Marketing Campaign Case Studies

Monday, May 5, 2008


Beginning in the mid-1980s Carnival Cruise Lines emerged as a leader in the global market, and within a decade the Miami-based carrier had become the world’s leading cruise operator. With a total of more than 30 ships and a broad base of holdings, Carnival Cruise Lines had become Carnival Corporation in 1994. By that time it had long since established a winning ad campaign, with television spots featuring entertainment personality Kathie Lee Gifford. Beginning in early 1997, however, the company took a new approach, using animated figures—most notably dancing fish—in place of human performers, with Gifford retained for the voice-over.
The agency of record, HMS Partners, typically employed a budget of $20 million to present two spots per year for the campaign, which was loosely titled ‘‘Fun Ships’’ and ran through 2000. The individual commercials, featuring their respective ‘‘stars’’—the computergenerated images—cavorting to a calypso beat while Gifford’s voice-over touted Carnival, were part of a continued branding effort in which Carnival sought to present itself as the ‘‘Fun Ships’’ line. ‘‘We own fun,’’ senior vice president of marketing Vicki Freed told Jeffery D. Zbar in the Fort Lauderdale Sun-Sentinel. ‘‘We’ve been investing in fun for 20 years now. All the research tells us that our brand is known for fun.’’
As a result of this campaign and other moves by Carnival—such as the purchase of rival lines, the construction of new ships, and innovative marketing methods—bookings on Carnival ships continued to grow in 1998, 1999, and 2000, as they had grown for many years preceding. With expanded fleet capacity and more ships slated to be finished in the early years of the new century, however, Carnival and other cruise lines were especially vulnerable to the downturn in the larger travel and tourism industry following the terrorist attacks on September 11, 2001.

In 1972 Ted Arison, a former executive with Norwegian Caribbean Lines, joined forces with Meshulam Riklis of American International Travel Service (AITS) to form Carnival Cruise Lines. The latter, an AITS subsidiary, launched its first ship, the Mardi Gras, shortly thereafter. Like some farcical version of the Titanic, the Mardi Gras ran aground on its maiden voyage. With this inauspicious start, the nascent line was soon heavily in debt, and in 1974 Arison bought out Riklis for almost nothing. By 1975, however, Arison had turned a profit by careful positioning with regard to Carnival’s target market. He added a second ship in 1976 and a third the following year. In the midst of a market depressed by high inflation during the late 1970s and early 1980s, Carnival prospered under the leadership of Arison and his son Micky, who became CEO in 1979. By 1987, when it went public, Carnival was the leading cruise operator in the world.
In the late 1980s Carnival diversified, adding short cruises to, and a gambling casino in, the Bahamas. There were also land tours, a hotel chain, and—following the 1989 purchase of Holland America Line—luxury cruises. By the mid-1990s the newly renamed Carnival Corporation had established a heavy presence in Europe that culminated with the early 1998 purchase of the upscale Cunard line of Great Britain for half a billion dollars.

