Good morning, AdLand. Here’s what you need to know today:
Starbucks, purveyor of coffee flavored water, builder of coffee scented corner stores and shelter for no coffee drinking Wi-Fi leeches, has a new shtick: a premium gift card. It’s made of steel! It’s ‘specially etched’! And it’s a super, limited edition that inanely costs 450 bucks.
The gift card itself costs $50 to make, the other $400 will be loaded as Starbucks credit and can only be bought on Gilt. I guess Starbucks people go to Starbucks enough that the $400 will manifest destiny itself in the caffeinated brown liquid but damn if this isn’t some elitist craziness. The card, which will surely make its owners feel good about themselves, comes with “with gold-level Starbucks card membership benefits, such as gifts and freebie refills on brewed coffee and tea.”
Jason Goldberger, executive vice president at Gilt.com, told the USA Today it’s all about exclusivity:
“When you’re waiting in line at Starbucks, the next person in line won’t have it.”
Ugh. [USA Today]
Ah, the perils of confusing coupons.
This coupon from Wendy’s recently caused quite a fuss when it was posted on Reddit. The general reaction was: what (or who) the heck is the “Redhead” that it’s selling?
No, Wendy’s isn’t peddling crimson-haired humans with any purchase.
Luckily, some of the more well-informed Redditors shared their knowledge:
“A “redhead” is their stupid coffee I got all excited when I saw the sign thinking it was a red, spicy buffalo sandwich (or a real redhead which I would have preferred ) But it is just coffee “
And now we know.
On Wendy’s end, it shows a disconnect in its marketing. Something like the Redhead, which obviously isn’t a commonly known brand, needs a bit of context.
I’m drinking coffee made by a K-Cup machine right now and it sucks. A lot. But alas, I’m too lazy to get a much better cup at the cafe around the corner. That said, after learning that all of those K-Cups are piling up in landfills—and not being recycled—I may have to reconsider.
According to CNBC, the way K-Cups are constructed, they can’t be recycled. Paper and foil are strongly adhered to the plastic capsule making so that sorting facilities can’t separate the materials. So those cups are destined for a single use and nothing more.
Image via Michael Dorausch
Reality appears to have finally arrived at Procter & Gamble, the world’s largest marketer, whose $10 billion annual ad budget has hurt the company’s margins.
P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G’s ad budget forever, regardless of what happens to its sales.
He told Wall Street analysts that he would have to “moderate” his ad budget because Facebook and Google can be “more efficient” than the traditional media that usually eats the lion’s share of P&G’s ad budget.
This is coming from the man who increased P&G’s adspend by a staggering 24 percent over the two years through October 2011, even though sales rose only 6 percent in the same period.
Note that P&G’s revenues were up 4 percent to $22 billion in the quarter but the company’s costs for sales, general and administrative work were flat.
P&G’s staggering ad budget has become a bit of an issue among analysts. On the call, McDonald and his crew were asked about ad costs three different times! . McDonald eventually said:
As we’ve said historically, the 9% to 11% range [for advertising as a percentage of sales] has been what we have spent. Actually, I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available.
In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world. So while there may be pressure on advertising, particularly in the United States, for example, during the year of a presidential election, there are mitigating factors like the plethora of media available.
P&G’s Old Spice campaign is a textbook example of what the entire company should be doing. The problem is that the entire company isn’t doing it. Check out Mr. Clean’s Twitter stream, for instance. Oh, right—he doesn’t have one.
McDonald’s recent discovery that digital media is free comes after the long-delayed launch of Tide Pods, now scheduled for a month from now but with only a limited supply. It was originally planned for July 2011. The ad budget for that campaign is estimated at $150 million and will come from agency Saatchi & Saatchi.
The problem is that while P&G has struggled to get a single U.S. pod out the factory door, several of its competitors have already launched competing laundry pod products.
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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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