account.

DDB’s Chicago office has auto-related accounts including Cars.com and State Farm.

The incumbent, independent Modernista, Boston, opted not to defend the business, which it won without a review in 2006.

Ark Advisors, New York, is managing the pitch, but did not return calls or e-mails for comment.

Cadillac spent $269 million in U.S. measured media last year, 20% more than the prior year, according to TNS Media Intelligence.

—
Contributing: Rupal Parekh

Over the past 18 months, a great debate has consumed our industry: Are digital agencies poised to sit at the head of the advertising table? Depending on whom you ask and what you read, the answer seems to flip flop

- with a majority of people still having reservations and making claims that digital agencies aren’t ready to lead.

So why does the debate continue? Does offline or online really matter to an oblivious consumer who’s only interested in “no-line” communications? Are we spending too much time focusing on who should lead and not enough asking: What’s next?

Ana Andjelic’s DigitalNext post, provocatively titled “Why Digital Agencies Aren’t Ready to Lead,” mentions several reasons why digital agencies aren’t ready to lead, one of which was their lack of experience in the business (as compared with the “decades of experience” that traditional agencies are known for). I’m sure there are instances where decades of experience can directly translate into success, but there are certainly instances (uh, Lehman Brothers?) where deep roots had no bearing on their ability to produce — and produce well. Furthermore, a certain percentage of the individuals now working and thriving in digital agencies came from traditional agencies.

Additionally, most of the world’s most ingenious inventions were not created overnight, but took years of hard work, research, observation, trial and error, and collaboration to fine tune. The digital ecosystem has required much of the same exploration — and, in most cases, into technologies that are new to all of us. As James March himself said, “Exploration involves being an amateur for a while, but only as a step on the way to being a professional.”

And while the structure of an interactive agency may often mimic “one big crazy family” (by the way: Whose family isn’t crazy?), how could making sure everyone’s opinion is heard be a bad thing? Most interactive agencies subscribe to the notion that you never know where the big idea or concept will come from. Sometimes the big idea can come from the exploration of a new technology or method that enhances consumer connection.

Here’s why:

* That was then, this is now. Like it or not, the days of the ingenious, 30-second TV spot are over. Today’s creative ingenuity lies within the idea, the technology, the concept, the innovation and, perhaps most important, the Holy Grail: consumer connection. Word of mouth is more prevalent than ever and interactive communities have an increasingly louder and more influential voice and are stronger (and sometimes the only) sources of breaking news stories. No one understands this better — nor is better equipped to handle the swift demands required — than the digital agency.

* Teaching an old dog new tricks. The “new trick” is immediacy. It’s about faster response times and the concept of immediacy. E-mail, IM, Twitter, Facebook, cellphones — all of these technologies set the stage for consumers wanting and expecting immediate responses, not to mention, immediate access to products and services. Traditional advertising agencies are not adapting to this mentality because they are still working with processes and organizational structures that were developed in a time when the internet and the concept of immediacy simply did not exist.

Digital agencies understand that brands are being held to higher-than-ever consumer expectations. The plethora of data we can garner from a $50,000 media buy can leave traditional agencies’ heads spinning with insight and analysis. The truth of the matter is: Interactive agencies are forcing traditional agencies to integrate with digital media to better track and measure campaign results through custom URLs, short codes, etc.

* Kickin’ it old school. Not only are the days of the 30-second TV spot gone, so too are the traditional advertising agency gurus like David Ogilvy and Bill Bernbach. Today, those figures have been replaced, instead, by financially backed entities. Rather than exploration and exploitation, digital agencies need their own gurus and legends that can lead by example.

Five or 10 years ago, I might agree with the argument that digital agencies weren’t ready to lead, but after sitting at the table with other agencies for the past decade — traditional, branding, public relations, marketing — it’s clear that digital agencies have proven their value, not to mention their ability to innovate, inspire, and create the big idea.

