Classic Example of What eLink preaches to clients....

General Mills Sees Profits Climb 49%

Marketing Outlay Increased 37% in Most Recent Quarter

General Mills confounded Wall Street this morning, with profits up 49%. Part of the food company's secret sauce is meaningful marketing increases, about 37% for the most recent quarter. Augmenting its well-worn strategy of supporting big-name brands, General Mills has focused ad dollars on "high ROI areas," such as multicultural consumers and the digital space.

During the fiscal second quarter, U.S. retail sales grew 5%, with Big G cereal sales up 10%.

Chris Growe, an analyst with Stifel Nicolaus Equity Research, estimated that the 37% increase translates to an additional $40 million on marketing during the quarter, and a 20% increase on year-to-date spend.

"Consumers are shopping our categories and appreciate the nutrition, the convenience and the value of our leading brands," CEO Ken Powell said during a call with analysts. "We continue to reinvest in our businesses at increasing levels. Advertising spending was already planned to be up by double digits and we're adding more."

General Mills' results are particularly impressive given the tough comparison of a year ago, when the company's U.S. business grew 11%. During the fiscal second quarter, U.S. retail sales grew 5%, with Big G cereal sales up 10%. Pillsbury and other baking sales increased 4%, as did Yoplait and other snacks.

During the fiscal second quarter ended Nov. 29, General Mills profits soared 49.5% to $565.5 million, from $378.2 million the year before.

Chief Financial Officer Donald Mulligan vowed to continue General Mills' reinvestment strategy. While media spending grew 37% in the quarter, he said General Mills is targeting at least a double-digit increase for the full fiscal year. That's a relatively conservative estimate given the rates of increase already on the books, but spending can vary dramatically by quarter. For instance, the holidays usually represent a tough comparison because that's when most consumers do the bulk of their serious cooking.

"We're focusing our spending on high ROI ideas with particular emphasis on multicultural consumers and digital marketing, and we're investing strongly in international markets to build our global brands," he said.

It will have to increase elsewhere as well. After four years of decreases, General Mills will have to modestly increase its in-store merchandising spending. Jeffrey Rotsch, exec VP-worldwide sales and channel development, said the company has worked hard to keep a lid on promotional spending. General Mills has leaned on its marketing to support necessary price increases, but the company's trade cost per case, related to retail promotions, has fallen in each of the last four years. Now, Mr. Rotsch said, there are areas where the company will have to gin up merchandising activity "in order to protect market share."

Mr. Rotsch also conceded that General Mills' advertising support for Progresso dropped off during the most-recent quarter, and sales slipped. He added that the company tried to spread its soup spending evenly throughout the year, rather than concentrating it more heavily into soup season. Less spending on a category that is down as a whole, he said, explains much of the difference." He also hinted that the brands' comparative ad battle with Campbell's Soup may still be weighing on sales.

"There may be also be some overhang from the negative advertising that we saw on the category last year and we expect that to recede over time," he said. "We view this as a big category and a great consumer category and so we're quite optimistic going forward." Shortly after the ad battle with rival Campbell's Soup Co., both marketers reported increasing soup sales. The increases were, however, driven primarily by price increases.

For the next two quarters, General Mills will be focusing on its "Biggest Loser" integration and supporting the movie sequel "Shrek Goes Fourth" in a variety of tie-ins with its cereals and snacks. In early 2010, the company will launch Wheaties Fuel, Chocolate Cheerios, Greek-style Yoplait yogurt and a Nature Valley Dark Chocolate granola bar. Mr. Powell said the company has not held launches back during the recession, when consumers are less likely to take chances on new products.

What your Search guy is basically telling you....

Most products & services that are marketed online leverage some kind of search channel. With some kind of SEO/SEM initiatives always being dubbed "the best source of traffic" or "the life-blood of our online traffic."

Here is an article that gives a couple of excuses why you should just not bother with any other forms of online advertising. Apparently if your genius Search Director can't make your online marketing work, it's no one else's fault but yours. Your content sucks, or your design sucks, or the best is...your product sucks and you should close the company. Read below...

