Marketing Campaign Case Studies

Tuesday, June 28, 2011


‘‘The Power of Dreams’’ targeted a large and diverse audience. While Honda wished to attract younger buyers, they were not the company’s only focus. With a wide range of car models, from the lower-priced Civic to the higher-end Accord, Honda could potentially appeal to drivers within all age groups and socioeconomic statuses. All potential new buyers, whatever their age, represented Honda’s target market. Thus, of the many different media that ‘‘The Power of Dreams’’ employed, television advertising, with its ability to reach a wide audience, was expected to be the most effective. Further, by portraying Hondas as hip and fun, the commercials appealed to a broad range of potential buyers. Honda’s new campaign mainly focused on raising public awareness of its cars—especially in Europe and the United Kingdom, where Honda was largely associated with motorcycles—and, in particular, getting new customers to visit Honda showrooms. There was also an emphasis on pleasing return customers. The company wished to improve communications with Honda owners and thus make them feel good about their choice of Honda; this in turn would convince them to buy a Honda the next time around.


In April 1964 Honda spent $300,000 to sponsor the Academy Awards, becoming the first foreign corporate sponsor in the event’s history. With the tagline ‘‘You Meet the Nicest People on a Honda,’’ the Honda advertising campaign was a success, becoming one of the bestremembered advertising campaigns in the company’s history. Nevertheless, although the campaign promoted Honda’s motorcycles well, it did little to sell Honda vehicles. The reality was that Honda was better known for its motorcycles than it was for its cars. This long remained the case in most of the countries where Hondas were sold. In Japan, where big-splash promotional efforts for Honda’s cars were common, the problem was not so severe. The 1981 campaign to promote Honda’s model the City, for one, was omnipresent in Japan, incorporating large-scale TV, radio, and print advertising. There was even a variety of City novelty goods for sale and a specialty magazine called City Press. Meanwhile, in the United Kingdom, Honda automobile production had yet to begin. Honda cars had been available there as imports, but not enough units were ordered to establish a presence. Further, the prices of imported cars could not compete with that of vehicles manufactured within the country. Thus, at the time, any sales push in the area focused on Honda motorbikes. In 1992, when Honda automobile production began in the United Kingdom, the shift toward promoting Honda automobiles there began, albeit slowly. But the potential market for the new manufacturing plant was huge: located in Swindon, England, it was responsible for producing vehicles well beyond the United Kingdom, including mainland Europe, the Middle East, and Africa. As such, Honda felt the need to begin a major campaign within the United Kingdom. Eventually it happened. ‘‘The Power of Dreams’’ replaced the 1999 global tagline ‘‘Do You Have a Honda?’’ This earlier campaign employed print, radio, and television, and portrayed the dreams of Honda’s founder, Soichiro Honda, who envisioned providing the world with all the possible means of travel. Soichiro Honda himself had repaired and created bicycles and motorcycles as well as both road cars and racing vehicles. The ‘‘Do You Have a Honda?’’ ads thus incorporated images of all of these means of transportation as well as more creative means, including a hot-air balloon and a cable car. Although the ‘‘Do You Have a Honda?’’ ads spread worldwide, the United Kingdom was barely affected by the campaign. From 1998 to 1999 Honda automobile sales in Europe dropped from 240,000 to 235,000. The decline continued through 2002. In the United Kingdom, Honda auto sales began to drop in 2000. In 2002 ‘‘Do You Have a Honda?’’ was replaced with the campaign ‘‘The Power ofDreams.’’ Although the tagline was part of a larger global focus, the campaign, under the leadership of ad agency Wieden+Kennedy in London, centered on promotional efforts within the United Kingdom.


In 2002 Honda Motor Company was the number-three Japanese automobile manufacturer in the world, behind Toyota and Nissan. While Honda’s automobile sales in Japan and the United States were considered strong, sales in the United Kingdom and mainland Europe were thought to be weak, even though automobile production in the United Kingdom had been ongoing for a decade. Further, Honda vehicle sales had been declining in these regions since 1998. In response to these problems Honda hired ad agency Wieden+Kennedy’s London office to create an advertising campaign that would directly address the issues.
‘‘The Power of Dreams,’’ released in 2002, was an omnipresent campaign in the United Kingdom and beyond, using television, direct mail, radio, posters, press, interactive television, cinema, magazines, motor shows, press launches, dealerships, postcards, beermats (coasters), and even traffic cones. It built upon Honda’s company slogan, ‘‘Yume No Chikara,’’ which was first endorsed in the 1940s by the company’s founder, Soichiro Honda. Translated into English, it meant to ‘‘see’’ one’s dreams. Wieden+Kennedy used this phrase as the basis of its question to consumers: ‘‘Do you believe in the power of dreams?’’ The global campaign, which centered on this tagline, included print and television components starring ASIMO, a humanoid robot developed by Honda. While the ASIMO ads gained widespread recognition, the 2003 television commercial called ‘‘Cog’’ was clearly a pinnacle of the campaign. In a single take with no special effects, more than 85 individual parts of the new Accord interacted in a complicated chain reaction. The spot won 37 advertising awards. Honda considered ‘‘The Power of Dreams’’ an advertising success. Worldwide sales of Honda vehicles rose dramatically from 2002 through 2005, from 2.6 million units per year to 3.2 million units per year. In the United Kingdom sales improved by 28 percent. In Europe sales in 2002 increased from 170,000 to 196,000, which rose to 217,000 in 2003. The campaign also won IPA Advertising Effectiveness awards, British Television Advertising awards, and even a 2003 Gold Lion at the Cannes International Advertising Festival.

Tuesday, May 31, 2011


HBO pronounced the ‘‘It’s Not T.V. It’s HBO’’ campaign an unequivocal success. In the company’s estimation, the campaign achieved its primary goal of elevating the brand’s image in the market. Extensive precampaign and postcampaign surveys indicated that the commercials had made viewers more aware of the HBO brand. According to the December 8, 1997, edition of USA Today, HBO’s membership increased from 21.1 million in 1996 to 22.7 million in 1997. But HBO stressed that it was difficult to correlate the number of subscribers with its high-profile ad campaign because of the variety of factors that influenced fluctuations in membership. For 25 years HBO had seen the number of its subscribers increase each year. The media and the advertising industry responded positively to the spots. On December 9, 1996, USA Today heralded the campaign as one of the ‘‘rare knockouts’’ in advertising. Trade publications such as Adweek and Shoot extolled the technical wizardry of the commercials. ‘‘Certainly there is something to be gained for an entertainment provider merely by being entertaining,’’ declared the November 4, 1996, Advertising Age. In September 1997 ‘‘Chimps’’ received the first ever Emmy Award for a commercial. It beat out other well-liked campaigns, such as those by Nike and Levi’s, to be named the best commercial of the year. Also in 1997 the ‘‘Chimps’’ spot received a Gold Clio Award. The Clios were international advertising awards presented annually in recognition of creative excellence and innovation in advertising. Viewers also responded well to the campaign. USA Today ’s Ad Track, a poll measuring the popularity and effectiveness of national campaigns, revealed that consumers consistently liked the HBO spots, often ranking them among the 10 best commercials. According to the newspaper, ‘‘the spots were especially effective with consumers aged 18–24.’’ Larry Gerbrandt, a senior analyst at Paul Kagan, told USA Today on December 8, 1997, that ‘‘the ads worked well for HBO. The name HBO is practically synonymous with pay TV.’’ Yet the campaign’s positive impact onHBO’s subscriber figures was less clear. Although 33 percent of respondents in the December 29, 1997, Ad Track survey declared that they liked the HBO campaign ‘‘a lot,’’ only 20 percent thought that the campaign was ‘‘very effective.’’ In a similar vein, Advertising Age criticized the campaign for not providing enough information about HBO’s actual programming. ‘‘Chimps’’ in particular generated a great deal of controversy. Many journalists were outraged that the basic premise of the spot was false. Goodall did not watch HBO; in fact, the pay channel was not available in the remote region of Africa where she lived. The spot drew more criticism when it was learned that the voice attributed to Goodall was not hers. HBO, however, felt the media were taking the commercial far too seriously, and the company itself was pleased with the results of its efforts. In 1998 the campaign was expanded to include print, radio, and direct mail. As the campaign morphed from a branding strategy for the network into its operating mantra in 1999, the marketing also shifted to specific programming. According to network executives, the strategy evolved based on the success of two of its shows—The Sopranos and Sex and the City—as well as of original movies that the network was producing and sporting events that it aired. The new marketing effort resulted in HBO being named Cable Marketer of the Year in 2000 by Advertising Age. The original ‘‘It’s Not T.V. It’s HBO’’ campaign was named to the Cable & Telecommunications Association for Marketing (CTAM) Hall of Fame in 2003, which, according to the organization, honored the ‘‘finest and most influential campaigns in the history of cable.’’


