Time to take a break from sales promotion?

It could be argued that sales promotion is the reality television of the marketing world. In the early days, sales promotions were exciting and innovative and consumers were getting more for their money. But now, like reality shows, they are everywhere and there is talk of overkill and consumer indifference.

The news that Nestlé Rowntree is to scrap Kit Kat’s “Britain’s biggest break” campaign after two years (MW last week) has prompted some industry experts to question the effectiveness of much of the current sales promotion in the market.

The “biggest break” campaign, which was introduced by former marketing director Andrew Harrison, is understood to have failed to make an impact on consumers. Insiders say people were not inspired by the promotion and that the brand did not see a sales increase as a result.

Despite this, Nestlé is investing £10m in a new interactive promotion Kit Kash, which launches mid-January, and gives consumers the chance to win prizes, including cars and holidays, with points inside wrappers.

It is not the only promotion in the confectionery sector. Rival Cadbury is marking its centenary next year with a multi-million pound campaign that includes an on-pack promotion giving away tickets for sport and music events and the theatre and cinema, while this summer Masterfoods ran a “Get It 1st” promotion on its Skittles, Mars, Maltesers, Bounty and Twix brands.

But questions still remain over whether these types of promotions actually increase sales and whether consumers really respond to them. Some sources believe manufacturers feel they must run promotions simply because their rivals do so. Others suggest promotions stifle creativity and that the money would be better spent on new product development.

Former promotions director at News International Andy Agar, who worked on one of the most successful sales promotions of recent years – Walkers’ Books for Schools campaign, which was supported by The Sun and the News of the World – thinks that less is more.

“The market is crowded with too many relatively low-brow and lacking-in-impact pieces of sales promotion,” says Agar, who now runs his own promotions consultancy Why Not!. The Walkers campaign, which involved schools collecting tokens from newspapers and crisp packets, ran for almost five years until 2003 and put 7 million books into UK schools.

It was followed by Tesco’s Computers for Schools. But there have been few campaigns recently that can claim to have captured the public’s imagination in a similar way.

In some cases there has even been a backlash. Cadbury’s Get Active promotion, for instance, was attacked for encouraging children to eat more chocolate to win sports equipment.

Former Jacob’s marketing director Paul Cousins, who claims to have started the “for schools” trend with Jacob’s Music for Schools campaign, says: “I’m inclined to agree that there is a developing consumer cynicism towards these promotions.”

Cousins, who is now a director at Catalyst Marketing Consultancy, feels promotion has changed because retailers have become more price focused. “The best promotion is to get something for nothing,” he says. “Buy one get one free (BOGOF) is so much more compelling than a promotion inside the wrapper of a Kit Kat.”

Research from Mintel appears to support Cousins’ view. Three-quarters of consumers said they were prompted to buy a product because of a BOGOF promotion.

Client services director at promotion agency GFM Dave Roscoe admits sales promotion tends to encourage consumers to switch from one brand to another rather than attract new customers. And he warns that brands need to be careful about which type of promotion they choose. “Flight promotions, for instance, have so many restrictions that they’re actually not worth much. Soon the public will start thinking promotions aren’t worth anything.”

The Andrex toy-puppy promotion of the early Nineties was one of the most successful sales promotion stories to date, according to Roscoe. It forced the company to increase production to respond to demand.

Mike Spicer, managing director of integrated agency ARC, which launched the Chocollect campaign for Masterfoods, believes the Pepsi Taste Challenge had a similar effect. “It made people reconsider the brand,” he says. “It’s rare, but every so often there’s an idea that’s absolutely spot-on, and that’s what sales promotion is all about.”

Partnerships with other brands can be an effective sales promotion technique, as illustrated by the successful Walkers and News International Books for Schools campaign. Last year, Britvic Soft Drinks aligned its Tango brand with PlayStation 2 (MW July 10, 2003) and launched a £2m instant-win on-pack promotion.

But most recent partnerships have struggled to excite the public and many have been criticised for their lack of relevance. According to the National Incentive Survey, Japanese speaking clocks and cans of mushy peas were among the bizarre gifts consumers received for responding to sales promotions this year.

To be successful, promotions have to tap into people’s lifestyles, says Chris Reed, managing director of partnerships and promotions agency SP Partnerships. “They need to be life-changing to have an effect. ‘Win a house’ promotions, for example, still work, but ‘win a holiday’ seems very mediocre these days.”

The newspaper industry, which was among the first to experiment with sales promotion when the tabloids launched bingo games in the early Eighties, has started a new trend by giving away DVDs and CDs with newspapers. Estimates suggest that a film DVD covermount can lead to a sales increase of up to 90,000.

Reed believes DVD offers are the future of sales promotion and says they could also work for the travel, leisure, retail and packaged goods sectors.

The consensus is that innovation is the key to sales promotion. Coca-Cola claims that its biggest on-pack promotion, created to support the launch of its music download website mycokemusic.com at the start of the year, exceeded its expectations, with more than a million people downloading tracks.

But increasingly marketers face a dilemma over their budgets. The great promotions of recent years cost millions of pounds and, though in the end they paid for themselves many times over, their success is becoming more difficult to repeat.

Cousins says: “If I was to become a marketing director again I’m not convinced I would be putting much of my budget into on-pack promotions. BOGOF is expensive, but at least I’d know I’d be driving sales. The cost of developing on-pack promotions is very high and the return, I believe, is at best obscure and at worst non-existent.