Don’t Beat Up Your SEO for Slow Sales

When you finally reach that point where you want to introduce search engine marketing and optimization in your overall marketing strategy it is important to understand how SEO fits into your overall marketing equation. Even though there are many different approaches and SEO service providers out there, it is important to understand that SEO is a form of inbound marketing.

If your website visitors do not convert you have to realize that this is not a direct problem from SEO service provider. Remember you can lead a horse to water but you can’t make them drink. If your website is set up poorly than all the SEO in the world will not help you become successful. Unless you hired a firm or a person to do more than just search engine optimization this should not be looked at as the problem. The problem is most likely many other factors.

Take a look at the following factors that might be affecting your website conversion:

1. Design: When was the last time your website has been updated? Is the design on par with your audience? Put yourself in their shoes for a moment and try to anticipate what you would like a website to look at. Does yours look this way? You cannot not be in denial here, if you are targeting a young demographic and your website hasn’t been updated since 2001 than it might be time to freshen things up a bit. Good design elements keep people engaged and wanting to know more.

2. Conversion Aspects: Does your website traffic need to figure out how to use your website? If your website makes a visitor work on how to contact you than you are already loosing the race. If you are an e-commerce site you have to make multiple entry points into your store from every single page. If you are a service based business you should have a phone number and lead form located almost everywhere so that you pave the way for that visitor to create some sort of action. The goal of your business needs to reflect immediately in your design otherwise you might lose that visitor forever.

3. Products: Everyone wants to think their service or products are the best but at some point you have to ask yourself if people really want what you’re selling. It might just be that your product isn’t cutting it. If this is the case you are better off to realize this at an early stage than spending a lot of money marketing a product people might not really be interested in.

4. Content: Remember your content should be written for the visitors that come to your website and should not just be written for the search engines. If your website content is poorly written (with weak call to action) then this could be a major reason why people are leaving your website and are not converting.

To close out here, make sure you take a moment to properly analyze your website if you start to see organic visitors (from your SEO efforts) are not converting as much as they should.

Holiday Advertising Effectiveness

In Holiday Retail Sales, the Best Ad Doesn't Always Win

New Survey Says Favorite TV Campaigns Have Limited Influence on Consumer Spending

Retailers shell out big bucks on holiday ads. And while consumers like them, that doesn't mean they're influenced by them. A new survey has found that half of consumers say they're not inspired to shop at the retailer whose holiday TV commercial or online promotion they liked best.

TOP TEN MEDIA INFLUENCERS
Coupons	45%
Word-of-mouth	27%
Advertising inserts	27%
Broadcast TV	23%
Newspaper	22%
Direct mail	21%
In-store promotion	18%
E-mail advertising	16%
Cable TV	12%
Magazines	11%
Internet advertising	11%
Radio	10%
Source: Retail Advertising and Marketing Association

"It goes along with the old adage that I know half my marketing dollars are wasted, I just don't know what half," said Mike Gatti, executive director at the Retail Advertising and Marketing Association survey, which was conducted by Big Research. "[Consumers] probably still get a kick out of the commercials, but there are a lot of brand loyalties out there. ... [But it] does position [retailers] in the minds of people whether they shop there or not."

When asked to choose their favorite holiday TV commercial, 26% of consumers chose one from Walmart, upsetting Target's holiday-ad dominance. Target had taken the top slot on the survey for the past three years, but this year it only garnered 16% of the vote. Perhaps that's not surprising, considering that consumers took to Facebook to complain about one commercial that seemed to cast doubt on the existence of Santa Claus and another that put a damper on Christmas morning with talk of finances.

The Martin Agency is Walmart's creative shop, while Wieden & Kennedy handled Target's holiday ads. Crispin Porter & Bogusky had the best showing of any agency, as it works with three of the retailers found on the Top 10 list: Best Buy, Gap and Old Navy.

Still, only 17% of consumers said their favorite ad motivated them to shop at a particular retailer, while 50% said it did not. One-third of consumers said their favorite ad didn't have an impact, because they already shop at that retailer.

Walmart again took top billing online, with 20% of consumers saying it had the best online holiday promotion. Amazon came in a close second, with 18% of the vote.

