Posted on Monday, December 20, 2010
WITH Christmas just days away, Madison Avenue is working hard to influence what consumers buy. But efforts aimed at turning browsers into spenders, known as shopper marketing or retail marketing, are becoming increasingly important the other 51 weeks of the year.
Shopper marketing once mostly took place in stores; tactics included placing coupon dispensers on shelves, designing eye-catching end-aisle displays and giving away product samples. Now, the battle to land on shopping lists or in shopping carts is waged long before consumers set foot in stores as they spend more time researching potential purchases online or asking friends on Facebook what to buy.
In another sign of the growing role for shopper marketing, units of two agencies owned by WPP — JWT and Ogilvy & Mather Worldwide — have formed a joint venture in North America to help marketers and retailers guide consumers on the so-called path to purchase. The joint venture, called JWT/OgilvyAction, is the brainchild of the Malone Advertising unit of JWT, which is being renamed JWT Action, and the OgilvyAction unit of Ogilvy.
JWT Action and OgilvyAction continue as autonomous agencies as they work together as JWT/OgilvyAction. The joint venture is handling tasks for clients that include American Express, John Deere, Kimberly-Clark, Kraft Foods, SC Johnson, Nestlé, Sara Lee and Unilever.
The goal is to “help us transform someone from a consumer to a buyer,” said Deborah Hannah, integrated marketing planning director at the Neenah, Wis., office of Kimberly-Clark, which is working with JWT/OgilvyAction on brands like Cottonelle, Huggies, Kleenex and Kotex.
Retail marketing can influence a shopper “as she goes from watching a TV ad on the couch to writing a list to going to Walgreens or Kroger,” Ms. Hannah said, “and then, once she is in the store, help us close the deal with her.”
The aspects of shopper marketing that are focused on consumers outside stores are assuming more significance, she added, with “the explosion of e-commerce and social commerce.” The latter refers to the combination of shopping online and networking on Web sites like Facebook and Twitter.
“Now that shopper marketing is no longer just in the store, there are so many opportunities,” Ms. Hannah said, offering an example of “shopper apps for the iPhone.”
“We need someone to help us navigate who is our target and how she decides to buy,” she added.
JWT/Ogilvy Action has 3,400 full-time and part-time employees in offices and field offices in cities like Akron, Ohio; Bentonville, Ark.; Chicago; Cincinnati; Los Angeles; Minneapolis; and New York. The joint venture is being led by Fred Bidwell, executive chairman, who continues as president and chief executive of JWT Action, and Sheila Hartnett, chief executive, who remains chief executive for the North American operations of OgilvyAction.
“There’s a major sea change going on in this space, which requires a different kind of agency,” Mr. Bidwell said. “We needed to bring a broader array of tools to the party.”
As a result, “we approached OgilvyAction and said, ‘Let’s go in this together, in a strategic partnership,’ ” he added.
He and Ms. Hartnett decided that a cooperative effort would “need to be a true business unit of WPP,” Mr. Bidwell said, “so we approached WPP with the idea of creating a joint venture.”
The joint venture is “having some early success,” he said, and it recently added a couple of marketer clients. Although they declined to be identified, Mr. Bidwell said, he was able to describe one as “a significant over-the-counter pharmaceutical company” and the other as “a significant food company.”
Asked for examples of cross-pollination — clients of one agency or the other that are working with the joint venture — Mr. Bidwell listed John Deere, “a Malone client, for which we’re bringing in thinking from OgilvyAction,” and SC Johnson, “an OgilvyAction legacy client, which people on the JWT side are deeply involved in helping.” Ms. Hannah said Kimberly-Clark, a longtime client of Malone, was obtaining from the joint venture services that are specialties of OgilvyAction, like product sampling.
Chip Martella, managing director for the New York office of JWT/OgilvyAction, singled out Kimberly-Clark, along with Procter & Gamble, as among the marketers that are “accelerating the growth of shopper marketing.”
“They’re telling their agencies: ‘Don’t come to us with a campaign idea that starts with TV or print ads and then show us how it works in the store. Start with the store,’ ” said Mr. Martella, who is also executive director of strategy for the North American operation of OgilvyAction.
The store can be virtual as well as real, he added, citing research that shows “over 50 percent of those shopping Wal-Mart stop at walmart.com first.”
Another indication of the increasing role being played by shopper marketing came last week, when a former executive of Procter — the world’s largest advertiser — was hired as the new leader of Saatchi & Saatchi X, the shopper marketing unit of Saatchi & Saatchi, part of the Publicis Groupe.
Dina Howell, who had been vice president for global media and brand operations at Procter, joined Saatchi & Saatchi X as worldwide chief executive. She succeeds Andy Murray, the founder of Saatchi & Saatchi X, who becomes chairman, a new post.
WPP is known for reorganizing and reconfiguring its agencies to better serve clients. For instance, in 2006 WPP formed a joint venture named Team Detroit by combining five agencies that worked for the Ford Motor Company in North America.
NYTBy STUART ELLIOTT