-By Todd Wasserman, Brandweek

The studies were produced in tandem by the Verse Group and Jupiter Research and based on interviews in November with 101 marketers at companies with more than $250 million in annual sales. They show that the economy has already had a great effect how marketers do their job.

One study, which will be released later this month, reveals that agencies are seen as part of the problem. According to that study, 45 percent of CMOs say they are spending more time managing their agencies than just two years ago. Only 21 percent of respondents say they are getting the best work from their agencies.

While that report shows more friction with agencies, a report Verse and Jupiter released last month shows that 89 percent of CMOs say their marketing is under greater scrutiny because of the economy. Fifty percent of marketers say achieving ROI is their No. 1 priority.

“I would say that the ROI has always been there but it’s been ratcheted up,” said Randall Ringer, chief strategy officer for the Verse Group. “The first things that get cut are training and marketing.”

-By Kenneth Hein

Oh yes, by all means, let’s. A free meal? Great idea! And why not? Paycheck-stretching Americans will love you for it. Heads nod in agreement around the polished table. The number-crunchers figure out how much free grub they can give away while still getting solid publicity without the margins going to hell. They think about the short-term bump in store traffic, then those ancillary purchases once the offer “drives trial.” The numbers don’t look too bad, and so they go for it.

This scenario is imaginary, but I’ll bet something awfully similar to it has been happening in conference rooms around the country. In roughly the past month alone, Denny’s, Quiznos, IHOP, Jack-in-the-Box, Arby’s and others have offered free food or drinks in an effort to build both store traffic and good will for their brands.

So what’s wrong with handing a guy a free sandwich? Let me count the ways. First off, so many chains are handing out free grub that the novelty’s worn off—so much so that what had been a premium is fast becoming an expectation. First it was: “Wow, I get a free burger!” Today, it’s: “Hey, where’s my free burger?!”

But the larger issue is that food giveaways—aside from bringing X number of curious people into your units—have few strategic benefits in the long run. OK, sure, you did bump up your foot traffic. But when your customers have showed up just for the giveaway, it’s hard to engender a true brand experience that’ll make a lasting impression or deliver a quality message for the products offered. After all, people are only in there for the freebie.

This is especially counter-productive if your brand is trying to send a quality message. Giveaways have this way of cheapening a brand’s image, and that’s never a good idea. Don’t just take my word for it, either. “The fact is that 99-cent value menus and food giveaways are bad for business,” says Andy Puzder, CEO, CKE Restaurants. “At Carl’s Jr. and Hardees, we have stayed the course with premium-quality burgers—not low-quality gut fill—while containing restaurant operating expenses. CKE, by the way, boasts the second-best margins in the industry behind McDonald’s.”

But, OK, let’s just say that our marketer knows that his giveaway is just a short-term strategy. Isn’t it still good for a little PR? Sure it is—and it’s also an invitation for the unavoidable mistakes that happen with mass giveaways to turn into complaints. Oh, I’m being a pessimist, huh? Well, let’s just start with what happened to Dr Pepper a few months back.

When the Unabridged History of Brands is finally written, Dr Pepper is very likely to go down as the creator of the most ill-advised giveaway ever. Of course, it had some help—namely, Guns N’ Roses. Just in case you missed it, the soft drink brand made a bet with all Americans: If reclusive vocalist Axl Rose ever came out of the recording studio with the band’s forever-deferred album, Chinese Democracy, every citizen gets a free Dr Pepper.

Execs were probably high-fiving until the album actually came out in November. Then the havoc began. Dr Pepper’s make-good took the form of coupons, but the redemption window was tiny and the Web site that dispensed them crashed repeatedly. What started out as a mean-spirited joke pointed at a singer named Rose only ended up getting millions pissed at a drink named Pepper.

But at what cost? The TV spot cost the company $3 million. And while many people no doubt enjoyed a good meal on the house, there were still plenty of complaints on the Web about long lines and accounts of people leaving before they were served. There’s a saying that it takes 10 compliments to undo one complaint. That tends to get magnified when you weave the reach of the Web into the equation.

And so we return to Quiznos, which promised to give away a million free subs. All people had to do was visit a Web site and sign up—and then the troubles began. Allegedly, headquarters expected franchisees to foot the bill. Then it set a quota to lighten the blow. Finally, it just pulled the plug. Quiznos rep Rebecca Steinfort wrote off the complaints as a product of the blogosphere: “Certain blog sites think that everyone in the country had a bad experience, but the number of issues was very low. That’s one of the things about the Internet.”

