Giving them the best start

While 118 118 attributes its rise from nowhere to market domination to a major television launch campaign, lottery Monday’s £15m spend produced a disaster. David Benady asks if bigger really is better for a brand’s debut, or whether a slow-burn strategy is the way to make an impression

After the disastrous launch of online charity lottery Monday, brand owners are re-evaluating the use of television advertising when unveiling new products. Launch campaigns have become increasingly important as the benefits offered by new products and services become more marginal. Even the introduction of the latest technology can leave the public cold. Consider the UK launch of third-generation mobile technology – it has been dubbed a “complete disaster” for the telecoms industry by 02 chief executive Peter Erskine.

There is huge pressure on launch advertising campaigns to convey a sense of market disruption, win over sceptical consumers and portray a new product or service as fundamentally changing people’s lives. However, Monday failed to convince many of its claim to be a serious rival to the National Lottery. It went live a month ago amid a humorous, though sardonic, £10m TV advertising fanfare created by agency Us.

Chariot, the company behind Monday, burned through £15m raised on the Alternative Investment Market (AIM) and failed to sell even a twentieth of the 10 million tickets each week it forecast. Last week, it sought further funding from the AIM, and it is altering its marketing strategy to focus less on high-profile campaigns, instead developing online and affiliate marketing programmes. Chairman Tim Holley, a former chief executive of National Lottery operator Camelot, is among three board members to have quit in the last week.

Not a hope in heaven

Some advertising sources criticise the launch ads for being “dark and sinister”. They featured a bizarre “evangelist” for the lottery telling those who were unhappy because they failed to win the National Lottery that there is a new way to play with better odds. Delaney Lund Knox Warren & Partners planning director Charlie Snow says/ “It was all very cool and grungy, but that isn’t what lotteries are about, they are about dreaming and optimism.”

According to Mark Howard, joint-creator of the Monday advertising at Us: “We thought the tone should be different to Camelot’s so we didn’t use fireworks and celebrations. We tried to be slightly quirkier. The insight was that this is a lottery for losers or people fed up with losing on the National Lottery. It is a saviour for them.”

He points out the Monday website crashed on the night of the first draw making it “impossible” to discern its success. Lottery sources were sceptical about the Web-based draw as it had no presence in high street retail outlets to rival the Camelot’s version. As one observer quips, Chariot identified a perceived gap in the market but found there was “no market in the gap”.

Talking people’s language

By contrast, Carphone Warehouse’s launch of its new broadband service has been incredibly successful. The so-called “free” broadband offer has attracted 340,000 people since its launch on April 11. The company announced last week that people signing up for the service now will have to wait until August to get online because of the backlog.

The heavyweight launch campaign through Clemmow Hornby Inge, with TV ads featuring a contemporary version of “Something in the Air” as its soundtrack, appears to have been instrumental in this success. The use of 1960s imagery proclaiming revolutionary change is typical of many launch campaigns.

However, the Advertising Standards Authority (ASA) has received 140 complaints questioning the “free” claim in the ads, as customers have to pay £21 each month to get Talk Talk and a £30 broadband connection fee. Two months into the campaign, the ASA has yet to rule on whether the ads were misleading. The work has already finished and, misleading or not, it seems to have had the desired effect.

In other cases it is harder to discern whether the launch ads have been responsible for a product’s success. For instance, deregulation of directory enquiry services spawned some high-spending ad campaigns, though most believe the ads from WCRS for 118 118 featuring the moustachioed runners won the race. Whether it was the easily remembered number or the power of the creative campaign that drove its success is a matter of debate.

Communications director for 118 118, William Ostrom, claims the brand spent £15m on its launch campaign – and now has a 45% market share. This compares with a £20m spend by Conduit for 118 888 (it has a 3% share) and a £5m budget for BT’s 118 500’s budget (a 35% share). Ostrom admits 118 118 is the simplest number to remember – the company bought it for £2m from the winner of the Oftel auction. But he thinks the energetic and entertaining runners and the strategy of spending the entire budget before launch was important. “It is no good expecting a campaign to work at the point of decision, it is too late. You have to run the campaign well before then,” he says.

Meanwhile, third-generation mobile phone brand 3 failed to make an impact at its launch in March 2003, despite a multimillion-pound budget through TBWA/London. Most observers blamed this on the ad campaign’s focus on technological benefits such as video calling. The brand achieved greater success after a relaunch through WCRS in 2004, which scrapped the original target market of business people in favour of appealing to the young. Its campaign, like that of Monday, was bizarre and hard to fathom, though this time the off-beat approach seems to have had a positive effect on 3. The brand claims to have 3.5 million subscribers, each spending on average £34 per month.

One of the great failed confectionery ad campaigns of recent times was the 2002 blockbuster launch of Nestlé’s Double Cream, which used extraordinary 60- and 90-second executions of a Bonny & Clyde-style campaign set in 1930s America. The ad campaign didn’t last long and the brand was axed last year after several relaunches failed.

According to Jonathan Rigby, who worked on the campaign at Lowe and is now a partner at Manchester-based Love, the ads were an attempt to create instant heritage for the new brand. This was important in a market dominated by long-standing brands Cadbury Dairy Milk and Galaxy.

Follow through

“I remember saying to the client at the time how critical it would be for a continued and sustained investment in Nestlé Double Cream over a number of years. Cadbury and Mars simply squeezed Double Cream out of the market through price discounting when it launched,” Rigby says.

There is a strong temptation to launch products with epic brand-building ad campaigns providing little product information. But these are expensive and need to be followed up with tactical ads. Meanwhile, opinion is split over whether to blow the whole budget before launch or save some money for later. But it is clear that ad campaigns for each new product introduction will have to be bigger, brasher and more powerful than the last one.

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