Again, half of consumers said the promotions didn't influence their shopping, while 22% said the promotion they deemed best caused them to shop at that retailer. About 28% of consumers said they weren't affected, because they regularly shop at a particular retailer.

When it came to what does influence holiday shoppers, coupons emerged as the most influential, with 45% of consumers citing them. Word of mouth and advertising inserts influence 27% of consumers, while broadcast TV and newspapers influence 23% and 22% of shoppers, respectively.

"Shoppers aren't only relying on traditional advertising to find the best deals," said Phil Rist, exec VP-strategic initiatives at Big Research. "Whether they were saving on shipping or using an in-store coupon, shoppers dug through every avenue of potential savings before choosing to commit."

Top ten holiday commercials
RETAILER	AGENCY
Walmart	Martin Agency
Target	Wieden & Kennedy
Best Buy	Crispin Porter & Bogusky
Gap	Crispin Porter & Bogusky
Macy's	JWT
Old Navy	Crispin Porter & Bogusky
Kmart	DraftFCB
Sears	Y&R
Hallmark	Leo Burnett
Kohl's	McCann Erickson
Source: Retail Advertising and Marketing Association

Direct mail, radio and outdoor billboards were all deemed more influential this holiday season, while newspapers, advertising inserts, broadcast TV, word of mouth and in-store promotions were less influential with shoppers.

"There's so much more out there to decide from," said Mr. Gatti, explaining why more areas fell in influence than gained. "This could also be due to the shift over the last year away from some traditional media into a lot of the new media."

In terms of the rise in direct mail's influence, Mr. Gatti suggested that retailers could be doing a better job of targeting consumers or they could be offering attractive pricing incentives and promotions through direct mail.

QVC finally steps into the vertical arena...

QVC Hires Zimmerman for Social Media, Digital Work

Shopping network QVC has hired an outside agency, Zimmerman Advertising, to help with interactive and social-media efforts.

The move is an unusual one for the home-shopping cable network because QVC has historically handled marketing in-house, and because the Omnicom Group agency, while known for its retail expertise, is hardly top of mind when it comes to agencies with experience in the increasingly popular social-media space.

"We do everything ourselves here, but every once in a while we tap someone to help us," said Peter Farrell, QVC's director of brand development and strategy. "When [Zimmerman] came in, they had a single-minded point of view around the importance of branding in the retail space. They will help add bandwidth to our team."

Zimmerman, Ft. Lauderdale, Fla., was selected by the marketer thanks to recommendations, not a review process. "I'm not into quote-unquote pitches," said Mr. Farrell, who prior to arriving at QVC nearly three years ago had an agency-side career in New York at shops such as McCann Erickson and Grey Advertising, mostly in account-service roles.

"I had a couple of possibilities who were good fits culturally, and, based on their experience, came in to meet with us. I've pitched and have been pitched too, and generally I don't like doing that because often times who seems to come in [from the agencies] during those pitches are not the times you are working with."

Mr. Farrell added: "You're asking agencies to spend a lot of time, energy and money developing stuff that will probably never get to market. I think it's better to slowly and carefully do some due diligence and meet with them."

Beyond cable
The move to hire Zimmerman comes as QVC, which began as a TV-based home-shopping network, has been evolving its business model to capture more consumers online. It's also adjusting its marketing mix accordingly.

The Liberty Media Corp.-owned company's programming is distributed to nearly 170 million homes worldwide via subsidiaries in the U.K., Germany and Japan. It plans to launch in Italy next year. According to TNS Media Intelligence, West Chester, Pa.-based QVC cut measured media spending from $21.4 million in 2007 to $12.3 million in 2008. For the first six months of 2009, the marketer spent $4 million.

In the past it has devoted the bulk of its marketing budget to TV (it airs between 20 and 30 different spots a year on cable), limited print executions and, periodically, outdoor. Direct marketing is another chunk of its marketing spending, which is now mostly e-mail and online search.

Mr. Farrell declined to provide the proportion of QVC's marketing budget that it plans to devote to social media in the future, but said it will increase, as "this space has become important to our business."

Among its first efforts for QVC, Zimmerman has been asked to engage QVC shoppers online and in communities such as Facebook and Twitter during the holiday season. The agency will also be reaching out to bloggers and "influencers" to offer interviews with product experts or discuss deals that QVC is offering.

