TV retains appeal for brands

16 February 2012

NEW YORK: Major brand owners including Estée Lauder, PepsiCo and Yum Brands are making increased use of television advertising as they seek to drive up awareness and revenues.

Over the last two years, Estée Lauder has made "more frequent use of TV" to promote the skincare and cosmetics products across its eponymous and Clinique brands, Fabrizio Freda, the firm's CEO said.

"The biggest way to attract mass is still television," Freda argued, as reported by Reuters. "People that today buy a lot of cosmetics in mass around the world don't always read Vogue."

Pepsi, the soft drinks brand, also recently announced what Albert Carey, head of its US beverage arm, called "substantial increases" to its adspend levels. TV, where the firm has made noticeable cutbacks in the recent past, is due to be a big beneficiary of this.

As an example, Pepsi cola resumed advertising in the Super Bowl with an ad starring the winner of the X Factor, the talent show, and Elton John, the singer. Coca-Cola also ran three ads during the annual event.

"It looks like it's back to Coke versus Pepsi right now," Peter Daboll, CEO of Ace Metrix, the effectiveness measurement company, said. "I really think the cola wars are going to be focused on the base brands."

Google has also used TV ads to promote its Chrome web browser, while eBay ran its first campaign for several years in late 2011. Barnes & Noble is similarly using this channel to champion its Nook e-reader.

"TV is the king of media categories when it comes to branding," said Vincent Letang, global head of forecasts for Magnaglobal, a division of IPG Mediabrands. "It is indispensable."

O'Reilly's Automotive, the car parts provider, will also leverage television for the first time this year. "We feel the addition of television ... along with moving to a national level program, will be a great benefit in continuing to grow the O'Reilly brand across all markets," said Ted Wise, its CFO.

Yum Brands, the fast food group, has also made heavy use of TV to drive up revenues in France, which has the highest average unit volume returns worldwide.

"We continue to build our scale and increase television advertising. France is also the first market where we experimented with the business rental market to drive new unit development and returns," David Novak, its CEO, said.

"And we've taken this approach to Germany where we're expecting to have the necessary scale to utilise television advertising in 2013."

Data sourced from Reuters/Seeking Alpha; additional content by Warc staff