Perhaps the synergy and balance between exploitation and exploration is off kilter for digital agencies, but more and more we’re starting to see the agency structure itself change with new hires in technology and social media. And marketers are noticing:

* According to Media magazine, AKQA was named the lead agency for Nike India earlier this year.
* Precor named Ascentium its agency of record in October 2009. According to Forrester’s Q2 2009 Interactive Agency Wave, Ascentium “received the highest client satisfaction scores in this year’s review.” The assignment with Precor includes strategic planning and execution of all offline and online campaigns.
* McAfee hiring Tribal DDB as its agency of record in 2008. This assignment included all TV, print, outdoor, and digital.

The balance may not be there today, tomorrow or next month. The truth of the matter is digital agencies have earned their right to sit at the head of the table because they’ve brought what consumers and marketers are looking for: new innovations in measurement; flexibility and nimbleness; and, most importantly, ideas that bring what a magazine spread or 30-second TV spot cannot.
—
ABOUT THE AUTHOR
Now president-CEO of Nurun, a global interactive marketing agency, Jacques-Hervé Roubert began his career in advertising at Havas Conseil and subsequently held senior executive positions with BDDP and Young & Rubicam.

… From Google to Vegemite

Australians Google any and everything. They’re glued to their Nokias, chuck a chicken on the barbie, indulge with Tim Tams and everyone has the hots for Hugh. Breast cancer has the strongest pull on their heartstrings, while Apple and Wii keep Australians constantly amused.

These are among the top brands in Australia according to the 2009 Brand Asset Valuator (BAV), a study conducted by George Patterson Y&R every three years. The latest BAV study examined 1,200 brands covering 139 different categories. More than 4,000 Australian consumers were surveyed online as part the WPP agency’s database of consumer perceptions of brands.

“What we’re seeing here are high-engagement players taking precedence over the more traditional and prestige brands. There is a new dynamic here which will have a significant impact on how marketers invest in their in their brands in the future,” said David Evans, national research director of George Patterson’s brand asset consulting division.

Top 10 Brands in Australia

1. Google
2. Nokia
3. Vegemite
4. Microsoft
5. Sony
6. Bunnings Warehouse
(the Southern Hemisphere’s largest hardware chain)
7. Ikea
8. Coca-Cola
9. Tim Tam
10. Wii

Bottom 10 Brands

1. Investra Property
2. House of Windsor Foods
3. Australand
(property developers)
4. Grazia (magazine)
5. Fidelity (investments)
6. Hudson (property)
7. GE Capital
8. Theos Bottle Shops
9. Aurora Coffee
10. GQ

“We saw the beginnings of this in the 2006 BAV study, when Google came in at No. 4. Today it is the most deserving leader of the pack right across the board due a combination of factors, delivering on promises, continuous energy and steady service innovation. Apple’s five products are also clear consumer favorites.”

This year’s BAV incorporates a new algorithm that tracks consumer trust in brands. And despite numerous recent stories to the contrary, consumers’ trust in brands has actually increased.

This is perhaps most evident in the service and finance sector, where new entrants Youi and ING have powered ahead of their conventional competitors. It also turns up in BAV’s first data on media and sports stars with all-around nice guys, Hugh Jackman and Michael Clarke, blitzing the field and adding significantly to their earning potential. Among the most-trusted brands are those consumers rely when they’re not feeling so flash: Panadol, Band Aid, Neurofen and Herron rank in the top 15.

There are also losers in Australia’s multibillion-dollar brandscape. Carlton & United Breweries (CUB) is punch drunk, while four of the top losers are clothing brands, Mambo, Stussy, Sportsgirl and Quicksilver. Several premium luxury brands have been hammered by the financial crisis with watches, jewelry and hotels slipping badly.

Consumers have also delivered a wake-up call for the car industry. BMW has fallen of its perch with Citroen and Land Rover also in decline. In other categories, NineMSN has taken a bath, while lamb has been given the chop in favor of chicken as Australians’ favorite meat to BBQ.

“Marketers can use BAV to determine their investment priorities, brand by brand and category by category. The study is also identifying new consumer trends, such as boomers being the first generation ever to follow the brand adoption patterns of a younger generation,” Mr. Evans said.

Digital Communications…

I spend a lot of time gazing into a crystal ball that I know is going to be cloudy half the time. Lately I have been pondering Facebook’s future.

Facebook is clearly on a roll and is knocking on Google’s door as the biggest site on the web. Will it continue to dominate or see its lead slip? Here are two potential outcomes.

