The TV spot opens with a view of two shiny orbs set against a starry, outer-space expanse. But this isn't 2001: A Space Odyssey. The "orbs" are two bald-headed men bearing rub-on tattoos. It's "Barqtoos II," the latest giveaway gimmick from niche soft-drink marketer Barq's Inc. Barq's has become the No.2 root beer in the U.S., largely owing to a marketing strategy based on such consumer promotions. Barq's doesn't run traditional, warm-and-fuzzy image ads anymore. "We decided that, for us, it was a waste," says Fred C. Walters, director of marketing. The company uses its ads to promote its promotions.
Barq's has lots of company as it heads into the consumer-promotions industry's biggest season. Summer '94 is shaping up as one of the biggest blowouts ever for the business of giveaways, tie-ins, coupons, contests, and the like. And many of the ads consumers are likely to see will be closely tied to those promotions. McDonald's Corp. has launched a $40 million global blitz to hype its link with Universal Pictures' modern-stone-age epic, The Flintstones, with "Grand Poobah" value meals, "Bedrock" mugs, and Happy Meals. Burger King Corp. is countering with a tie-in to Walt Disney Co.'s big summer box-office entry, The Lion King.
And there's more. Coca-Cola Co. is giving away $350 million worth of stuff, including 200 red Ford Mustang convertibles, in "Coca-Cola Red Hot Summer." PepsiCo Inc., fighting back, will give away free Pepsi at 10,000 U.S. locations in the "Ultimate Pepsi Challenge." MasterCard International Inc. is distributing 45 million Sunday newspaper inserts offering discounts at 100-plus merchants, such as CompUSA and Pearle Vision Inc. in a summer MasterValues promotion tied to World Cup soccer.
The barrage is more than a legacy of the recession. Consumer promotions are playing a larger role in marketers' strategies. Packaged-goods companies, marketing's bellwether, now spend more on such programs than on media ads (chart). Marketers who once used promotions to create short-term bursts in sales are increasingly seeing them as "a permanent, integral element of the brand," says Mava K. Heffler, MasterCard's vice-president of promotions. It's a shift from the days when marketers warily viewed promotions as something that would drain brand equity and encourage consumers to shop for deals. Says Heffler: "Promotion has become a backbone of marketing."
"ONE VOICE." For some brands, promotions are taking the lead. Cigarette companies have increasingly been using promotions such as "Winston Weekend" and "Marlboro Country Store"--in which smokers exchange proofs of purchase for apparel and other items--to talk to smokers. Frito-Lay Inc., meantime, is rolling all its marketing dollars for Fritos-brand corn chips this summer into sponsoring country crooner Reba McEntire's concert tour. The PepsiCo unit figures big TV campaigns are fine for such superbrands as Doritos and Lay's. But for Fritos, which doesn't command a megabudget, the sponsorship is a better way to reach its core market.
Marketers say the shift began in the 1990-91 downturn; profit pressures and value-minded shoppers forced companies to focus on keeping cash registers ringing. Those forces haven't abated. "It is very difficult to talk about brand imagery to a guy who's laying off 10,000 employees this week," says David A. Fowler, chief creative officer at DDB Needham, Dallas Group, an agency that works both in ads and promotions.
As marketers have focused on promotions, they have started to use the grab bag of tactics to build brands in much the same way they did with advertising: to craft a new image, reinforce an existing one, or reach out to prospects. Today, many argue that the age-old line between advertising and promotions--which set ad agencies and promotion agencies in competition for marketers' budgets--is irrelevant. The priority is to "speak to consumers with one voice," says Dean M. Barrett, vice-president of marketing for McDonald's. Barrett says tie-ins to films, sports, and cther properties are part of a larger strategy to link the brand to sports and families.
Marketers call the result "integrated marketing." But like "synergy," another popular word in marketing, it's mostly a euphemism for efficiency. Take Barq's. "We can't begin to compete with the big spenders in terms of building image," says Walters. So he looks for promotions "with attitude" to create a buzz, especially among kids and teens. After the Soviet Union fell, Barq's bought two tons of Soviet buttons, pins, and other memorabilia and gave them away in a "Soviet Union Going Out of Business" promotion.
That's small potatoes compared with McDonald's Flintstones program. The fast-food chain is not only piggybacking the film but negotiated a place in it, as "RocDonald's." The chain views the movie role as image-building. McDonald's also got a spot in the trailer, giving it two months to prime the pump for its promotional campaign. "We don't just want to do promotions," says Barrett. "We want to be integrated into the property."
STRANGE TERRITORY. Consumers seem to be buying in. McDonald's has been outperforming the category, according to researcher Technomic Inc. Sales rose 7.1%, to $14.2 billion, last year vs. 6.6% for the fast-food industry. MasterCard's shift to a promotional strategy stressing rebates and discounts has helped it end a five-year share slide and rebound two points, to 28.9%, according to Credit Card News.
MasterCard is turning MasterValues into a tool to segment consumer groups. Beyond its regular summer and winter MasterValues promotions, it has aimed promotions at business-card holders, college students, and gold-card customers. It has tailored programs to individual malls, and it has also creating customized programs for individual banks to help them better target customers.
In their quest to beat a new path to consumers, some marketers are planting their flag in strange territory. Offers for 10 or so minutes of free long-distance service from MCI Communications Corp., for example, have popped up in recent months on cans of Crystal Light powdered soft drinks, Taster's Choice coffee, and boxes of Keebler cookies and crackers. Angela O. Dunlap, MCI president for consumer markets, says the company views the tie-ins as "another channel for us to get out and tell people about MCI."
Cookie boxes as an ad medium for phone service? "The world has turned," says adman Fowler. He encourages his staff to view promotions as a challenge every bit as big as TV ads. And if that doesn't work? He reminds them that the more media they can communicate in, the more secure their careers will be.