Kellogg’s Cuts Costs and Invests in Meaning

In a recent message to investors at a Lehman Brothers Back-to-School Consumer Conference, Kellogg’s CMO Mark Baynes bragged of his company’s success at cutting costs in marketing through improved efficiency. Baynes mentioned several smart tactics related to traditional advertising, such as pooling commercial shoots and promotional analysis. But buried on page 71 of the Advertising Age coverage of his speech is a report that Kellogg’s is seeing strong results from a great example of meaningful marketing.

Baynes specifically mentioned that his company sees online ROI surpass that of broadcast TV “by a factor of well over two.”  Interestingly, the company’s most visible example of digital marketing is a two-year-long effort called The Special K Challenge.

The Special K Challenge holds a significant promise of meaning for consumers. It suggests that participants can drop a full dress size in two weeks by adopting a habit of two bowls of cereal a day for two weeks. The program includes customized plans and email tips from a trainer and nutritionist. Kellogg’s has partnered with Yahoo! to create a modest community site.

The program appears to be a big success in terms of marketing results as well. Aside from benefiting from the ROI efficiencies mentioned above, CEO David MacKay says the initiative is driving share and boosting cereal consumption outside of breakfast - a huge upside opportunity.

It is likely that many more marketing leaders will move dollars to digital marketing, as Kellogg’s ROI numbers are certainly not limited to the cereal aisle. My hope is that this current shift of focus doesn’t just mean more banner ads - but rather that brands rethink their entire marketing approach and use the digital channel to actually add value to their customers’ lives.