On Friday afternoon, I was trading blog war stories with my friend Jonathan Richman (check out his fantastic healthcare marketing blog, Dose of Digital). We agreed that it was unfortunate that some great posts that we wrote early on in our blogging days were basically unseen because they came before we had a critical mass of readers. That’s a shame because there’s some good content back there. At the same time, I don’t want to simply republish old work. But today I have a solution: I will bring new data to two older posts that can add value for recent and longtime readers alike.
Hyundai’s Assurance Program
Back in January, I wrote about Hyundai’s novel promise to allow customers to return cars if they lost their jobs during the time of a lease or loan repayment. Some of the reasons I loved the program include:
- New and novel idea at a time when people need economic insurance the most
- Plays on the insight that a lot of people really are delaying big purchases such as this
- Differentiates a small player in a big market
- Draws enormous free PR coverage
- Builds a very positive long-term equity for Hyundai, a brand that has struggled to break through
Even within its first weeks, Hyundai spokespeople claimed that the results were encouraging and traffic to their dealer lots was up.
Today, just about everyone knows that this program has been a grand slam for Hyundai. Sales for Hyundai were up 14% in January 2009 compared to the previous year, while the entire industry’s sales are down dramatically, including GM and Ford down 32% and 42%, respectively. Meanwhile, not a single customer had returned a car through March!
The only downside of the program is that it was quickly copied by others. GM and Ford now have programs that match it, and Hyundai has added an Assurance Plus program that will fund your car payment for 90 days if you lose your job. Meanwhile, many other companies have been inspired by the economy and Hyundai’s example, including Pfizer, JetBlue and the Minnesota Timberwolves. And there’s now a parody ad of the Hyundai program.
Gatorade’s “Got G?” Campaign
In another post from January, I wrote against the raft of new equity campaigns from brands such as Honda and Coke—my point being that these brands under pressure are simply using the old playbook of hiring a new agency and trotting out another meaningless and interruptive TV campaign. I saved my biggest dose of venom for Gatorade, which has just launched a campaign called “Got G?” The screenshot below pretty much sums it up:
According to the Sarah Robb O’Hagan, Gatorade’s chief marketing officer, as written in Slate, “…the idea behind the new look and the new ad campaign is to make the brand feel more contemporary and to appeal to the next generation of electrolyte drinkers.”
Here’s what I disliked about the Gatorade solution to its rising challengers and a crowded market:
- Overall, the new generation isn’t watching television, and they don’t respond to an advertiser’s slick message jammed in their faces. I believe this ad is what a group of 30-year ad-agency veterans would think that the next generation wants.
- People won’t spend their time searching Google to figure out what your new TV campaign is about.
- Pure equity ads that add no value won’t work anymore. You can no longer tell and sell.
- Gatorade missed an opportunity to add value to athletes’ lives, like Nike has with Nike+ and countless events and training websites.
- The star-studded lineup of actors in the ads signifies only that the client had a big budget; consumers see through this today.
Well, Gatorade spent millions on expensive actors, high-end commercial production, and heavy media weights during major sports events. The brand also underwent packaging changes that focused on the “G” of the brand. This was the brand’s big move to regain momentum. A second ad with Kevin Garnett and others offered a mock-up of Monty Python’s Holy Grail. Again, more sizzle but no steak.
The results are now in: Gatorade sales were down 13.7% in the first quarter of 2009. Yep, that’s in a quarter in which it likely spent well north of $50 million on media and commercial production. About half of the sales decline can be attributed to a 6.3% drop in category sales, but Gatorade also lost 6.4% share. Gatorade’s only strategy now seems to be suing Powerade for product disparagement. That’s just another old-school strategy that won’t work either.
I actually like the Gatorade brand a lot as a consumer. I first got turned onto it while running 10k races as a 12-year-old in Atlanta. Back then it was really like a secret formula for athletes. Today it’s my drink of choice at the convenience store. But the brand could be so much more, and the solution is sitting in front of it in the form of case studies from brands in its own (Pepsi) holding company, such as Doritos, Mountain Dew, and SunChips. All three brands have created marketing that people choose to engage with—marketing that itself improves people’s lives. And all are seeing sales increase despite tough competitors and a sagging economy.