The Google Scenario: In the more rosy picture, Facebook remains the disrupter. It transforms how we use the web.

Just as search changed our expectations that everything we want to know is accessible if we Google it, Facebook is the inverse. If information is important, it will find us through our friends and their friends and so on. We don’t have to Google it.

“Trends from friends” is as transformative as search. The more we use Facebook and the more we create and connect there, the smarter it gets in realizing what we need and when. We don’t have to ask.

The opportunity cost of switching to an alternative is simply too great. This is why millions remain with the same IM network they first tried years ago.

Facebook, like Google, groks data. And they know how to study and use it to make the experience and value grow with every status update, photo, connection and interaction. Once they get serious about search — and consumers see the value in using it for finding curated information — Facebook’s value and power could grow.

The AOL Scenario: It’s hard to believe but 10 years ago AOL was once dominant. It was a hit with advertisers.

Publishers paid for position and built grand palaces. It was the place to be. It was also a walled garden. Sound familliar? This begs the question: Could Facebook follow the same path? Possibly.

Through continuous innovation Facebook is trying not to become AOL. That’s the smart play. However, each successive update has irked consumers. The revamped news feed, which rolled out last week, is just the latest.

So far we keep coming back; but you have to wonder if a social network has nine lives. It’s possible fickle consumers will eventually migrate elsewhere.

Where might they turn? Just as with AOL they’ll go everywhere. The entire web is becoming social. Facebook Connect is a play to make this happen on their terms. However this is where Google, Yahoo and other stalwarts could shine. They already control millions of IM and email address books and have lots of data.

So which mask will Facebook don — Google’s or AOL’s? My bet right now is Google’s.
—
By Steve Rubel

… Helps Unemployed Find Jobs

Ryan Star knows a thing or two about being unemployed — but what he didn’t know was that he’d create a new model for music marketing.

The rangy rocker is working on an album release, has a reality TV show under his belt and just wrapped up about a half-year gig as the opening act for “American Idol’s” David Cook, but the memory of being without a job is still fresh. “I’ve been there, living on girlfriend’s couches,” said Mr. Star, munching on a green apple while sprawled across a chair in a living room of another sort — a lounge area in the office of his label, Atlantic Records. “I know what it is like to be down and have nothing and now I can reach out a hand to help.”

What he’s done to help is feature real unemployed professionals in the music video for his new single “Breathe,” and in the process he’s blended music marketing with recruiting. The website, breathe4jobs.com, is clearly there to sell the single, but it also acts as a very public posting board for a dozen real job-seekers, from software consultant and restaurant manager to balloon artist and digital-marketing specialist. People viewing the video who are interested in hiring them can send an e-mail through the site, which has already drawn a nibble for at least one hopeful less than a week since its posting.

“Touring around the country with David Cook, I’ve met a lot of people after shows,” Mr. Star said. “Going to Detroit, and all these cities, I’ve seen the good, the bad, the ugly and the sad. I’ve seen what it’s all about. These are people who want to work.”

He’s had some success — his song “Brand New Day” is the theme song for Fox’s “Lie to Me,” he’s appeared on Mark Burnett’s reality program “Rock Star: Supernova” and his album, “11:59,” is due early next year — and he decided he wanted to give back when it came time to do the video.

“The purpose is to make you look good — you are selling a product at the end of the day — but it didn’t sit right with me to spend a lot of money on something to make me look good knowing what [not having a job] means to these people. There were a million visuals I could put to it … but I wanted to find an idea that would mean something in the bigger picture,” Mr. Star said.

The lyrics to “Breathe” fit that purpose — “Breathe, just breathe, take the world off your shoulders, put it on me” — but the singer was also wary of looking crass with the finished product. “You don’t want to do something cheesy that looks like you are trying [simply] to sell something,” he said.

But so far, it’s been well-received and has generated some publicity from CNN, NBC’s local L.A. affiliate and ABC Radio, as well as a Twitter plug from none other than @aplusk, Ashton Kutcher, who spread the word to his 3.89 million (and counting) followers. “I don’t even know him,” said Mr. Star, himself an indefatigable Twitterer (@ryanstar). “It’s not like I said ‘Hey man, do me a favor,’ it’s just spreading.”

That’s good news for Trey Pitts, billed in the video as a digital-marketing specialist and retail manager. Mr. Pitts, a self-taught digital expert, is actually a friend of Mr. Star’s who helped shape his Facebook and MySpace pages. He’s been out of work for about six months after being laid off as a manager for TJX Cos. and has also worked as a racetrack manager, a video-store supervisor and sold real estate.

“Ryan’s heart is as big as his voice,” said Mr. Pitts. “This is not just some marketing strategy, he really cares about people.”

His contribution to the video has generated a couple of e-mails for more information and Mr. Pitts, whose dream job is to create digital marketing for a music or movie company, is hopeful.

So is Mr. Star, who is pumped up by the video hitting 181,000 tweets in a day and becoming a trending topic. “People underestimate the masses,” he said, tossing away his apple core. “You and I are the masses.”

Digital Advertising!

Oct. 27 marks the 15th anniversary of the industry’s first banner display ads, which appeared on Hotwired.com. To the many of you reading this who weren’t in the business back then, that’s not a typo; I’m not referring to www.HotWire.com, the travel site, but HotWired — the first commercial digital magazine on the web and the offshoot of Wired magazine.

For us, it started with a speech. It was May 1994, and Ed Artzt, the chairman of P&G at the time, made his landmark speech at the 4A’s meeting in White Sulphur Springs, WV calling for marketers and their agencies to dive headlong into the “new media” revolution or be left behind.

My boss and mentor Bob Schmetterer, president of Messner Vetere Berger McNamee Schmetterer (MVBMS), a unit of Euro RSCG, was in that audience and he was totally energized by Artzt’s challenge. It’s important to note that our largest account at the time was MCI, which employed Vinton Cerf — the “Father of the Internet” — as VP-data services.

At the time I was an MCI account guy and Bob assigned me to this new media and created a deadline in order to jumpstart the agency’s involvement in “cyberspace.” Our challenge seemed simple: develop something called a “graphical ad unit” for HotWired. This initial assignment was under the guise of “let’s explore this new medium and see what happens.”

HotWired was the first commercial web magazine to attract blue chip corporate sponsorships dollars on the web. The site launched shortly before Netscape’s browser, and the advent of such other new media such as Pathfinder.com (Time Inc.’s commercial web content offering) and Cnet.com.

Once the media commitment to HotWired was made, we needed to select clients we believed would share our excitement in entering this new space. We went through the client list and quickly reasoned that MCI (telecom), Volvo (automotive) and ClubMed (travel/hospitality) would be as good a core of candidates for this exploration as any.

Four of our then-clients placed ad banners as part of that first campaign, MCI, Volvo, Club Med and 1-800-Collect. (The other two advertisers were AT&T and Zima.) Keep in mind, this was 1994; the first graphical web browser, Mosaic, was less than a year old (soon to be replaced by Netscape Explorer), and Web access? Purely dial-up, 24.4kps if you were lucky, meaning these ads took a while to load. The online U.S. population? Two million, if that.

These “original six” were the first brands to take a leap of faith and place advertising in the unchartered “cyberspace” territory. But several didn’t know they were taking it until after the fact. Corporate America was still largely unfamiliar with the graphical web, so we didn’t even try to sell the concept. We decided to commit agency media and development dollars to place client banner ads on HotWired without clients’ prior consent or knowledge. The way he saw it was if they liked it, they would be happy to pay us and if not, that was OK too; but at least the agency would get a running start at exploring this new exciting medium that was on course to change all of our (professional) lives.

We were given the ad specs by HotWired and it was only then that we realized banners ads were clicked on and could drive consumers to a client designation on the web. Oops! This accidental lesson sparked us to develop websites for these initial ad banner placements. Some of our clients weren’t too sure they even wanted to “interact” with this new online population. Can you imagine?!

Its launch in 1994 was not without debate internally as to whether the ad units offered to the advertiser community should be simple text links or graphical ad banner units. Graphical ad display banners won out and the rest is history. And take a look at the hilarious come-on AT&T used to generate a click-through: “Have you ever clicked your mouse right HERE? You will!”

