LEVI'S GOES OFFLINE TO PLUG WEB STORES: INTERNET AD PLAN 'DIDN'T PAY OUT' FOR E-COMMERCE

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Levi Strauss & Co. halted online advertising for its new Web stores and now is regrouping, with plans to shift money into traditional media to drive traffic to its sites.

"We dumped a lot of money into the Internet," said Kevin McSpadden, director of e-commerce and retail marketing. "It didn't pay out."

The apparel marketer, laboring to get its faltering business back on track, in late November launched sales of Levi's and Dockers products at two sites (www.levi.com and www.dockers.com). The move was part of an effort to take more direct control of brands rather than relying solely on retailers to showcase products.

ADS ON 20 SITES

Levi Strauss backed the e-commerce push with ads on some 20 sites including America Online, Yahoo! and Ticketmaster, owned by Ticketmaster Online-CitySearch.

Levi Strauss has prohibited department stores from selling its products online. But the company isn't the only online source; discounter Bluefly (www.bluefly.com), which distributes Levi Strauss products it buys from the company and from retailer closeouts, last week was pitching select Levi's jeans at 31% off.

On Levi Strauss' official sites, typical orders of $56 to $120 per paying customer were not high enough to make the initial effort work, Mr. McSpadden disclosed last week at a meeting in San Francisco of the Internet Advertising Bureau. He didn't disclose spending.

Mr. McSpadden laid some of the blame on Internet media, saying Web pages cluttered with banners and other ads made it difficult for Levi Strauss to deliver its message.

Levi Strauss' online and traditional-media advertising for the commerce sites is handled by USWeb/CKS, Santa Clara, Calif. The sites where Levi Strauss advertised developed some of the Web creative.

WILL TRY ONLINE ADS AGAIN

Though Levi Strauss has gone dark on initial online ads, Mr. McSpadden said the company will try again. It will launch some ads as soon as next month on Ticketmaster, extending a marketing scheme allowing customers to buy clothes to match whatever concert or event they're attending.

For this fall and the holidays, Mr. McSpadden is considering a strategy in which it could share risk and rewards with Web sites, pursuing revenue-sharing deals in which payments for ads would be tied to sales generated through those ads. E-commerce sellers are showing growing interest in such hybrid deals.

USING PRINT, BROADCAST

But "to stay competitive," Mr. McSpadden said Levi Strauss will make a push into print, radio and TV advertising to promote its commerce sites, with ads running in November and December and possibly earlier in the fall.

Mr. McSpadden said Levi Strauss will work to make e-commerce ads complement brand advertising, which is split between TBWA/Chiat/Day, San Francisco and Playa del Rey, Calif., for the Levi's brand and Foote, Cone & Belding, San Francisco, for Dockers and Slates.

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