CHALLENGE


"There are a lot of people who are not necessarily as avid newspaper readers as they used to be," says Jeff Grev, Group Marketing Manager for Hormel Foods.

With free standing inserts (FSIs) in newspapers comprising a key marketing strategy for Hormel, losing newspaper readers could have big consequences. "The ability to reach them in their preferred media was important to be able to expand just what we'd get through newspapers," Grev says.

Grev and his team needed a new way to reach consumers who weren't reading newspapers. Naturally Grev's very aware that consumers now "may in fact be using the Internet as a primary source of information." However, like many consumer packaged goods (CPGs) firms, they had fraud concerns about supplementing FSIs with online couponing.

Also, as you may imagine, as the makers of the edible-variety of SPAM, Hormel wasn't eager to jump into email marketing. There was just too much room for a message to spiral out of viral control if jokesters got a hold of a creative promoting SPAM via email.


CAMPAIGN


First, Grev selected an online couponing provider that had enough security and measurement procedures to make his team feel safe:

o Coupons were only available to registered users of a free opt-in system. Once a consumer downloaded a coupon, that person would not be able to view or download that particular coupon from the same registered opt-in account a second time.

o Each downloaded coupon had a unique identifier code.

o Coupons were all for amounts well under $1, with most at or under 50 cents. Grev figured while this might be enough to motivate consumers to shop for Hormel products, it wasn't enough to go through the trouble of registering for multiple opt-in accounts.

o The team had easy access to coupon-clearinghouse reports so they could watch for possible fraud on the redemption end.

Next, he made the critical strategic decision that all offers presented via email would be for multiple Hormel products. The first wave of his campaign, launched in November 2003, featured eight coupons for a variety of Hormel products. The second wave launched in January 2004, featured seven coupons with equal variety.

So, while SPAM was promoted, it wasn't the solitary coupon or the focus of the campaign. Also, the SPAM brand was not in the "from" or the subject line of any email sent.

For maximum impact, both campaigns were promoted to the roughly same group of registered, third-party, coupon-site users in three ways:
1. An email strongly resembling an FSI was sent to an opt-in list.
2. A promotional ad also resembling the FSI was included in the site's regular member email newsletter.
3. A promotional ad with similar creative was placed on several sections of the couponing site.

All hotlinked to landing pages where users could choose precisely which of the seven or eight coupons they wished to print out. They could choose any or all.

Beyond measuring redemption rates, Grev was also interested in learning what impact the email campaigns would have on consumer attitudes. If the data looked great, it would be extra firepower to convince Hormel management that the Internet was a powerful media buy.

So, they had the third-party site send an email survey to consumers who had definitely seen the Hormel offers as well as a control group who had definitely not.

It was a fairly long survey, with about 25 questions, some of which included:
Did the consumer receive the Sunday paper?
Did they use the Sunday paper for coupons?
Did they remember the campaign?
Were they familiar with Hormel products?
Did they remember the unique campaign branding message?
How did they prefer to receive coupons? (print vs. online)
Did they buy additional Hormel products without the coupon?

Responders didn't receive anything for replying. Hormel received at least 300-400 responses "per bucket" to ensure fairly high statistical relevance.



RESULTS


"Redemption rates far exceeded those we receive through our traditional offline vehicles. We were very happy with the campaign," says Grev.

Grev and his team were happy to see no evidence of fraud. "It went off very smoothly, we had no issues," he says. And there were no unfortunate repercussions from the SPAM brand testing email.

Data from the consumer survey:

-- Nearly 30% of the participating consumers said they were not familiar with the Hormel family of products before viewing the emailed offers.

-- 27% of the surveyed consumers did not get the Sunday newspaper or did not use it for coupons; while 37% indicated they would prefer accessing grocery coupons via the Internet instead of newspapers.

-- Multi-coupon offers can work. Nearly 50% of consumers who took an action on Hormel’s promotion printed three or more coupons; 30% printed four or more coupons; 20% printed five or more coupons.

-- 53% of consumers who reported redeeming a coupon said they also purchased at least one or more incremental Hormel products without a coupon.

Grev plans to repeat the campaign again. "We're not looking to replace newspapers, but we want to spread our reach to as large a group as possible," he says.

Useful links related to this article:

Creative samples - print FSI and electronic versions http://www.marketingsherpa.com/hormel/ad.html

Related MarketingSherpa article: Online Coupons 101 - Redemption Data, Vendors, & How to Fight Fraud http://library.marketingsherpa.com/barrier.cfm?CID=2610

CoolSavings - the online media partner Hormel used to conduct the campaign http://www.coolsavings.com

Hormel http://www.hormel.com