1994: Year of the brand challenge
The recession may be over, but years of austerity – and new consumer attitudes – took their toll, forcing many companies to change their approach. For some, their experiments were a complete disaster.
SBHD: The recession may be over, but years of austerity – and new consumer attitudes – took their toll, forcing many companies to change their approach. For some, their experiments were a complete disaster.
Few could have predicted a year ago that Coca-Cola, the biggest brand in the world, would be fazed by an upstart own-label cola from a UK retailer. Fewer still could have anticipated that soft and gentle Persil would be accused of rotting clothes. And anyone who had suggested then that age-old foes such as Mars and Nestl might be exchanging Christmas cards at the end of 1994 would probably have been carted away in a white van.
The year was not a great one for the brand. Even though there was a modest nine per cent upturn in advertising spends to 6.6bn, brand owners were not rejoicing this Christmas.
They have found a common enemy in the shape of the retailer. As a result, a most unlikely assembly of rivals emerged in the form of the British Producers and Brand Owners Group.
Sainsbury’s Classic Cola galvanised them into action in April, just as the Commons began debating the finer details of the Trade Marks Bill. A string of similarly audacious lookalike own-label product launches followed Classic. "Unbelievable", exclaimed the brand owners, as their lobbying shifted up a gear.
But their efforts failed to win the protection they were seeking. The Bill became an Act in October, with no added clauses to rule against products that mimicked the "overall appearance" of others. The battle continues, however. The BPBOG is turning to separate British legislation, as well as to continental Europe, where European comparisons should expose the unwieldy might of the British shopkeeper.
Away from the grocery frontline brands fared a little better. Telephony proved to be one of the most dynamic marketing arenas. Orange – ne Hutchison – and Energis, entered the frenetic market. BT appointed Abbott Mead Vickers.BBDO to handle a new and, by all measures successful, push for brand awareness using Bob Hoskins. Mercury faced reality. Its attempts to break into BT’s private monopoly on domestic phone lines turned out to be an ill-conceived strategy, despite the award-winning ads starring Harry Enfield. The year ended with the announcement of heavy redundancies, and the demise of one of Britain’s favourite ad campaigns.
New additions to the brand fraternity included Going Places travel agent, Eurostar train service, the Milk Marque, Ariel Future, Persil Power and Virgin cola and vodka.
But the biggest brand launch by far was the National Lottery. It prompted unprecedented levels of hype, proving that we are as obsessed with gambling as most other nations.
The biggest gamble in marketing terms was Unilever’s decision to relaunch its flagship brand Persil with a new, all-powerful formulation. At the time, rival Ariel (from Procter & Gamble) was gaining fast on Britain’s top brand. Lever Brothers had been working on the relaunch of Persil for several years but the fear of losing pole position forced it to rush the tricky manoeuvre. P&G pounced within days of the launch going public, sending scare mail to the press warning of the damage caused by the accelerator – Lever’s new secret weapon.
Several highly respected companies, including Paul Smirnoff, Abbey National, Vauxhall and Shell, found themselves in court for the bad behaviour of their marketers. Lever backtracked by toning down its new innovation. But the criticisms still flooded in, and the Consumers’ Association launched trials of the toned down Persil Power, having ruled against the original formula.
Advertising agencies’ fortunes during the year were mixed. Clients did spend more than in 1993, but agencies were still plagued by self-doubt, fuelled largely by changes in technology that threaten their very existence. Intense navel gazing about how to deal with the advent of interactive multimedia gave rise to the expression the "superhypeway".
P&G chief Ed Artz compounded matters by asking bluntly what agencies could offer in the age of multimedia. Few, if any yet, have an answer.
Cosy reward packages for agency bosses were also on the wane in 1994. The last bastion of agency perks – the five-year contract – was symbolically removed in September when WPP chief executive Martin Sorrell accepted a three-year deal. US shareholders were less kind to Maurice Saatchi who was forced to resign last month over a 5m share option scheme. Few could have predicted the Thatcher-like ignomony of his forced departure from the Saatchi Group.
Ogilvy & Mather, Saatchi & Saatchi and Abbott Mead Vickers.BBDO were the star performers, picking up IBM, the National Lottery and BT respectively. WCRS did not fare so well, losing its best known account Prudential, as well as several other big-spending clients.
Television, meanwhile, continued to concentrate power in an ever decreasing circle of companies. Granada bought into LWT and MAI entered the premier league of media owners by adding Anglia TV to its portfolio.
The newspaper industry’s first victim of the broadsheet price war threw up its arms in defeat. The Independent was finally bought by Mirror Group Newspapers after a race against Heinz/Irish Independent man Tony O’Reilly.
And radio went through a mini-renaissance, seeing ad spends surge by 23 per cent to a record 225m. Meanwhile, the British magazine world ended the year in mourning for five-year-old Me, IPC’s answer to Gruner & Jahr’s Prima and Best, and fellow German publisher Bauer’s Bella.
O’Reilly grabbed the headlines for his decision to restructure Heinz marketing, as well as his bid for The Independent. Ad agencies flinched as the ubiquitous purveyor of tinned food announced it was to ditch product advertising and turn instead to direct marketing. Cynics in the industry interpreted this as a way to reduce costs in advance of a wholesale sell-off of the company. But no such move has yet been made.
Heinz’s move below-the-line was followed by other big name advertisers such as Unilever, and a trend emerged, prompted by a very logical question: why spend millions advertising a product that is so closely mimicked by retailers and thus benefits own-label sales as well as your own?
Unilever started building a database of consumers through door-to-door encounters, and that way amassed information of its own – wholly independent of the masters of the shopping aisle.
The fortunes of retailers themselves were not as rosy as headlines throughout the year may have indicated. Yes, they were permitted to open on Sundays for the first time, but Christmas turned out to be a washout with some observers describing it as the worst for 30 years. Aggressive price wars remained a dominant feature throughout the year, thanks to the presence of the new discount stores as well as a lingering obsession with value for money among consumers.
The year that was 1994 was supposed to have been the first year clear of recession. But try telling marketers that.