Macy’s Plans $100 Million TV Ad Campaign
It was considered a shock back in June when the highly-regarded Anne MacDonald was booted out after just 16 months as chief marketing officer of what was then Federated Department Stores but now renamed as Macy’s. She had the primary job of building up the Macy’s brand name, but with poor Q1 sales and now Q2 sales reporting in a 77% profit drop perhaps the reasons for her departure are becoming a bit clearer.
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Anne MacDonald, the chief marketing officer for Federated Department Stores who gave US newspaper publishers some blunt advice on what they need to do to continue getting the bulk of her near $1 billion ad budget, is suddenly herself out of a job. A company spokesman would not say why, but said her duties would be taken over by Peter Sachse, chairman-CEO of macy’s.com who was the marketing manager MacDonald had replaced when she came to Federated 15 months ago.
By combining many different department store names under the one Macy’s brand, newspapers across the US saw a big drop in their display advertising revenues, so with such poor Macy’s Q2 results might newspapers hope for an increased newspaper spend to get things back on track?
Perhaps not! According to The Wall Street Journal Macy’s is planning a big $100 million campaign – but it’s focused mainly on TV. It uses celebrity endorsements by the likes of Martha Stewart (she is launching a new line of products sold exclusively at Macy’s) and Donald Trump.
Apparently inside the company there was much debate whether celebrity endorsements were the way to go – others wanted coupons (think newspapers) and a lot of display ads that hype sales (think newspapers again) but endorsements won the day as the primary sales vehicle.
But all is not lost for newspapers. Martine Reardon, executive vice president of Macy’s corporate marketing, told the Journal that ads promoting sales would still run and she noted, “Use of coupons and promotional advertising has been reduced over the years, but there are still shoppers who love Macy’s sales,” she said.
Forgive an old-timer who has looked at department store display ads for some 50 adult years but this shopper can tell Macy’s he cares not what products Donald Trump may buy at Macy’s and much as we may love Martha Stewart and her product-line, what is really the big draw in getting shoppers into the store are the huge display newspaper ads promoting sales and discounts and all the like.
Go into any major US department store. On the days they run newspaper advertising promoting sales and discounts the foot traffic is heavy. On the days they don’t one there are more sales people present than shoppers (and it seems there are not as many sales people, either, these days). It’s not rocket science figuring out how to get feet into stores.
If there is an advertising and promotion problem at Macy’s it is because they seem so close to the problem that they can’t see the forest for the trees! – August 24, 2007
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