From the mid-1970s Ted Arison had shown an ability to recognize the target demographic of Carnival Cruise Lines, and more than 20 years later his son seemed to have inherited the trait. Furthermore, Micky Arison, with his family-controlled 45 percent of the company, continually worked to refine Carnival’s focus on its target market.
The elder Arison recognized early that the cruise line’s customer base was built around youngish middle-class adults, and he designed the shipboard entertainment—including discos, live music, and gambling—accordingly. Hence the focus on fun, evident in Freed’s statement that the line had been ‘‘investing in fun’’ for two decades. The first two spots in the new campaign, released in 1997, featuring dancing fish and swaying palms respectively and included a voice-over by Gifford, saying, ‘‘I guess some vacations are just more fun than others.’’ Gifford, whose contract with the cruise line continued until mid-1999, presented a somewhat longer, but still funoriented, tagline in the 1998 spots: ‘‘Looks like one vacation is just more fun. We guarantee it. Carnival. The most popular cruise line in the world.’’ Awareness of the target market motivated more than the company’s attempts to associate fun with its image, however. Journalist Kitty Pilgrim, interviewing Micky Arison for Cable News Network Financial News (CNNfn) in 1998, noted the high numbers of Americans who would have reached ‘‘the prime cruising age’’ within a few years. According to one analyst, Pilgrim commented, by 2005 there would be 81 million Americans between the ages of 40 and 59. Arison, when asked if he expected an increase in ticket sales to coincide with this trend, not surprisingly said that business had long been good and was only going to get better; nonetheless, he conceded, ‘‘There is no question that the aging of the baby-boom generation is falling into really our prime target market for cruising.’’
To accommodate the aging baby-boom market, along with growing health concerns among the population, in November 1998 Carnival launched its first-ever smoke-free cruise ship, the Paradise. The latter would sail a seven-day route between Miami and the eastern or western reaches of the Caribbean. Arison explained to Pilgrim that surveys had shown a decline in the numbers of smokers among Carnival customers. At present, he said, no more than 22 percent of the company’s passengers smoked, so it made sense to dedicate at least one ship to a completely smoke-free environment. Carnival also used price as a means of drawing in the large numbers of Americans who had never taken a cruise before in their lives—92 percent of the U.S. public, according to a study referred to in Advertising Age in early 1997. The Cruise Line International Association reported that in 1996 fewer than 5 million Americans took cruises, leaving a market of more than 270 million untouched.
In addition, given trends in the market, the company could be expected to attract female travelers. According to a study conducted by About Women, a business research firm, in late 1996, women were more likely to take cruises than men, more likely to plan their vacations carefully, and more likely to spend a greater amount of money. One of the chief concerns of women travelers—both in the leisure as well as business segments—was security. They wanted to know they would be safe in their rooms, whether in a hotel or on board a ship. Uniglobe Travel senior vice president Michele Desreux gave Carnival high marks for its treatment of female customers: ‘‘There are progressive suppliers,’’ she told the Worcester Sunday Telegram, ‘‘such as Hyatt Hotels and Resorts and Carnival Cruise Lines, that take special care with women travelers.’’

Did the 1998 hit Titanic—a huge box-office success as well as the winner of several Academy Awards, including Best Picture—hurt ticket sales for cruise ships? One would assume that it would have: after all, the central event of the film was the sinking of an ocean liner. But that would be an incorrect assumption, according to Carnival Corporation CEO Micky Arison. ‘‘I think exposure to the industry is clearly positive,’’ Arison told Kitty Pilgrim of Cable News Network Financial News (CNNfn), on the program In the Game in November 1998. ‘‘And while we weren’t expecting a boost from Titanic . . . the reality is that it did show some of the glamour of cruising’s past, and the first half of the movie . . . was pretty positive.’’
The first half of the film took place before the sinking of the majestic Titanic on the night of April 14, 1912. One scene in particular that seemed to have captured viewers’ imaginations, Arison told Pilgrim, was the one in which star Leonardo Di Caprio climbed onto the bow, placing himself at the very front of the ship. Arison stated, ‘‘We do have people trying to get out on the bows to feel fresh air because of the movie . . . Captains are constantly complaining that they’ve got to take people down from the bows of the ship.’’

At the same time that Carnival brought out its first round of ‘‘dancing fish’’ spots in early 1997, archrival Royal Caribbean Cruises also broke new advertisements. With six television spots created by ad agency McKinney & Silver of Raleigh, North Carolina, the Royal Caribbean campaign centered on the tagline ‘‘Like no vacation on earth.’’ Royal Caribbean’s commercials, like Carnival’s, departed from existing industry standards, which tended to call for shipboard scenes; the competitor’s spots used ‘‘fly-by’’ scenes of a ship cruising on the water. As Zbar reported in Advertising Age, ‘‘Other competitors ha[d] already charted new courses’’ in their adverting as well. In September 1996 Celebrity Cruise Line introduced a new campaign using animated figures created by Korey, Kay & Partners of New York City. Norwegian Cruise Lines had, in 1995, presented a series of spots built around the tagline ‘‘It’s different out here’’—advertising that used ‘‘attractive models and provocative themes,’’ in Zbar’s words, to make a departure from typical cruise-ship advertising.
Pointing out the common denominators underlying these advertisements, Zbar reported that ‘‘executives noted the merits of selling the emotional experience of cruising, as opposed to the rational approach’’—i.e., selling the sizzle rather than the steak. He quoted Adam Goldstein, vice president of marketing for Royal Caribbean: ‘‘We wanted to strike out in a new direction that gets people who historically might have been put off by yet more classic cruise imagery, to say that the kind of vacation we offer is connected with some of the most fundamental vacation and personal needs.’’