HBO gave BBDO New York the project of creating a memorable campaign. After HBO briefed the ad agency on its specific needs and concerns, BBDO took over the creative aspects of the campaign. In a brainstorming session, Michael Patti, the vice chairman and executive creative director of BBDO, and Don Schneider, the agency’s senior creative director, hit upon a striking concept. The two envisioned a commercial in which a parrot would recite famous movie lines because it saw into a neighboring apartment, where a television was tuned to HBO. The idea quickly evolved into the award-winning spot featuring lip-synching chimpanzees steeped in movie lingo. The 1996 spot, titled ‘‘Chimps,’’ featured renowned primatologist Jane Goodall and a group of wild chimpanzees in the Gombe preserve in Africa. Frame-by-frame animation made it appear as though the chimps were actually speaking famous lines from classic Hollywood movies. The premise of the spot was the powerful impact HBO exerted on its viewers. The commercial opened with a proud chimp uttering lines spoken by Marlon Brando in The Godfather : ‘‘He never could have outfoxed Santino. But I didn’t know until this day that it was Barzini all along.’’
Another chimp replied with lines from Forrest Gump:
‘‘Mama says that stupid is as stupid does.’’ As a third chimp tossed a stick to the ground, he repeated a line from Network:
‘‘I’m mad as hell and I’m not going to take it anymore.’’ A father chimp spoke Darth Vader’s well-known line from Star Wars —‘‘The force is with you, young Skywalker’’—as he patted a small chimp on the head. After a group of chimps chanted, ‘‘Toga! Toga! Toga! Toga! . . .’’ from Animal House, the camera panned to a bewildered Goodall writing in her journal. Her voice-over said, ‘‘September 19: Their inexplicable behavior continues.’’ A chimp then bellowed, ‘‘Yo, Adrian, I did it,’’ a line from Rocky. The camera cut back to Goodall’s cabin, where her television was tuned to HBO, and she continued, ‘‘Got to go now. Braveheart is on.’’ A black screen followed with a graphic and the campaign’s tagline, ‘‘It’s Not T.V. It’s HBO.’’
Producing the spot proved to be quite a challenge, however. The chimpanzees were filmed at their feeding sites in the Gombe preserve. Frame-by-frame animation was then used to create the illusion that the animals were reciting movie lines. Sherri Margulies, a film editor who worked on the spot, told Shoot that, while other commercials had used similar effects, ‘‘the elaborate attention to detail . . . on this spot [was] completely unique.’’ All told, the special effects took approximately 20 to 30 hours per chimp, requiring the ad agency to work around the clock for a month.
In 1997 HBO followed ‘‘Chimps’’ with four new television spots, each intended to elevate the HBO brand. Using tongue-in-cheek humor, the spots attempted to convey the uniqueness of HBO’s programming. In ‘‘Haircuts’’ the men of an idealized American small town sported bizarre, patterned haircuts. It turned out that Carl, the town barber, had become engrossed in HBO’s programming as he cut his customers’ hair, the result being freakish haircuts. In another spot, ‘‘Roach Motel,’’ an enthusiastic pest exterminator was unable to rid a home of its roaches by using sprays or bombs. He succeeded only by luring the cockroaches into a roach ‘‘motel’’ with a neon sign that advertised ‘‘Free HBO.’’ The campaign’s ironic wit continued in a spot featuring a sadistic repairman who tormented an entire town by plugging in and unplugging their cable in the midst of a captivating HBO program. A final commercial, ‘‘Glee Club,’’ related the tale of a disgruntled neighbor who gave the local barbershop quartet free HBO in the hope of distracting them from practicing at all hours. In order to reach the maximum number of potential viewers, HBO aired the commercials during its own programming, on other cable channels, and, most notably, on network television. All five spots ran during prime-time network shows, including top-rated programs such as the 1997 World Series, Seinfeld, Chicago Hope, and ER. The network commercials were intended to reach both current HBO subscribers and those who had either never subscribed or had allowed their subscription to lapse. HBO hoped that the commercials would remind current subscribers of the quality and value of the channel’s programming, while at the same time reaching millions of other viewers who had not signed up for HBO. ‘‘We wanted to inform nonsubscribers of what they are missing,’’ said Parmet. In 1998 the network continued the campaign with two new spots, including one that debuted during a Monday Night Football game. HBO also reported that the spots would be shown on as many as 20 other cable networks. Like the original spots, the new commercials relied on humor and high production values to assure that they would stand out. One spot, ‘‘Guardian Angel,’’ showed a person hit by a falling piano when his guardian angel was distracted by a television in a store window. The mishap was explained by the campaign’s tagline, ‘‘It’s not T.V. It’s HBO.’’ The second spot starred actor George C. Scott serving as the general of an army of germs fighting for control of a television remote. The campaign’s focus shifted in 1999 from the original brand strategy. Although its emphasis remained on the central theme, ‘‘It’s Not T.V. It’s HBO,’’ the advertising spots became focused on marketing specific HBO programming.


