Velveeta, Ro-Tel Are Case Study in Brand Collaboration

Sharing Media Budgets to Get More Bang Out of Their Advertising Buck, the Brands Explain How They Make It Work

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In the deli department and across grocery aisles, Kraft Foods and ConAgra battle away, vying for consumer attention. It's Hebrew National hot dogs vs. Oscar Mayer wieners, or Reddi-wip against Cool Whip.

But peace has broken out on the media front as the food giants join forces to co-promote Kraft's Velveeta cheese and ConAgra's Ro-Tel canned tomatoes -- two brands they're billing as the perfect combo for dips and other recipes in TV commercials and print and digital ads.

Touting two products at once is hardly new, of course, especially with in-store promotions or retail circulars that might suggest the pairing of a soda with a snack, for instance. But the Kraft-ConAgra partnership is notable for its size and scope and could signal a new wave of collaboration as marketers look to defray rising media costs.

"In the era of limited resources it's becoming very important for both of us: One, because of the bang for the buck, and two, we've been able to get greater investment from both of our companies because of the partnership," said Jason Ginsberg, a ConAgra brand manager who oversees Ro-Tel.

Indeed, left on their own, Velveeta and Ro-Tel would likely get little advertising attention, as both parent companies funnel most of their spending to higher-profile brands. "This is a way to get more dollars to spend against advertising and drag more awareness of our messaging," said Katie Peterson, senior brand manager for Velveeta.

And as companies streamline their brand portfolio, it might free them to pursue more joint efforts. A narrower focus "makes it a lot easier to work with people because they say that company is fundamentally different than me," said David Diamond, a packaged-goods marketing consultant.

But there are challenges: How do the brands, which use different ad agencies, pick the right shop? Who handles media buying? How do they protect company secrets? Kraft and ConAgra discussed their collaboration in -- what else -- a joint interview with Ad Age , sharing insights on why their partnership works and how it came together.

The Kraft-ConAgra combo began quietly seven years ago with a more typical program in which the two brands used in-store displays to jointly promote Velveeta and Ro-Tel. Finding success, the companies formalized the relationship, launching joint TV ads three years ago. This fall, the marketers plan to boost spending by 25% with eight new TV spots plugging tomato-infused queso dip that started about a week ago and run for six months. Print and digital ads plug other meals, such as casseroles and skillet meals. Last year, the two companies spent nearly $10 million on co-branded TV ads for the brands, according to Nielsen.

They decided against putting the creative work up for formal review, instead alternating shops each year. Last year the campaign went to Interpublic's DraftFCB, which at the time was Kraft's agency for Velveeta. But Velveeta now has no agency of record, so the companies gave it to Omnicom's DDB, San Francisco, which handled the joint campaign two years ago and works on a variety of ConAgra brands, including Ro-Tel. For digital, the team went with Kraft's agency, 360i. Each year "we re-evaluate which agency makes sense based on that year's objective and that year's creative brief and between the two companies we decide which agency is best fit to take on that project," Ms. Peterson said.

Media buying is a bit more complicated, since the companies are obligated by contract to use their own agencies—WPP's MediaCom for ConAgra and a team from Publicis' Digitas and MediaVest for Kraft. The solution? Split it in two with each marketer's shop handling buying for three months apiece. The agencies "worked together to build one holistic media plan that made sense for the full six months," Ms. Peterson said.

For agencies, "it's a little daunting to walk into a room with two sets of clients," said Travis Parr, associate creative director at DDB. But "these guys were really good about being respectful of each other and listening to each other [with] a lot of give and take and back and forth."

It helps that Velveeta and Ro-Tel are both run out of suburban Chicago. Mr. Ginsberg and Ms. Peterson both live downtown and meet frequently. And the team even gathers at each other's corporate offices, which could be considered enemy territory, full of proprietary info. So, do they keep each other out of certain conference rooms? "I haven't tried to go into other areas, but it's been a very warm welcome at ConAgra," Ms. Peterson said. Mr. Ginsberg added: "We don't have any interest in jeopardizing the partnership" because if it ended, that "would have huge ramifications on our individual businesses."

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