business news in context, analysis with attitude

Yesterday MNB reported on an Advertising Age story saying that News Corp.’s News America Unit – owned by media mogul Rupert Murdoch – is selling manufacturers including Procter & Gamble, Kimberly-Clark, Johnson & Johnson, Unilever, and General Mills “total control of advertising and promotion on the shelves of 35,000 U.S. stores for as long as two years at a time.”

The cost of such exclusivity can be in the millions and “can effectively lock out competitors from in-store advertising for their duration - even if the marketer is not advertising at that time - and confer an edge in crucial retail territory described by marketers as the ‘moment of truth.’” News America itself has a 90 percent market share in the in-store media categories in which it participates.

MNB user Glen Terbeek responded:

Wow! This is the ultimate abdication of a retailer's responsibility of being the Agent for their shoppers. It is mass marketing trade dollars at its worst! Can you imagine letting someone else control your in-store marketing? Or excluding marketing programs for items that the shoppers may want because some other manufacturer owns the right? Will new suppliers/products ever have a chance? Will every store be the same? It is adding Friction to the shopping process, rather than making it Frictionless. Why not just give the whole center store to Wal-Mart right now? What are the retailers thinking?

The next logical step would be for the manufacturers to go directly to the targeted shoppers through a third party web marketer, order processor, and fulfillment provider. After all, the trade dollars they would save would more than make this very cost effective and probably an easier shopping experience for the customer as well. And history has proven that the manufacturers quickly leave their current customers when a more direct (Frictionless) channel in reaching the shoppers they target develops.

The economic forces in the last 15 years have changed the supermarket business from a distribution business to a store by store marketing business. This "total Control" store marketing program is a step back to the eighties, in my opinion.

We had a story yesterday noting that baby boomers are not a homogenous group – that marketers have to treat early boomers different than late boomers.

MNB user Philip Herr wrote:

As part of the early boomer generation I cannot help but notice the advertising aimed at my cohort. Apart from remedies and drugs, which have always targeted an older group, I now see several financial services companies advertising to me in a fairly inept manner. And they all look the same. Specifically featuring footage and music of Woodstock, they anticipate gaining my attention and creating empathy by showing that they understand me. No, they don't. And the music and footage have nothing to do with my investment goals or fears. This is sloppy thinking -- they have opted to use these devices as a substitute for thinking through and uncovering real needs.

Gee, that sounds familiar. We can think of some retailers guilty of exactly the same mistake.

Another MNB use wrote:

I agree that not all baby boomers are equal. As the last of the 50’s models, I am more than a little irritated at some of the “progressive” changes my older brothers and sisters (literally not figuratively – mine are in agreement with me on most of this), brought about in those oh so heady days of the 60’s and 70’s. So, when I saw the new Ameriprise commercials (with the Mitch Ryder and the Detroit Wheels –“Give Me Some Lovin’” track) for the re branded Amex Financial Services Co., I almost wanted to shred my Platinum card, then remembered they are actually separate divisions, so I am OK for now. What about those irritating ads for health products, too? Do I really need some fake doctor telling me about this or that product for incontinence or sleep? NEWS FLASH- when you get older, you sleep less, and if you take Ambien or Lunestra, it ain’t gonna flash you back to the Zep concert at Three Rivers no matter how fun it would be!

In addition to being able to separate baby boomers based on when they were born, it also seems to us that you can separate them based on whether they think the sixties and early seventies were positive (in the long run) for this country or negative. How you feel about this sort of shapes your world view.

MNB user David Livingston had some thoughts about Winn-Dixie:

Winn Dixie has been bragging endlessly about how same store sales are up 7%. What don't mention is that hundreds of stores have been closed or destroyed. There has also been a huge population shift in Louisiana while at the same time many competitors were destroyed. Winn Dixie should be a bit more honest and show what their same store sales are by state. We would probably find that in Louisiana/Gulf coast, sales are up dramatically along with their competitors. Everywhere else it is probably the sad declines we have seen in the past.

Winn Dixie did not take sales from anybody and their gain did not come from any improvements made at store level. If you check the same store sales gains at all of Winn Dixie's competitors, they are most likely far exceeding Winn Dixie. This is just a one-time fluke as a result in a population shift, the loss of competition, and the distribution of free food stamps to every warm body in the area.

A year from now we will most likely see the largest same store sales drops in Winn Dixie history as Wal-Mart gets stores reopened and New Orleans begins to get repopulated.

On the subject of check fraud, addressed in yesterday’s MNB, Al Kober wrote:

I am amazed that many people still write checks for almost everything. Why is the big question. I saw customers in a restaurant leave their tip in the form of a check. To me the bigger question is why would a retailer still accept checks? I know there are security systems to run checks through at many stores. I was in line behind a customer in a small town hardware store. Her purchase was under $3.00 and she wrote a check, even though she had cash in her wallet. Go figure.

I, too, use one credit card and charge everything on that card. I get online accounting and online billing and online bill payment. And besides the credit card pays me money every year for doing so. It cost me nothing for the card. It cost nothing for the statement or to pay the bill. Seems like a no brainier to me, so why would anyone still use checks? I have no idea.

And finally, an email on the romance of White Castle and its appropriateness as a place for a first date, as MNB user Bryant Wynes wrote:

While we didn’t go to White Castle, I’m proud to say that on our first date, my wife (of nearly 32 years) and I spent a warm summer evening driving around with the top down in my 1970 GTO convertible. We checked out the brand new shopping mall in town, then capped off the date with a nice walk in the park. Aside from a root beer at the local drive in, I didn’t spend a dime on the date. To this day, we simply enjoy each other’s company. And I truly believe that she’d be delighted to share a bag of “sliders” with me for Valentine’s Day!

I’ll bet you’re selling “Mrs. Content Guy” short – and am guessing that she would enjoy a night away from the kids where the two of you could simply enjoy each other’s company – whether it was at a White Castle or Chez Paul.

After two weeks on the road (and another one to go) we think she’d just be happy if we’d show up occasionally.

C’est la vie!

KC's View: