Stuart Elliott: Where Madison Avenue Meets Wall Street

Given the crucial role that advertising plays in the economy some even have called it the life blood of capitalism I thought it would be interesting to see how much attention is being paid to advertising and related marketing activities in the latest annual reports 10Ks and proxy statements from a variety of consumerproduct companies The short answer after looking through the materials produced by about a dozen firms not so muchThat surprised me but maybe it shouldn39t have The numbercrunchers have a larger role in financial reports than the CMOs and to a lot of folks in green eyeshades advertising is an expense rather than an opportunity as the debate over relegating agencies to the ranks of quotvendorsquot by procurement officers demonstratesThat39s partly reflected in the appearance of advertising in several documents under quotrisk factorsquot as in dangers to the health of the company quotWe may experience challenges in creating display advertising on mobile devices that does not disrupt the user experiencequot warns the New York Times Company annual report quotIn addition technologies have been developed and will likely continue to be developed that enable consumers to circumvent digital advertising on websites and mobile devicesquotThe reports I read that are most interested in advertising are from the CocaCola Company which had almost 4 billion in ad expenses last year up from 35 billion in 2014 For instance readers are told a highlight of Shareowner Day on April 27 will be the opportunity to quotlearn more about our new global marketing campaign 39Taste the feeling39quotThe slogan is emblazoned on the cover of the proxy statement and inside one of seven questions in a QampampA with the company39s Chairman and Chief Executive Officer Muhtar Kent is devoted to the campaign and the new quotone brandquot strategy for the flagship Coke family quotThe campaign brings to life the idea that drinking a CocaCola any CocaCola is a simple pleasure that makes everyday moments more specialquot writes Kent or the corporate PR folksFurther into the proxy Kent39s oversight of the development of the strategy and the campaign is listed among his quot2015 performance highlightsquot as is his progress on productivity initiatives that are quotallowing the company to reinvest savings back in our brands and businessquotBy contrast PepsiCo the maker of the Coke rival PepsiCola mentions its Madison Avenue pursuits less frequently The annual report touches on the results of quotstepped up investments in advertising and marketingquot and gives a nod to quotwidespread recognition for innovative content creation that puts our brands at the center of popular culturequot such as a deal with the Fox series quotEmpirequotThere39s also a sentence about a quotfood and beverage partnership with the UEFA Champions Leaguequot in Europe and a graphic devoted to a quotglobal summer campaignquot for Lay39sColgatePalmolive is close behind CocaCola in tipping its corporate cap to its ad efforts On the first page of the annual report Ian Cook Chairman President and Chief Executive Officer cites the results of quotan integrated marketing campaignquot in India that forges quotan emotional connection with parentsquot He also writes how his company is quotincreasingly using digital media to communicate our brand messagesquot with digital accounting for 20 of its ad investment last year compared with 65 in 2010quotWe are proud that Colgate39s leading brands are winning with consumers worldwidequot he adds Cook describes the company39s instore and pointofpurchase promotions too such as displays and photos of them illustrate the reportAnother company taking time for its ad initiatives is Chipotle Mexican Grill most likely because as the firm39s leaders concede quot2015 was the most challenging year in Chipotle39s historyquot For 2016 quotour marketing will have a greater emphasis than usual on programs that are specifically designed to drive traffic into our restaurantsquot the 10K says such as quota large number of promotional offers for free or discounted foodquot along with a quotfocus on supply chain transparencyquot a reference to the foodsafety problems that bedeviled the companyLike ColgatePalmolive Chipotle talks about how it has quotincreased our use of digital mobile and social media in our overall marketing mixquot Like PepsiCo there39s a sentence about quotnew avenues of branded contentquot Unlike either Chipotle says it intends to quotincrease marketing and promotional spending considerably during the first half of 2016quot to help recover from the foodsafety debacleATampampT is the only other company to join CocaCola in devoting a cover to an ad slogan emblazoning quotMobilizing your worldquot on the annual report That was about it for advertising until a line in a table marked quotadditional financial informationquot detailing ad expenses of 36 billion last year up from 33 billion in 2014 There39s isn39t even a photo from a commercial featuring Lily the ATampampT store employeeLikewise in the materials for Kellogg don39t look for images of the company39s famous ad spokescritters like Tony the Tiger for there aren39t any Among the minimal discussion of marketing is a sentence on page 25 of the annual report which attributes the quotgood growthquot for Raisin Bran to quotgreat advertising and the introduction of Raisin Bran with Cranberriesquot Seven paragraphs later reporting on US snacks the company says it will give cookie brands quotnew support in 2016 including the relaunch of advertising featuring the Keebler ElvesquotThere also are passing references to Kellogg campaigns to promote eating breakfast among American consumers and Special K cereal in EuropeHershey is another company that addresses advertising sparingly as if it were scattering Reese39s Pieces in an attempt to lure ET out of the woods In 2016 and beyond writes John P Bilbrey Chairman President and Chief Executive Officer Hershey will be quotexecuting stronger consumer marketing that is more targeted and engagingquot There39s also a reference to a new Chief Marketing Officer and a mention of plans for quota greater shift to digital and mobile communicationsquotLike CocaCola Hershey recently switched to a quotone brandquot strategy for its flagship products but unlike the softdrink marketer Hershey made no mention of that in its materialsIn describing how each of its restaurant chains is faring Yum Brands includes some marketing highlights The most effusive are for Taco Bell which had the annual report boasts quota fantastic 2015quot and is quotthe industry gold standard for social engagement product development brand positioning and advertisingquotquotThe brand39s Live Mas positioning is an example of how strong brand identity can drive success across the spectrumquot the report says There are sentences about the launch of a new 5 value menu for Pizza Hut and the rollout around the world of the quotAlways originalquot brand positioning for KFCIn wading through all the fine print there were some lighter moments The Walt Disney Company39s 10K refers to commercials as quotcommercial announcementsquot Yum39s annual report is titled quotFeed the Worldquot as if the company were a cornucopia yielding vital agricultural foodstuffs rather than a purveyor of fast foodamp160And Hershey39s materials are in a manner of speaking sealed with a Kiss a stylized rendering of one decorates the coverImage at top courtesy of Corbis The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillageMyersBizNet management or associated bloggers

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Stuart Elliott: Where Madison Avenue Meets Wall Street

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