"Social media isn't just about amassing huge quantities of friends and fans, it's about leveraging that following and eventually converting it into sales," said Scott Thaler, exec VP-chief interaction officer at Zimmerman.

NBC is a perfect example of how marketing doesn't fix problems...fix your content, then adjust your marketing strategy.

Memo to Comcast: How to Fix NBC

Throw Money Back Into Programming (Read: Drop the 'Leno' Experiment) and Push the Envelope Creatively

Weighed down by lackluster programming and declining ratings, NBC has been a problem for many different people: programming honchos Kevin Reilly and Ben Silverman; NBC Universal CEO Jeff Zucker; GE chief Jeff Immelt; and even one-time top-rated late-night comic Jay Leno. Now the hot potato is soon to be passed to Comcast -- which, oddly enough, doesn't see the broadcast network as a burden at all.

Media buyers use NBC's current position to secure berths on popular programs such as 'The Office' for lower prices than they might expect to get if the network was faring better.

"The network, the broadcast station, and then TV production -- when you look at those three as kind of an ecosystem, it's a good business," said Steven Burke, Comcast's chief operating officer and the executive who will oversee NBC Universal once Comcast acquires it. "It clearly is not a business that is without its challenges, but it's a good business," he said in remarks made at an investor conference held in New York last week.

Yet NBC's flagship broadcast network enjoys a tarnished reputation. The Peacock has failed to keep its pipeline stocked with new hits after enjoying great success with such fare as "The Cosby Show" and "Seinfeld" back in the day. Want proof? A recent episode of "Saturday Night Live," NBC's own late-night comedy program, poked fun at the transaction, suggesting that "The final sticking point to the deal was GE convincing Comcast that it's still 1996."

In 2006, NBC pulled in more than $6 billion in ad revenue, according to TNS Media Intelligence. Through October of 2009, it has taken in about $3.65 billion, hurt by the economy, audience erosion and the lack of an Olympics telecast.

During the 2000-2001 TV season, top-rated NBC programs such as "ER," "Frasier" and "Friends" lured anywhere from 17 million to 20 million viewers on average. During this season so far, only broadcasts related to "Sunday Night Football" are bringing in more than 10 million viewers. Season to date as of Dec. 6, NBC's top entertainment programs, "Law & Order: SVU" and "The Biggest Loser" brought in an average of 9.64 million and 9.98 million, respectively.

Criticism for cost-cutting

NBC's attempt to keep viewers tuning in without making a splashy investment has garnered criticism. Since instilling Jay Leno every weeknight at 10 p.m., NBC has managed to lose ratings and ad dollars, and has caused many affiliates problems by providing a lackluster lead-in to late local news. NBC "has lost about a third of its viewers in the 10 p.m. time slot year over year given the switch to Jay Leno," wrote Wells Fargo Securities analyst John Janedis in a Dec. 9 research note.

Indeed, media buyers suggest they like particular properties on NBC, but they use the network's current position to secure berths on popular programs such as "30 Rock" or "The Office" for lower prices than they might expect to get if the network was faring better.

Now, NBC appears to be reversing course. "Our priority at NBC is to invest in quality content. We have been very aggressive this season with additional pilots and high-profile projects with such marquee producers as J.J. Abrams and Jerry Bruckheimer," Jeff Gaspin, chairman, NBC Universal Television Entertainment, said in an e-mailed statement.

But media observers suspect a substantial effort is required. "Overall, NBC needs to make the investment necessary to compete. If Comcast takes a cheap and gimmicky approach, they are destined to remain in fourth place. Worse yet, they could be challenged ratings-wise by some of the cable networks," said Jeff McCall, a professor of media studies at DePauw University in Greencastle, Indiana.

Jeff McCall, a professor of media studies at DePauw University, called the Leno experiment 'a weak attempt at saving money.'

"NBC needs to be more like Fox Entertainment, HBO and Showtime, by going for searing, powerful, taboo-breaking series that really push the envelope of television narrative," said Paul Levinson, a professor of communication and media studies at Fordham University in New York.

