Persuading brands that have never advertised before to take the plunge and hire an ad agency was made a little harder last week, after Pizza Express revealed that it was axing its first and only campaign. The pizza chain has long been an advertising rejectionist, sceptical about the power of ads and the worth of hiring agencies. So, when the company hired BDH TBWA last November to run a £1m campaign, it was seen as a significant U-turn. Pizza Express describes the campaign, which has run since last November, as an experiment to test the effects of advertising. It has decided that the trial has been unsuccessful.
Other notable ad cynics include Red Bull managing director Harry Drnec, who believes agencies bring little of importance to marketing, but charge the earth for it. Red Bull was launched through sampling, with ads – created by Frankfurt-based Kaftner & Partners – coming 18 months later. In the same way, Coca-Cola launched its Burn energy drink with no advertising at all, in order to maintain a sense of mystique – such an approach was seen as “slightly more underground” according to a spokeswoman. There are no plans for any above-the-line activity in England, although the brand is sponsoring Scottish clubbing magazine M8.
Breaking the vow of silence
Retailer Monsoon came close to embarking on an advertising campaign earlier this year, but pulled out when executives saw what the finished product looked like. The Body Shop has always eschewed ad campaigns, though some stores do take out ads in the local press. A spokeswoman says that, while it does use other marketing techniques, the chain rarely advertises in the traditional sense. “But Body Shop is not ideologically opposed to advertising,” she adds.
In contrast to the ad-eschewers, there is a growing band of novices, which are tasting the fruits of advertising and finding themselves hooked. Many have come late to the party, but now appear convinced that it plays an important part in increasing customer numbers and building their brands’ image. Waitrose started advertising five years ago and parent chain John Lewis has been dipping its toes in the water, while Marks & Spencer (M&S) is perhaps the most notable recent convert.
Pizza Express has built its business over the past 37 years largely through word of mouth, press coverage and its high street presence. The recent ads, which have run as posters and in the press over the past year, showed people wearing fashions from the Sixties to the present day, with the strapline: “Pizza Express – word of mouth since 1965.” The campaign was accompanied by radio executions.
But last week, as the chain announced disappointing like-for-like sales in London – where the campaign ran predominantly – chief executive David Page announced that the ads had been canned.
“It had absolutely no effect,” says Page. “It was the only ad we have done and it had no impact on sales. We have a customer base that has been coming to our restaurants for 20 years, about 15 times a year – and they do try other restaurants. The most important thing is to keep the food quality and the pizzas good.” He adds that that the best marketing tool Pizza Express has is its reputation.
The company’s results for the year to June 30 showed group turnover up by 15 per cent to £213.7m, boosted by a wave of restaurant openings. On the downside, like-for-like sales rose by just one per cent through the pizza restaurants and Page indicates that, in London, like-for-like sales were “heavily” down. Overall profits fell by 0.5 per cent, to £39.7m, from £39.9m in the previous year. In the light of the collapse of American tourism to the UK – which has hit the catering and tourism industry hard – and growing competition from other chains, this seems an odd time to conduct an experiment in advertising. But if ads cannot draw in more customers in times of crisis, when can they succeed?
Stephanie Brown, Pizza Express account director at BDH TBWA, says it was the success of advertising for CafÃ© Pasta, Pizza Express’s 14-strong chain of pasta restaurants, that persuaded a sceptical Page to try ads for the main chain. But she says that the agency was not privy to any tracking data about the effects of the campaign: “It is really hard to say anything about the effects of the campaign without having the data. The company says it failed, and I am not going to contradict our ex-client.” She adds, however, that the top-line data on sales showed growth.
One sector in which many brands do not advertise is retail. Retailers have an advantage over other companies, in that their brand names are blazoned across high streets. If the store-front is attractive and the personal recommendations are good, there may be little reason to spend extra money on advertising. In many sectors, however, advertising is a necessity rather than a luxury. Many packaged goods would get nowhere without it, and for direct-sellers it is a must. The odd luxury goods company – and even a few car manufacturers – may shun advertising, but in general, if there is no other way for a brand to be noticed, it won’t remain a brand for very long without ads.
Some retailers have switched on to advertising with demonstrable success – French Connection, through its “FCUK” campaign, is a good example. The campaign has helped the brand to expand out of metropolitan
centres into the provinces. Others have dipped their toes in the water only to pull back again – Monsoon, which dallied with a campaign through Partners BDDH, pulled out claiming the proposed print and outdoor campaign “did not reflect Monsoon’s brand”.
One advertising source, who has worked with various retailers, says that many are very cost-conscious and blanch at the idea of spending millions on a poster campaign: “Retailers connect with their customers not through advertising but through their branches, their windows and their brochures and mailers.”
Go forth, multiples
In the supermarket sector, some argue that advertising is a basic requirement for any chain that wants to be considered a “destination store”. Waitrose, the supermarket arm of the John Lewis Partnership, long scorned the advertising route until the onslaught of brand campaigns by Tesco and Sainsbury’s forced it to rethink. Mark Price, who joined the chain as marketing director in 1998 from John Lewis, explains: “Increasingly, we felt we were being shouted down. Waitrose is a great business but Tesco, Sainsbury’s and others were getting credit for ‘new’ ideas that Waitrose had used for years. We felt we had to get our message out.” The chain ran a campaign addressing the perception that Waitrose was expensive, and promoting some of the innovations the chain claims it introduced, such as organic food and the axing of genetically modified organisms in its food products.
The gospel according to John Lewis
Price insists that the campaigns – created by agency Banks Hoggins O’Shea/FCB – have been successful, and have served as a test-bed for a wider approach by the John Lewis Partnership, which has also started gingerly testing advertising for selected products on London Underground sites. Price says of the Waitrose ads: “We got Taylor Nelson Sofres data on the number of new shoppers and looked at that around the television advertising bursts. This showed that the ads were having an effect on the number of people coming into the stores.”
He stresses, however, that advertising is one small part of a bigger picture. And he says there was some opposition within the chain to spending millions of pounds on advertising: “In any business, there are those who are sceptical of the idea because it is subjective. The greatest compliment we had was that people did feel the advertising was consistent with the stores.”
M&S is perhaps one of the most famous examples of a brand that has come late to the attractions of co-ordinated advertising. While the company has run ads for many years, it was not until its popularity began to decline at the end of the Nineties that it decided to boost its ad budget and adopt a co-ordinated branding approach. It hired agency Rainey Kelly Campbell Roalfe/Y&R in 2000. The early advertising did little to stem declining sales and one execution – which showed a woman running through a field taking off her clothes and shouting “I’m normal” – made the retailer a laughing stock. Critics said it just didn’t ring true that an M&S customer would behave or think like that.
The execution became a convenient stick with which to beat and belittle the chain’s attempts at recovery. Some, while allowing that the ad led to a great increase in the number of shoppers entering stores, insist that once they were there they did not buy anything. Recent M&S ads have been more traditional, concentrating on product information. The company’s fortunes have begun to improve, though it is difficult to gauge exactly the role of the advertising in this.
An M&S spokeswoman appears to play down the importance of advertising in the chain’s strategy over the past two years: “The board put together a recovery strategy and advertising played its part in that, but it was just one part of the overall recovery strategy.”
As advertising saturation grows, fewer and fewer brands believe they can survive without spending a significant proportion of their sales on ads. Pizza Express, Body Shop and Monsoon are members of a dwindling band of retailers that reject ads, but the Pizza Express U-turn shows that advertising is by no means a prerequisite for a successful brand.