Is Kmart's Risque Holiday Ad Ringing Hollow?

Consumers Not Clear Who's Running Spot

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Kmart has undoubtedly attracted plenty of attention with its latest holiday ad, "Show Your Joe." But will the spot translate into a positive, refreshed view of the brand and boost Kmart's status among millennial and middle-aged women, two of its target demographics?

The opinions of marketing experts are mixed, based on the ad's performance. The risque spot follows in the wake of other tongue-in-cheek ads like "Ship My Pants" and "Big Gas Saving," and all were created by agency DraftFCB.

"Show Your Joe" shows six male hand-bell players wearing tuxedo jackets on top and only Joe Boxer briefs on bottom. Instead of ringing bells with their hands, they swivel their hips ring out the tune "Jingle Bells" with what appears to be something inside their shorts.

The ad has received 11.4 million hits on YouTube (with 44,000 likes and 2,500 dislikes), 4,100 shares and 6,700 likes on Facebook and thousands of messages from viewers, as of Nov. 22.

"This is a ballsy move. Pun intended," said Matti Leshem, CEO of brand strategy firm Protagonist, based in Los Angeles. "Here's a brand that's tired, and they come out with something that is edgy, truly naughty but fun and in no way mean-spirited," said Mr. Leshem. "And they've drawn attention to themselves in a world where there's 9,000 channels and where no one can get heard for more than a second."

The ad, which launched Nov. 15, is likely to help get consumers back into Kmart, at least for the holidays, predicted Mr. Leshem. "It elevates the halo of both brands and it gets them noticed in a clever way," he said

However, according to Gary Getto of Advertising Benchmark Index, which measures ads' effectiveness across all media channels, the ad performed "well below average" compared with all the ads in ABX's database. "The brand does not appear until late in the ad and by then we've laughed and aren't paying much attention," said Mr. Getto in an email.

But perhaps more telling is the ad's polarizing effect on viewers: It scored highest in the "dislike" category. However, its "likeability" score was second highest.

On the other hand, ad-tracking firm Ace Metrix said according to its research, the "Show Your Joe" ad scored well above normal for retail ads, with its highest score in the "attention" category and its lowest in "relevance." Among female respondents, comments ranged from "vulgar" or "offensive" to "hilarious" and "unique."

One key complaint came from parents wondering how to explain where the jingling comes from to children.

"This commercial is a playful take on spreading holiday cheer," Kmart responded to one Facebook comment. "We regret if you found it objectionable."

Executives from Kmart and Iconix, which owns the Joe Boxer brand, were unavailable for comment.

About 72%-75% of respondents found the ad "really clever, highly creative, really funny and are very much understanding the creative approach they are taking," said Jonathan Symonds, exec VP-marketing at Ace Metrix. Still, he noted that only 8% of respondents used Kmart by name. "I would say that on the last ad, 'Show Your Joe,' Kmart does struggle with brand attribution whereas with the last two [recent ads], they really didn't," Mr. Symonds said.

Indeed, consumers were confused by the ad's message, according to Mr. Getto. "What was the message? Joe Boxers are available at Walmart? That they come in several colors? People weren't sure," said Mr. Getto.

Mr. Getto noted that overall the "Show Your Joe" ad has so far underperformed Kmart's most recent punny ads, "Ship My Pants" and "Big Gas Savings."

Indeed, it's hard to measure just how much the ad will affect sales. Of course, it's necessary to have a holiday marketing campaign and attempt to lift Kmart's image, so in that light, the ad is a positive, said Paul Swinand, equity analyst at Morningstar. But he said the ad is still a stretch.

"This is a good campaign so it will leverage across the whole chain," said Mr. Swinand. "People didn't believe that Kmart carried any good brands or Sears did either. So now you're communicating to them that there are name brands at every Kmart. So the hope is to lift that whole experience. The problem it doesn't match with the real experience" of shopping at Kmart.

It won't be until early 2014 before the market sees the results of Kmart's holiday efforts. Parent company, Sears Holdings Corp., has struggled for years to remain relevant with consumers, which has shown in weak financial results under the leadership of Chairman-CEO Edward Lampert. The company reported Thursday that third-quarter sales slipped to $8.27 billion from $8.86 billion a year ago.

Breaking out Kmart, the chain had a third-quarter operating loss of $171 million, slightly wider than a loss of $164 million the prior year. Kmart-specific revenues totaled $2.92 billion, versus $3.08 billion a year ago; comparable-store sales declined 2.1% in the quarter.

Trading at around $60 a share, Sears stock is well off its high of $193 reached in April 2007. Kmart and Sears merged in 2005.

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