They say that the most attractive incentives for consumers are money, travel and cars. You could take those to a higher level of motivation and say that greed and dreams underpin how we respond. Sales promoters have long known this, of course, hence the dangling of glittering prizes at the end of competitions, mail-ins and the like.
As the brands which have offered these incentives go global, their owners have started to look into whether marketing strategies can be rolled out across borders. From packaged goods to car manufacturers, the notion of running a pan-European sales promotion has become something of a holy grail.
“They are a reality, they are happening and we are doing them,” says Mark Zimmer, founder director of promotions agency ZGC. That any doubt might exist as to whether cross-border sales promotion exists is not just the product of scepticism – it is a very real issue given the legal barriers.
Anybody familiar with the sales promotion industry will have seen a check list, originally compiled by IMP and later updated by the Institute of Sales Promotion, which shows what can be done in each European Union territory.
The chart ranges from all ticks in the UK column to nearly all crosses in the German boxes, with every combination in between. If you are fond of doing perms on the pools, you have a chance of figuring out how much coverage you could achieve with a common approach. If not, then you’d better beware.
“The first thing people do is go to the law books and look at what is allowed,” admits Zimmer. In fact, he is probably overstating the resourcefulness of many sales promoters and their agencies. The reality seems to be that they reach for the phone and the number of an agency in the target market.
“Companies in the UK find it difficult to discover what is allowed and what is not. There is nowhere to go to find out,” says Simon Mahoney, vice-chairman of the ISP and managing director of agency SMP. To address this, the Institute has been compiling a list of legal advisers in each country who can give an informed opinion. “If you are serious about running a promotion in Germany, to do the job properly you need professional advice,” says Mahoney.
You also need to pay for it. This appears to have been one of the major obstacles to the effective development of cross-border promotions, either because clients will not pay for the proper advice, or because agencies are pocketing the money and doing it on the cheap. Some German sales promotion agencies report receiving as many as five or six calls from UK agencies asking for free advice every week.
This is where the large agency networks can genuinely claim a point of difference and a competitive advantage. If they need advice on working in an overseas market, they will also ring up an agency there and ask. But since they own that outfit, they can guarantee getting an answer.
This does not impress many agency heads in the UK, however. Given the dynamism of the British market, which offers probably the most diverse and interesting promotions anywhere in the world, they believe they have the talent and ability to get around any obstacles. Certainly, few of the UK independents believe it worthwhile investing overseas.
“For a sales promotion agency today, a pan-European network is by no means crucial. We work with a number of blue-chip international companies, such as Coca-Cola & Schweppes and Bacardi Martini, yet in real terms it is relatively uncommon for a client to request a pan-European campaign. It is therefore, in most cases, impractical for an agency to have a complete network in place,” says Iain Sanderson, managing director of Dynamo Promotional Marketing.
Where a cross-border promotion is needed, the client is often the best placed to look for specialist advice, he argues. By talking to the local office in each market, not only do they feel involved in a promotion which otherwise can risk being too centralised, “but it also ensures that local knowledge and market conditions are taken into consideration”, he says.
This is an important issue given the politics which often flare up around marketing activity. For all that clients have regionalised production and administration, and centralised decision making into hubs in a network, they still have local offices managing local markets. With their own marketing budgets often being exploited to build a pan-European account, they want to have some say.
This is why some in the UK believe that agency networks are not the right solution, because they are too centralised in approach. “The time when a pan-European agency network, either owned or contracted, was essential has passed. There are pan-European accounts for pan-European companies, but the increasing appreciation of the importance of tailoring marketing activities closely to local market needs has curtailed the trend toward pan-European promotions, handled by one international agency,” says Charles Endacott, managing director of RJB Marketing.
Independents have instead become adept at drawing on either commercial resources or contacts to meet clients’ international demands. These contacts may be as informal as an agency director who is a good friend. Or they may be more structured, in the shape of a network of shared interest, rather than common ownership.
London-based agency TMW is a member of the InterDirect network which offers it the necessary knowledge sharing to work across borders. One of its key accounts is the Italian and east Mediterranean account for British Airways, which is run out of BA’s office in Rome. TMW won the account in a pitch against a range of agencies, both Italian and international.
“We think we can control the account from outside the country. The brand is the key. BA in overseas markets is fairly visible, although not as omnipresent as in its home market. But there is a strong brand identity. That is something to work with to drive greater consistency in secondary markets,” says Richard Marshall, business development director at TMW.
The airline is very committed to the idea of using its local offices as sources of knowledge, in contrast to taking a single global view. It even terms the approach “glocal” – a hybrid of the global branding with the local input. This is reflected in the work done by TMW on pan-European trade marketing for which it developed a basic promotional mech-anism and a central communications theme. These are then leveraged in local mar kets to reflect different conditions.
The pitfalls for cross-border marketing are not all legal. Cultural issues can sometimes have an even bigger impact if they lead to a customer backlash. Marshall notes that even for an airline promoting holiday travel, images of women in bikinis cannot be shown in Israel. Zimmer adds that, “for me, a more important issue is the cultural element. You can’t do that remotely”.
His company is in the process of putting together a network in order to address the growing demand from multinational clients. It is a long-term plan for the next three to five years, with at most only five new agencies pencilled in to open this year. “We look for centres of excellence. I am adamant the only way to do it is to do it properly. Too many agencies don’t,” he says.
For the moment, Zimmer is confident that London is the right place to use as a hub for the new network, but he acknowledges this is changing. “Given that a lot of global brands are American-owned, I feel reasonably confident being in London. Now clients like Hewlett-Packard are saying they should centralise in European territories other than the UK, in three to five years’ time, just giving a lead from London will not be enough,” he says.
It is undeniable that US companies are driving pan-European sales promotion. This is in part down to the fact that they own more global brands than any other country. It is also due to the fact that they have a vision which sees Europe as a prime region for expansion.
Marketing Drive has just launched a multicountry promotion for the tenth anniversary of Jeep across Europe, in association with American Airlines and Ray-ban. If consumers accept an invitation to take a test drive, they will be entered into a prize draw with a first prize of riding the trail in Lake Tahoe, California, with runners-up getting pairs of sunglasses.
“We put the promotion together with Bozell, which handles the Jeep account above the line worldwide. We used its network of European offices to adapt the promotion to suit local considerations,” says Alastair Wolfendale, director of
Marketing Drive, which has a shared parent company with the advertising agency.
Guidelines have been developed to ensure local legislation is respected in the running of the promotion in each country.
A CD-Rom with templates, artwork and copy is sent to the local Bozell agency, which then produces finished materials in the local language.
Wolfendale acknowledges that this approach suits Chrysler very well, since it is one of the few accounts to prefer centralisation of its advertising and marketing.
Not all clients will want to work like this. Nor will every client looking to push a promotion across a border have local offices which can provide important knowledge. In these cases, getting it right can be perilous. Use the wrong imagery and you could send out all the wrong messages. Airlines are fond of images of birds as symbols of freedom, for example. But in Southern Europe, they are seen as threatening and representing the darker side of life.
The good news is that the legal barriers are under attack. Following the European Union’s Green Paper on Commercial Communications, Brussels is getting serious about rolling back laws that unreasonably exclude overseas traders. A complaint by Polygram may even result in Germany’s excessively limiting laws being overturned. That will not solve the problem of whether to go with an independent or network agency. But it will reduce the number of calls German sales promoters have to field from anxious foreign marketers.