'Abandon the Leno strategy'

One recommendation: Removing "The Jay Leno Show" from prime time. "They need to abandon the Leno strategy and make the investment in the 10 o'clock hour that it will take to be competitive," Mr. McCall said. "NBC could use Leno less often, but with more effectiveness in weekly broadcasts, or with special stunts. The Leno experiment was a weak attempt at saving money. With the exception of reality TV, cheap won't get networks very far in prime time."

With technology rapidly snatching viewers away from traditional linear TV watching, one theory that has emerged is that audiences and advertisers may not be able to support five broadcast networks. And while the idea of venerable NBC -- once the dominant force in advertiser-coveted Thursday-night prime time -- as one of those outlets that might be thrown to the scrap heap would have shocked many not so many years ago, these days, the thought doesn't sound so implausible. Such talk hasn't been helped by NBC Universal executives floating such notions as making NBC a cable outlet or talking about managing for profit margins rather than ratings.

For its part, Comcast is throwing cold water on those ideas, even as it admitted that the majority of NBCU's cash flow comes from operations other than broadcast or film. "It has never been the case that we have thought about selling the broadcast business," said Mr. Burke, because it is "integral to the way NBC operates" and boosts all operations through creation of programming and promotion of content to a wider audience. Any push of NBC toward higher ratings, meanwhile, could result in better finances, he suggested.

The overall consensus is that it takes money to make money on TV. Content that attracts sizable groups of audience drives everything from ad dollars for first-run programs to web viewership to international and aftermarket sales.

"If I were directing Comcast's program interests, I would give [NBC] free rein to go make great programs. They have the money to get talent and great writers," said Len Shyles, an associate professor of communication at Villanova University. "Give them free rein, and then [Comcast] will deliver it, repurpose the hell out of it."

Customer Intelligence Gathering...

There has never been greater demand for marketing accountability. Consumers have never been so technologically and socially empowered, and we have never had the level of consumer data that we have today. The implications and challenges for understanding customers and marketing to them are enormous. Transforming customer data into actionable intelligence and measuring the business impact of marketing will be key success imperatives for tomorrow's CMO.

But while some claim that the age of the left-brain marketer has arrived, too often we see customer data buried in the direct-marketing department, manipulated and modeled by propeller-heads to create a campaign file. And yet, in a small number of firms, we find customer intelligence elevated into a strategic command center for the business. In these firms, customer knowledge drives decisions across the enterprise -- from marketing planning and strategy to product development, and from risk analysis and staffing to business operations and corporate strategy. And most of these firms point to a broad range of benefits, including improvements in customer acquisition, retention and satisfaction to increased revenue, profitability and customer lifetime value.

What defines these leading firms? They treat customer data as a strategic asset, put the customer at the center of all decision making and use data-driven insight to tailor all customer communications. It sounds simple, but can you name five companies that do it? Our research shows that fewer than 15% of firms have a strategic customer-intelligence operation. These firms leverage customer intelligence broadly throughout the organization, they value customer knowledge as a corporate asset and they frequently have an evangelist in the C-suite. They continually demonstrate that customer intelligence drives overall business growth.

So how do you become one of these firms? Start by looking at your corporate culture. Almost every company we speak with claims that they are focused on their customers and many even describe themselves as customer-centric. But very few follow through on that philosophy with any meaningful results. To do so, you need to break down organizational silos, align compensation structures, establish customer-listening programs and implement an enterprise-wide customer-contact strategy. This last element -- the contact strategy -- is a road map that ensures customers receive the most relevant message at the right time and in their preferred mode. Consider Disney, which uses what it learns from every customer interaction to stay one step ahead of customers at every turn. Disney's success is enabled by its information-driven and highly dynamic marketing practices, but it all starts with a corporate culture designed around the mantra "know me and be relevant."

After understanding the cultural changes that are needed, CMOs must hire the right people with the right skill sets. You need critical thinkers who can challenge the status quo and translate business problems into questions that can be answered with deep customer knowledge. In our research, we found that a high-performing customer-intelligence organization needs a centralized team comprised of people from four disciplines: 1. customer strategists 2. marketing technologists 3. marketing scientists and 4. marketing practitioners. These four archetypes each play very different but invaluable roles in the organization. While every firm has someone in the practitioner role, most firms are missing the customer strategist.

