AMAZON.COM RETURNS TO TV ADVERTISING

Latest Campaign Wags Its Finger at Shopping Malls

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SAN FRANCISCO (AdAge.com) -- In its first major TV effort since December 2000, Amazon.com is targeting bricks-and-mortar shopping malls rather than Buy.com, the online rival that has launched a book price war.

Amazon's test TV campaign in Portland, Ore., and Minneapolis points out the inconvenience of mall shopping. In one spot, for example, a woman waits at a counter while subtitles note a salesman said he would be with her in one minute -- nine minutes ago. Another shows two white-haired women confused at a mall directory map, with screen titles saying "You are here," then "Why?"

Attacking bookstores
Another spot attacks bookstores. It shows a man waiting in line to buy a book and noting the book will cost $35 -- and half the afternoon.

Each commercial ends with an arrow hitting a computer-style button imitating a computer click followed by the line: "Amazon.com and you're done."

Amazon is evaluating the effectiveness of the campaign, which is aimed at getting consumers to shop online regularly, not just for holidays or special occasions, said spokeswoman Patty Smith. She said she did not know when a decision would be made on a rollout.

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The campaign is from independent Wieden & Kennedy, Portland, which won the account in May 2001, at a time when Amazon CEO Jeff Bezos cut expenses significantly to prove to Wall Street the company could make a profit. Last holiday season, Mr. Bezos appeared in limited advertising in conjunction with promotions with MSNBC.

Marketing expenses down
Amazon said in recent statements to the Securities and Exchange Commission that marketing expenses, net of co-operative marketing reimbursements, were $138 million or 4% of sales in 2001, down from $180 million and 7% of sales in 2000 and $176 million, or 11% of sales in 1999.

When asked whether Amazon would be targeting Buy.com in its ads, Ms. Smith chuckled and said, "We always focus on the customer and not what the competition is doing."

Nevertheless, Amazon has engaged somewhat in battle. In the past 11 months, she said, Amazon.com has reduced the required tab to obtain free shipping from $99 to $49. In addition, it extended its 30% discount on books over $30 to include books costing $15 or more.

Buy.com enters fray
Buy.com late last month dropped shipping costs on all but the heaviest items and took out two full-page ads in Dow Jones Co.'s Wall Street Journal announcing it would sell all books at prices 10% below Amazon.com. Within 24 hours, Buy.com, known for its computer offerings, indicated book revenues were eight times their previous 30-day daily average and said the daily average of new customers on the site had tripled.

However, Buy.com President-Chief Financial Officer Robert Price said the move is not a return to the Internet's spendthrift days. "We would like to see [free shipping and the discounts] as a permanent fixture in our overall customer offering," Mr. Price said. "This is not a return to the mid-'90s. We believe we can do this profitably."

Buy.com advertising, from Aliso Viejo shop Think Big Marketing, included an ad in Gannett Co.'s USA Today and will continue via e-mail and insertion in Buy.com's inserts in 10 Sunday newspapers.

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