In striving to establish a strong brand identity for HBO, the campaign had to differentiate the channel from its competitors. HBO’s most direct competitors were other pay television channels. Although it was by far the most watched pay television station, HBO faced stiff competition from other cable channels. Networks such as Showtime and TNT followed HBO’s lead in offering more original programming. ‘‘There was a time when HBO’s programming was the only thing worth watching on cable, but that’s not the case anymore,’’ a television industry analyst told the New York Times. HBO’s long-term success involved more than simply staying afloat in the premium channel television industry. The channel was also competing against different types of entertainment sources. HBO felt that it could not compare itself only to other TV channels. It had to get people’s attention. In an era in which the average person could choose to watch a sitcom on network television, tune in to CNN on a basic cable package, rent a movie from a local video store, drive to a nearby theater to see the latest Hollywood film, or pay for HBO’s movies and shows, the image ads were intended to equate HBO with entertainment. According to Parmet, ‘‘The ads needed to be cutting edge. We wanted to make the kinds of ads that people would talk about the next day at work.’’

Saturday, April 30, 2011


With its huge base of subscribers, HBO had a diverse viewing audience. For that reason the ‘‘It’s Not T.V. It’s HBO’’ campaign did not target a narrow demographic group. HBO hoped to reach all segments of the American consumer market from ages 18 to 49. The image ads conceived by BBDO were considered an ideal means to reach this broad-based target. Because the spots did not focus on one aspect of HBO’s programming but instead tried to hone the overall image of the channel, the campaign could appeal to all viewers. ‘‘The campaign tries to convey that we are a total entertainment package—that there is something for everyone,’’ said Chris Donlay, HBO’s manager of corporate affairs. ‘‘We were not looking for a market share or Nielsen ratings,’’ said Nancy Parmet, HBO’s vice president of marketing, who oversaw the ‘‘It’s Not T.V. It’s HBO’’ campaign. ‘‘We were looking to break through the clutter.’’ USA Today acknowledged the competitive and multifaceted state of the entertainment industry when it declared that to thrive ‘‘HBO must remain top-of-mind with consumers.’’


In its early days HBO primarily showed Hollywood movies and high-profile sporting events such as boxing. In the mid-1980s, however, HBO began to emphasize original productions, which included critically acclaimed made-for-HBO movies such as And the Band Played On and From the Earth to the Moon, comedy shows such as The Larry Sanders Show, and dramatic series such as Oz.
The shift toward original programming was fueled in part by the arrival of the VCR, which enabled viewers to rent at their convenience the same Hollywood movies broadcast by HBO. By the mid-1990s the network also offered original documentary films, animation specials, children’s and family programming, extensive sporting events and shows, and coverage of contemporary music concerts. At the time of the ‘‘It’s Not T.V. It’s HBO’’ campaign, 30 percent of HBO’s programming was original. By 1997 HBO reached roughly 23 million subscribers, approximately one-fourth of the viewing public. That same year it also won 19 Emmy Awards for its original films and shows, the most ever garnered by a cable television channel.
HBO’s programming was recognized for being innovative and daring. The New York Times lauded the channel’s ‘‘willingness to take a chance on unconventional programming and to allow writers and directors to operate with minimal interference.’’ HBO produced movies dealing with such issues as abortion, AIDS, and racism. As a pay television channel independent of advertisers’ pressures and demands, HBO had the flexibility for controversial and bold programming. ‘‘We’re not selling ads,’’ Jeffrey Bewkes, the company’s CEO, told BusinessWeek. ‘‘We’re not selling our audience to advertisers. We’re selling our programming service to you.’’ HBO’s mandate, and the key to its survival and profitability, was to continue to expand its subscriber base.
Like the cable industry as a whole,HBOwas subject to ‘‘churning,’’ the phenomenon of tremendous fluctuations among subscribers. Each month a huge number of viewers disconnected their HBO service for a variety of reasons. Some signed up for a specific event, such as a high-profile tennis tournament, and then disconnected the next month. Others subscribed to HBO only during the winter months, when they knew they would spend more time indoors, and canceled the service in the spring and summer. Some lost their jobs or suffered other financial hardships, and some disconnected when they moved. Despite the constant drain of viewers, however, an even greater percentage signed up either as first-time or repeat subscribers. There were other factors that made it challenging for HBO to attract and retain subscribers. Potential customers had a wide array of entertainment choices. Network and cable television, premium cable channels like HBO, Showtime, and the Disney Channel, and video rentals, movie theaters, and even chat rooms on the Internet—all vied for the consumer’s entertainment time and dollars. It was in this competitive situation that HBO developed the ‘‘It’s Not T.V. It’s HBO’’ campaign. The goal was not only to distinguish HBO from its competitors but also to reflect the originality of much of HBO’s programming. The commercials, with their quirky humor, compelling plots, and high-tech execution, were intended to encapsulate the strengths of HBO and keep the channel prominent in the consumer’s mind.


Founded in 1972, Home Box Office (HBO) was the oldest and largest premium pay television channel in the United States. Unlike network television and most other cable channels, which raised revenue by selling advertising spots during programming, HBO relied exclusively on subscribers’ monthly fees to generate income. As consumers’ entertainment choices multiplied dramatically over the years, HBO strove to construct a distinctive niche for itself and to stand out amid competitors, which included other television channels, movies, home video rentals, and the Internet. In 1996 HBO launched an innovative $60 million television advertising campaign in an effort to draw attention to itself and to strengthen its brand recognition. The spots, conceived by ad agency BBDO New York, sought to reflect the spirit and the programming of HBO. Instead of previewing upcoming events or providing a traditional ‘‘tune-in’’ message, the ‘‘It’s Not T.V. It’s HBO’’ campaign attempted to present the viewer with a sample of HBO’s programming. The five spots making up the campaign deliberately strove to be humorous, creative, and original.
According to the company, based on surveys prior to and following the launch of the campaign, ‘‘It’s Not T.V.
It’s HBO’’ achieved its goal of increasing the network’s brand image and awareness among consumers. Further, the campaign earned praise from the media and advertising industries. ‘‘Chimps,’’ the first commercial of the campaign, was awarded the first ever commercial Emmy. In 1997 the ‘‘Chimps’’ spot received a Gold Clio Award in the Television/Cinema category. As the campaign continued, its focus shifted, and the slogan evolved into the network’s mantra, setting HBO apart not only from other pay television channels but also from all TV networks. The Cable& Telecommunications Association for Marketing (CTAM) named the campaign its Hall of Fame winner in 2003

Wednesday, March 30, 2011


The ‘‘Welcome to Hollywood’’ campaign was well received and resulted in numerous honors. Not only did the campaign garner several awards at the 40th annual Clio Awards Festival but the radio portion of the campaign received a gold award at the One Show, and several of the spots were recognized at the national Addy Awards. ‘‘Action’’ was named on Adweek’s ‘‘Best Spots of the Year—1998’’ list, and the campaign took honors at the 46th International Advertising Festival in Cannes, France. Cliff Freeman was selected as the Agency of the Year by both the Clio Awards and SHOOT. Hollywood Entertainment managed to open about one store per day in 1998, and by mid-1999 there were more than 1,300 Hollywood Video stores in 43 states;
Hollywood Video’s market share was about 10 percent. For the quarter ended September 30, 1998, Hollywood reported revenue of $184.1 million, a 48 percent increase from the same period in 1997. Same-store sales enjoyed an increase of 7 percent. For the first quarter of 1999 the company reported revenue of $260 million, up 53 percent from the same period in 1998. Same-store sales jumped by 18 percent, and net income climbed 92 percent. In October 1998 Hollywood purchased, Inc., a leading Web-based video retailer, thus expanding its distribution channels. As the company’s Web site indicated: ‘‘The past success of Hollywood Video is apparent and the future is bright. If the Hollywood Video story were a movie, the final frame of this action packed adventure would not read ‘The End,’ but rather ‘To Be Continued . . . ’ ’’


By the time Hollywood Video launched its ‘‘Welcome to Hollywood’’ campaign in mid-1998 the company had a strong first quarter under its belt—it had opened 88 new stores and reported revenue of $170 million, a 54 percent jump from the first quarter of 1997. The company also launched a new store design that emulated the allure of Hollywood to a greater degree—the bright lights and monitors were accompanied by Hollywood memorabilia and photos of movie stars. The campaign’s ads appeared in major U.S. markets and spotlighted Hollywood Video’s new releases, promotions, guarantee policies, and, as Wattles said in the Portland Oregonian, ‘‘that we love movies. . . . We are Hollywood.’’ Arthur Bijur, Cliff Freeman’s executive creative director, explained in SHOOT that the campaign was designed to show consumers that Hollywood Video ‘‘really gets Hollywood and everything about it, . . . to show that it’s more a place which is really all about movies.’’ To accomplish this, Bijur said, the spots focused on things that were uniquely and utterly Hollywood.
‘‘Action’’ was set in the action/adventure section of a Hollywood Video store. An older cowboy dressed in black attempted to teach two male employees how to throw a fake punch as customers looked on in curiosity. The employee practicing to hit ran into some trouble with the maneuver. The cowboy explained, ‘‘That was a good start, but we don’t actually want to hit the person.’’ The puncher tried again but was unsuccessful. On the third punch the second employee slumped to the ground as the cowboy exclaimed, ‘‘That was so close!’’ Another television spot, ‘‘Don,’’ lampooned movie trailers and featured Don LaFontaine, who actually provided voiceovers for many trailers. In the ad a couple approached the counter with a video and asked the employee to tell them a bit about the movie. The employee knocked on a cabinet underneath the counter and LaFontaine, dressed in a suit, emerged. The employee handed him the tape, and LaFontaine read in his instantly recognizable voice:
‘‘From Flesh to Steel. From Blood to Blade. From Man to Mutant. Evil has a new enemy. Justice has a new weapon. And the world . . . has a new hero.’’ LaFontaine then handed the tape back to the employee and crawled back into the cabinet. Cliff Freeman art director Matt Vescovo explained in SHOOT that ‘‘the whole idea is that Hollywood Video is totally Hollywood, and one of the things we associate with Hollywood is this guy’s voice. So what better guy is there to describe a movie to customers than this guy who’s an authority and knows everything about every movie and everybody has heard his voice a million times?’’ Other spots included ‘‘Birds,’’ which parodied Alfred Hitchcock’s movie of the same name, ‘‘Musical,’’ which featured two male employees dancing and singing about the store’s five-day rental policy, and ‘‘Credits,’’ which spoofed the final credits of a movie. The ‘‘Welcome to Hollywood’’ campaign also included several radio spots. All followed the ‘‘Sixty Second Theater’’ theme and provided a humorous glimpse into the plots of such popular movies as Tomorrow Never Dies, As Good As It Gets, Scream 2, and Good Will Hunting. In the ads the announcer began, ‘‘Hollywood Video presents Sixty Second Theater, where we try, unsuccessfully, to pack all the action and drama of a two-hour Hollywood production into 60 seconds.’’ A comical take-off of the plot ensued, complete with actors impersonating the celebrity voices. The Good Will Hunting spot ended with the announcer stating, ‘‘If this doesn’t satisfy your urge to see Good Will Hunting, and we can’t say we blame you, then rent it today at Hollywood Video, where Good Will Hunting is guaranteed to be in stock, or next time it’s free.’’


Generating three times as much revenue as the theatre arena, the home video market was extremely lucrative and, as a result, highly competitive. Number-one ranked Blockbuster Inc. (previously Blockbuster Entertainment Corp.), which was three times the size of Hollywood Video, had dominated the field for a decade and at the end of 1997 boasted 4,000 stores in the United States and 6,000 globally. Purchased by entertainment giant Viacom Inc. in 1994, Blockbuster enjoyed a commanding market share of 25 percent at the beginning of 1998. Hollywood, though expanding rapidly, had just fewer than 1,000 stores by Christmas 1997 and a market share of about 5 percent, according to the Portland Oregonian. Blockbuster was not invincible, however, and the company struggled in 1996 and 1997 as a result of financial and marketing blunders. Hollywood Video, meanwhile, enjoyed rapid expansion and healthy profits. Though media reports made much of the competition between Blockbuster and Hollywood, Wattles maintained that he did not view Blockbuster as a rival or an enemy. ‘‘[W]hile Blockbuster is certainly the Goliath, I would not describe us as the David at all. We are not out to slay Goliath,’’ Wattles said in the Wall Street Transcript in 1994. He referred to Blockbuster as ‘‘our friendly competitor’’ and insisted there was room in the market for both superstore chains. Still, the two appeared to be rivals—Hollywood claimed to have the largest number of titles, offered guaranteed availability of popular releases, and had aggressive pricing and rental strategies. Blockbuster, with a new CEO and renewed focus on video rentals, responded in late 1997 by lowering its prices, extending rental periods, providing incentives for returning rentals early, and offering more new releases. Blockbuster also launched a new advertising campaign in early 1998 with the theme, ‘‘Get your movie . . . and go home happy.’’
Blockbuster and Hollywood Video were the clear leaders in the video-rental market, but both companies had to contend with independent retailers as well as national and regional chains such as third-ranked Video Update Inc. and Suncoast Motion Picture Company. The independents, on the other hand, complained that they could not compete with video giants, which were capable of instituting revenue-sharing deals with movie studios that allowed them to purchase videos at much lower costs and thus offer larger numbers of popular titles—the Independent Video Retailers Group stated that independent stores located within three miles of a Blockbuster store suffered from an 11 percent decline in revenues during the first half of 1998.