For 12 years, starting in the mid-1980s, Carnival advertising had centered on celebrities, usually depicted on board a Carnival ship. Julie Weingarden in Adweek described the typical Carnival ad lineup as ‘‘second-tier celebrities like Richard Simmons and Willard Scott rubbing elbows with perky ship hostess/spokesperson Kathie Lee Gifford.’’
Then in January 1997 came the first in a new line of television spots, which Zbar described in Advertising Age:
‘‘Realistic, computer-animated tropical fish and swaying palms replace longtime spokeswoman Kathie Lee Gifford—retained as voice-over talent—as the central characters. As the fish dance to an original mambo tune, a Carnival ship is seen plying the water’s surface. And as palms sway to a calypso beat, a ship sails into view. ‘I guess some vacations are just more fun than others,’ says Ms. Gifford’s voice-over.’’
The new television campaign had emerged from a 1996 print campaign using the theme of fun, and whereas Carnival had spent $30 million on total advertising in the preceding year, in 1997 it intended to devote $20 million to the new campaign alone. The company certainly was not having to spend money on celebrity talent: the ‘‘stars,’’ as Weingarden called the main attractions in the commercials, were computer-generated. Behind the new spots was the work of Digital Domain, a computer production facility in Venice, California, that had also provided visuals for the film Titanic. In 1998 the company proceeded with what Zbar called ‘‘a continued shift from shipboard shots and toward branding its ‘Fun Ships’ concept.’’ Again there were two spots that replaced their predecessors on national television in October, and again the theme of fun was built around the antics of images created with the help of a computer. In ‘‘Starfish,’’ a school of those multilegged sea creatures danced to a calypso beat, and the same musical backing appeared in ‘‘Beach Chairs & Umbrellas’’—a spot that showed yet more cavorting on the part of nonhuman actors. Both spots included Gifford’s voice-over: ‘‘Looks like one vacation is just more fun. We guarantee it. Carnival. The most popular cruise line in the world.’’ The campaign continued with little alteration through 2000.

Results for Carnival in the late 1990s seemed to indicate that the company’s leadership was justified in straying from cruise-ship advertising tradition. In 1999 Wall Street analyst Brian Egger of Donaldson, Lufkin and Jenrette, a specialist in the cruise and gaming industries, described Carnival as ‘‘extremely well positioned.’’ According to Suzanne Koudsi of Leisure Travel News, Egger called Carnival his ‘‘favorite company’’ and noted, ‘‘Carnival is best known for going after a customer that’s never taken a cruise.’’
The fall of 2000 saw Carnival depart even further from the celebrity-focused platform that had defined its advertising prior to 1997. The new campaign adopted the conventions of so-called ‘‘reality TV’’ as a means of updating Carnival’s image and addressing negative stereotypes about the cruising experience. Amateur actors were sent on Carnival cruises and then interviewed after the fact; the hope was that the actors would appear to be disinterested, third-party endorsers. The first-time cruisers told stories of negative expectations overcome, and in the process they described highlights of their individual Carnival vacations. The previous tagline, ‘‘The most popular cruise line in the world,’’ remained in place. The booming cruise industry of the late 1990s had led Carnival, along with its competitors, to increase the size of its fleet dramatically. The consequences of such overbuilding were already cause for concern by 2000, but the September 11, 2001, terrorist attacks turned the situation into a full-blown problem. The declines in travel and tourism following the attacks forced Carnival and its competitors to resort to deeply discounted fares in the scramble to fill what had become an overabundance of berths. Although the subsequent years were difficult ones for all cruise lines, the long-term outlook for the cruise industry remained strong, and Carnival was well positioned for future growth in the event of a rebound, thanks in no small part to its marketing-generated identity as the ‘‘fun’’ cruise line.

No comments: