Throughout 2005 CHIEF MARKETER filled you in on campaigns, trends, and advances involving a number of companies. Before we plunge ahead into 2006, we decided to look back at a few of the stories and keep you up to date on what happened next.
Mitsubishi Drives Brand Relevance with Free Gas
In September ( “Mitsubishi: Forget Discounts, We’ll Give You Free Gas”), we told you that Mitsubishi Motors North Americawas rewarding buyers of new 2005 model-year vehicles with a year's worth of gasoline, counteracting the aggressive price-discounting programs of competitors General Motors, the Chrysler Group, and Ford Motors.
The enticement of a prepaid debit card worth $1,500-$2,000 helped spark sales—sales for October 2005 were 1% higher than for the previous October, and November sales jumped 7.2% over the previous November. But that’s not the only benefit, according to Dave Schembri, the company's executive vice president, sales and marketing.
"We're one of the few manufacturers showing a sales increase right now, but this promotion has allowed us to be viewed as a relevant brand," Schembri says. "The opinion of the brand is up. According to the Allison-Fisher survey, results have spiked considerably. Brand-building is as important as sales because we are living in a tactical world now."
Commercial Alert Wants Stealth Marketing Ban
Consumer advocacy group Commercial Alert thinks buzz marketers are breaking the law. And in October, it asked the Federal Trade Commission to determine if marketers involved in the tactic, also known as stealth or guerilla marketing, are violating federal laws prohibiting deceptive advertising.
And the FTC's response? Nothing has been posted to the group's Website. And Commercial Alert posts the FTC's replies whether or not they are wins for the group.
One group, the Word of Mouth Marketing Association (WOMMA), was quick to send out a release describing the difference between word of mouth and stealth advertising.
Perhaps surprisingly, several marketers contacted by CHIEF MARKETER agree that such an investigation may be a good idea. Click here to read their responses.
The Naked Truth from Bluefly
Bluefly CEO Melissa Payner thought she was crazy. She'd look in her closet and see nothing among a sea of black outfits.
If made her wonder, Do other women feel that way? Her thoughts turned into September and October's $3 million controversial print and cable TV campaign (featuring partial nudity), "That's Why I Bluefly."
She also discovered that customers want to communicate with brands. Two e-mail surveys asking customers "why do you shop" had excellent clickthrough rates, and both were answered by more than 85% of openers.
The direct and cable/print campaign had a financial impact for the retailer, too. November sales were up 60% vs. the previous year, and October sales were up 53%.
The ad run is over, but lives on in the form of an online sweepstakes that dangles a daily $1,000 shopping spree.
Read more about Bluefly's campaign here.
Poker: Coming to CBS or Not?
Poker has enjoyed a successful run on a handful of cable networks for several years. And back in July, CBS said it would become the first broadcast network to step up. (”Why Poker Is a Safe Bet for Marketers.”)
The network announced that beginning on Christmas, CBS Sports will televise eight ProJo Poker tourneys. But the 3-5 p.m. time slot announced by the network and the online gaming partner is filled with other viewing options, depending on the market you're in. Neither CBS nor ProJo Poker returned calls to CHIEF MARKETER.
There may be a good reason for CBS to back out: Television ratings for poker broadcasts in the United States have generally declined in 2005 compared to 2004, according to “Poker News.” And the online publication doesn't list the CBS-ProJo Poker marriage in its 2006 television preview.
A Little Gnome Told Me Travelocity Would Make It Big
Several years ago Travelocity was, in the words of chief marketing officer Jeffrey Glueck, "a faded pioneer brand." By 2002 rival Expedia had surpassed it in terms of marketing share; what's more, Travelocity wasn't even profitable.
Thanks to a rebranding and remerchandising strategy ”Travelocity: ‘Faded Pioneer Brand’ No More,”, the online travel reservations provider is in the black, with revenue continuing to rise. Since 2003, revenue from airline reservations--a barely profitable segment of the travel business--went from accounting for 65% of total sales to just 35%, with the more lucrative non-air services now bringing in the majority of sales.
And Travelocity spent just $100 million on marketing in the U.S. last year, according to Glueck, compared with $145 million by Orbitz and $300 million by Expedia. Which means that little gnome mascot must work for cheap!
Travelocity's growth should continue in 2006, based on parent company Sabre Holdings' financial projections, released Dec. 12:
- 2006 revenue projected to approach $3 billion, a year-over-year increase of roughly 15%
- 2006 EPS (adjusted) projected to be greater than $1.70
- 2006 EPS (GAAP) projected to be greater than $1.20
- 2006 free cash flow projected to be greater than $300 million, more than double over 2005, with cash flow from operations of approximately $440 million