Friday, February 25, 2011


More than 80 percent of households in the United States owned VCRs in the late 1990s, and these households were filled with potential Hollywood Video customers. As a result Hollywood’s target audience was quite broad. The company’s advertising agency indicated that Hollywood’s target market consisted of those aged 18 to 45 as well as suburban families with children. Wattles discussed the company’s consumer target in an interview in the Wall Street Transcript in 1994 and said, ‘‘ . . . when the advertising agencies ask what your demographic profile is, I say, ‘Alive.’’’ Nearly everyone, Wattles elaborated, enjoyed watching movies. ‘‘One thing that’s nice about our business is our demographic profile. It’s so simple. Obviously there are demographic profiles of people who watch more movies than others but the curve is very slight. We’re not just a teenage business, or a midlife business, or an X-generation business.’’ To appeal to this wide audience, Hollywood Video stores focused on the one thing all the customers shared—the love of movies. ‘‘Our store design, our marketing, and our advertising reflect the name and image of Hollywood,’’ he explained. ‘‘We try to create an exciting environment that is movie and/or movie star oriented.’’ Though Hollywood Video’s audience was sizeable, many viewers were growing increasingly distracted by new entertainment technologies and options, such as pay-per-view television programming, digital video disks (DVD), the Internet, and expanded offerings from cable television and direct broadcast satellite. Industry analysts labeled the video-rental market mature, with little growth left. According to a study for the Video Software Rental Association, total revenue from the rental market declined 4.2 percent in 1997. Tom Wolzien, an analyst with Sanford C. Bernstein, pointed to a 1996 poll of 1,000 households with satellite television programming that discovered a 70 percent drop in video rentals. Still, many believed an audience for video rentals remained. Roffman Miller Associates’ Marvin Roffman told the Los Angeles Daily News: ‘‘There were a lot of people on Wall Street that were giving the death knell to the industry . . . [b]ut it’s probably not going to die for a long time. Home video is still a very viable business.’’ Hollywood Video believed this as well, and to continue to attract customers the company implemented many customeroriented policies, such as lower rental prices, guaranteed availability of popular rentals, and five-day rentals on every video in the store. According to the Portland Oregonian, Wattles was not intimidated by new technologies or forecasts of doom; Hollywood Video would, Wattles stated, change with the times and with clientele tastes. ‘‘As long as interest in movies continues, . . . there will be opportunities,’’ Wattles vowed.


Hollywood Video first opened its doors in 1988 with one store in Portland, Oregon, run by owner Wattles and his wife. From the outset Hollywood Video stores were large, brightly lit with an abundance of neon, and had 50 to 70 television monitors blasting the latest video offers. Employees dressed in red bow ties and cummerbunds. Every detail was designed to mimic the excitement and bright lights of Hollywood. And like Hollywood and the movie industry, Hollywood Video moved quickly and aggressively—only five years after its formation and with a total of 16 stores, the company went public. With the acquisition of Texas video-rental chain Video Central in 1994, the number of Hollywood Video stores rose to 100, and by 1995 the company was the third largest video-rental chain in the United States. By 1996 Hollywood had assumed the numbertwo position, and the company reported net income in 1996 of $20.63 million, a surge of 75 percent over net income in 1995, which was $11.79 million. The company had more than 500 stores in 29 states by October of 1996. Wattles told the Portland Oregonian, ‘‘In the third quarter [of 1996], we averaged better than a new store opening every 36 hours . . . and in the fourth quarter we plan on averaging over a new store every 24 hours.’’ In 1997 the company opened 356 new stores, and net income continued to rise—in the second quarter of 1997, Hollywood enjoyed an 83 percent increase in profits.


Hollywood Entertainment Corporation hurtled into 1998 at a screaming expansion pace for its chain of Hollywood Video retail stores—the company planned to open more than 353 new stores in 1998 to bring the total number up to 1,260 by year’s end. The decade-old chain of superstores had quickly become the second largest video-rental chain in the nation, and chairman, founder, and CEO Mark J. Wattles believed that Hollywood Video had ample opportunity for growth. ‘‘[In 1993] we were a 15 store chain and embarked on a very aggressive store opening schedule.’’Wattles announced in a prepared statement. ‘‘Last week [April 13, 1998] we opened our 1,000th video superstore and we plan on opening our 2,000th within the next three years. With over 20,000 employees, and a very strong management team, we are not only focused on growth, but the continued improvement of our operations, as well.’’
To position Hollywood Video as the superlative entertainment store, Hollywood Entertainment launched its first major branding campaign in May 1998. Developed by
New York-based Cliff Freeman and Partners, an agency known for its creative, cutting-edge work, the ‘‘Welcome to Hollywood’’ campaign consisted of nine television spots and eight radio ads. The radio ads followed the theme ‘‘Sixty Second Theater’’ and provided humorous synopses of popular movie plots. The television ads were set in Hollywood Video stores and featured store employees in amusing behind-the-scenes situations. Wattles discussed the purpose of the campaign—estimated to have cost anywhere from $11 million to $20 million—at the company shareholders’ meeting in May 1998. ‘‘We want to be a brand so powerful that when you think of movies you think of Hollywood [Video],’’ he said. President and COO Jeff Yapp agreed. ‘‘We want our customers to think of Hollywood Video as their inside connection to Hollywood and the world of entertainment,’’ Yapp said in a prepared statement. ‘‘As our mission statement says, ‘We are Hollywood. We are entertainment.’ ’’