Not all customers are created equal, and by some accounts, your bottom 20% of clients may be draining 80% of your profits. Do you know who they are? Does your executive team? Do you have a strategy for changing that equation? Customer value isn't just a marketing metric, it should be a key performance indicator for the business. As CMO, you will have to help reconcile customer value with line of business and brand managers that are tasked with growing revenue for their corner of the world and make enterprise customer value a high-level metric for the organization. Some firms, such as Farmer's Insurance, take this further and use customer knowledge to predict the lifetime value of prospective customers and target high-potential value prospects accordingly.

Once you have figured out the cultural element and addressed the people component, you can start to think about technology. Customer intelligence relies heavily on technology. It requires a data-management and analytics framework that centralizes customer data, listens across channels, automates processes, and enables intelligent "push" and "pull" interactions with customers. But all the technology in the world will be wasted unless it is being pointed in the right direction -- on facilitating the organization's ability to put the customer at the center of everything they do -- and not just talking about it.

CMOs have always cared deeply about their brands and the emotional connection that they create with their customers. They absolutely must continue to do so, but that kind of connection will be nearly impossible to create with increasingly empowered, connected customers who have limited tolerance for marketing. To succeed, the next-generation CMO must help their organizations to truly understand their customers; they must act as the customer advocate within the organization; and they must focus on building customer value at every interaction.

Value Marketing with NASCAR....

Here is an example of an organization collecting and spending tens of millions of dollars, and not taking the steps to monetize those spends.

"...My experience over the last six years has been working with clients to develop data-capture programs to activate the Nascar fan with interest in a brand or driver. This will drive loyalty and actually drive fans to make purchases.

If you like Kevin Harvick, will you buy Pennzoil at AutoZone or get an oil change at Jiffy Lube? A value exchange has to be determined. Consumers will give you information about themselves and permission to contact them if they perceive a value exchange. Would you rather have an e-mail from Kevin Harvick or from Pennzoil? Would you like to get an e-mail from the Jack Daniels race team every Monday and also be invited to a special Jack Daniels tasting in your city? The viral and buzz factor is invaluable -- a simple e-mail is not.

When my agency pioneered electronic data capture for Crown Royal in 2006, we captured over 170,000 names. We activated customers right from the footprint. These names were 100% accurate and 100% opted in. Follow-up was within 48 hours via e-mail. The research on purchase behavior and brand preference was invaluable. That's the good news; the bad news is that Crown Royal did virtually nothing with those names.

Sifting through data

Here is the disconnect. Currently, only a few sponsors have any sort of data capture. Chevy and Jack Daniels have kiosks at races in which the consumer has to self-administer data by filling out forms. Most consumers can't be bothered. Most sponsors still use paper and pencil. Imagine the cost of data entry, the degree of data error, and by the way, six months later you might get a follow-up.

A more troubling issue is the relationship-marketing follow-up. Would you not want to know that a consumer is ready to buy a Chevy truck in the next three months so you could connect him to a local dealer? Would you not want to pre-qualify him for the truck loan via one of the credit services?

If you invest in Nascar as a marketing platform, you need to understand the ROI. Event-marketing agencies have sold impressions and traffic with no actual ROI metrics. In this economy, no marketer can afford to not connect the brand with the consumer and find every way possible to build sales. Electronic data capture is one tool, but mobile and interactive digital signage can also be very effective.

Track attendance may be down this year, but the Nascar nation is still estimated at 40 million-plus strong, which presents tremendous opportunities for advertising, online, mobile and interactive marketing. Now is the time for sponsors to engage with this passionate and loyal audience and leverage their investment.

Here are some questions that CMOs and CFOs should be asking before investing in sponsorship and event marketing regardless of the sport or event:

Will this reach our target customer in a meaningful way? Will we be able to connect with this consumer and capture his or her data? If we want customers to give us permission to contact them, what is the long-term value exchange? What are the ROI metrics against this investment? How can this investment provide drive to retail programs that can be tested? What digital platforms can we use to engage consumers and build a database?"

Words to think about, for sure.