Virtual path to teen tummies

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Not all the chips are down in dot-com land. Earlier this year, PepsiCo's Frito-Lay surprised the industry when it decided to forgo Super Bowl TV advertising for Internet initiatives as a way of trying to reach elusive teen-agers. And Cammie Dunaway, VP-general manager of marketing for Frito-Lay's kids and teen-targeted brands, a portfolio worth $4 billion in annual sales, says the marketer was so pleased with the results that it 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. 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.

Ms. Dunaway says Doritos' decision to 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 says.

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 says.

* And obviously build sales.

In fact, it is marketers' inability to determine good metrics that has largely prevented significant Internet marketing plans, says Jim Nail, senior analyst at Forrester Research.

"If marketers in the [consumer package-goods] world are spending 1% to 2%, that's a lot, so Frito-Lay's 9% is aggressive," Mr. Nail says. "Others aren't doing it largely out of inertia because there aren't proven models or well-accepted models of how to make the Internet work. Doritos is out there blazing the trail."

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

GAUGING POPULARITY

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 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.

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

First, Doritos tied to 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. Ms. Dunaway says 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.

way to stay connected

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 says.

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.

Frito-Lay may in fact be a bellwether of package-goods marketers overall, says 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," he says, and realizing "that it's where the eyeballs are for very strong, desirable targets."

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