Sales promotion 467
line activity, to drop the word ‘advertising’
from its title as too limiting seemed to be
symbolic. These omens of doom were promptly
followed by a flood of new money being
poured into advertising during the dot-com
boom.
Debates about which side of the line is the
wisest destination for marketing funds have
always been inconclusive, and look increasingly
irrelevant. Advertising and sales promotion are
both effective techniques, which work best as
complementary components of a strategically
planned and integrated communications cam-
paign. The trend towards such integration and
the blurring of that imaginary line has led to:
The proliferation of ‘integrated communications’
(or ‘through the line’) agencies handling
campaigns on both sides of the line.
An increase in ‘Spadspend’, advertising
expenditure to reinforce promotions. This
accounts for an estimated 20 per cent of all
advertising. Iceland supermarkets took the top
prize for Outstanding Marketing Achievement
and the award for Brand Revitalization in the
2000 Marketing Society Awards, for its
advertising campaign focused on its ‘Feel The
Deal’ multi-buy promotions.
More themed promotions aiming to reinforce
brand values and advertising messages. Heinz’s
use of prizes in groups of 57 for their
competitions is a simple example of brand
theming.
Some very novel approaches to managing the
promotional effort. Sega invited the winners of a
promotional competition to form a ‘think-tank’
with brand managers and advertising agency
account managers to help plan their future
campaigns.
The growing importance of sales promotion
Measuring total sales promotion expenditure
accurately is virtually impossible due to its
fragmented nature and the diversity of defini-
tions of what it should include. While some
estimates include all direct mail costs, others
exclude them. Yet direct mail is actually a
medium for sales promotion (and advertising),
with approximately 80 per cent of mailshots
containing some form of promotion. Discount-
ing is a key promotional activity, but its ‘cost’
can be calculated in several ways. Although
we can only estimate the overall growth in
promotions, evidence of it confronts us every
time we enter a supermarket. Some of the
components of total promotions expenditure
can also be measured accurately, even if we
cannot agree what constitutes the whole. Cou-
pon distribution in the UK was 5.1 billion in
2000 and a staggering 248 billion in the USA.
Table 18.2 shows figures for different elements
of promotional expenditure for 2000 in the
USA, who lead the world in promotion
usage.
There are eight key factors driving the
growth in promotions:1 Increasing ‘respectability’. Partly through
increasing use by market leaders including
Heinz, Unilever, McDonald’s, Coca-Cola, Pepsi
and Cadbury’s. Credibility has also been
boosted by increasing professionalism among
sales promotion agencies.
2 Increased impulse purchasing. Purchase decisions
are increasingly made in-store, and can
therefore be influenced by in-store
promotions. Point of Purchase (POP) Institute
research sponsored by companies including
Procter & Gamble and Anheuser-Busch
examined the impact of 60 000 POP displays in
250 US supermarkets. Properly displayed
promotions boosted sales between 2 and 65
per cent depending on the product category
and the POP display type.
3 Shortening time horizons. Time pressure makes
the fast responses or sales boosts that
promotions can offer attractive. Internet
promotions have increased responsiveness
further, since companies can rapidly change
on-line discounts, coupons and other offers