FRITO-LAY REPORTS DORITOS ONLINE AD SUCCESS

Devotes 9% of Product's Marketing Budget to Internet Executions

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NEW YORK (AdAge.com) -- A year's test of online ad campaigns has been so successful at reaching teenagers for PepsiCo's
An image from the Doritos.com Web site, which is currently hyping Salsa chips. Among other things, online visitors can watch music jam sessions and new Doritos TV commercials not yet released for broadcast.
Frito-Lay that the company plans to maintain a strong Internet presence.

Frito-Lay surprised the industry last winter when it abandoned Super Bowl TV advertising for Doritos to test new kinds of online marketing initiatives aimed at elusive teenagers.

Committed to Internet
But Cammie Dunaway, vice president and general manager of marketing for Frito-Lay's kids- and teen-targeted brands, a portfolio worth $4 billion in annual sales, said the marketer will commit at least as much to the Internet next year for Doritos.

The PepsiCo snack unit spent roughly 9% of the Doritos annual marketing budget on the Web in 2002. Jim Nail, senior analyst at Forrester Research, pointed out that that was significant because "if marketers in the [consumer package-goods] world are spending 1% to 2%, that's a lot, so Frito-Lay's 9% is aggressive."

Frito-Lay's Doritos spent $16 million in measured media from January through July of 2002, down 24% from the same period a year earlier, according to Taylor Nelson Sofres' CMR.

Waking up to the Web
Frito-Lay may in fact be a bellwether of package-goods marketers overall, said Rudy Grahn, senior analyst of advertising at Jupiter Research, a division of Jupitermedia Corp. "Consumer package-goods companies are waking up to the Internet as they've started to realize that the Web helps them get at hard-to-reach audiences."

Ms. Dunaway said Doritos' decision to

More than 90% of U.S. teenagers are online and they are a major target market for Frito-Lay products.
commit extensive resources to the Internet stemmed in part from a study from researcher Teenage Research Unlimited. The 2001 study showed as many as 92% of teens are online; 44% think the Internet has changed the way they get information on products and services; and significant numbers are watching less TV and reading fewer magazines than in prior years.

That research, combined with Ms. Dunaway's own experience with Doritos' mainly TV-focused 2001 media plan overdelivering the 25-plus set while underdelivering the crucial 19-year-old bull's-eye, convinced Frito-Lay that "we had to get more aggressive in the interactive space," she said.

Frito-Lay's online objectives
First, Ms. Dunaway worked with Frito-Lay's Internet agency, Omnicom Group's @tmosphere, New York, to develop four clear objectives for the Internet plan. The efforts had to:

  • Be able to work with TV and in-store efforts for maximum integration

  • Connect with teens in a way that might not appeal to the more typical gatekeeper mom target

  • Start building a one-to-one dialogue with Doritos consumers.

  • Such clear objectives are important for any marketer aiming to get more aggressive online, Ms. Dunaway said.

  • And obviously build sales.

Frito-Lay took its TV advertising online to Doritos.com, offering teens the chance to view commercials, including ones that hadn't yet aired on TV, "which teens love," Ms. Dunaway said. Following on the "Bold and Daring" campaign developed by Omnicom's BBDO Worldwide, New York, Frito-Lay streamed seven spots an average of 60,000

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times each and garnered 57,000 votes on whether the ads were bold, daring or neither.

Testing TV spots
One side benefit of streaming commercials online was that Frito-Lay was able to gauge the popularity of one ad it was hesitant about. "Online, consumers responded so positively, we decided to put it on air," Ms. Dunaway says. "Such direct feedback is something that a lot of testing methodologies just don't do."

The Internet also provided a great way to make consumer promotions relevant to teens.

In February, Doritos ran a promotion with Microsoft Corp.'s Xbox online and offline, offering consumers the chance to win an Xbox video-game console by entering a special code from instant-win game pieces found on packages. The effort drove 700,000 registrations on Doritos.com, where consumers were offered the opportunity to exchange information about themselves for advance notice on products and promotions. In fact, 43% opted into the database. Much of the communication for the promotion came from packages themselves, but Doritos also tied in to gaming sites, including the Internet Gaming Network, to help reach out to relevant audiences.

This summer, Doritos ran a similar Austin Powers: Goldmember promotion, with tags to TV ads, online ads and point-of-purchase materials. That promotion garnered 150,000 registrations, with 20%, or 30,000 people, opting in to the database.

Quarterly teen promotions
To meet its second objective of delivering marketing programs with teens, Doritos decided to develop quarterly promotions with teen-oriented partners.

First, Doritos latched onto MTV.com for a sweepstakes offering a free spring break vacation that gained 100,000 entries, 76% of whom opted to sign up for the database. In the second quarter, Doritos did a promotion with pop band Outkast, playing off the band's double Grammy win, offering a chance on Doritos.com to meet the band at a New York concert. Ads on Outkast's site as well as relevant music-related sites helped build awareness.

Through these programs, which helped build a database of more than 350,000 names just through the middle of this year, Frito-Lay is helping meet its third objective: building a one-to-one dialogue with consumers. The company already has established e-mail relationships, offering news of upcoming promotions and products, and speaking to them on a personal level.

Online consumer panel
Ms. Dunaway said in 2003 she hopes to get an even better understanding of the demographics of those consumers and their purchase patterns. She plans to create an online consumer panel to test products and promotional concepts.

As for sales, Doritos is up roughly 5% so far in 2002, growth that while not maybe directly attributable to the Internet, "it's something that makes me more confident that it's the right way to stay connected to this audience," Ms Dunaway said.

Brand managers at the company likewise are starting to see the benefits of the medium. Lay's has developed an online component to its new Taste of America line, allowing consumers to vote for the next flavor, and Ms. Dunaway recently pitched Frito-Lay Chief Marketing Officer John Compton on an aggressive program next year for ePloids, the snack unit's teen auction site. The site allows teens to bid Ploids (points collected off of Frito-Lay snack packages) for Casio watches, Nintendo games and other teen-targeted merchandise, as well as play games.

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