The reaction ran from enthusiastic to somewhat leery. MCI, as one would expect, was truly supportive of our proactive initiative. Their corporate culture encouraged exploration. Volvo, on the other hand, understood the value of our experimenting with the new medium, but did not want to push/urge any interaction with the consumer. They didn’t know what to expect, did not know how to handle responses and was concerned legal implications were involved. As a result, you see the first Volvo ad banner was nothing more than the Volvo logo and photo of an auto. No call to action or direction to click was to be incorporated into the Volvo banner. In fact, if someone clicked on that banner in October of 1994, it would take them to a simple questionnaire that could be emailed by the consumer on what kind of Volvo they might be interested in.

Looking back at the birth of this industry and the first simple graphical banners, I am still amazed at how much has been achieved in the first 15 years. That said, I anxiously await the further advancements coming our way in terms of new ad technologies, ad forms and ad measurement capabilities (e.g. attribution modeling). The issues surrounding display banners and online brand measurement are many and have been well chronicled (see the recent special eMarketer report entitled The Online Brand Measurement: Connecting Dots for example).

Research suggests we have a long road ahead in terms of measurement — and I don’t disagree; however, I’m not convinced we’re that far off. I don’t believe there will ever be a “silver bullet” to solve all of our problems, as our industry is constantly evolving, becoming more complex and proving to be a moving target. But all that said, from what we have learned through the use of fundamental building blocks of acquired knowledge, industry and case studies, the use of traditional media metrics, the use of existing best measurement practices for digital and a quest to continually “test and learn,” we will ultimately be successful.

Has any one item in our industry been encased with so much debate — at times even disdain — as to its true value, role and contribution to marketing communications from its inception in 1994 to this day? Yet the display banner is the impetus to the creation of the online advertising category that will reach beyond $24 billion in 2009, according to eMarketer. Perhaps more important, no other development since has advanced advertising measurement, effectiveness and accountability than the display banner.

So on Oct. 27, I hope you will join me in toasting the birthday of the banner display ad — whether you are a “cup is half-empty” or “cup is half-full” type of person. Some days I love the business and others day… well, not so much… but I have to admit: it’s been an unbelievable 15 years.

I leave you with a challenge… Can you guess the two-word copy from one of the original banner ads that generated 78% click-through rate? I look forward to your answers.

ABOUT THE AUTHOR / Frank D’Angelo is founder and partner of CL&S, New York.

The Candidates: Amazon, Hyundai, Lego, McDonald’s, Walmart

Each year, Ad Age awards one top marketer judged to outperform the rest. The past two years, we left the choice up to senior marketing executives, but this year, dear reader, we are turning this important decision over to you.

Ad Age’s editors and reporters have done the spadework, narrowing the list of choices to five marketers we deemed most adept at navigating what — to understate — has been a tough year. The selection will be interesting, since each of these companies handles its brand in different ways and each suggests a different way ahead for the art and science of marketing in a time of great flux. It’s up to you to tell us which you think has been most successful in 2009, worthy of joining recent Ad Age winners such as the Obama campaign (2008), Apple (2007) and Toyota (2006). Voting ends Wednesday, Oct. 21, and the victor will be announced in the Nov. 9 issue.

Amazon: Customer Service as Marketing

Far from a marketer in any traditional sense, Amazon has just about no ad budget and a tiny internal marketing operation. Instead of trying to penetrate consumer consciousness with a barrage of TV ads, it’s focused on developing a supreme customer service on a massive scale. As a result, shopping at Amazon is a seamless experience and just about everyone knows it. And that kind of awareness is gold in a day when bad products and services are outed immediately, regardless of the media budget or creative idea propping them up. Keeping prices low (though not too low, even in these hard times) and shipping deals sweet has — no surprise — resonated with recessionary customers. Revenue was up 16% over the first half of 2009 as Amazon consistently beat expectations.

While big-brand blasts aren’t its style, Amazon does do cool things that hit home with tastemakers. The retailer won plenty of plaudits for its frustration-free packaging, meant to do away with those annoying plastic clamshell containers. And, of course, its Kindle e-reader has helped build the category in the mind of consumers, something competitors Sony and Barnes & Noble are now trying to take advantage of.