It certainly is—and that’s the problem. Many people give equal weight to a blog post and a balanced news article. What kind of impression about Quiznos did they come away with?

According to Steinfort, Quiznos accomplished its goal of alerting customers to the fact that the chain has less expensive menu items to enjoy. She also points out, that brand can now uses the e-mail addresses it captured for direct-marketing efforts. So it’s not all bad.

Still, the fact remains that giving away free food is harder than you think. And which would you rather have: Customers coming in to spend money with a brand they love, or ones merely there to demand the latest freebie?

-By Progressive Grocer

According to Being Consumer-Centric: A Retailer and Manufacturer Update, produced by IDC Global Retail Insights and sponsored by Demandtec and Precima, companies are seeing benefits from consumer focused, but more opportunities are available.

Findings of the survey include:

• Most retailers (75 percent) and consumer products manufacturers (58 percent) rank consumer centricity as a top-three success factor.
• 80 percent of retailers and 67 percent of manufacturers expect to place an increased focus on it this year.
• Manufacturers need to work on leveraging consumer insights across the organization with only 43 percent indicating their ability is better than satisfactory, compared to 64 percent of retailers.
• The limited availability of team resources is the largest impediment to consumer-centric success for both retailers (37 percent) and manufacturers (43 percent).
• Lack of support and executive sponsorship is no longer a significant barrier for retailers (16 percent) with more than 75 percent retailers appointing a senior consumer-centricity role.

“As expected, this research clearly demonstrates a continued trend toward consumer-centricity as a critical business strategy,” said Brian Ross, general manager, Precima. “What is surprising, however, is that we find that many of the core obstacles – such as limited team resources – are unsolved as barriers to success. This is a clear call to both retailers and manufacturers that getting the fundamentals in place, including the right data, the right people, and the right tools is critical to a winning consumer-centric strategy.”

The survey sample consisted of 120 respondents, including 55 retailers and 65 consumer products manufacturers with titles of director level and above, and was conducted through online and telephone interviews. 

-By Kenneth Hein

The sparse ad, which targets beleaguered business owners, simply says: “It doesn’t take an act of Congress or a trillion bucks to stimulate consumer spending. You can reinvigorate the economy today by putting a money-saving offer in the hands of targeted consumers.” Tagline: “It’s time for Val-Pak.  The ad also includes a call-to-action in the form of a toll-free number and Web address.

This marks a change in marked change in strategy for the company which up until now had traditionally advertised to consumers. Last year it switched to a dual target of consumers and businesses, and this year it is speaking directly to businesses that are looking to drive sales.

“This ad is somewhat unexpected for the Valpak brand, but it shows we are more relevant than ever in this new era,” said  Kim Dominguez, director of marketing at Valpak. 

Dominguez says the push is inline with consumers’ behavioral changes: “Everyone is feeling the pain of our current economy, businesses and consumers alike. This ad speaks to everyone, highlighting the savings consumers find in the envelope at home, and the power of promotional advertising to stimulate sales for businesses.”

Valpak spent $8 million on media (excluding online) for the first 11 months of 2008, per Nielsen Monitor-Plus. 

-By Todd Wasserman

Al Gemma, a Democrat who serves as the deputy majority leader in the Rhode Island House of Representatives, introduced a bill two weeks ago that would generate revenues by using the sides of school buses as advertising space. Gemma said he had no specific advertiser in mind. “I don’t expect Playboy centerfold ads,” he said. “I mean discreet ads for  philanthropists, stuff that’s appropriate for school buses.” 

Gemma said he had no idea if the bill would pass.

Rhode Island is not the first state to consider school bus advertising. Media Advertising in Motion, a Scottsdale, Ariz., firm that links brands like Geico and State Farm with school buses, has generated more than $3 million for school districts in Arizona and Colorado with such advertising, said the firm’s president, Jim O’Connell. O’Connell said he makes a distinction between outside-the-bus advertising, which targets other drivers and inside-the-bus advertising, which targets kids. His firm only does the former.

Josh Golin, associate director of the Boston-based Campaign for a Commercial-Free Childhood, said the outlook for firms like Media Advertising in Motion is good—he expects more school districts to look into school bus ads. “It’s something that’s going to become more prevalent as budgets get cut,” he said. Nevertheless, the CCFA’s position on school bus ads is that they inappropriate. “We don’t think advertising should be a compulsory part of the school day,” he said.