Thursday, January 27, 2011


Hilton was delighted with the results of ‘‘It Happens at the Hilton.’’ Consumer surveys indicated that the campaign had performed well above expectations in reaching its target audience. Moreover, research revealed that Hilton had successfully negotiated the risks of incorporating famous personalities, according to Hilton’s vice president of marketing. Despite the company’s concerns, the campaign had remained rooted to the product it touted. Consumers understood that the celebrity photos were used to underscore the unique qualities of the hotel—that things ‘‘happened there’’—and did not feel put off by them. Hilton continued the campaign into 1999.
The company was so impressed with the effectiveness of ‘‘It Happens at the Hilton’’ that it extended the campaign for internal use. Just as ‘‘It Happens at the Hilton’’ signaled to consumers a new identity for the venerable old hotel, the company inaugurated ‘‘Hilton Pride Makes It Happen’’ to bring this same message to its staff. These posters strove to remind employees that the ‘‘new’’ Hilton was their creation and responsibility and that they should take pride in the hotels where they worked.


Hilton’s challenge was to distinguish its brand from the numerous competing upscale hotel chains. It’s first objective was, therefore, to make ‘‘It Happens at the Hilton’’ stand out from other hotel advertising. ‘‘There is a lot of hotel advertising out there, but if you take the logo off, they are almost interchangeable,’’ a Bozell executive told Advertising Age on October 5, 1998. Using celebrities to represent the brand was essential to this agenda. But this approach was not without its danger. While ‘‘celebritydriven ad campaigns [were] immediate attention-getters’’ that could break ‘‘through the clutter,’’ of other advertising, the Chicago Tribune noted, Hilton’s effort ran the risk of having consumers confuse its brand with those of other companies the celebrities had endorsed in the past. Alternately, consumers might assume that Hilton was too exclusive, if the likes of Naomi Campbell lodged there. ‘‘We had been concerned that the creative concept featuring personalities might not be relevant to everyday guests,’’ Dirks said to Advertising Age International. To alleviate this risk, Hilton and Bozell conducted extensive pre-launch testing in key Hilton markets, such as Los Angeles, New York, and London, to ensure that ‘‘It Happens at the Hilton’’ was accessible to its target audience.
Having cleared this hurdle, Hilton’s next task was to bring the message of the campaign—that guests should expect a memorable experience when staying at the Hilton—to its chosen audience of elite business and leisure travelers. Print was the predominant medium used because of its ability to hone in on select niches. For instance, since frequent business travelers were a key market, Hilton erected poster versions of the spots at international airports and ran them in in-flight magazines such as American Way and Delta Sky. To address business people even when they were not on the road, Hilton also advertised in publications including the Financial Times, Business Week, Time, Newsweek, U.S. News & World Report, as well as major market newspapers, such as the Wall Street Journal, USA Today, and the New York Times. Moreover, Hilton utilized travel magazines so that it could connect with consumers planning leisure travel. Hilton placed ads in Travel & Leisure and Conde Nast Traveler as well as in family-focused magazines such as Family Fun and Travel & Leisure Family. Finally, Hilton pitched ‘‘It Happens at the Hilton’’ to meeting planners at large corporations by printing the pieces in meeting planner magazines. There was also a small portion of the campaign devoted to television. For the most part, Hilton would trade rooms for airtime on programs such as Entertainment Weekly and broadcasts of the Oscars and Grammys. These short 15-second spots employed the ‘‘It Happens at the Hilton’’ tag line.
The campaign was global in its scope, running on four continents. The first two print pieces broke not only in the United States and Canada, but also in Australia, the United Kingdom, Germany, and various Asian nations. Publications in each country were used, such as the Frankfurter Allgemeine Zeitung in Germany. The international focus was imperative if Hilton was to reach the growing market of American business people who traveled frequently, as well as international business travelers around the world. According to a company press release, Hilton wanted the campaign to be seen by more than three-quarters of international business travelers.