In 2009, Amazon also snatched up what’s likely to go down as one of the smartest deals of the year, laying out more than $800 million to buy Zappos, which should pay huge dividends, both in terms of bolstering Amazon in the clothing and shoe sales, and in continuing to build out a culture based first and foremost on the customer.

Hyundai: Bold Assurances

What can aggressive marketing do for you during recession? Just ask Hyundai. In September the Korean auto giant enjoyed 27% sales gains while the market fell over 23%. Amid the worst auto market in decades, so far in 2009 it’s managed to expand its share by nearly a third, to around 5% of the market.

Of course, critics will say that 5% is still relatively small beans, but Hyundai is building the kind of marketing machine that has even the most cynical ad-watchers expecting further growth. This isn’t simply a story of bludgeoning consumers with a bigger media budget (although that certainly hasn’t hurt): In 2009, Hyundai has gone from advertising also-ran to trendsetter. The brave and smart Hyundai Assurance push confronted the recession head-on, telling consumers they could give their Hyundai back if they lost their jobs. And now the automaker has launched an effort aimed at those who have old cars that didn’t quite make the cut as clunkers — another wise response to market conditions.

The automaker still faces some major tests in the U.S., not least of which is launching the Equus into the luxury car market next year, a move that will test the elasticity of a brand that is probably still generally perceived as being about value. But, with a PR operation that’s done a great job of communicating the ever-improving quality of its vehicles — and the advertising smarts it has shown in 2009 — you start to believe that today’s Hyundai can pull off even those high-tariff marketing maneuvers.

Lego: Always Listening

Deep into a video-game era, Lego should have long ago seen its empire of bricks reduced to heaps of multicolored plastic rubble, and apocalypse did almost come to Legoland. In 2004, losses totaled nearly $300 million, as the family-owned Dutch company was caught between a past where children’s playtime was all about using imagination and a present of “Rock Band,” games, movies and TV shows that don’t allow for stretching the imagination. Yet, in a relatively short time Lego has bounced back. Going against the grain of a toy industry in decline, Lego saw sales spike 18% last year and, in the first half of 2009, sales were up 23%.

Success has come along multiple fronts. First, Lego slashed the amount of time it takes to develop new toys and, more importantly, the toys it already makes, to gel well with contemporary culture, linked then to popular movies such as “Star Wars” and “Indiana Jones.” That means Lego’s owners had to overcome a long-held resistance to creating movie-themed sets that often had violent accoutrement such as guns and knives. Now, by some estimates, licenses make up more than half of sales.

Listening might now be en vogue among Twitter and Facebook-obsessed marketers, but Lego was getting good at it before it was fashionable to court the opinion of consumers. The other thing Lego has done is to stop viewing the large population of adults who love its brand as an oddity to be ignored. Now the company has a big presence at events involving grown-up fans and has 44 ambassadors around the world who seek out the community’s input. The company is also investing in its retail presence, expanding to 47 stores by year’s end and it’s designing a board game and developing a movie.

McDonald’s: Redefining Value

In 2009, McDonald’s redefined value for the fast-food industry, teaching that it isn’t synonymous with dollar items. While McDonald’s has owned that cheapest of propositions, it’s also done a series of campaigns behind core full-price menu items, such as Big Mac and Chicken McNuggets, that resulted in double-digit sales gains each time — extra impressive at a time when consumer confidence is low. McDonald’s even ditched the dollar cheeseburger, which has lowered overall percentage of value menu sales and left competitors fighting over how many things they can sell for a buck.

In raising the price of the double cheeseburger by 20 cents, the marketers threw franchisees a bone while they were forced to shell out for the McCafé renovations. It was a masterful stroke that meant the McCafé rollout was done on time, even a little early. In recent months, it’s promoted premium products such as Angus and McCafé, the latter of which has essentially redefined the coffee category and will likely reduce the price of a decent cup of coffee in the future. In addition to helping the caffeine-addicted, McDonald’s assuaged mothers by adding salads, grilled-chicken options and vanilla lattes, and by adding a moms’ quality control panel. This winter, it’s going after 7-Eleven with more bottled drinks and then setting its sights on healthier competitors by adding smoothies next year.

In the U.S., second-quarter same-store sales grew 3.5% and global same-store sales were up 5% at a time when many of the best-performing competitors were flat and the industry as a whole was down. McDonald’s achievement is particularly dizzying because the chain is lapping many years of gains, some of them quite sizeable, and over a massive system.

Walmart: Recessionary Resource

When Vanity Fair and “60 Minutes” recently asked Americans which company best symbolizes America today, Walmart was the winner by a country mile. Of course, there aren’t too many country miles free of the sprawling superstores. But ubiquity aside, Walmart has made great strides in doing more than just a growing an elephantine footprint used to stomp out suppliers and force mom-and-pop rivals out of business: It’s become corporate America’s recessionary resource in a time when it’s most needed.

An ad campaign has driven the value message across at just the right time, when Walmart marketing has developed sophistication beyond simply low prices. It has increasingly applied analytics to maximize margin with an eye toward the fact that the retailer doesn’t have to keep expanding price gaps (in some cases it can even narrow them) to win.

Walmart has winnowed lesser-performing brands from shelves, worked to get marketers to shovel more of their marketing dollars into Bentonville’s own marketing budget, and restaged its Great Value brand. In short, it’s having a massive impact on all the marketers who do business with it — which is most of them.

Walmart has also been active on the digital front, launching a highly successful “Twilight” DVD almost entirely through social media and it is looking to expand the clout of its website, both by selling ads to vendors and bringing on new vendors to fill in gaps in the product offering. It’s also pondering ways to harness the long tail both within and outside its stores via digital marketing.

We appreciate your input. This poll closes on Wednesday, Oct. 21.
By Matthew Creamer

by Subverting Its Own Search Policies

Google is experimenting with its deepest foray into local advertising and along the way is branching out from one of its most cherished philosophies of search advertising: the keyword auction.

In a bid to get more local advertisers to buy search ads, starting this week Google is trying out a new type of search ad and pricing system in the San Francisco and San Diego markets.

Rather than ask businesses to set up a campaign and bid for keywords, they’re offering local advertisers (or non-advertisers) a search ad for a flat fee. The fee is set by Google and based on the average that similar businesses are paying for a given keyword in that market.

The goal is to simplify search advertising for local businesses that may not want to bid on keywords or to set up and optimize a search campaign.

“When we talk to small businesses, they don’t always want to know what an auction is, how to create an ad, or bid on keywords, it’s complicated, so our goal has been to, ‘How can we make this really simple for them where they just pay a flat fee per month,’” Susan Wojcicki, Google VP of product management, said.

Familiar model
It’s a model much more familiar to local businesses, such as plumbers, electricians, hair salons and restaurants, or any local business that has advertised in the yellow pages. But Google is offering an additional perk: the option to link the ad to a Google voice number so they know which calls are being referred from the search ad.

Calls that come in via the Google Voice number are identified by what Google is calling by a soft “whisper”: “This call brought to you by Google.”

The voice number allows businesses that don’t have websites — and don’t care about clicks or conversions — the ability to track the performance of their ad.

“You get the benefits of simplicity and a simple startup but also the measureability of AdWords so we tell you how many visitors you got and what value you are getting for the investment you made,” said Jeff Huber, Google senior VP of engineering.

The program has been live for two days in San Francisco and San Diego, and right now there are no immediate plans to expand it. Google isn’t first to market with this; companies such as WebVisible and Marchex have been packaging search inventory and reselling it to local businesses for some time.

Improving relevance
But those companies aren’t Google, which for many people has become the de facto yellow pages as it improves local search relevance. Google believes it could vastly expand the number of local businesses using AdWords by allowing them to easily convert an organic listing into a paid ad for a flat fee.

Max Kalehoff, VP of marketing for Clickable, said Google’s move may address the tendency of local advertises to “churn,” or start a campaign and give up on it for whatever reason. “Some businesses don’t want to do search advertising; they just want to put a dollar in and receive phone calls,” he said.

The new local ads come as Google is nearing the end of a top-to-bottom revamp of its search advertising system over the last six months known internally as AdWords 3.0. That system was first launched in 1999 and turned Google from a small startup against the likes of Inktomi and Altavista into a company that generates $25 billion in revenue, mostly from search advertising.

As part of the revamp, Google is trying to give more relevant results for local searches, which plays into its local strategy. A user who searches for a restaurant, for example, no longer has to specify where they are; that is determined by the IP address or browser, and relevant local results are returned, along with a map.

The experiment in flat-fee ads is part of Google’s Local Business Center interface, which Mr. Huber said serves “over a million” small businesses worldwide.

Universal, Sony, Others Wrestle With How Social Media Affects Box Office

Can the so-called Twitter effect boost a movie’s box-office performance faster than any traditional form of word-of-mouth? Not yet, say many top movie marketers and researchers, but the social networking platform’s impact on a studio’s media mix and campaign management has already taken shape.

Witness Sony Pictures, one of the first studios to create branded Twitter pages for its films, which saw releases such as “District 9,” “Julie & Julia” and “The Ugly Truth” open strong and maintain momentum by keeping the branded conversation around each film active and updating the films’ followers on the microblogging site with exclusive content in the following weeks. The results? Grosses of $113 million, $90 million and $88 million, respectively, and counting.

But the idea behind a Twitter effect gained traction this summer after the Hollywood press and the blogosphere blamed Twitterers for shortening the box-office life of films such as Universal’s “Bruno,” which opened to a strong $30 million but quickly sputtered to a $12 million second weekend based on poor word-of-mouth and a high volume of negative tweets. Could moviegoers with nothing but a cellphone and a Twitter account really be undermining the millions of dollars poured into a movie’s marketing?

Market research firm 360i recently tested the Twitter effect by comparing Twitter traffic for “Bruno” during its first weekend at the box office with three other summer films, and found “Bruno” to have the highest percentage of drop-off in second-day box-office grosses (-39%) and negative tweets (21%).

But making a direct correlation between the two is far from scientific and hardly one-size-fits-all for all films, said Sarah Hofstetter, 360i’s senior VP-emerging media and client strategy. “A movie like ‘Bruno’ is exceptionally polarizing — either everyone wants to see Sacha Baron Cohen naked or they don’t,” she said. “You have to differentiate in the content and context of a film — if you give too much credence to Twitter marketing and you say, ‘Our efforts contributed to a 10% lift in ticket sales,’ no one’s going to agree on what caused that.”

Little impact
And Twitter, as well as other social media, has yet to directly affect the methodology behind the metrics supplied by box-office forecasters to the studios to gauge all-important first-weekend ticket sales weeks in advance. One major movie forecaster said active Twitter and Facebook users have yet to be included in the sample size because it “needs to be reflective of how the studios spend their money. To chase Twitter or social networks would be a disservice to that population.”

In fact, Twitter has helped forecasters such as Marketcast and Nielsen NRG steadfastly hold on to their role in manufacturing hype around those all-important first three days. In the case of “Bruno,” analysts correctly predicted the $30 million opening weekend, but stayed away from managing post-debut expectations. “Our job stops after opening day. The rest is up to the universe,” said one forecaster.

Nor has Twitter had a measurable impact on studios’ marketing budgets, even as they add dedicated staffers to manage and measure social-networking activity around their slates. “While Twitter is important as social media, it is a very small sliver of our marketing campaign,” said a Sony executive. “I think it is more effective as a gauge of how effectively your materials are working and it allows marketers to take a real-time pulse on consumer attitudes towards your brand or property.”

Instead, Twitter has become the campaign-management tool of choice, one that studios and other marketers can harness faster and to a greater extent as more case studies crop up on a weekly basis. “The name of the game for the studios is to take full advantage of all early signals,” said Pete Blackshaw, exec VP-Nielsen Online’s digital strategic services. “The downside for them is a movie can be damaged really quickly — the flow of information on these platforms, and degree to which influencers are tapping into those signals is quite profound.”

But one former marketer at a major studio suggested that Sony has harnessed Twitter more effectively for a $30 million movie such as “District 9″ than other surprise blockbusters such as Warner Bros.’ “The Hangover” or Disney’s “The Proposal.”

“Sony did a very good job at continuing engagement with consumers. The film got such positive buzz from consumers that they started talking about it through [Sony's] real-time stream,” the executive said. “I don’t think those other studios knew what they had on their hands at the time.”

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